Clearly it is important for EP banks to turn away projects that are unsuitable on environmental and social grounds, as this is an important function of the Equator Principles. Equally, Financial Institutions should not be pressurised into avoiding all high risk projects, it needs to be recognised that in some cases banks with a reasonable appetite for risk can work with their clients to build capacity and transform unsuitable projects into environmentally and socially acceptable ones, and that this transfer of knowledge can have longer term benefits.
Dutch banking giant ING announced that its participation in the 1.7 billion USD controversial paper mill project of Finnish company Botnia in Uruguay "is no longer under consideration". The paper mill has been strongly criticized in Uruguay and Argentina for its severe negative environmental impacts. The ING Group had an advisory role to the company and was to arrange a USD 480 million loan package from private banks for the project.
"The paper mill is exactly the sort of project that should not pass the Equator Principles test. At a time when major banks debate a revision of the Equator Principles it is a very welcome signal that ING took its social and environmental responsibilities seriously" said Johan Frijns, coordinator of BankTrack.