中英第三方市场国家基础设施合作项目：ESG+指引（英文版）VIP专享VIP免费

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Guide

Environmental, Social and

Governance (ESG) Evaluation and Assessment

for Overseas Infrastructure Projects

UK-China Third Country Infrastructure Cooperation

Programme

September 2020

China Infrastructure Programme background

This was a three year programme between China and the UK which ended in October 2021.

The programme brought together international and Chinese expertise to increase the

sustainability, quality and commercial viability of Chinese-led, growth-enhancing infrastructure

in Africa and Asia and increase access to private capital.

A key aspect of this programme was joint UK-China working to promote the application of best

practices to improve the quality of infrastructure delivery across the project lifecycle in

developing countries. Through collaboration, the aim was to increase the participation of

international private capital and create opportunities for UK, Chinese and international

businesses.

Geographic coverage

The programme was funded by the British Embassy Beijing. the programme was targeted at

ODA eligible countries (e.g. lesser developed markets).

The geographic focus of the programme was in developing African and Asian countries.

However, a number of recommendations, particularly in relation to the development, financing,

and delivery of high quality infrastructure projects also apply to other markets The countries

selected for analysis in this report have been selected to provide a mix of countries across

these regions.

Certain reports refer to experience from developed markets where there are relevant lessons

for African and Asian countries. However, they do not cover the detailed procurement practices

or issues faced by Chinese State Owned Enterprises (SOEs) in these markets.

Infrastructure project lifecycle

The programme supported changes across the project lifecycle as set out below. This is critical

to increasing the sustainability, quality and commercial viability of projects.

Purpose of the technical assistance reports

The China Infrastructure Programme was designed to bring together International and Chinese

expertise to increase the sustainability, quality, commercial viability and bankability of Chinese-

led, growth-enhancing infrastructure in Africa and Asia.

The programme has now closed. One closure activity was to make certain Technical Assistance

Reports produced by the programme publicly available to Chinese and other organisations

involved in overseas infrastructure development and financing.

The Reports are hosted on CHINCA’s website.

This introductory document provides brief descriptions of each report and maps them to stages

of the project lifecycle.

Intended audiences

The primary audiences for the Reports are :

a) Chinese SOEs engaged or interested in delivering infrastructure projects in Africa and

Asia (and also with potential applicability to other markets);

b) Chinese financial institutions and investors involved in financing and/or investing in

Chinese infrastructure projects in overseas markets; and

c) Policy-makers and regulators in China who are involved in activities relating to Chinese

infrastructure projects in overseas markets.

The Reports may also comprise useful reference documents for:

a) International and British companies and financial institutions engaged or interested in

international-China infrastructure cooperation in developing markets, particularly Africa

and Asia; and

b) The broader community of international infrastructure experts.

Important Notice

The Technical Assistance Reports as detailed within this introductory document were produced

under the UK-China Infrastructure Programme and were created based on information

available at the time of creation of these Reports.

The reports remain under the ownership of UK Government which reserves the right to

separately distribute copies of the report.

You agree to use the contents of the Reports in a way that does not restrict or inhibit the use

and enjoyment of this site by anyone else. The UK Government can change or remove content

at any time without notice.

You agree to release the UK Government from any claims or disputes that may come from

using these Reports.

The UK Government does not give any guarantees, conditions or warranties about the accuracy

or completeness of any content used by these Reports.

Views expressed do not necessarily reflect Foreign Commonwealth and Development Office's

official policies

You should get professional or specialist advice before doing anything on the basis of the

Reports.

The UK Government is not liable for any loss or damage that may come from using the Reports.

This includes:

any direct, indirect, or consequential losses; and

any loss or damage caused by civil wrongs (‘tort’, including negligence), breach of contract or

otherwise.

This applies if the loss or damage was foreseeable, arose in the normal course of things or you

advised us that it might happen.

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GuidetoEnvironmental,SocialandGovernance(ESG)EvaluationandAssessmentforOverseasInfrastructureProjectsUK-ChinaThirdCountryInfrastructureCooperationProgrammeSeptember2020ChinaInfrastructureProgrammebackgroundThiswasathreeyearprogrammebetweenChinaandtheUKwhichendedinOctober2021.TheprogrammebroughttogetherinternationalandChineseexpertisetoincreasethesustainability,qualityandcommercialviabilityofChinese-led,growth-enhancinginfrastructureinAfricaandAsiaandincreaseaccesstoprivatecapital.AkeyaspectofthisprogrammewasjointUK-Chinaworkingtopromotetheapplicationofbestpracticestoimprovethequalityofinfrastructuredeliveryacrosstheprojectlifecycleindevelopingcountries.Throughcollaboration,theaimwastoincreasetheparticipationofinternationalprivatecapitalandcreateopportunitiesforUK,Chineseandinternationalbusinesses.GeographiccoverageTheprogrammewasfundedbytheBritishEmbassyBeijing.theprogrammewastargetedatODAeligiblecountries(e.g.lesserdevelopedmarkets).ThegeographicfocusoftheprogrammewasindevelopingAfricanandAsiancountries.However,anumberofrecommendations,particularlyinrelationtothedevelopment,financing,anddeliveryofhighqualityinfrastructureprojectsalsoapplytoothermarketsThecountriesselectedforanalysisinthisreporthavebeenselectedtoprovideamixofcountriesacrosstheseregions.CertainreportsrefertoexperiencefromdevelopedmarketswheretherearerelevantlessonsforAfricanandAsiancountries.However,theydonotcoverthedetailedprocurementpracticesorissuesfacedbyChineseStateOwnedEnterprises(SOEs)inthesemarkets.InfrastructureprojectlifecycleTheprogrammesupportedchangesacrosstheprojectlifecycleassetoutbelow.Thisiscriticaltoincreasingthesustainability,qualityandcommercialviabilityofprojects.PurposeofthetechnicalassistancereportsTheChinaInfrastructureProgrammewasdesignedtobringtogetherInternationalandChineseexpertisetoincreasethesustainability,quality,commercialviabilityandbankabilityofChinese-led,growth-enhancinginfrastructureinAfricaandAsia.Theprogrammehasnowclosed.OneclosureactivitywastomakecertainTechnicalAssistanceReportsproducedbytheprogrammepubliclyavailabletoChineseandotherorganisationsinvolvedinoverseasinfrastructuredevelopmentandfinancing.TheReportsarehostedonCHINCA’swebsite.Thisintroductorydocumentprovidesbriefdescriptionsofeachreportandmapsthemtostagesoftheprojectlifecycle.IntendedaudiencesTheprimaryaudiencesfortheReportsare:a)ChineseSOEsengagedorinterestedindeliveringinfrastructureprojectsinAfricaandAsia(andalsowithpotentialapplicabilitytoothermarkets);b)Chinesefinancialinstitutionsandinvestorsinvolvedinfinancingand/orinvestinginChineseinfrastructureprojectsinoverseasmarkets;andc)Policy-makersandregulatorsinChinawhoareinvolvedinactivitiesrelatingtoChineseinfrastructureprojectsinoverseasmarkets.TheReportsmayalsocompriseusefulreferencedocumentsfor:a)InternationalandBritishcompaniesandfinancialinstitutionsengagedorinterestedininternational-Chinainfrastructurecooperationindevelopingmarkets,particularlyAfricaandAsia;andb)Thebroadercommunityofinternationalinfrastructureexperts.ImportantNoticeTheTechnicalAssistanceReportsasdetailedwithinthisintroductorydocumentwereproducedundertheUK-ChinaInfrastructureProgrammeandwerecreatedbasedoninformationavailableatthetimeofcreationoftheseReports.ThereportsremainundertheownershipofUKGovernmentwhichreservestherighttoseparatelydistributecopiesofthereport.YouagreetousethecontentsoftheReportsinawaythatdoesnotrestrictorinhibittheuseandenjoymentofthissitebyanyoneelse.TheUKGovernmentcanchangeorremovecontentatanytimewithoutnotice.YouagreetoreleasetheUKGovernmentfromanyclaimsordisputesthatmaycomefromusingtheseReports.TheUKGovernmentdoesnotgiveanyguarantees,conditionsorwarrantiesabouttheaccuracyorcompletenessofanycontentusedbytheseReports.ViewsexpresseddonotnecessarilyreflectForeignCommonwealthandDevelopmentOffice'sofficialpoliciesYoushouldgetprofessionalorspecialistadvicebeforedoinganythingonthebasisoftheReports.TheUKGovernmentisnotliableforanylossordamagethatmaycomefromusingtheReports.Thisincludes:anydirect,indirect,orconsequentiallosses;andanylossordamagecausedbycivilwrongs(‘tort’,includingnegligence),breachofcontractorotherwise.Thisappliesifthelossordamagewasforeseeable,aroseinthenormalcourseofthingsoryouadvisedusthatitmighthappen.GuidetoESGforInfrastructureprojectsSeptember20200TableofContentsUK-ChinaThirdCountryCooperationProgramme..............................................................41Synopsis............................................................................................................................51.1ESGStandards..................................................................................................................71.2ESGBestpractice.............................................................................................................81.3InternationalPrivateCapitalandESG................................................................................91.4Ongoinginitiativesandtools..............................................................................................92LegalandInstitutionalFrameworks.............................................................................122.1TheEquatorPrinciples(EPs)IV(2020)...........................................................................122.2TheIFCPerformanceStandardsonEnvironmentalandSocialSustainability(2012)......162.3TheWorldBankGroupEnvironmental,HealthandSafety(EHS)Guidelines..................192.4BRIGreenInvestmentPrinciples(2019)..........................................................................232.5OverviewoflocalEIAFramework....................................................................................252.6ComparisonofHostCountryandEP/IFCRequirements..................................................313OverviewofEnvironmentalandSocialManagementSystems(ESMS).......................344BestPracticeApproachbyProjectStage....................................................................414.1Planning–ProjectConcept.............................................................................................434.2Construction–AssetDevelopment..................................................................................534.3CommissioningandOperation.........................................................................................534.4ProjectClosure................................................................................................................545PhysicalClimateRisks...................................................................................................565.1ImportanceofPhysicalClimateRiskassessments..........................................................565.2ScreeningforPhysicalClimateRiskandAdaptationImpact............................................585.3AppraisalofPhysicalClimateRiskandAdaptation..........................................................595.4MonitoringandReportingofAdaptationImpact...............................................................626ESGandPrivateProjectFinancing.............................................................................646.1Environmental,SocialandGovernance(ESG)impactonFinancialPerformance...........646.2AdditionalProjectFinancierStandardsforESG..............................................................646.3ESGBenchmarking........................................................................................................67GuidetoESGforInfrastructureprojectsSeptember20201AbbreviationsInthisGuide,thefollowingabbreviationsshallhavethefollowingmeaningsunlessotherwisestatedAbbreviationMeaningAIAppointedIndividualsAfDBAfricanDevelopmentBankADBAsianDevelopmentBankAIIBAsianInfrastructureInvestmentBankALARPAsLowAsReasonablyPracticableAPUAuxiliaryPowerUnitsASEANAssociationofSouthEastAsianNationsBATBestAvailableTechnologyBEIsBiologicalExposureIndicesBRIBeltandRoadInitiativeBODBiochemicalOxygenDemandCDPCommunityDevelopmentPlanCFCChlorofluorocarbonsCIACumulativeImpactAssessmentCOAEIAApprovalConditionsDGDynamicGrowthDOEDepartmentofEnvironmentDOSHDepartmentofOccupationalSafetyandHealthE&SEnvironmentalandSocialEUEuropeanUnionEAREnvironmentalAuditReportEBExistingBuilt-UpAreaEBRDEuropeanBankforReconstructionandDevelopmentEHSEnvironmental,HealthandSafetyEIAEnvironmentalImpactAssessmentEIATRCEIATechnicalReviewCommitteeEMFElectromagneticFieldEMPEnvironmentalManagementPlanEMREnvironmentalMonitoringReport(EPEquatorPrincipleEPAPEquatorPrinciplesActionPlanEPDEnvironmentProtectionDepartmentEPFIEquatorPrinciplesFinancialInstitutionsEQAEnvironmentalQualityActESGEnvironmental,SocialandGovernanceESIEnvironmentalScopingInformationESIAEnvironmentalandSocialImpactAssessmentESMPEnvironmentalandSocialManagementPlanESMSEnvironmentalandSocialManagementSystemESPOEuropeanSeaPortsOrganisationEUEuropeUnionEXCOExecutiveCouncilFPICFreePriorandInformedConsentFSFeasibilityStudyFSBFinancialStabilityBoardGAGovernmentAgencyGuidetoESGforInfrastructureprojectsSeptember20202GACGranularActivatedCarbonGCAGlobalCommissiononAdaptationGHGGreenhouseGasGIIPGoodInternationalIndustryPracticeGWPGlobalwarmingpotentialH&SHealth&SafetyHAZMATHazardousMaterialsHAZIDHazardIdentificationHAZOPHazardandOperabilityHQHeadquarterHVACHeating,VentilationandAirConditioningICInclusiveCommunitiesICCInternationalCodeCouncilICNIRPInternationalCommissiononNon-IonisingRadiationProtectionIEEInitialEnvironmentalExaminationIESCIndependentEnvironmentalandSocialConsultantIFCInternationalFinanceCorporationILOInternationalLabourOrganisationIMOInternationalMaritimeOrganisationIPPIndigenousPeoplePlanIPSAInitialPovertyandSocialAssessmentandAnalysisISOInternationalStandardsOrganisationKPIKeyPerformanceIndicatorL&FSLifeandFireSafetyLALocalAuthorityLTOLandingandTake-offMSWMunicipalSolidWasteNDNewDevelopmentNGONon-GovernmentalOrganisationsNIOHSNationalInstituteforOccupationalHealthandSafetyNPBDNationalPolicyonBiologicalDiversityNPCCNationalPolicyonClimateChangeNPDCNationalDevelopmentPlanningCommitteeNPENationalPolicyonEnvironmentNPPNationalPhysicalPlanNORMNaturallyOccurringRadioactiveMaterialNRNewRoadNREBNaturalResourcesandEnvironmentBoardNTSNon-TechnicalSummaryODSOzoneDepletingSubstancesOECDOrganisationforEconomicCo-operationandDevelopmentOSMOperationalSafetyManagementP2M2Pollution,PreventionandMitigationMeasuresPCBsPolychlorinatedBiphenylsPDCAPlan-Do-Check-ActPELsPermissibleExposureLimitsPIDGPrivateInfrastructureDevelopmentGroupPMParticulateMatterPOPsPersistentOrganicPollutantsPPEPersonalProtectiveEquipmentGuidetoESGforInfrastructureprojectsSeptember20203PRCPeople’sRepublicofChinaPRIPrinciplesforResponsibleInvestmentPSPerformanceStandardsQRAsQuantitativeRiskAssessmentsRACReportAdequacyRDARegionalDevelopmentAuthoritiesROWRights-of-WayRTRailway&TransitTrainSRSpatialSustainabilityResilienceSDGSustainableDevelopmentGoalSEAStrategicEnvironmentalAssessmentSEPStakeholderEngagementPlanSEPAStateEnvironmentalProtectionAdministrationSMSSafetyManagementSystemSOPStandardsOperatingProcedureSSASiteSuitabilityAssessmentSTDSexuallyTransmittedDiseasesSZIRASitingandZoningofIndustryandResidentialAreasTCFDTaskForceonClimate-RelatedFinancialDisclosuresTENORMTechnologicallyEnhancedNaturallyOccurringRadioactiveMaterialTHCTotalHydrocarbonsTLVThresholdLimitValueTORTermsofReferenceTORACTermsofReferenceAdequacyCheckTRCTechnicalReviewCommitteeTSSTotalSuspendedSolidsUKUnitedKingdomUKEFUnitedKingdomExportFinanceUNUnitedNationsUNCLOSUnitedNationsConventionontheLawoftheSeaUNDPUnitedNationsDevelopmentProgrammeUNFCCCUnitedNationsFrameworkConventiononClimateChangeUNGPUnitedNationsGuidingPrinciplesUNPRIUnitedNations-supportedPrinciplesforResponsibleInvestmentUSEPAUnitedStatesEnvironmentalProtectionAgencyVOCVolatileOrganicCompoundWACWasteAcceptanceCriteriaWBGWorldBankGroupWEFWorldEconomicForumWHOWorldHealthOrganisationGuidetoESGforInfrastructureprojectsSeptember20204UK-ChinaThirdCountryCooperationProgrammeTheUK-ChinaThirdCountryNationalInfrastructureCooperationProgrammeisdesignedtoexploreandenhancethecooperationbetweenUKcompaniesandChinesecompaniescarryingoutinfrastructureprojectsinAfricaandAsia.ThisGuidehasbeenpreparedaspartofthatprogramme.Theprogrammelastsforthreeyears,anditbringstogetherInternationalandChineseexpertisetoincreasethesustainability,qualityandcommercialviabilityofChineseled,growthenhancinginfrastructureinAfricaandAsiathatincreasesaccesstoprivatecapital.Infrastructuredevelopmentiskeytoprosperityandsecurity,especiallyindevelopingeconomies.AkeyaspectoftheprogrammeisjointChina-UKworkingtopromotetheapplicationofbestpracticestoimprovethequalityofinfrastructuredeliveryacrosstheprojectlifecycleindevelopingcountries.Throughcollaboration,weaimtoincreasetheparticipationofinternationalprivatecapitalandcreateopportunitiesforUK,Chineseandinternationalbusinesses.ThisreportcoversinternationalbestpracticerelatingtoEnvironmental,SocialandGovernance(ESG)aspectsofinfrastructureprojectdeliveryindevelopingmarkets.Thisisakeypartoftheassessmentcarriedoutbyinternationalprivatecapitalwhendecidingwhethertofinanceaproject.HighqualityESGperformanceiscriticaltoobtainingprivatecapital.Itisalsocriticaltoensuringhighqualityprojectsthatgeneratebenefitsandminimiseimpactsoncommunities.GuidetoESGforInfrastructureprojectsSeptember202051SynopsisEnvironmental,SocialandGovernance(ESG)assessmentsareacriticalpartofinfrastructureprojectdelivery.InternationalprivatecapitalwillnotinvestinprojectsthatdonotmeethighstandardsforESG,duetobothriskandreputationalissues.Meetingthesestandardsalsoensuresprojectsdelivertheexpectedbenefitstocommunities,engagingthemthroughouttheprojectpreparationanddeliveryphasesoftheinfrastructurelifecycle.Atthesametime,theworldfacesanunprecedentedclimateemergencyandthereisanurgentneedtoacceleratethetransitiontowardsamoresustainableglobaleconomy.Consideringthis,manyinvestorsarefocusedonthelongtermimpactsinadditiontoriskandreturnontheirinvestments,andtoensurethattheirinvestmentssupportglobal(andnational)climate,environmentalandsocialsustainabilitygoalsasshowninFigure1.1.Figure1.1:FinancingSustainableGrowth1Investmentinprojectswhicharealignedwiththetransitiontoalow-carbon,climateresilientandresource-efficienteconomyarekeytorealisingtheseambitions.Thisalsoincludesensuringprojectsdeliverthesocialbenefitsexpectedtocommunities.Theabilityofaprojecttodemonstratethesekeysustainabilitybenefitscanunlockaccesstoprivatecapital,includinggreenand/orsustainablefinancingstreams.Investors’focusonESGconsiderationsisgrowingandchangingandmanyorganisationsaredevelopingmetricsandprocessestoevaluatetheimpactofprojectsoncommunitiesandtheplanet.Therefore,akeyareaforfinanciersistheapplicationofahighqualityESGprocess.ThisincludesboththeevaluationofESGrisksaswellaseffectivemonitoringandreportingprocesses.TheapproachtoESGisakeyconsiderationforinternationalprivatecapital(e.g.projectfinancebanks),whowillnotlendtoprojectsthatdonottransparentlymeettheirrequiredESGstandards.ThefocusonESGfrominternationalprivatecapitalincludesbothmanagementofreputationalrisk(e.g.avoidinginvestinginprojectsthatwillhaveanadverseeffectonthecommunity)andfinancialrisk,witharecognitionthatESGmanagementimpactsfinancialreturns.ResponsibleinvestingisaGuidetoESGforInfrastructureprojectsSeptember20206keyfocusforinvestorswhodonotwanttobeassociatedwithprojectsthathavenegativeimpactsoncommunitiesortheenvironment.Aswellasbeingrequiredtoobtainfinancing,meetinghighqualityESGstandardscreatesbenefitsforprojectdevelopers.TheapproachessetoutinthisGuideallowfortheidentificationandmitigationofESGrisksthatmaycreatebothfinancialandreputationimpactsifnotaddressed.Italsoreducestheriskofprojectdelaysandcancellationthroughdemonstrationoftheprojectbenefitstothecommunity.Thisisimportantforindividualprojectsbutalsoforthereputationofthecompanyinthemarket.Highqualityprojectscanbeusedasevidencewhenbiddingforfutureprojects.Poorqualityprojectsdamagethereputationofthecompanyandmaycreateissuesforsuccessfuldeliveryoffutureprojects.EngagementwithChinesecompaniesandfinancinginstitutionshasalsodemonstratedthatthisisachallengingareainthedeliveryofoverseasprojectsinAfricaandAsia.ThekeychallengesincludinganunderstandingoftheinternationalstandardsforESG,includingforfinancing,aswellashowtocarryoutthenecessarystudiesandactivitiestomeettheirrequirements.Therearealsochallengesworkingindevelopingcountrieswherethestandardsrequiredmaynotbespecifiedormaybechanging.Theexperienceofcompaniesinthesemarketsalsoshowsthatfailuretocomplywiththestandardsrequiredcanleadtoincreasedcosts,additionalrisk,projectdelays,suspensionandterminations.WhiletheESGrequirementsmaybechallenging,notmeetingthemalsoreducesaccesstofinancingatacompetitiveratethatcanensureaprojectisfinanciallyviable.ToaddressthesechallengesthisGuidesetsoutthebenefitsofmeetingESGstandardstosupportdevelopmentofaninfrastructureprojectthatiseconomically,financially,socially,environmentally,andinstitutionallysustainable.ThisincludesbestpracticeintheESGprocessandbuildingunderstandingoftheprivatecapitalrequirementsforESG.TheGuideisdevelopedtoleadprojectproponentsthroughaprocessof:UnderstandingbothinternationalprivatecapitalbestpracticerequirementsforESGassessments(e.g.EnvironmentalandSocialImpactAssessment,ESIA)andselectedhostcountryassessments(e.g.theEIA);EstablishingbestpracticeapproachestoESGmanagementthroughanEnvironmentalandSocialManagementSystem(ESMS);EstablishingkeyESGEvaluationandAssessmentbestpracticeapproaches,includingthroughtheuseofchecklists2;andAssessmentofphysicalclimaterisksandtheirimpacts,consideringthelong-termnatureofinfrastructureprojects.UnderstandinghowtheESGrequirementsfitwithinthefinancingprocessforaninfrastructureproject2EvaluationandAssessmentsprimarilytheupfrontpreparationoftheprojecttoassesstheimpacts,risksanddevelopmentofmitigationapproaches.ThisGuidefocusesontheseareasastheyarecriticaltoobtainingprivatecapital.However,Section3andSection4ofthisGuidealsocovertheoperationalphasesofaprojectasESGmustbeconsideredthroughouttheprojectlifecycle.GuidetoESGforInfrastructureprojectsSeptember20207ItisapplicabletodifferenttypesofinfrastructureprojectsregardlessofscaleorgeographiccoveragealthoughdoesnotintendtoprovideastepbystepprocessofhowtosecureESGapprovals.1.1ESGStandardsThereareseveralESGframeworksadoptedbymultilateralbanks(andusedbyprivatecapitalproviders)whichprovideinternationalstandardsforprojectstomeet.ThisGuideisnotintendedtocoverallESGframeworksthatmayberelevanttoprojectsusingprivatecapital.InsteaditfocusesontheEquatorPrinciples(EPs)andgoodinternationalindustrypracticesbytheInternationalFinanceCorporation(IFC)PerformanceStandards.TheEPsprimarilyrelyonapplicationoftheIFCPerformanceStandardsandarethemainstandardusedbyprivatecapitalproviders.ThestandardsaresetoutinmoredetailinSection2andintheseparateAppendices.Thereare105financialinstitutionsthathaveadoptedtheEPs.Thesesignatoriesrepresentthecoreofinternationalprivatecapitalinvestorsforinfrastructureprojects.Wheretheseinstitutionsarefinancingaprojectinadevelopingcountry,theywillrequiretheESGprocesstocomplywiththeEPs,includingcompliancewiththeIFCPerformanceStandardsandtheWorldBankGroup(WBG)Environmental,HealthandSafety(EHS)Guidelines.Thisincludesbeingprovidedwithtransparentinformationthroughoutthedevelopment,constructionandoperationoftheproject.Understandingoftheserequirementsthereforeprovidespotentialaccesstoawiderangeofinternationalprivatecapital.Whereothermultilateralsareinvolvedinaproject(e.g.theAsianInfrastructureInvestmentBank(AIIB),AsianDevelopmentBank(ADB)etc.)theirrequirementswillalsoneedtobeunderstood.However,therearemanycommonelementsbetweendifferentmultilateralrequirementsandmultilateralsarecontinuingtoworkcloselytogetherwhendevelopingprojects.Forexample,theUpperTrishuli-1hydropowerprojectinNepalwasfinancedbyarangeofmultilaterals,includingtheIFC,ADB,AIIBandotherlendersincludingtheCDC,aUKDevelopmentFinanceInstitution.TheIFCcarriedouttheESGassessmentsinlinewiththeapplicableIFCPerformanceStandards,whichwereacceptedbytheotherlenders(e.g.AIIBdidnotneedtocarryoutitsownassessmentastheirrequirementsaremateriallythesameastheIFCandWBG).ThiswouldthereforehavealsometinternationalprivatecapitalrequirementsassetoutintheEPs.TheapplicationofeffectiveESGprocessesalsorequiresadetailedunderstandingofthehostcountryESGrequirements.Thesevarysignificantlyfrommarkettomarket.Section2alsoprovidestherequirementsoftheKenyaandMalaysiaESGregulationsasexamplesofkeymarketsinAfricaandAsia.However,ifprivatecapitalistolendtoaninfrastructureproject,meetingthehostcountrystandard(i.e.theEnvironmentalImpactAssessment(EIA)requirementsforprojectlicensing)asaminimummaynotbesufficient.TheIFCPerformanceStandards(andthereforetheEPs)alsorequirethatwheretherearedifferencesbetweenthehostcountryrequirementsandthePerformanceStandards,themorestringentrequirementsshouldbemet.Thismeansthatinternationalfinancingwillalwaysrequirethehigheststandardandmeetingtheminimumhostcountrystandardisnotenoughtoobtainprivatecapital.Section2thereforeprovidesacomparisonoftheESGEvaluationsandAssessmentsrequiredinMalaysiaandKenyawiththeEPs/IFCPerformanceStandards.ThepurposeofthisistodemonstratetheareaswhereinternationalprivatecapitalstandardsarelikelytobehigherthanthehostcountryrequirementsandrequireadditionalESGEvaluationandAssessment.Thisincludesboththetopicsthatmustbecovered(e.g.EPsrequireanassessmentoflocalrecruitmentandprocurementforwhichtherearenominimumstandardsinKenyaandMalaysia)aswellasspecifictargets(e.g.theIFCstandardfornoiselevellimitinaresidentialareais55dBAcomparedto60GuidetoESGforInfrastructureprojectsSeptember20208dBAinKenya).Thisisnotdesignedasanexhaustivelistbuttodemonstratethatadoptionofthehigherofhostcountryandinternationalstandardsisrequiredforeffectiveprojectpreparation.SeparateAppendicesarealsoincludedcoveringdetailedinformationontheMalaysia,KenyaandEquatorPrinciples/IFCPerformanceStandards.1.2ESGBestpracticeFollowingadescriptionoftherequirementsofinternationalfinancetheGuidecoversexamplebestpracticetools.Withintheinternationalarena,themanagementofESGperformanceacrossallprojectstagesisoftenconductedthroughanEnvironmentalandSocialManagementSystem(ESMS).Goodgovernancehelpsaprojecttooperatemoreefficiently,improveaccesstocapital,mitigaterisk,andsafeguardagainstmismanagement.Itmakesaprojectmoreaccountableandtransparenttotheinvestors,increasesaccesstocapital,encouragesnewinvestments,boostseconomicgrowth,providesemploymentopportunitiesandgivesthemthetoolstorespondtostakeholderconcerns.Section3thereforepresentsaninternationallyrecognisedeffectivemanagementsystemtoassess,controlandcontinuallyimproveESGperformance.ThissectionisadaptedfromtheIFCESMSImplementationHandbook.ItisintendedtoprovidebestpracticeapproachesacrosskeyelementsoftheESGprocess.AnESMSdoesnotneedtobecomplicated,butitdoesneedtobedocumentedandthenputintopractice.ThegovernancestructureandresponsibilitieswithinanESMSincorporatethecommitmentsrelevanttotheprojectlifecycletoensuresystematicandeffectiveexecutiontoassess,controlandcontinuallyimproveESGperformance.Thissectionprovidesa“Plan-Do-Check-Act(PDCA)cycle”approachtoallowrelevantstakeholderstoidentify,addressandminimisethepotentialESGrisksandadverseimpactsandultimatelyenhanceandstimulateaproject’spositiveimpacts.ThisESMScoversanumberofareas,includingpolicy,riskidentification,managementandorganisationalcapacityandemergencypreparednessandresponse.Theseareasaredirectlylinkedtohowtheprojectismanaged.Italsocoversareassuchasstakeholderengagement,establishingagrievancemechanismforthelocalpopulationandcommunityengagementandcommunication.ThesearefundamentalaspectsofESGtoobtainthebuy-infromcommunitiesandensureaprojectmeetstheirneeds.Havingadetailedplaninplacethatismonitoredandreviewedprovidesconfidencetokeyprojectstakeholders,includingprivatefinanceproviders.Section4providesadditionalguidanceonbestpracticeforESGassessments.ThissummarisesESGfactors/considerationsusingrelevantchecklists.Itissplitoutbetweeneachphaseofthelifecycle,includingplanning,construction,commissioningandprojectclosure.Itisimportantthatnoonestageofthelifecycleisignored.InternationalprivatecapitalwillexpectaprojecttomeetESGstandardsthroughoutitslife–itisnotenoughtohaveaplanbeforeconstructionthatisnotthenreviewed,updatedoreffectivelyimplemented.Thisisimportanttoaccessprivatecapital.Inalongtermprojectthedebtandequitymaybesoldatdifferentstagesoftheproject.Thisisimportanttoallowprivatefinancierstorecyclecapital.However,theyneedtounderstandESGperformanceateachstageoftheproject,includingapplicationoftheagreedplansfromprojectplanning,tobewillingtolendtotheproject.Thechecklistsprovidedcoverthetypicalquestionsthatinternationalprivatecapitalproviderswillrequireinformationon,basedonbothlocalandinternationalstandards.Everyprojectwillneedtohavedetailedassessmentscarriedout,dependingonthesector,countryandprojectrequirements.However,thechecklistscanbeusedtoidentifytherelevantassessmentsthatwillbecarriedout.GuidetoESGforInfrastructureprojectsSeptember20209Thesecanthenbetestedwithotherstakeholders,includinggovernmentsandfinanceproviders,toensuretheywillmeettheapprovalrequirements.AswellasmeetingallESGrequirements,assessingandmanagingphysicalclimaterisksarebecomingmoreimportanttofinanceproviders.Thelongtermnatureofinfrastructureprojectsmeanstheyarevulnerabletochangesinclimatethatmayimpactperformance,requireadditionalcostandreducethebenefitsofaproject.Section5providesguidanceontherobustidentification,assessment,managementandreportingofphysicalclimaterisksandadaptationimpactandsignpoststheusertofurtherrelevantframeworksandtools.Thisincludesactivitiesinboththeprojectplanningstageaswellasthroughmonitoringandreportingduringprojectdelivery.Theaimofthisprocessistoensurethatassetsareadaptedtoclimatechangesothatboththeassetsthemselvesareclimateresilient;andphysicalclimateriskstootherassociatedeconomicactivitiesaremanaged.TheassessmentofphysicalclimaterisksislikelytocontinuetoincreaseinimportanceasESGassessmentsarecarriedouttoreducerisktocommunities,projectdevelopersandfinanciers.1.3InternationalPrivateCapitalandESGEarlyinvolvementoffinanceprovidersisparticularlyimportant.Section4summarisestypicaltimingofwhenfinanceprovidersarelikelytobeinvolvedinESGassessments.Earlyinvolvementisbeneficialtoallowfinancierstoidentifyissuesandhavethemresolvedthroughprojectpreparation.Thisreducesriskthatlaterintheprojecttherearedelaysorfinanceprovidersareunwillingtolendtoaproject.ESGhasbecomeanincreasinglyimportantissueforinfrastructurefinanceproviders.Projectsthatdonotmeettherequiredstandardswillnotachievefinancing.Section6referencestheimportanceofESGtofinanciers.ItalsosummarisestheapproachtakentoassessingESGforkeyinfrastructurelendersincludingbanks,exportfinance,multilateralsanddevelopmentfinance.AssetoutabovethekeytoolsusedbyfinanciersaretheEPsandIFCPerformanceStandards.However,somemultilateralsalsousetheirownstandards,althoughthesearetypicallycloselyalignedwiththeEPs/IFC.ThecomplexityofinfrastructureprojectsinAfricaandAsiameansthatevenwhereprivatecapitalisusedthereislikelytobesupportrequiredfromamultilateral,forexamplethroughuseofcreditenhancementtools.AccessingthesetoolswillrequiremeetingtherelevantinternationalESGstandard.Earlyassessmentisthereforeimportanttounderstandwhichstandardsarelikelytoberequiredandthattheprojectispreparedtodemonstrateclearlyhowthiswillbeachieved.Akeyissueforfinanceprovidersistheavailabilityofdatatobenchmarkandcompareprojects.Thisisimportantinboththeinitialphasesofprojectsandthroughconstructionandoperations.Forexample,refinancingcantakeplacetorecyclecapitalonceconstructioniscomplete,reducingtheoverallcostoffinance.However,newinvestorswillwanttounderstandtheproject’sESGperformance.Section6providesasummaryoftoolsthatareusedbyinvestorstobenchmarkESGperformance.However,thisisadevelopingpartoftheinfrastructuremarketasinvestorsexpectationsevolvewiththeincreasingimportanceofESG.Therearealsobenefitstoprojectparticipantsfromprovidingtransparentinformationonperformance.Thisincludesfinanciersprovidinglowercostdebtandincreasedaccesstofinancingtools.1.4OngoinginitiativesandtoolsThereareawidevarietyofongoinginitiativesonESGrelatingtoinfrastructureprojectsandthiscontinuestobeadevelopingarea.ForexampletheEPshavebeenthroughanumberofiterationswithEP4comingintoeffectfromJuly2020(withimplementationdelayeduntilOctober2020duetoCOVID-19).WehavebasedtheanalysisoftheguidanceonthelatestEP4asitwillbemostrelevanttofutureprojects.FurtherguidanceonapplicationoftheupdatedEP4isduetobepublishedsoon.GuidetoESGforInfrastructureprojectsSeptember202010TheBRIGreenInvestmentPrincipleshavealsobeenincludedinthisGuide.Developedin2018,theseprincipleshave28signatoriesacrossChineseandInternationallendersandidentifytheneedformanagementofESGrisksandconductingindepthduediligence.AswiththeEPsthisprovidesaddedincentivetoincreasethestandardsforinfrastructureprojectstoaccessprivatecapital.Inaddition,ESGisalsobecomingmoreimportanttoaccessindividualfinancialproducts,including‘sustainablefinance’and‘greenfinance’.Greenbondissuancewasestimatedat$255bnin2019,up49%from2018.Mostofthisissuancerelatestocorporatesratherthaninfrastructureprojects.However,thereisgrowingappetiteanddevelopmentofproductsthatcanprovidefinancewhereprojectsareabletodemonstrategreencredentials.Forexample,theAIIBformedastrategicpartnershipwithAberdeenStandardin2019fora$500mfundtargetingAsianinfrastructurerelatedbonds,withESGfactorsfullyintegratedintotheinvestmentprocessandportfoliomanagement.ThesetypesofpartnershipsarelikelytoincreasetodevelopfinancialproductsspecificallytargetingprojectsthatmeethighqualityESGstandards.TheAIIBhasalsodevelopedtheSustainableCapitalMarketsInitiativetosupportcapitalmarketcapacityforinfrastructureinemergingmarketsinAsia.Thisincludesworkingwithstakeholderstoimprovetransparencyanddisclosureofperformance.AkeyissuesubjecttoseveralongoinginitiativesintheprivatesectorishowtoimprovedataqualitytobeabletojudgeESGperformance.Thishasbeenacontinualchallengeinanewanddevelopingarea.Ina2019SustainableFinancingsurveybyHSBConly24%ofrespondentsdisclosetheESGcharacteristicsoftheirwholeportfolio,reducingaccesstodataforinvestors.Therehavebeeninitiativestotacklethisissue,forexamplein2009agroupofpensionfundsstartedtheGlobalRealEstateSustainabilityBenchmarks(GRESB)tobenchmarkESGperformanceandprovidecomparativeassessment.ThesetypesofinitiativesareimportanttounderstandtheimpactofhigherqualityESGstandardsandarecoveredfurtherinsection5.TheWorldEconomicForum(WEF)hasdevelopedmetricstobeincludedincorporateaccountsfrom2021toenablecompaniestoreportcorporatemetricsonareassuchasemploymentstandardsandenvironmentinlinewiththeSDGs.Whilenotdirectlyrelatedtoinfrastructuredevelopment,itdemonstratestheincreasedscrutinythatpotentialinvestorsfaceandispartofwiderWEFworkonthisissue,includingthereleaseofawhitepaperinMarch2020onfutureESGconsiderationsforinvestors..InSeptember2020theWEFproducedawhitepaperon‘CommonMetricsandConsistentReportingofSustainableValueCreation’.Thisreportidentifies24coremetricsfordisclosureofESGinformationaswellas34‘expanded’metricsthatprovidedamoresophisticatedmeasurementapproach.WhilenotonlyrelatedtoinfrastructurethesemetricsidentifykeyareasofinformationtransparencyrequiredbyinvestorsandalignedtotheSDGs.TheUnitedNationsDevelopmentProgramme(UNDP)andChinaDevelopmentBankhasalsopublishedareportin2019onharmonisinginvestmentandfinancingstandardstowardssustainabledevelopmentalongtheBeltandRoad.ThisGuideidentifiesthecommoncoreofstandardsrequiredbythemultilaterals,nationaldevelopmentbanksandChineseinstitutions.TheGuidealsorecommendskeyprinciplesincludingtheimportanceofprojectevaluation,reportingandmonitoringandtheincorporationofESGaspectsintodecisionmaking.Thisworkisplannedtocontinuetodeveloppolicyguidelinesandmanualstoharmonisesustainableinvestmentandfinancingstandards.Additionally,theUnitedNations-supportedPrinciplesforResponsibleInvestment(UNPRI)hascontinuedtoplayanimportantroleinthedevelopmentofESGtools,forexampleonmanagingESGriskinsupplychains.Thisincludesspecifictoolsforinfrastructureinvestors.ThesedevelopmentshighlightthewiderangeofongoingactivitiesrelatingtoESG.Thesearelikelytocontinuetodevelop,withincreasedexpectationsfrominternationalfinanceaswellashostGuidetoESGforInfrastructureprojectsSeptember202011countrygovernments.Thiswillrequiregreaterfocusfromprojectdeveloperstoensureprojectsmeetthelateststandardsastheyaredeveloped.LimitationsThisGuideisintendedtoprovideasummaryofbestpracticeinrelationtoESGfromaninternationalperspective.ItdoesnotinanywaydiminishtheresponsibilitiesoftheManagementandBoardoftheusers.TheadoptionandimplementationofrecommendationsasshowninthisGuideissolelytheresponsibilityandriskofthefinalusers.ThisGuideisdistributedwiththeunderstandingthattheinformation,policiesandproceduretemplatesareintendedasareferenceandforinformationalpurposesonlyandarenottoberelieduponforoperations–eachprojectisdifferentandmustbeassessedcarefullyandinliaisonwiththerelevantinvestorESGteam.GuidetoESGforInfrastructureprojectsSeptember2020122LegalandInstitutionalFrameworksThepurposeofthissectionistoprovideanunderstandingofbothinternationalprivatecapitalbestpracticerequirementsforESGassessmentsandhostcountryassessments.ItprovidesthisthroughafocusontheESGassessmentandapprovalsstageofaproject,coveringESIA(international)andEIA(national)asfollows:ThefirstpartintroducestheEPs,theIFCPerformanceStandardsandtheWBGEHSStandardsthatarerequiredforprivatecapitalinvestment;andThesecondpartprovidesanoverviewoftheESGrequirementsfortwohostcountries,MalaysiaandKenya,todescribetherespectivelocalESGregulationsrequiredforanyproposedprojectsandtheprocessesthatmustbeundertaken.ThehostcountieshavebeenselectedaskeymarketsinAsia(Malaysia)andAfrica(Kenya)toprovideexamplesforcomparisonagainstinternationalprivatecapitalrequirements,basedontheEPsandIFCPerformanceStandards.Inthefuture,thelistofcountriescouldbeexpandedtootherdevelopingmarketsinAfricaandAsia.ThereportalsoincludesasummaryoftheBRIGreenInvestmentPrinciples(GIPs),towhichanumberofChineseandInternationallendersaresignatories.TheGIPssetoutkeyPrincipleswhicharealsoimportanttoaccessgreenfinance.Italsoprovidesahigh-levelcomparisonoftheMalaysiaandKenyarequirementstotheEPsandIFCPerformanceStandards.Thisisnotintendedtobeexhaustivebutdemonstrateswheretherearedifferencesthatwouldneedtobeconsidered.ThisreflectsthatthehigherofthecountrystandardsorIFCPerformanceStandardsmustbemettofacilitateprivatecapitalinvestment.Whereprojectsaretransparentlyprocuredtheywilloftenspecifythestandardstobemet.Thismaybethehostcountrystandardoraninternationalstandard.However,thespecificrequirementsarenotalwaysclearlyprovided.Whereprojectsareseekingtoobtainprivatecapitalitisthereforeimportantthattheinternationalstandardsareachieved.Thesearelikelytoformthehigheststandardthatcanalsoguaranteethestandardsrequiredbytheprocurementaremet–reducingtheriskofabidbeingrejected.However,allprojectsshouldengagewiththehostcountrycarryingouttheprocurementtounderstandtheirrequirements.AdditionalinformationofthehostcountryissetoutinfurtherdetailinthesupportingAppendices.2.1TheEquatorPrinciples(EPs)IV(2020)Currentlyadoptedby105privatefinancialinstitutions3in38countries,theEP4,issuedin2020,setthecommonandvoluntaryguidelinesprimarilyintheprovisionofminimumESGstandards.Thisincludesindetermining,assessingandmanagingESGrisksandimpactsinprojectsandinsupportingresponsibleriskdecision-makingwhenfinancingaproject(withtotalprojectcapitalcostsofUSD$10millionormore)acrossallindustrysectorsandgeographies.Italsoaimstodeveloptheprojectinamannerthatissociallyresponsible(includingthroughmeasuringprojectimpactsondifferentgenders)andreflectssoundenvironmentalmanagementpractices.TheEPsalsocoversproject-relatedcorporateloans,bridgeloansandproject-relatedrefinanceandacquisitionfinance.TheEPsestablish10principles(refertoFigure2.1)inaddressingESGrisksandissuesinglobalprojectfinancetransactions,includingadherencetotheInternationalFinanceCorporation(IFC)PerformanceGuidetoESGforInfrastructureprojectsSeptember202013Standards(referSection2.2ofthisGuide).TheseprinciplesaredesignedtoserveasabenchmarkforthefinancialindustrytomanageESGrisksinprojectfinancing.UnderPrinciple1,whenaprojectisproposedforfinancing,theEPFIscategoriseeachprojectbasedonthemagnitudeofpotentialenvironmentalandsocialrisksandimpacts,includingthoserelatedtoHumanRights,climatechange,andbiodiversity.Thecategorisationcanbedividedintothreemaincategories:CategoryA:projectswithpotentialsignificantadverseESGrisksand/orimpactsthatarediverse,irreversibleorunprecedented;CategoryB:projectswithpotentiallimitedadverseESGrisksand/orimpactsthatarefew,generallysite-specific,largelyreversibleandreadilyaddressedthroughmitigationmeasures;andCategoryC:projectswithminimalornoadverseESGrisksand/orimpacts.UnderPrinciple2,allCategoryAandCategoryBprojectsarerequiredtoconductanESGEvaluationandAssessmentprocesstoaddresstherelevantenvironmentalandsocialrisksandimpactsoftheproposedproject.EverycategoryasstatedabovehasdifferentESGEvaluationandAssessmentDocumentation.ForCategoryAandCategoryBprojects,theDocumentationincludesanEnvironmentalandSocialImpactAssessment(ESIA).Oneormorespecialisedstudiesmayalsoneedtobeundertaken.ForotherCategoryBandpotentiallyCprojects,alimitedorfocusedenvironmentalorsocialassessmentmaybeappropriate,applyingapplicableriskmanagementstandardsrelevanttotherisksorimpactsidentifiedduringthecategorisationprocess.TheproposedprojectshouldincludeassessmentsofpotentialadverseHumanRightsimpactsandclimatechangerisksaspartoftheinternationalEIAortheEnvironmentalandSocialImpactAssessment(ESIA)orotherAssessment,withtheseincludedintheAssessmentDocumentation.ProjectshouldalsorefertotheUnitedNationsGuidingPrinciples(UNGPs)toassessHumanRightsrisksandimpacts.Figure2.1:TheEquatorPrinciplesIV01020304080910060507TheEquatorPrinciples(EPs)IV(2020)ReviewandCategorisationEnvironmentalandSocialAssessmentApplicableEnvironmentalandSocialStandardsEnvironmentalandSocialManagementSystem&EPActionPlanStakeholderManagementGrievanceMechanismIndependentReviewCovenantsIndependentMonitoringandReportingReportingandTransparencyGuidetoESGforInfrastructureprojectsSeptember202014Principle3requiresthattheprojectcomplywiththeapplicableandrelevanthostcountrylaws,regulationsandpermitsthatpertaintoenvironmentalandsocialissues.TheprinciplealsobringsintoconsiderationcompliancewiththeIFCPerformanceStandardsonEnvironmentalandSocialSustainability(IFCPS)andtheWorldBankGroup(EBG)IFCEnvironmental,HealthandSafetyGuidelines(EHSGuidelines).Principles4through7andPrinciples9and10applytoallCategoryAand,asappropriate,CategoryBprojects.Principle8appliestoallCategoryAandCategoryBprojects.Thisincludes:Principle4:projectwouldberequiredtodevelopand/ormaintainanEnvironmentalandSocialManagementSystem(ESMS),aswellasEnvironmentalandSocialManagementPlan(ESMP)toaddresstheESGissuesraisedandtoincorporateactionsrequiredtocomplywiththeapplicablestandards.projectshallalsoobligetoanEquatorPrinciplesActionPlan(EPAP)tooutlinegapsandcommitmentstomeetwiththeapplicablestandards,ifapplicable;Principle5:projectwillberequiredtodemonstrateeffectiveStakeholderEngagement,asanongoingprocessinastructuredandculturallyappropriatemanner.ThisincludestheInformedConsultationandParticipationprocess.AllprojectsaffectingIndigenousPeopleswillalsoneedtocomplywiththerightsandprotectionsforIndigenousPeoplescontainedinrelevanthostcountryandinternationallaw;Principle6:projectisrequiredtoestablisheffectivegrievancemechanismtoresolveconcernsatnocost,andwithoutretributiontothepartythatoriginatedtheissueorconcern.Suchgrievancemechanismsshouldalsonotimpedeaccesstojudicialoradministrativeremedies;Principle7:AnIndependentEnvironmentalandSocialConsultant,willcarryoutanIndependentReviewoftheAssessmentprocess,inbringingtheprojectintocompliancewiththeEPsorindicatewherethereisajustifieddeviationfromtheapplicablestandards.ForCategoryBprojects,ESGduediligenceperformedbyamultilateralorbilateralfinancialinstitutionoranOrganisationforEconomicCo-operationandDevelopment(OECD)ExportCreditAgencymaybeconsideredtodeterminewhetheranIndependentReviewisrequired;Principle8:WhereaclientisnotincompliancewithitsESGcovenants,theEPFIswillworkwiththeprojectonremedialactionstobringitbackintocompliance;Principle9:TheEPFIswillrequireindependentmonitoringandreportingthroughoutthefinancinglifecycle.MonitoringandreportingshouldbeprovidedbyanIndependentEnvironmentalandSocialConsultant(IESC),orqualifiedandexperiencedexternalexpertstoverifyitsmonitoringinformation;andPrinciple10:AdditiontothedisclosurerequirementsinPrinciple5,projectmustensurethat,ataminimum,asummaryoftheESIAisaccessibleandavailableonlineandthatitincludesasummaryofHumanRightsandclimatechangerisksandimpacts/annualGHGemissionsreporting,ifapplicable.Consideringtheappropriateconfidentialityconsiderations,EPFIswillalsopubliclydisclosed(minimumannually)ontransactionsthathavereachedFinancialCloseandonitsEquatorPrinciplesimplementationprocessesandexperience.Basedontheserequirementsthefollowingpageprovidesanexampleprocessthatisrequiredtomeetaprivatecapitalprovider’srequirementforassessmentagainsttheEPs(refertoFigure2.2ofthisGuide).GuidetoESGforInfrastructureprojectsSeptember202015Figure2.2:FlowcharttowardsFinancingCloseGuidetoESGforInfrastructureprojectsSeptember2020162.2TheIFCPerformanceStandardsonEnvironmentalandSocialSustainability(2012)Whenaprojectisproposedforfinancing,theEquatorPrinciplesFinancialInstitutions(EPFIs)willreviewtheprojectbasedontheenvironmentalandsocialEvaluationandAssessmentofIFC.InApril2006,theIFC,amemberoftheWBG,releasedasetofPerformanceStandardsbasedupontheoriginalWBGSafeguardPolicies,whichfurtherrecognisedthespecificissuesassociatedwith(privatesector)projects.TheIFCPerformanceStandardshavebeenbroadenedtoincludeissuessuchasgreenhousegases,humanandgenderrights,communityhealth,andsafetyandsecurity.ArevisedsetofPerformanceStandardscameintoforceonJanuary1,2012.ThePerformanceStandardsaredirectedtowardsaproject,providingguidanceonhowtoidentifyESGrisksandimpacts,andaredesignedtohelpavoid,mitigate,andmanagerisksandimpactsasawayofdoingbusinessinasustainableway.Together,theeight(8)PerformanceStandardsestablishstandardsthattheprojectmustmeetthroughoutthelifeofaninvestmentbytheIFC(refertoFigure2.3).ThesestandardsarealsoappliedtoinvestmentsmadebyEPFIs.Figure2.3:TheIFCPerformanceStandardsPerformanceStandard1underscorestheimportanceofmanagingESGperformancethroughoutthelifeofaproject.PerformanceStandards2through8establishobjectivesandrequirementstoavoid,minimise,andwhereresidualimpactsremain,tocompensate/offsetforrisksandimpactstoESGreceptorsandsensitivities.Dependingonprojectcircumstances,otherPerformanceStandardsmayapplyaswell.PerformanceStandards2through8describepotentialESGrisksandimpactsthatrequireattention(refertoTable2.1foradditionaldescriptionofeachperformancestandard).ThePerformanceStandardsshouldbereadtogetherandcross-referencedasneeded.TherequirementssectionofeachPerformanceStandardappliestoallactivitiesfinancedundertheproject,unlessotherwisenotedinthespecificlimitationsdescribedineachparagraph.InadditiontomeetingtherequirementsunderthePerformanceStandards,aprojectmustcomplywithapplicableESGhostcountrylaw,includingthoselawsimplementinghostcountryobligationsundertheapplicableESGinternationallawe.g.theUnitedNations(UN)Treaties,theInternationalLabourOrganisation(ILO),theInternationalMaritimeOrganisation(IMO)Protocols,theInternationalUnionforConservationofNatureandNaturalResources(IUCN)andtheAssociationofSouthEastAsianNations(ASEAN)agreements.GuidetoESGforInfrastructureprojectsSeptember202017Table2.1:DescriptionoftheIFCPerformanceStandardsPerformanceStandards(PS)DescriptionPerformanceStandard1:AssessmentandManagementofEnvironmentalandSocialRisksandImpactsestablishestheimportanceof:-integratedESGassessmenttoidentifyimpacts,risks,andopportunitiesofprojects;-effectivecommunityengagementthroughdisclosureofproject-relatedinformationandconsultationwithlocalcommunitiesonmattersthatdirectlyaffectthem;and-theproject’smanagementofESGperformancethroughoutthelifeoftheproject.WhereESGrisksandimpactsareidentified,projectisrequiredtomanagethemthroughitsManagementSystem.PerformanceStandard1alsoisthekeydriverbehindthedevelopmentofESGPoliciesandprocedures,ESIAandassociatedmanagementplans;andTheseESGEvaluationandAssessmentshallbeconsistentwiththeexpectationsofthePerformanceStandardsandtheapplicableWorldBankGroupEnvironmental,HealthandSafety(EHS)Guidelines(refertoSection2.6).PerformanceStandard2:LabourandWorkingConditionsrecognisesthatthepursuitofeconomicgrowththroughemploymentcreationandincomegenerationshouldbeaccompaniedbyprotectionofthefundamentalrightsofworkers.TherequirementssetoutinthisPerformanceStandardhavebeeninpartguidedbyafewinternationalconventionsandinstruments,includingthoseoftheInternationalLabourOrganisation(ILO)andtheUnitedNations(UN);ESGEvaluations&AssessmentarerequiredunderthisPerformanceStandard–subjecttothefindingsinESIAandrecommendationsbythelendersincludes:-HumanResources;-SupplyChainandContractor;-OccupationalHealth&Safety;-EHSCommunicationandTraining;-LocalRecruitmentandProcurement;and-WorkersAccommodation.PerformanceStandard3:ResourceandEfficiencyandPollutionPreventionrecognisesthatincreasedeconomicactivityandurbanisationtogeneratepollutioninamannerthatmaythreatenpeopleandtheenvironmentatthelocal,regional,andgloballevel;ThisPerformanceStandardoutlinesaproject-levelapproachtoresourceefficiencyandpollutionpreventionandcontrolinlinewithinternationallydisseminatedtechnologiesandpractices;ESGEvaluations&AssessmentarerequiredunderthisPerformanceStandard–subjecttothefindingsinESIAandrecommendationsbythelendersincludes:-ClimateChangeandGreenhouseGasesEmissions;-AirQuality;-NoiseandVibration;-ErosionandSedimentation;GuidetoESGforInfrastructureprojectsSeptember202018PerformanceStandards(PS)Description-SoilandGroundwater;-WaterandWastewater/Effluents;-Non-HazardousSolidandLiquidWaste;-HazardousMaterials;-PesticideUse;-ElectromagneticField(EMF);-LandscapeandVisual;-FloodRisk;-NaturallyOccurringRadioactiveMaterial(NORM)andTechnologicallyEnhancedNaturallyOccurringRadioactiveMaterial(TENORM);-SpillageandLeakages;and-MajorAccidentHazards.PerformanceStandard4:CommunityHealth,SafetyandSecurityrecognisesthatprojectactivities,equipment,andinfrastructurecanincreasecommunityexposuretorisksandimpacts.Inaddition,communitiesthatarealreadysubjectedtoimpactsfromclimatechangemayalsoexperienceanaccelerationand/orintensificationofimpactsduetoprojectactivities;Therisksthataprojectcouldexacerbateanalreadysensitivelocalsituationandstressscarcelocalresourcesshouldnotbeoverlookedasitmayleadtofurtherconflict;ESGEvaluations&AssessmentarerequiredunderthisPerformanceStandard–subjecttothefindingsinESIAandrecommendationsbythelendersincludes;-CommunityHealthandSafety;-CommunityDevelopment;-SecurityPersonnel;-FirePreventionandLifeSafetyProcedure;and-Traffic(andVessel).PerformanceStandard5:LandAcquisitionandInvoluntaryResettlementrecognisesthatproject-relatedlandacquisitionandrestrictionsonlandusecanhaveadverseimpactsoncommunitiesthatusethisland.Involuntaryresettlementrefersbothtophysicaldisplacement(relocationorlossofshelter)andtoeconomicdisplacement(lossofassetsoraccesstoassetsthatleadstolossofincomesourcesorothermeansoflivelihood)asaresultofproject-relatedlandacquisition;Tohelpavoidexpropriationandeliminatetheneedtousegovernmentalauthoritytoenforcerelocation,projectisencouragedtousenegotiatedsettlementsmeetingtherequirementsofthisPerformanceStandard,eveniftheyhavethelegalmeanstoacquirelandwithouttheseller’sconsent;ESGEvaluations&AssessmentarerequiredunderthisPerformanceStandard–subjecttothefindingsinESIAandrecommendationsbythelendersincludes:-ResettlementPlan;and-LivelihoodRestorationActionPlan.PerformanceStandard6:BiodiversityConservationandSustainableManagementofLivingNaturalResourcesrecognisesthatprotectingandconservingbiodiversity,maintainingecosystemservices,andsustainablymanaginglivingnaturalresourcesarefundamentaltosustainabledevelopment;GuidetoESGforInfrastructureprojectsSeptember202019PerformanceStandards(PS)DescriptionThefollowingESGEvaluations&AssessmentarerequiredunderthisPerformanceStandard–subjecttothefindingsinESIAandrecommendationsbythelenders:-TerrestrialBiodiversitye.g.KeyBiodiversityAreas,ProtectedAreas,NationalLawsonForestProtection,InvasiveSpecies,Flora&Fauna,LandClassAssessment;-MarineBiodiversitye.g.Macrobenthos,CoralReefs,Fish,MarineMammals,MarineHerpetofauna,Seabirds,MarineProtectedAreas,MarineInvasiveSpecies;and-ManagementofEcosystemServices.PerformanceStandard7:IndigenousPeoplerecognisesthatIndigenousPeoplesareoftenamongthemostmarginalisedandvulnerablesegmentsofthepopulation;Inmanycases,theireconomic,social,andlegalstatuslimitstheircapacitytodefendtheirrightsto,andinterestsin,landsandnaturalandculturalresources,andmayrestricttheirabilitytoparticipateinandbenefitfromdevelopment.IndigenousPeoplesareparticularlyvulnerableiftheirlandsandresourcesaretransformed,encroachedupon,orsignificantlydegraded;projectcancreateopportunitiesforIndigenousPeoplestoparticipatein,andbenefitfromprojectrelatedactivitiesthatmayhelpthemfulfilltheiraspirationforeconomicandsocialdevelopment;andIndigenousPeoplePlan(IPP)isrequiredunderthisPerformanceStandard–subjecttothefindingsinESIAandrecommendationsbythelenders.PerformanceStandard8:CulturalHeritagerecognisestheimportanceofculturalheritage.ConsistentwiththeConventionConcerningtheProtectionoftheWorldCulturalandNaturalHeritage,thisPerformanceStandardaimstoensurethatclientsprotectculturalheritageinthecourseoftheirprojectactivities;Inaddition,therequirementsofthisPerformanceStandardonaproject’suseofculturalheritagearebasedinpartonstandardssetbytheConventiononBiologicalDiversity;ESGEvaluations&AssessmentarerequiredunderthisPerformanceStandard–subjecttothefindingsinESIAandrecommendationsbythelendersincludes:-ChanceFindProcedures;and-CulturalHeritagePlan.2.3TheWorldBankGroupEnvironmental,HealthandSafety(EHS)GuidelinesTheWBGGeneralEHSGuidelines(2007)aretechnicalreferencedocumentswithgeneralandindustry-specificexamplesofgoodinternationalindustrypracticeandareusedastechnicalsourceofinformationduringaprojectappraisal.TheGeneralEHSGuidelinealsocontaininformationoncross-cuttingESGandHealth&Safety(H&S)issuespotentiallyapplicabletoindustrysectors.Theindustry-sectorguidelinescoverarangeofindustries–includingthenineinfrastructuresectorsinTable2.2.TheseindustrysectorEHSGuidelinesaredesignedtobeusedtogetherwiththeGeneralEHSGuidelinesdocument.GuidetoESGforInfrastructureprojectsSeptember202020Table2.2:IndustrySectorGuidelines–SelectedInfrastructureprojectEHSGuidelinesDescriptionEHSGuidelinesforAirports(2007)Applytotheoperationofcommercialairports.Thedocumentdoesnotincludeactivitiesassociatedwithaircraftoperatorsincludingaircraftmaintenanceactivities.EHSGuidelinesforPorts,HarboursandTerminals(2007)Applicabletocommercialports,harbours,andterminalsforcargoandpassengerstransfer.EHSGuidelinesforRailways(2007)Applicabletoactivitiestypicallyconductedbyrailinfrastructureoperatorsdedicatedtopassengerandfreighttransport.EHSGuidelinesforShipping(2007)Includeinformationrelevanttotheoperationandmaintenanceofshipsusedforthetransportofbulkcargo,andgoodsaswellastovesselsoperatedwithfossilfuelsanddonotaddressissuesspecifictonuclear-poweredvessels;andCargohandling,vesselmaintenance,andotherin-portactivitiesarecoveredundertheEHSGuidelinesforPortsandHarbours(2007).EHSGuidelinesforTelecommunications(2007)Applicabletotelecommunicationsinfrastructuresuchasfixedlineandwirelessvoiceanddatatransmissioninfrastructure;andAlsoincludesthelong-distanceterrestrialandsubmarinecables(e.g.fibreopticcables),aswellasradioandtelevisionbroadcasting,andassociatedtelecommunicationsandbroadcastinginstallationsandequipment.EHSGuidelinesforTollRoads(2007)Includeinformationrelevanttoconstruction,operationandmaintenanceoflarge,sealedroadprojectsincludingassociatedbridgesandoverpasses;andIssuesassociatedwiththeconstructionandoperationofmaintenancefacilitiesareaddressedintheGeneralEHSGuidelines.EHSGuidelinesforTourismandHospitalityDevelopment(2007)Containinformationrelevanttotourismandhospitalityfacilities,includingbusinessandcityhotels,resorts,ecolodges,andotheraccommodationandcateringfacilities;andDoesnotincludethetourismtravelsectornordoesitapplytocruiseshipsorotherocean-goingactivities.EHSGuidelinesforWasteManagementFacilities(2007)Coverfacilitiesorprojectsdedicatedtothemanagementof:GuidetoESGforInfrastructureprojectsSeptember202021EHSGuidelinesDescription-municipalsolidwasteandindustrialwaste,includingwastecollectionandtransport;wastereceipt,unloading,processing,andstorage;and-landfilldisposal;physico-chemicalandbiologicaltreatment;andincinerationprojects.EHSGuidelinesforWaterandSanitation(2007)Includeinformationrelevanttotheoperationandmaintenanceof:-potablewatertreatmentanddistributionsystems,and-collectionofsewageincentralisedsystems(suchaspipedsewercollectionnetworks)ordecentralisedsystems(suchasseptictankssubsequentlyservicedbypumptrucks)andtreatmentofcollectedsewageatcentralisedfacilities.TheseGeneralEHSandindustrysectorGuidelinescontaintheperformancelevelsandmeasuresthatarenormallyacceptabletotheIFC,andthataregenerallyconsideredtobeachievableinnewfacilitiesatreasonablecostsbyexistingtechnology.AdditionalinformationoftheWBGGeneralEHSGuidelinesandthenineselectedindustrysectors–infrastructureprojectsareavailabletheIFCwebsite4.InadditiontomeetingtherequirementsandperformancelevelsundertheWBGEHSGuidelines,projectsshallcomplywiththeapplicablehostcountryregulationsandlaw.WhenhostcountryregulationsdifferfromthelevelsandmeasurespresentedintheseGeneralEHSGuidelines,projectsareexpectedtoachievewhicheverismorestringent5.Iflessstringentlevelsormeasuresareappropriateinviewofspecificprojectcircumstances,afullanddetailedjustificationforanyproposedalternativesisneededaspartoftheproject-orsite-specificESGrequirements.ThenumericalenvironmentalrequirementsoftheWBGGeneralEHSGuidelinesisprovidedinAppendixC(separateappendicestothisGuide).ExamplesofprojectsundertakenbasedontheIFCPerformanceStandards&EHSGuidelinesrequirementsareprovidedbelow:CaseStudy:UrbanandSemi-UrbanWaterSupplySchemeESIAAUKcontractorenteredintoaConstructionContractwiththepubliclyownerwaterutilityforthedesignandconstructionof13watertreatmentinfrastructurefacilitiesinCameroon(waterintakestructures,watertreatmentplants,treatedwaterstoragetanks,anddistributionnetworks).FinancefortheProjectwassoughtfrominternationallenders.AnESIAoftheprojectwasthereforerequiredtomeettheinternationalrequirementsforaCategory“B”projectandCameroonEIAregulations.Inthisinstance,theinternationalESIAconsultantworkedwiththelocalEIAconsultantteamtodelivertheabove.ItwasagreedwithUKEFthattheIFCPerformanceStandardsandtheEHSGuidelineswouldformtheapplicablestandardsfortheESIA,tomeettheEPsrequirements.Alignmentwiththeserequirementsincluded:DeliveryriskmanagementandqualitycontrolbystablishingaclearscopefortheESIA;preparingfieldworkprotocolstoIFCPSs/EHSguidelines;spotmonitoringofthelocalEIAconsultantduringfieldwork;UndertakingaproportionateESIA.Giventhenumberofsites,thefocuswasonidentifying‘commonissues’atallsites,aswellasany‘site-specificissues’thatrequiredadditionalconsideration.ForGuidetoESGforInfrastructureprojectsSeptember202022example,ahydrologyandwaterqualityassessmentwereidentifiedasnecessaryonlyforthesiteswherenewintakeswereproposed;Developingacloseworkingrelationshipwiththeinternationallender.Throughearlysharingofinformationandscopeandestablishingaregularfeedbackmechanismtokeepallpartiesuptodateonprogress;Inmeetinginternationalstandardsforstakeholderengagement,earlypreparationofaFrameworkStakeholderEngagementPlan(SEP)toguidethelocalprocessandensureengagementmetinternationalaswellaslocalrequirements;Itwasnecessarytonegotiatetheapproachtophysicalandeconomicdisplacementwiththepublicownertomeettheinternationalstandards.Aspecificapproachwasagreedtoavoidsettingprecedentforallfuturepublicowner’sprojectswhilststillmeetingtheIFCrequirements.ASupplementaryLandAcquisitionandCompensationPlanwasdevelopedtoidentifythegapsandproposethewayforward,whichwasthenalsoagreedwiththeinternationallender.Additionalcompensationtomeetinternationalrequirementswasaddressedthrougha“DisturbanceAllowance”;andPreparationofanoverarchingESMPanddetailedindividualmanagementplansfortheoverallscheme;anddevelopmentofanoutlineESMStomanagetheprocessthroughconstructionandoperation.CaseStudy:PutuIronOreMineESIA,LiberiaInsupportofaFeasibilitystudy,anESIAwasundertakenforthePutuIronOreMiningInc.projectintheGrandGedehCountyofLiberia.Theprojectisfinancedbyaninternationalcorporate.AfullspectrumofspecialiststudieswasundertakenaswellasanintensivestakeholderengagementscheduleandresettlementactionplandevelopmenttoalsomeettheWorldBank(andEPs).Thisisalarge-scaleironoreproject,withanexpectedlifeofmineof80yearswithsignificantsupportinginfrastructurerequired.Tomeettheserequirements,thefollowingwereprepared:•ResettlementActionPlan;•StakeholderEngagementPlan(SEP);•ESIAReport;and•ESMP.StakeholderengagementwascarriedoutthroughouttheprojectareaandaSEPwaspreparedtoactasworkingdocumenttoundertaketheprojectengagement.EngagementwasundertakenwithvillagesalongtheproposedroadtotheminesiteaswellasGovernmentministersandlocalorganisations.Aspartoftheidentificationofimpactsattheinitialstage,itwaspossibletominimisetherequirementforresettlementfromtheoriginalestimationof34,000peoplewhichwouldhavebeendisplacedtoapproximately2,000people,throughcarefulrealignmentoftheroad,railwayandthetailingsmanagementfacility.ThefootprintoftheminewasalsominimisedtoreducethelossofrainforestandthereisaproposaltooffsetthedamagethroughextensionandadditionalprotectionofthenearbySapoNationalPark.Environmentalandsocialmanagementprogrammesweredevelopedforallphasesoftheproject,includingaroadupgrade,railwaydevelopmentandportfacilityconstruction.Thisreflectstheneedtofocusonsocialaspectsaswellasenvironmentalimpactsoftheproject.Italsoreflectstheneedtoconsiderallinfrastructureelementsofaprojectandtheirimpact,includingsupportinginfrastructuresuchasroadandrail.GuidetoESGforInfrastructureprojectsSeptember2020232.4BRIGreenInvestmentPrinciples(2019)TheBRIGreenInvestmentPrinciplesoutlinesevenprinciples(refertoFigure2.4)assteptowardsagoldstandardforgreeninvestmentalongtheBeltandRoad.Itrecognisestheinternationallenders,investorsandcorporationsthatinvestandoperateintheregiontoensuretheirprojectsarealignedwiththeESGstandardsandrequirements.Theprinciplesalsorecommendactionsand/orEvaluationandAssessmentinincorporatingESGfactorsasprovidedinthefigurebelow.TheGreenInvestmentPrinciplesweredevelopedthroughjointworkingbetweentheCityofLondonCorporation’sGreenFinanceInitiativeandChina’sGreenFinanceCommittee.ThePrincipleswerefirstpublishedin2018andaresupportedthroughtheChina-UKPACTprogramme(PartneringforAcceleratedClimateTransitions).SignatoriestothePrinciplesrecognisetheimportanceofincorporatinglow-carbonandsustainabledevelopmentintoprojectsinBeltandRoadcountries.AsofApril2020,therewere37globalinstitutions,mostlylargefinancialinstitutions,signeduptothePrinciples,includingbothChineseandInternationallenders.Thisprovidesakeygroupoffinanciersactiveininfrastructuredevelopmentindevelopingmarkets(manyofthesignatorieshavealsoadoptedtheEPs).Figure2.4:BRIGreenInvestmentPrinciples(2019)GuidetoESGforInfrastructureprojectsSeptember202024TheprincipleshaveclearapplicationtoESG.Principle2isfocusedontheapplicationofESGlaws,regulationsandstandards,assetoutinthissection.However,thewiderprinciples,includingtheneedfortransparency,stakeholderengagementandimplementationofsystemstominimiseimpactsallhavedirectrelevancetomeetinginternationalprivatecapitalexpectations.TheGIPswillcontinuetobedevelopedandexamplesofbestpracticearelikelytobedevelopedthatcanbeusedaslearningforotherprojects.Section6includesafocusontheassessmentofphysicalclimaterisks,whicharedirectlyrelatedtotheaimsoftheGIPs.GuidetoESGforInfrastructureprojectsSeptember2020252.5OverviewoflocalEIAFrameworkTheapplicationofeffectiveESGprocessesalsorequiresadetailedunderstandingofthehostcountryESGrequirements.Thesevarysignificantlyfrommarkettomarket.However,ifprivatecapitalistolendtoaninfrastructureprojectindevelopingcountries-meetingthehostcountryESGstandard(i.e.EIAregulations)isaminimumrequirement.Wheretherearedifferencesbetweenthehostcountryrequirementsandtheinternationalstandards,themorestringentrequirementsshouldbemettofacilitateprivatecapitalinvestment.ThefollowingsectionsprovidestheEIAprocessandrequirementsoftheMalaysiaandKenya.2.5.1MalaysiaLegalFrameworkandEIAProcedureThemainfederalframeworkenvironmentallegislationinMalaysiaistheEnvironmentalQualityAct(EQA),1974(Act127),supportedbyitssubsidiaryActs,Regulations,OrdersandLegislation.ItisapplicabletoallstatesandisadministeredbytheDepartmentofEnvironment(DOE),whichistheauthorityestablishedundertheEQAandplaysakeyroleintheenforcementoftheprovisionsoftheActanditssubsidiaryregulations.TheEQAwasrevisedin2012.AdditionalinformationisprovidedintheseparateAppendixA.EIAisastatutoryrequirementforactivitieswhichhavebeenprescribedundertheEnvironmentalQuality(PrescribedActivities)EnvironmentalImpactAssessment)Order,2015.ThoseindustrialactivitiesthataresubjecttothemandatoryEIArequirementsareneverthelesssubjecttovariousregulationsundertheEQA1974.ThestatesofSabahandSarawakenactedtheirownenvironmentallegislationsrequiringEIAforactivitieswhichfallwithinthestatejurisdictioni.e.theSabahEnvironmentProtectionEnactment,2002(Enact.12/2002)andtheSarawakNaturalResourcesandEnvironmentOrdinance,1993(Chapter84)respectively.TheEIAGuidelinesinMalaysiacontainanEIAorderwhichcomprisesoftwoschedules.TheEIAfortheFirstSchedulefollowsadifferentEIAprocedurefromtheEIAfortheSecondSchedule.ThetypeofprojectdefineswhichSchedulewillbeused.TherelevantprojecttypesaresetoutineachSchedule.ProjectsundertheFirstScheduledonotrequirepubliccomment,whileSecondScheduleprojectsmustbepubliclydisplayedandallowforpubliccomment.Inaddition,infacilitatinginfrastructureprojectsinMalaysia,thelocalDOEhasalsoissuedtheguidancedocumentstoassistprojectinpreparingtheEIAReports.AgeneraloverviewoftheEIAprocedureisillustratedintheFigure2.5.AsocialassessmentiscoveredaspartoftheEIArequirements;however,itonlycoversthetopicsonsocioeconomicsandtheprojectsenvironmentalimpactassessmentonthesocialreceptors.GuidetoESGforInfrastructureprojectsSeptember202026Figure2.5:GeneralOverviewofEIAProcedureinMalaysiaNOGuidetoESGforInfrastructureprojectsSeptember202027RolesandResponsibilitiesofPartiesInvolvedintheEIAProcedureSeveralindividualsandorganisationsplayimportantandspecificrolesandshoulderdifferentresponsibilitiesintheEIAprocedure.TherolesandresponsibilitiesarebrieflydescribedinTable2.3below.Table2.3:RolesandresponsibilitiesofeachpartyinvolvedinEIAProceduresPartyRolesandResponsibilitiesProjectProponentAnindividualororganisationthatisproposingtoundertakethedevelopmentofaprescribedactivity;MaybefromthepublicortheprivatesectorandmayberepresentedbyanEIAconsultant;Responsibleforallaspectsrelatedtothedevelopmentoftheprojectincludingtheenvironmentalplanningoftheprojectanditsassociatedcost;andMaydelegatethetaskofconductingtheEIAprojecttotheprojectEIAConsultantortoanotherorganisationbutremainsultimatelyresponsibleforthecontentoftheEIAReportontheproject.LocalregisteredEIAConsultantAnindividualwhohasbeentaskedbytheprojecttoconducttheEIA;Typically,theleaderofateamofEIAConsultantsofvarioustechnicaldisciplinesrelevanttotheproposedproject;and.TheEIAteamleaderwhoworkforaregisteredEIAconsultingfirmandthesubjectmatterexpertsshallbeDOE-registeredConsultantswhoshallmaintainprofessionalisminconductingacomprehensiveEIAandproduceaqualityEIAReportthatisusefulfordecision-makingpurposes.EnvironmentalRelatedAgenciesandExpertsAgenciesandindividualswhohavetechnicalexpertiseandexperienceinspecificareasplayanimportantroleinprovidingrelevantinputsonenvironmentalimpacts,impactstudytechniques,andpollutionpreventionandmitigationmeasures;andTheinputsfromtheseagenciesandindividualsmaybesoughtbytheDOEwheneverdeemednecessary.PublicPublicparticipationisanessentialandintegralpartofprojectdevelopmenttoprovideanavenueforthepublictochanneltheirviewsontheproposedproject;andSomeformofpublicparticipationtoobtaintheirinputstotheEIAstudy,shallbeimplementedwhichmayincludepublicengagementandpublicdisplayofEIAReport.TechnicalReviewCommittee(TRC)EIATechnicalReviewCommittee(EIATRC)reviewstheEIAReportsintermsofitsReportAdequacy(RAC);FirstSchedule:DOEstateoffice,andSecondSchedule:DOEHQ;MembersofbothEIATRCsaretheTRCmembers,representativesfromrelevantGAs,andAIsfromwithinoroutsideoftheDOE,whohavevasttechnicalexperiencesintherelevantareasrelatedtotheproposedproject;andNGOsmayalsobeinvitedtositonthecommitteesasgeneralrepresentativesorasAIs.InthecaseoftheEIATRCattheDOEstateofficeswhichreviewsEIAReportsoftheFirstScheduleactivities,AIswillonlybeappointedwhenneededonacase-to-casebasis,asdescribedearlier.TheapprovingauthorityistheGovernmentAuthoritythathasthetaskofdeciding,inviewoftheenvironmentalanddevelopmentcosts,andthebenefitsoftheproposedprojecttothecommunity,how(orwhether)aprojectshouldproceed.TheprojectapprovingauthoritiesincludetheNationalDevelopmentPlanningCommittee(NDPC)forFederalGovernmentsponsoredprojects;TheStateExecutiveCouncil(EXCO)forStateGovernmentsponsoredprojects;thevariousLocalAuthorities(LAs)orRegionalDevelopmentAuthorities(RDA)withrespecttoplanningapprovalwithintheirrespectiveareas.GuidetoESGforInfrastructureprojectsSeptember2020282.5.2KenyaLegalFrameworkandEIAProcedureTheConstitutionofKenya(2010)isthesupremelawoftherepublic.Inrelationtotheenvironment,Article42ofChapterFour,theBillofRights,conferstoeverypersontherighttoacleanandhealthyenvironment,whichincludestherighttohavetheenvironmentprotectedforthebenefitofpresentandfuturegenerationsthroughlegislativemeasures,particularlythosecontemplatedinArticle69,andtohaveobligationsrelatingtotheenvironmentfulfilledunderArticle70Section69(2)everypersonhasadutytocooperatewiththeStateandotherpersonstoprotectandconservetheenvironmentandensureecologicallysustainabledevelopmentanduseofnaturalresources.InKenya,EIAlegalrequirementsfirstappearedintheEnvironmentalManagementandCoordinationAct(EMCA)of1999andsubsequentlyintheEnvironmental(ImpactAssessmentandAudit)Regulationsof2003.AdditionalinformationisprovidedintheseparateAppendixB.TheEMCAof1999,amendedin2015,wasanActofParliamentthatprovidedfortheestablishmentofanappropriatelegalandinstitutionalframeworkforthemanagementoftheenvironment.ThisActwasprovidedfortheestablishmentofanappropriatelegalandinstitutionalframeworkforthemanagementoftheenvironmentandformattersconnectedtherewithandincidentalthereto.PartVIoftheActdirectedthatanynewprogram,activityoroperationshouldundergoEIA(Part6ofEMCA)andaReportpreparedforsubmissiontotheNEMA.TheEnvironmental(ImpactAssessmentandAudit)Regulations,2003providedguidelinesforconductingEIAandEnvironmentalAudits.ItofferedguidanceonfieldstudyandoutlinesthestructureofEIAandAuditReports.Thelegislationfurtherexplainedthelegalconsequencesofpartialornon-compliancetotheprovisionsoftheAct.Inaddition,theprojectshallalsobeobligedtomeettheapplicablesocial-relatedregulationssuchastheNationalLandPolicy,2009;EnvironmentandLandCourtAct,2011;CommunityLandBill,2011;LandAct,2012;LandRegistrationAct,2012.6Figure2.6providestheEIAprocedureinKenya.GuidetoESGforInfrastructureprojectsSeptember202029Figure2.6:GeneralOverviewofEIAProcedureinKenyaApprovalwLeadMonitoringLICENSEsignificantadverseprojectReportHIGHCOURTLeadNEMAtoapprovewithin45daysafterreceivingComprehensiveprojectReportMonitoringGuidetoESGforInfrastructureprojectsSeptember202030RolesandResponsibilitiesofPartiesInvolvedintheEIAProcedureTheMinistryofEnvironmentandNaturalResources(MENR)isresponsiblefortheenvironmentatpolicylevel.TheMinistrycomprisesofvariousdivisionsattheheadquartersanddepartmentsincludingtheNationalEnvironmentalManagementAuthority(NEMA).TheNEMAisthecorporatebodyresponsiblefortheadministrationoftheabovelegislation.LedbyaDirectorGeneral,NEMAco-ordinatesandregulatesvariousenvironmentalmanagementactivities,initiationoflegislativeproposalsandsubmissionofsuchproposalstotheAttorneyGeneral,research,investigationsandsurveysinthefieldofenvironment.NEMAisalsochargedwiththeresponsibilityoftheexecutionoftheEIA,toensurethepublicanddecisionmakershavealltheinformationneededtoevaluatetheimpactofproposeddevelopmentprojectsoncommunitiesandtheenvironment.Inaddition,Section68ofEMCAalsoobligatesNEMAwiththeresponsibilityofcarryingoutenvironmentalauditofallactivitiesthatarelikelytohavesignificanteffectontheenvironment.Anenvironmentalauditstudymustbeundertakenondevelopmentactivitieslikelytohaveadverseenvironmentalimpactssuchason-goingprojectscommencedpriortothecomingintoforceoftheregulationsornewprojectsundertakenaftercompletionofanEIAstudyReport.Incarryingoutanenvironmentalauditstudy,theNEMAregisteredandappointedauditormustcarryoutanappraisalofalltheprojectactivitiesincludingtheproductionofgoodsandservices;considerenvironmentalregulatoryframeworks,environmentalhealthandsafetymeasuresandsustainableuseofresources.TheprinciplesapplicabletoEIAarealsorelevantinanenvironmentalaudit.InthesituationwherenoEIAlicensetobeissuedbyNEMA,theprojectproponentmayappealtotheNationalEnvironmentTribunal(NET]within60daysaftertheNEMA’sdecision,andtheNETisrequiredbythelawtogivereasonsforitsdecisions.IfdissatisfiedbyanydecisionofNET,theprojectproponentmaychallengethatdecisionbeforetheEnvironmentandLandCourt(ELC).AnappealtotheELCmustbemadewithin30daysofthedecisionmadebyNET.ThedecisionoftheELCisfinal.Thatmeansnofurtherappealmaybemade.Nevertheless,thereareotheroptionsavailableforreviewofdecisionsofNEMAanditsofficers:ThefirstpossibilityistoapplytotheHighCourtforjudicialreview-challengingthewaythedecisionwasmade;andThesecondistofileapetitionallegingviolationofconstitutionalrightsintheConstitutionalandHumanRightsDivisionoftheHighCourt–particularlytherighttoacleanandhealthyenvironmentunderArticle70.However,itismostlikelytheHighCourtwillfirstdecidewhetheritisthemostappropriatecourttodeterminethedisputeorwoulditbebesthandledattheNETorELC.GuidetoESGforInfrastructureprojectsSeptember2020312.6ComparisonofHostCountryandEP/IFCRequirementsTheprevioussectionshavesetouttheapproachrequiredtocarryingoutESGassessmentstomeethostcountryandinternationalprivatecapitalrequirements.Ashasbeenoutlined,akeyissueisthatwhenhostcountryregulationsdifferfromthelevelsandmeasurespresentedininternationalbestpracticeguidelines,projectsareexpectedtoachievewhicheverismorestringent.Therearetwokeywaysinwhichtherequirementsmaydiffer:1.EvaluationsandAssessments–hostcountriesmaynotspecifythesameareasforcompletingtheevaluationsandassessmentstopicsrequiredbytheIFCPerformanceStandards;and2.Content–theIFCPerformanceStandards(includingtheEHSGuidelines)or,insomecases,thehostcountryrequirementsmaybemorestringentinthetargetsthatarerequiredtobemetForitem1,Table2.4providesthecomparisonofminimumESGrelatedEvaluationsandAssessmentsinMalaysiaandKenyaagainsttheEPC/IFCPSrequirements.WhereacircleisprovidedthismeansthatanEvaluationandAssessmentisrequired.Table2.4:ComparisonofEIAProcedureandESGEvaluations&AssessmentsinMalaysiaandKenyatotheEquatorPrinciplesandtheIFCPerformanceStandardsESGEvaluationsandAssessmentsMalaysiaKenyaEPandIFCGovernance●●●FeasibilityStudy,InitialEnvironmentalExamination●--EnvironmentalandSocialImpactAssessmentincludingScreening&Scoping,BaselineAssessment,ImpactAssessment,ProjectAlternatives●●●TechnicalSubjects(whichwillbethebasisofESMMPorEMMP)suchas:HumanResources-●●SupplyChainandContractor--●OccupationalHealth&Safety●●●EHSCommunicationandTraining--●LocalRecruitmentandProcurement--●WorkersAccommodation-●●LandUse,TopographyandGeology/Hydrogeology●●●GreenhouseGasesEmissions&ClimateChange--●AirQuality●●●NoiseandVibration●●●ErosionandSediment●●●SoilandGroundwater●●●WaterandWastewater●●●Non-HazardousSolidandLiquidWaste●●●HazardousMaterials●●●SpillPreventionandResponse--●PesticideUse--●ElectromagneticField(EMF)--●LandscapeandVisual●●●FloodRisk--●CommunityHealthandSafety●●●CommunityDevelopmentincludingsocioeconomics●●●SecurityPersonnel--●FirePreventionandLifeSafety--●Traffic(andVessel)-●●GuidetoESGforInfrastructureprojectsSeptember202032ESGEvaluationsandAssessmentsMalaysiaKenyaEPandIFCResettlement--●LivelihoodRestoration--●ManagementofEcosystemServices●●●Terrestrial/MarineBiodiversity●●●IndigenousPeople/HumanRights-●●ChanceFindProcedures--●CulturalHeritage●●●EnvironmentalandSocialManagementSystem--●StakeholderEngagement●●●GrievanceMechanism●●●EnvironmentalandSocialMonitoringPlan●●●EmergencyPreparednessandResponses--●OngoingReporting●●●ESGCompliancee.g.DueDiligence,Audit●●●DecommissioningPlan--●ThemaingapsbetweenthehostcountryandIFCPSrequirementsisthestructureofassessmentinrelationtolabourandworkingconditionsandthelivelihoodrestoration/resettlement.Themainrequirementathostcountrylevelfocusesmainlyonthecommunityandtheoccupationalhealth&safetyanddoesnotrequireadditionalfactorstobedisclosedintheEIA.Forexample,Malaysia’sEIAfocusesmainlyonthesocioeconomicsassessmentonly,andprovidesavoluntarilyoptionforprojectproponentstoconductdetailedstudiesonthebasicrightsofworkers,labourfairtreatment,resettlementandlivelihoodrestorationplan,ofwhicharerequirementsbytheIFCPS.AdditionalexamplesofgapsbetweentheEPsandcountrystandardsalsoinclude,butarenotlimitedto,thefollowing:Developmentofagoodmanagementsystem,appropriatetothesizeandnatureofthebusinessactivity,topromotesoundandsustainableenvironmentalandsocialperformanceaswellasleadtoimprovedfinancialoutcomes(refertoSection3ofthisGuide);Requirementathostcountryleveltoconductastand-aloneGHG/climatechange,floodriskspillpreventionincludingemergencypreparednessandresponses,pesticideusemanagementandtheEMGstudies;andPotentialforcommunityexposuretorisksandimpactsarisingfromequipmentaccidents,structuralfailuresaswellasimpactsonacommunity’snaturalresources,exposuretodiseasesandtheuseofsecuritypersonnel.Foritem2,thereareexampleswhereIFCstandardsaremorestringentthanthehostcountriesrequirements.ThereaseveralrequirementswheretherearedifferencesbetweentheIFCEHSGuidelinesandKenyarequirements,includingwheretheIFCstandardsaremorestringent.Thisincludes:AllrequiredparametersundertheIFCEHSGuidelines7forAmbientAirQualityaremorestringentforIFC,withanexceptionofSulphurDioxide(10-minute)requirementsforwhichboththeIFCrequirementsandlocalstandardsaresimilar;7BasedonWHOAirQualityGuidelines.Source:https://www.ifc.org/wps/wcm/connect/4e01e089-ad1a-4986-b955-e19e1f305ff0/1-1%2BAir%2BEmissions%2Band%2BAmbient%2BAir%2BQuality.pdf?MOD=AJPERES&CVID=ls0KF2JGuidetoESGforInfrastructureprojectsSeptember202033Thenoise-levelwithintheresidential/institutionsareashouldnotexceedtheIFCnoiseguidelines–whicharemorestringentthanthoselocalstandards(withanexceptionofinstitutionsduringnight-time).However,thelocalnoise-levelstandardsaremorestringentthantheIFCforthecommercial/industrialarea;andForthesurfacewaterqualityaprojectcanmeeteithertheIFCrequirementsorthelocalstandardsfortheselectedparameters,withanexceptionoftheTotalSuspendedSolid(TSS)level–ofwhichthelocalstandardismorestringentthattheIFCEHSGuidelines.CaseStudy:KenyaRoadsAnnuityProgramTheGovernmentofKenyaislookingtobuildorupgradeupto10,000kmofroadsundera10-yearPrivateFinanceInitiative/Public-PrivatePartnershipmodel.TheProgramwillbeimplementedinthreephasesundertheFinance-Design-BuildMaintainandTransferContractstructureunderaPPPframework.TheMinistryofTransport,Infrastructure,HousingandUrbanDevelopmentinvitedapplicationsforshortlistingofbidderstofinance,design,build,maintainandtransferonanannuitybasisRoadsindifferentLots.TheLender,CfCStanbic,hasenteredadebtarrangingmandatewithdifferencepreferredbiddersfordifferentLots.AspartoftheirESGprocess,StanbicrequiredanEnvironmentalandSocialDueDiligenceoftheenvironmentaldocumentationandmanagementsystemsofthepreferredbidderagainsttheEP,theIFCandnationalrequirements.AgapanalysiswasundertakenincludingareviewofnationalEIAReportsandthepreferredbiddersESMS;andthelikelyriskassociatedwiththegapsidentified.Inaddition,anEnvironmentalandSocialActionPlan(ESAP)wasthenpreparedtoidentifytheESGactionsrequiredtobecompletedasdifferentstagesoftheprojectthatwouldformpartoftheconditionsofthefinancialagreement.ThisreflectstheneedfortheIFCstandardstobemet–whicharehigherthantherequirementsofKenyainsomeareas.Doingsocreatesthepotentialtoprivatelyfinanceaprojectwhichwouldotherwisenotbepossible.IncomparingbetweentheIFHEHSGuidelinesandtheselectedenvironmentalstandardsinMalaysia:AllrequiredparametersundertheIFCEHSGuidelines8forAmbientAirQualityandtheNoiseLevelaremorestringent;andForthesurfacewaterqualityaProjectcanmeeteithertheIFCrequirementsorthelocalstandardsoftheselectedparameters,withanexceptionoftheBiologicalOxygenDemand(BOD)andtheChemicalOxygenDemand(COD)levelsforClassI,IIA,IIBandIVwater(asdefinedunderlocalstandards);andtheTotalSuspendedSolidsforClassIIA,IIBandIIIofwhichthelocalstandardsaremorestringentthantheIFCEHSGuidelines.Therearenoapplicablelocalstandards(inKenyaandMalaysia)forthemarineseabedquality,hencemeetingtheinternationalstandardsshallberequired,whereapplicable.IflessstringentlevelsormeasuresareappropriateinviewofspecificProjectcircumstances,afullanddetailedjustificationforanyproposedalternativesisneededaspartoftheProject-orsite-specificESGrequirementstomeetinternationalrequirements.Additionally,intheabsenceofanyapplicableenvironmentalstandardsinhostcountries,internationallyrecognisedsourcese.g.theWorldHealthOrganisations(WHO),MARPOL73/78(whicharefurtherreferencedinSection4)maybereferredto.8BasedonWHOAirQualityGuidelines.Source:https://www.ifc.org/wps/wcm/connect/4e01e089-ad1a-4986-b955-e19e1f305ff0/1-1%2BAir%2BEmissions%2Band%2BAmbient%2BAir%2BQuality.pdf?MOD=AJPERES&CVID=ls0KF2JGuidetoESGforInfrastructureprojectsSeptember2020343OverviewofEnvironmentalandSocialManagementSystems(ESMS)TheprevioussectionsummarisedtherequirementsofESGassessmentsandwheretheremaybedifferencesbetweenhostcountryminimumstandardsandinternationalprivatecapitalexpectations.ThispurposeofthissectionistopresentabestpracticeapproachinassessingandmanagingESGrisksthroughoutallprojectstages,usinganEnvironmentalandSocialManagementSystem(ESMS).ThishasbeenadaptedfromtheIFCEnvironmentalandSocialManagementSystemImplementationHandbooktoprovideguidanceonkeybestpracticeareas.Lenderswillexpectprojectproponentstobeabletodemonstratetheyhaveawell-developedESMS.Goodgovernancehelpsaprojecttooperatemoreefficiently,improveaccesstocapital,mitigaterisk,andsafeguardagainstmismanagement.Itmakesaprojectmoreaccountableandtransparenttotheinvestors,increasesaccesstocapital,encouragesnewinvestments,boostseconomicgrowth,providesemploymentopportunitiesandgivesthemthetoolstorespondtostakeholderconcerns.AnESMSdoesnotneedtobecomplicated,butitdoesneedtobedocumentedandthenputintopractice.ThegovernancestructureandresponsibilitieswithinanESMSincorporatethecommitmentsrelevanttotheprojectlifecycletoensuresystematicandeffectiveexecutiontoassess,controlandcontinuallyimproveESGperformance,aspartofaPlan-Do-Check-Act(PDCA)cycle(refertoFigure3.1).Thiscyclealsoguidestheprojectandtherelevantstakeholderstoidentify,addressandminimisethepotentialESGrisksandadverseimpactsandultimatelyenhanceandstimulateaproject’spositiveimpacts.Figure3.1:PDCACycleAsolid,functioningand“live”managementsystemismadeupofnineinterrelatedelements,asshowninFigure3.2.Thefollowingsectionpresentsanoutlineonhowtodevelopandimplementasystemusingtheseelements.GuidetoESGforInfrastructureprojectsSeptember202035Figure3.2:ElementsofESGManagementSystemPoliciesThecornerstoneofanESMSisasetofpolicies,whichsummarisethecommitmentthataprojecthasmadetomanagingESGrisksandimpacts.Asetofpoliciesestablishtheexpectationsforconductinallrelatedaspectsoftheprojecti.e.theycommunicatetherelevantESGpoliciestoallstakeholders.PoliciesshouldbeclearandsimpleandcanbeexpandedtoalignwithinternationallyrecognisedESGstandardsforrelevantissues;andbetailoredtoaproject’soperationsandspecificESGrisksandimpacts.Thepoliciestelleveryonewhatisallowedandwhatisnotallowedwhenitcomestosocialandenvironmentalissuessuchaslabourandworkingconditions,resourceefficiencyandpollutionprevention,andcommunityhealth,safetyandsecuritySeniormanagementorBoardsupportiscriticalforintegratingaproject’sESGcommitmentthroughoutalllevelsofaproject.ThisincludesinputintothedevelopmentoftherelevantESGpoliciesandcommitmenttoESGpolicies.OnceapolicyisagreedbySeniormanagement,“buy-in”tothepolicyisrequiredisdriveimplementation.Seniormanagement,andtheirprojectmanagers,needtoeffectivelyshapeandcommunicatetheimportanceofshort-,medium-andlong-termESGissues,bymakingthemanongoingpartofhigh-levelboardandmanagementdiscussions,publicspeeches,andmessagestoemployeesandthesupplychain.IdentificationofRiskandImpactsandManagementProgramsImplementationoftheESMSincludesidentificationofrelevantESGrisksandimpactsviaariskassessmentprocess(basedontheoutcomesofimpactassessmentactivity(refertoSection2ofthisGuide)oranyotherESGEvaluationandAssessmente.g.EnvironmentalandSocialDueDiligence(ESDD))anddevelopmentofappropriatestrategiesormanagementprogramswithactionplanstoavoid,minimizeorcompensatefortherisksandimpactsthatwereidentified;andtodrivecontinualimprovement.Itisgoodpracticetoemphasizepreventiveandproactiveactions:(1)trytoavoidcausingsocialorenvironmentaldamage;(2)ifnotpossible,thenminimizetheimpact;(3)ifnotpossible,thencompensateoroffsetthedamage.GuidetoESGforInfrastructureprojectsSeptember202036Theactionplansshouldcoverthetargetoftheactioni.e.whatrisksarebeingaddressed,howtheactionsandprocedureswillbeimplementedtoaddresstherisks,whythisisrequired,timeframeanddeadlines,resultsmeasurement,andresponsibilitiesparties.OrganisationalCapacityandCompetencyAnESMSextendsbeyonddocumentedpoliciesandprocedures.SeniormanagementsupportandleadershipthroughouttheprojectiscriticaltoimplementingasustainableESMS,supportedbyateamthattakesresponsibilityforthemanagementsystem-seniormanagementneedstoensurerealignmentofreportingduties,allocationofappropriatetimeandauthoritytocarryouttheworkinvolved.AprojectmayalsoneedadedicatedESMSteamandcommittedemployeesatalllevelstoeffectivelyimplementthemanagementsystemAwell-balancedESMSTeamshouldincludeknowledgeableprojectprofessionalswithEHSexperienceandperformanceshouldbeevaluatedbasedontheconsistentimplementationofassignedduties.TheESMSTeamshouldnotworkinisolationwhenidentifyingrisksanddefiningactionstoaddressthem.Tobetrulyeffective,theESMSTeamneedstoconsultwithpeoplefromalllevelsofthecompany,includingsupervisorsandworkers,astheyarekeyfrontlineidentifiersofproblemse.g.legal&compliance,contractsandpurchasing,operationsorproduction,humanresources,forexample.Inordertodeveloptheorganisationalcapacity,theprojectproponentwillneedtotraintheworkforceregardingtheproject’sESGcommitments.Thismayincludeprogressivetrainingtechniqueswithspecificgoalstoraiseawareness,togaincommitmentandtoteachemployeestheknowledgeandskillstheyneedtoimplementtheESMS.TrainingshouldbeeffectivelyimplementedandshoulddistinguishbetweenthosewhoonlyneedbasicESMStrainingandthoserequiringmoreadvancedtraining.EmergencyPreparednessandResponseEvenwithgoodsystemsinplace,emergenciescananddohappen.Therefore,itisessentialtoplan,implementandtraintheemployeesregardingemergencypreparednessandresponse.Thisplanshouldbedevelopedinthelocalcontext,tobemadeavailableatallprojectstakeholdersforregularreviewandupdate.Theprojectproponentmayutilisetheproject’sriskassessmentinfocusingontheemergenciesthataremostlikelytohappenorwouldcausethemostharm,includingthedevelopmentofanEmergencyPreparednessandResponsePlancoveringeachprioritisedemergencyevent.StakeholderEngagementStakeholdersarepersonsorgroupswhoaredirectlyorindirectlyaffectedbyaproject,aswellasthosewhomayhaveinterestsinaprojectand/ortheabilitytoinfluenceitsoutcome,eitherpositivelyornegatively.Stakeholdersmayincludelocallyaffectedcommunitiesorindividualsandtheirformalandinformalrepresentatives,nationalorlocalgovernmentauthorities,politicians,religiousleaders,civilsocietyorganisationsandgroupswithspecialinterests,theacademiccommunity,orotherbusinesses9.GuidetoESGforInfrastructureprojectsSeptember202037Thedevelopmentoftheprojectmayhaveanimpactonthelivesofrelevantstakeholders.Theexistingandfuturerelationshipwitheachgroupisdifferent,andtheprojectdevelopmentmustadapthowengagementiscarriedouttomitigaterisksarising.Asystematicandcontinualengagementwithstakeholdersalsoprovidestheopportunitytohighlightthepositiveandnegativeaspectsoftheproject’spresence.Thislowerstheriskofanti-projectsentimentsthatcouldleadtocostlylitigationordisruption.Bykeepingthesegroupsinformedandmaintaininganopencommunicationchannel,itmaylowertheriskofnegativecampaignsthatcouldaffecttheprojectdevelopment’sreputation.Thefirststepinbuildingarelationshipwiththestakeholdersistoidentifythem.Basedontheproject’sriskassessmentandtheareasofpotentialnegativeimpactsandidentifywhowouldbedirectlyorindirectlyimpacted–aprojectproponentshouldbeabletoidentifythestakeholders.Thestakeholdersmaybecategorisedtodifferentgroupsandmappedaccordingtothedegreetowhichtheyareimpactedbytheprojectlifecycleandtheircapacitytoinfluence.Aftermappingthestakeholdergroups,thenextstepistodevelopaplanforhowtoengagewiththegroups.Aneffectiveandregularcommunicationwiththevariousstakeholdergroupsshouldbeimplementedtounderstandhowaprojectmaydirectlyandindirectlyaffectthemandtogetearlywarnings.Stakeholderengagementactivitiesshouldbemorefrequentwithgroupsthataremoreseverelyaffected,aswellaswiththosethathaveagreaterabilitytoinfluence.Theprojectproponentshouldalsoreviewandupdatethestakeholderengagementplanatregularintervalsandwhentherearemajorchangesinprojectlifecycle.Figure3.3illustratesthestakeholderengagementprocess.Figure3.3:StakeholderEngagementProcessExternalCommunicationandGrievanceMechanismIftheprojectmaygiverisetosocialandenvironmentalimpactsinthecommunity,inquiries,concernsandcomplaintsareboundtoarise.Thewayinwhichtheseissuesaremanagedwillhavesignificantimplicationsforhowtheprojectisperceivedand,possibly,whetheritsucceeds.Projectproponentshouldalwaysestablishandmaintainapubliclyavailableandeasilyaccessiblechannelforstakeholders(e.g.phonenumber,website,emailaddress,etc.).Externalstakeholderscanprovidevaluableinformation,suchassuggestionsforprojectimprovement,advancewarningincriticalsituations,feedbackoninteractionswithotherprojectstakeholdersand/orGuidetoESGforInfrastructureprojectsSeptember202038commentsfromthelocalandapplicableregulators,NGOsandindividualsregardingaproject’sESGperformance.TheprocedureforexternalcommunicationandgrievancesshouldincludethemethodsprovidedinFigure3.4.Figure3.4:ExternalCommunicationProcessInaddition,apublicgrievancemechanismshouldbeestablishedtoenablestakeholders-includingindividuals,groupsorcommunitiesaffectedbytheproject-toraiseaninquiry,aconcernoraformalcomplaintwiththeprojectproponent.Inpractice,agrievancemechanismshouldbedevelopedasprovidedinFigure3.5.Forallgrievances,theprojectproponentshouldcommittoaresponsetimeandkeeptoitasthiswillincreasetransparencyandasenseof“fairprocess”andensurethatallgrievancesareaddressed.Themoreserioustheclaim,themoreindependentthemechanismshouldbetodeterminetheresolutionandoptionsforredresse.g.allegationsofwidespreadgroundwatercontamination,mightrequireimmediateinterventionbyseniormanagersandmorededicatedresourcesforinvestigating,documentingandreporting.Forcomplexandrecurringproblems,considerationshouldbegiventoreachingouttothecertifiedthird-partyfacilitatorsthatcanactasindependentmediators.Figure3.5:GrievanceMechanismProcessReceive,registerandvalidateexternalcommunicationsandrequestsforinformationScreenandassesstheimportanceoftheissueraisedanddeterminehowtoaddressProvide,track,documentandpublishresponsesAdjustmanagementprograms,whenappropriate.1234Establishawayforstakeholderstocontact–openlyoranonymously–toposetheirquestions,toexpressconcernsortofileacomplaint.Examplesaresuggestionboxes,atoll-freetelephonehotline,anemailaddress,andregularmeetings.1234Assignapersonorteaminyourcompanytoberesponsibleforreceiving,registeringandprocessingallgrievancesEstablishprocedurestoregister,screen,categorise,investigateanddetermineresolutionandredressoptions.EstablishasystemtocommunicatedecisionstakenandprogressonpendingactionsGuidetoESGforInfrastructureprojectsSeptember202039OngoingReportingtoAffectedCommunitiesThefinal,criticalsteptowardsbuildingandmaintainingagoodrelationshipwiththeproject’sexternalstakeholderssuchaslocalcommunitiesistokeeptheminformedoftheresponsestotheirconcernsorcomplaintsbyreportingbacktotheaffectedcommunitiesandexplainingtheactionsthattheprojectproponentmayimplementtoaddresstheissues,andtheoutcomesofthoseactions.Thefrequencyofthiscommunicationshouldbeproportionaltothescaleofstakeholders’concerns,anditshouldbeconductedatleastannuallyduringconstructionand,asrequiredbytheproject,duringoperation.Iftheproject’sactivitieschangeornewESGrisks/impactsemerge,itisincumbentupontheprojectproponenttocontactstakeholdersoutsideoftheregularscheduletodiscusssuchchangesMonitoringandReviewThemonitoringandreviewprocessprovidecriticalcomponentswithintheESMSinensuringtherelevantESGpolicies/proceduresarebeingcommunicatedandtheESGactionplansarebeingimplemented.Itisanumbrellatermthatincludesvariousmethodsforevaluatingperformance.Incident/nonconformityreportingproceduresshouldbefullycommunicatedaspartofprojectinductiontrainingpriortoanyindividualcommencingworkfor,oronbehalfof,theprojectproponent.Inaddition,managementreviewshouldincludeassessingopportunitiesforimprovementandtheneedforchangesinthesystem;andshouldtakeplaceatleasteverysixmonths-annually.Recordsofthemanagementreviewwithevidenceofactionsagreedandtakenshouldbedocumented,andtheoutputofmanagementreviewsshouldincludethedecisionsandactionstoanyactionsincludingthosepertainingtocontinualimprovement.CaseStudy:CameroonNachtigalHydropowerProjectTheenvironmentalimpactoftheProjectwasdesignatedasaCategoryAbytheWorldBankGroup,whichisdefinedaslikelytohavesignificantadverseenvironmentalimpactsduetotheshorttermimpactsofnegativecumulativeimpactsonlandpressureandsocialinfluxesintheprojectarea.Thesewereaddressedthrough:oEarlyimplementationofanEnvironmentalandSocialManagementPlan(ESMP)andBiodiversityActionPlanoutlinedthemitigationmeasurestoavoidandminimiseexpectednegativeimpactsonterrestrialbiodiversity.oDedicatedteamswereformedtoimplementrecommendationsandmonitorcontractualobligations.oAppraisalmissionsledbyIFCweremadetooverseeriskmitigationplanswithNHPC’senvironmentalandsocialteamandconservationbodiessuchasMinistriesofForestryandtheEnvironmentandInternationalUnionforConservationofNaturetomeetwithlocalauthoritiesandaffectedcommunities.oApartnershipagreementtopromoteemploymentfortheresidentslocatedintheProject’sarea.oApartnershipagreementtosupporttherevivalanddevelopmentofagriculturalactivitiesofcommunitiesaffectedbytheProject.Thisincludesthepaymentofcompensation,provisionofimprovedseedsandtrainingofimprovedagriculturaltechniquesoCommunityconsultationswereundertakenwithidentifiedprojectstakeholderstodeterminethescopeofthelivelihoodrestorationplanandenteredintopartnershipstosupportrevivalofeconomicactivitiesintheaffectedareas.oImplementationofaGrievanceMechanismforthelocalcommunity.Duringtheprojectconstructionand35-yearoperationalconcessionperiod,NHPC’sgrievancemechanismwillbeoperationalandadaptitsgrievanceresolutionmechanismtoeffectivelyrespondtothechangingnatureofregisteredcomplaintsGuidetoESGforInfrastructureprojectsSeptember202040oCameroon’sexistinghighprevalenceofgenderbasedviolenceisarootedsocialphenomenonwherewomenandgirlsarevictimsofphysicalviolenceperpetuatedbypartnersandfamilymembers.Mitigationmeasuresweremadewithreferencetoexistingprojectsandintroducedtohandlecomplaintsandmisconductandopencommunicationchannelsweresetuptoaddressallegations,includingthroughtheinvolvementoflocalqualifiedNGOs.Thedetailedapproachtakenensuredtheprojectwaspreparedtostandardsthatmettherequirementsofinternationalfinance.Theprojectobtainedfinancingfromarangeofequityanddebtproviders,including:oUS$810millionofDevelopmentFinance–syndicateof11developmentfinanceinstitutions(AFC,AFD,AfDB,CDC,DEG,EAIF,EIB,FMO,IFC,OFIDandPROPARCO)oUS$200millionofcommercialbankdebt–syndicateof4commercialbanks(BICEC,SCB,StandardCharteredandSociétéGénérale)oEquity-US$332millionfrombothprivatecapital(EDF)andotherinternationalorganisations(e.g.IFC,Africa50)GuidetoESGforInfrastructureprojectsSeptember2020414BestPracticeApproachbyProjectStageThepurposeofthissectionistoprovideguidanceonbestpracticeapproachestoESGthroughthedifferentstagesofaprojecti.e.planning–projectconcept,construction–assetdevelopment,commissioningandoperation,andprojectclosure.Thisisbasedontheinvolvementofprivatefinanceinaproject.Basedontheapplicablemandatorylocalrequirementsandinternationalbestpractices(refertoSection2–3ofthisGuide),Figure4.1belowprovidesanexampleoftheESGprocessfromprojectdevelopmentthroughtooperationandclosure.Thisincludesboththeperspectiveofthelenderandtheprojectproponent.ThisdemonstratestheneedtoconsiderESGaspectsearlyintheprojectandmaintainthisfocusthroughouttheprojectlife.Italsoshowsthekeyareasinwhichlenderswillexpecttobeinvolvedateachstageoftheprocess.TheguidanceincorporatesseveralcheckliststhatdemonstratethedifferentrequirementsthatmaybenecessarytosatisfynationalandinternationalprivatecapitalESG.Thechecklistsprovidedinthissectioncover:PreliminaryESGImpactsChecklist;ListofApplicableLocalESGRegulationsandStandards;RelevantInternationalStandards;RelevantInternationalTreatiesandAgreements;Scopingphasechecklist;ESGAssessmentduringprojectplanning-highlevel;ESGAssessmentduringprojectplanning–detailedESIA;EnvironmentalandSocialMonitoringandManagementPlan;OutlineESMS;andESGComplianceAssessment.Itisimportanttohavetherightskillsandresourcesinplacetomanagetheserequirementsandinteractionwithlendersandprovidetransparentinformationtothem.Openengagementcanincreasethechancetoobtainprivatecapitalaskeyrisksareidentifiedandmitigated,providingconfidenceintheprojectdelivery..GuidetoESGforInfrastructureprojectsSeptember202042Figure4.1:RoadmaptoESGProjectFinancingPROJECTLENDERSandESGAudit–ConstructionUpdatedESMP,SEP,ESGManagementSystem–OperationESGAudit-OperationE&SMonitoring-OperationProjectSupervisionandDevelopmentOutcomeTrackingReviewofupdatedESMP,SEPandESGManagementSystem–OperationProjectSupervisionandDevelopmentOutcometrackingofE&SMonitoringandESGAuditdocuments–OperationGuidetoESGforInfrastructureprojectsSeptember2020434.1Planning–ProjectConceptEnvironmentalassessmentcanbeundertaken,tovaryingdegreesofdetail,atdifferentstagesinthedesignphaseofaproject.Forexample,anassessmentcanbecarriedoutatthepre-feasibilitystage,feasibilitystageordetaileddesign.Differenthostcountrieswillhavedifferentrequirementsintermsofthelevelofassessment,ifany,appliedatthesedesignstages.Priortodetaileddesign,assessmentsmanynotbeexplicitlyrequiredhowevermaybepreparedtohelpinformthedesignprocessofenvironmentalandsocialconstraintsfromanearlystage,andtoprovideevidencetoLendersthatanassessmentofalternativeswasconductedconsideringenvironmentalandsocialaswellastechnicalandeconomicissues.Inrelationtotheimpactassessment,hostcountriestypicallyapplyseveralphasessuchasscreening,scopingandimpactassessment.AsidentifiedinSection2,someofthesestagesmayormaynotapply,dependingonthetypeofprojectanditslikelyimpacts.Insomecases,ahigh-levelassessmentisonlyrequired,andinothers,amoredetailedimpactassessment.Thisisdescribedbelow,andapplicabilitywilldependonthetypeofproject,hostcountryandLender.ScreeningprocessThefirststepinprojectplanningisfortheprojectproponenttoreviewapplicableESGcriteriaonacase-by-casebasis(i.e.foreachproject)toassesswhatlevelofESGassessmentandevaluationisrequired,ifany.Throughthisprocessof“screening”,itcanbedeterminedwhetherESGisrequiredand,ifso,whatlevelofdetailisrequiredinsubsequentstagesoftheprocess.Thoseprojectswithagreaterextendand/orseverityofpotentialimpactsarelikelytorequiredmoredetailedassessmentandevaluationaspartoftheESGprocess.ThePreliminaryESGImpactsChecklist(refertoTable4.1below)providesalistofquestionsabouttheprojectactivitieswhichmayhaveimpactsontheexistingenvironmentandsocialreceptors/sensitivitieswithintheprojectarea.Thiscanbeusedtoscreenaprojectandthereinidentifywhatisrequiredfortheprojectanditsnextsteps.WhilstatanationalleveltheremaybespecificcriteriathatdeterminewhetheranEIAisrequired(e.g.,acertaintypeofprojectfallswithinthelegislativeschedules),attheinternationallevelthereisnospecificrulethatcanbeusedtodecidewhethertheresultsofusingtheChecklistshouldresultinanESIAbeingrequired,andthisistypicallydeterminedthroughprofessionaljudgementandliaisonwiththerelevantfundingbody.However,asaguide,ifthereisone“Yes”answertoaquestionintheChecklist,theprojectislikelytoresultinasignificanteffect,therebyrequiringanEIA/ESIAtobeconducted.Asageneralprinciple,thegreaterthenumberof“Yes”answers,thegreaterthesignificanceoftheeffectsidentified,andthereforethemorelikelyitisthatanEIA/ESIAisrequired.NotApplicableanswersindicateuncertaintyabouttheoccurrenceand/orsignificanceofeffectsandshouldpointtowardsapositivescreeningdecision(i.e.thatEIA/ESIAisrequired)astheEIA/ESIAprocesswillhelptoclarifytheuncertainty.GuidetoESGforInfrastructureprojectsSeptember202044Table4.1:PreliminaryESGImpactsChecklistItemYes/No/NotApplicableBrieflyprovideprojectdescriptionIsthislikelytoresultinasignificanteffect?Yes/No/NotApplicableWillconstruction,operationordecommissioningoftheprojectinvolveactionswhichwillcausephysicalchangesinthelocality(topography,landuse,changesinwaterbodies,etc)?Willconstructionoroperationoftheprojectusenaturalresourcessuchasland,water,materialsorenergy,especiallyanyresourceswhicharenon-renewableorinshortsupply?Arethereanyplansforfuturelandusesonoraroundthelocationwhichcouldbeaffectedbytheproject?Willconstruction,operationordecommissioningoftheprojectinvolveuse,storage,transport,handlingorproductionofhazardoussubstancesormaterialswhichcouldbeharmfultohumanhealthortheenvironmentorraiseconcernsaboutactualorperceivedriskstohumanhealth?Willconstruction,operationordecommissioningoftheprojectproducesolidwastesduringconstructionoroperationordecommissioning?Willconstructionoroperationoftheprojectreleasepollutantsoranyhazardous,toxicornoxioussubstancestoair?Willconstruction,operationordecommissioningoftheprojectleadtorisksofcontaminationoflandorwaterfromreleasesofpollutantsontothegroundorintosurfacewaters,groundwater,coastalwastersorthesea?Arethereanyinland,coastal,marineorundergroundwatersonoraroundthelocationwhichcouldbeaffectedbytheproject?Arethereanyareasonoraroundthelocationwhichareprotectedunderinternationalornationalorlocallegislationfortheirecological,landscape,culturalorothervalue,whichcouldbeaffectedbytheproject?Istheprojectlocatedinapreviouslyundevelopedareawheretherewillbelossofgreenfieldland?GuidetoESGforInfrastructureprojectsSeptember202045ItemYes/No/NotApplicableBrieflyprovideprojectdescriptionIsthislikelytoresultinasignificanteffect?Yes/No/NotApplicableArethereanyareasonoraroundthelocationwhicharealreadysubjecttopollutionorenvironmentaldamagee.g.whereexistinglegalenvironmentalstandardsareexceeded,whichcouldbeaffectedbytheproject?Istheprojectlocationsusceptibletoearthquakes,subsidence,landslides,erosion,floodingorextremeoradverseclimaticconditionse.g.temperatureinversions,fogs,severewinds,whichcouldcausetheprojectconstructionandoperationactivitiestopresentenvironmentalproblems?Arethereanyotherareasonoraroundthelocationwhichareimportantorsensitiveforreasonsoftheirecologye.g.wetlands,watercoursesorotherwaterbodies,thecoastalzone,mountains,forestsorwoodlands,whichcouldbeaffectedbytheproject?Arethereanyareasonoraroundthelocationwhichareusedbyprotected,importantorsensitivespeciesoffaunaorflorae.g.forbreeding,nesting,foraging,resting,overwintering,migration,whichcouldbeaffectedbytheproject?Willconstruction,operationordecommissioningoftheprojectcausenoiseandvibrationorreleaseoflight,heatenergyorelectromagneticand/orradiologicalradiation?Arethereanyareasorfeaturesofhighlandscapeorscenicvalueonoraroundthelocationwhichcouldbeaffectedbytheproject?Istheprojectinalocationwhereitislikelytobehighlyvisibletomanypeople?Arethereanyareasonoraroundthelocationwhicharedenselypopulatedorbuilt-up,whichcouldbeaffectedbytheproject?Willtherebeanyriskofaccidentsduringconstructionoroperationoftheprojectwhichcouldaffecthumanhealthortheenvironment?Willtheprojectlife-cycleresultinsocialchanges,forexample,indemography,traditionallifestyles,employment?GuidetoESGforInfrastructureprojectsSeptember202046ItemYes/No/NotApplicableBrieflyprovideprojectdescriptionIsthislikelytoresultinasignificanteffect?Yes/No/NotApplicableArethereanyareasonoraroundthelocationwhichareoccupiedbysensitivelandusese.g.hospitals,schools,placesofworship,communityfacilities,religiousfestivalswhichcouldbeaffectedbytheproject?Arethereanyroutesorfacilitiesonoraroundthelocationwhichareusedbythepublicforaccesstorecreationorotherfacilities(bothlandandsea),whichcouldbeaffectedbytheproject?Arethereanytransportroutesonoraroundthelocationwhicharesusceptibleto(land/sea)trafficcongestionorwhichcauseenvironmentalproblems,whichcouldbeaffectedduringtheprojectconstruction,operationordecommissioning?Arethereanyareasorfeaturesofhistoricorculturalimportanceonoraroundthelocationwhichcouldbeaffectedbytheproject?Arethereanyareasresidedbythevulnerablegroupse.g.children/youthandwomengroupsaswellasindigenouspeoplecommunities?Willtherebedifferentialimpactsfromtheprojectbasedongender,eitherthroughdevelopmentoftheprojectortheimpactsthatithasnthecommunities?Arethereexistinglandusesonoraroundthelocatione.g.homes,gardens,otherprivateproperty,industry,commerce,recreation,publicopenspace,communityfacilities,agriculture,forestry,tourism,miningorquarryingwhichcouldbeaffectedbytheprojectactivities?Arethereanyareasonoraroundthelocationwhichcontainimportant,highqualityorscarceresourcese.g.groundwater,surfacewaters,forestry,agriculture,fisheries,tourism,minerals,whichcouldbeaffectedbytheprojectactivities?Arethereanyotherfactorswhichshouldbeconsideredsuchasconsequentialdevelopmentwhichcouldleadtoenvironmentaleffectsorthepotentialforcumulativeimpactswithotherexistingorplannedactivitiesinthelocality?GuidetoESGforInfrastructureprojectsSeptember202047RelevantlegislationandstandardsOncetheneedforanEIA/ESIAhasbeenestablished,aprojectproponentshouldidentifyallapplicableESGregulationsandstandards.Thelegalrequirementcoverstherelevantlocalhostcountrylegaldocuments(providedbytherelevantlocalauthoritiese.g.DepartmentofEnvironment(DOE),DepartmentofOccupationalSafetyandHealth(DOSH))(refertoTable4.2).Inobtaininginternationallenders’involvement,asetofinternationalstandardsmayapplytotheprojectdevelopmentrequirements.TheserequirementsmustbeadheredandwilldefineprojectsneedstoconductrelevantESGEvaluationandAssessmentthroughouttheplanning,constructionandoperationactivities.AnexampleusingtheEPsisprovidedinTable4.3.Table4.2:ListofApplicableLocalESGRegulationsandStandardsPotentialAssessmentApplicabilitytotheprojectYesNoN/AProjectproponentsshallensuretheESGassessmentscomplywithallapplicablehostcountryESGregulationsandstandards.Thelegalrequirementshouldincludetherelevantlegaldocuments(providedbytherelevantlocalauthoritiese.g.DepartmentofEnvironment(DOE),DepartmentofOccupationalSafetyandHealth(DOSH)asfollows,butnotlimitedto:Anti-BriberyandCorruption,BusinessCodeofConductincludingLicensetoOperateLabourandEmploymentprojectpermitsandapprovingauthorities(includingEnvironmentalandSocialImpactAssessmentprocess)SpatialPlanning(projectdoesnotcontradictanylocaldevelopmentplansSiteselectionAirEmissionandNoiseWaterQualityWasteManagementandEffluentDischargesOccupationalSafetyandHealthincludingMajorAccidentHazards,HazardousChemicals,OccupationalDiseasesetc.LandAcquisitionandIndigenousPeopleHumanRightsCorporateSocialResponsibilityandCommunityDevelopmentTable4.3:RelevantInternationalStandardsPotentialAssessmentApplicabilitytotheprojectYesNoN/AProjectproponentsmustreviewtherelevantlenders’requirementstodetermineapplicabilitytotheproject.TheEPshavebeenprovidedasanexamplebelow,howeverthiscanbereplacedwiththeIFCPerformanceStandards,theEHSGuidelines,orotherLenderrequirementsasapplicable.EP1:ReviewandcategoriseEP2:EnvironmentalandsocialassessmentEP3:ApplicableenvironmentalandsocialstandardsEP4:EnvironmentalandsocialmanagementsystemandActionPlanEP5:StakeholdermanagementEP6:GrievancemechanismEP7:IndependentreviewEP8:CovenantsEP9:IndependentmonitoringandreportGuidetoESGforInfrastructureprojectsSeptember202048EP10:ReportingandtransparencyWhenhostcountryregulationsdifferfromthelevelsandmeasurespresentedininternationalbestpracticesstandardsandguidelines,projectsareexpectedtoachievewhicheverismorestringent10.Iflessstringentlevelsormeasuresareappropriateinviewofspecificprojectcircumstances,afullanddetailedjustificationforanyproposedalternativesisneededaspartoftheproject-orsite-specificESGrequirements.Additionally,hostcountriesmaybesignatorytointernationaltreatiesandagreementsand/or,intheabsenceofanyapplicableenvironmentalstandardsinhostcountries,internationalrecognisedsourcese.g.theWorldHealthOrganisations(WHO),MAPROL73/78maybereferredto.AchecklistforrelevanttreatiesandagreementsisprovidedinTable4.4,thoughisnotanexhaustivelist.Table4.4:RelevantInternationalTreatiesandAgreementsPotentialAssessmentApplicabilitytotheprojectYesNoN/AGiventhepossibilityoftheinternationallenders’involvements,asetofinternationalstandardsthatthelocalcountryissignatorytomaybeapplicabletotheproject.Theseadditionalstandardsandexpectationswillbeadheredthroughouttheplanning,constructionandoperationactivities.Thefollowingexamplesincluderelevantinternationaltreatiesandagreements:ParisClimateChangeAgreement(2016)UnitedNationsFrameworkConventiononClimateChange(UNFCCC)asNon-annexpartyandtheParisclimateaccordwithintheUnitedNationsFrameworkConventiononClimateChange(1992)ConventiononBiologicalDiversity(1992)ConventiononInternationalTradeofWildFaunaandFloraEndangeredSpecies(1973)UnitedNationsConventionontheLawoftheSea(UNCLOSIII)(1973–1982)InternationalConventionforthePreventionofPollutionfromShips,1973asmodifiedbytheProtocolof1978(MARPOL73/78)AbolitionofForcedLabourConvention(1957)MinimumAgeConvention(1973)ConventionontheEliminationofAllFormsofDiscrimination(1999)CESCRInternationalCovenantonEconomic,SocialandCulturalRights(2006ScopingPhaseInsomecases,underhostcountrylegislation,thereisarequirementtoundertakeascopingphaseinordertodeterminethetopicsthatshouldbeconsideredintheESIA.Scopingcoverspreliminaryidentificationofimpacts,sothattheassessmentcanfocusonthoseofmostrelevanceandlikelytobeofgreatestsignificancetotheproject.Ausefulwayofidentifyingthepotentialimpactsofaprojectistoidentifyalltheactivitiesorsourcesofimpactthatcouldarisefromconstruction,commissioningandoperationordecommissioningoftheproject,andtoconsiderthesealongsidethecharacteristicsoftheprojectenvironmentthatcouldbeaffected,toGuidetoESGforInfrastructureprojectsSeptember202049identifywheretherecouldbeinteractionsbetweenthem.Table4.5setsoutachecklistcanalsobeusedforthispurpose.Table4.5:ScopingphasechecklistTopicstobescopedin/outoftheESIAApplicabilitytotheprojectJustificationforscopingin/outYes(scopedin)No(scopedout)N/A(scopedout)GeneralClimateandMeteorologicalConditionsAmbientAirQualityNoise&VibrationSurfaceWaterSoilandGroundwaterNaturallyOccurringRadioactiveMaterial(NORM)andTechnologicallyEnhancedNaturallyOccurringRadioactiveMaterial(TENORM)ElectromagneticField(EMF)TerrestrialBiodiversitye.g.KeyBiodiversityAreas,ProtectedAreas,NationalLawsonForestProtection,InvasiveSpecies,Flora&Fauna,LandClassAssessmentMarineBiodiversitye.g.Macrobenthos,CoralReefs,Fish,MarineMammals,MarineHerpetofauna,Seabirds,MarineProtectedAreas,MarineInvasiveSpeciesCriticalHabitatGovernanceandDecision-MakingProcessLandUseandSpatialPlanningPopulationEducationEconomicsandLivelihoodsPovertyintheprojectareaIdentifiedPotentialVulnerableGroupsTransportationandsupportingpublicinfrastructureSocioculturalCommunityHealth,CommunitySafety&Security,andPerception&ExpectationUnplannedEventsAscopingreportshallincludethefollowinginformation:AnoverviewoftheProjectdescription;Initialexistingenvironmentalandsocialcharacterisationofthelocationoftheproject;Reviewofpotentialprojectinteractionsandtheresultsoftheimpactscopingprocess;andESIATermsofReference(TOR)andsubsequentstepsImpactAssessmentAnEnvironmentalandSocialImpactAssessment(ESIA)ensuresthatdecision-makersconsiderenvironmentalandsocialimpactswhendecidingwhethertoproceedwithaproject.TheESIAisessentiallyaplanningtoolforavoidingor,wherethatisnotpossible,minimisingimpactsandrisksbyidentifyingthemandthenidentifyingactions,eithertobeimplementedindesignorthroughouttheconstructionandoperationphases,toaddressthoseimpactsandrisks.Theassessmentprocessthereforeseekstoavoidcostlymistakesinprojectimplementation,eitherbecauseoftheESGrisksthatarelikelytoariseduringprojectimplementation,orbecauseofmodificationsthatmayberequiredsubsequentlyinordertomaketheactionsacceptableincludingenvironmentalandsocialmitigationandmonitoringplan.GuidetoESGforInfrastructureprojectsSeptember202050Asidentifiedatthestart,environmentalassessmentmaybeundertakenatearlystagesofthedesignprocess,e.g.pre-feasibility,whenthelevelofdesignisveryhighlevelandthereforeonlyahigh-levelassessmentcanbeundertaken.Itmayalsobeundertakenonceapreferreddesignhasbeenselected.Whetherahigh-levelimpactassessmentoradetailedimpactassessmentisrequiredwillbedeterminedconsideringthehostcountrylegislationandeachLenders’requirements;andwillbedrivenbythepotentialimpactsoftheproject.Theseimpactsmayormaynothavebeenscopedpreviously,asidentifiedabove(i.e.insomecases,scopingisnotrequiredandthedecisiontomovestraightfromscreeningtotheimpactassessmentmaybeundertaken).Dependingonthesignificanceofaprojectimpactsandrisks,theESGEvaluationandAssessmentmaycompriseafull-scale(detailed)impactassessmentoralessdetailedreportsuchasanInitialEnvironmentalExamination(IEE),forexample,foraprojectwithlimitedimpacts,generallysite-specific,largelyreversible,andreadilyaddressedthroughmitigationmeasures.Table4.6providesanindicativechecklistoftopicsthatmaybeincludedinahigh-levelassessment.Forprojectswithmoresignificantimpacts,afull-scale,detailedimpactassessmentmayberequired.Thecontentofadetailedassessmentincludes,ataminimum,isprovidedinTable4.7.Table4.6:Reportingduringprojectplanning-highlevelPotentialAssessmentApplicabilitytotheprojectYesNoN/AForprojectswithlimitedimpacts,generallysite-specific,largelyreversibleonthesignificanceofprojectimpactsandrisks,theassessmentmaycompriseafull-scaleimpactassessment;oradesktopreviewofpre-FSorIEE,withitsnarrowerscope,maybeconductedforprojectswithlimitedimpacts,generallysite-specific,largelyreversible,andreadilyaddressedthroughmitigationmeasures.Thecontentofahigh-levelassessmentsuchasanIEEinclude,ataminimum:IntroductionPolicy&LegalFrameworkProjectDescriptionincludingprojectDesignDescriptionofESGBaselineInformationDisclosure,ConsultationandParticipationandGrievanceMechanismPlanningOverviewofEnvironmentalandSocialImpacts,MitigationandManagementMeasuresTable4.7:ESGAssessmentduringprojectplanning–detailedESIAPotentialAssessmentApplicabilitytotheprojectYesNoN/AIntroductionPolicy&LegalFrameworkProjectDescriptionincludingprojectDesignAnalysisofalternativesDescriptionofESGBaselineInformationDisclosure,ConsultationandParticipationandGrievanceMechanismPlanningEnvironmentalimpactsandMitigationMeasuresCumulativeImpactAssessment(CIA)OutlineEnvironmentalandSocialManagementPlanNon-TechnicalSummary(NTS)GuidetoESGforInfrastructureprojectsSeptember202051EnvironmentalandSocialManagementandMonitoringTheESMPincludesthemitigationmeasuresandmanagementandmonitoringactivities,togetherwithdetailsofwhoisresponsibleforimplementation,howthesemeasuresareevaluatedforperformance,timingandreportingresponsibilities.AchecklistofthepotentialcomponentsofanESMPareprovidedinTable4.8.Table4.8:EnvironmentalandSocialMonitoringandManagementPlan11PotentialAssessmentApplicabilitytotheprojectYesNoN/ALabourandWorkingConditionsHumanResourcesPlanSupplyChainandContractorManagementOccupationalHealth&SafetyManagementEHSCommunicationandTrainingProcedureLocalRecruitmentandProcurementPlanWorkersAccommodationandManagementPlanResourceEfficiencyandPollutionPreventionGreenhouseGasesEmissionsandClimateChangeAssessmentAirQualityControlNoiseandVibrationControlErosionandSedimentControlPlanSoilandGroundwaterManagementWaterandWastewaterManagementNon-HazardousSolidandLiquidWasteManagementHazardousMaterialsManagementSpillPreventionandResponseProcedurePesticideUseManagementElectromagneticField(EMF)ManagementLandscapeandVisualAssessmentFloodRiskAnalysisCommunityHealth,SafetyandSecurityCommunityHealthandSafetyManagementCommunityDevelopmentPlanSecurityPersonnelManagementFirePreventionandLifeSafetyProcedureTraffic(andVessel)ManagementLandAcquisitionandInvoluntaryResettlementResettlementPlanLivelihoodRestorationActionPlanBiodiversityConservationandSustainableManagementLivingNaturalResourcesManagementofEcosystemServicesTerrestrial/MarineBiodiversityActionPlanandOffsetManagementIndigenousPeopleIndigenousPeoplePlan(IPP)CulturalHeritageChanceFindProceduresCulturalHeritagePlanGuidetoESGforInfrastructureprojectsSeptember202052TheprojectproponentshouldalsodevelopanoutlineofanESMStoprovideaconsolidatedsummaryofcommitmentsrelevanttotheprojecttoensuresystematicandeffectiveexecutionofthesecommitments.ThisisusedasaguidetotheLenders,thecontractorsandthestakeholderstoidentify,addressandminimisethepotentialESGconcernsandadverseimpactsandultimatelyenhancingandstimulatingproject’spositiveimpacts.AnoutlineoftheESMSisprovidedinTable4.9.Table4.9:OutlineESMSPotentialAssessmentApplicabilitytotheprojectYesNoN/AOutlineofEnvironmentalandSocialManagementSystem(ESMS)-aproject-leveldocumentprovidingasummaryofESGcommitmentsrelevanttotheprojecttoensuresystematicandeffectiveexecutionofthesecommitments.ThiscanbeusedasaguidetotheLenders,contractorsandstakeholderstoaddressandminimisethepotentialESGconcernsandadverseimpactsidentifiedintheassessmentabove,andultimatelyenhanceandstimulateproject’spositiveimpacts.Contentofamanagementsystemincludes:CorporateESGPoliciesESGOrganisationalandResponsibilityESGRiskRegisterincludingConstructionandOperationEnvironmentalAspectIdentification(ENVID),HealthRiskAssessment(HRA)andinitialManagementPlanEnvironmental,HealthandSafety(EHS)TrainingandAwarenessStakeholderEngagementPlan(SEP)andGrievanceMechanism(GM)On-goingReportingtoAffectedCommunitiesEmergencyResponseandPreparedness(ERP)ESGManagementPlan,Monitoring/Inspection,Reporting,AuditandReviewTheprojectproponentshouldalsoidentifythefrequencyinconductingofESGAuditandaspartoftheESMS(refertoTable4.10)inidentifyinganddevelopingmeasuresandactionsplansto:Avoid,minimise,mitigate,andwhereresidualimpactsremain,compensate/offsetforESGimpacts;IdentifyopportunitiestoimproveESGperformanceoutcomesandmonitoranddocumentESGperformancethroughouttheprojectfinancinglifecycle;andDiscloseinformationaboutitsinstitutionalandinvestmentactivities.Thisprovidestransparencytoinvestors.Table4.10:ESGComplianceAssessmentPotentialAssessmentApplicabilitytotheprojectYesNoN/AESGComplianceAssessmenti.e.ESGAuditCorporategovernanceAdditionaltotheESMS,asgoodpractice,theprojectproponentshouldconsiderthedevelopmentofaCorporateGovernancemethodologytoevaluateandimproveitsgovernanceofkeyESGpoliciesandprocedures—toidentify,reduce,andmanagerisk.Suchamethodologycanhelptheexecutionoftheprojectinconfirmingitscommitmenttodemonstrateleadershipandpromoteeffectiveenvironmental,social,andcorporategovernancethroughouttheprojectlifecycle.GuidetoESGforInfrastructureprojectsSeptember202053Theparametersofcorporategovernancemayinclude:CommitmenttoESG(LeadershipandCulture):Demonstratingacommitmenttoimplementinghigh-qualitycorporategovernance,includingthegovernanceofkeyenvironmentalandsocialpoliciesandprocedures;StructureandFunctioningoftheBoardofDirectors:Theboardofdirectorsisqualifiedandadequatelystructuredtooverseethestrategy,management,andperformanceofthecompany;ControlEnvironment:aproject’sinternalcontrolsystem,internalauditfunction,riskmanagementsystem(includinganenvironmentalandsocialmanagementsystem),andcompliancefunctionaresufficienttoensuresoundstewardshipoftheproject’sassets,effectivenessofoperations,accuracyinReporting,andcompliancewithpolicies,procedures,laws,andregulations;DisclosureandTransparency:Financialandnonfinancialdisclosuresarearelevant,faithful,andtimelyrepresentationofmaterialeventstoshareholdersandotherstakeholders;TreatmentofMinorityShareholders:inclusionofminorityshareholders’rightsandotherstakeholders;andGovernanceofStakeholderEngagement:Thegovernanceofstakeholderengagementparticularlyoversightoverstakeholdermapping,stakeholderengagementpolicyandgrievancemechanisms.4.2Construction–AssetDevelopmentBasedontherecommendationoftheapplicableESGEvaluationandAssessmenttheprojectproponentshouldcontinuallyupdatethefollowing‘live’documentsduringtheconstructionphase.ThisprovidestransparencytoprivatecapitalovertheoutcomeandimpactoftheESGandanyadditionalactionsthatarerequired.Theupdatesshouldincludethe:RelevantEnvironmentalandSocialManagementPlan(ESMP);StakeholderEngagementPlan(SEP)andPublicConsultationandDisclosure;EnvironmentalandSocialManagementSystem(ESMS);andESGAudit(refertoTable4.10).Additionally,ESGrisksduringconstructionphasewilllikelyincludecontractor/supplychainmanagement,whichrequirestraininginrelationtotheprojectESGrequirements,commitments,andprovisionsderivedfromthevarioussourcedocuments(e.g.ESGpolicies,regulatoryrequirements,ESMP,ESIAdocumentation,supplementalassessments,etc.).TheseESGrequirementsshouldbeanintegralpartofanycontract.ConstructionmajorhazardanalysisandriskassessmentisrecommendedtobeconductedinconjunctionwithHazardIdentification(HAZID)studies,andQuantitativeRiskAssessments(QRAs).Examplesofotherrisk/hazardassessmentsincludelifeandfiresafetyassessmentsandhumanhealthandenvironmentalriskassessments.Duringconstruction,theprojectproponentand,asrelevant,theircontractors,shouldcontinuallyconductenvironmentalandsocialmonitoringactivitiesandreportontheseinlinewithhostcountryand/orLenderrequirements.4.3CommissioningandOperationAsaboveforconstruction,basedontherecommendationoftheapplicableESGEvaluationandAssessmenttheprojectproponentshouldcontinuallyupdatethefollowing‘live’documentsduringcommissioningandoperationphase.ThisprovidestransparencytoprivatecapitalovertheoutcomeandimpactoftheESGandanyadditionalactionsthatarerequired.Theupdatesshouldincludethe:RelevantEnvironmentalandSocialManagementPlan(ESMP);GuidetoESGforInfrastructureprojectsSeptember202054StakeholderEngagementPlan(SEP)andPublicConsultationandDisclosure;EnvironmentalandSocialManagementSystem(ESMS);andESGAudit(refertoTable4.10).ESGrisksduringthecommissioning/operationphasemayincludecontractor/supplychainmanagement,whichrequirethemtobetrainedinrelationtotheprojectESGrequirements,commitments,andprovisionsderivedfromthevarioussourcedocuments(e.g.ESGpolicies,regulatoryrequirements,ESMP,ESIAdocumentation,supplementalassessments,etc.).TheseESGrequirementsshouldbeanintegralpartofthecontract.Inaddition,theprojectproponentshouldcontinuallyconductenvironmentalandsocialmonitoringactivitiesasthedevelopmentoftheprojecthasthepotentialtoreleasetoxic,hazardous,flammableorexplosivematerial;orwhereprojectoperationscouldresultininjurytoplantpersonnelorthepublicasidentifiedbytherisksandimpactsidentificationprocess.ContinuousoperationalmajorhazardanalysisandriskassessmentisrecommendedtoconductedinconjunctionwithHazardIdentification(HAZID)studies,HazardandOperability(HAZOP)studies,andQuantitativeRiskAssessments(QRAs).Examplesofotherrisk/hazardassessmentsincludelifeandfiresafetyassessmentsandhumanhealthandenvironmentalriskassessments.Duringcommissioning/operation,theprojectproponentshouldconductenvironmentalandsocialmonitoringactivitiesandreportontheseinlinewithhostcountryand/orLenderrequirements.4.4ProjectClosureWhenthefacilitynolongerservesausefulsocialoreconomicpurpose,itneedstobedismantledandthesitemadeavailableforotheruses.Requirementsfordecommissioningshouldbeconsideredduringdesignandplanningoffacilities.Thedecommissioningplanandassociatedcostestimateswillalsoneedtobepreparedinadvance,toensurefinancialresourceswillbeavailable.DecommissioningimposespotentialESGimpactsontheenvironmentalsensitivities,lossoflocalemployment,ageneraldeclineinlocalsocioeconomicsactivities,thecutting-backofcommunityservicespreviouslyprovided,andthedisbandmentoflocalcommunityinvolvementinmonitoringESGimpacts,canallintroducelong-termfinancialand-reputationalliabilitiesfortheproject.Anenvironmentalassessmentshouldbeconductedtoidentifyallenvironmentalliabilitiesandestablishabaselinereportontheenvironmentalconditionsoftheprojectpropertyatthetimeoftransfer.Theseconditionsshouldbedocumentedandcommunicatedtothepurchaserrepresentatives.Ifenvironmentalcontaminationisdiscovered,thedecisiontoremediateconditionsshallbeagreeduponwiththepurchaserandshallbereflectedintheagreementofsale,asrequiredbythehostcountrylegalrequirements.Environmentalremediationaimstoreduceradiationexposurefromcontaminatedsoil,hazardouswastestoragefacilitiesorothercontaminatedinfrastructure,groundwaterorsurfacewater.Itspurposeistoprotectthepeopleandtheenvironmentfrompotentialharmfuleffects.Insomecases,however,thismaynotbepractical,andrestrictionsmaybeplacedonfuturelanduseandhabitation.Iflongtermenvironmentalwarrantyisprovidedtopurchaser,thescopeofenvironmentalassessmentwillbeaccordinglyexpandedtoallowfortheestablishmentofanexpandedbaseline.BothdecommissioningandenvironmentalremediationshouldalsoensureHealth&Safety(H&S)oftheworkforceandthelocalpublicmustbeensuredfromanypotentialhazards.Hence,anappropriatelegalandregulatoryframework,aswellaspropertrainingforpersonnelbothinimplementationandinregulatoryoversightareamongthenecessarypreconditionstoensureH&Srisksareproperlymanagedandmitigatedpriortothesiteexit.GuidetoESGforInfrastructureprojectsSeptember202055Additionally,stakeholderconcernsaroundfutureprojectclosure,downsizing,ordivestmentshouldbeidentifiedduringinitialprojectplanningandaspartofanESIAprocess,oratleastsufficientlyinadvanceoftheeventstoallowstakeholderstoinformthedesignofmitigationandriskmanagementmeasures,andtherealisationofeconomicopportunities.Therangeofstakeholderspotentiallyaffectedby(orinfluentialin)decisionstodecommissionprojectfacilitiesordivestassetswilllikelybedifferentfromthoseatearlierstagesofaproject.Engagingwithstakeholderswellbeforetheseeventstakeplacecanlowercosts,reduceliabilitiesandstrengthentheoverallprojectreputation.SuccessfuldecommissioningwillbeexpectedtobeachievedwhenitcanbedemonstratedthroughanESGAudit.GuidetoESGforInfrastructureprojectsSeptember2020565PhysicalClimateRisks5.1ImportanceofPhysicalClimateRiskassessmentsAstheworldfacesanunprecedentedclimateemergency,thereisanurgentneedtoacceleratethetransitiontowardsamoresustainableglobaleconomy.Consideringthis,manyinvestorsarestartingtoreflectonlongtermimpactsinadditiontoriskandreturnontheirinvestments,andtoensurethattheirinvestmentssupportglobal(andnational)climate,environmentalandsocialsustainabilitygoalsasshowninFigure5-1.ThisgoesbeyondtheassessmentofESGrisksthroughconstructiontoassesslong-termpotentialimpactofclimatechangeonaproject.Thisincludeshowclimatechangemayrequirechangestotheinfrastructureassetinfutureyearsormayimpactcommercialterms.Whilearelativelynewareaofanalysistheapproachtomanagingphysicalclimateriskislikelytobecomemoreimportanttoinvestorsandbearequirementtoaccessinternationalprivatecapital.Aswellasmitigatingriskinvestorsareseekingtomakeinvestmentsinactivitiesalignedwiththetransitiontoalow-carbon,climateresilientandresource-efficienteconomy.Theabilityofaprojecttodemonstratethesekeysustainabilitybenefitscanunlockaccesstogreenand/orsustainablefinancingstreams.Investors’focusonESGconsiderationsisgrowingandchangingandmanyorganisationsaredevelopingmetricsandprocessestoevaluatetheimpactofprojectsontheplanet.AsoutlinedinSection2.4,theGreenFinanceCommitteesofChinaandtheUKpublishedtheGreenInvestmentPrinciples(GIP)inrecognitionthatassustainablefinancegrows,investorsneedtobeawareofthelong-termvalueofESGinvestments12.Figure5-1:FinancingSustainableGrowth13Thereisacleareconomic,environmental,andsocialimperativetotheidentificationandmanagementofphysicalclimaterisks14.Investmentintheadaptationofassetstoclimatechangecanbringmultiplebenefits.TheGlobalCommissiononAdaptation(GCA)usesthetermthe‘tripledividend’(seeFigure5.2).Thiscomprises:GuidetoESGforInfrastructureprojectsSeptember202057AvoidedLosses:Thisisthemostcommonmotivationforinvestinginadaptation,howevertakenalonesuchlossesunderestimatethetotalbenefitstosociety;EconomicBenefits:Investmentsinclimateresiliencenotonlyhavesocialandenvironmentalbenefitsbutgeneratehealthyratesofreturn.TheGCAfoundstandardratesofreturnintheorderof2:1to10;andEnvironmentalandSocialBenefits:Awell-functioningnaturalenvironmentunderpinsallhumanactivity.Healthyecosystemscanreducetheimpactsofmanyclimatehazards,includingdrought,floods,heatwavesandsea-levelrise.Protectingandusingtheseecosystemstoadapttoclimatechangeisaneffectivewayofbuildingresilience.Climatechangealsodisproportionatelyimpactsthemostvulnerablegroupsinsociety,includingwomenandgirls,indigenouscommunities,andmarginalisedgroups.Ensuringinvestmentsadequatelymanageclimaterisksallowsthemtomeettheirobjectivesandensuresthatexistinginequalitiesarenotexacerbated.Figure5.2:TheTripleDividendfrominvestinginAdaptation15Recognisingthatinvestmentintheadaptationandtheidentificationandmanagementofphysicalclimateriskcangeneratemultiplebenefits,afewinitiativesaregainingtractionanddrivingthisagenda,including:TheChina’sGreenIndustriesGuidanceCatalogue;TheEuropean(EU)TaxonomyforSustainableFinance;TheFinancialStabilityBoard(FSB)TaskforceonClimateRelatedFinancialDisclosures(TCFD);TheInternationalStandardsOrganisation(ISO)32210:202xFrameworkforSustainableFinance(indraft);andTheUNPrinciplesforResponsibleInvestment.ThisguidanceoutlinesunlockingthepotentialofBRIGreenInvestmentPrinciple5onutilisinggreenfinancialinstruments,providingguidanceontherobustidentification,assessment,managementandreportingofphysicalclimaterisksandadaptationimpactandsignpoststheusertofurtherrelevantframeworksandtools.TheassessmentandmanagementofphysicalclimaterisksalsoallowscompliancewithBRIGreenInvestmentPrinciple2onunderstandingtheESGRisks,andPrinciple3onthedisclosureofenvironmentalinformation,andformsacornerstoneofcompliancewiththeprinciplesandrecommendationsoftheTCFD.Theaimofthisprocessistoensurethatassetsareadaptedtoclimatechangesothatboththeassetsthemselvesareclimateresilient;andphysicalclimateriskstootherassociatedeconomicactivitiesaremanaged.Inturn,thiscangeneratethefollowingoutcomes:Maintainorenhancemarketpositionorenternewmarkets;GuidetoESGforInfrastructureprojectsSeptember202058Realiseorenhancerevenuesandreduceoperationalcosts;Maintainthecapitalvalueofassetsand(intheextreme)avoidthestrandingofassets;Regulatorycomplianceandreduceliabilities;andEnhancereputation.Thissectionfurtheroutlinesthemainstagesforappraisinginvestmentopportunitiesfromaphysicalclimateriskpointofview,namely:Screeningforphysicalclimateriskandadaptationimpact;Appraisalofphysicalclimateriskandadaptation;andMonitoringandreportingofadaptationimpact.5.2ScreeningforPhysicalClimateRiskandAdaptationImpactAssummarisedinSection2.1,theEPssetoutthecommonguidelinesandvoluntaryprinciplesformeetingminimumESGstandardsinnewprojects,includinghowtodetermine,assess,andmanageESGrisksandimpacts.TheEPsarealsodesignedtosupportthedevelopmentofprojectsthataresociallysoundandenvironmentallyresponsibleandincludetheneedforassessmentsofclimatechange(orphysicalclimate)risk.Projectsarescreenedandcategorisedaccordingtothemagnitudeoftheirpotentialenvironmental,socialandgovernancerisksandimpact,withdifferentrequirementsforfollow-upassessmentsandmanagementactivitiesbasedonthelevelofimpact.Fromaphysicalclimateriskandadaptationperspective,screeningcanbecarriedouttoeitherpositivescreeningornegativescreening.AlignedwiththeEPs,projectsshouldbescreenedbythelenders(throughinformationprovidedbytheprojectdeveloper)forpotentialphysicalclimaterisksandadaptationimpactcategorisedby:CategoryA:projectswithpotentialsignificantadversephysicalclimaterisksand/orimpactsthatarediverse,irreversibleorunprecedented,and/orprojectleveladaptationimpactorimpactontheadaptationofwidersystems;CategoryB:projectswithpotentiallimitedadversephysicalclimaterisksand/orimpactsthatarefew,generallysite-specific,largelyreversibleandreadilyaddressedthroughmitigationmeasures,and/orprojectleveladaptationimpactorimpactontheadaptationofwidersystems.;andCategoryC:projectswithminimalornoadversephysicalclimaterisksand/orimpacts,and/orprojectleveladaptationimpactorimpactontheadaptationofwidersystems.InfrastructureprojectswillbeeithercategoryAorBandrequireconsiderationofphysicalclimaterisksandtheiradaptationimpact.Negativescreeninginvolvestheidentificationofthephysicalclimateriskstoaplannedprojectorinvestmentwhichcouldnegativelyimpactonitsperformanceortheresilienceofwidersystemstoclimatechange.Forexample,ensuringthatthedesignofanewhospitaltakesincreasedheatstressintoaccount,orthataroadsurfaceisdesignedtobeabletowithstandhighermaximumtemperatures.Negativescreeningallowsaninvestmentofficertoidentifythekeyphysicalclimaterisksthatmayaffecttheproject,andrapidlycategorisethebroadlevelofriskfaced,allowingtheprioritisationofresourcesonprojectswhicharehigherrisk.Todeterminethevulnerabilityofaninvestmenttoclimatechange,itisfirstnecessarytounderstandthedegreetowhichspecificcomponentsandactivitiestobefinancedcouldpotentiallybeimpactedbyclimatechange.Althoughinsomecases,suchasresearchanddevelopmentortrainingandcapacity-buildingprojects,theremaybenosignificantphysicalclimaterisks,mostinfrastructureinvestmentsfinancedinthedevelopingmarketsinAsiaandAfricawillhaveseveralspecificphysicalclimaterisksthatwillimpactactivities.GuidetoESGforInfrastructureprojectsSeptember202059Sectorsensitivitymatriceshavebeendevelopedandcanbeusedtoguidetheinitialidentificationofpotentialclimaterisks16,ortailoredlistscouldbedevelopedfordevelopingmarketinvestments.Havingidentifiedrelevantphysicalclimaterisks,eachcanbegivenasensitivityrating(high,mediumorlow)basedonanexpertreviewoftheclimatesensitivityofthesector,whichwillbeguidedbystakeholderengagementandacomprehensivereviewofsupportingevidence(asavailable).Positivescreeninginvolvestheidentificationofprojectandinvestmentopportunitieswhicharelikelytohavethegreatestadaptationimpactbothintermsofprojectleveladaptationimpactandimpactontheadaptationofwidersystems.Forexample,developinganewirrigationsystemorimprovingfloodriskmanagement.5.3AppraisalofPhysicalClimateRiskandAdaptation5.3.1ScopingtheprojectandassessmentThefoundationforanyassessmentofphysicalclimateriskisaclearunderstandingoftheprojectcontext,objectives,andhowtheassessmentwillbeintegratedinto,andinform,thewiderprojectappraisalprocess.Theinitialclimateriskscreeningwillhelptoinformthisstep,however,therewillbeaneedforamorein-depthunderstandingoftheprojectandthebaselineconditions,andagreaterlevelofengagementwithprojectstakeholders.Specifically,itisnecessaryto:Understandthebackgroundtotheproject,itscomponentsandthestageintheprojectdevelopmentprocessinwhichtheassessmentisbeingundertaken,andtherelevantprojectstakeholdersandthedecision-making/policycontext.Understandanddefinetheprojectboundaries,takingintoaccounttheassetsandsystemsbeingfinancedaswellastheinterconnectionswithwidersystemsthatdirectlyaffect,orareaffectedbytheperformanceorsustainabilityoftheproject.Establishtheappropriatetimescaleoverwhichclimatechangeimpactsaretobeassessed.Thisshouldreflecttheintendedlifespanoftheassets,systemsorinstitutionsbeingfinancedandconsidertheplanning,construction,financing,operationalanddesignlifecyclesaswellasdecommissioningand/orremovalorreplacement.Theassessmentshouldalsobeintegratedintothewiderappraisalandreportingprocessfortheseprojects.Thisincludesrelatedfeasibilitystudies,duediligenceorimpactassessment(forexampleESIA).5.3.2DevelopinganevolvingclimatebaselineAnumberofdifferentclimatemodelsareusedtocreateprojectionsofhowdifferentclimatevariableswillchangeinthefuture17.Thesemodelshavedifferentassumptionsabouthowtheclimatesystemworksandvaryinthechangestheyshowfordifferentclimatevariables.Thedegreeofchangeisalsohighlydependentonhowquicklyemissionsofgreenhousegassescanbereduced,sodifferentemissionsscenariosareusedtomodelchangesunderdifferinglevelsofmitigationeffort18.Assuchforanygivenvariablethereisuncertaintyovertheexpectedchanges,anditiscriticalthataclimateriskassessmentaccountsforthisuncertainty.Assessmentstypicallyusethe2050sand2080sastimeframes,withthelifetimeoftheassetinquestiondeterminingthemostappropriatetimehorizontouse.SeveralapproachescanbeusedtoaccountfortheGuidetoESGforInfrastructureprojectsSeptember202060uncertaintyinclimateprojections.Forexample,a‘climatefutures’,orclimatenarrativesapproach19usestherangeofclimateprojectionstodevelopsimplified,plausiblescenariosoffutureclimatechange,forexample‘veryhot,dry’,or‘warm,nochangeinrainfall’.Modelscanbeselectedtorepresentthesescenarios,coveringareasonablerangeofchangesinfutureclimate,andusedforclimateimpactassessment.Intheexamplebelow,usedtoinformtheassessmentofaproposedirrigationschemeinKyrgyzstan20,modelswereselectedtocoverawiderangeofpossibleoutcomes,includingtwoselectedasmoreextremestresstests.Thisallowedanassessmentoftheviabilityoftheirrigationschemeunderarangeofdifferentpossiblefuturesandinformedthedevelopmentofadaptationmeasures.Informationfromthehistorical,climatetrends,andclimateprojectiondatacanbecombinedintoaninformed,qualitativeassessmentofthelikelihoodofaclimatehazardimpactingtheprojectoverthecourseofitslifetime,asdiscussedbelow.Thisassessmentcanbedesk-based,orcanbecarriedoutinaparticipatorymannerwithprojectstakeholders.UsefulsourcesofclimatedataincludetheKNMIClimateExplorer21,theWorldBank.5.3.3AssessmentofphysicalclimateriskDeterminingclimatevulnerabilityHavingidentifiedthepotentiallysignificantphysicalclimateriskstoaproject,itisnecessarytoassesstheexposureoftheinvestmenttotheseclimaterisks.Forexample,floodriskisapotentialissuefornewhousingdevelopments,however,location-specificassessmentsmayshowthatfortheareainquestionthereisnoriskofflooding.Thissteprefinesthelistofpotentialclimaterisks,andresultsinalistofkeyclimatevulnerabilitiestobeconsidered.Areviewofexistingregionalclimatechangeassessments,andpubliclyavailabledatasources,includingobservedtrendsinclimatevariablesandhazards,modelledfloodanddisasterrisk,andclimateprojectionscanbeusedtocategoriseexposureasLow,MediumorHighforeachofthepotentialphysicalclimaterisks.Forexample,althoughlandslidesmayhavebeenidentifiedasapotentialrisk,ifareviewofinformationatthedistrictorregionallevelshowsthatlandslidesdonotoccurintheregionduetoitstopography,thentheprojecthasLowexposuretolandslides.Whereas,iftheinvestmentisinafloodproneareawhereavailableinformationsuggeststhatclimatechangewillexacerbatefloodrisk,theprojectwouldbecategorisedashavingaHighexposuretofloodrisk.Theoutputofthisprocessisaqualitativedeterminationoftheclimatevulnerabilityofeachactivityassociatedwithaprojecttospecificclimatevariablesandclimatehazardsusingavulnerabilityratingmatrix(Table5.1).Thisprocessisinformedbyexpertopinion,stakeholderengagement,andareviewofsupportingevidence(literatureanddata)asavailable.Thehigh(andselectedmedium)climatevulnerabilitiesassociatedwitheachactivityorcomponentaretakenforwardtotheassessmentofphysicalclimaterisk.Table5.1:ClimateVulnerabilityRatingMatrixSensitivityExposureLowMediumHighLowLowLowLowMediumLowMediumMediumHighLowMediumHighGuidetoESGforInfrastructureprojectsSeptember202061ClimateriskratingOncethescopeoftheprojectandtheassessmentisclearlyunderstood,andaclimatebaselinedeveloped,acomprehensiveappraisalofphysicalclimateriskshouldbecarriedoutforthehigh(andselectedmoderate)climatevulnerabilitiesidentifiedduringthepreviousstage.Thephysicalclimateriskassessmentprocesswillfocusonidentifyingtheseverityandlikelihoodofimpactsoverthelifeoftheproject.Expertdeterminationsofthelevelofseverityandlikelihoodofimpacts(discussedfurtherbelow)arecombinedtodevelopaphysicalclimateriskratingregisterfortheplanneddesign,constructionandoperationoftheprojectinresponsetokeyclimatevariablesandhazards(Table5.2).Analysisshouldcombinequantitativeandqualitativedata,andshouldbeparticipatoryinnature,engagingrelevantstakeholdersthroughworkshopsorinterviews.Theresultsofthisassessmentthenguidetheidentificationandappraisalofadaptationoptionsinresponsetospecificextreme,highandselectedmediumphysicalclimaterisks.Table5.2:PhysicalClimateRiskRatingMatrixLikelihoodSeverityofimpactInsignificantMinorModerateMajorCatastrophicAlmostCertainLowModerateHighExtremeExtremeLikelyLowModerateModerateHighExtremeModerateLowLowModerateHighExtremeUnlikelyLowLowModerateModerateHighVeryunlikelyLowLowLowModerateModerateTheclimateriskassessmentshouldcombinedataonhistoricalevents,observedtrends,andclimateprojections,toassesstheseverityandlikelihoodofdifferentrisksaffectingtheproject.Severitycanbeestimatedinaqualitativeorquantitativemanner,basedonanassessmentofthelevelofdamageanddisruptionthatwouldoccurshouldariskmaterialise.Thisshouldbebasedontheoverallimportanceoftheinfrastructure(e.g.damagetokeyregionalenergyinfrastructureshouldberatedasmoreseverethandamagetolocaltransportnetworks),whetherlossoflifewouldbelikely,thereversibilityofanydamage,andlikelyeconomiccosts.Formoredetailedassessmentsonlargerprojects,costandimpactmodellingcanbecarriedouttoinformtheassessmentofimpact:Modellingthebaselinesituationandanalysisofthedamagecostsoflossanddamagefrombothdirectclimateimpactsandindirectimpactsonwidersystems;andEstimationofdamagecostsusinglocallyderiveddepth-damagecurvesandothermethodstoestimatetheExpectedAnnualDamages(EAD).Forexample,floodmodelscouldberunusingbaseline,andclimatechangescenarios,andusedtoestimatethedamageandeconomiccosttoproject.Suchmodellingcanalsoinformsubsequentanalysisofthecostsandbenefitsofdifferentmeasurestoadapttoclimatechange.Thestartingpointforassessingthelikelihoodofaclimatehazardintheprojectlocationshouldbehistoricaldataontheoccurrenceofclimatehazardsintheprojectlocation.Thisestablishesthebaselinelevelofriskfromahazard.Wheredataisavailable,trendsinthefrequencyandmagnitudeofhazardsshouldbeestablished;isfloodriskincreasinginthearea;havedroughtsbecomemoresevere.Oncethehistoricalrisk,andtrendinhazardshasbeenidentified,climateprojectionsandimpactmodelscanbeusedtoassesshowriskmaychangeoverthelifetimeoftheproject.Theprojectteamshouldestablishcriteriabywhichlikelihoodcategoriescanbeassessed.Acombinationofhistoricaldata,andclimateandimpactmodelscanbeusedtoassessthelikelihoodthedifferenthazardsoverthelifetimeoftheprojectinvestment.DatasourcesfortheseassessmentswillvaryGuidetoESGforInfrastructureprojectsSeptember202062dependingonlocation,butmayincludenationalmeteorologicalanddisasterriskassessments,aswellasglobaldatasetssuchastheDeltaresGlobalFloodExplorer22andtheGFDRRThinkHazard23platform,amongothers.Fordetailedassessmentsimpactmodellingstudieswilllikelyneedtobecarriedinadditiontomakinguseofpubliclyavailabledatasources.5.3.4IdentifyingandassessingadaptationoptionsAdaptationoptionsshouldbeidentifiedtohelptheprojectaddresssignificantrisksasidentifiedintheprevioussteps.Includingkeystakeholdersfromboththeprojectteam,andrepresentativesofanyprojectbeneficiariesintheprocessofdevelopingandprioritisingadaptationoptionsincreasesthelikelihoodthattheselectedadaptationmeasuresareeffective.Adaptationoptionsmayalsobesoft,forexamplecapacity-building,orthedevelopmentofriskmanagementplans,orhard,forexampletheincreasingdrainagecapacity,oradaptingbuildingdesigntoreduceheatgain.Mostclimateriskswillbemosteffectivelymanagedbyadoptingaportfolioofdifferentadaptationmeasures,forexamplecombiningincreasedshading,improvedinsulation,improvedventilationandtheuseofgreenexteriorspacetocoolbuildings.Giventheuncertaintiesinvolved,wherepossibleprojectdesignandadaptationmeasuresshouldmaintainflexibility,andallowforfutureadjustmentsasmoreinformationbecomesavailable.Forexample,designingflooddefencessothatitisrelativelysimpletoincreasethelevelofprotectionofneeded.Oncealonglistofadaptationhasbeendeveloped,aparticipatorymulti-criteriaanalysiscanbeusedtoprioritiseoptions.Criteriausedintheassessmentshouldbechosenincollaborationwiththeprojectteam,however,shouldcoverESGconsiderations.Differentoptions,orportfoliosofoptionscanbescoredagainsttheselectedcriteria,andshouldthenbeintegratedintoprojectdesign.Thefollowingsectionaddressesthedevelopmentofmetricstomonitorandreportontheperformanceoftheadaptationmeasuresimplemented.5.4MonitoringandReportingofAdaptationImpactAmonitoringandevaluationframeworkforadaptationshouldbedevelopedthatlinksprojectactivitiesorinputstooutputsandthedesiredprojectoutcomesandisintegratedintotheoverallframeworkfortheinvestment.Clear,sector-specific,standardisedandobjectivelymeasurableprojectspecificadaptationindicatorsneedtobeidentified.Informedbythepreviousassessmentstages,baselinesandtargetswillbesettocaptureexpectedoutputsandoutcomesoftheproject.InaccordancewiththeBRIGreenPrinciples(Principle3),itisrecommendedthatmetricsandkeyperformanceindicators(KPIs)aredevelopedtoenablebenchmarksandtargetstomeasureperformanceandcontributiontoobjectives.Thisenableskeystakeholderssuchasregulators,investorsandstafftomoreeasilyassessalignmentandcompareprojectsacrosstheBRI.Wherepossible,suchmetricsandKPIsshouldbebasedonbestavailableevidence;inthattheyarealignedwiththemost-recentscientificunderstandingofwhichactionsareneededtoachieveinternationalsustainabilitygoals.TheyshouldfocusonthoseaspectsofESGincludingeconomicfactorsmostrelevantandmaterialtotheproject,andtobedevelopedonatransparentbasis,workingwithkeystakeholders(includinginterestedpartiesoutsidethefinancialservicessector).Theyshouldbespecific,measurable(preferablyquantifiable),achievable,realisticandtime-bound.Despitetherebeingno'onesize-fits-all'solutiontoadaptationmetricsandKPI,andthefactthattheirdevelopmentandapplicationarestillatearlystages,thereissufficientknowledgetoinformthechoiceofindicatorstoevaluatetheimpactofdirectadaptationmeasures.24Theadaptationimpactofaprojectmaybemeasuredinphysicalunitsasthechangethattheprojectdeliversagainstapre-projectbaseline,withinestablishedprojectboundaries.Thismodelcanbeusedforseveraladaptationimpactindicators.GuidetoESGforInfrastructureprojectsSeptember202063Stakeholdersshouldalsobeabletoassessaprojectalignmentandprogressagainsteachoftheagreedprinciplesandcontributiontowardstrategicobjectives.SuchevidencecanbeincludedinatablethatconsolidatesESGandeconomicdata.Anexternalthird-partyreviewofsuchreportinganddisclosures,canfacilitatetrustandmarketconfidenceintheprocessandoutcomes.GuidetoESGforInfrastructureprojectsSeptember2020646ESGandPrivateProjectFinancing6.1Environmental,SocialandGovernance(ESG)impactonFinancialPerformanceESGEvaluationandAssessmentcreatesbroadersupportforprojectfinancing,reducesrisksanduncertainties,helpsmaintaina“locallicensetooperate,”andenhancestheprojectreputation.Ultimately,economicdevelopmentcannotbesuccessfulifitisnotsustainable,andsustainabilitycannotbeachievedwithoutESGconsiderations.ESGcanalsoprovideapositivecontributiontocorporateperformance.WhilethepreviouschaptersnotethatthereareissueswithobtainingbenchmarkdataforESGimpacts,a2015studyofover2,000academicstudiespublishedsince1970,supportedbythePrinciplesforResponsibleInvestment(PRI),demonstratedthatover60%ofstudiesshowapositivelinkbetweenESGandfinancialreturns,withonly10%havinganegativeimpact.25Insomeprojectsectors,coststructurespredominatelyreflecttheenvironmentalandsocialevaluationandassessmentfore.g.measurestoincreaseresourceefficiencyacrossoperationsandthesupplychaincanreducebusinesses'exposuretovolatilecommoditymarkets,risinginsurancepremiums,andfinancialproductsusedforhedgingpurposes(S&PGlobal,2019).Socialfactorshavealsoshowntoenhancerevenuegenerationthrough,forexample,elevatingworkforceproductivity,supportingdiversityandabetterunderstandingofcustomerneeds.Effectivelabourandtrainingmanagementplaysanimportantroleinreducingcosts,andhumanresourcedepartmentsconstantlybalancetheworkforcetoreducerecruitmentandredundancycostswhilemaintainingtherightlevelsofexperience.Thisprovidesadirectandeconomicallysignificantpositivecontributiontothecorporatefinancialperformanceaswellascreatingstrongerrelationshipsinhostcountriesandwithotherpotentialpartners.Additionally,ESGEvaluationandAssessmentwillalsoinfluencethedistributionofand/oraccesstocommunitydevelopmentbenefits,includingemployment,revenue,socialinvestment,opportunitiestoparticipateequallyinthedevelopmentofincomelevelsandopportunitiesforlocalsourcingofgoodsandserviceswhichtranslatesintopositiveeconomicgrowth,taxrevenuelevels,equitableaccesstoopportunitiesandaccrualofbenefitsaswellasimprovementofsocioeconomicvulnerability.6.2AdditionalProjectFinancierStandardsforESGThisguidesetsoutthekeyrequirementsforassessingandevaluatingESG.Asdiscussedintheintroduction,theEPshavebeenselectedasrepresentativeinternationalstandardsastheycoverawiderangeofprivatecapitalproviders.Theprocesstakenbyprivatecapitaltoassessaprojectissetoutatfigure4.1.Thisdoesnotjusthappenatthefinancingpointbutrequiresinvolvementthroughouttheprocesstoensuretheyarecomfortablewiththeprojectstructure.PrivateCapital–signatoriestotheEPsPrivatecapitaltypicallyrequiresprojectstomeettheEPs.SignatoriestotheEPsincludeawidevarietyoffinanciersthatformthecoreofprivatefinanceforinfrastructure.Thisincludes:Projectfinancebanks–manybanksthatprovideprojectfinanceloanshaveadoptedtheEPs.ThisincludesbothUKandinternationallendersandkeylenderssuchasStandardCharteredandHSBC.Thesebankstypicallylendtogreenfieldandbrownfieldprojectsandformakeypartofdebtfinancing.GuidetoESGforInfrastructureprojectsSeptember202065Astheyaretypicallyinvolvedearlyoninaprojecttheytakeanactiveroleinrequiringhighstandardstobemet;ExportFinance–UKExportFinance(UKEF)aswellasotherinternationalexportfinanceproviders(ExportCreditNorway,SwedishExportCreditandothers).Thesearekeylenderswherethereisasupplychainfromtherelevantcountry.Theyalsooperatealongsidethecommercialprivatebanksandsoarecloselyalignedinthestandardsrequired;andDevelopmentfinance–theKoreaDevelopmentBank,theFMO(Netherlands),etc.Theselendersprovidedevelopmentsupporttodevelopingcountries.IndoingsotheyrequiretheEPstobemetOtherinvestors–notsignatoriestotheEPsTheEPsalsoprovideanimportantreferencepointforotherinvestors,evenwheretheyarenotsignatories.Thisisparticularlythecaseforequityinvestors(withthemajorityofEPsignatoriesbeingdebtproviders).Forexample,Meridiam,anequityinvestorinbothdevelopedandemergingmarkets,basetheirESGassessmentsoninternationalstandards,includingtheEPsaswellasIFC,EIBandEBRDrequirements.TherearefewerInstitutionalinvestors(e.g.pensionfundsandothercapitalmarketsinvestors)thathaveadoptedtheEPs.However,theseinvestorsaremorefocusedonbrownfieldassetsastheytypicallyareunabletotakeconstructionrisk.Whentheyinvestintheseprojects,afterconstructionhasbeencompleted,theywillseektoensureallESGrequirementsaremetatthetimetheprojectwasdeveloped(e.g.theywillrelyontheprojectfinancebankshavingrequiredcompliance).Theseinvestorsalsoprovidedebttoprojects.WheretheyarerefinancingaprojectfromaprojectfinancebankthatfollowstheEPsthiswillprovideconfidencetheprojecthasbeenpreparedinlinewithbestpractice.Theywillalsocarryouttheirownduediligenceontheprojecttoensureithascontinuedtomeetthestandardssetwhentheprojectinitiallyreachedfinancialclose.Thismeansthattheongoingmonitoringandcomplianceduringconstructionandoperationsmustbetoahighstandardtoattractadditionalinvestors.MultilateralsMultilateralsprovidearangeofsupporttoprojects,fromdirectlendingthroughtoguaranteesofspecificrisks(e.g.politicalrisks).EachmultilateralhasproducedESGstandardsthatmustbemet.However,thereissomeconvergencebetweenthesestandards,andtheycanbeoperatedtogether.Forexample,theAIIBrecognisestheIFCPerformanceStandardsas‘materiallyconsistent’withtheAIIBEnvironmentalandSocialPolicy.Asummaryoftheadditionalkeymultilateralsissetoutbelow:TheAIIB–EnvironmentalandSocialFramework;TheADB–EnvironmentalAssessmentGuidelinesandSafeguardPolicyStatement;TheAfricanDevelopmentBank(AfDB)-AfricanDevelopmentBankGroupESG;andTheEuropeanBankforReconstructionandDevelopment(EBRD)–EnvironmentalandSocialPolicy.OthersThePrivateInfrastructureDevelopmentGroup(PIDG)providesawiderangeofdevelopmentsupporttoprojectsinAfricaandAsia,includingtechnicalassistance,earlystageprojectdevelopmentandfinancingsupport.PIDGhasanumberofwaysofsupportingthefinancingofprojectsthroughInfraCoAsia,InfraCoAfrica,EmergingAfricaInfrastructureFund(EAIF)andGuarantCo.ThisincludesprovidingMezzaninedebtproductstoleverageinadditionalprivatecapital(throughEAIF)andforeignexchangehedgingprojectstoallowforlocalcurrencytobeused(GuarantCo).PIDGrequireprojectstomeettheIFCPerformanceStandardsbuthavealsodevelopedtheirownHealth,Safety,EnvironmentandSocial(HSES)policythatisalignedwiththeStandards.PIDGoftenworkalongsideprojectfinancebanksandotherinvestorsastheyaimtoleverageinprivatecapital.GuidetoESGforInfrastructureprojectsSeptember202066TheCDCisownedbytheUKGovernmentandprovidesdevelopmentfinancetoprojectsinAfricaandSouthAsia.AllborrowersmustadheretotheCDCCodeofConduct,whichreflectstheIFCPerformanceStandardsTable6.1providesfurtherdetailontheapproachofdifferentfinancinginstitutionsthatmaybeinvolvedinthefinancingofaprojectinadevelopingcountryinAfricaandAsia.Itsetsoutthekeyapproachestakenbydifferentinternationalprivatefinanceprovidersandmultilaterals.Table6.1:ApplicableStandardsofdifferentInternationalFinancingInstitutionsFinanceProvidersApplicableStandardsEPs(includingIFCPSs)IFCOwnStandardProjectFinanceBanks--UKExportFinance-AIIB--ADB--AfDB--EBRD--PrivateInfrastructureDevelopmentGroup(PIDG)-CDC-Anexampleofprojectfundedbytheprivatecapitalandguidedbytheapplicableinternationalstandardsisprovidedbelow:CaseStudy:GabonRoadRehabilitationProjectTheproposedprojectaimstoimprovetrafficconditionsinthecityofLibrevilleanditsagglomerations,tosupportGabon’sinvestmentintheMasterPlanGabonEmergent2011-2016,whichaimstoachieveemergenceby2025.TheprojectisbeingdevelopedinaccordancewithaMemorandumofUnderstandingbetweentheprojectproponentandtheGovernmentofGabon.FundingfortheProjectwassoughtfromtheUnitedKingdomGovernmentexportcreditagency,theUKExportFinance(UKEF).TheUKEFprovidedadirectlendingfacilityfortheprojecttotheGovernmentofGabonunderaFacilityAgreement(loanagreement).Tosecurethefundingfortheproject,oneofthecriteriawastomeettheUKEFESGrequirements,whichrefertotheIFCPerformanceStandardsandtheWorldBankGroup(WBG)Environmental,HealthandSafety(EHS)Guidelines.Initially,theprojectwasscreenedbyUKEFinaccordancewiththeirESGrequirementsasaCategoryB,i.e.aprojectwithpotentialenvironmentaland/orsocialimpactsthatarelessadversethanthoseofCategoryAprojects.Typically,theseimpactsareafewinnumber,site-specific,fewifanyareirreversible,andmitigationmeasuresaremorereadilyavailable.ItwasdeterminedinliaisonwithUKEFESGdepartmentthatanESIAwouldberequired,tomeetbothnationalGaboneseEIAlegalrequirementsandUKEFrequirements.Topicscoveredintheimpactassessmentincluded:Soils;Waterresources;Traffic;Noiseandvibration;Airquality;Biodiversity;GuidetoESGforInfrastructureprojectsSeptember202067Waste;Socialimpactassessment;LabourandOccupational,HealthandSafety(OHS);Physicalandeconomicdisplacement;Culturalheritage;andCumulativeimpactassessment.Tomeettheapplicableinternationalrequirements,severalaspectsneededtobeaddressed.Specifically,tomeetinternationalrequirementsbutnotnationalrequirementsthefollowingwasincludedintheESGscopeofwork:LabourandOHS)aspects;Physicalandeconomicdisplacement;AdetailedESMP;AConstructionStakeholderEngagementPlan(SEP);andASupplementaryResettlementActionPlan.TherewerealsoseverallocalrequirementsthatwentbeyondtheagreedscopefortheUKEF,relatedtothetypesandnatureoffieldsurveys.UndernationallegislationafullsuiteoffieldsurveyswasrequestedbytheEnvironmentalRegulator,regardlessofthepotentialimpactsoftheproject.Althoughthesesurveyswerenotconsiderednecessarytomeetinternationalrequirements(consideringthenatureandlikelyimpactsoftheproject),theywerenonethelessneededtobecompletedtomeetnationalrequirements.Furthermore,giventhedifferenceinthelocalreportingstandards,itwasdeterminedthroughliaisonwiththeUKEFandthelocalregulator,thattheinternationalESIAReportwouldbedevelopedfortheUKEFpurposes;andthenextractsofthiswouldbeusedtopreparealocalEIAReportforsubmissiontotheenvironmentalregulator.Thepurposeofthiswastoavoidprovidingthelocalregulatorwithareportthatwentbeyondnationalrequirements.FollowingsubmissionoftheESIAandassociateddocumentationtotheUKEF,conditionsprecedenttotheloanagreementwereidentified,focusedaroundquantifyingthedisplacementimpactsthroughamoredetailedPlan.OncethiswassubmittedtoUKEFandapproved,theESGdepartmentsignedofftheloanagreementfromanenvironmentalandsocialperspective.6.3ESGBenchmarkingAkeyissueforfinanciersisthebenchmarkingofprojects.Thisisasignificantchallengeinanewanddevelopingarea.Lackofdataimpactsfinanciersabilitytoassessprojectseffectively,monitorperformanceandidentifyrisks.Thisisimportantforlendersthroughouttheprojectlifecycle.Itisalsoimportanttoallowforrecyclingofcapitalandattractingadditionalinvestors.Forexample,projectsthatareabletodemonstratehighESGperformancemaybemoreattractivetolendersonceconstructioniscomplete.Theselendersmaybeabletoreplacebankfinancingusedinconstructionwithlowercostfinancing,increasingreturnstotheprojectsponsors.AnumberofbenchmarkingtoolsforESGhavebeendeveloped.Someexamplesareprovidedbelowbuttheappropriatetoolswillbedependentontherequirementsofeachproject.Thisisanareathatislikelytocontinuetodevelop,withnewtoolsandapproachesdevelopedtobenchmarkingprojectsGuidetoESGforInfrastructureprojectsSeptember202068Table6.2:ESGBenchmarkingToolsNameOrganisationDescriptionSourceGRESBAssessmentGRESBAssessesandbenchmarkstheEnvironmental,SocialandGovernance(ESG)performanceofrealassets,providingstandardizedandvalidateddatatothecapitalmarketsLinkS&PGlobalS&PGlobalAacross-sector,relativeanalysisofanentity’scapacitytooperatesuccessfullyinthefutureandisgroundedinhowESGfactorscouldaffectstakeholdersandpotentiallyleadtoamaterialdirectorindirectfinancialimpactontheentityLinkCEEQUALBRESustainabilityassessmenttoolusedfortheassessmentofalltypesofcivilengineering,infrastructure,landscapingandpublicrealmprojectsandcontractsLinkCDPScoresCDPGlobalProvidesadisclosureandscoringsystemforbothcompaniesandgovernmentstomeasureenvironmentalrisk.Scorescanbebenchmarked,buildingtransparencyandreputation,includingwithinvestorsLinkMSCIESGRatingsMSCIRules-basedmethodologythatratescompaniesona‘AAAtoCCC’scaleaccordingtotheirexposuretoESGrisksandhowwelltheymanagethoserisksrelativetopeersLinkRefinitivESGDataRefinitivMeasurescompaniesESGperformancebasedonreporteddatainthepublicdomainacrossthreepillarsand10differentESGtopicsLinkESGRiskRatingsSustainalyticsProvidesESGRiskRatingstohelpidentifyandunderstandfinanciallymaterialESGrisksandhowthoserisksmightaffectperformance.LinkGuidetoESGforInfrastructureprojectsSeptember202069GlossaryInthisGuide,thefollowingshallhavethefollowingmeaningsunlessotherwisestated:AffectedCommunitiesLocalcommunitieswithinaproject’sareaofinfluence,directlyaffectedbytheprojectactivities.AirQualityControlMeasurestoreduceoreliminatethedetrimentalemissionsintotheatmosphereassociatedwithprojectactivities.AppointedIndividualsInMalaysia.theAppointedIndividuals(AIs)areindividualswhohaveextensivetechnicalexperienceintherelevantareasrelatedtotheproposedproject,whichmayincludepotentialprojectenvironmentalimpacts,impactstudymethodologies,andapplicablepollutionpreventionandmitigationmeasures.BaselineStudiesDeskbasedandfieldworkundertakentoprovideacontextwithinwhichtheimpactsoftheprojectcanbeassessed,settingoutadescriptionofphysical,biological,social/socio-economicandculturalconditionsthatwouldbeexpectedtoprevailcurrentlyandinthefutureintheabsenceoftheproject.CommunityHealth,SafetyandSecurityManagementPlanAplanthatprovidesaclearsetofactionsandresponsibilitiesforthecontrolofimpactsaffectingthehealthandsafetyofthecommunitieswithintheprojectareaaswellasaddressingsecurityrelatedimpactsfromacommunityperspective.CommunityDevelopmentPlanAPlanthatestablishesappropriatesustainabledevelopmentactivitiesthatwillbenefitthelocalcommunitieswithintheprojectarea.Thiscanbeachievedbyimplementingcommunitydevelopmentprograms,whichareessentialtomitigateimpactsduringprojectactivitiesassociatedwiththesocialandcommunityhealthcomponentsoftheproject.ConditionsPrecedentAconditionprecedentisastipulationthatdefinescertainconditionsthatmusteitheroccurorbemetbyeitherpartytoensureprogressorexecutionofacontract.ChanceFindProceduresAproceduresettingouttheactionstobetakenfromthediscoveryofaheritagesiteoritem,toitsinvestigationandassessmentbyatrainedarchaeologistorotherappropriatelyqualifiedperson.CulturalHeritagePlanAplanforthemanagementofallknownandnotyetidentifiedculturalheritageitemsthatmaybeimpacted,eitherdirectlyorindirectly,bytheprojectactivities.Encompassesallproject-relatedactivitiesassociatedwiththemanagementoffindingswhichareidentifiedasCulturalHeritageitemsincludingpublicconsultation,communityaccess,removalofreplicableculturalheritageandnon-replicableculturalheritage,criticalculturalheritage&project’suseofculturalheritage.CumulativeImpactCumulativeimpactsarethosethatresultfromthesuccessive,incremental,and/orcombinedeffectsofanaction,project,oractivitywhenaddedtootherexisting,planned,and/orreasonablyanticipatedfutureones.DesignatedCountriesAtermusedintheEquatorPrinciplesforcountriesdeemedtohaverobustenvironmentalandsocialgovernance,legislation,systemsandinstitutionalcapacitydesignedtoprotecttheirpeopleandthenaturalenvironment.TheEquatorPrinciplesAssociationmakesnoindependentassessmentofeachcountry’sperformanceintheseareasandrequiresadesignatecountrytobebothGuidetoESGforInfrastructureprojectsSeptember202070amemberoftheOrganisationforEconomicCo-operationandDevelopment(OECD)andappearontheWorldBankHighIncomeCountrylist.EcosystemServicesEcosystemservicesaredefinedasthebenefitsthatpeople,includingbusinesses,derivefromecosystems.Theseservicesaresubstantialandvaried,underpinningbasichumanhealthandsurvivalneedsaswellassupportingeconomicsactivities,thefulfilmentofpeople’spotential,andenjoymentoflife.Planshallalsoprovideauniformbasistoassessthestatusfourcategoriesofecosystemservicesasfollows:-ProvisioningServices:includingsuchtangibleassetsasfreshwater,food,fibre,timberandmedicinalplants;-RegulatingServices;thebenefitobtainedfromanecosystem’scontrolofthenaturalenvironment,includingoftheregulationofsurfacewaterpurification,carbonstorage,andsequestration,climateregulation,protectionfromnaturalhazard,airquality,erosionandpests;-CulturalServices;non-materialbenefitsincludingdiverseaspectofaesthetic,spiritual,recreational,andothersculturalvalue;and-Supportingservices;thenaturalprocessessentialtothemaintenanceoftheintegrity,resilience,andfunctioningofecosystem,therebysupportingthedeliveryofallotherbenefits.Theyincludesoilformation,nutrientcycling,andprimaryproduction.ElectromagneticFieldManagementAnElectromagneticField(EMF)acombinationofelectricandmagneticfieldsofforce.Theyaregeneratedbynaturalphenomenabutalsobyhumanactivities,mainlythroughtheuseofelectricity.Environmental,HealthandSafetyCommunicationandTrainingProcedureOutlinesthebasictrainingandinformationtobeissuedbytheprojectandactionsrequiredtoensurepersonnelaresuitablytrainedinEnvironmental,HealthandSafety(EHS)mattersapplicabletothetypeofworktobeundertakenorsupervisedduringtheprojectlifecycle.Environmental,SocialandGovernanceEnvironmental,Social,andGovernance(ESG)referstoasetofcriteriaorstandardsthatestablishaframeworkforassessingtheimpactofaprojectontheenvironmentandlocalcommunitiesthatinvestorsusetoscreenandmonitortheperformanceofpotentialinvestments.Environmentalcriteriaconsiderhowaprojectperformsasastewardofnature.Socialcriteriaexaminehowaprojectproponentmanagesrelationshipswithemployees,suppliers,customers,andthecommunitieswhereitoperates.Governancedealswithaprojectproponents’leadership,humanresources,auditsandinternalcontrols.InthecontextofhisGuide,ithasalsobeenusedtodescribecountryenvironmentalandsocialcriteriathatmustbemetforprojectapprovals.EnvironmentalandSocialManagementPlanorEnvironmentalMonitoringandManagementPlanProvidesatechnicalplantomonitorandmitigateanyadverseenvironmentalandsocialrisksandimpactsthatmayarise,duringthewholeprojectlifecycle.Itisalsointendedtoensurethatanypositiveprojectimpactscanbefurtherharnessedtoensuringlongtermsustainabilityoftheproject.TheprojectwillhavetheoverallresponsibilityinimplementingthemanagementplanensuringadequatecompliancetotheEnvironmentalImpactAssessment(EIA)/EnvironmentalandSocialImpactAssessment(ESIA)conditionsofapprovalandanyotherprojectcommitments.EnvironmentalImpactAssessmentEnvironmentalImpactAssessment(EIA)isameansofdrawingtogether,inasystematicway,anassessmentofthelikelysignificantenvironmentaleffectsGuidetoESGforInfrastructureprojectsSeptember202071EnvironmentalandSocialImpactAssessmentarisingfromaproposeddevelopment.EIAisundertakeninaccordancewithnationallegislation.AnEnvironmentalandSocialImpactAssessment(ESIA)istheprocessforpredictingandassessingthepotentialenvironmentalandsocialimpactsofaproposedproject,evaluatingalternativesanddesigningappropriatemitigation,managementandmonitoringmeasures.ItistypicallyusedtodefineaninternationalapproachtothelocalEIAprocess,andfocusesonadditionalanddetailedsocialrelatedimpacts.ScreeningScopingScreeningisfirststepintheEIA/ESIAprocess,whereinaprojectisreviewedtodeterminewhetheranEIA/ESIAisrequired(accordingtonationallegislationand/orIFIrequirements).Scopingistheprocessofidentifyingtheissues(topics)thatarelikelytobeofmostimportanceduringtheEIA/ESIAforprojectplanning,decision-makingandstakeholderinterest;andeliminatesthosethatareoflittleconcern.ScopingisasystematicexercisethatestablishestheboundariesoftheEIA/ESIAandsetsthebasisoftheanalysesyouwillconductattheconsequentstageoftheEIA/ESIA.Issues/impactsdeemedtohaveanegligibleimpact,orthosewhicharewellunderstood,willbescopedoutoftheEIA/ESIAtofocusonimpactsthathavebeenidentifiedaspotentiallysignificant.EnvironmentalandSocialManagementSystemAnEnvironmentalandSocialManagementSystem(ESMS)isasetofpolicies,procedures,toolsandinternalcapacitytoidentifyandmanageaProject’senvironmentalandsocialimpactsandrisks.TheESMSisalivedocumentandshouldbeupdatedthroughoutaprojectlifecycleFinancialCloseDateofwhichallconditionsprecedenttoinitialdrawingofdebthavebeensatisfiedorwaivedFirePreventionandLifeSafetyProcedureProvidesasetofactionstoundertakeinrelationtofirepreventionandlifesafetyofaproject’sdesign,construction&operationalactivitiesinfullcompliancewithlocalbuildingcodes,localfiredepartmentregulations,locallegal/insurancerequirements,andinaccordancewithaninternationallyacceptablelifeandfiresafetystandard.FloodRiskAnalysisAnanalyticalprocessthatprovidesinformationaboutorquantifiesprobabilitiesandconsequencesofafloodevent.Free,Prior,Informed,ConsentBasedongoodfaithnegotiationbetweenprojectandaffectedindigenouscommunities,Free,Prior,Informed,Consent(FPIC)buildsonandexpandstheprocessofInformedConsultationandParticipationandensuresthemeaningfulparticipationofIndigenouscommunitiesindecisionmakingandfocusesonachievingagreements.GreenhouseGasesEmissionsGreenhousegases(GHGs)includecarbondioxide(CO2),nitrousoxide(N2O),andmethane(CH4).HumanResourcesPlanAPlanwhichincludesmeasuresandproceduresinrelationto,butnotlimitedto:-WorkingConditionsandTermsofEmployment;-Workers’RightsandCollectiveBargaining;-HumanRights(childlabour,forcedlabour,diversity,equalpaymentetc.);-Non-DiscriminationandEqualOpportunity;andGuidetoESGforInfrastructureprojectsSeptember202072-Retrenchment.HumanRightsSecuringdignityandequalityforallcommunities.Asaminimum,projectshallexpressthoseintheInternationalBillofHumanRightsi.e.theUniversalDeclarationofHumanRights,theInternationalCovenantofCivilandPoliticalRightsandtheInternationalCovenantonEconomic,SocialandCulturalRightsandtheprinciplesconcerningfundamentalrightssetoutintheInternationalLabourOrganisation’sDeclarationonFundamentalPrinciplesandRightsatWork.ImpactAssessmentImpactassessmentistheevaluationandpredictionoftheimpactsofaproject.Inthiscontext,itcoverstheimpactsonthephysical,biological,culturalorhumanenvironment.TheprincipalstepsareImpactprediction,Impactevaluation,Mitigationandenhancement,andResidualimpactevaluation.IndigenousPeoplePlanThereisnouniversallyaccepteddefinitionof“IndigenousPeoples.”IndigenousPeoplesmaybereferredtoindifferentcountriesbysuchtermsas“Indigenousethnicminorities,”“aboriginals,”“hilltribes,”“minoritynationalities,”“scheduledtribes,”“firstnations,”or“tribalgroups.”Ininvestmentterms,“IndigenousPeoples”istypicallyusedinagenericsensetorefertoadistinctsocialandculturalgrouppossessingthefollowingcharacteristicsinvaryingdegrees:-Self-identificationasmembersofadistinctindigenousculturalgroupandrecognitionofthisidentitybyothers;-Collectiveattachmenttogeographicallydistincthabitatsorancestralterritoriesin-Theprojectareaandtothenaturalresourcesinthesehabitatsandterritories;-Customarycultural,economic,social,orpoliticalinstitutionsthatareseparatefromthoseofthemainstreamsocietyorculture;or-Adistinctlanguageordialect,oftendifferentfromtheofficiallanguageorlanguagesofthecountryorregioninwhichtheyreside.-ThePlandescribesproceduresforprojectsthataffectindigenouspeoples.Itsetsoutbasicdefinitions,policyobjectives,guidelinesforthedesignandimplementationofprojectprovisionsorcomponentsforindigenouspeoples,andprocessinganddocumentationrequirementsi.e.GovernmentalAgencyCollaborationPermitinrelationtotheCustomaryLand;and-PlanshallalsodescribetheFreePriorandInformedConsent(FPIC)includingImpactsonLandsandNaturalResources&RelocationofIndigenousPeoplesfromLandsandNaturalResourcessubjecttoTraditionalOwnershiporUnderCustomaryUse.InformedConsultationandParticipationAprocessofstakeholderengagementthatbuildsuponthestakeholderengagementprocesstoenableAffectedCommunities’informedparticipation.Itinvolvesamorein-depthexchangeofviewsandinformation,andanorganisedanditerativeconsultation,leadingtotheincorporatingintothedecision-makingprocessoftheAffectedCommunitiesonmattersthataffectthemdirectly.Thisincludestheproposedmitigationmeasures,thesharingofdevelopmentbenefitsandopportunities,andimplementationissues.GuidetoESGforInfrastructureprojectsSeptember202073LabourManagementPlanLandscapeandVisualAssessmentAplanthatprovidesaclearsetofactionsandresponsibilitiesforthemanagementofprojectworkers.Theprocessofevaluatingtheeffectofaprojectuponthelandscape.Theassessmentestablishestheexistingconditionsoftheprojectarea,potentialvisualimpactsorinteractionswiththeenvironmentandidentifiesrecommendmeasurestomitigatetheseimpacts.LivelihoodRestorationActionPlanThisPlanprovidesdetailedmeasurestoaddresseconomicdisplacementandlivelihoodimpactscausedasaresultofaproject.LocalRecruitmentandProcurementPlanThisPlanprovidesactionsandmeasurestoaddresstheprocessoffindingandhiringprojectemployees,coveringlocalrecruitmentrequirementsandprocurementprinciplesthatwillbeemployedbytheprojecttomeetnationalrequirementsandprojectcommitments.Non-HazardousSolidandLiquidWaste&HazardousMaterialsManagementPlanAplanthathighlightsthemanagementpracticesforon-sitewastesinreducingassociatedenvironmentalriskstoanacceptablelevelincompliancewithapplicablelocalenvironmentalrequirements/internationalguidelines;andcoversthemanagementofwasteonsite.Itcoverscollectionandsegregationofwastesincludingdomesticwaste,constructionwastes,hazardouswaste;temporarystorageareaandwastedisposalmanagement.Non-TechnicalSummaryANon-technicalsummary(NTS)isaconcisedocumentthatprovidesadescriptionoftheESIAprocessanditsfindingsinamannerthatisbothappealingtoreadandeasilyunderstoodbythegeneralpublic.NoiseandVibrationControlMeasurestoavoidorlimitenvironmentalnuisanceassociatedwithnoiseandvibrationgeneratedbyprojectactivities.OccupationalHealth&SafetyManagementProcessesputinplacetominimizetheriskofinjuryandillnessandprotectthesafetyandhealthoftheemployees,contractorsandcustomers.Thisismadepossiblebyidentifying,assessingandcontrollingriskstoworkersinallworkplaceoperations.ItmayincludeastructuredsystemforthemanagementofOccupationalHealthandSafety(OHS)risksinensuingthoseriskswillbereducedtoAsLowAsReasonablyPracticable(ALARP).PesticideUseManagementAimstopreventexoticweedsandpestsfromentering,spreadingorbecomingestablishedintheprojectarea,andtoimplementmeasuresinpreventingvector-bornedisease.ProjectInfrastructureprojectownedbyaprivateproponent,ofthefollowingtype:-Airports;-Ports,HarboursandTerminals;-Railways;-Shipping;-Telecommunications;-TollRoads;-TourismandHospitalityDevelopment;-WasteManagementFacilities;and-WaterandSanitation.GuidetoESGforInfrastructureprojectsSeptember202074ProjectAlternativeAssessmentAnanalysisofthedifferentalternativestothepreferredproject.Itshouldcoveralternativelocations,energy/fuelsourcesandtechnologyandfacilitiesdesign(inaccordancewiththegoodinternationalindustrypractice).ProjectFinancingMethodoffinancinginwhichinternationallenderslookprimarilytotherevenuesgeneratedbyaproject,bothasthesourceofrepaymentandassecurityfortheESGexposure.ProjectLifecycleOverallprocessofdevelopingandexecutinganinfrastructureprojectincludingplanning,construction,operationanddecommissioningactivities,aswellasprocurementofsupplies,permittingandlicensing,financing/repayment.ProjectProponentAnindividualororganisationthatisproposingtoundertakethedevelopmentofaprescribedactivity.ResettlementActionPlanAPlanthatsetsouttherequirementstobefollowedifanyphysicaldisplacementofresidentialpropertieswilloccurasaresultoftheproject.Itshouldbepreparedinaccordancewiththeapplicablehostcountrylaws,regulationsandpoliciesrelatedtolandacquisitionandinternationalguidelines.ThePlanshouldcovertheeligibility,entitlementsandcompensationsmeasurestobeprovided.SecurityPersonnelManagementCoversthereviewandengagementofsecuritypersonnelfortheprojecttoavoidhumanrightsabusesinthelocalcommunityasaresultofsecuritypersonnelhiredfortheproject;aswellastheStandardOperatingProcedure(SOP)forthesecurityforcesteamandrelevanttrainingprogrammesrequired.SoilandGroundwaterManagementPlanAplanthatprovidesaclearsetofactionsandresponsibilitiestoavoidorminimiseimpactsonsoilsandgroundwater.SpillPreventionandResponseProcedureCoversmitigationmeasuresandspillpreventionofminorandmajorspills(dieselfuel),andspillcontrolmeasurestobetaken.StakeholderEngagementPlanandPublicConsultationandDisclosureAStakeholderEngagementPlan(SEP)isalivingdocument(i.e.onethatisupdatedregularly)thatcoversaprojectsstakeholder,on-goingengagementactivitiesincludingpublicdisclosures,andtheprojectgrievancemechanism.SupplyChainandContractorManagementSustainableDevelopmentGoalsAseriesofactionsandprocedurestomanagecontractorsandthesupplychainontheproject.TheSustainableDevelopmentGoals(SDGs)wereadoptedbyallUnitedNationsMemberStatesin2015asauniversalcalltoactiontoendpoverty,protecttheplanetandensurethatallpeopleenjoypeaceandprosperityby2030.Thereare17goals:1.NoPoverty2.ZeroHunger3.GoodHealthandWell-being4.QualityEducation5.GenderEquality6.CleanWaterandSanitationGuidetoESGforInfrastructureprojectsSeptember2020757.AffordableandCleanEnergy8.DecentWorkandEconomicGrowth9.Industry,Innovation,andInfrastructure10.ReducingInequality11.SustainableCitiesandCommunities12.ResponsibleConsumptionandProduction13.ClimateAction14.LifeBelowWater15.LifeonLand16.Peace,Justice,andStrongInstitutions17.PartnershipsfortheGoalsTerrestrial/MarineBiodiversityActionPlanandOffsetManagementOutlinesthepracticalstepsinrelationtotheassociatedproceduresandactionsforbiodiversitymanagementatprojectsites;andaddressestheactionsrequiredtoreducetheimpactsonbiodiversityvaluesandecosystemservices,forexample:biodiversitymanagement;managedlandclearance;preventionofwater,airandsoilpollution;andhabitatrestorationandprogressiverehabilitation.Traffic(andVessel)ManagementCoverstheprocedureforsecurityandsafetyofpedestrian/othermarineusersandvehicle/vesselsmovements,grievancemechanism/incidentReportingsystem,publicinterfaces,includingtemporaryroads,roadclosuresanddiversions,trafficmarshals,deliveriesandlaydownareas,andvehiclesparkingsystem.ValueChainAvaluechainisabusinessmodelthatdescribesthefullrangeofactivitiesneededtocreateaproductorservicethroughouttheprojectlifecycle.WaterandWastewaterManagementPlanAplanthatprovidesaclearsetofactionsandresponsibilitiesforthemanagementofpotentialimpactsonsurfacewaterandmarinewater(e.g.duetoeffluentdischarge).WorkersAccommodationManagementPlanCoverstheprovisionofhousingoraccommodationforworkersbyemployersandtheissuesthatarisefromtheplanning,constructionandmanagementofsuchfacilities.GuidetoEnvironmental,SocialandGovernance(ESG)EvaluationandAssessmentforOverseasInfrastructureProjectsAppendicesUK-ChinaThirdCountryInfrastructureCooperationProgrammeSeptember2020GuidetoESGforInfrastructureprojects-AppendicesSeptember20202AppendixAEIAinMalaysiaA.1ListofApplicableEnvironmentalFrameworkFrameworkLegislation(Federal),includingEIALawsandGuidelinesEnvironmentalQualityAct1974(ActNo.127),amendedbytheEnvironmentalQuality(Amendment)Act1985(ActNo.A636),theEnvironmentalQuality(Amendment)Act1996(ActNo.A953)andnumerousminoramendments;EnvironmentalQuality(PrescribedActivities)(EnvironmentalImpactAssessment)Order1987,amended;EIAGuidelinesforCoastalResortDevelopmentprojects(1994),PetrochemicalIndustries(1994),IndustrialEstateDevelopment(1994),GolfCourseDevelopment(1994);EIAProceduresinMalaysia(1990,revised);andHandbookofEnvironmentalImpactAssessmentGuidelines(1987).SubsidiaryLegislationundertheEQAEnvironmentalQuality(PrescribedPremises)(CrudePalmOil)Regulations1977;EnvironmentalQuality(PrescribedPremises)(CrudePalmOil)Order1977;EnvironmentalQuality(Licensing)Regulations1977;EnvironmentalQuality(CleanAir)Regulations1978;EnvironmentalQuality(CompoundingofOffences)Rules1978;EnvironmentalQuality(PrescribedPremises)(RawNaturalRubber)Regulations1978;EnvironmentalQuality(PrescribedPremises)(RawNaturalRubber)Order1978;EnvironmentalQuality(SewageandIndustrialEffluents)Regulations1979,amended1997;EnvironmentalQuality(ControlofLeadConcentrationinMotorGasoline)Regulations1985;EnvironmentalQuality(MotorVehicleNoise)Regulations1987;EnvironmentalQuality(ScheduledWastes)Regulations1989;EnvironmentalQuality(PrescribedPremises)(ScheduledWastesTreatmentandDisposalFacilities)Order1989;EnvironmentalQuality(PrescribedPremises)(ScheduledWastesTreatmentandDisposalFacilities)Regulations1989;EnvironmentalQuality(DelegationofPowersonMarinePollutionControl)Order1993;EnvironmentalQuality(DelegationofPowersonMarinePollutionControl)Order1994;EnvironmentalQuality(ProhibitionontheUseofChloroflourocarbonsandOtherGasesasPropellantsandBlowingAgents)Order1993;andEnvironmentalQuality(ProhibitionontheUseofControlledSubstancesinSoap,SyntheticDetergentandOtherCleaningAgents)Order1995.EnvironmentalRulesEnvironmentalQuality(CompoundingofOffences)(OpenBurning)Rules2000EnvironmentalQuality(CompoundingofOffences)Rules1978EnvironmentalQuality(DelegationofPowers)Order2005-P.U.(A)Order2005EnvironmentalQuality(PrescribedConveyance)(ScheduledWastes)Order2005;EnvironmentalQuality(DeclaredActivities)(OpenBurning)Order2003;GuidetoESGforInfrastructureprojects-AppendicesSeptember20203EnvironmentalQuality(DelegationofPowers)(PerbadananPutrajaya)Order2002;EnvironmentalQuality(DelegationofPower)(HalonManagement)Order2000;EnvironmentalQuality(DelegationofPowers)(InvestigationofOpenBurning)Order2000;EnvironmentalQuality(ProhibitionOnTheUseofControlledSubstanceinSoap,SyntheticDetergentAndOtherCleaningAgents)Order1995EnvironmentalQuality(DelegationofPowersOnMarinePollutionControl)Order1994;EnvironmentalQuality(ProhibitionOnTheUseofChrolofluorocarbonsAndOtherGasesAsProperllantsAndBlowingAgents)Order1993EnvironmentalQuality(DelegationofPowersOnMarinePollutionControl)Order1993;EnvironmentalQuality(PrescribedPremises)(ScheduledWastesTreatmentAndDisposalFacilities)Order1989;EnvironmentalQuality(PrescribedActivities)EnvironmentalImpactAssessment)Order1987;EnvironmentalQuality(Prescribedpremises)(RawNaturalRubber)Order1978;andEnvironmentalQuality(PrescribedPremises)(CrudePalmOil)Order1977.EnvironmentalOrderEnvironmentalQuality(DelegationOfPowers)Order2005;EnvironmentalQuality(PrescribedConveyeance)(ScheduledWastes)Order2005;EnvironmentalQuality(DeclairedActivities)(OpenBurning)Order2003;EnvironmentalQuality(DelegationOfPowers)(PerbadananPutrajaya)Order2002;EnvironmentalQuality(DelegationOfPowers)(HalonManagement)Order2000;EnvironmentalQuality(DelegationOfPowers)(InvestigationOfOpenBurning)Order2000;EnvironmentalQuality(ProhibitionOfTheUseOfControlledSubstancesInSoap,SyntheticDetergentAndOtherCleaningAgents)Order1995)Order2005;EnvironmentalQuality(DelegationOfPowersOnMarinePollutionControl)Order1994;EnvironmentalQuality(ProhibitionOfTheUseOfChlorofluorocarbonsAndOtherGasesAsPropellantsAndBlowingAgents)Order1993;EnvironmentalQuality(DelegationOfPowersOnMarinePollutionControl)Order1993;EnvironmentalQuality(PrescribedPremises)(SchedulesWastesTreatmentAndDisposalFacilities)Order1989;EnvironmentalQuality(PrescribedActivities)(EnvironmentalImpactAssessment)Order1987;EnvironmentalQuality(PrescribedPremises)(RawNaturalRubber)Order1978;andEnvironmentalQuality(PrescribedPremises)(CrudePalmOil)Order1977.EnvironmentalGuidelinesThePlanningGuidelinesForEnvironmentalNoiseLimitsandControl,2ndEdition.,2007;GuidelinesForNoiseLabellingandEmissionLimitsofOutdoorSources,2ndEdition,2007;ThePlanningGuidelinesForVibrationLimitsandControlintheEnvironment,2ndEdition,2007;GuidelinesForTheClassificationOfUsedElectricalAndElectronicEquipmentInMalaysia;GuidelinesfortheExportofScheduledWaste;andGuidelineonExport,ImportandStorageofScheduledWaste.GuidetoESGforInfrastructureprojects-AppendicesSeptember20204OtherApplicablesubsidiaryActs,Plans,PoliciesandInternationalConventionsNationalPolicyonEnvironment(NPE)TheNationalPolicyonEnvironment(NPE),formulatedin2002,aimsatcontinuouseconomic,socialandculturalprogressandenhancementofthequalityoflifeofitspeople,throughenvironmentallysoundandsustainabledevelopment;andThedetailsontheNPEisavailableintheNationalPolicyonEnvironment.NationalPolicyonBiologicalDiversity(NPBD)TheNationalPolicyonBiologicalDiversity(NPBD)2016-2025isarevisedversionoftheNationalPolicyonBiologicalDiversity1998inmeetingthecurrentbiodiversitymanagementneedsinMalaysiaaswellastofulfilnational’sobligationundertheUnitedNationsConventiononBiologicalDiversity(CBD);andThedetailsonNPBDisavailableintheNPBD2016-2025.NationalPolicyonClimateChange(NPCC)TheNationalPolicyonClimateChange(NPCC)wasformulatedin2009tofacilitatetheintegrationofclimatechangeconsiderationsintoplanningandimplementationofdevelopmentprogrammesanddecision-makingprocessesthroughtheEIAprocess;andThedetailsofthestrategicthrustandtheircorrespondingkeyactionsareavailableintheNationalPolicyonClimateChange.NationalPhysicalPlan(NPP)Malaysia’sThirdNationalPhysicalPlan(NPP-3)providesalong-termstrategicframeworkfornationalspatialplanningandincludesmeasuresrequiredtoshapethedirectionandpatternoflanduse,biodiversityconservationanddevelopmentinPeninsularMalaysia;ThePlanalsoemphasisesonsustainabledevelopmentandplanningasakeyprincipleinachievingaresilientandliveablenationin2040;andAdditionally,thePlansetsguidelinesforfederalandstategovernmentstocontroldevelopmentandlandadministration.ThePlanincludesmeasurestoaddressclimatechangeandconservenaturalresourcesandbiologicalresourcesinthecountry,includingestablishingcarbonsinksforsequestration,establishingsustainableforestandwatermanagement,andaCentralForestSpinetolinkkeyecologicalareasinPeninsularMalaysia.TableA.1:MainThrustsandCorrespondingStrategicDirectionsoftheNPP-3Thrust1(DG):DynamicUrbanandRuralGrowthThrust2(SR):SpatialSustainabilityandResiliencetoClimateChangeThrust3(IC):BuildingInclusiveandLiveableCommunities•DG1:BalancedUrbanGrowth;•DG2:IntegratedRuralDevelopment;and•DG3:EnhancingConnectivityandAccess.•SR1:SustainableManagementofNatural,FoodandHeritageResources;•SR2:HolisticLandUsePlanning;and•SR3:LowCarbonCitiesandSustainableInfrastructure.•IC1:InclusiveandQualityLivingEnvironment;•IC2:LivableCommunityEnvironment;and•IC3:CommunityParticipationandCollaboration.ExamplesofNPPdocumentsare:EnvironmentallySensitiveAreaReport–DOE1993(translatedfromLaporanKawasanSensitifAlamSekitar–JAS1993);GuidetoESGforInfrastructureprojects-AppendicesSeptember20205EnvironmentallySensitiveArea:RoleandContributiononLandUsePlanning-DepartmentofTownandCountryPlanning1998(translatedfromKawasanSensitifAlamSekitar:PeranandanSumbanganPerancanganGunaTanah–JPBD1998);GeneralApproachandGuidelinesonEnvironmentallySensitiveAreaPlanning-DepartmentofTownandCountryPlanning1998(translatedfromPendekatandanGarisPanduanUmumPerancanganKawasanSensitifAlamSekitar–JPBD1998);SustainableDevelopmentStrategyandSelangor’sLocalAgenda21-EnvironmentallySensitiveArea-StateGovernmentofSelangor(translatedfromStrategiPembangunanMampandanAgenda21Selangor–KawasanSensitifAlamSekitar-KerajaanNegeriSelangor1999);GuidelinesonConservationofEnvironmentallySensitiveArea(DepartmentofTownandCountryPlanning,2004)(translatedfromGarispanduanPemuliharaanKawasanSensitifiAlamSekitar(JPBD,2004));TownandCountryPlanningAct1976(Act172)(Incorporatingamendmentsupto1stJanuary2006);LandConservationAct(Act385)(incorporatingamendmentsupto1stJanuary2006);NationalLandCode(Act56of1965);andLocalGovernmentAct1976(Act171)(Incorporatingamendmentsupto1stActA1311oftheyear2007).PlanningandLandUseNationalLandCode1965(ActNo.56);LandOrdinance1956(Sabah);LandCode1957(Sarawak);LocalGovernmentAct1976(ActNo.171);LandAcquisitionAct1960(ActNo.486),revised1992;LandDevelopmentAct1956(ActNo.474),revised1991;NationalLandRehabilitationandConsolidationAuthority(Incorporation),Act1966(ActNo.398),revised1989;FederalLandsCommissionerAct1957(ActNo.349);LandConservationAct1960(ActNo.385),revised1989;TownandCountryPlanningAct1976(ActNo.172),amended;MunicipalandTownBoards(AmendmentAct1975(ActNo.A289);HousingDevelopers(ControlandLicensing)Act1966(ActNo.118),revised1973;FederalTerritory(Planning)Act1982(ActNo.267);CityofKualaLumpur(Planning)Act1973(ActNo.107);GeologicalSurveyAct1974(ActNo.129);Land(GroupSettlementAreas)Act1960(ActNo.530),revised1994;SewerageServicesAct1993(ActNo.508);Street,DrainageandBuildingAct1974(ActNo.133);WatersAct1920(ActNo.418),revised1970,1989;andDrainageWorksAct1954(ActNo.354),revised1988.MarinePollutionMerchantShipping(OilPollution)Act1994(ActNo.515);MerchantShippingAct1952(ActNo.70),revised1966,1982and1992;GuidetoESGforInfrastructureprojects-AppendicesSeptember20206PortAuthoritiesAct1963(ActNo.488),revised1992;Ports(Privatisation)Act1990(ActNo.422);andExclusiveEconomicZoneAct1984.WildlifeandProtectedAreasProtectionofWildlifeAct1972(ActNo.76),revised1976,1991;WildlifeandBirdsProtectionOrdinance1955;TamanNegara(Kelantan)Enactment1938;TamanNegara(Pahang)Enactment1939;TamanNegara(Terengganu)Enactment1939;NaturalResourcesOrdinance1954(Sarawak),amendedbytheNaturalResourcesandEnvironment(Amendment)Ordinance1993(Sarawak);NationalParksandReservesOrdinance1956(Sarawak);WildlifeProtectionOrdinance1990(Sarawak);PublicParksandGreensOrdinance1993(Sarawak);ParksEnactment1984(Sabah);FaunaConservationOrdinance(Sabah)1963;NationalParksAct1980(ActNo.226);andProtectedAreasandProtectedPlacesAct1959(ActNo.298),revised1983.ForestryNationalForestryAct1984(ActNo.313);MalaysianForestryResearchandDevelopmentBoardAct1985(ActNo.319);Wood-BasedIndustries(StateLegislaturesCompetency)Act1984(ActNo.314);MalaysianTimberIndustryBoard(Incorporation)Act1973(ActNo.105);NaturalResourcesOrdinance1949;ForestEnactment1968(Sabah);andForestOrdinance1954(Sarawak).IndigenousPeoplesAboriginalPeoplesAct1954(ActNo.134),revised1974.OtherassociatedlegislationExclusiveEconomicZoneAct,1984;CustomDuties(Amendment)(No.35)Order1989(madeundertheCustomsAct1967);PromotionofInvestment(PromotedActivitiesandProducts)(Amendment)(No.10)Order1990(madeunderthePromotionofInvestmentAct,1986);Customs(ProhibitionofImport)Order1998,(Amendmend)2006,P.U.(A)434;Customs(ProhibitionofExport)Order1998,(Amendmend)2006,P.U.(A)433;SarawakNaturalResourcesandEnvironment(PrescribedActivities)Order1994;SabahConservationofEnvironment(PrescribedActivities)Order1999;andExclusiveEconomicZone(AppointmentofAuthoritisedOfficer)Order2001[P.U.(A)35/2001].InternationalconventionsGuidetoESGforInfrastructureprojects-AppendicesSeptember20207The1989BaselConventionontheControlofTransboundaryMovementsofHazardousWastesandtheirDisposal;InternationalConventionforthePreventionofPollutionFromShips1973;InternationalConventionontheEstablishmentofanInternationalFundforCompensationforOilPollutionDamage,1971;InternationalConventionofCivilliabilityforOilPollutionDamage,1969;The1973ConventiononinternationalTradeinEndangeredSpeciesofWildFaunaandFlora(Accession20October1977);The1985ViennaConventiononSubstancesthatdepletetheozonelayer(Accession29August1989);The1987MontrealProtocolonSubstancesthatdepletetheozonelayer(Accession29August1989);The1992ConventiononBiologicalDiversity;The1992UnitedNationsFrameworkConventiononClimateChange;The1979ConventionontheConservationofMigratorySpeciesofWildAnimals;The1971RamsarConventiononWetlandsofInternationalImportanceEspeciallyasWaterfowlHabitat(beingadministeredbyUNESCO);TheInternationalTropicalTimberAgreement;TheCharteroftheIndigenous-TribalPeoplesoftheTropicalForests;LangkawiDeclarationontheEnvironment,1989;LondonAmendmenttotheMontrealProtocolonSubstancesthatDepletetheOzoneLayer,1990;andUnitedNationsConferenceonEnvironmentandDevelopment,1992.StateLawsandRegulationsSabahEnvironmentProtectionEnactment,2002(Enact.12/2002)Section12oftheEnactmentprovidesfortheMinistertoprescribeanydevelopmenttobeaPrescribedActivityforwhichanEIAoraproposalformitigationmeasuresisrequiredtobesubmittedtotheDirectoroftheStatedEnvironmentProtectionDepartment(EPD)forapproval.;TheEnactmentprovidespowerstoprohibittheexecutionofanyprescribeactivitythatisincontraventionoftheregulations.Two(2)subsidiaryOrdershavesincebeenestablishedtobringintoeffecttheprovisionsofthisEnactment;TheEnvironmentProtection(PrescribedActivities)Order2005spellsoutthe12groupsofprescribedactivities;UndertheEnvironmentProtection(PrescribedActivities)(EnvironmentalImpactAssessment)Order2005,theaboveOrderfurthercategorisestheprescribedactivitiesintoFirstandSecondScheduleswhichdifferinthetypeofEIAReportsubmissionrequiredtobemadetotheDirectoroftheEPD;PrescribedactivitiesunderFirstSchedulearerequiredtosubmitaproposalformitigatingmeasureswhileprescribedactivitiesunderSecondSchedulearerequiredtoprepareandsubmitanEIAReport.;andTheDirectoroftheEPDmaybyanoticeinwritingtotheprojecttoceaseaprescribedactivityintheeventofnon-compliancewiththeconditionsofapprovalissuedfortheprescribedactivity.SarawakNaturalResourcesandEnvironmentOrdinance,1993(Chapter84)GuidetoESGforInfrastructureprojects-AppendicesSeptember20208TheNaturalResourcesandEnvironment(PrescribedActivities)Order,1994(Sarawak)madeundertheNaturalResourcesandEnvironmentOrdinance1993stipulatesthetypesofactivitieswhicharesubjectedtoanenvironmentalimpactassessment.ActivitiesprescribedundertheOrdinancearerelatedtothedevelopmentofnaturalresourcesoftheState;TheprovisionofthisOrdinanceissimilartothatoftheEQAandtheEnvironmentalProtectionEnactmentofSabah.Section11AoftheOrdinanceconferspowerstotheNaturalResourcesandEnvironmentBoard(NREB)byOrder,torequireanypersonundertakingaprescribedactivitytosubmitareportontheimpactofsuchactivitiesonthenaturalresourcesandenvironmenttotheBoardforitsapproval;AuniquefeatureoftheOrdinanceistheprovisionforearlycommencementofpreparatoryworkfortheactivityorpartofit(suchasearthworks)priortotheapprovaloftheEIAReport;andAnOrderprescribingtheactivitiesrequiringanenvironmentalimpactassessmentwasestablishedin1994.A.2HighlightsofEIAprovisionsintheEQA1974Section34A(1)–TheMinistermayprescribeanyactivitywhichhavesignificantenvironmentalimpactsasprescribedactivity;Section34A(2)–AppointmentofqualifiedpersontoconductEIA;Section34A(2)(A)–DirectorGeneralshallmaintainalistofqualifiedpersons;Section34A(2)(B)–QualifiedpersonshallberesponsiblefortheEIA;Section34A(2)(C)–EIAreportshallbeinaccordancewiththeguidelines;Section34A(3)–DirectorGeneralcanapprovetheEIAreportwithconditionsandinformrelevantapprovingauthority;Section34A(4)–DirectorGeneralmaynotapprovetheEIAreportifnotconsistentwithphysicalplanorfulfiltheguidelines;Section34A(5)–DirectorGeneralcanrequirethesubmissionofadditionalreportsotherthantheEIAreport;Section34A(6)–ActivityisnottobecarriedoutuntilEIAreportisapproved;Section34A(7)–Responsibilityoftheproponenttoprovideproofofcompliancewithconditionsofapproval;Section34A(8)–Finenotexceedingfivehundredthousandorimprisonmentforcontraveningsection34A;andSection34AA–DirectorGeneralmayissueprohibitionorstopworkorder.GuidetoESGforInfrastructureprojects-AppendicesSeptember20209A.3ListofPrescribedActivitiesanditscorrespondingsub-activitiesrelatedtoinfrastructureprojectsunderFirstScheduleandSecondScheduleTableA.2Prescribedactivitiesanditscorrespondingsub-activitiesbasedonEnvironmentalQuality(PrescribedActivities)(EnvironmentalImpactAssessment)Order2015FirstScheduleSecondScheduleAerodromeExpansionofanaerodromeinvolvingarunwayof1,000metresorlonger.AerodromeConstructionofanewaerodromeinvolvingarunwayof1,000metresorlonger;orConstructionofaerodromeinoradjacentorneartoanystatepark,nationalpark,nationalmarinepark,islandsurroundingmarineparkorenvironmentallysensitivearea.DrainageandIrrigationConstructionofman-madelakesandenlargementofartificiallakeswithsurfaceareasof100hectaresormore;orIrrigationschemescoveringanareaof500hectaresormore.DrainageandIrrigationConstructionofman-madelakesandartificialenlargementoflakeswithsurfaceareasof50hectaresormoreinoradjacentorneartoenvironmentallysensitivearea;orAnydrainageofwetland,wild-lifehabitatorofdryinlandforestcoveringanareaof20hectaresormore.PortsExpansionofportinvolvinganincreaseof50percentormoreinhandlingcapacityperannum;orExpansionoffishingportinvolvinganincreaseof50percentormoreinfishlandingcapacityperannum.PortsConstructionofanewport.Constructionofanewfishingport.PowerGenerationandTransmissionConstructionofsteamgeneratedpowerstationusingfossilfuels(otherthancoal)andhavingthecapacityof10megawattsormore,withorwithouttransmissionline;Constructionofcombinedcyclepowerstation,withorwithouttransmissionline;orConstructionoftransmissionlineinenvironmentallysensitivearea.PowerGenerationandTransmissionConstructionofcoalfiredpowerstationandhavingthecapacityof10megawattsormorewithorwithouttransmissionline;orConstructionofnuclear-fuelpowerstationwithorwithouttransmissionline.DevelopmentinCoastalandHillAreaConstructionofbuildingorfacilitieswith80roomsormoreincoastalarea;orConstructionofhill-stationresortorhotelat300metersormoreabovemeansealevelcoveringanareaof20hectaresormore.DevelopmentinCoastalArea,NationalParkandStateParkDevelopmentoftouristfacilities,recreationalfacilitiesorotherfacilities—inanynationalparkorstatepark;oronanyislandinsurroundingwaterswhichhasbeengazettedasanationalmarineparkormarinereserveundertheFisheriesAct1985[Act317].DevelopmentinSlopeAreaDevelopmentorlandclearinglessthan50percentofanareawithslopegreaterthanorequalto25°butlessthan35°.DevelopmentinSlopeAreaDevelopmentorlandclearingof50percentormoreofanareawithslopegreaterthanorequalto25°butlesserthan35°;orConstructionofroad,tunnelorbridgetraversinganareawithslopegreaterthanorequalto35°.GuidetoESGforInfrastructureprojects-AppendicesSeptember202010FirstScheduleSecondScheduleWasteTreatmentandDisposalScheduledwaste:Constructionofrecoveryplant(off-site);Constructionofwastewatertreatmentplant(off-site);orConstructionofstoragefacility(off-site).Solidwaste:Constructionofcompostingplant;orConstructionofrecoveryplantorrecyclingplant.Sewage:Constructionofsewagetreatmentplantwith20,000populationequivalentormorel;orSludgetreatmentfacilities.WasteTreatmentandDisposalScheduledwaste:Constructionofthermaltreatmentplant;Constructionofoff-siterecoveryplantforleadacidbatterywastes;Constructionofoff-siterecoveryplantortreatmentfacilitythatgeneratessignificantamountofwastewaterwhichislocatedattheupstreamofpublicwatersupplyintake;orConstructionofsecurelandfillfacility.Solidwaste:Constructionofthermaltreatmentplant;Constructionofsanitarylandfillfacility;orConstructionoftransferstation.RoadConstructionofexpressways;Constructionofhighways;orConstructionofroad,tunnelorbridgetraversingoradjacentorneartoenvironmentallysensitiveareas.ConstructionofDamConstructionofdamorimpoundingreservoirforthepurposeofirrigation,floodmitigation,controlofsiltation,recreational,watersupplyoranyotherreasonwithasurfaceareaof100hectaresormore;orDamandhydro-electricpowerschemewitheitherorbothofthefollowing:-damof15metresormoreinheightandancillarystructurescoveringatotalareaof40hectaresormore;or-reservoirwithasurfaceareaof100hectaresormore.WaterSupplyGroundwaterdevelopmentforindustrial,agriculturalorurbanwatersupplyof4,500cubicmetresormoreperday.TransportationConstructionofnewroutesorbranchlineforamassrapidtransportproject;orConstructionofnewrailwayrouteorrailwaybranchlines.-RadioactiveMaterialsandRadioactiveWasteAnyactivityspecifiedinthisScheduleandtheFirstScheduleusingradioactivematerialsandgeneratingradioactivewastes.TheprescribedactivitiesthatareapplicabletotheStateofSarawakandSabahareasfollows:StateofSarawak-items1and3andsubitems4(a)and(b)and7(a)oftheFirstSchedule;and-items1,3,4,9and10andsubitem7(a)oftheSecondSchedule.StateofSabah-items1and7andsubitems4(a)and(b)oftheFirstSchedule;and-items1,4,7and10oftheSecondScheduleTableA.3:Listpfprescribedactivitiesanditscorrespondingsub-activitiesbasedonSabah’sEnvironmentProtection(PrescribedActivities)(EnvironmentalImpactAssessment)Order2005FirstScheduleSecondScheduleGuidetoESGforInfrastructureprojects-AppendicesSeptember202011ResortsandRecreationalDevelopmentDevelopmentofresorts,recreationalortourismfacilitiescoveringanareaof10hectaresormorebutlessthan30hectares;orDevelopmentofresorts,recreationalortourismfacilitieswithin200metresfromthehigh-watermarkofthecoastalarea.DrainageandIrrigationIrrigationschemescoveringanareaof500hectaresormore;orDrainageofwetlandforestscoveringanareaof50hectaresormore.AnyOtherActivitiesWhichMayDamageorHaveanAdverseImpactonQualityofEnvironmentConstructionofbuildingsforpublicpurposeswithin200metresfromthehigh-watermarkofthecoastalarea;orConstructionofopenjettieswithalengthof100metresormoreforcommercialorpublicusealongriversorseafront.LandReclamationReclamationoflandbytheseaoralongriverbanksfordevelopmentofhousing,commercialorindustrialestates,constructionofmajorroads,orotherpublicpurposes.-PowerGenerationConstructionofdamsandhydro-electricpowerschemesinvolvingthefollowing:damsover15metreshighandancillarystructurescoveringanareaof40hectaresormore;artificiallakesorreservoirswithasurfaceareacovering50hectaresormore;ordiversionofstreams,riversorwatercourses.-ResortsandRecreationalDevelopmentDevelopmentofresorts,recreationalortourismfacilitiescoveringanareaof30hectaresormore;Developmentofresorts,recreationalortourismfacilitiesonhillswithslopeshavinggradientof20degreesormore;orDevelopmentofgolfcourses.-WaterSupplyConstructionofdams,artificiallakesorreservoirswithasurfaceareaof50hectaresormoreforimpoundingwater;orDevelopmentofgroundwatersupplywithacapacityof4,500cubicmetresormoreperday.-AnyOtherActivitiesWhichMayDamageorHaveanAdverseImpactonQualityofEnvironmentConstructionofbuildingsforpublicpurposesonhillswithslopehavinggradientof20degreesormore;Constructionofmajorroadsorupgradingofmajorroadsinvolvingrealignmentandwideningthroughsettlement,coastalareasorwetlandforests,oronhillswithslopeshavinggradientof20degreesormore;Constructionofportfacilities(includingwarehouses,containeryardsandcargostoragefacilities)forcommercialusealongriversorseafront;orConstructionofclosedlandingjettiesforcommercialorpublicusealongriversorseafront.TableA.4:Listpfprescribedactivitiesanditscorrespondingsub-activitiesbasedonSarawak’sPrescribedActivitiesOrder1994GuidetoESGforInfrastructureprojects-AppendicesSeptember202012FirstScheduleSecondScheduleActivitieswhichmaypolluteinlandwateroraffectsourcesofwatersupply:Developmentofgroundwaterwithasupplycapacityof4,500cubicmetresperday;Constructionofdams,artificiallakesorreservoirswithasurfaceareaof50hectaresforimpoundingofwater;Irrigationschemescoveringanareaexceeding1,000hectares;Creationoflakes,pondsorreservoirsfortherearingoffishorprawns,exceeding50hectaresinarea;Mining,pursuanttoanyMiningLease,CertificateorLicenceissuedundertheMiningOrdinance,[Cap.83(1958Ed.)],coveringareasexceeding50hectaresorwheremininginvolvestheuseofchemicals(includingexplosives)ofanynature;orDiversionofwatercourses,streamsorriversortheexcavationofsandandotherrockmaterialsthereform.TheSecondScheduleofthisOrderistheFormofEIAreport.FacilitiesforDisposalandTreatmentofWastesThedevelopmentoflandfillformunicipalwastesoranysiteorareausedortobeusedforthestorage,disposal,treatment,recyclingordecompositionofmunicipalsolidwastes;orTheestablishmentofconstructionofanyplantorfacilityforthestorageandtreatmentofmunicipalsewageorwastewater.AnyOtherActivitiesWhichMayDamageorHaveanAdverseImpactonQualityofEnvironmentorNaturalResourcesofTheStateIncludingtheFollowing:Constructionof:oParksandrecreationalfacilitiesorresorts;oBuildingsexceedingfour(4)storeyshighforresidentialpurposes;oBuildingsforcommercialorotherpurposes,oroOnhillwithslopesof20degreesofmore.Establishmentofgolfcourses;Constructionofportfacilities(includingwaterhouses,godowns,containeryardsandcargostoragefacilities)alonganyoftheriversgazetteundersection11oftheSarawakRiverOrdinance,1993[Cap.4];DevelopmentofresortfacilitiesinareaswithintheforeshoresofSarawak;Creationofparksandrecreationalfacilitieshavinganareaexceeding50hectaresforcommercialpurposes;Anydevelopmentactivityintendedtobecarriedoutwithinawatercatchmentareadeclaredundersection8oftheWaterOrdinance,1994[Cap.13];Constructionofroadsthroughsettlements,peatswamps,beachfront,mangroveorhillslopesof20degreesormore;Extractionandremovalofearthorclayfromanareaexceeding10hectaresandwithin3kilometresofanyhousing,commercialorindustrialareaoranyareawhichhasbeenapprovedforhousing,commercialorindustrialdevelopment;TheestablishmentofaplantedforestundertheForestOrdinance[Cap.126(1958Ed.);orTheclearingofvegetationonanylandorthebreakingupofanylandforanypurposeofanareaexceeding50hectares.GuidetoESGforInfrastructureprojects-AppendicesSeptember202013A.4EIAGuidanceDocumentTableA.4:ExamplesofEIAGuidanceDocumentGuidancedocumentanditsdescriptionEIAGuidanceDocumentforCoastalandLandReclamationActivitiesGeneralForprojectthatrequirescoastalandlandreclamationprojectse.g.ports/harbours,airports,railways,shipping,telecommunications,tollroads,tourismandhospitalitydevelopment-thisguidancedocumentthefollowinglocalpolicy,legalrequirementandguidelinesshallbefollowed:NationalPhysicalPlan(2005);EnvironmentalQuality(PrescribedActivities)(EnvironmentalImpactsAssessments)Order(2015);EnvironmentalQuality(ScheduledWaste)Regulations(2005);EnvironmentalQuality(CleanAir)Regulations(2014);EnvironmentalQuality(Sewage)Regulations(2009);EnvironmentalQuality(IndustrialEffluent)Regulations(2009);TownandCountryPlanningAct;FederalDepartmentofTownandCountryPlanning1;andRelevantDOEGuidelinese.g.ErosionControlforDevelopmentprojectsintheCoastalZones;PreparationofCoastalEngineeringHydraulicStudyandImpactEvaluation.SiteselectionItisimportantthatprojecttocorroborateandtobeinlinewiththepoliciesstipulatedintheNationalPhysicalPlanpublishedbytheDepartmentofTownandCountryPlanningofMalaysia.KeyissuesandscopeInpreparingandEIAreportforcoastalandlandreclamationrelated,projectshallbeabletoidentifykeyESGissues.Thisincludes:Locationshowslandtenure,sitecharacteristics,mapsofprojectarea,landuseplan,andsitepreparationactivities;Existingenvironmentalandsocialbaselineincluding:-Hydraulicsandcoastalhydrodynamicse.g.erosion/sedimentationandaccretionareas,bathymetricsurveys,tidalandcurrentpatterns,waveclimateandgeology;-Hydrologyandgroundwatere.g.drainagepatterns,floodarea,groundwaterquality;-Marine/River/Brackishe.g.TotalSuspendedSolids(TSS),chemicalcontaminants,aquaticbiologicalindicators,nutrientscontent;-Airquality-Marineandfreshwaterbiologicalandecologicalsystem;-Wastemanagement;-Transportandaccess;and-Socialandeconomicissues.Mitigationandabatementmeasuresprojectshallproposemitigationmeasuresandstrategiestoreduceorpreventadverseimpactsondifferentsectorsoftheenvironmentandsocialreceptorswithinprojectarea.Thesemitigationsmustbesustainable,integrated,measurable,achievableandfeasibletocoverprojectlifecycle.EnvironmentalManagementPlanAkeyoutcomeoftheEIAprocesswillbeanEnvironmentalManagementPlan(EMP)which:Identifieskeypotentialprojectimpactsarea;Setsupprogrammeformonitoringthepotentialimpacts;andEstablishesreportingandmitigation(includingemergency)responseprocedures.EIAGuidanceDocumentforEstablishmentofIndustrialLocatedwithinGazettedandEIAApprovedIndustrialSitesGeneralForprojectthati.e.developmentofshipping/shipyardwithdeadweighttonnegreaterthat5,000tonnes-thisguidancedocumentthefollowinglocalpolicy,legalrequirementandguidelinesshallbefollowed:EnvironmentalQualityAct(2019);EnvironmentalQualityOrder(PrescribedActivities)(EnvironmentalImpactsAssessments)(2015);EnvironmentalQuality(ScheduledWaste)Regulations(2005);1TherearevariousdepartmentsthatsitundertheFederalDepartmentofTownandCountryPlanning.TheseincludebutnotlimitedtoNationalPhysicalPlanningDivision,NationalLandUseInformation,RegionalPlanningDivision,DevelopmentPlanDivisionandZoneprojectOffice.PeninsularMalaysiaisdividedinto4differencezones–Northern,Southern,CentralandEastern.ThefunctionoftheZoneprojectOfficeincludespreparedevelopmentplanincludingstatestructureplan,districtlocalplan,etc.GuidetoESGforInfrastructureprojects-AppendicesSeptember202014EnvironmentalQuality(PrescribedConveyance)(ScheduledWaste)Order(2005);EnvironmentalQualityRegulations(PrescribedPremises)(ScheduledWasteTreatmentandDisposalFacilities)Order(2005);EnvironmentalQuality(CleanAir)Regulations(2014);EnvironmentalQuality(RefrigerantManagement)Regulations(1999);EnvironmentalQuality(HalonManagement)Regulations(1999);EnvironmentalQuality(Sewage)Regulations(2009);EnvironmentalQuality(IndustrialEffluent)Regulations(2009);EnvironmentalQuality(PrescribedPremises)(ScheduledWasteTreatmentandDisposalFacilities)Regulations(1989);Customs(ProhibitionofExport)Order(1993);Customs(ProhibitionofImport)Order(1993);andotherrelevantguidelines,e.g.GuidelinesfortheSitingandZoningofIndustries;EIAGuidelinesforToxicandHazardousWasteTreatmentandDisposalprojects;EIAGuidelinesforRiskAssessment;andTechnicalGuidelinesfortheEnvironmentallySoundManagementunderBaselConventionontheControlofTransboundaryMovementsonHazardousWastesandTheirDisposal.Notethatscheduledwasterecoveredandtreatedbyaproject/wastegeneratoron-sitedonotrequireseparateEIAorlicensingfromtheDOE.SiteselectionDetailsofthesitesuitabilityoftheshipping/shipyardprojectareashallbeevaluatedwithrespecttothegazettestructureorlocalplans,surroundinglanduse,provisionofset-backsorbufferzonesasprovidedin“GuidelinesfortheSitingandZoningofIndustries”,thecapacityoftheareatoreceiveadditionalpollutionload,andwastedisposalrequirements.projectoptionsprojectshallassessalternativemethodsincluding:Sourcesandsupplyofrawmaterialsincludingproximity,sustainability,transportroute;ProcessoptionsinrelationtoBestAvailableTechnologies(BAT)ofintegratedpollutioncontrol,hazardpotentialsandbeneficialcomponentse.g.energyrecovery/wasteminimisation;andTreatmentandwastedisposalsystems.KeyissuesandscopeInpreparingandEIAreportforcoastalandlandreclamationrelated,projectshallbeabletoidentifykeyESGissues.Thisincludes:Layoutplanandlandusemap;projectconceptandcomponents;Processdescription;Physicalandchemicalcharacteristicsofrawmaterials;Existingenvironmentalandsocialbaselineincluding:-Airqualityandnoiselevelconditions;-Dischargeofeffluentsintermsofqualityandquantity;-Accidentalspillsandleakages;-Health&Safety(H&S);-Wastemanagement;-Transportandaccess;and-Risk.Mitigationandabatementmeasuresprojectshallproposemitigationmeasuresandstrategiestoreduceorpreventadverseimpactsondifferentsectorsoftheenvironmentandsocialreceptorswithinprojectarea.Thesemitigationsmustbesustainable,integrated,measurable,achievableandfeasibletocoverprojectlifecycle.EnvironmentalManagementPlanAkeyoutcomeoftheEIAprocesswillbeanEnvironmentalManagementPlan(EMP)which:Identifieskeypotentialprojectimpactsarea;Setsupprogrammeformonitoringthepotentialimpacts;andEstablishesreportingandmitigation(includingemergency)responseprocedures.EIAGuidanceDocumentfortheconstructionofScheduledWasteRecoveryPlantGeneralForprojectthati.e.WasteManagementFacilities-thisguidancedocumentthefollowinglocalpolicy,legalrequirementandguidelinesshallbefollowed:EnvironmentalQualityAct(2019);EnvironmentalQualityOrder(PrescribedActivities)(EnvironmentalImpactsAssessments)(2015);EnvironmentalQuality(ScheduledWaste)Regulations(2005);EnvironmentalQuality(PrescribedConveyance)(ScheduledWaste)Order(2005);EnvironmentalQualityRegulations(PrescribedPremises)(ScheduledWasteTreatmentandDisposalFacilities)Order(2005);GuidetoESGforInfrastructureprojects-AppendicesSeptember202015EnvironmentalQuality(CleanAir)Regulations(2014);EnvironmentalQuality(RefrigerantManagement)Regulations(1999);EnvironmentalQuality(HalonManagement)Regulations(1999);EnvironmentalQuality(Sewage)Regulations(2009);EnvironmentalQuality(IndustrialEffluent)Regulations(2009);EnvironmentalQuality(PrescribedPremises)(ScheduledWasteTreatmentandDisposalFacilities)Regulations(1989);Customs(ProhibitionofExport)Order(1993);andCustoms(ProhibitionofImport)Order(1993).Notethatscheduledwasterecoveredandtreatedbyaproject/wastegeneratoron-sitedonotrequireseparateEIAorlicensingfromtheDOE.SiteselectionDetailsofthesitesuitabilityofthescheduledwasterecoveryfacility(off-site)projectareashallbeevaluatedwithrespecttothegazettestructureorlocalplans,surroundinglanduse,provisionofset-backsorbufferzonesasprovidedin“GuidelinesfortheSitingandZoningofIndustries”,thecapacityoftheareatoreceiveadditionalpollutionload,andwastedisposalrequirements;andprojectisadvisedtobelocatedtheactivitieswithingazetteandEIAapprovedindustrialsite.StatementofNeedFirststepinestablishingtheneedofprojectincludesthefollowing:projectionsonincreasingwastearisingovertheprojectlifecycle;Currentwastetreatment/disposalpractices,costandenvironmentalimpacts;Availabilityofalternativefacilitiesinthelocalarea;Benefitsoftheproposedscheduledwasterecoveryprojects;andThenoprojectoption.KeyissuesandscopeInpreparingandEIAreport,projectshallbeabletoidentifykeyESGissues.Thisincludes:projectdescriptionwithsupportingtechnicaldata,maps&socioeconomicsandenvironmentalfeaturesessentialtotheproject;Layoutplanandlandusemap;Physicalandchemicalconditionsofscheduledwasteforrecoverypurposes;WasteAcceptanceCriteria(WAC)foreachtypesofschedulewasteswhichtoberecovered;Recoveryprocesstechnologydescription;Massbalancecalculation;Finalproduct;Existingenvironmentalandsocialbaselinewithin5kmradiusincluding:-Airqualityandnoiselevelconditions;-Dischargeofeffluentsintermsofqualityandquantity;-Managementofscheduledwaste;-Accidentalspillsandleakages;-CommunityHealth&Safety(H&S);-Wastemanagement;-Transportandaccess;and-Risk.Mitigationandabatementmeasuresprojectshallproposemitigationmeasuresandstrategiestoreduceorpreventadverseimpactsondifferentsectorsoftheenvironmentandsocialreceptorswithinprojectarea.Thesemitigationsmustbesustainable,integrated,measurable,achievableandfeasibletocoverprojectlifecycle.EnvironmentalManagementPlanAkeyoutcomeoftheEIAprocesswillbeanEnvironmentalManagementPlan(EMP)which:Identifieskeypotentialprojectimpactsarea;Setsupprogrammeformonitoringthepotentialimpacts;andEstablishesreportingandmitigation(includingemergency)responseprocedures.OtherapplicableandavailableDOEEIAGuidancedocumentsandGuidelinesthatwillberelevanttoinfrastructureprojectsinMalaysiainclude:EIAGuidelinesforCoastalResortDevelopmentprojects;EIAGuidelinesforDevelopmentoffTouristandRecreationalFacilitiesonIslandinMarineParks;EIAGuidelinesforDevelopmentofTouristandRecreationalFacilitiesinNationalPark;EIAGuidelinesforDevelopmentofResortandHotelFacilitiesinHillStation;EIAGuidelinesforToxicandHazardousWasteTreatmentandDisposalprojects;EIAGuidelinesforMunicipalSolidWasteandSewageTreatmentandDisposalprojects;GuidelinesforDevelopmentofSolidWasteSanitaryLandfill;GuidetoESGforInfrastructureprojects-AppendicesSeptember202016GuidelinesforSolidWasteIncinerationPlant;EIAGuidelinesforDrainageand/orIrrigationprojects;andEIAGuidelinesforRiskAssessmentA.5EIAProcedureinMalaysiaPre-submissionstageofEIAReportThestepsrequiredduringthepre-submissionstageofEIAReportareasfollows:Screening-TheEIAConsultantneedstodeterminewhichScheduletheproposedprojectfallsunder:FirstScheduleorSecondScheduleasdescribedintheEnvironmentalQuality(PrescribedActivities)(EnvironmentalImpactAssessment)Order,2015;and-IftheproposedprojectconsistsofmorethanoneprescribedactivityandoneofthemfallsundertheSecondSchedule,thentheprojectshallbeconsideredtofallundertheSecondScheduleoftheEnvironmentalQuality(PrescribedActivities)(EnvironmentalImpactAssessment)Order,2015.ScopingandTermsofReference(TOR)-Scopingistheprocessinidentifyingthekeyenvironmentalissuesandthestudyofspatialandtemporalboundaries,aswellastheimpactsofspecificprojectsontheenvironmenttofollowtheEIAguidelinesforspecificprojectsissuedbythelocalDOE.Duringthescopingprocessdesktopanalyses,stakeholderinterviews,andpublicmeetingsmaybeconducted;-Sitesuitabilityassessment(SSA)shallalsobeperformedbycomparingtheproposedproject(itslocationandtypeofdevelopment)withtheapproveddevelopmentplanssuchtheNationalPhysicalPlan(NPP),structureplans,andGuidelinesfortheSitingandZoningofIndustryandResidentialAreas(SZIRA)oranyotherguidelinesprescribedbytheDirectorGeneralofEnvironmentwhicharerelevanttotheproposedproject;and-TermsofReference(TOR)istheproductofthescopingprocesswhichsetstheobjectives,definesthescope,andestablishesthestrategyandschedulefortheEIAtoaddresstheseissues.Environmentalandsocialbaselineconditions-Thebaselineconditionsshallbebasedonstudieswhichprovideadetaileddescriptionoftheaffectedareaandestablishtheexistingenvironmentalandsocioeconomicbaselinestatuswheretheproposedprojectistobelocated.ThetypicalbaselinestudiesmayaddressthefollowingmainareasasshowninTableA.5,whichisnotexhaustive,andnotallitemslistedareapplicabletoallEIAstudies.TableA.5:ListofmainareasfortypicalbaselinestudiesPhysicalEnvironmentalBiologicalSocio-economicCultural/HeritageLandUse;Topography;Geology,hydrogeology;Airquality;Waterquality;Noise,vibrationandnuisance;Terrestrialandaquaticecosystems;Demography;Developmentneedsandpotential;Archaeologicalresources;andHistoricalresources.GuidetoESGforInfrastructureprojects-AppendicesSeptember202017Soilsandterrain;andWatershed.Groundwater;andVisual/aesthetics.Floraandfauna;andEnvironmentalsensitiveareas.Infrastructurefacilities;andEconomicactivities.-Thebaselineofenvironmentalsamplingsshallmeettherequiredlocalstandardsandrequirements.Theapplicablenumericalenvironmentalproject’sstandardsinMalaysiaisprovidedinAppendixA.6.ImpactAssessmentMethodology-DuringtheimpactassessmentphaseoftheEIAstudy,appropriatemethodologiestoassesstheenvironmentalimpactsshallbeidentifiedforanEIAstudyandtherationaleforthechoiceofmethodologiesshallbediscussed.SpecificationsandFormatofEIAReport-ItistheresponsibilityoftheprojectProponentandtheEIAconsultingteam(especiallytheEIAteamleader)toensurequalitycontroloftheEIAReportisperformedbeforetheEIAReportissubmittedtotheDOE.Internalqualitycheckwillensurethatallrelevantandpertinenttaskshavebeenperformedsatisfactorily.Reportshallalsoincludethefollow-upworksofpostEIAstagethatarerequired,suchasEnvironmentalManagementPlan(EMP),EnvironmentalMonitoringReport(EMR)andEnvironmentalAuditReport(EAR).DuringsubmissionstageofEIAReportThestepsrequiredduringthesubmissionstageofEIAReportareasfollows:SubmissionofEIAReport-TheEIAforactivitiesfallingundertheFirstSchedulearetobesubmittedtotherespectiveDOEstateoffices,whilethosefallingundertheSecondSchedulearetobesubmittedtotheDOEHQ.Ifaprojectislocatedonasiteinvolvingtwoormorestates,theReportshallalsobesubmittedtotheDOEHQ;-EIAshallbepreparedintheformofhardandsoftcopies,accompaniedwithacoverletterbearingtheprojectProponent’sletterheadwhichshallbesubmittedtotherespectiveDOEoffice.AsummaryofEIAReportsubmissionrequirementsisshowninTableA.6.TableA.6:EIAReportSubmissionRequirementItemFirstScheduleActivitiesSecondScheduleActivitiesSubmissionofEIAReportDOEStateDOEHQNo.ofEIAReportFive(5)weeksprocedure:Minimumtwelve(12)hardcopiesand1softcopytoStateDOE;andMinimumone(1)hardcopyandone(1)softcopytoDOEHQ12weeksprocedure:Minimumthirtyfives(35)Hardcopiesandone(1)softcopyNameofReviewCommittee(RC)DOEStateOffice;andEIATRC.DOEHQ;andEIATRC.ChairpersonofRCDirectorofDOEStateOfficeDirectorGeneralofEnvironmentMembersofRCDOEstateofficers;AIs–incertaincircumstances;andRepresentativesfromGAsandNGOs.DOEHeadOfficeofficers;AIs;andRepresentativesfromGAsandNGOs,ifrequired.EIAReviewProcessGuidetoESGforInfrastructureprojects-AppendicesSeptember202018-AssesstheadequacyandcompletenessoftheEIAReportandthatinformationpresentedisclear,concise,transparent,quantitativelyaccurate,welldefined,explicit,andisofadequatequalityfordecisionmaking.ThisincludesassessingpubliccommentsandfeedbacksfortheEIAReportforprescribedactivitieswithadversesignificantenvironmentalimpactsandhighpublicinterestandtomakedecisionontheapprovaloftheReportandtheconditionstobeattachedtotheapproval.GeneralRequirementsofEIAReviewProcessThegeneralrequirementsofEIAReportreviewandthecommitteesinvolveinthereviewprocessaresummarisedinTableA.7.FigureA.1providestheflowchartofreviewprocess.TableA.7:GeneralRequirementsonEIAReportReviewComponentsofEIAReviewProcessFirstScheduleActivitiesSecondScheduleActivitiesTimeline25workingdays(five(5)weeks)60workingdays(12weeks)SubmissionofEIAReportSubmittoDOEStateOfficeSubmittoDOEHQDistributiontorelevantGAs2PublicparticipationinEIAStudyPublicdisplayofEIAReport3WebdisplayofEIAReportSubmitsoftcopyoftheEIAReporttoDOEStateOfficeSubmitsoftcopyoftheEIAReporttoDOEHQAdvertisementofEIAReport4PostSubmissionStageofEIAReportTheEnvironmentalManagementPlan(EMP)translatesthepollution,preventionandmitigationmeasures(P2M2s)recommendedintheEIAReportandtheEIAApprovalConditions(COA)intoaction.TheEMPisaconcreteplanofactionwhichisexplicit,illustrative,action-oriented,time-boundanddefinitive;andbynature,alivingdocumentwhichneedstoberevisedandupdatedwhenthereexistcertaincircumstanceswhichdemandchangestobemade.PertinentaspectstobeincorporatedintheEMPsarestipulatedtoensurethattheCOAsaretranslatedintoactionableitemsresultinginreducedadverseimpactstotheenvironment.2Writtencommentstobeobtainedand>three(3)workingdaysprovidedbeforecommentsaredue.3Displayfor30daysfromthedateofannouncementattherelevantDOEstateoffices,publiclibrariesandlocalauthorityoffices,aswellasaccessedthroughDOE’shomepage.TheEIAReportmaybepurchasedbythepublic.TimeframeforpublictosubmitcommentstotheDOEis45days.4Advertisein>two(2)majornewspapersforthree(3)consecutivedays.DraftcopyofadvertisementwillbesubmittedtoEIASecretariatforapprovalpriortoplacement.ForprojectsinSabahandSarawak,theadvertisementmustbeplacedin>one(1)regionalnewspaper.GuidetoESGforInfrastructureprojects-AppendicesSeptember202019FigureA.1:EIAReportingProcedurefortheFirstScheduleandSecondScheduleActivities–ReviewStageTRCYESNOPre-submissionstageSubmissionStage(EIAReport)FirstScheduleSecondScheduleTRC(HQ)RejectionofEIAReportResubmissionofNewEIAReport(ifintended)PublicDisplayDistributionofEIADistributionofEIAReportSiteVisit(ifnecessary)EIATRCMeeting(StateorDG)Sec34A(3)EQA1974?Approvedwith/withoutconditionsEMPSubmission,COAExecutionPlanEMPSubmission,COAExecutionPlanPresentationCompliance,Impact&PerformanceMonitoring,3rdPartyAudit,EMR,EAREIATRCMeeting(DG)Sec34A(3)EQA1974?FirstScheduleSecondScheduleYESYESYESYESNODIDNOTPASSTRCRejectionofEIAReportResubmissionofNewEIAReport(ifintended)NONONOMinorerrorMinorerrorSubmissionofcorrectedEIAReportSubmissionofcorrectedEIAReportWITHINTIMELIMITWITHINTIMELIMITEXCEEDSTIMEEXCEEDSTIMELIMITPROCESSENDPROCESSENDLegend:COA:EIAConditionsofApprovalDG:DirectorGeneralEIATRC:EIATechnicalReviewCommitteeatDOEStateorHQEAR:EnvironmentalAuditReportEMP:EnvironmentalManagementPlanEMR:EnvironmentalMonitoringReportTOR:TermsofReferenceTORAC:TermsofReferenceAdequacyCheckTRC:DOETechnicalReviewCommitteeGuidetoESGforInfrastructureprojects-AppendicesSeptember202020AppendixB:EIAinKenyaB.1ListofApplicableEnvironmentalFrameworkInKenya,theEnvironmentalManagementandCoordinationAct(EMCA),1999(tobereadtogetherwiththeEnvironmentalManagementandCo-ordination(Amendment)Act,2015)5isthemainenvironmentallawcoveringimportantenvironmentalissueswhichincludestheEnvironmentImpactAssessment,EnvironmentalManagement/MonitoringEffortenvironmentalpermitting,andenvironmentalaudits.TableB.1:SummaryofApplicableEIARegulationsItemRules/RegulationsEnvironmentalApprovalTheEnvironmentalManagementandCoordinationAct(EMCA),1999EnvironmentalPermitNEMAissuesawiderangeofenvironmentallicensesandpermitsundervariousenvironmentalregulationsincluding:TheRadiationProtectionAct;NoiseandExcessiveVibrationPollution(Control)Regulations,2009;WasteManagementRegulations2006;ImpactAssessmentandAuditRegulations,2003;ControlledSubstancesRegulations2007;andConservationofBiologicalDiversityandResources,AccesstoGeneticResourcesandBenefitSharing)Regulations,2006.City/DistrictPermittingProcessFood,DrugsandChemicalSubstancesAct;andTheLocalGovernmentAct/TradeLicensingAct.KenyaCopyrightBoardTheCopyrightAct.PublicDisclosureinrelationtoEnvironmentalImpactAssessmentRevisedEIAregulationsAirQuality:AmbientAirEnvironmentalManagementandCo-ordination(AirQuality)Regulations,2013.AirQualityEnvironmentalManagementandCo-ordination(AirQuality)Regulations,2013.NoiseEnvironmentalManagementandCoordination;and(NoiseandExcessiveVibrationPollution)(Control)Regulations,2009.VibrationEnvironmentalManagementandCoordination;and(NoiseandExcessiveVibrationPollution)(Control)Regulations,2009.OdourEnvironmentalManagementandCo-ordination(AirQuality)Regulations,2013.GroundwaterQualityEnvironmentalManagementandCoordination,(WaterQuality)Regulations2006.BiodiversityEnvironmentalManagementandCoordination(ConservationofBiologicalDiversityandResources,AccesstoGeneticResourcesandBenefitSharing)Regulations,2006.HazardousWasteManagementEnvironmentalManagementandCo-ordination(WasteManagement)Regulations,2006;andNationalGuidelinesonSafeManagementandDisposalofAsbestos.Non-HazardousWaste/GeneralWasteManagementEnvironmentalManagementandCo-ordination(WasteManagement)Regulations,2006.EffluentDischargeStandardsEnvironmentalManagementandCoordination,(WaterQuality)Regulations2006.5TheEnvironmentalManagementandCo-ordination(Amendment)Act,2015highlightstheamendmentstotheEnvironmentalManagementandCoordinationAct(EMCA),1999GuidetoESGforInfrastructureprojects-AppendicesSeptember202021ItemRules/RegulationsWaterQuality&Hydrology:SeawaterPollutionEnvironmentalManagementandCoordination,(WaterQuality)Regulations2006;andEnvironmental(PreventionofPollutioninCoastalZoneandOtherSegmentsofTheEnvironment)Regulation,2003WaterQuality&WaterResourcesEnvironmentalManagementandCoordination,(WaterQuality)Regulations2006.HealthandSafetyOccupationalSafetyandHealthAct,2007.SpatialPlanKenyaNationalSpatialPlan(2015–2045)LandAcquisitionandLandCompensationLandAct,2012;LandRegistrationAct,2012;NationalLandCommissionAct,2012;CommunityLandAct,2016;andChapter5oftheConstitution.HumanRightsConstitutionofKenya.LabourManagementThelabourlawsinKenyaof2007arebrokendownintofiveActsasenactedbytheParliament.Theseare:TheEmploymentAct;LabourInstitutionsAct;LabourRelationsAct;OccupationalSafetyandHealthAct(OSHA);WorkInjuryBenefitsAct(WIBA);andFactoriesandOtherPlacesofWorkAct.PreventionofPollutioninCoastalZoneEnvironmental(PreventionofPollutioninCoastalZoneandOtherSegmentsofTheEnvironment)Regulation,2003.ConservationoffisheriesFisheriesAct(Chapter378).ControlofthesaleandexportoftimberTimberAct(Chapter386)Protection,conservationandmanagementofwildlifeWildlife(ConservationandManagement)Act(Chapter376).conservationofforestresourcesTheForestsAct,2005;ForestsAct(Chapter385);andForestConservationShorttitle.andManagementAct,2016.BiosafetyBiosafetyAct2009.SandharvestingNationalSandHarvestingGuidelines,2007.B.2ListofLow,MediumandHigh-riskprojectsTableB.2:ProjectsCategorisation(asper2ndScheduleofEMCA)CategoryTypeofprojectLowEstablishmentofplacesofworshipincludingchurches,mosquesandtemplesCommunitybasedandsocialprojectsincludingsportfacilities,stadia,socialhallsCommunitywaterprojectsincludingboreholes,waterpans,sanddamsandsub-surfacedamsDispensaries,healthcentresandclinicsLivestockholdinggroundsandcattledipsExpansionorrehabilitationofmarketsCarandbusparksLocalroadsandfacilityaccessroadsBusinesspremisesincludingshops,stores,urbanmarketshedsCottageindustry,juakalisectorandgaragesSmallscalerehabilitation,maintenanceandmodernizationofprojectsGuidetoESGforInfrastructureprojects-AppendicesSeptember202022CategoryTypeofprojectSchoolsandrelatedinfrastructureforlearnersnotexceedingonehundredStandardwarehousesnotexceedingonethousandfourhundredsquaremetersMediumUrbanDevelopmentincluding:Establishmentofmulti-dwellinghousingdevelopmentsofnotexceedingonehundredunits;Tourismandrelatedinfrastructure;Hotelswithbedcapacitynotexceedingonehundredandfifty;andShoppingcentres,commercialcentresandcomplexes,businesspremises,shopsandstoresnotexceedingtenthousandsquaremeters.Transportationincluding:Constructionandrehabilitationofroadsincludingcollectorsandaccessroads;Constructionofalightrailtransit;Constructionofjetties,marinas,piersandpontoons;Rehabilitationworksofairportsandairstrips;Helipads;Parkingfacilities;andConstructionofbridges.Waterresourcesandinfrastructure,including:Drillingforpurposesofutilizinggroundwaterresourcesandrelatedinfrastructure;Waterabstractionworks;andWatersupplyanddistributioninfrastructure.Artisanalminingincludingquarryingof:Preciousmetalsandgemstones;Limestoneanddolomite;Harvestingofaggregate,sand,gravel,soil,clay,stoneandslate;Gypsum;Pozollana;Carbondioxide;andferrousandnon-ferrousores.Forestryrelatedactivities,including:Timberharvestinginplantationforests;Reforestationandafforestation;andWoodpreservationortreatmentfacilities.Agricultureandrelatedactivities,including:Medium-scaleagriculturenotexceedingonehundredhectares;Mediumsizegrainstorage;Mediumsizeagriculturalandlivestockproducestoragefacilities;Aquaculturenotexceedingonehectare;andMediumscaleirrigationproject.Mediumscaleprocessingandmanufacturingindustries,including:Brickandearth-waremanufacture;Abattoirsandmeat-processingplants;Fish-processingplants;Plantsfortheconstructionorrepairofaircraftsorrailwayequipment;Plantsforthemanufactureoftanks,reservoirsandsheet-metalcontainers;Plantsformanufacturingorrecyclingofplasticsorpaper;Plantsformanufacturingpharmaceuticals;Plantsforthemanufactureofcoalbriquettes;Distilleries;Anyotherfood-processingplantsoragro-basedprocessingplant;andGo-downsforstorageandwarehouses.Powerandinfrastructureprojects,including:Hydropowerdevelopmentnotexceedingtenmegawatts;Electricalsub-stations;Pumped-storageschemes;Cogenerationofpower;Lowvoltagepowertransmissionlines;andSolarpowerfarmsorplantsGuidetoESGforInfrastructureprojects-AppendicesSeptember202023CategoryTypeofprojectHydrocarbonsprojects,including:Servicestations;LPGfillingplant;andLubricantblendingfacilities.Wastedisposal,including:Wastetransferstationsorstoragefacilities;Compostingsitesorplants;andRemovalandonsitedisposalofasbestos.PackagedtreatmentplantsoronsitewastewatertreatmentplantsBiofuelsprocessingplantsTelecommunicationinfrastructuresExpansionoftertiaryinstitutionsandrelatedinfrastructuresHighGeneral:Anactivityoutofcharacterwithitssurrounding;andAnystructureofascalenotinkeepingwithitssurrounding.Changesinlanduseincluding:Majorchangesinlanduse;andLargescaleresettlementschemes.UrbanDevelopmentincluding:Designationofnewtownships;Establishmentorexpansionofindustrialestates;Establishmentorexpansionofrecreationalareasinnationalparks,nationalreserves,forests,naturereservesandanyareasdesignatedasenvironmentallysensitive;Establishmentofshoppingcentres,commercialcentresandcomplexes;Establishmentofhospitals;Hotelswithabedcapacityexceedingonehundredandfifty;Establishmentofnewhousingdevelopmentsexceedingonehundredhousingunits;Establishmentofschoolsandotherlearninginstitutionsexceedingonehundredlearners;andOtherrelatedurbandevelopments.Transportationandrelatedinfrastructureprojects,including:Allnewmajorroadsincludingtrunkroads;Railwaylines;Airportsandairfields;Oilandgaspipelines;Harboursandports;Constructionoftunnelsandchannels;Metrotransportfacilities;andUndergroundtransportworks.Miningandotherrelatedactivitiesincluding:Preciousmetals;Slatefirms;Gemstones;Ferrousandnon-ferrousores;Coal;Phosphates;Limestoneanddolomite;Quarryingofstoneandslate;Harvestingofaggregate,sand,gravel,soilandclay;andExplorationtoproducepetroleumandmineralsinanyform.Forestryrelatedactivitiesincluding:Clearanceofforestareas;Reforestationandafforestationwithalienspecies;Introductionofalienspecies;Excisionsofgazettedforests;Conversionofforestsforwhateverpurposes;andAnyprojectslocatedwithinforestreservessuchasconstructionofdamsorothercontrolstructuresthatfloodlargeareas.GuidetoESGforInfrastructureprojects-AppendicesSeptember202024CategoryTypeofprojectAgricultureincluding:Aerialspraying;Largescaleagricultureexceedingonehundredhectares;Introductionofnewcropsandanimals;Largescaleirrigationexceedingonehundredhectares;Majordevelopmentsinbiotechnologyincludingtheintroductionandtestingofgeneticallymodifiedorganisms;andBiofuelplantations.ProcessingandmanufacturingIndustriesincluding:Mineralsororesrefiningandprocessing;Largescalebrickandearthwaremanufacture;Cementmanufacturingplantsandlimeprocessing;Glassworks;Fertilisermanufactureorprocessing;Explosiveplants;Tanneries;Abattoirshandlingmorethanonehundredanimalsperdayandmeatprocessingplants;Brewingandmalting;Bulkgrainprocessingandstorageplants;Largescalefishprocessingplants;Pulpandpapermills;Heavymanufacturingplants;Leadsmeltingandprocessingplants;Edibleoilplants;Steelmills;Sugarfactories;andAnyotherchemicalworksandprocessingplants.Powerandinfrastructureprojects,including:Thermalandhydropowerdevelopmentexceedingtenmegawatts;Geothermaldevelopment;Windfarms;Nuclearreactorsandnuclearplants;andHighvoltageelectricaltransmissionlines.Hydrocarbonprojects,including:Depotsandrefineryfacilitiesforhydrocarbons;Depotsfornaturalgas;Oilandgasfieldsdevelopment;andOilrefineriesandpetrochemicalworks.Wastedisposalworks,including:Sewerageworksandwastewatertreatmentplants;Installationfordisposalofindustrialwastes;Installationofincinerators;Sanitarylandfillsites;Hazardouswastetreatmentordisposalfacilities;Facilitiesfordisposalofsolidorliquidhazardouswaste;Sludgetreatmentfacility;E-wasterecyclingfacilities;Wasteoilrecyclingfacilities;Wastetyreprocessingandrecyclingfacilities;andCommercialasbestosdisposalsites.GuidetoESGforInfrastructureprojects-AppendicesSeptember202025CategoryTypeofprojectActivitiesinnaturalconservationareas,including:Establishmentofprotectedareas,bufferzones,andwildernessareas;Actionslikelytoaffectendangeredspeciesoffloraandfauna;Formulationormodificationofwatercatchmentmanagementprojects;projectsforthemanagementofecosystemsespeciallybymanipulatingfireandwater;Commercialexploitationofnaturalfaunaandflora;Introductionofalienspeciesoffaunaandfloraintoecosystems;Wetlandsreclamationoranyprojectslikelytoaffectwetlands;projectslocatedinindigenousforestsincludingthoseoutsideofgazettedforests;andAnyprojectinanenvironmentallysensitivearea.Marineresourcesexploitationandreclamation,including:Mineralexploitationofresourcesinthemarineareas;Reclamationofmarineareas;andMariculture.B.3EIAProcedureinKenyaPre-submissionstageofEIAReportTheSecondScheduleofEMCAamendedin2019dividesprojectsintolow,mediumandhighrisk(refertoAppendixB.2ofthisAppendix).Ifaprojectfallsintothecategoryoflowormediumrisk,thenthedevelopermustprepareasummaryprojectReport,whichincludesthelistsofpossibleimpactsoftheprojectunderthefollowingheadings:Ecologicalimpacts–likebiologicaldiversity;Socialimpacts–likeeffectsontransport,health,culture;Landscape–views;Landuses;andWater–includingquantityandquality.TheEMCAprovidesthattheReportmustbesubmittedbeforeanyfinancing,commencing,proceedingwith,carryingout,executingorconductingorcausingtobefinanced,commenced,proceededwith,carriedout,executedorconductedbyanotherpersonanyundertaking.AnEIAstudyisrequiredforhighriskprojects.Aprojectisrequiredtoperformascreening/scopingprocedureanddrawuptermsofreference(ToR)thatprovidespecificguidelinesforundertakingtheEIA.Thescopingreviewshouldalsoclearlyidentifyhowtheaffectedcommunitywillbeinvolvedintheprojectformulation,e.g.,viapublicmeetings(“barazas”),questionnairesanddirectinterviews.SimilartothesummaryprojectReportforlow&mediumriskprojects,theToRshallincludemattersrequiredtobeconsideredinthemakingofanEIAincluding:Ecologicalconsiderationsincludingtheimpactoftheprojectonbiologicaldiversity,sustainableuseandecosystemmaintenance;Socialconsiderationsincludingeconomicimpacts,socialcohesionordisruption,effectonhumanhealth,immigrationoremigration,communicationandeffectsoncultureandobjectsofculturevalue;Landscapeandlanduses;andImpactsoftheproposalonwatersourcesanddrainagepatterns/drainagesystems.GuidetoESGforInfrastructureprojects-AppendicesSeptember202026TheEIAstudymustbeconductedaccordingtotermsofreference(TORs)developedduringthescopingexercisebythedeveloperandapprovedbyNEMA.Therefore,thefullrequirementsforanEIAstudydependonthelaw(EMCAanditsvariousregulations)andthescoping/TORexercise.TheEIAstudyistobeconductedinaccordancewiththegeneralenvironmentalimpactassessmentguidelinesandsectorEIAguidelinessetoutintheThirdScheduletotheEMCA.TheEIAmustconsiderenvironmental,social,cultural,economic,andlegalconsiderations.Anumericalenvironmentalproject’sstandardinKenyaisprovidedinAppendixB.4ofthisAppendix.Additionally,publicparticipationisalsoatthecentreoftheEIAstudy.Aprojectmust,inconsultationwithNEMA,seektheviewsofindividuals/localcommunitieswhichmaybeaffectedbytheproject.Publicparticipationshouldbecarriedout,ataminimum,withthefollowingactivities:Publiciseprojectanditsanticipatedimpactsandbenefitsbypostingpostersinstrategicpublicplacesinthevicinityoftheprojectsite;Providenoticeontheproposedprojectfortwo(2)successiveweeksinanewspaperthathasanationwidecirculation;Provideanoticeannouncementinbothofficialandlocallanguagesinaradiowithanationwidecoverageforatleastonceaweekfortwo(2)consecutiveweeks;Aminimumofthree(3)publicmeetingswiththeaffectedindividualsandlocalcommunitiestoexplaintheprojectimpactsandtoreceivetheiroralorwrittencomments;Noticesatleastone(1)weekpriortothemeetingsandthatthevenueandtimesofthemeetingsareconvenient;andConsultationwithNEMAtoappointasuitablyqualifiedcoordinatortoreceiveandrecordbothoralandwrittencommentsandanytranslationsthereofreceivedduringallpublicmeetings.TheEIAReportshallbepreparedbytheregisteredandlicensedEIAandauditexperts,anduponcompletionshallbesubmittedtoNEMAforreview.TheReportmustalsobeaccompaniedbyanon-technicalsummaryoutliningthekeyfindings,conclusionsandrecommendationsofthestudyandmustbesignedbytheprojectandEIAexpertsinvolvedinitspreparation.SubmissionstageofEIAReportUponreceivingthesummaryprojectReport(forthelow–mediumprojects),theNEMAmustdecidewithinfive(5)dayswhethertheproposedprojectwouldhaveasignificantandadverseimpactontheenvironment.Ifitdecidesitwillnot,NEMAwillapprovetheproject.IfNEMAdecidessignificantandadverseimpactsarelikely,itwillrequirethedevelopertoprepareandsubmitacomprehensiveprojectReport.Withinseven(7)daysofreceivingthecomprehensiveprojectReport,NEMAforwardsacopyoftheReporttorelevant“leadagencies”i.e.variousgovernmentbodiesandtherelevantCountyEnvironmentCommittee.Thesebodiesmustmaketheirwrittencommentswithin20days.Allinall,thelawexpectsNEMAtodecideontheprojectReportandcommunicatethedecisionwithin45daysofprojectReportreceipt.AfterreviewingthecomprehensiveprojectReport,NEMAdetermineswhetheritdisclosesmitigationmeasures,andifsatisfied,NEMAmayissuealicence.Forthehigh-riskproject-afterreceivingtheEIAstudyReport,NEMAmustwithin14daysprovideacopytorelevantlead(government)agenciesfortheircomments.TheleadagenciesmustassessthestudyGuidetoESGforInfrastructureprojects-AppendicesSeptember202027ReporttoensurethatitcomplieswiththeTORsandcoversallthenecessaryissuesandinformation.ThoseleadagenciesarerequiredtoprovidetheirfeedbacktoNEMAwithin30daysofreceivingthestudyReport.Regulation21obligatesNEMAtoinvitethepublictomakeoralorwrittencommentsontheReport.Onconclusionofthehearing,thepresidingofficershallcompileaReportoftheviewspresentedatthepublichearingandsubmittheReporttotheDirectorGeneralofNEMAwithin14daysfromthedateofthepublichearing.Followingthisstage,NEMAmustdecideonwhethertograntanEIAlicence.ItmayrequireadditionalinformationfromthedevelopertoensurethattheEIAstudyisaccurateandasexhaustiveaspossible;thisisbecauseNEMAisnotonlyrequiredtoensurethatthecontentoftheEIAiscompletebutalsothat,whereprocedureisprovidedfor,itissubstantiallycompliedwith.Inmakingthatdecision,thelawrequiresNEMAtopayattentionto:thevalidityoftheenvironmentalimpactassessmentstudyReportwithemphasisontheeconomic,socialandculturalimpactsoftheproject;thecommentsmadebyaleadagencyandotherinterestedparties;theReportofthepresidingofficercompiledafterthepublichearing;andotherfactorswhichNEMAmayconsidercrucialintheimplementationoftheproject.AdecisionwhethertograntanEIAlicencemustbemadewithinthreemonthsofsubmissionofanEIAstudyReporttoNEMAbytheprojectProponent.ThedecisionmustbecommunicatedtotheprojectProponentinwriting,andreasonsforthedecisionmustbegiven.Finally,whenNEMAapprovesanEIAstudy,itwillissueanEIAlicenceunderRegulation24totheprojectProponentonthetermsandconditionsnecessaryfortheprotectionoftheenvironment,andtoensuresustainabledevelopmentandsoundenvironmentalmanagement.Therearedevelopmentprojectsthathavealotofcomponentsandmayspanalargegeographicalarea.Forsuchaproject,EIAsconductedforthevariouscomponentscannotgiveaholisticviewoftheenvironmentalimpactsoftheentireproject.Incertaincircumstances,aStrategicEnvironmentalAssessment(SEA)becomesnecessary.TheEMCAandtheEIAregulationsprovidethatallgovernmentpolicies,plansandorprogramsforenvironmentalimplementationshallbesubjectedtoaSEAinprovidingadispassionateandobjectiveevaluationofgovernmentplansandprojects.Thepossibilityoffinancecouldbeexplored,butnobindingcommitmentmade,howeversomeplansmustbemadeinorderthattheprojectReportcancontaintheinformationrequired.ActualsitepreparationorconstructionactivitiesmustnotbebegunbeforethenecessaryapprovalisreceivedfromNEMA.Post-submissionstageofEIAReportAnyEIAlicenceissuedcanbecancelledorsuspendedbyNEMA.OnceNEMAcancelsorrevokesanEIAlicense,includingforcontraveningconditionsofthelicense,theholdercannotproceedwiththeprojectuntilanewlicenseisissuedbyNEMA.Additionally,NEMAmayrequiresubmissionofafreshEIAstudyReportaftertheEIAlicenceisissuedif:thereisasubstantialchangeormodificationintheprojectorinthewaytheprojectisbeingoperated;GuidetoESGforInfrastructureprojects-AppendicesSeptember202028theprojectposesenvironmentalthreatswhichcouldnotbereasonablyforeseenatthetimeofthestudy,evaluationorreview;oritisestablishedthattheinformationordatagivenbytheprojectinsupportoftheapplicationforanEIAlicencewasfalse,inaccurateorintendedtomislead.Shouldthelicensehavebeenissued,projectproponentshallalsodeveloptheEnvironmentalManagementPlan(EMP)whichproposesthemeasurestoeliminate,minimise,ormitigateadverseenvironmentalimpactsbasedontheoutcomesofEIA,includingtherespectivecost,timeframe,andresponsibilitytobeimplementedaccordinglythroughouttheprojectlifecycle.GuidetoESGforInfrastructureprojects-AppendicesSeptember202029AppendixC:ComparisonoftheapplicableWBGIFCEHSGuidelinesandEnvironmentalandtheLocalEnvironmentalStandardsandLimitsTherelevantEnvironmentalAssessmentlevelsarepresentedfortheselectedmainenvironmentalsensitivitiesi.e.ambientairquality;noise;surfaceandgroundwaterquality;andthemarinewaterandseabedquality,whereapplicable.TableC.1:AmbientAirQualityStandards(Malaysia)ParameterPeriodofMeasurementStandard6(µg/m3)(IFE)Standard7(µg/m3)(Malaysia)NitrogenDioxideInstantPeak--1hour200(Guideline)28024hours-70MonthAverage--1-year--SulphurDioxideInstantpeak--10-minute500(Guideline)-1hour-24hours125(Interimtarget1)50(Interimtarget2)20(Guideline)-1-year--ParticulateMatterlessthan10micrometres(PM10)24hours150(Interimtarget1)100(Interimtarget2)75.0(Interimtarget3)50(Guideline1001year70(Interimtarget1)50(Interimtarget2)30(Interimtarget3)20(Guideline)40ParticulateMatterlessthan2.5micrometres(PM2.5)24hours75(Interimtarget1)50(Interimtarget2)37.5(Interimtarget3)25(Guideline)351year35(Interimtarget1)25(Interimtarget2)15(Interimtarget3)10(Guideline)15GroundLevelOzone(O3)1hour-1808hours-100Oxidant1hour--8hours160(Interimtarget1)-6BasedontheMalaysiaAmbientAirQualityStandard,whichreplacetheMalaysiaAmbientAirQualityGuideline19897BasedontheMalaysiaAmbientAirQualityStandard,whichreplacetheMalaysiaAmbientAirQualityGuideline1989GuidetoESGforInfrastructureprojects-AppendicesSeptember202030ParameterPeriodofMeasurementStandard6(µg/m3)(IFE)Standard7(µg/m3)(Malaysia)100(Guideline)1year--TableC.2:AmbientAirQualityStandards(Kenya)ParameterPeriodofMeasurementIFCEHSGuidelines(µg/m3)EnvironmentalStandardinKenyaNitrogenDioxideInstantPeak-0.5ppm(Residential,Rural&Otherarea)1hour200(Guideline)0.2ppm(Residential,Rural&Otherarea)24hours-100µg/m3(Industrialarea)MonthAverage-0.1ppm(Residential,Rural&Otherarea)1-year40(Guideline)0.08ppm(Residential,Rural&Otherarea)OxidesofNitrogen(NOX)AnnualAverage-80µg/m3(Industrialarea)60µg/m3(Residential,Rural&Otherarea)15µg/m3(Controlledarea)24-hour-150µg/m3(Industrialarea)80µg/m3(Residential,Rural&Otherarea)30µg/m3(Controlledarea)AnnualAverage-0.2ppm(Residential,Rural&Otherarea)MonthAverage-0.3ppm(Residential,Rural&Otherarea)24-hours-0.4ppm(Residential,Rural&Otherarea)1-hour-0.8ppm(Residential,Rural&Otherarea)InstantPeak-1.4ppm(Residential,Rural&Otherarea)SulphurDioxideInstantpeak-500µg/m³(Residential,Rural&Otherarea10-minute500(Guideline)0.191ppm(Residential,Rural&Otherarea)1hour--24hours20(Guideline)0.048ppm/125µg/m³(Residential,Rural&Otherarea)1-year-30µg/m3(Controlledareas)CarbonMonoxide1hour-10.0mg/m³(Industrialarea)GuidetoESGforInfrastructureprojects-AppendicesSeptember202031ParameterPeriodofMeasurementIFCEHSGuidelines(µg/m3)EnvironmentalStandardinKenya8hours-4.0mg/m³(Residential,Rural&Otherarea)Dust/TotalSuspendedParticles24-hour-500µg/m3(Industrialarea)200µg/m3(Residential,Rural&Otherarea)100µg/m3(Controlledareas)1-year-360µg/m3(Industrialarea)140µg/m3(Residential,Rural&Otherarea)70µg/m3(Controlledareas)AnnualAverage-100µg/m3(Residential,Rural&Otherarea)24-hour-180µg/m3(Residential,Rural&Otherarea)ParticulateMatterlessthan10micrometres(PM10)24hours50(Guideline)150µg/m3(Industrialarea)1year20(Guideline)100µg/m3(Residential,Rural&Otherarea)ParticulateMatterlessthan2.5micrometres(PM2.5)24hours25(Guideline)75µg/m3(Industrialarea)1year10(Guideline)35µg/m3(Industrialarea)Lead24-hour-1.5µg/Nm3(Industrialarea)1µg/Nm3(Residential,Rural&Otherarea)0.75µg/m3(Controlledarea)MonthAverage-2.51year-1µg/Nm3(Industrialarea)0.75µg/Nm3(Residential,Rural&Otherarea)0.5µg/m3(Controlledarea)HydrocarbonsInstant-700ppbTotalVOC24hours-600µg/m3(Industrialarea)GroundLevelOzone(O3)1hour-200µg/m3(Industrialarea)8hours-0.12ppm(Residential,Rural&Otherarea)Oxidant1hour--8hours100(Guideline)-1year--TableC.3:AmbientNoiseStandard(Malaysia)GuidetoESGforInfrastructureprojects-AppendicesSeptember202032SiteIFCEHSGuidelines(LAeq(dBA))Standard(LAeq(dBA))8(Malaysia)Daytime(07:00-22:00)Night-time(22:00-07:00)Daytime(07:00-22:00)Night-time(22:00-07:00)LowDensityResidential554555(ND)960(EB)1060(NR)1160(RT)1250(ND)55(EB)55(NR)55(RT)SuburbanResidential554560(ND)65(EB)65(NR)60(RT)55(ND)60(EB)60(NR)55(RT)UrbanResidential554565(ND)65(EB)65(NR)65(RT)60(ND)60(EB)60(NR)60(RT)MixedDevelopment--65(ND)65(EB)70(NR)70(RT)60(ND)60(EB)65(NR)65(RT)NoiseSensitiveReceptors/Areas--55(ND)60(EB)60(NR)60(RT)50(ND)55(EB)55(NR)55(RT)Institutional/educational(School,Hospital,Worship)554555(ND)60(EB)50(ND)55(EB)Commercialbusinesszone707065(ND)70(EB)70(NR)70(RT)60(ND)65(EB)65(NR)65(RT)Industrialzones707070(ND)75(EB)75(NR)75(RT)65(ND)75(EB)70(NR)75(RT)Recreational--60(ND)55(ND)TableC.4:AmbientNoiseStandard(Kenya)8BasedontheMalaysiaGuidelinesforEnvironmentalNoiseLimitsandControl(ThirdEdition)9RecommendedPermissibleSoundLevelbythereceivingLandUseforNewDevelopment;abbreviatedasND10RecommendedPermissibleSoundLevelbythereceivingLandUseforExistingBuiltUpAreas;abbreviatedasEB11LimitingSoundLevelfromRoadTraffic(ForNewRoadsand/orRedevelopmentofExistingRoads);abbreviatedasNR12LimitingSoundLevelfromRailway&TransitTrains(ForNewRailway&TransitLines&Re-Alignments);abbreviatedasRTGuidetoESGforInfrastructureprojects-AppendicesSeptember202033SiteIFCEHSGuidelines13(LAeq(dBA))EnvironmentalStandardinKenyaDaytime(07:00-22:00)Night-time(22:00-07:00)Daytime(06:00-20:00)Night-time(20:00-6:00)LowDensityResidential55456035SuburbanResidential55456035UrbanResidential55456035MixedDevelopment--5535NoiseSensitiveReceptors/Areas--4035Institutional/educational(School,Hospital,Worship)55456040(Worship)3535(Worship)Commercialbusinesszone70706035Industrialzones70706035Foranybuildingusedasahealthfacility,educationalinstitutions,convalescenthome,oldagehomeorresidentialbuilding--109dB(C)109dB(C)Foranybuildinginanareasusedforresidentialandoneormoreofthefollowingpurposes:commerce,small-scaleproduction,entertainment,oranyresidentialapartmentinanareathatisusedforpurposesofindustry,commerceorsmall-scaleproduction,oranybuildingusedforthepurposeofindustry,commerceorsmall-scaleproduction--109dB(C)109dB(C)13Guidelinesvaluesarefornoiselevelsmeasuredoutofdoors.Source:GuidelinesforCommunityNoise,WorldHealthOrganisation(WHO),1999GuidetoESGforInfrastructureprojects-AppendicesSeptember202034TableC.5:SurfaceWaterandGroundwaterQualityStandards(Malaysia)ParametersUnitsIFCEHSGuidelinesStandard(Malaysia)SurfaceWater14Groundwater15ClassIClassIIAClassIIBClassIIIClassIVClassVAmmoniacalNitrogenmg/L-0.10.30.30.92.7>2.7-Alkylbenzylsulphonatesmg/L--------BiochemicalOxygenDemand(BOD)mg/L30133612>12-ChemicalOxygenDemand(COD)mg/L12510252550100>100-DissolvedOxygen(DO)mg/L-75–75–73–5<3<1-pH--6.5–8.56–96–95–95–9-5.5–9.0ColourTCU-15150150---300ElectricalConductivity16µS/cm-1,0001,000--6,000-1,000Floatables--N17NN----Odour--NNN----Salinityppt-0.51--2--Taste--NNN----TotalDissolvedSolidsmg/L-5001,000--4,000-1,50014BasedontheMalaysia’sWaterQualityStandardsforMalaysia15BasedontheMalaysia’sGroundwaterQualityStandardsandIndex16Relatedparameters,onlyonerecommendedforuse17N=Novisiblefloatablematerialsordebris,noobjectionalodourornoobjectionaltasteGuidetoESGforInfrastructureprojects-AppendicesSeptember202035ParametersUnitsIFCEHSGuidelinesStandard(Malaysia)SurfaceWater14Groundwater15ClassIClassIIAClassIIBClassIIIClassIVClassVTotalSuspendedSolidsmg/L50255050150300300-Temperature°C--Normal+2-Normal+2--Normal±2TurbidityNTU-55050---1,000FaecalColiform18/Ecolicount/100mL-101001004005,000(20,000)195,000(20,000)a5,000MPN/100mlTotalColiformcount/100mL-1005,0005,00050,00050,000>500005,000MPN/100ml-ClassIClassIIA/IIBClassIII20ClassIVClassVGroundwaterAluminium,Almg/L-Naturallevelsorabsent-(0.06)0.5LevelsaboveIVAnd/or-Arsenic,Asmg/L-0.050.4(0.05)0.10.01Barium,Bamg/L-1---Boron,Bmg/L-1(3.4)0.8-18Geometricmean19Maximumnottobeexceeded20Maximum(unbracketed)and24-houraverage(bracketed)concentrationsGuidetoESGforInfrastructureprojects-AppendicesSeptember202036ParametersUnitsIFCEHSGuidelinesStandard(Malaysia)SurfaceWater14Groundwater15ClassIClassIIAClassIIBClassIIIClassIVClassVCadmium,Cdmg/L-0.010.0121(0.001)0.01Naturallevelsorabsent0.003Calcium,Camg/L-----Carbondioxide,CO2mg/L-----Chloride,Cl2mg/L--(0.02)-250Chromiummg/L----0.05ChromiumHexavalent,Cr(VI)mg/L-0.051.4(0.05)0.1-ChromiumTrivalent,Cr(III)mg/L--2.5--Cobalt,Comg/L-----Copper,Cumg/L-0.02-0.21.0Cyanide,CNmg/L-0.020.06(0.02)-0.07Fluoride,Fmg/L-1.51011.5FreeAmmoniaNitrogen(NH3-N)mg/L----1.5FreeChlorine,Clmg/L-200-80-Hardnessmg/L-250--50021Athardness50mg/LCaCO3GuidetoESGforInfrastructureprojects-AppendicesSeptember202037ParametersUnitsIFCEHSGuidelinesStandard(Malaysia)SurfaceWater14Groundwater15ClassIClassIIAClassIIBClassIIIClassIVClassVIron,Femg/L-111(Leaf)5(Others)1.0Lead,Pbmg/L-0.050.02(0.01)50.05Magnesium,Mgmg/L----0.3Manganese,Mnmg/L-0.10.10.20.2Mercury,Hgmg/L-0.0010.004(0.0001)0.0020.001Nickel,Nimg/L-0.050.90.20.05NitrateNitrogenasN(NO3-N),NO3mg/L-7-510NitriteNitrogenasN,NO2mg/L-0.40.4(0.03)-0.4#Potassium,Kmg/L-----Selenium,Semg/L-0.010.25(0.04)0.020.01Silicamg/L-50---Silver,Agmg/L-0.050.0002-0.05Sodium,Namg/L---3SAR200Sulphate,SO4mg/L-250--250Sulphide,Smg/L-0.05(0.001)--Tin,Snmg/L--0.004--GuidetoESGforInfrastructureprojects-AppendicesSeptember202038ParametersUnitsIFCEHSGuidelinesStandard(Malaysia)SurfaceWater14Groundwater15ClassIClassIIAClassIIBClassIIIClassIVClassVTotalPhosphateasPmg/L-0.20.1--Uraniummg/L-----Zincmg/L-50.42223.0Gross-αBq/L-0.1--0.1Gross-βBq/L-1--1.0Radium,Ra-226Bq/L-<0.1---Strontium,Sr-90Bq/L-<1---Benzenemg/L------OrganicMaterial(KMNO4)mg/L------Pesticide23mg/L-----0.00003–0.03Aldrin/Dieldrinµg/L-0.020.2(0.01)---BHCµg/L-29(0.1)---CCEµg/L-500----Chlordaneµg/L-0.082(0.02)---Dichlorodiphenyltrichloroethane(DDT),t-DDTµg/L-0.1(1)---22Athardness50mg/LCaCO323Aldrin/dieldrin,DDT,Heptachlor,Methoxychlor,Lindane,Chlordane,Endosulfan,hexachlorobenzene,2,4,5–T,2,4-D,2,4-DB,Alachlor,Aldicarb,Carbofuran,MCPA,PermethrinGuidetoESGforInfrastructureprojects-AppendicesSeptember202039ParametersUnitsIFCEHSGuidelinesStandard(Malaysia)SurfaceWater14Groundwater15ClassIClassIIAClassIIBClassIIIClassIVClassVEndosulfanµg/L-10----Heptachlor/Epoxideµg/L-0.050.9(0.06)---Lindaneµg/L-23(0.4)---Oil&Grease(EmulsifiedEdible)µg/L-7,000;N24N---Oil&Grease(Mineral)µg/L1040;NN---PhenolCompound,asPhenolµg/L-10---0.002Polychlorinatedbiphenyl(PCB)µg/L-0.16(0.05)---Surfactant(MBAS/BAS)µg/L-5005,000(200)--1.0mg/L2,4-Dichlorophenoxyaceticacid,2,4-Dµg/L-70450---2,4,5-trichlorophenoxyaceticacid,2,4,5-Tµg/L-10160---Endrinµg/L------Fenoprop,2,4,5-TPµg/L-4850---Methoxychlorµg/L------24Freefromvisiblefilmsheen,discolourationanddepositsGuidetoESGforInfrastructureprojects-AppendicesSeptember202040ParametersUnitsIFCEHSGuidelinesStandard(Malaysia)SurfaceWater14Groundwater15ClassIClassIIAClassIIBClassIIIClassIVClassVParaquatµg/L-101,800---Toxaphaneµg/L------TotalColiform-400MPN------TableC.6:SurfaceWaterandGroundwaterQualityStandards(Kenya)ParametersUnitsIFCEHSGuidelinesStandardinKenyaBiochemicalOxygenDemand(BOD)mg/L30-ChemicalOxygenDemand(COD)mg/L125-pH--6.5–8.5TotalDissolvedSolidsmg/L-1,200TotalSuspendedSolidsmg/L5030Copper,Cumg/L-0.05Lead,Pbmg/L-0.05NitrateNitrogenasN(NO3-N),NO3mg/L-10Selenium,Semg/L-0.01Zincmg/L-1.5Oil&Grease(Mineral)µg/L10-TotalColiform-400MPN-GuidetoESGforInfrastructureprojects-AppendicesSeptember202041TableC.7:MarineSeabedQualityStandards(Malaysia)ParameterUnitStandard25(Malaysia)Class1Class2Class3InterimClassE1InterimClassE2InterimClassE3SensitiveMarineHabitatsFisheries(includingMari-culture)Industry,commercialactivities&coastalsettlementsEstuariesCoastalPlainLagoonComplexDistributaryNetworkTotalSuspendedSolidsmg/l2550100303030Marinelitter-FreefrommarinelitterTemperature°C<2°CincreaseovermaximumambientpH-6.5–9DissolvedOxygenmg/l>6>5>3>5>5>5Ammoniaμg/l355032051010Phosphateμg/l575670100180180Nitrateμg/l1060700200570430Cyanideμg/l2714555Polycyclicaromatichydrocarbon,PAHμg/l1002001,000555TotalPhenolCompoundμg/l110100101010OilandGreasemg/l0.010.145111Tributyltin,TBTμg/l0.0010.0100.0500.0020.0020.002Mercuryμg/l0.040.040.040.040.040.04Hexavalentchromiumμg/l0.141020101010Aluminiumμg/l272755272727Arsenic(III)μg/l133311Cadmiumμg/l0.502311125BasedonMalaysiaMarineWaterQualityStandardsandIndexGuidetoESGforInfrastructureprojects-AppendicesSeptember202042ParameterUnitStandard25(Malaysia)Class1Class2Class3InterimClassE1InterimClassE2InterimClassE3SensitiveMarineHabitatsFisheries(includingMari-culture)Industry,commercialactivities&coastalsettlementsEstuariesCoastalPlainLagoonComplexDistributaryNetworkCopperμg/l1.32.98111Leadμg/l2.28.5121.322Zincμg/l7501001655FaecalColiformCfu/100ml707070707070TherearenoapplicableIFCguidelinesnorstandardsinKenyaformarineseawaterquality.Additionally,therearealsonoavailablelocalstandardsformarineseabedsedimentqualitystandardsinbothMalaysiaandKenya.Hence,anyprojectimpactsonthemarineseabedwillbebenchmarkagainstthestandardsprovidedintheAustralianandNewZealandGuidelinesforFreshandMarineWaterQuality(ANZECC/ARMANZ2000)presentedbelow:TableC.8:MarineSeabedQualityStandardsParametersUnitsANZECC/ARMANZ2000aISQG-Low(TriggerValue)bISQG-HighbAntimonymg/kgdrywt225Cadmium1.510Chromium80370Copper65270Lead50220Mercury0.151Nickel2152Silver13.7Zinc200410Arsenicmg/kgdrywt2070TributyltinµgSn/kgdrywt570Acenaphthenemg/kgdrywt16500Acenaphthalene44640Anthracene851,100Fluorine19540Naphthalene1602,100GuidetoESGforInfrastructureprojects-AppendicesSeptember202043ParametersUnitsANZECC/ARMANZ2000aISQG-Low(TriggerValue)bISQG-HighbPhenanthrene2401,500LowMolecularWeightPAHs5523,160Benzo(a)anthracene2611,600Benzo(a)pyrene4301,600Dibenzo(a,h)anthracene63260Chryene3842,800Fluoranthene6005,100Pyrene6652,600HighmolecularweightPAHs1,7009,600TotalPolycyclicaromatichydrocarbon4,00045,000TotalDichlorodiphenyltrichloroethane1.646p.p’-DDE2.227o.p’+p.p’-DDD220Chlordane0.56Dieldrin0.0928Endrin0.028Lindane0.321TotalPolychlorinatedbiphenyls23-aAustralianandNewZealandGuidelinesforFreshandMarineWaterQuality,2000.bInterimSedimentQualityGuideline.

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