The Newly Revised IFC Perfomance Standards -Guidance on Implementation by Equator Principles Association members from 1 January 2012
http://www.equator-principles.com/index.php/all-ep-association-news/254-...
7 December 2011
The IFC has updated its Sustainability Framework, which includes the newly revised Performance Standards, and the IFC will be applying them from 1 January 2012. Consistent with the current Equator Principles (EP) framework, the EP Association Steering Committee has agreed that the newly revised IFC Performance Standards will also take effect for EP Association Members on 1 January 2012. Accordingly Exhibit III of the EPs (which refers to the 2006 IFC Performance Standards) will be updated on 1 January 2012 to reflect their implementation by EP Association members under the current EP framework.
The EP Association will continue to ensure that the EP III Update Process (EP III Update Process) is robust and produces a version of the EPs that is fully applicable to it members, addresses the most significant issues with regards to environmental and social risk and impacts, and considers the guidance from the revised IFC Performance Standards. The EP Association has allocated a considerable period of time to complete this process however during this time it requires its members to apply the EPs consistently and using the current industry best practice standards. This requirement supports the decision by the EP Association Steering Committee to update Exhibit III of the EPs before the completion of the EP III Update Process. It should be noted that the EPs will fully reflect changes to the revised IFC Performance Standards once EP III has been formally agreed by the EP Association.
The EP Association Steering Committee wishes to ensure that EP Association members, clients and stakeholders can transition smoothly and consistently to the revised IFC Performance Standards and provides simple guidance below on how this can be achieved:
• The existing EPs (specifically Exhibit III) will refer to the revised IFC Performance Standards from 1 January 2012.
• The revised IFC Performance Standards should be applied (as per the EPs) to all new and current project finance transactions when the borrower has commissioned an Environmental and Social Impact Assessment (ESIA) on or after 1 January 2012.
• The old IFC Performance Standards can be applied to current project finance transactions when the borrower has commissioned an ESIA before 1 January 2012 on the proviso that it is completed by 30 June 2012.
• All new transactions after 30 June 2012 should apply the revised IFC Performance Standards.
The EP Association Steering Committee accepts that in certain situations there might be legal constraints that prevent this guidance from being strictly applied. Each EP Association member should endeavour to make all necessary efforts to ensure this guidance is incorporated into their institution’s review of transactions according to their own risk management frameworks and engagement with clients.
If you have any questions about the EP III Update Process, the revised IFC Performance Standards or the guidance given above, please contact the EP Secretariat.