Petroleum Engineers Conference

WKC attends the 2016 Society of Petroleum Engineers Conference in Accra, Ghana

Marc Blanché from WKC’s South African office recently travelled to Ghana to present at the Society of Petroleum Engineers (SPE) Health Safety, Security, Environment and Social Responsibility Conference in Accra.

The main conference themes included:

• Overcoming security issues faced in Ghana
• Lessons learnt from infectious disease outbreaks in Ghana
• Ensuring operation safety in the midst of volatile regulatory changes and uncertainty
• Environment and Sustainability related technical sessions

Marc’s presentation was titled “Equator Principles and International Finance Corporation Performance Standards (IFC PS): Challenges with Implementation in Developing Economies”.  The abstract for the presentation is provided below.

The purpose of an Environmental and Social Impact Assessment (ESIA) is to determine whether a new development will lead to a measurable difference in the quality of the natural environment and the quality of life of impacted communities. ESIA, particularly in developed economies, has evolved into an area of professional analysis that goes beyond anticipating possible impacts, to one that sets out potential measures to avoid, reduce, mitigate or monitor the effects of new developments.

Within certain developing economies, however, there has been little evolution of ESIA regulation and limited institutional capacity within relevant governmental authorities.

In 2003 a number of prominent banks adopted the Equator Principles, essentially a credit risk management framework for determining, assessing and managing environmental and social risks in project finance transactions. The Equator Principles are underpinned by the IFC PS on Environmental and Social Sustainability. Over 80 banks and export credit agencies are signatories to the Equator Principles (known as Equator Principle Financial Institutions, or EPFIs).

The emergence of the Equator Principles / IFC PSs can significantly improve the standard of ESIA prepared by those seeking to access capital from EPFIs. Notwithstanding this, certain requirements remain aspirational and are problematic to implement in certain developing economies.

The paper addressed:

• The emergence of ‘lender standard’ ESIA and IFC PSs
• The procedure that needs to be followed to satisfy EPFIs that environmental and social risks have been assessed and addressed adequately for new projects
• The challenges of addressing Equator Principles / IFC PS requirements in developing economies with particular focus on IFC PS 3 – Resource Efficiency and Pollution Prevention

For more information on undertaking environmental studies in accordance with the Equator Principles or IFC Performance Standards, please contact us.