For those who wish to read around the subject here is a link to some of the critiques on the Equator Principles, The NGO Position Paper on Equator Principles II is now available. Unsurprisingly, the NGO’s do not think the revised Equator Principles go far enough.
However, the revision process has been a huge achievement, with an impressive level of co-operation from the financial institutions involved. They have certainly paved the way for more effective environmental and social risk mangement in project finance, and now wider financial transactions too.
NGO response in summary:
After analyzing the proposed revision, it is our sense that the EPFIs have failed to grasp this opportunity. While the draft EPII does offer some improvements, the overall approach is based on establishing the lowest common denominator and allowing some of the least committed institutions to hold the standards back.
Furthermore, the rushed engagement and review process does not allow the time necessary to address the fundamental problems and shortcomings of EPI. We share the concern of the EPFIs for a timely and efficient revision and adoption process, but we also strongly believe that excessive haste will result in a final product that does not address weaknesses and lack of clarity in the revised principles, which will be much more costly in the longer term.
They identify 2 particularly problematic projects that EP banks are considering financing as demonstrating that the EPs are not working effectively.
We especially consider two projects now under consideration as highly problematic, namely the Sakhalin II oil and gas project in the Russian Far East and the Botnia/ENCE pulp and paper mill projects in Uruguay.
BankTrack member groups and others have documented extensively that both projects are in gross violation of the Equator Principles. Yet, some of the very same banks that took the lead in EPI are now are seeking a lead role in financing these operations. It is these financial decisions that will ultimately determine whether or not the Principles are seen as credible and effective.