Scope

EFIC introduced its Environment Policy (the policy) in July 2000 after public consultation and research of practices worldwide.

The policy provides a framework for identifying and assessing any significant environmental impacts of export transactions and overseas investments for which EFIC facilities are sought. Since the introduction of the policy, EFIC has used an environmental screening process to categorise transactions as A, B, or C. The policy also provides for interested parties to be informed about significant transactions under consideration and enables them to make submissions in relation to proposed transactions.

EFIC committed to reviewing its policy at a time consistent with the first approval or rejection of a Category A transaction. To assist with the review process, PricewaterhouseCoopers (PwC) was asked to assess compliance related matters concerning the implementation and operation of the policy from July 2000 to March 2003.

This report is the result of the compliance assessment and reflects the compliance issues that were prepared by PwC and subsequently made public by EFIC.

Key Findings

In summary, based on interviews and sampling of records, the PwC assessment found that EFIC was in compliance with its Environment Policy during the period of July 2000 to March 2003.

The results of the review

EFIC is complying with its Environment Policy

Key findings are:

at the Letter of Offer stage it was noted that in all 34 existing facilities examined, the process for identifying and assessing significant environmental impacts was complied with
for all Category A transactions examined (which includes the only Category A existing facility available at the time) an extensive Environmental Report addressing social and environmental impacts was prepared and summarised in a board paper
for all Category B existing facilities examined an Environmental Report was prepared using project specific environmental assessments compiled by others, or internal and external reference materials sourced by EFIC
of the 25 Category C existing facilities examined, 3 were not in compliance with EFIC's internal control procedures
EFIC has declined 2 proposals on environmental grounds
EFIC encourages exporters to adopt the World Bank Group's Pollution Prevention and Abatement Handbook (PPAH) as their principal reference for environmental impact, however situations have arisen where the PPAH has not been adopted for Category A transactions
for Category A transactions EFIC supplements the use of the PPAH with other standards including (but not limited to):
- IFC safeguard policies
- International Cyanide Management Code
- Australian and New Zealand Guidelines for Fresh and Marine Water Quality
the significance of social issues is assessed as an integral part of the environment risk assessment process for Category A existing facilities, and in the case of Sepon Gold consultants were commissioned by the sponsor to obtain an understanding of local public comment
independent assessments of environment or community impacts are undertaken when there are either capacity or knowledge constraints within EFIC
all Category A existing facilities have been accurately disclosed in annual reports
a number of Category B and Category C existing facilities were reported on an aggregate basis for the review period due to the low level of financial exposure involved EFIC's legal counsel monitors 67 international commitments defined in treaties, protocols and other declarations.

EFIC should consider the following matters as part of its Environment Policy review process going forward:

provide clarity as to how the content of the customs website is applied within EFIC beyond the list of ‘banned substances and herbicides'
further review the list of 67 international commitments defined in treaties, protocols and other declarations, recognising that this list was last updated in October 2001
update the checklists for excluded goods and restricted goods so that they reflect any new relevant content on the customs exclusion website, and any possible changes from the 67 international commitments that EFIC monitors
update formal environmental procedures to better reflect existing practices when dealing with Category A facilities, including:
- use of environmental conditions in policy statements
- use of board papers and board approval
- use of special conditions attached to the board approval and monitored through the Covenant Register of Agreement .

View the full report from PricewaterhouseCoopers.