ING and BBVA have just been issued a challenge by the Centre for Human Rights and Environment (CEDHA) on their compliance with the Equator Principles. Inevitably bank which sign up to the Equator Principles will find themselves open to greater scrutiny. It will be interesting to see the outcome of this challenge as it will be an important early step in defining the scope and strength of the application Equator Principles.
Human Rights issues are clearly taking centre stage at present with many projects being scrutinised in relation to this issue.
The Centre for Human Rights and the Environment (CEDHA) recently filed an Equator Principles Compliance Complaint to Equator Banks ING and BBVA on the grounds that both banks are considering financing pulp mills in Uruguay which, according to the IFC Compliance Advisor/Ombudsman (CAO), violate IFC Social and Environment Safeguard Policies and therefore the Equator Principles.
Responding to CEDHA’s complaint on behalf of more than 39 000 stakeholder victims, the CAO released the Preliminary Assessment Report on the two pulp mills in Uruguay. The report definitively proves Equator Principle violations during the environment assessment process. Further, CEDHA wishes to advise ING and BBVA of the enormous political, environmental,
social and financial risks faced by the projects which are the cause of major diplomatic unrest and a submission detailing human rights violations currently under consideration by the Inter-American Commission on Human Rights.
This is an unprecedented test-case for the Equator Principles as the legitimate and independent IFC advisor has provided clear evidence of Equator Principle non-compliance by the proponents. As Equator Banks, ING and BBVA cannot ignore the CAO report.
By filing the Compliance Complaint, CEDHA seeks assurance that the Equator Principles will be upheld and consideration of these projects will be suspended.
Further informatin can be found in the ING Compliance Complaint and accompanying Press Release. CEDHA hopes that both Equator and non-Equator banks, professionals working in the realm of project finance, and environment and social risk assessors, will take note and adhere to international obligations and fulfill the duty to respond to growing global expectations.