Looking Ahead - Mining and the Environment: From Ore to Metal - page 856

Performance Requirements and Accountabilities
Driven by Lenders

Many of the challenges arising from global economic change have been translated into
proactive industry-wide business frameworks. This particularly applies to the resource
industry sector. International agencies, such as the World Trade Organization (WTO),
World Bank, United Nations, and industry organizations and associations, such as the
World Business Council, all contribute to the rise and evolution of international 'leading
practice' guidelines and compliance requirements. However, the pressure for additional
performance accountabilities has also come from a range of global lending institutions
such as the International Finance Agency (IFC), Asian Development Bank (ADB) and the
Japanese Bank for International Cooperation (JBIC), as well as many private sector com-
mercial banks.
As discussed at the outset of this text, in 2003, private i nancial institutions (The Equator
Principles Financial Institutions - EPFIs) started to adopt a set of 'Equator Principles'
that represent a i nancial industry benchmark to determine, assess and manage social and
environmental risks in project i nancing. There is a close connection between the deriva-
tion of various recent and evolving international performance standards and the Equator
Principles, which explicitly use and refer to various IFC and World Bank Group policy
guidelines.
Further examples of international standards increasingly applicable to all major inter-
national projects include the Global Reporting Initiative of the World Business Council,
established in the late 1990s (with a i rst mining-specii c guide published in 2005 - 'GRI
Mining and Metals Sector Supplement, Pilot Version 1.0', incorporating an abridged ver-
sion of the GRI 2002 Sustainability Reporting Guidelines) and the OECD Principles of
Corporate Governance published in 2004. These two connect to and are cognisant of vari-
ous other international standards and compliance or reporting requirements.
In sum, governments, international development agencies and lenders have introduced
an extensive range of incentives, frameworks and obligatory requirements to improve busi-
ness performance, including social and environmental performance, and to reduce risks.
International mining is, and will increasingly be, subject to these multi-factorial and inter-
related performance requirements. Unfortunately, it is also clear that despite the laudable
intents, these new performance requirements may result in overkill, demand substantial
efforts on the part of proponents, and increase the time required for developments, which
may jeopardize well-conceived projects. After all mining is about providing mineral
resources to the world at affordable prices, in monetary as well as environmental terms.

In 2003, private fi nancial
institutions (The Equator Principles
Financial Institutions - EPFIs)
started to adopt a set of 'Equator
Principles' that represent a fi nancial
industry benchmark to determine,
assess and manage social and
environmental risks in project
fi nancing.

Despite the laudable intents,
these new performance
requirements may result in
overkill.

Mining and Sustainability - Conventional Perceptions versus Facts

Clearly many of the pressures and incentives for improved performance align with the
sustainability agenda. Sustainability has been a rising issue for business over the last two
decades. However, since 2006 with the release of former US Vice-President Al Gore's i lm,
'An Inconvenient Truth' and UK economist Nicholas Stern's report 'The Stern Review',
public awareness has sky-rocketed. Leading business sectors of course embraced sustain-
ability well before this, with support in the late 1990s for initiatives such as the Global
Reporting Initiative of the World Business Council (GRI 2000) and, more recently, The
Global Environmental Management Initiative (GEMI) in 2002. However, there is now an
avalanche of more current initiatives, for example the establishment of the World Business
Council for Sustainable Development by the World Business Council (2006).