Banks| Policies| Dodgy Deals| Campaigns
About us| Blog| Publications| Successes| Contact us| Donate
About BankTrack
Visit us
Organisation
Our team
Our board
Guiding principles
Team up with us
Jobs at BankTrack
Our annual reports
Funding and finances
History
BankTrack in the media
Our privacy policy
Donate
2023-01-23 00:00:00
Berta Cáceres: new rules for banks could help stop defender killings
2023-01-16 00:00:00
In the balance: Why European due diligence legislation must cover financial services
2022-12-08 00:00:00
Exposed: Western banks funding Qatar’s carbon bombs
2022-12-08 00:00:00
Right-wing attack on sustainable finance is the latest form of climate denial
2022-12-14 11:08:26
HSBC announces it will no longer finance new oil and gas fields
2022-10-13 15:56:39
More major banks and insurers refuse to support EACOP
2022-09-16 10:38:48
European Parliament passes emergency resolution against human rights violations & environmental threats linked to EACOP
2022-06-27 09:49:16
Crédit Agricole takes first step to phase out from the oil and gas sector
Connect
2022-11-22 00:00:00
Banking on Thin Ice: Two years in the heat
2022-11-17 00:00:00
BankTrack Global Human Rights Benchmark 2022
2022-10-21 00:00:00
Burning forests in the name of clean energy? How banks are failing to exclude the harmful wood biomass industry from finance
2022-06-28 00:00:00
The East African Crude Oil Pipeline (EACOP): Finance Risk Update No. 3
2022-04-05 00:00:00
The BankTrack Human Rights Benchmark Asia
2022-03-30 00:00:00
Banking on Climate Chaos 2022
See all publications
Browse
Home
Banks
Policies
Dodgy Deals
Campaigns
About
About BankTrack
Donate
Contact BankTrack
Publications
Victories
Follow Us
News
BankTrack blog
Facebook
Twitter Fossil Banks No Thanks Twitter Fossil Banks No Thanks Instagram
Affiliate Websites
Fossil Banks No Thanks
StopEACOP
Forests & Finance
Banks & Biodiversity
Drop JBS
Bank of Coal
Don't Buy into Occupation
Home › News
Japanese banks betray their commitments and the environment by funding more dirty coal
Start
Banks
Dodgy Deals

By: Market Forces
2018-04-18

Share this page:

Aerial view of Nghi Son 1. Photo: Courtesy of Google Maps/Google Earth
Go to:
Start
Related Banks
Related Dodgy Deals

Environmental organizations have condemned Japanese commercial banks for agreeing to finance the new polluting Nghi Son 2 coal power station in Vietnam, calling on the banks to act in accordance with the Equator Principles, a key agreement among banks to manage environmental and social risk and revoke the finance for the Nghi Son 2 coal-fired power plant.

Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking Corporation and Mizuho have reportedly signed loan agreements for the Nghi Son 2 coal power station in Vietnam.

Last month all three banks were made aware of numerous environmental and social risks that make Nghi Son 2 ineligible to receive finance from any bank that is a member of the Equator Principles. However, the banks ignored this advice and proceeded to finance the project, which would generate twice as much CO2 per every unit of power generated as the average generating plant in Vietnam.

“SMBC, MUFG and Mizuho seem to think that people in Vietnam don’t deserve clean air and power, but should get pollution and outdated technology. These double-standards are an insult to those of us who want the chance to develop cleanly and bypass the dirty energy blunders of the Western world”, said Hong Hoang, Executive Director of Vietnamese group CHANGE VN.

Another Equator Principles Financial Institution, Standard Chartered Bank, was a member of the Nghi Son 2 syndicate until last month but withdrew from the final deal.

“Standard Chartered acted appropriately upon learning that the Nghi Son 2 project failed to satisfy the Equator Principles, exiting from a project that it simply could not finance”, said Market Forces Executive director Julien Vincent.

“On the other hand, Japan’s major banks are making a mockery of the Equator Principles, which are supposed to steer banks away from projects where people, process and the environment are neglected. They should be ashamed of their actions”, said Mr Vincent.

“This decision by SMBC, MUFG and Mizuho to fund sub-critical coal plant development in Vietnam is totally at odds with meeting the 1.5-2C Paris Agreement goal and flies in the face of their commitment to disclose and manage climate risks through their endorsement of the recommendations outlined by the Task Force on Climate Related Financial Disclosures” said Shin Furuno, Japan Divestment Campaigner for 350.org Japan.

Breaches of the Equator Principles

Environmental groups have identified the following points that constitute breaches of the Equator Principles related to the Nghi Son 2 project:

  • No analysis of potential alternatives to the project: Equator Principle 2 clearly states that the alternatives to the project must be considered, “when combined Scope 1 and Scope 2 Emissions are expected to be more than 100,000 tonnes of CO2 equivalent annually.” As far as is known, no such alternatives analysis was conducted, and if one was conducted, it was not made available.
  • Potentially non-compliant with Vietnamese law: Equator Principle 3 states that “the project must be compliant with relevant host country laws, regulations and permits that pertain to environmental and social issues.”  The project may not comply with Vietnamese law as the environmental impact assessment does not make it clear whether and how public consultation with the communities affected by the project took place.
  • Lack of stakeholder engagement: Equator Principle 5 requires ongoing stakeholder engagement. In addition to public consultation as required under Vietnamese law, it is unclear that the communities that are affected by the project are being consulted and engaged with on an ongoing basis regarding the terms of the project.  
  • Independent Review: Under Equator Principle 7, an Equator Principles Financial Institution is required to conduct an Independent Review of the assessment documentation.  It is unclear that Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking Corporation or Mizuho completed such a review. If they had, it would be concerning that they would continue to finance the project without substantial changes to the technology used by the power project – given that it will would generate twice as much CO2 per every unit of power generated as the average generating plant in Vietnam.

Lack of information: Not allowing the project-affected communities access to information about potential impacts and alternatives to the project is contrary to Equator Principle 3, which clearly indicates that financial institutions cannot hide behind the regulatory frameworks in the countries in which they operate.  While Vietnam does not require environmental impact assessments to be publicly available, in “non-designated” countries such as Vietnam, the assessment process for project finance must comply with the International Finance Corporation’s Performance Standard 1, which requires that the project sponsor provide affected communities with access to relevant information on: “(iii) any risks to and potential impacts on such communities and relevant mitigation measures; (iv) the envisaged stakeholder engagement process…”  It is unclear that any of this information was provided to the project-affected communities.

View this news article on the Market Forces website here.

View BankTrack's Nghi Son 2 Dodgy Deal profile here.

Go to:
Start
Related Banks
Related Dodgy Deals

Related banks

Mitsubishi UFJ Financial Group (MUFG) Japan

active

Mizuho Financial Group Japan

active

Sumitomo Mitsui Banking Corporation (SMBC) Japan

active
Go to:
Start
Related Banks
Related Dodgy Deals

Related Dodgy Deals

Projects

There are no projects active for this item now.
on record

Nghi Son 2 coal power plant Vietnam

Coal Electric Power Generation
Browse
Home
Banks
Policies
Dodgy Deals
Campaigns
About
About BankTrack
Donate
Contact BankTrack
Publications
Victories
Follow Us
News
BankTrack blog
Facebook
Twitter Fossil Banks No Thanks Twitter Fossil Banks No Thanks Instagram
Affiliate Websites
Fossil Banks No Thanks
StopEACOP
Forests & Finance
Banks & Biodiversity
Drop JBS
Bank of Coal
Don't Buy into Occupation
Vismarkt 15
6511 VJ Nijmegen
The Netherlands

Tel: +31 24 324 9220
Contact@banktrack.org
©2016 BankTrack                Webdesign by BankTrack and EASYmind
BankTrack is a registered charity in the Netherlands (ANBI) - RSIN 813874658
Find our privacy policy here

Stay up to date

Sign up now for all BankTrack's news


Make a comment

Your comment will be reviewed, before being posted