Case story

  • Finland

OECD NCP Finland - CEDHA vs Finnvera plc

Uruguay 2006

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Story

CEDHA’s complaint to the NCP of 8 June 2006 alleged that Botnia’s Orion pulp mill project would impact local communities’ economic livelihoods and human rights. The Complainants maintained that the project was plagued with environmental problems, including the company’s failure to collect and provide reliable information about the project’s real and foreseeable impacts. The complaint also stated that the project was straining regional diplomatic relations between Argentina and Uruguay. Another case against Nordea, a financial institution, was filed with the Swedish NCP.

Finnvera, the Finnish Export Credit Agency, was supporting Botnia’s Orion pulp mill project. The complaint called on the Finnish NCP to insist that Finnvera cease consideration of the Botnia project given Botnia’s breaches to the Guidelines. Finnvera is an independent export credit agency owned 100 per cent by the Finnish state.

Outcome

At the June 2006 annual meeting of NCPs, the Finnish NCP invited CEDHA to a meeting to discuss the Botnia and Finnvera cases in August 2006. In August, the Finnish NCP informed CEDHA via email that the complaints against Botnia, Finnvera and Nordea would be discussed during the August 30 meeting in Helsinki. However, the Finnish NCP did not confirm that it had accepted the Finnvera and Botnia cases.

In October 2006, the Finnish NCP rejected the Finnvera complaint citing the fact that the Guidelines were not applicable because Finnvera is not a Multinational Enterprise, and the Guidelines cannot be considered to refer to state’s export guarantee activities . In response, CEDHA lodged two complaints, with the OECD’s Investment Committee and Finland’s Parliamentary Ombudsman, concerning the Finnish NCP’s decision to reject the complaint in January 2007.

In February 2007, the Finnish NCP refused to review its decision.

NCP statement.

References

OECD Watch case story page: http://oecdwatch.org/cases/Case_98

Participant Perspectives


Finland NCP

Date: 2006/10/12

 

Finland’s NCP statement on the specific instance concerning the Orion paper mill factory project (Uruguay; Botnia SA) and Finnvera Oyj

The Center for Human Rights and Environment (CEDHA) made on 8 June 2006 a request for specific instance to the Finnish national Contact Point, as defined by the OECD Guidelines for Multinational Enterprises, concerning the financial activities of Finnvera Oyj in relation to the Botnia SA paper mill project in Uruguay. With respect to the request, the Finnish National Contact Point is the Finnish Ministry of Trade and Industry. The request of CEDHA was dealt with by the MONIKA Advisory Committee of International Investment and Multinational Enterprises, which is attached to the Ministry.

According to the OECD Guidelines for Multinational Enterprises, the Finnish National Contact Point must first decide whether the request for specific instance will merit a further examination, before issuing a statement on it. The nature of Finnvera Oyj’s special financing and the company’s position as a provider of state export guarantees must be considered when dealing with the matter. The following issues should be taken into account, in particular:

  • Finnvera Oyj cannot be considered a multinational enterprise, as defined by the Guidelines, when contemplating the special nature of Finnvera Oyj as a provider of state’s export guarantees

  • The OECD Guidelines cannot be considered to refer to state’s export guarantee activities, which are regulated nationally by special legislation and for which special arrangements exist within the OECD (such as environmental principles approved for export credit agencies). - First and foremost, the Guidelines concern investment activities and enterprises that have made investments (primary investors), in this case Botnia SA. Commentary 10, Chapter 2 (general principles) of the Guidelines (supply chain) advises multinational enterprises to encourage their business partners and subcontractors to comply with principles that are in harmony with the Guidelines, and which cannot be applied directly to an export credit agency.

  • The OECD Committee of Investment and Multinational Enterprises’ (CIME) commentary on the Investment Nexus made in April 2003 does not entail that the Guidelines should be applied to Finnvera Oyj’s special financing activities.

  • With respect to the investment viewpoint taken by the Guidelines, applying them to the activities of Finnvera Oyj could not, ever otherwise, be considered appropriate.

Based on the reasons mentioned above, and having had the case considered by the MONIKA Advisory Committee, the Finnish Ministry of Trade and Industry has concluded that the request for specific instance issued by CEDHA on 8 June 2006 does not merit further examination by the Finnish National Contact Point.

 

 

Contributor(s): This article was modified by Kyle (5), Nicolaclayre (5), and Ejfturnbull (1).