Precedent setting application of Equator Principles in High-Income OECD Countries?
While the application of
The Project Finance International’s
This is unusual – and suggests a bonanza for consultants who will have endless opportunities to assist with gap analysis, concordance assessment, monitoring, certifications, waivers and generate the shear endless reporting requirements which come with the scale and complexities of $20+ billion project involving a large group of banks and ECAs! 😉
But let’s get back to the topic...
While the Equator Principles “apply globally and to all industry sectors”, the associated requirements typically mean different things based on variables such as the location of the project to be financed under the EPs. Australia is an OECD High-Income country. Using the more recent Equator Principals III jargon, this means that Australia is a so called “
The Equator Principles website highlights that “Designated Countries are those countries deemed to have robust environmental and social governance, legislation systems and institutional capacity designed to protect their people and the natural environment”. The EPIII also notes that for “Projects located in Designated Countries, the Assessment process evaluates compliance with relevant host country laws, regulations and permits that pertain to environmental and social issues”. In the preceding paragraph, the EPIII highlights that for “Projects located in Non-Designated Countries, the Assessment process evaluates compliance with the then applicable IFC Performance Standards on Environmental and Social Sustainability (Performance Standards) and the World Bank Group Environmental, Health and Safety Guidelines (EHS Guidelines) (Exhibit III).”
Trying to get a feel for what this means in terms of the ESIA process of the Ichthys, I visited the
I started downloading a couple of the large documents on INPAX’s website. A word search of the Ichtys Gas Field Development Project’s Supplement to the Draft EIA did not find the terms “Equator Principles”, “IFC Performance Standards” or “World Bank”. The same search conducted for the “Ichthys Project Nearshore Environmental Monitoring Plan” was also not fruitful. And as it is now Friday afternoon here, I stopped playing this search game. Perhaps others can point me to specific environmental and social requirements/changes which were applied to the deal because of the application of the Equator Principles and IFC Performance Standards and inform me how/why they exceed Australian requirements.
Do you think that the application of the Equator Principles and IFC Performance Standards in projects located in High Income OECD Countries is a good/bad/precedence setting event? Will this change the purpose of the Equator Principles and IFC Performance Standards? And will it attract some of the
About the author: Mehrdad Nazari (MSc, MBA, LEAD Fellow) is a Senior ESIA & Sustainability Advisor, and Director of