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Citizen act ang_equator_principles


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Citizen act ang_equator_principles

  1. 1. CITIZEN ACT - season 2011-2012 Equator Principles CITIZEN ACT – SEASON 2011-2012
  2. 2. <ul><li>Equator Principles </li></ul>| P.2 EQUATOR PRINCIPLES
  3. 3. _ What are Equator Principles ? WHAT ARE EQUATOR PRINCIPLES ? The Equator Principles are : “a financial industry benchmark for determining, assessing and managing social & environmental risk in project financing ” (   Equator Principles were launched in 2003 by ten international banks, Equator Principles have now become a global standard for project finance.   EPs provide a framework for the environmental and social evaluation of projects: compliance with local law in High Income OECD countries and with IFC social & environmental policies and quantitative environmental guidelines elsewhere   A voluntary agreement , but “Equator has teeth”: Adopters agree that they “will not provide loans directly to projects where the borrower will not or is unable to comply with our environmental and social policies and procedures”.   In August 2011, EP has been adopted by around 70 banks
  4. 4.   _ What are the Equator principles requirements ? <ul><li>  </li></ul><ul><li>SCOPE </li></ul><ul><li>HOW ? </li></ul><ul><li>HOW AND WHERE ? </li></ul><ul><li>WHAT ? </li></ul>REQUIREMENTS
  5. 5. <ul><li>Project financing (non recourse) with project costs > 10MUSD </li></ul><ul><li>Project financings covering new, expansion or upgrade of existing projects which significantly change the nature or degree of existing impact </li></ul>  _ SCOPE REQUIREMENTS
  6. 6.   _ How? <ul><li>  </li></ul><ul><li>Screen the level of social & environmental risk associated with all applicable project financings and assign a risk category : </li></ul><ul><ul><li>Category A – Projects with potential significant adverse social or environmental impacts that are diverse, irreversible or unprecedented </li></ul></ul><ul><ul><li>Category B – Projects with potential limited adverse social or environmental impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures </li></ul></ul><ul><ul><li>Category C – Projects with minimal or no social or environmental impacts </li></ul></ul>REQUIREMENTS
  7. 7.   _ How and Where? REQUIREMENTS <ul><li>For projects in high-income OECD Countries : </li></ul><ul><li>Comply with assessment processes, requirements and standards of local regulations </li></ul><ul><li>  </li></ul><ul><li>For projects in non-OECD, and those in OECD but not high-income countries : </li></ul><ul><ul><li>In addition to compliance with local regulations (or as required by local regulations), complete an Environmental and Social Impact Assessment (ESIA) </li></ul></ul><ul><ul><li>ESIA has to reflect IFC Performance Standards and IFC Environmental Health and Safety Guidelines (IE review and gap analysis) </li></ul></ul><ul><ul><li>Measures to be implemented to ensure compliance will be structured in an Environmental and Social Action Plan (ESAP) </li></ul></ul><ul><ul><li>The ESAP will be covenanted to the loan documentation </li></ul></ul>
  8. 8.   _ What ? REQUIREMENTS <ul><li>Environment & Social issues covered by the standards : </li></ul><ul><ul><li>Community: Health, Safety, Resettlement, Indigenous people, Cultural property… </li></ul></ul><ul><ul><li>Environment: Ecology, Biodiversity and Natural habitats, Efficient use of natural resources, Hydrology, Air, Water, Soil pollution… </li></ul></ul><ul><ul><li>Labour: Occupational Health & Safety, Child labour, Forced labour… </li></ul></ul><ul><li>  </li></ul><ul><li>Consultation / Disclosure </li></ul><ul><ul><li>At the project level: consultation of local communities ; for the most sensitive projects, establishment of a grievance mechanism </li></ul></ul><ul><ul><li>For each EPFI, reporting requirement : report publicly the EP implementation process and the number of projects reviewed at least annually </li></ul></ul><ul><li>  </li></ul><ul><li>Independent review and monitoring for the most sensitive projects </li></ul>
  9. 9. <ul><li>  _ Ten Principles </li></ul>TEN PRINCIPLES 1/ Review and categorisation 2/ Social and Environmental assessment 3/ Applicable Social & Environmental standards 4/ Action plan and management system 5/ Consultation and disclosure 6/ Grievance Mechanism 7/ Independent review 8/ Covenants 9/ Independent monitoring and reporting 10/ EPFI reporting
  10. 10. EQUATOR PRINCIPLES | P. <ul><li>Novethic </li></ul><ul><li>SGCIB GLFI/EME </li></ul>  _ Sources