BANKS DODGY DEALS CAMPAIGNS
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
International Bank Campaigners Gathering
Donate
2023-05-25 00:00:00
Philippines communities are fighting back against gas & LNG build-out in the Verde Island Passage
2023-03-17 00:00:00
Briefing: The role of financial institutions in decarbonising the steel sector
2023-03-09 00:00:00
Dutch bank ING supports controversial pipeline to import gas from authoritarian Azerbaijan
2023-02-23 00:00:00
Financial institutions need to address steelmaking’s coal addiction
2023-05-17 14:30:30
EACOP Financial Advisor SMBC is no longer involved with the project
2023-03-28 13:43:00
French bank Société Générale withdraws from Rio Grande LNG
2023-03-20 08:50:41
Who dares to finance Eni and Exxon’s dangerous Rovuma gas plans in Mozambique?
2023-03-14 14:59:00
New ING policy could spark bank shift away from financing oil and gas infrastructure
Connect
2023-05-03 00:00:00
A Rotten Business: How Barclays became the go-to bank for JBS, one of the world's most destructive meat corporations
2023-04-13 00:00:00
Banking on Climate Chaos 2023
2023-04-12 00:00:00
The East African Crude Oil Pipeline (EACOP): Finance Risk Update No. 4
2023-03-29 00:00:00
BankTrack Annual Report 2022
See all publications
Sections
Banks Dodgy Deals Campaigns
Our campaigns
Banks and Climate
Banks and Human Rights
Banks and Nature
Banks and Pandemics
Our projects
Tracking the NZBA
Banks and Putin's war in Ukraine
Tracking the Equator Principles
Tracking the PRBs
Banks and steel
End Coal Finance
Find a Better Bank
Banks and the OECD Guidelines
Media
News Publications
Fossil Banks No Thanks StopEACOP Forests & Finance Banks & Biodiversity Drop JBS Bank of Coal Don't Buy into Occupation
BankTrack
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 International Bank Campaigners Gathering Donate
Successes Contact BankTrack
Donate Mailing list Facebook Twitter Login
Home › BankTrack news ›
BankTrack News

New Equator Principles to have deeply underwhelming impact on people and planet

Commitments on community safeguards and climate change far below what is required
2013-06-04 | Amsterdam
By: BankTrack
Contact:

For interviews please contact:

  • Johan Frijns BankTrack coordinator, johan@banktrack.org, T +31 6 12421667
  • Michelle Chan, Director, Economic Policy Program FoE US, mchan@foe.org, T: +1 510-900-3141
  • Zachary Hurwitz, International Rivers policy program, zachary@internationalrivers.org, T +1 510 848 1155 x313
2013-06-04 | Amsterdam
By: BankTrack
Contact:

For interviews please contact:

  • Johan Frijns BankTrack coordinator, johan@banktrack.org, T +31 6 12421667
  • Michelle Chan, Director, Economic Policy Program FoE US, mchan@foe.org, T: +1 510-900-3141
  • Zachary Hurwitz, International Rivers policy program, zachary@internationalrivers.org, T +1 510 848 1155 x313

The long awaited new, third version of the Equator Principles (EPIII) (1) will have a deeply underwhelming impact on safeguarding the rights and interests of communities affected by ‘Equator compliant‘ projects, as well as on efforts to stop runaway climate change. Thus concludes BankTrack, the global network of NGOs closely monitoring the Principles since their inception in 2003, at the formal launch of EPIII, today in Amsterdam at the 10th Anniversary Conference of the Equator Principles.

"BankTrack considers EPIII a modest improvement over EPII (2), especially with regards to their expanded scope (3) and the transparency requirements for adopting banks. But the new principles are outright disappointing in their absence of any new commitments on strengthening community rights and on combating climate change", said Johan Frijns, BankTrack coordinator. "We expected this extensive review process, involving hundreds of stakeholders and taking over two years to complete, to come up with a breakthrough on both crucial matters; this is a huge missed opportunity that leaves the Principles stranded in the Minor League for years to come."

Community rights

The new Principles fail to strengthen the ability of communities to effectively invoke the Principles to defend their rights and interests. As in EPII, communities are not considered rights holders but remain seen as passive stakeholders in projects that befall on them. The EP requirements on conducting impact assessments, stakeholder engagements, the development of management plans and action plans and the establishment of grievance mechanisms all presume that the project envisioned by the sponsor eventually will proceed as planned.

Despite consistent demands raised by BankTrack and numerous other civil society groups (4) over the last ten years, the Equator Principles Financial Institutions (EPFIs) have also again refused to establish an accountability and compliance mechanism, where affected stakeholders could have filed complaints on non compliance with the Principles.

"The absence of such an accountability mechanism, by now standard procedure with all multilateral development banks and some Export Credit Agencies, makes a mockery of stated ambitions of EPFIs to set a gold standard in social and environmental risk management", said Michelle Chan, Director, Economic Policy Program for Friends of the Earth US, "Such accountability mechanisms, apart from being essential to ensure access to remedy, are also a vital part of any adequate risk management system, providing banks with an external source of information on their clients' performance."

Climate change

The new Equator Principles contain only two climate related ‘requirements' for clients, requirements that are so devoid of any ambition as to render them meaningless in the global fight against climate change. None of the proposals made by BankTrack and other stakeholders to include financed emission reduction targets and opt for the categorical exclusion of certain high impact sectors (coal mining, tar sands) and project types (coal power plants) found their way in the final EPIII.

One ‘requirement' is that "for all Projects, in all locations, when combined Scope 1 and Scope 2 Emissions are expected to be more than 100,000 tonnes of CO2 equivalent annually, an alternatives analysis will be conducted to evaluate less Greenhouse Gas (GHG) intensive alternatives." However, it is then left entirely to the client to decide what to do with the outcome of the analysis, with no obligation at all imposed on him to opt for the less GHG intensive alternative.

The second ‘requirement' is for "the client to report publicly on an annual basis on GHG emission levels (combined Scope 1 and Scope 2 Emissions) during the operational phase for Projects emitting over 100,000 tonnes of CO2 equivalent annually". The threshold of 100,000 tonnes is far higher than the 25,000 tonnes required in the Performance Standards of the International Finance Corporation, to which EPIII is pegged. Given the absence of any obligatory reduction targets over time, such reporting requirements alone will also do little to nothing to reduce emissions.

"It took exactly ten years for the very word ‘climate' to first appear in this environmental risk management tool for banks. But when it finally does, there still seems to be no appreciation whatsoever of the magnitude of the threat posed by climate change to all of us, banks included, let alone any corresponding ambition level" said Yann Louvel, BankTrack's climate and energy coordinator, "Banks should not need an ‘alternative analysis' or an ‘emission levels report' to understand that they must immediately terminate the financing of coal power plants, coal mines, and oil and gas exploration and infrastructure projects altogether; only that is adequate risk management"

Belo Monte Dam

The launch of the new Equator Principles coincides with the latest occupation by 170 indigenous people armed with bows and arrows of the construction site of the ‘Belo Monte' Dam in Brazil. The groups have vowed to defend their land with their own lives, leading to fears that this may lead to a massacre due to police repression (5).

The project is mostly financed by funding from BNDES of Brazil that is passed through EPFI Caixa Econômica Federal. According to the loan contract, seen by BankTrack, the project is to meet all relevant Equator Principles requirements, including those on stakeholder consultation and indigenous peoples' consent. However, indigenous people say that project developer Norte Energia, S.A. is far from implementing those commitments.

"It is a testimony to the sorry state of the Principles that horrible projects such as the Belo Monte Dam are allowed to proceed with an Equator stamp of approval.  Affected indigenous people stand to lose their lives defending their lands, right at the moment when Equator banks toast on their tenth anniversary",commented Zachary Hurwitz, Policy Coordinator at International Rivers; "If the Principles do not even make a difference in such dire situations, then what are they to deliver elsewhere?"

 

(1) See http://www.equator-principles.com/index.php/all-news-media/ep-association-news

(2) EPII was launched in June 2006. EPIII is in place from June 4 2013 but there is a transition period lasting until January 1st 2014 for existing EPFIs to transfer to EPIII.

(3) The scope of EPIII now includes also a strictly defined set of large corporate loans where proceeds are known and bridge loans. See the text of EPIII.

(4) For a full overview of all publications of BankTrack on, and correspondence with the Equator Principles Association see the document section at: http://www.banktrack.org/show/pages/equator_principles

(5) For further details on Belo Monte see:

http://www.internationalrivers.org/campaigns/belo-monte-dam

http://amazonwatch.org/work/belo-monte-dam

http://www.banktrack.org/show/dodgydeals/belo_monte_dam

Dodgy Deals
There are no active project profiles for this item now.

Belo Monte dam

Brazil
Project
On record
Hydroelectric Power Generation

Belo Monte dam

Brazil
Sections
Banks Policies Dodgy Deals Campaigns
Our campaigns
Banks and Climate Banks and Human Rights Banks and Nature Banks and Pandemics
Our projects
Tracking the NZBA Banks and Putin's war in Ukraine Tracking the Equator Principles Tracking the PRBs Banks and steel End Coal Finance Find a Better Bank Banks and the OECD Guidelines
Media
News Publications
Fossil Banks No Thanks StopEACOP Forests & Finance Banks & Biodiversity Drop JBS Bank of Coal Don't Buy into Occupation
BankTrack
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 International Bank Campaigners Gathering Donate
Successes Contact BankTrack
Vismarkt 15
6511 VJ Nijmegen
The Netherlands
Tel: +31 24 324 9220
Contact@banktrack.org
Donate Mailing list Facebook Twitter
©2022 BankTrack
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