Chapter 3-Regulatory Requirements

1 of 9Environmental Management Consultants Chapter 3

ESIA of LNG Terminal, Jetty & Extraction Facility - Pakistan Gasport Limited

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3 REGULATORY REQUIREMENTS

This chapter provides synopsis of policies, legislation,and guidelines that may have relevance to the proposedproject. The proponent of this project (Pakistan GasportLimited) will comprehensively follow the relevantrequirements of the policy documents and legislativeframework as well as those recommendations asdescribed in the national and international guidelines forthe proposed project. Many of those guidelines havebeen incorporated in the mitigation measures and theEnvironmental Management Plant (EMP) which hasformulated for the better environmental and socialimpacts management. Brief on some of those guidelinesand regulations are given below and also attached asAnnexure-II. The higher (better) of the listed regulations/ codes / standards have been used. Care has beentaken to ensure that these are not in conflict with those ofIFC Guidelines.

3.1- Policies and Plans

3.1.1- National ConservationStrategy

The National Conservation Strategy (NCS) is theprimary policy document approved by the FederalCabinet in March 1992. The NCS identifies 14 coreareas including conservation of biodiversity.

Review of the NCS in 2000 concluded in approval ofNational environmental Action Plan (NEAP) by thePakistan Environmental Protection Council under thechairmanship of the President/ Chief Executive ofPakistan in February 2001.

The Government of Pakistan (GoP) and UnitedNations Development Program (UNDP) have jointlyinitiated an umbrella support program called theNational Environmental Action Plan-Support Program(NEAP-SP) signed in October 2001 and implementedin 2002. The development objective supported byNEAP-SP is environmental sustainability and povertyreduction in the context of economic growth.

3.1.2- Biodiversity Action Plan

Pakistan is a signatory to the Convention onBiological Diversity, and is thereby obligated todevelop a national strategy for the conservation ofbiodiversity. The GoP has constituted a BiodiversityWorking Group under the auspices of the Ministry ofEnvironment, Local Government and RuralDevelopment to develop a Biodiversity Action Plan(BAP) for the country. The Plan, which has beendesigned to complement the NCS and the proposedprovincial conservation strategies, identifies thecauses of biodiversity lost and suggests a series ofproposals. Since the Plan is yet to be reviewed by theCabinet, its provisions have not been finalised.

3.1.3- LNG policy

Natural gas plays a key role in Pakistan's energybalance as it currently accounts for more than 50% ofthe country's primary energy supplies. The FederalGovernment of Pakistan (the "Government") hasprepared this policy (the "Policy") package forpotential investors in order to facilitate the successfulimplementation of LNG import projects. LNG policycovers Import Project Structure, LNG Procurement,Ownership & Operation of the LNG Terminal, RLNGMarketing & Transportation, Regulatory Frameworkduring construction period and operational period,Government Incentives, Pricing of RLNG,Government Guarantee, Freedom to Participate in theLNG Business, Technical Codes and Standards,Shipping of LNG, Other Permits and Licenses.

3.1.4- Maritime Policy of Pakistan

The National Maritime Policy of Pakistan has recentlybeen approved and notified on October 16, 2002. Thepolicy advocates "Management of Assets in ajudicious manner with conscientious regard to theenvironment and international law". The objective ofthe policy is "protection and conservation of maritime

environment/ecosystem" and section IV of the Policyholds the Port Authorities responsible to protect themaritime environment within their prescribed limits.This includes tasks of monitoring and combatingspills.

3.2- National Laws andGuidelines

3.2.1- Pakistan EnvironmentalProtection Act 1997

Pakistan Environmental Protection Act wasintroduced in December 1997 to provide theprotection, conservation, rehabilitation andimprovement of the environment, for prevention andcontrol of pollution, and promotion of sustainabledevelopment. Some of the relevant clauses withrespect to this study are as under:

Clause 12 - An Initial Environmental Examination(IEE) report is to be submitted for all proposeddevelopments. An Environmental & Social ImpactAssessment report is to be submitted for certain typesof major development and those that have asignificant adverse impact. Provincial EnvironmentalProtection Agency will have four months to respondto the reports.

Clause 16 - Environmental Protection Order: Itpermits Federal and Provincial EPAs to enforceprotection measures and remediation wherecontamination of the environment has taken place.

Clause 18 - Offences by Bodies Corporate: This clauseidentifies individual responsibility and liability toprosecution where contravention of an Ordinance iscommitted by a body corporate.

Clause 30 - Act to override other laws: This Act takesprecedence over other laws in effect at the time.

3.2.2- Pakistan EnvironmentalProtection Agency Review of and EIARegulations 2000

The Pakistan Environmental Protection AgencyReview of IEE and EIA Regulations, 2000 (the

'Regulations'), prepared by the Pak-EPA under thepowers conferred upon it by the PEPA, provide thenecessary details about the preparation, submission,and review of the initial environmental examination(IEE) and the Environmental & Social ImpactAssessment (EIA).

Categorisation of projects for IEE and EIA is one of themain components of these Regulations. Projects havebeen classified on the basis of expected degree ofadverse environmental impacts. Project types listed inSchedule II are designated as potentially seriouslydamaging to the environment, and those listed inSchedule I as having potentially less adverse effects.Schedule I projects require an IEE to be conducted,rather than a full-fledged EIA, provided that theproject is not located in an environmentally sensitivearea.

The projects which are constructed in the sensitiveareas are subject with the submission of EIA atplanning stage. The LNG jetty will be constructed inthe sea which involves reclamation of land for jettyinstallation as well as dredging activity to prepareroute for LNG transporting ships. Therefore thisprojects falls under Schedule-II of regulations and anEIA is mandatory. List of projects requiring an EIAunder PEPA, Review of IEE and EIA Regulations,2000 are attached in Annexure-I for ready reference.

EPA accords their approval subject to certainconditions, such as:

n Before commencing construction of the project,the proponent is required to submit anundertaking accepting the conditions.

n Before commencing operation of the project, theproponent is required to obtain NOC from theEPA a written confirmation of compliance withapproval conditions and requirements of the IEE.

It is required that an EMP be submitted with therequest for obtaining confirmation of compliance.

3.2.3- Port Qasim Authority Act, 1973(Modified in 2002)

This act empowers PQA to prepare master plan and a



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master-programme for the development of the portarea. Environmental control and prevention ofpollution in the port area are also responsibilities ofthis authority. This act encourages and promising theproponent to conduct EIA or IEE prior to anydevelopment in the port area. Clause 71B and 71C,explains the responsibilities of authorities and thepenalties of non-compliance. Both the clauses aregiven as under:

71B (Port to be Pollution Free, etc)

1) The authority shall be responsible for maintainingthe marine environments of the port's limit in order toensure that the sea, land and air are free from pollution.

2) No owner or master of the vessel or any industry,manufacturing establishment, mill, factory or any kind,cargo handling company, terminal operator, etc. shalldischarge any solid or liquid waste, oily, noxiousradioactive and hazardous substances, bilgedischarges, residues and mixtures containing noxioussolid and liquid wastes, de-blasting of unwashed cargotanks and line washing, garbage, emission of anyeffluent or waste or air pollution or noise in anyamount concentration or level in excess of NEQS, orstandards, which may be specified, from time to time,by the Authority of Port limits.

3) Any person contravening the provision of sub-section (2) shall be liable to penalty as determined andnoticed by the authority from time to time for eachcontravention in addition to the charges for cleaning ofport and removal of pollution there from.

Section 71C (Environmental Pollution etc)

4) No proponent of the project shall commenceconstruction or operation unless he has filed with thisauthority as IEE or, where the project is likely to causean adverse environmental effect, an EIA, and hasobtained from authority approval thereof.

5) The authority shall:

n Review the IEE and accord its approval, orrequired submission of an EIA by the proponent;or

n Review the EIA and accord its approval subject tosuch condition as it may deem fit to impose, orrequire that the EIA be re-submitted after suchmodification as may be stipulated.

For ready reference, relevant sections of PQA Act arebeing attached as Annexure-III.

3.2.4- National Environmental QualityStandards (NEQS) 2000

The NEQS were first promulgated in 1993 and havebeen amended in 1995 and 2000 by PEPA. These arethe basic guidelines for liquid effluent and gaseousemissions of municipal and industrial origin tocomply with. These standards present the maximumallowable concentration for liquid effluent before itsdischarge into sea, inland water & sewage (total 32parameters to comply with) and gaseous emissions inthe ambient air from industrial sources (total 16parameters to comply with).

The NEQS document is attached as Annexure-IV forreference.

3.2.5- Antiquities Act 1975

The Act defines ancient products of human activity,historical sites, or sites of anthropological or culturalinterest, national monuments etc. The act is designedto protect antiquities from destruction, theft,negligence, unlawful excavation, trade & export andprohibits new construction in the proximity of aprotected antiquity.

3.2.6- Forest Act 1927

This act empowers provincial forest authorities todeclare any area as forest. The proposed project is notin forest declared area; however, mangroves will havethe prime importance and their conservation will beconsidered when the project executed.

3.2.7- Ports Act 1908 and PakistanTerritorial Waters and Maritime ZonesAct 1976

The Ports Act 1908 ensures safe shipping in the sea and



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prevention of pollution in waters. Pakistan TerritorialWaters and Maritime Act 1976 regulates theexploration, development, conservation, andmanagement of living and nonliving resources inPakistan's Exclusive Economic Zone (EEZ), whichextends up to 200 miles from the country's coastal zone.

3.2.8- EIA guideline package ofPakistan Environmental ProtectionAgency

The PEPA prepared the Pakistan EnvironmentalAssessment Procedures in 1997. The guidelinespertaining to the review process of impact assessmentshave been recently given regulatory status in theReview of IEE and EIA Regulations 2000. The packageof regulations prepared by PEPA with relevance to thisIEE includes:

n Policy and Procedures for Filing, Review andApproval of Environmental Assessments;

n Guidelines for the Preparation and Review ofEnvironmental Reports;

n Guidelines for Public Consultation

Policy and procedures for filing, review and approvalof environmental assessments: These guidelines definethe policy context and the administrative proceduresthat will govern the environmental assessment process,from the project pre-feasibility stage, to the approval ofthe environmental report. According to the procedureslaid out in the policy guidelines, IEE's or EIA's are to befiled with the EPA of the province where the project isto be implemented. The PEPA has, however, beengiven the right to review any environmental report atany time and the power to revoke the decision of theprovincial EPA, if it deems this to be necessary. Projectshave been classified in the policy guidelines byexpected degree of adverse environmental impacts.Those projects having potential environmental impactsare listed in Schedule-A. Projects which havecomparatively slightly narrow environmental issuesand can be managed by less extensive analysis areincluded in Schedule-B and Schedule-C, includes thoseprojects which doesn't fall in Schedules A&B and donot require an EIA or IEE but an environmental

approval will be sought.

Guidelines for the preparation and review ofenvironmental reports: It requires proponents toprepare terms of reference for the environmentalassessment reports. It requires that all studies shouldcontain baseline data on the area and must contain anassessment of the potential environmental impacts andthe recommended mitigation measures.

Guidelines for public consultation: These guidelinesare a part of a package of regulations and guidelines. Itprovides assistance throughout the environmentalassessment of project by involving the public whichcan lead to better and more acceptable decision-making.

Public involvement, undertaken in a positive mannerand supported by a real desire to use the informationgained to improve the proposal, will lead to betteroutcomes, and lay the basis for ongoing positiverelationships between the participants.

3.2.9- Self- monitoring and reportingrules 2001

The Self-Monitoring and Reporting System will makethe country's industry owners and operatorsresponsible for systematic monitoring and reportingof their environmental performance.

By implementing this system, the government will, infact, transfer the responsibility for examining andevaluating industry's environmental performance toindividual industrial facilities. Apart from savingEPAs considerable expense, time and effort, thismeasure will enable industry to make long-termprovisions for eco-friendly production. The reporteddata will also enable government agencies to assistindustrial units in controlling their pollution levels.

3.3- International Conventions& Guidelines

3.3.1- MARPOL 1973 (modified in1978)

Ship generated waste is regulated globally as part of



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the implementation of the International Conventionfor the prevention of pollution from Ships 1973 asmodified by the Protocol of 1978 (MARPOL 73/78).The requirement of MARPOL 73/78 is established in20 Articles, two Protocols and five annexes; theseinclude contamination by oil, noxious liquidsubstances carried in bulk, harmful substances,sewage and garbage. Pakistan is signatory to all fiveannexes.

3.3.2- London Convention 1972

In 1972, The London Convention on the Prevention ofMarine Pollution by Dumping of Wastes and OtherMatter defines a Black List of toxic substances, and aGrey List of less hazardous substances that may onlybe dumped under a prior special permit, the dumpingof any other wastes not specified in these lists requiresa prior general permit. In 1990 this Convention wasamended to require signatory countries to considerwhether an adequate scientific basis exists forassessing the environmental impact of a substance (i.e.dredged material) before issuing a permit fordumping. Pakistan is signatory to the LondonConvention and a Notification came into force on 8thApril 1995.

3.3.3- IUCN Red List

IUCN has published red list, it includes those speciesthat are under potential threat of extinction. Thesespecies have been categorised as endangered,vulnerable in decline, lower risk species and datadeficient species that may be at risk of extinction in thewild. No faunal specie (observations) that fall underthe IUCN Red List category were made during recentsite surveys for the EIA study. The red list is attachedas Annexure-V for reference purpose.

3.3.4- Laws of Seas

The UN Convention on the Law of the Sea wasadopted and opened for signature in 1982. OnNovember 16th 1994, it entered into force for 68countries. Pakistan is signatory to the convention.It establishes a basic structure of obligations,

objectives and principles covering all sources ofmarine pollution that include: Pollution by vessels(operational and accidental discharges from ships)and Dumping (the deliberate disposal of wastes atsea by ships, aircrafts, platforms, or other manmade structures).

3.3.5- International Convention onBiodiversity

The Convention on Biological Diversity was adoptedduring the Earth Summit of 1992 at Rio de Janeiro.The Convention requires parties to develop nationalplans for the conservation and sustainable use ofbiodiversity, and to integrate these plans into nationaldevelopment programmes and policies. Parties arealso required to identify components of biodiversitythat are important for conservation, and to developsystems to monitor the use of such components witha view to promoting their sustainable use.

3.3.6- World Bank Guidelines onEnvironment

The principal World Bank publications that containenvironmental guidelines are listed below.

n Environmental Assessment-Operational Policy4.01. Washington, DC, USA. World Bank 1999

n Environmental Assessment Sourcebook, VolumeI: Policies, Procedures, and Cross-Sectoral Issues.World Bank Technical Paper Number 139,Environment Department, the World Bank, 1991& Environmental Assessment Sourcebook,Volume III: Guidelines for EnvironmentalAssessment of Energy and Industry Projects.World Bank Technical Paper No. 154,Environment Department, the World Bank, 1991

n Pollution Prevention and Abatement Handbook:Towards Cleaner Production, EnvironmentDepartment, the World Bank, United NationsIndustrial Development Organisation and theUnited Nations Environment Program, 1998

The first two publications listed here provide generalguidelines for the conduct of an EIA, and address the

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EIA practitioners themselves as well as projectdesigners. While the Sourcebook in particular hasbeen designed for the Bank projects, and is especiallyrelevant for the impact assessment of large-scaleinfrastructure projects, it contains enormousinformation which is useful to environmentalists andproject proponents.

3.3.7- IFC Guidelines

A- EHS guidelines for LNG

These EHS Guidelines are applied as required bytheir respective policies and standards. Theseindustry sector EHS guidelines are designed to beused together with the General EHS Guidelinesdocument, which provides guidance to users oncommon EHS issues potentially applicable to allindustry sectors.

B- General EHS Guidelines

The General EHS Guidelines contain information oncross-cutting environmental, health, and safetyissues potentially applicable to all industry sectors.

These General EHS Guidelines are designed to beused together with the relevant Industry Sector EHSGuidelines which provide guidance to users on EHSissues in Specific industry sectors. A complete list ofindustry-sector guidelines can be found at the EHSGuidelines contain the performance levels andmeasures that are generally considered to beachievable in new facilities by existing technology atreasonable costs.

The General EHS Guidelines are organized asfollows:

n Environmental

n Occupational health and safety

n Community health and safety

n Construction and decommissioning

This guideline applies to facilities or projects thatgenerate emissions to air at any stage of the projectlife-cycle. The applicability of the EHS Guidelines

should be tailored to the hazards and risksestablished for each project on the basis of theresults of an environmental assessment.

C- Environmental, Health, and SafetyGuidelines for Liquefied Natural Gas(LNG) Facilities

The Environmental, Health, and Safety (EHS)Guidelines are technical reference documents withgeneral and industry. These EHS Guidelines areapplied as required by their respective policies andstandards. EHS guidelines are designed to be usedtogether with the General EHS Guidelines document,which Provides guidance to users on common EHSissues potentially applicable to all industrial sectors.

The applicability of EHS Guidelines for Crude Oil andPetroleum Product Terminals include informationrelevant to land and shore-based petroleum storageterminals receiving and dispatching bulk shipmentsof crude oil, gasoline, middle distillates, aviation gas,lube oil, residual fuel oil, compressed natural gas(CNG), liquid petroleum gas (LPG), and specialtyproducts from pipelines, tankers, railcars, and trucksfor subsequent commercial distribution. Thisguideline covered Industry-Specific Impacts andManagement and Performance Indicators andMonitoring.

The EHS Guidelines for Liquefied Natural Gas (LNG)Facilities include information relevant to LNG baseload liquefaction plants, transport by sea, and re-gasification and peak shaving terminals. For coastalLNG facilities including harbours, jetties and ingeneral coastal facilities (e.g. coastal terminals marinesupply bases, loading/offloading terminals),additional guidance is provided in the EHSGuidelines for Ports, Harbours, and Terminals. ForEHS issues related to vessels, guidance is provided inthe EHS Guidelines for Shipping. Issues related toLPG/Condensate production and storage inliquefaction plants are not covered in this Guideline.

3.3.8- LNG Regulations

The following regulations provide guidelines for the



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design, construction and operation of LNG facilities.

n 49CFR Part 193 Liquefied Natural Gas Facilities:Federal Safety Standards- This section coverssiting requirements, design, construction,equipment, operations, maintenance, personnelqualifications and training, fire protection, andsecurity.

n 33CFR Part 127 Waterfront Facilities HandlingLiquefied Natural Gas and Liquefied HazardousGas - This federal regulation governs import andexport LNG facilities or other waterfront facilitieshandling LNG. Its jurisdiction runs from theunloading arms to the first valve outside theLNG tank.

n NFPA 59A Standard for the Production, Storage,and Handling of Liquefied Natural Gas (LNG) -This is an industry standard issued by theNational Fire Protection Association (NFPA).

NFPA 59A covers general LNG facilityconsiderations, process systems, stationary LNGstorage containers, vaporization facilities, pipingsystems and components, instrumentation andelectrical services, transfers of natural gas andrefrigerants, fire protection, safety and security. It alsomandates alternative requirements for vehicle fuelingfor industrial and commercial facilities usingAmerican Society of Mechanical Engineers (ASME)pressure vessel containers. This standard includesrequirements for LNG facilities to withstandsubstantial earthquakes. The NFPA standard for levelof design means that the LNG facilities are stronglyfortified for other events such as wind, flood,earthquakes and blasts.

The latest update of NFPA 59A was published in2001.

n NFPA 57 Standard for Liquefied Natural Gas(LNG) Vehicular Fuel Systems - This standardcovers vehicle fuel systems, LNG fuelingfacilities, installation requirements for ASMEtanks, fire protection, safety and security forsystems on board vehicles and infrastructurestoring 70,000 gallons of LNG or less.

European standards include the following.

n EN 1473 - The European Norm standard EN 1473Installation and equipment for Liquefied NaturalGas - Design of onshore installations evolved outof the British Standard, BS 7777 in 1996. It is astandard for the design of onshore LNGterminals. This standard is not prescriptive butpromotes a risk-based approach for the design.

n EN 1160 - Installation and equipment forLiquefied Natural Gas - General Characteristicsof Liquefied Natural Gas contains guidance onproperties of materials commonly found in LNGfacility that may come into contact with LNG.

n EEMUA 147 - Recommendations for the designand construction of refrigerated liquefied gasstorage tanks. This document contains basicrecommendations for the design andconstruction of single, double and fullcontainment tanks for the bulk storage ofrefrigerated liquefied gases (RLGs) down to -165°C, covering the use of both metal andconcrete materials.

Regulations applicable to LNG ships include:

n 33 CFR 160.101 Ports and Waterways Safety:Control of Vessel and Facility Operations. ThisU.S. federal government regulation describes theauthority exercised by District Commanders andCaptains of the Ports to insure the safety ofvessels and waterfront facilities, and theprotection of the navigable waters and theresources therein. The controls described in thissubpart are directed to specific situations andhazards.

n 33 CFR 165.20 Regulated Navigation Areas andLimited Access Areas: Safety zones. A safetyzone is a water area, shore area, or water andshore area to which, for safety or environmentalpurposes, access is limited to authorized persons,vehicles, or vessels. It may be stationary anddescribed by fixed limits, or described as a zonearound a vessel in motion. It is commonly usedfor ships carrying flammable or toxic cargoes,



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fireworks barges, long tows by tugs, or eventslike high speed races.

n 33 CFR 165.30 Regulated Navigation Areas andLimited Access Area: Security Zones. This sectiondefines a security zone as an area of land, water,or land and water that is so designated by theCaptain of the Port or District Commander forsuch time as is necessary to prevent damage orinjury to any vessel or waterfront facility, tosafeguard ports, harbors, territories, or waters ofthe United States or to secure the observance ofthe rights and obligations of the United States. Italso determines the purpose of a security zone -to safeguard vessels, harbors, ports, andwaterfront facilities from destruction, loss, orinjury from sabotage or other subversive acts,accidents, or other causes of a similar nature inthe United States and all territory and water,continental or insular, that is subject to thejurisdiction of the United States. Generally, itcovers ships with flammable or toxic cargoes,cruise ships, naval ships, and nuclear powerfacilities and airports.

The National Fire Protection Association (NFPA)develops fire safety codes and standards drawingupon the technical expertise of persons from diverseprofessional backgrounds that form technicalcommittees. These committees address concernsabout specific activities or conditions related to firesafety. The members of these committees use an openconsensus process to develop standards forminimizing the possibility and effects of fire. NFPAhas adopted two comprehensive standards, NFPA59A and NFPA 57, that relate to LNG.

NFPA 59A Standard for the Production, Storage andHandling of Liquefied Natural Gas (LNG) 2001Edition describes the basic methods of equipmentfabrication as well as LNG installation and operatingpractices that provide for protection of persons andproperty. It also "provides guidance to all personsconcerned with the construction and operation ofequipment for the production, storage, and handlingof liquefied natural gas." This comprehensivestandard contains detailed technical requirements to

ensure safety of LNG facilities and operations,including general facility considerations, processsystems, stationary LNG storage containers,vaporization facilities, piping systems andcomponents, instrumentation and electrical services.

The standard also incorporates, by reference,technical standards developed by a number of otherprofessional organizations, such as American Societyof Mechanical Engineers (ASME), the AmericanSociety of Civil Engineers (ASCE), the AmericanPetroleum Institute (API), the American ConcreteInstitute (ACI), and the American Society for Testingand Materials (ASTM).

The NFPA is not empowered to enforce compliancewith its codes and standards. Only regulatory bodiesor political entities that have enforcement powers canset the standards that the NFPA creates to regulate theindustry. An example is when FERC uses the NFPAstandards in their safety review of LNG facilities.

3.3.9- Equator Principles

Project financing, a method of funding in which thelender looks primarily to the revenues generated by asingle project both as the source of repayment and assecurity for the exposure, plays an important role infinancing development throughout the world. Projectfinanciers may encounter social and environmentalissues that are both complex and challenging,particularly with respect to projects in the emergingmarkets.

The Equator Principles Financial Institutions (EPFIs)have consequently adopted these Principles in orderto ensure that the projects we finance are developed ina manner that is socially responsible and reflect soundenvironmental management practices. By doing so,negative impacts on project-affected ecosystems andcommunities should be avoided where possible, andif these impacts are unavoidable, they should bereduced, mitigated and/or compensated forappropriately. We believe that adoption of andadherence to these Principles offers significantbenefits to ourselves, our borrowers and localstakeholders through our borrowers' engagementwith locally affected communities. We therefore



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recognise that our role as financiers affords usopportunities to promote responsible environmentalstewardship and socially responsible development.As such, EPFIs will consider reviewing thesePrinciples from time-to-time based onimplementation experience, and in order to reflectongoing learning and emerging good practice. ThesePrinciples are intended to serve as a common baselineand framework for the implementation by each EPFIof its own internal social and environmental policies,procedures and standards related to its projectfinancing activities. We will not provide loans toprojects where the borrower will not or is unable tocomply with our respective social and environmentalpolicies and procedures that implement the EquatorPrinciples.

There are major nine (9) principles which have beendefined in the Equator Principles given as follow:

n Principle-1: Review and Categorisation

n Principle-2: Social & Environmental Assessment

n Principle-3: Applicable Social & EnvironmentalStandards

n Principle-4: Action Plan and ManagementSystem

n Principle-5: Consultation and Disclosure

n Principle-6: Grievance Mechanism

n Principle-7: Independent Review

n Principle-8: Covenants

n Principle-9: EPFI Reporting

3.3.10- IFC Performance Standards onSocial & Environmental Sustainability

International Finance Corporation (IFC) applies thePerformance Standards to manage social andenvironmental risks and impacts and to enhancedevelopment opportunities in its private sectorfinancing in its member countries eligible forfinancing. The Performance Standards may also beapplied by other financial institutions electing toapply them to projects in emerging markets.

Together, the eight Performance Standards establishstandards that the client is to meet throughout the lifeof an investment by IFC or other relevant financialinstitution:

n Performance Standard-1: Social & EnvironmentalAssessment and Management System

n Performance Standard-2: Labour and WorkingConditions

n Performance Standard-3: Pollution Preventionand Abatement

n Performance Standard-4: Community Health,Safety and Security

n Performance Standard-5: Land Acquisition andInvoluntary Resettlement

n Performance Standard-6: BiodiversityConservation and Sustainable Natural ResourceManagement

n Performance Standard-7: Indigenous Peoples

n Performance Standard-8: Cultural Heritagecertain objectives have been set in the

Certain objectives have been set in the IFCperformance standards to achieve sustainabledevelopment. Those objectives are given below:

n To identify and assess social and environmentimpacts, both adverse and beneficial, in theproject's area of influence

n To avoid, or where avoidance is not possible,minimize, mitigate, or compensate for adverseimpacts on workers, affected communities , andthe environment

n To ensure that affected communities areappropriately engaged on issues that couldpotentially affect them

n To promote improved social and environmentperformance of companies through the effectiveuse of management systems.



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Documents

Chapter 3-Regulatory Requirements