|Map of the Ichthys LNG Project Area|
in North West Australia
The Equator Principles website highlights that “Designated Countries [such as Australia and other high income OECD countries] are those countries deemed to have robust environmental and social governance, legislation systems and institutional capacity designed to protect their people and the natural environment”. The EPIII also notes that for “Projects located in Designated Countries, the Assessment process evaluates compliance with relevant host country laws, regulations and permits that pertain to environmental and social issues”. In the preceding paragraph, the EPIII highlights that for “Projects located in Non-Designated Countries, the Assessment process evaluates compliance with the then applicable IFC Performance Standards on Environmental and Social Sustainability (Performance Standards) and the World Bank Group Environmental, Health and Safety Guidelines (EHS Guidelines) (Exhibit III).”Despite the proponents in the Ichthys LNG Project reportedly used the EPIII performance standards in an Australian context. Read the post in full here.
Speaking in a purely personal capacity I'd like to see more use of the Equator Principles in developed countries. They're rigorous and well-understood internationally, and can help to allay international investor concerns and facilitate due diligence on a project. An excellent point is made in the comments for Mehrdad's piece:
Although Australia is a developed country, projects like this are usually situated in remote areas which have many of the same characteristics as developing nations: delicate & untouched environment, indigenous traditional landowners, etc. Local laws regulate these issues but, by hedging its bets, the bank does not have to due diligence local law to the same extent – and the syndicate’s lawyers don’t have to convince 41 credit committees.Thanks to Martin Birley for alerting me to the piece.
There's some very low-resolution images of the article from Project Finance International on the case below.