social due diligence in eib lending : an introduction to eib’s social standards eleni kyrou,...
Post on 21-Dec-2015
217 Views
Preview:
TRANSCRIPT
Social Due Diligence in EIB Lending : an Introduction to EIB’s Social Standards
Eleni Kyrou, Social Development Specialist
PJ/ECSO
November 5th, 2014
1European Investment Bank
2 European Investmen
t Bank
I. The Foundation of EIB’s E&S FrameworkEIB’s general approach to the environment and social well-being is derived from the Lisbon Treaty (2009)
The Charter of Fundamental Rights of the EU as the main reference for EIB’s social standards; and supplemented by good practice requirements (MFIs’ standards, ILO Core Labour Conventions, UN Guiding Principles on Business & Human Rights, etc)
EIB Statement of Environmental and Social Principles and Standards (2009) as its highest-level policy articulating EIB’s commitments to environmental and social sustainability
EIB E&S Practices Handbook (updated 2013) operationalizes the Statement, introduces HR language, and provides guidance to promoters on compliance and alignment to E&S performance
EIB E&S Standards apply to all regions (exceptions indicated); all types of financing; both public and private sector projects; throughout the project cycle
Foundation of EIB’s Environmental & Social Framework
3European Investment Bank
• Highest-level policy of the Bank articulating EIB’s commitments to environmental and social sustainability
• Applicable to all regions, all types of financing, to the whole project, throughout the project cycle
EIB Environmental and Social Framework
4European Investment Bank
Lisbon Treaty
EU Charter of Fundamental Rights
Inform
ing
Transparency Policy
Environmental and Social Standards
1. Assessment and Management of Environmental and Social Impacts and Risks
2. Pollution Prevention and Abatement 3. Standards on Biodiversity and Ecosystems 4. Climate-related Standards 5. Cultural Heritage 6. Involuntary Resettlement 7. Rights and Interests of Vulnerable Groups 8. Labour Standards 9. Occupational and Public Health, Safety
and Security 10. Stakeholder Engagement
Statement on Environmental and Social Principles and Standards
Environmental and Social Practices and
Procedures
Thematic and Sector Guidance
Sourcebooks
Operationalised by
The Integrated Approach
EIB E&S Framework
EIB E&S SPS committing to
sustainability and the protection and respect of human
rights
Integration: Environment,
climate change, social issues,
biodiversity and ecosystems
Standards apply to both public and private
sector and to all regions
10 EIB E&S Standards :
key requirements for Bank
supported operations
Internal due diligence
procedures for the Bank
COMPLIANCE QUALITY ENHANCEMENT
RISK & IMPACT MANAGEMENT
What do EIB’s E&S policies and Standards Encompass?
EIB Environmental and Social Standards
7European Investment Bank
• Requirements to be met throughout the life of an EIB-supported operation
• Help promoters manage E&S impacts and risks
• Help promoters improve their E&S performance through implementation of sound environmental and social practices, transparency and accountability.
The Social Standards: Key Messages & Specific Outcomes Defined
The social standards that need to be achieved are defined, but not the way in which they are achievedAvoid impacts – Application of the Mitigation HierarchyAvoids prescription and allows promoters to develop solutions that are appropriate to the circumstances and locationIncreases both opportunities and risks for promoters and their financiers
Opportunity•Innovation
•License to operate
•Cost effectiveness solutions
•Efficiency
Risk•Promoter and EIB need to understand what they have to do
•Capacity constraints of the promoter can mean that impacts are not managed
9European Investment Bank
EIB Social Due Diligence Guiding Principles
Appraisal in the context of the project’s definition, covering relevant stages of the project cycle, proportional to impacts and risks;
Support positive environmental and social outcomes;
Comply with national laws (but if not adequate – EIB/EU/IFI policies should be the substitute) but sometimes not enough to say project is acceptable because it has national approval;
Apply international best practices;
Create ownership among stakeholders;
Assess implementation capacities and systems;
Support the rights of the project affected people;
Monitoring and review;
Not to be dogmatic but use experience, sector and country knowledge, judgement and common sense.
10European Investment Bank
III. Human Rights Integration: Key Principles
HR impact assessment seen as an integral part of a robust social impact assessment – not required as a stand-alone instrument
HR mitigation hierarchy as key principle -- premised on the principle of remedy rather than off-setting
Focus on materiality of risk to affected persons, now acknowledged as rights-holders
Guided by considerations of likelihood, severity, and frequency of HR impacts anticipated, hence ordering the prioritization of mitigation measures accordingly (with exceptions in supply chain)
Likelihood is often linked to: (i) the country context related to specific rights, and (ii) specific business relationships posing particular HR risks
Severity is to be appraised on basis of gravity of anticipated impacts (scale), scope and remediability of the said impact
Considerations of influence over potential impact and leverage over those able to affect change should inform attribution of responsibility and obligation for action
11European Investment Bank
III. Human Rights Integration: Key Challenges
Supply chain risks remain due to the decision to limit the requirement to the application of standards and due diligence on the first-tier supplies
Application of standards in environments with poor governance (and particularly with public promoters)
Challenges related to monitoring and follow-up of implementation of commitments by promoters
12European Investment Bank
What’s in the Standards?
Objectives
Definitions
General guidance
Screening questionnaire
Specific requirements where sensible
Further references
European Investment Bank 31
What’s not in the Standards?
Detailed step-by-step directions
Coverage of all likely project scenarios
Detailed methodologies for further studies
=>Social Development Specialist
Further resources
European Investment Bank 31
European Investment Bank Page 16
Standard 1: Assessment and Management of Environmental and Social Impacts and Risks
Objective
To anticipate, avoid, minimize, and compensate for impacts and risks;
To mitigate or minimise negative impacts to affected communities and the environment;
To promote effective use of environmental and social management systems
To promote adequate engagement and communication with project-affected communities
In sum:
Standard 1 establishes the importance of (i) integrated assessment to identify the environmental and social impacts, risks, and opportunities of projects; (ii) effective community engagement through disclosure of project-related information and consultation with local communities on matters that directly affect them; and (iii) management of environmental and social performance throughout the life of the project .
European Investment Bank Page 17
Standard 1: Assessment and Management of Environmental and Social Impacts and Risks
Key elements
Assessment
Management
M&E
Stakeholder engagement
Relevant frameworks of reference
SEA
Assessment area, taking into account: assets or facilities or associated works directly owned or managed by the Promoter and integral parts of the main project intervention; supporting/enabling activities; associated facilities or businesses; areas and communities likely to be affected by cumulative impacts
When do we undertake a comprehensive environmental and/or social assessment?
Environmental and Social Management Plans (ESMPs)
Organizational and Management Systems
Intermediated Operations; Corporate loans
European Investment Bank Page 18
Standard 8: Labour Standards
Objectives
To promote fair treatment, non-discrimination, equal opportunity and safe conditions for workers and employees;
To ensure compliance with national employment and labour laws;
To protect workers and avoid the use of forced or child labour;
To promote the right to freedom of association.
Key elements
The Bank is expected to undertake a labour assessment, follow up in monitoring
Requires comparable terms and conditions for all workers;
Defines first-tier supplier and contractor, requiring application of due diligence at that level, too;
Introduces requirements for workers’ accommodation;
Ensures worker access to a grievance mechanism;
Introduces the notion of labour audit.
European Investment Bank Page 19
Standard 8: Labour Standards
Red linesNo child labour is admissibleNo forced or bonded labour is acceptable
Highly desirableFreedom of association and the right to collective bargaining
Screening
Check Promoters’ awareness of ILO Core Labour Standards and compatibility with national law
Assess risk in terms of labour problems [downtime, union problems, worker-management relationships, working conditions, etc ]
Is there an internal grievance mechanism for workers?
Review the Promoter’s employment policies (HR), their adequacy, and management’s capacity to implement
Are the actions required to meet necessary standards articulated in the ESMP?
How to handle subcontractors and supply chain?
Do not rely automatically on fellow IFIs in the transaction
European Investment Bank Page 20
Standard 9: Occupational and Public Health, Safety and Security
Objectives
To anticipate and avoid or manage health, safety and security impacts on workers and the public;
To safeguard people and property in accordance with relevant human rights principles.
Key highlights•The Standard applies to 1st-tier suppliers and primary contractors. Promoters are recommended to seek to apply the Standard through the supply chain with the use of a human rights due diligence assessment.•Where health impacts on the public and/or the workers of significant magnitude, an ESHIA is expected. Specifically for the labour domain, a hazard assessment is foreseen.•Labourers’ accommodation and health, hygiene & safety considerations•Security management enters the scene in our due diligence•Different risks related to HSS that the promoter needs to address, managed through a variety of plans, such as: influx management plan; emergency preparedness plan; traffic management plan; security management plan etc. •IFI differences on OSHS
European Investment Bank Page 21
Standard 9: Occupational and Public Health, Safety and Security
Screening
Assess health, safety and hygiene risks for workers and communities alike transportation and access, waste disposal, security personnel, in-migration of workers – exposure to disease, etc.
Plans or measures to deal with these risks
Is there a formal structure to deal with the HSH issues? Reporting measures of incidents?
Are there any significant security threats? Is the Promoter considering the hiring of public or private security forces?
Check living and hygiene conditions at labourers’quarters
Monitoring can be done by site visits for major projects by lenders advisors
EIB Project Cycle and Social Due Diligence Elements
22European Investment Bank
Project cycle Paper trail E&S issues
Social
screening
Env. eligibility
Upstream
Identification
Issues meeting
COP Business plan
ESIA (s)
EA
ESDS
E&S Rating
REM
PreAppraisal
PIN
Appraisal AFS
Opinion for
Appraisal (OA)
Appraisal report
E&S
covenants
(loan conditions)
Approval CA
Loan negotiation
Contract
E&S - REM
indicators
Implementation
Operation
Progress reports
Completion
Completion
report
Stages of the EIB Project Cycle and Relevant Points of Disclosure and Engagement
23European Investment Bank
• Appraisal • Disbursement • Supervision• Approval
EIB:
Publication of NTS/EIS
• Pre-Appraisal
Promoter: Community
engagement and consultation
Promoter:
On-going Community Engagement /
Documentation Updates
EIB:
Publication of ESDS
ECSO: What We Strive For
ECSO: Environment, Climate and Social Office (PJ)• Three (3) social specialists in place available for full attribution and/or
helpdesk function
• Social screening process once PIN is issued
• Social Working Group (inter-directorate)
We work towards:
Adding value
A collaborative and transparent process;
Engage stakeholders in a variety of ways;
Adapt to ever changing global E&S needs;
Obtain feedback from directly-affected communities and promoters.
24European Investment Bank
top related