`Equator Principles won't hurt investment'<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The decision by the world's leading commercial banks to apply
\nenvironmental principles when financing projects in developing
\ncountries would not dampen investment prospects in Indonesia, an
\nexpert said.<\/p>\n
"Frankly speaking, I do not think that it will discourage
\ninvestment here because at the implementation level there is
\ngoing to be -- to some extent -- a sort of compromise to strike a
\nbalance between the interests of creditors and debtors.<\/p>\n
"This means that the loans will continue, but there will be
\nagreed action plans or efforts to reduce and minimize the adverse
\nimpacts of the projects on the environment," Citibank economist
\nAnton Gunawan told The Jakarta Post on Friday.<\/p>\n
Anton was commenting on a joint statement issued earlier by
\nthe World Bank stating that ten major banks from seven countries
\nwould adopt a series of guidelines on social and environmental
\nissues in loans to developing nations.<\/p>\n
The banks will apply the agreement -- known as the "Equator
\nPrinciples" -- for financing purposes in all industrial sectors,
\nincluding mining, oil and gas, and forestry.<\/p>\n
The ten banks are ABN AMRO Bank and Rabobank of the
\nNetherlands; Barclays Plc. and Royal Bank of Scotland of Britain;
\nU.S.-based Citigroup Inc.; French-based Credit Lyonnais; Credit
\nSuisse Group of Switzerland; HVB Group and WestLB AG of Germany;
\nand Westpac Banking Corporation of Australia.<\/p>\n
According to the World Bank, these banks extended a total of
\nUS$14.5 billion in project loans in 2002 worldwide, with 30
\npercent of those going to developing countries.<\/p>\n
Anton said that the initiative had been under discussion for
\nsome time in various international economic forums, including the
\nWorld Trade Organization and Asia Pacific Economic Cooperation
\nforum.<\/p>\n
"They have been asking for more participation from the private
\nsector to help create sustainable (economic) development. So,
\nthis should serve as a response," he added.<\/p>\n
He admitted that the adoption of the agreement would raise
\ncosts on the part of borrowers, but not to a level that would
\ndiscourage investment.<\/p>\n
"All they (borrowers) have to do is to make a proper
\nassessment on the possible impacts of the project on the social
\nand environmental sectors. The cost should not be that high."<\/p>\n
Key points in Equator Principles<\/p>\n
1. The borrower has to make assessments on such issues as
\nsustainable development and the use of renewable natural
\nresources; protection of human health, cultural properties, and
\nbiodiversity; avoiding the use of dangerous substances;
\nsocioeconomic impacts.<\/p>\n
2. The assessment will be conducted in compliance with the
\napplicable host country laws, regulations and permits required by
\nthe project.<\/p>\n
3. The borrower has to covenant to provide regular reports,
\nprepared by in-house staff or third party experts, on compliance
\nwith the Environmental Management Plan (EMP).<\/p>\n
4. As necessary, lenders can appoint an independent environmental
\nexpert to provide additional monitoring and reporting services.<\/p>\n
5. The principles apply to projects with a total capital cost of
\nUS$50 million or more.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/equator-principles-wont-hurt-investment-1447893297",
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"sponsor": "Okusi Associates",
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