The Equator Principles are being updated: under “EP III” process

The Equator Principles (EP) are a set of voluntary principles developed by private banks to guide their social and environmental risk management systems. There are ten principles in total, listed below.

EQUATOR PRINCIPLES

Principle 1:  Review & Categorisation Principle 2:  Social & Environmental AssessmentPrinciple 3:  Applicable Social & Environmental StandardsPrinciple 4:  Action Plan & Management SystemPrinciple 5:  Consultation and DisclosurePrinciple 6:  Grievance MechanismPrinciple 7:  Independent ReviewPrinciple 8:  CovenantsPrinciple 9:  Independent Monitoring & ReportingPrinciple 10: EPFI reporting

Principle 3 provides the ‘Applicable Social and Environmental Standards’ which are supposed to be implemented according to the requirements of the remaining 9 principles. The Applicable Social and Environmental Standards are the Performance Standards of the International Finance Corporation (IFC) plus other relevant Environmental, Health and Safety Guidelines, although ‘justified deviation’ from these standards is permitted. In August 2011, the IFC Board adopted a revised set of Performance Standards and, in late 2011, the Equator Principles Association adopted these revised IFC Performance Standards in their entirety into the Applicable Social & Environmental Standards, Principle 3, of the Equator Principles. This incorporation became effective on 1 January, 2012.

In addition to this update, the Equator Principles as a whole are being revised in the EP III Update process which was launched in late 2011 and will continue into 2012. In March a draft version of a revised set of Equator Principles will be released for a 60-day formal public consultation. 

The new IFC Performance Standards are useful in that they require private companies to secure the free, prior and informed consent (FPIC) of indigenous peoples for a range of project activities. This standard of FPIC has been adopted into the Equator Principles through the incorporation of the IFC Performance Standards. The current on-going revision of the other Equator Principles could strengthen or weaken this requirement for FPIC and should be carefully monitored.

For more information: http://www.equator-principles.com