Description
The Equator Principles (EPs) are a voluntary set of standards for determining, assessing, and managing social and environmental risk in project finance, in which the lender looks primarily to the revenues generated by a single project both as the source of repayment and as security for the exposure.
A paper on “Equator Principles”
“Equator Principles”
? ABOUT THE EQUATOR PRINCIPLES The Equator Principles (EPs) are a credit risk management framework for determining, assessing and managing environmental and social risk in project finance
transactions. Project finance is often used to fund the development and construction of major infrastructure and industrial projects. The EPs are adopted voluntarily by financial institutions and are applied where total project capital costs exceed US$10 million. The EPs are primarily intended to provide a minimum standard for due diligence to support responsible risk decision-making. The EPs, based on the International Finance Corporation Performance Standards on social and environmental sustainability and on the World Bank Group Environmental, Health, and Safety Guidelines (EHS Guidelines), are intended to serve as a common baseline and framework for the implementation by each adopting institution of its own internal social and environmental policies, procedures and standards related to its project financing activities. Equator Principles Financial Institutions (EPFIs) commit to not providing loans to projects where the borrower will not or is unable to comply with their respective social and environmental policies and procedures that implement the EPs. In addition, while the EPs are not intended to be applied retroactively, EPFIs will apply them to all project financings covering expansion or upgrade of an existing facility where changes in scale or scope may create significant environmental and/or social impacts, or significantly change the nature or degree of an existing impact.
The EPs have become the industry standard for environmental and social risk management and financial institutions, clients/project sponsors, other financial institutions, and even some industry bodies; refer to the EPs as good practice. Currently 73 adopting financial institutions (71 EPFIs and 2 Associates) in 27 countries have officially adopted the EPs, covering over 70 percent of international project finance debt in emerging markets. The EPs has greatly increased attention and focus on social/community standards and responsibility, including robust standards for indigenous peoples, labor standards, and consultation with locally affected communities within the project finance market. They have also promoted convergence around common environmental and social standards. Multilateral development banks, including the European Bank for Reconstruction & Development, and export credit agencies through the OECD Common Approaches are increasingly drawing on the same standards as the EPs. The EPs have also helped spur the development of other responsible environmental and social management practices in the financial sector and banking industry (for example, Carbon Principles in the US, Climate Principles worldwide) and have provided a platform for engagement with a broad range of interested stakeholders, including NGOs, clients and industry bodies. ? SCOPE The Principles apply to all new project financings globally with total project capital costs of US$10 million or more, and across all industry sectors. In addition, while the Principles are not intended to be applied retroactively, we will apply them to all project financings covering expansion or upgrade of an existing facility where changes in scale or scope may create significant environmental and/or social impacts, or significantly change the nature or degree of an existing impact. The Principles also extend to project finance advisory activities. In these cases, EPFIs commit to make the client aware of the content, application and benefits of applying the
Principles to the anticipated project, and request that the client communicate to the EPFI its intention to adhere to the requirements of the Principles when subsequently seeking financing. ? STATEMENT OF PRINCIPLES EPFIs will only provide loans to projects that conform to Principles 1-9 below: ? Principle 1: Review and Categorization
When a project is proposed for financing, the EPFI will, as part of its internal social and environmental review and due diligence, categories such project based on the magnitude of its potential impacts and risks in accordance with the environmental and social screening criteria of the International Finance Corporation (IFC) (Exhibit I). ? Principle 2: Social and Environmental Assessment
For each project assessed as being either Category A or Category B, the borrower has conducted a Social and Environmental Assessment (“Assessment”) process to address, as appropriate and to the EPFI’s satisfaction, the relevant social and environmental impacts and risks of the proposed project (which may include, if relevant, the illustrative list of issues as found in Exhibit II). The Assessment should also propose mitigation and management measures relevant and appropriate to the nature and scale of the proposed project. ? Principle 3: Applicable Social and Environmental Standards
For projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, the Assessment will refer to the then applicable IFC Performance Standards (Exhibit III) and the then applicable Industry Specific EHS Guidelines (“EHS Guidelines”) (Exhibit IV).The Assessment will establish to a participating EPFI’s satisfaction the project's overall compliance with, or justified deviation from, the respective Performance Standards and EHS Guidelines.
The regulatory, permitting and public comment process requirements in High-Income OECD Countries, as defined by the World Bank Development Indicators Database, generally meet or exceed the requirements of the IFC Performance Standards (Exhibit III) and EHS Guidelines (Exhibit IV). Consequently, to avoid duplication and streamline EPFI's review of these projects, successful completion of an Assessment (or its equivalent) process under and in compliance with local or national law in High-Income OECD Countries is considered to be an acceptable substitute for the IFC Performance Standards, EHS Guidelines and further requirements as detailed in Principles 4, 5 and 6 below. For these projects, however, the EPFI still categorizes and reviews the project in accordance with Principles 1 and 2 above. The Assessment process in both cases should address compliance with relevant host country laws, regulations and permits that pertain to social and environmental matters. ? Principle 4: Action Plan and Management System
For all Category A and Category B projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, the borrower has prepared an Action Plan (AP) which addresses the relevant findings, and draws on the conclusions of the Assessment. The AP will describe and priorities the actions needed to implement mitigation measures, corrective actions and monitoring measures necessary to manage the impacts and risks identified in the Assessment. Borrowers will build on, maintain or establish a Social and Environmental Management System that addresses the management of these impacts, risks, and corrective actions required to comply with applicable host country social and environmental laws and regulations, and requirements of the applicable Performance Standards and EHS Guidelines, as defined in the AP. For projects located in High-Income OECD countries, EPFIs may require development of an Action Plan based on relevant permitting and regulatory requirements, and as defined by host-country law. ? Principle 5: Consultation and Disclosure
For all Category A and, as appropriate, Category B projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, the government, borrower or third party expert has consulted with project affected communities in a structured and culturally appropriate manner. For projects with significant adverse impacts on affected communities, the process will ensure their free, prior and informed consultation and facilitate their informed participation as a means to establish, to the satisfaction of the EPFI, whether a project has adequately incorporated affected communities’ concerns. In order to accomplish this, the Assessment documentation and AP, or non-technical summaries thereof, will be made available to the public by the borrower for a reasonable minimum period in the relevant local language and in a culturally appropriate manner. The borrower will take account of and document the process and results of the consultation, including any actions agreed resulting from the consultation. For projects with adverse social or environmental impacts, disclosure should occur early in the Assessment process and in any event before the project construction commences, and on an ongoing basis. ? Principle 6: Grievance Mechanism
For all Category A and, as appropriate, Category B projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, to ensure that consultation, disclosure and community engagement continues throughout construction and operation of the project, the borrower will, scaled to the risks and adverse impacts of the project, establish a grievance mechanism as part of the management system. This will allow the borrower to receive and facilitate resolution of concerns and grievances about the project’s social and environmental performance raised by individuals or groups from among project-affected communities. The borrower will inform the affected communities about the mechanism in the course of its community engagement process and ensure that the mechanism addresses concerns promptly and transparently, in a culturally appropriate manner, and is readily accessible to all segments of the affected communities.
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Principle 7: Independent Review
For all Category A projects and, as appropriate, for Category B projects, an independent social or environmental expert not directly associated with the borrower will review the Assessment, AP and consultation process documentation in order to assist EPFI's due diligence, and assess Equator Principles compliance. ? Principle 8: Covenants
An important strength of the Principles is the incorporation of covenants linked to compliance. For Category A and B projects, the borrower will covenant in financing documentation: a) To comply with all relevant host country social and environmental laws, regulations and permits in all material respects; b) To comply with the AP (where applicable) during the construction and operation of the project in all material respects; c) To provide periodic reports in a format agreed with EPFIs (with the frequency of these reports proportionate to the severity of impacts, or as required by law, but not less than annually), prepared by in-house staff or third party experts, that (i) document compliance with the AP (where applicable), and ii) provide representation of compliance with relevant local, state and host country social and environmental laws, regulations and permits; and d) To decommission the facilities, where applicable and appropriate, in accordance with an agreed decommissioning plan. Where a borrower is not in compliance with its social and environmental covenants, EPFIs will work with the borrower to bring it back into compliance to the extent feasible, and if the borrower fails to re-establish compliance within an agreed grace period, EPFIs reserve the right to exercise remedies, as they consider appropriate.
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Principle 9: Independent Monitoring and Reporting
To ensure ongoing monitoring and reporting over the life of the loan, EPFIs will, for all Categories A projects, and as appropriate, for Category B projects, require appointment of an independent environmental and/or social expert, or require that the borrower retain qualified and experienced external experts to verify its monitoring information which would be shared with EPFIs. ? Principle 10: EPFI Reporting
Each EPFI adopting the Equator Principles commits to report publicly at least annually about its Equator Principles implementation processes and experience, taking into account appropriate confidentiality considerations. ? DISCLAIMER The adopting EPFIs view these Principles as a financial industry benchmark for developing individual, internal social and environmental policies, procedures and practices. As with all internal policies, these Principles do not create any rights in, or liability to, any person, public or private. Institutions are adopting and implementing these Principles voluntarily and independently, without reliance on or recourse to the IFC or the World Bank. ? EXHIBIT I: CATEGORISATION OF PROJECTS As part of their review of a project’s expected social and environmental impacts, EPFIs use a system of social and environmental categorization, based on the IFC’s environmental and social screening criteria, to reflect the magnitude of impacts understood as a result of assessment. These categories are:
Category A – Projects with potential significant adverse social or environmental impacts that is diverse, irreversible or unprecedented; 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; and Category C – Projects with minimal or no social or environmental impacts. ? EXHIBIT II: ILLUSTRATIVE LIST OF POTENTIAL SOCIAL AND ENVIRONMENTAL ISSUES TO BE ADDRESSED IN THE SOCIAL AND ENVIRONMENTAL ASSESSMENT DOCUMENTATION In the context of the business of the project, the Assessment documentation will address, where applicable, the following issues: a) Assessment of the baseline social and environmental conditions b) Consideration of feasible environmentally and socially preferable alternatives c) Requirements under host country laws and regulations, applicable international treaties and agreements d) Protection of human rights and community health, safety and security (including risks, impacts and management of project’s use of security personnel) e) Protection of cultural property and heritage f) Protection and conservation of biodiversity, including endangered species and sensitive ecosystems in modified, natural and critical habitats, and identification of legally protected areas. g) Sustainable management and use of renewable natural resources (including sustainable resource management through appropriate independent certification systems) h) Use and management of dangerous substances
i) Major hazards assessment and management j) Labor issues (including the four core labor standards), and occupational health and safety k) Fire prevention and life safety l) socio-economic impacts m) Land acquisition and involuntary resettlement n) Impacts on affected communities, and disadvantaged or vulnerable groups o) Impacts on indigenous peoples, and their unique cultural systems and values p) Cumulative impacts of existing projects, the proposed project, and anticipated future projects. q) Consultation and participation of affected parties in the design, review and implementation of the project r) Efficient production, delivery and use of energy s) Pollution prevention and waste minimization, pollution controls (liquid effluents and air emissions) and solid and chemical waste management Note: The above list is for illustrative purposes only. The Social and Environmental Assessment process of each project may or may not identify all issues noted above, or be relevant to every project. ? EXHIBIT III: IFC PERFORMANCE STANDARDS ON
ENVIRONMENTAL AND SOCIAL SUSTAINABILITY As of January 1, 2012, the following lists of IFC Performance Standards were applicable: Performance Standard 1 - Assessment and Management of Social and Environmental Risks and Impacts.
Performance Standard 2 - Labor and Working Conditions Performance Standard 3 - Resource Efficiency and Pollution Prevention Performance Standard 4 - Community Health, Safety and Security Performance Standard 5 - Land Acquisition and Involuntary Resettlement Performance Standard 6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources Performance Standard 7 - Indigenous Peoples Performance Standard 8 - Cultural Heritage The IFC has developed a set of Guidance Notes to accompany each Performance Standard. While not formally adopting the Guidance Notes, EPFIs or borrowers may use the Guidance Notes as useful points of reference when seeking further guidance on or interpretation of the Performance Standards. The IFC Performance Standards, Guidance Notes and Industry Sector EHS Guidelines can be found at
http://www.ifc.org/ifcext/policyreview.nsf/Content/2012-Edition. Important Note: The EP Association Steering Committee has provided guidance on how members, clients and stakeholders can transition smoothly and consistently from the 2006 to the 2012 IFC Performance Standards. Please refer tohttp://www.equator-principles.com/index.php/allep-associationnews/254-revised-ps for this guidance. ? EXHIBIT IV: INDUSTRY-SPECIFIC ENVIRONMENTAL, HEALTH AND SAFETY (EHS) GUIDELINES EPFIs will utilize the appropriate environmental, health and safety (EHS) guidelines used by the IFC which are now in place, and as may be amended from time-to-time. The IFC is using two complementary sets of EHS Guidelines available at the IFC website
(http://www.ifc.org/ifcext/sustainability.nsf/Content/EHSGuidelines). These sets consist of all the environmental guidelines contained in Part III of the World Bank’s Pollution Prevention and Abatement Handbook (PPAH) which went into official use on July 1, 1998 and a series of environmental, health and safety guidelines published on the IFC website between 1991 and 2003. Ultimately new guidelines, incorporating the concepts of cleaner production and environmental management systems, will be written to replace this series of industry sector, PPAH and IFC guidelines. Where no sector specific guideline exists for a particular project then the PPAH’s General Environmental Guidelines and the IFC Occupational Health and Safety Guidelines (2003) are applied, with modifications as necessary to suit the project
doc_505544061.docx
The Equator Principles (EPs) are a voluntary set of standards for determining, assessing, and managing social and environmental risk in project finance, in which the lender looks primarily to the revenues generated by a single project both as the source of repayment and as security for the exposure.
A paper on “Equator Principles”
“Equator Principles”
? ABOUT THE EQUATOR PRINCIPLES The Equator Principles (EPs) are a credit risk management framework for determining, assessing and managing environmental and social risk in project finance
transactions. Project finance is often used to fund the development and construction of major infrastructure and industrial projects. The EPs are adopted voluntarily by financial institutions and are applied where total project capital costs exceed US$10 million. The EPs are primarily intended to provide a minimum standard for due diligence to support responsible risk decision-making. The EPs, based on the International Finance Corporation Performance Standards on social and environmental sustainability and on the World Bank Group Environmental, Health, and Safety Guidelines (EHS Guidelines), are intended to serve as a common baseline and framework for the implementation by each adopting institution of its own internal social and environmental policies, procedures and standards related to its project financing activities. Equator Principles Financial Institutions (EPFIs) commit to not providing loans to projects where the borrower will not or is unable to comply with their respective social and environmental policies and procedures that implement the EPs. In addition, while the EPs are not intended to be applied retroactively, EPFIs will apply them to all project financings covering expansion or upgrade of an existing facility where changes in scale or scope may create significant environmental and/or social impacts, or significantly change the nature or degree of an existing impact.
The EPs have become the industry standard for environmental and social risk management and financial institutions, clients/project sponsors, other financial institutions, and even some industry bodies; refer to the EPs as good practice. Currently 73 adopting financial institutions (71 EPFIs and 2 Associates) in 27 countries have officially adopted the EPs, covering over 70 percent of international project finance debt in emerging markets. The EPs has greatly increased attention and focus on social/community standards and responsibility, including robust standards for indigenous peoples, labor standards, and consultation with locally affected communities within the project finance market. They have also promoted convergence around common environmental and social standards. Multilateral development banks, including the European Bank for Reconstruction & Development, and export credit agencies through the OECD Common Approaches are increasingly drawing on the same standards as the EPs. The EPs have also helped spur the development of other responsible environmental and social management practices in the financial sector and banking industry (for example, Carbon Principles in the US, Climate Principles worldwide) and have provided a platform for engagement with a broad range of interested stakeholders, including NGOs, clients and industry bodies. ? SCOPE The Principles apply to all new project financings globally with total project capital costs of US$10 million or more, and across all industry sectors. In addition, while the Principles are not intended to be applied retroactively, we will apply them to all project financings covering expansion or upgrade of an existing facility where changes in scale or scope may create significant environmental and/or social impacts, or significantly change the nature or degree of an existing impact. The Principles also extend to project finance advisory activities. In these cases, EPFIs commit to make the client aware of the content, application and benefits of applying the
Principles to the anticipated project, and request that the client communicate to the EPFI its intention to adhere to the requirements of the Principles when subsequently seeking financing. ? STATEMENT OF PRINCIPLES EPFIs will only provide loans to projects that conform to Principles 1-9 below: ? Principle 1: Review and Categorization
When a project is proposed for financing, the EPFI will, as part of its internal social and environmental review and due diligence, categories such project based on the magnitude of its potential impacts and risks in accordance with the environmental and social screening criteria of the International Finance Corporation (IFC) (Exhibit I). ? Principle 2: Social and Environmental Assessment
For each project assessed as being either Category A or Category B, the borrower has conducted a Social and Environmental Assessment (“Assessment”) process to address, as appropriate and to the EPFI’s satisfaction, the relevant social and environmental impacts and risks of the proposed project (which may include, if relevant, the illustrative list of issues as found in Exhibit II). The Assessment should also propose mitigation and management measures relevant and appropriate to the nature and scale of the proposed project. ? Principle 3: Applicable Social and Environmental Standards
For projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, the Assessment will refer to the then applicable IFC Performance Standards (Exhibit III) and the then applicable Industry Specific EHS Guidelines (“EHS Guidelines”) (Exhibit IV).The Assessment will establish to a participating EPFI’s satisfaction the project's overall compliance with, or justified deviation from, the respective Performance Standards and EHS Guidelines.
The regulatory, permitting and public comment process requirements in High-Income OECD Countries, as defined by the World Bank Development Indicators Database, generally meet or exceed the requirements of the IFC Performance Standards (Exhibit III) and EHS Guidelines (Exhibit IV). Consequently, to avoid duplication and streamline EPFI's review of these projects, successful completion of an Assessment (or its equivalent) process under and in compliance with local or national law in High-Income OECD Countries is considered to be an acceptable substitute for the IFC Performance Standards, EHS Guidelines and further requirements as detailed in Principles 4, 5 and 6 below. For these projects, however, the EPFI still categorizes and reviews the project in accordance with Principles 1 and 2 above. The Assessment process in both cases should address compliance with relevant host country laws, regulations and permits that pertain to social and environmental matters. ? Principle 4: Action Plan and Management System
For all Category A and Category B projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, the borrower has prepared an Action Plan (AP) which addresses the relevant findings, and draws on the conclusions of the Assessment. The AP will describe and priorities the actions needed to implement mitigation measures, corrective actions and monitoring measures necessary to manage the impacts and risks identified in the Assessment. Borrowers will build on, maintain or establish a Social and Environmental Management System that addresses the management of these impacts, risks, and corrective actions required to comply with applicable host country social and environmental laws and regulations, and requirements of the applicable Performance Standards and EHS Guidelines, as defined in the AP. For projects located in High-Income OECD countries, EPFIs may require development of an Action Plan based on relevant permitting and regulatory requirements, and as defined by host-country law. ? Principle 5: Consultation and Disclosure
For all Category A and, as appropriate, Category B projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, the government, borrower or third party expert has consulted with project affected communities in a structured and culturally appropriate manner. For projects with significant adverse impacts on affected communities, the process will ensure their free, prior and informed consultation and facilitate their informed participation as a means to establish, to the satisfaction of the EPFI, whether a project has adequately incorporated affected communities’ concerns. In order to accomplish this, the Assessment documentation and AP, or non-technical summaries thereof, will be made available to the public by the borrower for a reasonable minimum period in the relevant local language and in a culturally appropriate manner. The borrower will take account of and document the process and results of the consultation, including any actions agreed resulting from the consultation. For projects with adverse social or environmental impacts, disclosure should occur early in the Assessment process and in any event before the project construction commences, and on an ongoing basis. ? Principle 6: Grievance Mechanism
For all Category A and, as appropriate, Category B projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, to ensure that consultation, disclosure and community engagement continues throughout construction and operation of the project, the borrower will, scaled to the risks and adverse impacts of the project, establish a grievance mechanism as part of the management system. This will allow the borrower to receive and facilitate resolution of concerns and grievances about the project’s social and environmental performance raised by individuals or groups from among project-affected communities. The borrower will inform the affected communities about the mechanism in the course of its community engagement process and ensure that the mechanism addresses concerns promptly and transparently, in a culturally appropriate manner, and is readily accessible to all segments of the affected communities.
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Principle 7: Independent Review
For all Category A projects and, as appropriate, for Category B projects, an independent social or environmental expert not directly associated with the borrower will review the Assessment, AP and consultation process documentation in order to assist EPFI's due diligence, and assess Equator Principles compliance. ? Principle 8: Covenants
An important strength of the Principles is the incorporation of covenants linked to compliance. For Category A and B projects, the borrower will covenant in financing documentation: a) To comply with all relevant host country social and environmental laws, regulations and permits in all material respects; b) To comply with the AP (where applicable) during the construction and operation of the project in all material respects; c) To provide periodic reports in a format agreed with EPFIs (with the frequency of these reports proportionate to the severity of impacts, or as required by law, but not less than annually), prepared by in-house staff or third party experts, that (i) document compliance with the AP (where applicable), and ii) provide representation of compliance with relevant local, state and host country social and environmental laws, regulations and permits; and d) To decommission the facilities, where applicable and appropriate, in accordance with an agreed decommissioning plan. Where a borrower is not in compliance with its social and environmental covenants, EPFIs will work with the borrower to bring it back into compliance to the extent feasible, and if the borrower fails to re-establish compliance within an agreed grace period, EPFIs reserve the right to exercise remedies, as they consider appropriate.
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Principle 9: Independent Monitoring and Reporting
To ensure ongoing monitoring and reporting over the life of the loan, EPFIs will, for all Categories A projects, and as appropriate, for Category B projects, require appointment of an independent environmental and/or social expert, or require that the borrower retain qualified and experienced external experts to verify its monitoring information which would be shared with EPFIs. ? Principle 10: EPFI Reporting
Each EPFI adopting the Equator Principles commits to report publicly at least annually about its Equator Principles implementation processes and experience, taking into account appropriate confidentiality considerations. ? DISCLAIMER The adopting EPFIs view these Principles as a financial industry benchmark for developing individual, internal social and environmental policies, procedures and practices. As with all internal policies, these Principles do not create any rights in, or liability to, any person, public or private. Institutions are adopting and implementing these Principles voluntarily and independently, without reliance on or recourse to the IFC or the World Bank. ? EXHIBIT I: CATEGORISATION OF PROJECTS As part of their review of a project’s expected social and environmental impacts, EPFIs use a system of social and environmental categorization, based on the IFC’s environmental and social screening criteria, to reflect the magnitude of impacts understood as a result of assessment. These categories are:
Category A – Projects with potential significant adverse social or environmental impacts that is diverse, irreversible or unprecedented; 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; and Category C – Projects with minimal or no social or environmental impacts. ? EXHIBIT II: ILLUSTRATIVE LIST OF POTENTIAL SOCIAL AND ENVIRONMENTAL ISSUES TO BE ADDRESSED IN THE SOCIAL AND ENVIRONMENTAL ASSESSMENT DOCUMENTATION In the context of the business of the project, the Assessment documentation will address, where applicable, the following issues: a) Assessment of the baseline social and environmental conditions b) Consideration of feasible environmentally and socially preferable alternatives c) Requirements under host country laws and regulations, applicable international treaties and agreements d) Protection of human rights and community health, safety and security (including risks, impacts and management of project’s use of security personnel) e) Protection of cultural property and heritage f) Protection and conservation of biodiversity, including endangered species and sensitive ecosystems in modified, natural and critical habitats, and identification of legally protected areas. g) Sustainable management and use of renewable natural resources (including sustainable resource management through appropriate independent certification systems) h) Use and management of dangerous substances
i) Major hazards assessment and management j) Labor issues (including the four core labor standards), and occupational health and safety k) Fire prevention and life safety l) socio-economic impacts m) Land acquisition and involuntary resettlement n) Impacts on affected communities, and disadvantaged or vulnerable groups o) Impacts on indigenous peoples, and their unique cultural systems and values p) Cumulative impacts of existing projects, the proposed project, and anticipated future projects. q) Consultation and participation of affected parties in the design, review and implementation of the project r) Efficient production, delivery and use of energy s) Pollution prevention and waste minimization, pollution controls (liquid effluents and air emissions) and solid and chemical waste management Note: The above list is for illustrative purposes only. The Social and Environmental Assessment process of each project may or may not identify all issues noted above, or be relevant to every project. ? EXHIBIT III: IFC PERFORMANCE STANDARDS ON
ENVIRONMENTAL AND SOCIAL SUSTAINABILITY As of January 1, 2012, the following lists of IFC Performance Standards were applicable: Performance Standard 1 - Assessment and Management of Social and Environmental Risks and Impacts.
Performance Standard 2 - Labor and Working Conditions Performance Standard 3 - Resource Efficiency and Pollution Prevention Performance Standard 4 - Community Health, Safety and Security Performance Standard 5 - Land Acquisition and Involuntary Resettlement Performance Standard 6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources Performance Standard 7 - Indigenous Peoples Performance Standard 8 - Cultural Heritage The IFC has developed a set of Guidance Notes to accompany each Performance Standard. While not formally adopting the Guidance Notes, EPFIs or borrowers may use the Guidance Notes as useful points of reference when seeking further guidance on or interpretation of the Performance Standards. The IFC Performance Standards, Guidance Notes and Industry Sector EHS Guidelines can be found at
http://www.ifc.org/ifcext/policyreview.nsf/Content/2012-Edition. Important Note: The EP Association Steering Committee has provided guidance on how members, clients and stakeholders can transition smoothly and consistently from the 2006 to the 2012 IFC Performance Standards. Please refer tohttp://www.equator-principles.com/index.php/allep-associationnews/254-revised-ps for this guidance. ? EXHIBIT IV: INDUSTRY-SPECIFIC ENVIRONMENTAL, HEALTH AND SAFETY (EHS) GUIDELINES EPFIs will utilize the appropriate environmental, health and safety (EHS) guidelines used by the IFC which are now in place, and as may be amended from time-to-time. The IFC is using two complementary sets of EHS Guidelines available at the IFC website
(http://www.ifc.org/ifcext/sustainability.nsf/Content/EHSGuidelines). These sets consist of all the environmental guidelines contained in Part III of the World Bank’s Pollution Prevention and Abatement Handbook (PPAH) which went into official use on July 1, 1998 and a series of environmental, health and safety guidelines published on the IFC website between 1991 and 2003. Ultimately new guidelines, incorporating the concepts of cleaner production and environmental management systems, will be written to replace this series of industry sector, PPAH and IFC guidelines. Where no sector specific guideline exists for a particular project then the PPAH’s General Environmental Guidelines and the IFC Occupational Health and Safety Guidelines (2003) are applied, with modifications as necessary to suit the project
doc_505544061.docx