EIA Reserve Matters

September 22, 2008

The amended EIA regulation came into force on the 1st September 2008.

These Regulations amend the Town and Country Planning (Environmental Impact Assessment) (England and Wales) Regulations 1999 (the 1999 Regulations”) so that they apply to applications for subsequent approval of matters under conditions attached to planning permissions.

In 2006, the House of Lords and the European Court of Justice (ECJ) ruled that the UK had failed to transpose the EIA Directive correctly, because the Regulations implementing the EIA Directive allowed only for EIA before the grant of outline planning permission and not at the later stage when reserved matters were approved.

The ECJ ruled that where development cannot be carried out until details relating to reserved matters are approved by a local planning authority, the decisions to grant outline planning permission and to approve the reserved matters must be considered to constitute, as a whole, a multi-stage development consent for the purposes of the EIA Directive. If it became apparent during the course of the second stage that the project was likely to have significant effects on the environment (for example, where those effects were not identifiable until then) then an environmental impact assessment was required. Since the Regulations then in force did not allow for EIA to be required at that stage, they did not fully implement the EIA Directive.

These Regulations amend the 1999 Regulations to close the loophole identified by the ECJ. As well as applying to applications for approval or reserved matters and other matters under a condition, they also apply to ROMP (review of mineral permissions) applications.


China drafts environmental guidelines for firms investing abroad

September 16, 2008

China is drafting environmental guidelines for companies investing in or providing economic aid to overseas countries.

 The work is being undertaken by the Chinese Academy for Environmental Planning (CAEP), in cooperation with the Global Environmental Institute (GEI) and the University of International Business and Economics. The first draft is now being discussed, the GEI said.

 A report released by the CAEP last week said the country lacked comprehensive environmental protection policies in its overseas projects, although investment had been expanding.

 Statistics show that between 2002 and 2006, China’s overseas non-financial direct investment grew by 60 percent annually. By the end of 2006, 5,000 Chinese companies had set up nearly 10,000 directly invested firms and invested $90.6 billion in 172 countries.

China’s overseas investment and aid mainly focuses on exploring oil and other resources, processing, manufacturing, and construction in African and Southeast Asian countries. Without proper management, such projects are likely to cause environmental problems, the report said.

In April, several companies, including China Mobile, Haier Group, and China International Marine Containers, joined “Caring for Climate”, a voluntary UN initiative to combat global climate change. Liu Meng, director of UN Global Compact China Office, told China Daily earlier that these companies’ participation suggests that China’s business sector is catching up with its international counterparts on climate issues.

China National Petroleum Corporation, the country’s largest oil producer, has pledged to stick to stringent environmental requirements before deciding on overseas projects.

Currently, only four banks in China have either formulated independent environmental standards for financing, or have joined the United Nations Environment Program Finance Initiative to reduce environmental risks.

Minimum Requirements for Equator Principle Reporting and one year of EPII Implementation and

September 17, 2007

A template which sets out the minimum reporting requirements for EPII has also been released. This covers:

  • An annual report;
  • The number of projects screened each year;
  • The category and number of projects reviewed;
  • A discussion on EP implementation (although the scope of this is completely up to the bank concerned).
  • The template also contains suggested formats for providing regional and sectoral information, but this is not obligatory.

The template certainly is minimal and unsurprisingly many organisations and shareholders will be expecting the banks to provide substantially more information than is set out in the requirements. Many EP banks are already providing far more information and are setting an excellent example for those that have signed up to the principles more recently.

On May 14, 26 out of 51 EPFIs met to discuss lessons learned and challenges related to EPII implementation.

6 recent adopters attended the event and made a significant contribution to the success of the meeting. EPFIs have been implementing the new Principles for nearly one year following their revision and launch in London last July. Bank of America hosted the day-long event in Washington, DC. Issues related to EPFI governance, disclosure and transparency related to Principle 10, and other items were discussed. This EPFI meeting was then followed by a 2-day series of meetings at the International Finance Corporation (IFC’s) “Community of Learning” event which focused on lessons learned from application of the IFC Performance Standards. EPFIs interacted with and heard from IFC senior management and staff, and also had the opportunity to interact with a number of environmental representatives of Development Finance Institutions (DFIs) from across the globe.

A-Z Guidelines to Successful Public Private Partnership

November 3, 2006

This seminar is being held by the European Public Private Partnership Centre in Hungary. On the 27th – 29th November 2006, at the Corinthia Aquincum Hotel, Budapest.

I am delighted to have been invited to present on ‘The need for environmental and social risk management for PPP Projects’.

The European Public-Private Partnership Center (EPPPC) was established to serve as a know-how center for public sector bodies, private entrepreneurs, investors and other industry players in the growing international marketplace of PPPs. Their state aim is to fully embrace the idea of PPP and educate the above representatives by offering them comprehensive training services as well as widespread expertise through consulting.

Link to the Training Workshop Brochure

Investment in emerging markets – opportunities for risk management and sustainability

October 2, 2006

Until the last few years, the conventional view towards investing in emerging markets was that sustainability considerations too often appeared subordinate to the quest for economic growth. Emerging markets are now seen by many in the investment community as a place where good rewards can be earned.
EIRIS had just completed a review of the opportunities for responsible investment in emerging markets, which reveals the possibilities for diversification and risk management for investors as well as wider potential gains for sustainability.

The report identifies factors hindering Socially Responsible Investment in emerging markets:

  • perceived lack of consistent and widespread good corporate governance
  • continuing government ownership and control such as with many large listed Asian companies that can be a critically important variable in Environmental and Social Governance performance
  • the retention of large controlling interests by families in many emerging market companies that limit the rights and influences of minority shareholders.
  • even where governance, environmental or labour regulations are strong in some countries, enforcement is sometimes weak.
  • doubts about the honesty of some disclosed information or its credibility. For instance, in relation to ISO14001, the reputation of those providing the certification is crucial for trusting the information disclosed.
  • difficulties in engaging with companies in emerging markets. Although language may be a factor in some cases, the corporate culture of many companies is not yet responsive or attuned to international investors especially relating to environmental and social issues.
  • a limited number of third party organisations in these countries or regions to undertake the research required on companies. The Iinternational Finance Corporation is undertaking initiatives to facilitate and increase this research capacity.

New Report on Conflict-Sensitive Business Practice (CSBP)

September 29, 2006

A new report Conflict-Sensitive Business Practice: Engineering Contractors and their Clients, has been prepared by Engineers Against Poverty and International Alert

Contractors operating in unstable states face a range of conflict risks. Oil, gas and mining projects, which frequently have significant contractor involvement, can inadvertently trigger or sustain violence, or become the focus of resentment themselves. Produced in partnership with Engineers Against Poverty, this guidance note is addressed both to engineering contractors and their clients. It examines some key issues related to conflict, contractors and conflict sensitivity, and introduces conflict-sensitive business practice (CSBP) – steps through which these issues can be understood and managed.

The report outlines some of the key costs of conflict to projects, which include:
Direct costs:

  • Security – Higher payments to state/private security firms; staff time spent on security management
  • Risk management – Insurance, loss of coverage, specialist training for staff, reduced mobility and higher transport costs
  • Material – Destruction of property or infrastructure
  • Delays – Lost time through site blockades or disruption of materials and services
  • Capital – Increased cost of raising capital
  • Personnel – Kidnapping, killing and injury; stress; recruitment difficulties; higher wages to offset risk; cost of management time spent protecting staff
  • Reputation – Consumer campaigns, risk-rating, share price, competitive loss
  • Litigation – Expensive and damaging law suits

Indirect costs:

  • Human – Loss of life, health, intellectual and physical capacity
  • Social – Weakening of social capital
  • Economic – Damage to financial and physical infrastructure, loss of markets
  • Environmental – Pollution, degradation, resource depletion
  • Political – Weakening of institutions, rule of law, governance movements

Barclays, believes that business ethics are key ingredient to their record financial performance

August 4, 2006

John Varley, Group CEO of Barclays, explains why business ethic are so important to branding and maintaining good relationships with stakeholders – customers, employees, regulators and investors. Barclays sets out how these considerations have made an inherent contribution towards to their ongoing strong financial performance.

Imagine that you’re a big organisation, making good returns on capital. You can make choices that are irresponsible … but lucrative. But bit-by-bit, as the values that bind your organisation together are compromised through irresponsible choices, and the trust of your customers is diluted, your brand will suffer. And let’s be sure about this: brands are far more important to stock market value and sustained growth, than short term profits.

Beyond financial results

  • In February of 2005, Barclays reported a record financial performance.
  • A few weeks ago I was able to report another record performance – in the area of corporate responsibility.
  • Many of you will have seen the recent results of the Business in the Community “Companies that count” index in the Sunday Times. This year we’re 3rd – our highest ever ranking.

Our top three ranking reveals something important: a strong performance as a responsible corporate citizen does not conflict with strong financial performance.

Business-wide responsibility

We can’t (and shouldn’t) separate our corporate responsibility activity from our daily business. Nor can we separate corporate responsibility from our brand. That’s because the people we seek to reach with our brand expect us to be responsible.

Our stakeholders – customers, employees, regulators and investors are becoming more sensitive to our changing world. They are intensely interested in ethical, environmental and social issues, and business conduct. For customers making buying decisions, corporate responsibility is a point of difference. For talented people looking to move organisations, corporate responsibility is a point of difference.

Really making a difference

Another example of where we have taken an important lead is our involvement as a founder member of the Equator Principles. The Equator Principles form a framework for a thorough independent environmental – and social – assessment of the impact of project financing, for major infrastructural programmes, such as dams and pipelines and mining.

We’re a leading provider of financing of this sort. So it’s an important area of business for us. But we have made a choice about how we are going to participate in this business. And by doing so, we are influencing other participants. More and more governments and construction companies are making the same kind of choice.

They realise that financing will be easier to obtain if the project complies with the Equator Principles.

Extracts from the text of John Varley’s speech on 31st May at the Fifth Ethical Corporation Summit in London