Minerals, Wealth and Progress - Mining and the Environment: From Ore to Metal - page 38

short, to reflect experiences in past project financing. The Performance Standards are
essentially an update of the IFC's environmental Safeguard Policies but with an increased
focus on the environmental and social performance during project implementation. Some
controversy surrounds the 2006 standards. Certain NGOs have questioned whether the
provisions assure that local communities will be adequately consulted, and whether envi-
ronmental impact assessment reports will be open to full public scrutiny. There are con-
cerns over acceptable levels of pollutants, and the exclusion of 'no-go' zones for projects.
Be that as it may, such commentators are perhaps missing a more substantial point
(Warner 2006). For twenty years, environmental regulators and development finance
institutions such as the IFC, ADB, and AfDB have required companies to undertake
Environmental Impact Assessment (EIA) studies as a mechanism to manage significant envi-
ronmental and social risks and impacts. The approach works by exploiting 'the moment of
maximum leverage'. Securing an environmental clearance certificate from domestic regula-
tors, or closing a project financing deal with international financiers, is made conditional on
the applicant committing to a series of environmental and social risk management measures.
The problem is that the exercise is dominated by the need for companies to secure a formal
licence to operate, or source new financing. Once regulatory approval is obtained and the
financial deal is closed, little leverage remains to ensure adequate implementation of environ-
mental and social mitigation measures during project development and operation. The EIA
is completed, the hurdle for financing is overcome, the project documentation looks good,
but thereafter implementation of environmental mitigation efforts is not taken seriously.

Once regulatory approval
is obtained and the fi nancial
deal is closed, little leverage
remains to ensure adequate
implementation of environmental
and social mitigation measures
during project development and
operation.

Focusing on Implementation Rather than Planning

Enter the new IFC Performance Standards - a collection of eight quality standards ( Figure
1.11 ), covering some well-established environmental and social issues such as disclosure,
biodiversity conservation, and involuntary resettlement, but expanded to encompass new
issues such as employee working conditions, supplier environmental performance, commu-
nity security and Indigenous Peoples' intellectual property. The linchpin of the new standards
is Performance Standard 1. PS1 reframes the way in which environmental and social issues
are to be handled. No longer is it sufficient to conduct isolated EIA studies, outsourced to

The linchpin of the new standards
is Performance Standard 1.

IFC Performance Standards
PS 1: Social Environmental Assessment
and Management System
PS 2: Labour and Working Conditions
PS 3: Pollution Prevention and Abatement
PS 4: Community Health, Safety and Security

EP2

Applicable Social
and Environmental
Standards

EP3

PS 5: Land Acquisition and Involuntary

EP4

Resettlement

PS 6: Biodiversity Conservation and

Sustainable Natural Resource

Management

PS 7: Indigenous Peoples
PS 8: Cultural Heritage

FIGURE 1.11
The 2006 IFC Environmental and Social Performance Standards

The Performance Standards focus on a company's capacity to
manage environmental and social risks and opportunities during
mine development and operation rather than on establishing a
comprehensive EIA at the outset of the project.

EP Compliance