Sustainability Conference in Seoul

Prizma’s Bill Kennedy was recently invited to participate at the 6th Sustainability Management Conference in Seoul, Korea.  The focus of the event, sponsored by the Korean Standards Association and the Ministry of Knowledge Economy, was an examination of the IFC Performance Standards, the Equator Principles and OECD’s Guidelines for Multinational Enterprises and the way in which companies and banks have been responding to them.  In Bill’s presentation on the Performance Standards and the Equator Principles he defined the role and responsibilities of the IFC and its clients in implementing the recently revised Standards. In doing so he paid particular attention to PS 6 on Biodiversity Conservation and Sustainable Natural Resource Management and PS 7 on Indigenous Peoples, both of which have been substantially strengthened in the recent revision. The new requirements for biodiversity offsets and Free and Prior Informed Consent (FPIC) prompted a number of questions from the participants. (See also previous blog entries that touch on FPIC here and here).

The presentation on the Equator Principles received a significant amount of attention as no Korean financial institution has yet adopted them. This may be changing, however, particularly through the increased scrutiny by environmental NGOs. For example, a June 2011 complaint by an Indian NGO to the IFC’s Compliance Advisor/Ombudsman (CAO) related to the Tata Mundra coal fired power project in the state of Gujarat in India identifies not only the IFC but also the Export‐Import Bank of Korea and the Korea Export Insurance Corporation, as co-financers.

The OECD was represented at the Conference by Ms. Marie-France Houde who reported on the 2011 update of its Guidelines for Multinational Enterprises. The main substantive results of the update include a new chapter devoted to human rights, another on due diligence and the supply chain, new provisions on Internet Freedom and Stakeholder Engagement as well as full alignment with provisions of the International Labor Organization (ILO)

Approximately 100 representatives of Korean businesses and financial institutions were in attendance which was held on November 9, 2011. Is this a sign that Korean financial institutions will start formally adopting and applying the IFC Performance Standards and Equator Principles?

We would like to extend our special thanks to Mr. Oh, Sun Tae with the Korean Standards Association’s Sustainability Management Team for the kind invitation and support.