OHS and Environmental Incident Investigations: Best Practice in Equator Principles Compliance

Industries like mining and energy know all too well that a health and safety disaster can cost shareholders millions and create untold legal and reputational liabilities. What may not be so well known is that disasters are often averted, not through prescient foresight, but by acting on the warning signs that precede most major health and safety incidents. Those warning signs are identified through one of the most potent tools in the occupational health and safety (OHS) arsenal: incident investigation.

This article discusses incident investigation in the context of mining companies operating in emerging markets, possibly seeking to comply with the requirements of the Equator Principles and IFC Performance Standards. To this end, we introduce a new process for investigation pioneered by OHS expert Michael Tooma in Australia, called the Positive Incident Investigation.

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Grievance Mechanisms and the Equator Principles

Principle 6 of the Equator Principles (EP) requires that, for all Category A and B projects, the borrower must create a “grievance mechanism” as part of the Environmental and Social Management System (ESMS). A grievance mechanism must be designed to receive and facilitate resolution of concerns about the project’s environmental and social performance.

This article will discuss the Grievance Mechanism requirement in the EP, including as set out in the IFC Performance Standards on Environmental and Social Sustainability (IFC Performance Standards).

Making the Sustainability Case: The Convergence of Independent Reviews and Legal Risk Management in Equator Principles Implementation

The third iteration of the Equator Principles (EP) framework will be released in the first quarter of 2013. The revised framework will, like its predecessors, have substantial implications for billions of dollars in international project financings. It will also reinforce the importance of environmental and social reviews in addressing legal and reputational risks facing Equator Principles Financial Institutions (EPFI). This article highlights the critical role legal counsel can (and should) play in EP implementation - particularly in the independent review process required by Principle 7.

Independent Review Requirements in Equator Principles III

The requirement for "independent reviews" has been strengthened in the last draft of the EP III.  This means that Equator Principle Financial Institutions (EPFI) will need to be more cognizant of how they conduct such reviews and who they choose to do them.  The final draft of the EP III is set to be released in the first quarter of 2013.

Seminar Invitation: Equator Principles III - The New Benchmark for Sustainable Finance in Emerging Markets

Equator Principles III (EP III) is set to be released in the first Quarter of 2013. EP III is an agreement amongst global financial institutions - including major financial institutions in Australia and Asia - to apply environmental and social standards to project financing. To RSVP CLICK HERE

Based on the practices of the International Finance Corporation of the World Bank, these principles set the industry gold standard for environmental and social sustainability, particularly in emerging markets like Indonesia, Myanmar, Papua New Guinea and the Peoples' Republic of China.

Our seminar examines the new EP III and its implications for companies looking for financing and for their financiers. How can you comply more efficiently? What is expected and how do they affect you?

This seminar features a panel that includes a representative from the Export Finance and Insurance Corporation (EFIC) and the lead author of the first comprehensive book on the IFC Performance Standards. The session will provide an essential guide on these issues, with a practical orientation for bankers and those seeking access to capital.

Venue: Norton Rose Australia Level 18 Grosvenor Place 225 George Street Sydney

Information: 5:15pm registration 5:30pm seminar begins 7:00pm seminar ends with networking drinks to follow
Norton Rose hosts: Tessa Hoser, Partner Chris Redden, Partner Michael Torrance, Senior Associate

Enquiries: Lynette Shelley, 02 9330 8935

To RSVP CLICK HERE

Legal practitioners can claim 1.5 CPD points in the Substantive Law category for attendance

Understanding "Consent" in Free Prior and Informed Consent (FPIC) of Indigenous Peoples - Implications for the IFC Performance Standards and Equator Principles

This article considers the meaning of "consent" in Free Prior and Informed Consent (FPIC) applied to an Equator Principles governed project where the IFC Performance Standards on Environmental and Social Sustainability (the Performance Standards) apply.  The contents are derived from a chapter by Pierre-Christian Labeau in the book IFC Performance Standards on Environmental and Social Sustainability: A Guidebook.

Good Practice Note on Cumulative Impact Assessment and Management for the Private Sector in Emerging Markets

IFC is preparing a Good Practice Note on Cumulative Impact Assessment and Management for the Private Sector in Emerging Markets, with the intention of providing practical guidance to companies investing in emerging markets to improve their understanding, assessment, and tools to manage cumulative environmental and social impacts associated with their projects or business activities.

More information on the external consultation process can be found here.  A link to the draft Good Practice Note can be found here.

Sample Chapter Excerpt - "IFC Performance Standards on Environmental and Social Sustainability: A Guidebook"

Here is a link to a chapter sample for the new Guidebook, "Chapter Two, Performance Standard Two: Labour and Working Conditions".  For more information on the book and to order click here.

IFC Performance Standards Mitigation Hierarchy and the Important Role of "Offsets" in Sustainable Development

A primary focus of the environmental and social management program required by the Equator Principles and Performance Standard One of the IFC Performance Standards on Environmental and Social Sustainability (IFC Performance Standards) is mitigation of identified risks, along with the implementation of performance improvement measures. To this end, Clients are expected to design a mitigation approach that follows a structure — referred to as a “hierarchy” — of avoidance,minimization and compensation or offset.  While offset may be the least desirable mitigation strategy, it has a very important role to play in the implementation of the IFC Performance Standards and the promotion of sustainable development.

Kearney & Labeau: Yukon Court of Appeal (Canada) confirms that “open-entry” mining system does not preclude the application of the duty to consult

In December 2012, a three-judge Court of Appeal for Yukon decided unanimously that the recording of a mineral claim by the Mining Recorder, pursuant to Yukon’s Quartz Mining Act (the Act), triggers the duty to consult. Furthermore, the court held that merely providing notice of recorded claims to affected First Nations was not necessarily sufficient to discharge the government’s obligation to consult. The decision has significant implications for the mining and prospecting system in Yukon, and potentially for other open- or free-entry systems in Canada.  This case also has implications for our understanding of FPIC, a requirement of the IFC Performance Standards, which is analogous to the consultation obligations of highly developed legal regimes like Canada.

What's New in EP III - Greenhouse Gases Alternatives Analysis and Reporting

What's New in EP III - Increased Scope of Labour and Working Conditions Requirements

What's New in EP III - Public Disclosure of Environmental and Social Impact Assessment (ESIA) and Environmental and Social Management Plans (ESMP)

What stays (essentially) the same in EP III?

The following items remain the same in EP III according to the draft that was released in August 2012.  The final draft will be released in early 2013. So, what will likely stay the same?  Read more to find out...

Increasing Role for Legal Professional Privilege in EP Process

In light of the inter-relationship and overlap between EP and legal and regulatory requirements, an integrated approach to EP implementation with environmental and social legal due diligence is likely to emerge as a best practice trend. One significant advantage of doing so is the potential role that legal privilege can play in the EP implementation process.

New UN Global Compact Business Reference Guide on Indigenous Peoples' Rights Released

Following on revision of the IFC Perofrmance Standard 7 on Indigenous Peoples.  The UN Global Compact guide can be found HERE.

Expanded Scope of the Proposed Equator Principles III

Growing Legal Implications for Banks as Private Regulators of Environmental and Social Standards – Need for a New Approach with More Legal Involvement

Many banks have historically treated Equator Principles (EP) implementation process as though it were “non-legal”. This has been due, in part, to a belief that the initially voluntary nature of the EP agreement makes it different from a legally imposed requirement. While entering into the EP agreement is, certainly, a voluntary decision, the reality of that decision is that it carries significant legal implications and even risks.

Sustainable Finance 2.0 – Application to Capital Markets