World Bank Requirements and the Equator Principles: Compliance and its Challenges
In June, 2003 a group of 10 commercial banks first made public their adherence to a set of social and environmental commitments known as the Equator Principles. This announcement signified a new level of consistency and increased coherency in the operating procedures and requirement, between the multilateral and bilateral lending institutions, and the major sources of private sector financing for the mining sector.
Many of the banks assert that these standards are simply public commitments to what were already internal bank standards, and that their assessments, and decisions on loans, are not substantially changed by the development of these principles. Yet the principles represent a further move along a trajectory well-established in the business world today, of corporate social responsibility and increasing pressure towards a common set of standards. And most significantly, the public nature of the Equator Principles breaks - to some degree-with a long tradition of privacy in the banking industry and exposes the banks and potentially their clients, to the review and vigilance of other stakeholders.
This paper will review the importance and relevance of the Equator Principles, and how they relate to the World Bank standards. It will look at the context driving their development and touch on some key considerations for achieving Equator Principle compliance.
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