Who and where are the Equator Banks? - IILJ

More documents

Recommendations

Info

= tÜ~í=ÇáÑÑÉêÉåÅÉ=Ü~îÉ=íÜÉ=bèì~íçê=mêáåÅáéäÉë=ã~ÇÉ=íç=íÜÉ= bèì~íçê=_~åâë\=EÅçåíáåìÉÇF= One area where there was uniform concern was social impact assessment, in spite of the fact that bilateral and multilateral lenders and export credit agencies have been carrying out such assessments for some time. Equator Banks and sponsors, in our view at least, have made some surprising choices when appointing external experts. For example, engineering firms (rather than environmental or legal experts or economists) appear to be charged with a wide range of tasks that are not wholly or partly within their field of expertise, qualification or knowledge. Equally worrying was the discovery that some Equator Banks appear to take the view that they had discharged their duty in respect of the Equator Principles by accepting the findings of sponsors’ consultants. In many cases, irrespective of the project categorisation, it may be prudent for the Equator Banks to engage independent consultants to review the reports provided by the sponsor or the sponsor’s technical consultants. fåíÉêå~ä=éêçÅÉëëÉë= There is a very real danger that information will be received by Equator Banks, but not acted upon or that the actions taken will be inadequate or unnecessarily delayed. As inaction may trigger civil or criminal liability for the Equator Banks, it is important that there should be a clear chain of communication within the bank discharging the Equator Principles function (the Environment Bank), and that a senior officer within the Environment Bank should be charged with supervising information assessment and communication within the Environment Bank itself and within the syndicate. This should be an ongoing process, rather than, as was suggested to us by a leading environmental consultant of an IFC practice, one where reports are left to fester over the year and then given superficial examination to comply with internal deadlines. Where a loan is syndicated, syndicate members will have to be confident that the Environment Bank (whether an Equator Bank or non-Equator Bank) nominated to ensure that the project is compliant with the Principles is sufficiently robust in its approach and application, in order to ensure that the reputation of each syndicate member is protected. j~âáåÖ=~=ÇáÑÑÉêÉåÅÉ=íç=íÜÉ=éêçàÉÅí= A problem with project assessment by Equator Banks which applies to all projects is that the lending banks may not become involved in projects early enough to influence the fundamentals of the project, laying the banks open to the charge that the Principles are just window-dressing or, in NGO-speak, carrying out ‘greenwash’. NO= bèì~íçê=mêáåÅáéäÉë=pìêîÉó=OMMR=Ó=pìãã~êó=oÉéçêíW=m~êí=f=Ó=qÜÉ=_~åâë= cêÉëÜÑáÉäÇë=_êìÅâÜ~ìë=aÉêáåÖÉêI=cÉÄêì~êó=OMMR=
= tÜ~í=ÇáÑÑÉêÉåÅÉ=Ü~îÉ=íÜÉ=bèì~íçê=mêáåÅáéäÉë=ã~ÇÉ=íç=íÜÉ= bèì~íçê=_~åâë\=EÅçåíáåìÉÇF= A particularly difficult assessment issue is raised by staged projects. Where the initial stages of a project, such as motorway projects, have not been the subject of review in accordance with the Principles but current or future stages are so assessed, complications arise. Equator Banks at the early stage of the development and implementation of the Principles have tended to be pragmatic in their approach to staged projects. At least as far as the future stages of staged projects are concerned, the difficulty of financing and syndication without some sort of framework for environmental and social review will mean that sponsors will, probably, have to adhere to the Principles, although doing so may well involve a more detailed assessment than cursory examination of the cumulative impact of the various stages of the project. Similar difficulties may arise with regard to projects that have been a long time in planning before the adoption of the Principles and cannot be unwound simply. It remains to be seen how this will be addressed in light of the Principles. During the course of our survey, it was made clear to us that a number of Equator Banks had decided not to participate in loan syndication of certain projects. This was not because the bank considered the environmental or social impacts of a project to be unacceptable, but simply because it felt that the project did not fit the risk profile of its existing loan portfolio or it did not have the resources or expertise to assess the project adequately in the time given by the sponsor or arranging bank to come to a conclusion. Other Equator Banks may feel that, because of their greater resources or expertise in projects of a certain type, an adequate assessment of the project could be made in the time available or that a project of a particular type can be accommodated within its loan portfolio. mêçàÉÅí=Å~íÉÖçêáë~íáçå= Some NGOs are concerned about ‘categorisation creep’ where the Equator Banks, under pressure from sponsors and loan arrangers, and given the scope for subjectivity in categorisation, may be tempted to place projects in lower risk categories to reduce costs associated with carrying out social and environmental impact assessment. Our own impression is that projects are not systematically downgraded in this way by Equator Banks. Many issues addressed by the Principles involve some element of judgement as to which equally qualified leading professional advisers may legitimately hold different opinions. That professionals acting for banks or sponsors may disagree does not necessarily involve a degree of artificial manipulation of categorisation of a project. NP= bèì~íçê=mêáåÅáéäÉë=pìêîÉó=OMMR=Ó=pìãã~êó=oÉéçêíW=m~êí=f=Ó=qÜÉ=_~åâë= cêÉëÜÑáÉäÇë=_êìÅâÜ~ìë=aÉêáåÖÉêI=cÉÄêì~êó=OMMR=
Page 1 and 2: qÜÉ=tçêäÇ=_~åâ=áë=åçí=
Page 3 and 4: = fåíêçÇìÅíáçå This is a
Page 5 and 6: = tÜç=~åÇ=ïÜÉêÉ=~êÉ=íÜ
Page 7 and 8: = tÜó=Ü~îÉ=íÜÉ=bèì~íçê
Page 13: = tÜ~í=ÇáÑÑÉêÉåÅÉ=Ü~î
Page 17 and 18: = tÜ~í=ÇáÑÑÉêÉåÅÉ=Ü~î
Page 19 and 20: = tÜ~í=Çç=kdlë=íÜáåâ=çÑ
Page 21 and 22: = iç~å=ÇçÅìãÉåí~íáçå=
Page 23 and 24: = iç~å=ÇçÅìãÉåí~íáçå=
Page 25 and 26: = tÜÉêÉ=åÉñí=Ñçê=íÜÉ=
Page 27 and 28: = oÉÅçããÉåÇ~íáçåë=Ñç
Page 29 and 30: = oÉÅçããÉåÇ~íáçåë=Ñç

Who and where are the Equator Banks? - IILJ

Create successful ePaper yourself

Delete template?

Save as template?