THE COUNCIL
HAVING REGARD to the Convention on
the Organisation for Economic Co-operation and Development of 14th December
1960 and, in particular, to Article 5 b) thereof;
HAVING REGARD to the mandate from
OECD Ministers given in 1999 to strengthen Common Approaches on environment and
officially supported export credits by the end of 2001 and noting that this
mandate was renewed in 2000 when OECD Ministers welcomed the progress towards Common
Approaches;
NOTING that OECD Ministers in 2001 have recognised
that export credit policy can contribute positively to sustainable development
and should be coherent with its objectives;
NOTING that the present Recommendation builds upon
Members’ experience in implementing the 2001 Draft Recommendation on Common
Approaches on Environment and Officially Supported Export Credits
[TD/ECG(2000)11/REV6], the 1998 Statement of Intent on Environment and the
Action Statement, adopted by the OECD Working Party on Export Credits and
Credit Guarantees (ECG) in February 2000, the ECG Work Plan adopted in 2000,
and complements the ECG Agreement on Environmental Information Exchange for
Larger Projects adopted in 1999;
RECOGNISING that while Members may have different
means of delivering official support for export credits through their export
credit agencies (ECAs), the primary role of ECAs is to promote trade in a
competitive environment, whereas multilateral development banks and development
agencies focus primarily on development assistance;
NOTING that project sponsors, exporters, financial
institutions and ECAs have, individually or jointly, different roles,
responsibilities and leverage with regard to projects benefiting from official
support;
RECOGNISING the sovereign right of buyers’
countries to make decisions regarding projects within their jurisdictions;
RECOGNISING the responsibility of Members to
consider the positive and negative environmental impacts of projects, in
particular in sensitive sectors or located in or near sensitive areas, in their
decisions to offer official support for export credits;
On the proposal of the Working Party on
Export Credit and Credit Guarantees:
RECOMMENDS that Members, before taking decisions
on officially supported export credits, apply the following common approaches
for identifying and evaluating the environmental impacts of projects and
exports of capital goods and services destined to projects (hereafter referred
to as “projects”), including the impact on involuntary resettlement, indigenous
peoples and cultural property (for the purpose of this Recommendation hereafter
referred to as “environmental impacts”).
I. GENERAL PRINCIPLES
i) Scope
1.
This
Recommendation applies to officially supported export credits for projects with
a repayment term of two years or more.
ii) Objectives
2.
The
general objectives of this Recommendation are to:
●
Promote coherence between policies regarding
officially supported export credits and policies for the protection of the environment, including relevant
international agreements and conventions, thereby contributing towards
sustainable development.
●
Develop common procedures and processes relating to the
environmental review of projects benefiting from officially
supported export credits, with a view to achieving equivalence among
the measures taken by the Members and to reducing the
potential for trade distortion.
●
Promote good environmental practice and consistent processes for
projects benefiting from officially supported export credits, with a view to
achieving a high level of environmental protection.
●
Enhance efficiency of official support procedures by ensuring that
the administrative burden for applicants and export credit agencies is
commensurate with the environment protection objectives of this Recommendation.
●
Promote
a level playing field for officially supported export credits.
To achieve these
objectives, Members seek to:
●
Foster
transparency, predictability and responsibility in decision-making, by
encouraging disclosure of relevant environmental information with due regard to
any legal
stipulations, business confidentiality and other competitive concerns.
●
Encourage the prevention and the mitigation of the adverse
environmental impacts of projects.
●
Enhance
financial risk assessment of projects by taking into account their
environmental aspects.
II. SCREENING AND CLASSIFICATION OF
PROJECTS
Members should screen
all applications for officially supported export credits covered by this
Recommendation. The screening should identify projects which require a review
due to their potential adverse environmental impacts, and projects which are in
sensitive sectors or located in or near sensitive areas. The parties involved
in a project, such as applicants (exporters and lenders) and project sponsors,
should provide all information necessary to carry out the screening. The
screening should take place as early as possible in the risk assessment
process, and, where appropriate, should also identify the overall project(s),
if any, to which capital goods and/or services are related.
As a result of the
screening process, Members should classify all projects in respect of which
their share is above SDR 10 millions. Members should also classify all projects
in sensitive areas in respect of which their share is below SDR 10 millions.
6. Members
should classify projects in accordance with the potential environmental impact
and the extent of the environmental review required:
●
Category A: a project is classified as Category A if it
has the potential to have significant adverse environmental impacts. These
impacts may affect an area broader than the sites or facilities subject to
physical works. Category A, in principle, includes projects in sensitive
sectors or located in or near sensitive areas. An illustrative list of
sensitive sectors and sensitive areas is set out in Annex I.
●
Category B: a project is classified as Category B if its
potential environmental impacts are less adverse than those of Category A
projects. Typically, these impacts are site-specific, few if any of them are
irreversible, and mitigation measures are more readily available.
●
Category C: a project is classified as Category C if it
is likely to have minimal or no adverse environmental impacts.
III. ENVIRONMENTAL REVIEW
7. When
undertaking an environmental review, Members should indicate
to the appropriate parties involved in the project the type of environmental
information they require in relation to the potential environmental impacts of
the project, including, where appropriate, the need for an Environmental Impact
Assessment (EIA).
The information to be supplied should include:
●
Potential environmental impacts (e.g. generation
of significant air emissions, effluents, waste or noise, significant
use of natural resources) including the impact on
involuntary resettlement, indigenous peoples, and cultural property;
●
The environmental standards, practices and processes
that the parties involved in the project intend to apply;
●
The results of any public consultations on the project
with relevant stakeholders.
8. For a Category A project, Members should
require an EIA. The applicant is responsible for providing such an EIA.
9. The scope of an environmental review for a
Category B project may vary from project to project. The review should examine
the project's potential negative and positive environmental impacts, including
measures to prevent, minimise, mitigate, or compensate for adverse impacts and
improve environmental performance.
10. Beyond screening and classification, no
further action is required for a Category C project.
11. An EIA should address the
issues set
out in Annex II.
12.1 When undertaking environmental reviews,
Members should benchmark projects against host country standards, against one
or more relevant environmental standards and guidelines published by the World
Bank Group, the European Bank for Reconstruction and Development, the Asian
Development Bank, the African Development Bank and the Inter-American
Development Bank and against the safeguard policies published by the World Bank
Group.
Members may also benchmark against any higher internationally recognised
environmental standards, such as European Community standards.
12.2 Projects should, in all cases, comply with
the standards of the host country and when the relevant international standards
against which the project has been benchmarked are more stringent these
standards would be applied.
12.3 If a Member finds it necessary to apply
standards below the international standards against which the project has been
benchmarked, it shall report and justify the standards applied on an annual ex-
post basis in accordance with paragraph 19.
12.4 In
the absence of a contrary decision by the ECG, the international environmental
standards, guidelines and safeguard policies applied by the institutions
referred to above are the ones applicable at the time of the adoption of the
Recommendation.
IV. EVALUATION, DECISION AND
MONITORING
13. Members
should evaluate the information resulting from screening and review, decide
whether to request further information, decline or provide official support
and, if support is to be provided, whether this should involve conditions to
fulfil prior to, or after the final commitment for official support, e.g.
mitigation measures, covenants, monitoring requirements.
14. Members
should ensure that procedures are in place to monitor, as appropriate, the
implementation of projects, to ensure compliance with the conditions of their
official support. In the case of non-compliance with the conditions of official
support by applicants, the Member should take any action that it deems
appropriate in order to restore compliance, in accordance with the terms of the
contract for official support.
V. EXCHANGE AND DISCLOSURE OF
INFORMATION
15. Members
should publish national ECA environmental policy
statements/principles and procedural guidance.
16. Taking
into account the competitive context in which they operate and constraints of
business confidentiality, Members should:
●
Share information with a view to seeking, where appropriate,
common positions on the environmental review of projects, and reply in a
timely manner to requests from other Members in a co-financing or a competitive
situation on the environmental standards accepted by the Member.
●
For Category A projects, seek to make environmental impact
information publicly available (e.g. EIAs, summary thereof) at least 30
calendar days before a final commitment to grant official
support. In the case where environmental impact information cannot, for
exceptional reasons, be made public Members shall explain the circumstances and
report these in accordance with paragraph 19.
●
Make
available to the public at least annually, subject to legal provisions on
public disclosure in Members’ countries, information on projects classified in Categories A and B.
17. The
ECG shall:
●
Exchange
views on a regular basis with appropriate stakeholders on the operation of this
Recommendation.
●
Share experiences under this Recommendation with Non-Member Economies.
●
With
due regard to business confidentiality, make aggregated information publicly
available annually based on Members’ reporting in accordance with paragraph 19.
VI. REPORTING AND MONITORING OF THE
RECOMMENDATION
18. Members
shall:
●
Ensure, through appropriate measures, compliance with their
policies and procedures pursuant to this Recommendation.
●
Monitor and evaluate, over time, the experience with this
Recommendation at a national level, and share experiences with the other
Members, including about standards applied to those projects which were subject
to environmental review as referred to in paragraph 12.
●
Continue
to enhance and improve procedures at a national level to address the
environmental impacts of projects, and to encourage their ECAs to
allocate appropriate resources for this purpose.
19. Members
shall report to the ECG ex-post on an annual basis, in accordance with
Annexes III.A and III.B, projects classified in Categories A and B respectively,
for which a final commitment has been issued during the year of reporting.
20. The
OECD Secretariat shall monitor the implementation of this Recommendation
through compilation of annual reporting by the Members, and report annually to
the ECG.
21. The
ECG shall review all elements of this Recommendation not later than the end of
2006 in the light of experience and report to Council. The ECG shall, in the
light of this Recommendation also review by the end of 2006 the Agreement for
the Environmental Information Exchange for Larger Projects.
ANNEX I
ILLUSTRATIVE LIST OF
SENSITIVE SECTORS AND AREAS
“The following list
is indicative and the types of projects it contains are examples only.
“A” level projects
This list applies to “greenfield”
or major extension projects […] in the categories listed below.
1.
Crude oil refineries (excluding undertakings
manufacturing only lubricants from crude oil) and installations for the
gasification and liquefaction of 500 tonnes or more of coal or bituminous shale
per day.
2.
Thermal power stations and other combustion
installations with a heat output of 300 megawatts or more and nuclear power
stations and other nuclear reactors, including the dismantling or decommissioning of such power stations or reactors (except research installations for the
production and conversion of fissionable and fertile materials, whose maximum
power does not exceed 1 kilowatt continuous thermal load).
3.
Installations designed for the production, or enrichment
of nuclear fuels, the reprocessing, storage or final disposal of irradiated
nuclear fuels, or for the storage, disposal or processing of radioactive waste.
4.
Integrated works for the initial smelting of cast-iron
and steel; installations for the production of non-ferrous crude metals from ore, concentrates or secondary raw materials by metallurgical, chemical or
electrolytic processes.
5.
Installations for the extraction of asbestos and for the
processing and transformation of asbestos and products containing asbestos: for
asbestos-cement products, with an annual production of more than 20,000 tonnes
finished product; for friction material, with an annual production of more than
50 tonnes finished product; and for other asbestos utilisation of more than 200
tonnes per year.
6.
Integrated chemical installations, i.e. those
installations for the manufacture on an industrial scale of substances using
chemical conversion processes, in which several units are juxtaposed and are
functionally linked to one another and which are for the production of: basic
organic chemicals; basic inorganic chemicals; phosphorous-, nitrogen- or
potassium-based fertilizers (simple or compound fertilizers); basic plant
health products and of biocides; basic pharmaceutical products using a chemical
or biological process; explosives.
7.
Construction of motorways, express roads and lines for
long-distance railway traffic and of airports with a basic runway length of
2,100 metres or more; construction of a new road of four or more lanes, or
realignment and/or widening of an existing road so as to provide four or more lanes, where such new road, or realigned and/or widened section of road would be
10 km or more in a continuous length.
8.
Pipelines, terminals, and associated facilities for the
large-scale transport of gas, oil, and chemicals.
9.
Sea ports and also inland waterways and ports for
inland-waterway traffic which permit the passage of vessels of over 1,350
tonnes; trading ports, piers for loading and unloading connected to land and
outside ports (excluding ferry piers) which can take vessels of over 1,350
tonnes.
10.
Waste-processing and disposal installations for the
incineration, chemical treatment or landfill of hazardous, toxic or dangerous
wastes.
11.
Large
dams and other impoundments designed for the holding back or permanent
storage of water.
12.
Groundwater abstraction activities or artificial
groundwater recharge schemes in cases where the annual volume of water to be
abstracted or recharged amounts to 10 million cubic metres or more.
13.
Industrial plants for the (a) production of pulp from
timber or similar fibrous materials; (b) production of paper and board with a
production capacity exceeding 200 air-dried metric tonnes per day.
14.
Peat extraction, quarries and open-cast mining, and
processing of metal ores or coal.
15.
Extraction of petroleum and natural gas for commercial
purposes.
16.
Installations for storage of petroleum, petrochemical,
or chemical products with a capacity of 200,000 tonnes or more.
17.
Large-scale logging.
18.
Municipal waste water treatment plants with a capacity
exceeding 150,000 population equivalent.
19.
Municipal solid waste-processing and disposal
facilities.
20.
Large-scale tourism and retail development.
21.
Construction of overhead electrical power lines.
22.
Large-scale land reclamation.
23.
Large-scale primary agriculture/silviculture involving
intensification or conversion of natural habitats.
24.
Plants for the tanning of hides and skins where the
treatment capacity exceeds 12 tons of finished products per day.
25.
Installations for the intensive rearing of poultry or
pigs with more than: 40,000 places for poultry; 2,000 places for production
pigs (over 30 kg); or 750 places for sows.
26.
Projects which are planned to be carried out in
sensitive locations or are likely to have a perceptible impact on such
locations, even if the project category does not appear in the above list. Such
sensitive locations include National Parks and other protected areas identified by national or international law, and other sensitive locations of international,
national or regional importance, such as wetlands, forests with high
biodiversity value, areas of archaeological or cultural significance, and areas
of importance for indigenous peoples or other vulnerable groups.
ANNEX II
ENVIRONMENTAL IMPACT
ASSESSMENT REPORT[5]
An
EIA’s scope and level of detail should be commensurate with the project’s
potential impacts. The EIA report should include the following items (not
necessarily in the order shown):
-
Executive
Summary: concisely discusses significant findings and recommended actions.
-
Policy,
legal and administrative framework: discusses the policy, legal, and
administrative framework within which the EIA is carried out.
-
Project
description: describes the proposed project and its geographic, ecological,
social, and temporal context, including any offsite investments that may be
required (e.g. dedicated pipelines, access roads, power plants, water supply,
housing, and raw material and product storage facilities). Indicates the need
for any resettlement or social development plan. Normally includes a map
showing the project site ands the project’s area of influence.
-
Baseline
data: assesses the dimensions of the study area and describes relevant
physical, biological, and socio-economic conditions, including any changes
anticipated before the project commences. Also takes into account current and
proposed development activities within the project area but not directly
connected to the project. Data should be relevant to decisions about project
location, design, operation, or mitigatory measures; the section indicates accuracy,
reliability and sources of the data.
-
Environmental
Impacts: predicts and assesses the project’s likely positive and negative
impacts, in quantitative terms to the extent possible. Identifies mitigation
measures and any residual negative impacts that cannot be mitigated. Explores
opportunities for environmental enhancement. Identifies and estimates the
extent and quality of available data, key data gaps, and uncertainties
associated with predictions, and specifies topics that do not require further
attention.
-
Analysis
of alternatives: systematically compares feasible alternatives to the proposed
project site, technology, design and operation-including the “without project”
situation- in terms of their potential environmental impacts; the feasibility
of mitigating these impacts; their capital and recurrent costs; their
suitability under local conditions; and their institutional, training and
monitoring requirements. For each of the alternatives, quantifies the
environmental impacts to the extent possible, and attaches economic values
where feasible. States the basis for selecting the particular project design
proposed and justifies recommended emission levels and approaches to pollution
prevention and abatement.
-
Environmental
Management Plan: describes mitigation, monitoring and institutional measures to
be taken during construction and operation to eliminate adverse impacts, offset
them, or reduce them to acceptable levels.
-
Consultation:
Record of consultation meetings, including consultations for obtaining the
informed views of the affected people, local non-governmental organisations and
regulatory agencies.
