Background
EFIC’s corporate values include a commitment to uphold best-practice environmental and social standards in the transactions it supports. Our Policy for environmental and social review of transactions (Policy) sets out the principles EFIC applies to meet its corporate values, and our Procedure for environmental and social review of transactions (Procedure) describes how we implement the Policy.
EFIC incorporates two globally recognised approaches to environmental and social due diligence in its Policy and Procedure: the “Common Approaches” and the Equator Principles.
EFIC is bound by the Organisation for Economic Co-operation and Development (OECD) Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (the “Common Approaches”).
In March 2009 EFIC joined many financial institutions and export credit agencies by voluntarily adopting the Equator Principles. The Equator Principles provide a benchmark that financial institutions involved in project finance can use in their management of social and environmental risk.
Reporting
Principle 10 of the Equator Principles requires reporting on implementation of the Equator Principles, taking into account appropriate confidentiality considerations. EFIC’s Procedure provides information on:
- the environmental and social review process for all EFIC transactions (including project finance)
- our approval process
- our approach to including conditions covering environmental and social issues in EFIC’s transaction documents
- how the Equator Principles are incorporated into EFIC’s Procedure.
The Table below summarises the number of transactions signed over the past three financial years. It includes details of all EFIC transactions (other than transactions involving an EFIC Headway working capital guarantee, foreign exchange facility guarantee, producer offset loan or bonding lines) and separately identifies project finance transactions. The location, industry type, sector and results of screening and classification for individual projects supported by EFIC (including project finance) are provided in Table 3 of EFIC’s 2012 Annual Report.
Environmental and social review summary*
| |
Category A |
Category B |
Category C |
Existing project and non-project potential impact |
| |
|
|
|
Yes |
No |
| 2011–12 |
|
|
|
|
|
| All facilities |
2 |
5 |
7 |
1 |
13 |
| Project finance |
1 |
0 |
0 |
Not applicable |
Not applicable |
| 2010–11 |
|
|
|
|
|
| All facilities |
0 |
2 |
22 |
0 |
2 |
| Project finance |
0 |
0 |
0 |
Not applicable |
Not applicable |
| 2009–10 |
|
|
|
|
|
| All facilities |
1 |
4 |
13 |
Not separately considered |
Not separately considered |
| Project finance |
1 |
0 |
0 |
Not separately considered |
Not separately considered |
*facilities shown in the Annual Report to consist of multiple parts (shown by numbers in brackets in the Annual Report) are considered a single facility for the purposes of this table.
EFIC supported one project finance transaction in 2011–12, the Wiggins Island Coal Export Terminal. Although EFIC’s transaction involved an export finance guarantee, EFIC’s role and due diligence was effectively undertaken as project finance.
Principle 10 also requires reporting on transactions screened, i.e. transactions where due diligence has commenced but no decision on support made. Based on experience, EFIC reports as “screened” those project finance transactions for which a mandate or equivalent was received by EFIC. Two project finance transactions were screened during the 2012 financial year, both associated with Category A projects.
More information about the Equator Principles is available on the Equator Principles website.