Minerals, Wealth and Progress - Mining and the Environment: From Ore to Metal - page 40

Categorization is an ongoing
process, and the environment
category can be changed as
more detailed information
becomes available during the
environmental assessment
process.

Eventually the determination of the environment category is to be based on the most
environmentally sensitive component of the project. This means that if one part of the
project has the potential for significant adverse environmental impacts, then the project
is to be classified as Category A regardless of the potential environmental impact of other
aspects of the project (ADB 2003). Categorization is an ongoing process, and the environ-
ment category can be changed as more detailed information becomes available during the
environmental assessment process.

Environmental Assessment of Existing Operations

The new Performance Standards also help to answer the question of how to apply environ-
mental assessment guidelines such as the original Equator Principles to existing operations to
which Equator Banks are providing new funds. PS1 focuses on a company's capacity to man-
age environmental and social risks and opportunities during project development and opera-
tion, rather than on establishing a comprehensive EIA at the outset of a new project with
subsequent lack of implementation of recommended management efforts. The environmen-
tal due diligence then takes on the role of a management systems review ( Figure 1.13 ).
Another question arises. Most countries now have their own EIA legislation, so what
is the need for additional Performance Standards? There is a realization that challenges
still face impact assessment, particularly in countries where governance, ineffective insti-
tutional frameworks, and shortages of financial and human resources may render conven-
tional approaches to impact assessment inappropriate. Project proponents may claim that
they comply with all relevant national laws or policies, but such laws or policies may be
inadequate. International financing institutions consider it their duty, either due to rea-
sons of corporate responsibility, (a recent buzz word) or due to perceived risk to reputa-
tion, to ensure that environmental assessment is commensurate with investment exposure
and to ensure environmental prudence and due diligence.

FIGURE 1.13
Equator Principles Due Diligence

Feasibility

EIA
PREPARATION

The Equator Principles focus on a
company's capacity to manage
environmental and social risks and
opportunities during operation.

Design and
construction

EIA
REVIEW

Planning

COMPLIANCE
REVIEW

EIA Commitments

Host Country Legislations
and Regulations
Equator Principles

Operation

Closure