Minerals, Wealth and Progress - Mining and the Environment: From Ore to Metal - page 36

Today the EIA process is widely used to analyze environmental, social, and economic
impacts of a proposed action within a single framework. Despite a lack of internationally
consistent standards, the impact assessment practice designed by the World Bank (1991)
is widely adopted by practitioners in a set of guidelines often referred to as the 'Equator
Principles'. Today's environmental assessment has evolved into a planning process that
goes well beyond environmental permitting. Best practice EIA identifies environmental
risks, lessens conflict by promoting community participation, informs stakeholders, and
lays the foundation for sustainable benefits created by mining.
Understanding the impact assessment process requires, above all else, accepting that it
is not science per se. While it may apply scientific concepts, impact assessment is in fact a
political necessity in a democracy; a bureaucratic tool to negotiate and document accept-
ance of decision-making; and a planning process to improve project design, construction,
and implementation.

Understanding the impact
assessment process requires,
above all else, accepting that it
is not science per se.

1.8 THE EQUATOR PRINCIPLES - IMPROVED PRACTICES
FOR BETTER OUTCOMES

The World Bank Operational Directive

The World Bank developed several policies governing environmental assessment (EA) of
projects as early as 1989. Operational Directive (OD) 4.01 on Environmental Assessment
is the central document that defines the Bank's environmental assessment requirements.
The Environmental Assessment Sourcebook (World Bank 1991) and its updates provide
technical and authoritative guidance. Subsequently the International Finance Corporation
(IFC), the private sector arm of the World Bank, released a similar set of Environmental
Safeguard Policies, specifically tailored to private sector financing. Multi-lateral financing
institutions such as the Asian Development Bank (ADB), the African Development Bank
(AfDB), or the European Bank for Restructuring and Development (EBRD) broadly
adopted the World Bank's guidelines and formulated policies and procedures quite simi-
lar in nature to the original World Bank Environmental Operational Procedures. While
widely praised, the World Bank's approach to environmental assessment remained limited
to projects in which the World Bank or IFC had a financial stake. This changed in 2003.

The Buy-in of Private Financial Institutions

Four private financial institutions, ABN Amro, Barclays, Citigroup, and West LB, drafted
a set of voluntary guidelines to ensure environmentally and socially responsible project
financing, dubbed the Equator Principles (EP) ( Figure 1.10 ) . The Equator Principles,
drafted with assistance from IFC, very much reflect the original IFC Environmental and
Social Safeguard Policies. They represent an attempt by private financial institutions to
introduce into lending decisions a more structured and rigorous consideration of social
and environmental impacts of the projects banks are being asked to fund. Originally
embraced in June 2003 by 10 banks, the Equator Principles have become the accepted
standard for environmental assessment, adopted by more than 60 financial institutions
(Equator Principles Financial Institutions-EPFI- or in short Equator Banks- EB), by
2007, accounting for about 80% of private project funding. An Equator Bank will only
lend to projects whose sponsors the bank considers are able and willing to comply with

The Equator Principles very
much refl ect the original IFC
Environmental and Social
Safeguard Policies.