12 October 2018
The Equator Principles (EPs) are a global set of voluntary standards that financial institutions sign on to – so that in financing large scale projects, they don’t harm people and the environment.
Market Forces, working with Vietnamese community organisations and other international NGOs, has found that EP signatory banks are violating those principles in their involvement in syndicates funding five Vietnamese coal-fired power stations. In doing so, they are failing the people that the principles seek to protect.
Tell Australia’s big four banks to use their influence at the October 2018 Equator Principles meeting
What do these violations mean?
Here’s an explanation of how six major banks have violated the Equator Principles in the projects they’ve been involved with, and why this matters.
|Violation||Equator Principle (EP)||Why does this matter?|
|Failure to ensure that the project sponsors disclose information key for communities to evaluate the impacts of proposed power stations, whether through Environmental and Social Impact Assessments (ESIAs) or other means.||EP 5: |
|Vietnamese people who live near the projects don’t know how the project might affect them – for example:
· The project might release warm water into the bay and fishing in the community may decline, affecting people’s livelihoods.
· The project’s coal ash dump might be close to where people live, harming kids with asthma or leading to other respiratory illnesses.
The problem is, the people around the plant don’t know the effects and the banks aren’t helping them get that information.
|Failure to require that communities are informed and engaged by ensuring the sponsors hold public consultations and engage stakeholders at the time of the ESIA and on an ongoing basis.||EP 5: |
|Vietnamese people who live around the projects aren’t being told about how the project might impact them (see above) or asked about what they need from the project. The banks aren’t helping them have a voice.|
|Failure to require compliance with Vietnamese Law on Environmental Protection:|
1. No evidence of public consultation
2. ESIAs over two years old without an executed project must be repeated.
|EP 3: Applicable Environmental and Social Standards||Vietnamese people aren’t being told information or asked about the project (see above), but also any information about the project that the government holds would be old. Things may have changed in years since the ESIA was completed. The banks need to make sure that up-to-date information is available so local people can make informed decisions.|
|Failure to ensure that the sponsors explore alternatives to the projects or by conducting alternatives analyses themselves.||EP 2: Environmental and Social Assessment||Without this information, Vietnamese people can’t consider whether wind or solar (great options in Vietnam) would be better from producing electricity than polluting coal.|
|Failure to demonstrate commissioning independent reviews.||EP 7: Independent Review||EP banks have to independently review the projects, not just rely on the information from the coal power developer. Vietnamese people should have the confidence that these reviews are being conducted.|
What are we doing about these violations?
All 94 Equator Principles financial institutions are meeting on 16 October 2018 to review the EPs and make some much needed and long overdue changes.
These principles are far from perfect in their current form. But, if they are to protect the people most affected by the Vietnamese coal-fired power projects, the banks that have signed up to them must be held accountable.
The other 88 financial institutions have a responsibility to ensure not only that they follow the EPs themselves, but also that their fellow signatories do so.
Australia’s big four banks – ANZ, Commbank, NAB and Westpac – are all EP members.
Market Forces is calling on the big four and all other banks to pull their fellow banks into line, or risk the integrity of the Equator Principles altogether.