IFC EHS Guidelines, Project Finance and Environmental ... B/IFC EHS Guidelines, Project... · ABRAHAM JACOB OPERATIONS MANAGER, ECB Presentation Outline 1. EHS Issues and Project
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ABRAHAM JACOB
OPERATIONS MANAGER, ECB
IFC EHS Guidelines, Project Finance and Environmental Impact Assessments
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
Presentation Outline
1. EHS Issues and Project Finance
2. Equator Principles
3. IFC’s Performance Standards
4. IFC’s EHS Guidelines & World Bank PPAH
5. Environmental & Social Impact Assessments
6. Experience and Lessons
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
1. Project Finance involves review of:
Revenue potential from a project
Terms of Repayment
Risks and Exposure to Risks
2. Need to consider EHS Issues in Project Finance:
Minimize adverse impacts to the Environment
Minimize adverse impacts to the Community
Reduce Risk to Project from interruptions & delays
Reduce Risk to Financers (loss of revenue, delays in repayments, reputation, etc)
EHS Issues and Project Finance
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
Equator Principles & Project Finance
1. A set of Voluntary Guidelines for assessing and managing Social and Environmental Risks to Project Financing
2. An Initiative from the Banking and Financing Sector. First Initiated in 2002 by various Banks and the World Bank’s International Financing Corporation (IFC)
3. First Released in 2003, subsequently revised in 2006 - Adopted by over 40 Financing Institutions during a Three Year Implementation Period. Applicable to projects with a total capital cost of USD 10 Million or More!
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
Equator Principles & Project Finance
4. A Financing Institution (Bank) which has adopted the principles is referred to as an Equator Principle Finance Institution
5. An EPFI will not finance a project, unless the Project Proponents demonstrate compliance to the agency’s procedures for implementing the principles
6. Financing Institutions that have adopted the EPs include - ABN AMRO, Bank of America, Citigroup Inc, Credit Suisse Group, HSBC Group, Royal Bank of Canada, Standard Chartered Bank, Westpac Banking Corporation - Over 40 Institutions Worldwide
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
Equator Principles & Project Finance
Projects in Non OECD countries to comply with IFC Performance Standards and EHS Guidelines
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
IFC Performance Standards
IFC Performance
Standard NoTitle Focus Issues
1 Social and
Environmental
Assessments and
Management
Systems
Social and Environmental Impacts.
Engagement of Affected Communities.
Social and Environmental Performance through
effective Management Systems.
2 Labour and
Working Conditions
Worker-Management Relationship.
Fair Treatment, Non Discrimination and Equal
Opportunity.
Compliance to Legal Requirements.
Prevent Child Labour and Forced Labour.
Safe and Healthy Work Conditions.
3 Pollution Prevention
and Abatement
Avoid/Minimize adverse impacts on human health
and environment
Reduction of emissions contributing to climate
change
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
IFC Performance Standards
IFC Performance
Standard NoTitle Focus Issues
4 Community, Health,
Safety and Security
Avoid/Minimize risk to and impacts on the health
and safety of the local community during the
project cycle from both routine and non routine
circumstances
Safeguarding of personnel and property
5 Land Acquisition
and Involuntary
Resettlement
Avoid or minimize involuntary resettlement
wherever feasible
Mitigate adverse social and economic impacts from
land acquisition or restrictions on affected persons’
use of land by: (i) providing compensation for loss
of assets at replacement cost and (ii) ensuring that
resettlement activities are implemented with
appropriate disclosure of information, consultation,
and the informed participation of those affected
Improve or at least restore the livelihoods and
standards of living of displaced persons
Improve living conditions among displaced persons
through provision of adequate housing with security
of tenure at resettlement sites
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
IFC Performance Standards
IFC Performance
Standard NoTitle Focus Issues
6 Biodiversity,
Conservation and
Sustainable Natural
Resource
Management
Protect and conserve biodiversity
Encourage sustainable management and use of
natural resources
7 Indigenous People Development process to consider needs of
indigenous people
Avoid adverse impacts on indigenous people
On-going relationship with indigenous people
Participation of indigenous people
Preserve culture, knowledge and practice of
indigenous people
8 Cultural Heritage Identify and protect cultural heritage sites from
project activities
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
IFC’s EHS Guidelines and WB-PPAH
1. IFC’s EHS Guidelines:
• Released in April of 2007
• Have replaced Part III of the World Bank’s Pollution Prevention Abatement Handbook (1998) (PPAH)
• Guidelines are a set of technical reference documents for Good International Industry Practice (GIIP)
• Provides performance levels and measures that are acceptable to IFC and achievable with reasonable cost
• Facilitates Project compliance to IFC Performance Standard No 3 (Pollution Prevention and Abatement)
• Is an EPFI/IFC Reference for Project Appraisal (Environmental & Social Review)
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
IFC’s EHS Guidelines and WB-PPAH
2. World Bank’s PPAH:
• Released in 1998
• Replaces the Environmental Guidelines of 1988
• Developed to achieve the World Bank’s Environmental Policies in Operational Policy 4.01 and 4.02
• Part I provides policies on pollution management
• Part II provides good practice recommendations
• Part III provides guidelines on preparation of World Bank projects (pollution control and reduction)
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
IFC’s EHS Guidelines and WB-PPAH
3. Changes/Updates (PPAHEHS Guidelines)
Current organization of EHS Guidelines contained in Part III of the PPAH and on IFC's website
New organization as part of the EHS Guidelines Update
General Env. Guidelines Monitoring Hazardous Materials Mgmt.
Life & Fire Safety Occupational Health & Safety
Polychlorinated Biphenyls(PCBs) Wastewater Reuse
Wildland Management
General EHS Guidelines One Guideline to cover cross-cutting environmental, occupational /
community health and safety
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
IFC’s EHS Guidelines and WB-PPAH
3. Changes/Updates (PPAHEHS Guidelines)
Current organization of EHS Guidelines contained in Part III of the PPAH and on IFC's website
New organization as part of the EHS Guidelines Update
Agribusiness / Food Production Guidelines
Dairy Industry Fruit & Vegetable Processing
Sugar Manufacturing Vegetable Oil Processing
Meat Processing & Rendering Breweries Fish Processing
Food & Beverage Processing Plantations
Pesticide Handling
Mammalian Livestock Production Poultry Production
Plantation Crop Production Annual Crop Production
Aquaculture Sugar Manufacturing Vegetable Oil Processing
Dairy Processing Food and Beverage Processing
Meat Processing Poultry Processing Fish Processing
Breweries
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
IFC’s EHS Guidelines and WB-PPAH
3. Changes/Updates (PPAHEHS Guidelines)
Current organization of EHS Guidelines contained in Part III of the PPAH and on IFC's website
New organization as part of the EHS Guidelines Update
Chemicals Manufacturing Guidelines
Chlor-Alkali Plants Mixed Fertilizer Plants
Pesticides Formulation Pesticides Manufacturing
Petrochemicals Manufacturing Petroleum Refining Pharmaceutical Manufacturing
Phosphate Fertilizer Plants Nitrogenous Fertilizer Plants
Large Volume Petroleum-based Organic Chemicals Manufacturing
Petroleum-based Polymers Manufacturing Nitrogenous Fertilizer Production
Phosphate Fertilizer Production Pesticides Manufacturing, Formulation,
and Packaging
Pharmaceuticals and Biotechnology Manufacturing
Oleochemicals Manufacturing Natural Gas Processing Petroleum Refining
Coal Processing Large Volume Inorganic Compounds
Manufacturing and Coal Tar Distillation
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
IFC’s EHS Guidelines and WB-PPAH
3. Changes/Updates (PPAHEHS Guidelines)
Current organization of EHS Guidelines contained in Part III of the PPAH and on IFC's website
New organization as part of the EHS Guidelines Update
Oil & Gas Guidelines
Oil & Gas Dev (Onshore) Offshore Oil & Gas
Onshore O&G Development Offshore O&G Development
Liquefied Natural Gas (LNG) Facilities
Power Guidelines
Thermal Power for New Plants Thermal Power Rehabilitation Electric Power Transmission
Geothermal Projects Wind Energy Conversion
Electric Power Transmission and Distribution Geothermal Energy
Wind Energy Thermal Power
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
IFC’s EHS Guidelines and WB-PPAH
4. Comparison of Standards (Thermal Power)
IFC/WB/PPAH IFC/EHS Guidelines
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
IFC’s EHS Guidelines and WB-PPAH
5. Environmental and Social Impact Assessment
World Bank O.P 4.01 Annex C
• Projects are classified as Category A (Significant Impacts, B or C (not significant impacts)
• Minimum Content:
Executive Summary
Policy Legal & Administrative Framework
Project Description (includes Justification)
Baseline Assessment
Impact Assessment
Analysis of Alternatives
Environmental Management Plan
Appendices (EIA-Assessors, Consultations, etc)
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
IFC’s EHS Guidelines and WB-PPAH
6. Environmental and Social Impact Assessment
Equator Principles(Social and Environmental Assessment – SEA)
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
Lessons from our Experience
7. Lessons from our experience with the ESIA (SEA) process based on Equator Principles, IFC Standards and EHS Guidelines
• A comprehensive scoping study to be carried out prior to the formal SEA (to ensure assessment identifies and evaluates the main environmental and social issues)
• SEA process will be effective if it is part of the overall Project Planning Process
• Stakeholders to be identified and consultations to be carried out early in the project planning (e.g. Local communities who maybe relocated, Neighboring industries that could be affected by project impacts such as from discharge of cooling water, Environmental regulators, etc)
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
Lessons from our Experience
7. Lessons from our experience with the ESIA (SEA) process based on Equator Principles, IFC Standards and EHS Guidelines - continued
• SEA to document the Project evaluation of alternatives and justify project specifications (includes process and technology, emission/discharge specifications, pollution controls, site selection)
• Any modeling studies to be in line with IFC EHS Guidelines (e.g. air, marine discharge). Modeling to justify to the satisfaction of the lenders the emissions/discharges specifications
• Mitigation and monitoring measures to be prescriptive, and precise to the extent possible, and derived from local regulatory requirements, IFC guidelines, assessment findings.
ABRAHAM JACOB
OPERATIONS MANAGER, ECB
Lessons from our Experience
7. Lessons from our experience with the ESIA (SEA) process based on Equator Principles, IFC Standards and EHS Guidelines - continued
• SEA report structure to be agreed with the Lenders/ Financers and Regulators (regulators in the middle east follow the OP 4.01 Annex C guidelines and are not familiar with Exhibit II for Category A/B assessments in the Equator Principles)
• SEA to classify projects based on Regulator’s and Lender’s classification
• Public disclosure to be in line with Lender’s policies.
• SEA to provide detailed recommendations for Social and Environmental Management System (includes grievance mechanism) & Action Plan for Mitigations
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