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Comparison between the Equator Principles and Indian Legislation
COMPARATIVE ANALYSIS OF THE EQUATOR PRINCIPLES AND INDIAN LEGISLATION
Prepared By Rupanwita Dash February 2008
Centre for Development Finance Institute for Financial Management and Research 24, Kothari Road, Nunganbakkam, Chennai, INDIA http://ifmr.ac.in/cdf/ Contact author Rupanwita Dash (rupanwita.dash@ifmr.ac.in)
TABLE OF CONTENTS Executive Summary 1. The Equator Principles an Introduction 1.1 What are Equator Principles (EPs)? 1.2 Status of adoption of EPs by Financial Institutions 2. Indian Policy, Legislation and Regulatory System 2.1 Relevant Policies, Acts, Rules, Notifications 2.2 Concerned Authorities and governance 3. Comparison of Equator Principles and Indian Legislation 3.1 Comparison of procedures 3.1.1 Categorization 3.1.2 Environment Impact Assessment (EIA) 3.1.3. Environmental Management Plan (EMP) 3.1.4 Comparison of EIA Report 3.1.5 Comparison of Authorities and Agencies 3.1.6 Public consultation 3.1.7 Comparison of Monitoring Mechanisms 3.2 Comparison between standards 3.2.1 General Environmental Standards 3.2.2 Health and safety 3.3 Sector/ Industry Specific Comparisons Chlor-Alkali Industry Cement Industry Aluminum Industry Pesticide Industry Petroleum Refining Pharmaceutical Industry 4. Conclusion References Annexures 22 22 23 24 25 26 27 29 30 4 5 7 8 9
11 13 14 15 16 16 17 19 19
LIST OF ANNEXURES Annexure 1(a): The Equator Principles Annexure 1(b): Significant Changes in the Latest Revision of EPs Annexure 1(c): List of EPFIs (As of February 2008) Annexure 1 (d): Top Project Finance EPFI in 1st Half of 2006 Annexure 1 (e): Top Project Finance Non-EPFI in 1st Half of 2006 Annexure 2: List of environmental legislation in India Annexure 3(a): List of projects requiring environmental clearance from central government Annexure 3 (b): List of 17 Major Polluting Industries in India Annexure 4: Checklist of Information to be furnished before EIA Annexure 5: Procedure for Public Hearing Annexure 6: General Environmental Standards in Indian Context Annexure 7: General Environmental Standards as per PPAH, World Bank Annexure 8: Risks to Environment and Human Health
Comparison between the Equator Principles and Indian Legislation Executive Summary The Equator Principles are a set of voluntary guidelines for environmentally and socially responsible project finance. The principles came out in 2003, and within 5 years 58 banks from all over the world has signed onto the Equator Principles. However none of the Indian Banks have become a signatory to the EPs. In India there are several requirements, regulations and systems which are intended to assess and manage the environmental risks of project finance. Since India does not fall within the definition of a high-income OECD country, compliance with both host country legislation and with the relevant IFC and World Bank guidelines will be a requirement. It is important therefore to ascertain the extent to which Indian procedures and standards meet with the IFC and World Bank requirements. In this paper a comparative analysis of the Equator Principles and Indian environmental regulations is presented. The first two sections briefly outline the Equator Principles and the Indian regulations. In the third section the same are compared with each other with respect to procedures, standards and practices. In India the project developer is required by regulation to undertake an Environment Impact Assessment (EIA) in order to obtain Environmental Clearance, which is the major prerequisite for starting projects. The compliance standards are set by the Central Pollution Control Board and the Ministry of Environment and Forestry; regulation and compliance is carried out by the same agencies, which are representatives of the state/government and thus are perceived as neutral third parties. Banks involvement here is minimal and banks are not required to spend any resources on investigating environmental and social issues, since the state body is responsible for the initial risk assessment and compliance. For the same reason, the banks face greater risks since they have no say or role in the assessment and management of a projects environmental risks which may affect them later. For the EP banks, each project is screened and categorised depending on the environmental and/or social risk. Based on the environmental assessment, the borrowers are required to prepare an environmental and social action plan to mitigate the risks, and ensure that communities affected by the project are duly consulted. If the environmental and social action plans are not followed, the banks reserve the right to declare the project loan in default. The procedural requirements such as categorization, environmental impact assessment, environmental management plan and public consultation are similar in EP and Indian regulation. The major differences are found in the pollution standards where Indian standards are more lenient and in social standards and labor, health and safety issues, where Indian norms are inadequate. The Equator Principles are a broadly accepted framework that can assist Indian banks in addressing environmental and social risks in project finance. Such guidelines which emphasize the role and responsibilities of banks (which is lacking in the present system where banks are satisfied by receiving an environmental clearance certificate from the client) will facilitate better control over project risks from the banks perspective and will help banks work closer with their clients.
Comparison between the Equator Principles and Indian Legislation I. THE EQUATOR PRINCIPLES AN INTRODUCTION What are the Equator Principles? The Equator Principles (EP or Principles) are a set of voluntary guidelines for the categorization, assessment and management of social and environmental risks in project finance. The EPs were announced in 2003 as a joint initiative by 10 leading banks 1 and the International Finance Corporation (IFC), and were subsequently revised in 2006. The latest version comprises 10 Principles (please refer to Annexure 1(a) and 1(b)). Equator Principles Financial Institutions (EPFIs) commit to apply extensive environmental and social due diligence to all project loans exceeding US$ 10 million, across all industries. The Principles serve as a common baseline and framework for EPFIs to develop individual internal practices and policies. The environmental and social screening process for projects is based on that used by the IFC. Projects are categorised as A (high), B (medium) or C (low) depending on the nature of environmental and/or social risk. For all Category A and B projects an environment assessment is required to address the potential environmental and social impacts, and propose appropriate mitigation and management tools according to the impacts of the project. Based on the environmental assessment, the borrowers are required to prepare an environmental and social action plan to mitigate the risks, and to ensure that stakeholder consultation with affected communities is undertaken. If those plans are not followed, the banks reserve the right to declare the project loan in default. The Principles also require borrowers to agree to enter into certain covenants in its financing documents. For all Category A projects, and as appropriate for Category B projects, the borrower needs to retain qualified and experienced external experts to monitor project compliance, or appoint an independent expert in environmental and social issues to do so. Thus the banks are actively engaged in the entire process of risk management in a project. The EPFIs are required to report publicly regarding their processes and experiences in implementing the Principles. A template for minimum reporting requirements was developed in 2007.2 The mandatory requirements are: (1) An annual report, (2) Number of projects screened each year, (3) Category and number of projects reviewed, (4) Discussion on EP implementation (scope of this is left to the concerned bank). The template also has formats for providing optional regional and sectoral information.
Figure 1: The Equator Principles

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The 10 original Equator banks are : ABN AMRO Bank, N.V., Barclays PLC, Citigroup, Inc., Credit Lyonnais, Credit Suisse Group, HVB Group, Rabobank, Royal Bank of Scotland, WestLB AG, and Westpac Banking Corporation 2 http://riskybusiness.wordpress.com/2007/09/17/banks-meet-to-discuss-one-year-of-epii-implementation/
Principle 1. Review & Categorisation of projects
Using E&S screening criteria of IFC
Category A
Category B
Category C
Principle 2. Social & Environmental Assessment
Principle 3. Applicable social and environmental standards For high income OECD countries: host country laws/regulations. For all other projects: (i) host country laws/regulations (ii) World Bank PPAH (iii) IFC Performance standards (iv) IFC EHS Guidelines Describes / prioritises actions for mitigation, corrective actions and monitoring measures for managing the risks identified
Principle 4. Prepare Action Plan, E&S Management System
Principle 5. Consultation and Disclosure Principle 6. Grievance Mechanism
The borrower, government or third party expert should consult the affected public and provide a non-technical summary of assessment report in local language and inform of the grievance mechanism.
Principle 7. Independent review
An expert not directly associated with borrower shall review the environmental assessment and Action Plan in order to assist the EPFIs due diligence The borrower will be required to covenant compliance with host country laws and the Action Plan, to provide periodic reports, to decommission facilities where applicable The EPFIs will require appointment of an independent E&S expert or require that borrowers retain such expert for monitoring EPFIs commit to report at least annually about Equator implementation process and experience
Principle 8. Covenants linked to compliance
Principle 9. Independent monitoring and reporting
Principle 10. EPFI reporting
PPAH: Pollution Prevention and Abatement Handbook ESH Guideline: Environment, Health and Safety Guidelines Only for projects located in non-OECD/ Medium, low income OECD countries as defined by World Bank development Indicators
Status of Adoption and Implementation of EP by Financial Institutions 6
In 2003, ten international commercial banks signed the EPs and currently (February 2008) 58 institutions have voluntarily adopted the Equator Principles. The list of these 58 EFPIs are provided in Annexure 1(c). By 2006, The Principles governed over 80% of all project finance lending. Of the total project finance debt, US$ 49 bn (62%) and US$ 38 bn (38%) went to the High income OECD and Non and Low income OECD countries (emerging markets), respectively. In the emerging markets, the total debt amount for Equator Principle debt financing was US$28 billion or 93 per cent of the market. Whilst the EPFIs command 34% of the loans, non-adoptees underwrote 59 per cent of emerging markets project finance debt within Equator-compliant deals, and a further seven per cent of debt was raised in nonEquator assessed projects3. EP financing is most active in the petrochemicals industry followed by power, transport and oil & gas. Annexure 1(d) and Annexure 1 (e) provide details on the finance by EPFIs and Non-EPFIs respectively.
A study conducted by Infrastructure Journal, IJ first half review: Equator Principles financing, 17 August 2006
Comparison between the Equator Principles and Indian Legislation II. INDIAN POLICY AND REGULATORY SYSTEM PERTINENT TO PROJECT FINANCE In India the environmental aspects of project finance deals are governed primarily by environmental legislation of the Ministry of Environment and Forestry (MoEF) and the Central Pollution Control Board (CPCB). A project developer is required by regulation to undertake an Environment Impact Assessment (EIA) in order to obtain Environmental Clearance, which is the major prerequisite for starting projects and thus is demanded by banks in all project finance deals in India. Relevant Policies, Acts, Rules, Notifications The National Environmental Policy and a set of Acts, Rules and Notifications related to water pollution, air pollution, hazardous substances management, eco-sensitive zones and environment protection govern the environmental and social aspects related to project approvals. There are specific clearance requirements (environmental clearance, forests clearance, genetic engineering approval committee clearance) and standards for compliance (emission standards, effluent standards, solid waste management) for each project. The standards are set by the Central Pollution Control Board of India. The regulatory authorities (Ministry of Environment & Forest and State Level Impact Assessment Authority) are responsible for monitoring the compliance of the project activities. The details of the regulations are provided in Annexure 2 in four sections such as general legislations, forest and wildlife related, water related and air related legislations. All proposed projects require prior environmental clearance from concerned authorities (as discussed in the next section of this chapter); project developers must conduct a detailed environmental impact assessment, hold a public hearing and prepare an environmental management plan in order to obtain project clearance. This is applicable for all new projects/activities, expansion of existing activities and change of product mix in existing projects. Environment Impact Assessment (EIA)4 EIA is a decision making tool to predict the effect of a proposed activity or project on the environment. It assesses the impact of the project on human beings, natural resources and resource use, flora and fauna, cultural heritage assets, local culture and economy, and health and safety. The process consists of two major stagesthe feasibility test and design engineeringas well as several sub-stages. The various steps of the EIA process are shown graphically below. The EIA process mirrors to a large extent the steps of the Equator Principles with minor differences in magnitude, scale and aspects of detail.5
EIA process in India

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Introduction to Environment Impact Assessment (EIA)- Presentation by Ms. Radhika, Centre for Science and Environment, New Delhi, Aug 2007 5 For details please refer to Comparative Analysis of the Equator Principles and Indian Legislation - A draft report prepared by Ms. Rupanwita Dash, Centre for Development Finance, IFMR, Chennai, Oct 2006

Project concept and site selection Proposal of project Project A, Get clearance from MoEF Project B, Get clearance from state
Submission of form & relevant information to Expert Appraisal Committee for project A &B Screening (Applicable for B category project) EIA required (Called B1 project) Scoping (For both A & B category project) Impact assessment Draft EIA followed by public consultation Not approved Submission to appraisal committee and decision Post monitoring Approved EIA not required (Called B2 project)
Concerned Authorities and governance The Ministry of Environment & Forests (MoEF) The Ministry of Environment & Forests is the nodal agency for the planning, promotion, co-ordination and overseeing of the implementation of environmental activities, prevention and control of pollution, protection of environment etc. All Category A 6 projects are directly regulated by the Ministry. State Environment Impact Assessment Authority (SEIAA) This is the regulatory authority for all projects in Category B and grants environmental clearances based on the recommendations of the State Expert Appraisal Committee (SEAC). Expert Appraisal Committee (EAC) and State Expert Appraisal Committee (SEAC) These are committees formed at national and state level respectively for screening, scoping and appraising of the projects. They recommend projects based on the environmental
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Project Category A and B are as per given Schedule in EIA Notification 2006
Comparison between the Equator Principles and Indian Legislation impact assessment report and environmental management plan for getting clearance from the MoEF and the SEIAA. National Environment Appellate Authority This is a national level authority formed to hear appeals with respect to restriction of areas in which any industries, operations or processes or class of industries, operations or processes shall not be carried out or shall be carried out subject to certain safeguards under the Environment (Protection) Act, 1986 and for related matters. National Environment Tribunal National Environment Tribunal is formed for effective and expeditious disposal of cases arising from any accidents occurring while handling any hazardous substances, to giving relief and compensation for damages to persons, property and the environment and related matters. Central Pollution Control Board (CPCB) Central Pollution Control Board is a statutory organization at the national level that provides technical services to the Ministry of Environment & Forests. The major functions of the board are: Advise the Central Government on any matter concerning prevention and control of water and air pollution and improvement of the quality of air. Lay down, modify the pollution standards Collect, compile and publish technical and statistical data relating to pollution and the measures devised for their effective prevention, control or abatement Prepare manuals, codes and guidelines relating to treatment and disposal of sewage and trade effluents Co-ordinate the activities of the State Pollution Control Board Disseminate pollution related information, create awareness State Pollution Control Boards Each state has a pollution control board that acts in accordance with the CPCB and the MFoE. These boards function as the state level agency for enforcement, advisory services, monitoring, research and creation of public awareness. They also conduct the public hearing part of the environmental clearance of any project.
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Comparison between the Equator Principles and Indian Legislation III. COMPARISON BETWEEN THE EQUATOR PRINCIPLES AND INDIAN REGULATIONS The EPs are a set of voluntary guidelines that provides a broad framework for assessing the environmental and social risks of a project. The Principles refer to the World Bank Group Pollution Prevention and Abatement Handbook, and the IFC Performance Standards and EHS Guidelines for particular standards of compliance to be achieved. Whilst these are indicative in nature and do not provide legal commitments, the standards have been developed through a multi-stakeholder approach and are accepted as industry practice. In addition to complying with local environmental and social regulations in each country where a project occurs, the Principles also ensure that industry good practice is applied where local regulations may be deficient. Through the application of Principle 8 entitled Covenants, the EPFIs, by ensuring compliance both with local laws and with environmental Action Plans, effectively ensure that environmental and social risk are appropriately managed. Indian regulations are very specific and provide detailed accounts of the activities to be carried out, the procedures, the acceptable environmental standards, the authorities and division of power and responsibilities. This fundamental difference has to be recognized at subsequent comparisons between the EPs and the Indian regulations. The comparison is carried out for both the procedures and standards of compliance. The standards are quantitative and objective, which makes the comparison easier; whereas the procedures though similar at the conceptual level are more difficult to compare since the proper comparison lies in the actual implementation of the stated framework. Six sectors-Aluminium, Chlor-Alkali, Cement, Pesticide, Pharmaceutical and Petroleum Refining--are compared below in further detail. Comparison of Procedures The comparison is done for each of these steps: 1. Categorization of the projects, 2. Environmental clearance and environment impact assessment (EIA), 3. Environmental Management Plan (EMP) 4. Comparison of Authorities and Agencies 5. Public consultation and monitoring requirements 6. Comparison of Monitoring Mechanisms 1. Categorization Category Indian Regulations Category A, B1, B2 Category A and B is defined by the Schedule provided in EIA by Ministry of Environment and Forest. There can be A or B or both Equator Principles Category A, B,C Category A Projects with potential significant adverse social or environmental impacts that are diverse, irreversible or
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Comparison between the Equator Principles and Indian Legislation categories for each industry, e.g., Mining of minerals Category A: 50 ha. of mining lease area Asbestos mining irrespective of mining area Category B: <50 ha 5 ha .of mining lease area Oil and Gas (Offshore and onshore exploration, development & production); all projects come under Category A Based on the spatial extent of potential impacts and potential impacts on human health and natural and man made resources. Ex Ante The Schedule to EIA Notification lists out Category A and B unprecedented Category B Projects with potential limited adverse social or environmental impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures Category C Projects with minimal or no social or environmental impacts.
Criteria/Basis of Categorization Time of Categorization
Based on the magnitude of potential impacts and risks in accordance with the environmental and social screening criteria of the IFC Ex Ante and Ex Post If financing is sought at an early stage in project development, the categorization determines the appropriate impact assessment requirements.
Purpose of categorization
If the impact assessment has already been developed, the project may be retroactively categorized and changes to the impact assessment made as required. All Category A projects require prior For all Category A and Category B environmental clearance from the projects located in non-OECD Central Government in the Ministry countries/OECD countries not of Environment and Forests (MoEF) designated as High-Income7, the on the recommendations of an Principles require compliance with Expert Appraisal Committee (EAC) the IFC Performance Standards and EHS Guidelines, and with the All Category B will require prior World Bank PPAH. environmental clearance from the State/ Union Territory Environment For projects located in high-income Impact Assessment Authority OECD countries, compliance with (SEIAA). The SEIAA shall base its local regulations will suffice decision on the recommendations of a State or UT level Expert Appraisal Committee (SEAC)
as defined by the World Bank Development Indicators Database
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Comparison between the Equator Principles and Indian Legislation 2. Comparison of Environmental Impact Assessment Indian Regulation All Category A projects are required to submit the EIA report. Based on Form 1, Category B projects are further divided into B1 and B2 Categories. Category B1 requires further EIA report and B2 projects can directly apply for clearance without EIA study. This facilitates screening out small projects which can be judged based on the information furnished and eliminates the scope of detailed EIA study, time and cost thereof. All projects provide project specific details to the concerned authority in Form 18, based on which they are further screened (details given in Annexure 4). For all projects, Form 1 and a copy of the pre-feasibility study report have to be submitted. For construction projects (item 8), Form 1, Form 1A and a copy of the Conceptual Plan are to be submitted. The reports submitted with the application shall be evaluated and assessed by the Impact Assessment Agency and a committee of Experts. Checklist provided by the MoEF for assessing impact on land, water, vegetation, fauna, air, aesthetics, socio-economic aspects, building materials, energy conservation, etc. The Impact Assessment Agency shall prepare a set of recommendations based on technical assessment of documents and data furnished by the project authorities, supplemented by data collected during visits to sites or factories, if undertaken, and details of public hearing. The assessment shall be completed within a period of ninety days from receipt of the requisite documents and data from the project authorities and completion of public hearing, and a decision shall be conveyed within thirty days thereafter. The clearance is granted after two months of submitting the final reports and shall be valid for a period of five years for
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Equator Principles All Category A, and select Category B projects (in non OECD countries and non high-income OECD countries) are required to undergo EIA. Category C projects do not require a detailed assessment. For projects in high-income OECD countries, compliance with local regulations will suffice, and may or may not include a full EIA. For projects in high income OECD countries, the environmental assessment or equivalent must show that the project complies with host country laws, regulations and permits required for the project. For all other projects, in addition to host country law compliance, projects must comply with the IFC Performance Standards and EHS Guidelines and with the World Bank PPAH.
The borrower shall prepare the EIA and EMP based on the host country laws, regulations and permits, IFC Performance Standards and EHS Guidelines and World Bank PPAH, as required. An independent expert opinion may be required. No formal clearance is granted as there is no authority involved here. The EPFIs screen the project for financing based on the EIA and EMP reports and details relating to public consultation.
Form 1refers to Appendix 1 of EIA Notification 2006
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Comparison between the Equator Principles and Indian Legislation commencement of the construction or operation of the project. The EAC/SEAC determine detailed and comprehensive Terms of Reference (ToR) addressing all relevant environmental concerns for the preparation of an Environment Impact Assessment (EIA) Report for the project by the scoping process.
The borrower or consultant will ensure that, if EPFI financing is to be sought, the ToR is consistent with EP requirements. If this has not occurred by the time an EPFI considers a project for financing, the EPFI will specify appropriate ToR to address any shortfalls in assessment.
3. Comparison of Environmental Management Plan (EMP) Indian Regulations The Environment Management Plan would consist of all mitigation measures for each item-wise activity to be undertaken during the construction, operation and the entire life cycle to minimize adverse environmental impacts as a result of the activities of the project. The EMP should specify mitigation measures including prevention and control for each environmental component and rehabilitation and resettlement plan. It would also delineate the environmental monitoring plan for compliance of various environmental regulations. It will state the steps to be taken in case of emergency. Equator Principles The action plan will describe and prioritize the actions needed to implement mitigation measures, corrective actions and monitoring measures necessary to manage the impacts and risks identified in the Assessment, and corrective actions required to comply with applicable host country social and environmental laws and regulations, and requirements of the applicable Performance Standards and EHS Guidelines. EP requires that the client has in place an Environmental Management System that addresses the management of these impacts.
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Comparison between the Equator Principles and Indian Legislation 4. Comparison of detailed EIA Report Indian Regulations Under Indian regulatory requirements, the Environmental Assessment report should be structured as follows: 1. Introduction Purpose of the report Identification of project & project proponent Brief description of nature, size, location of project and its importance to the country, region Scope of the study details of regulatory scoping carried out (as per Terms of Reference) 2. Project Description Description of those aspects of the project that are likely to cause environmental impacts. Description of mitigation measures incorporated into the project to meet environmental standards, environmental operating conditions, or other EIA requirements Assessment of new & untested technology for the risk of technological failure 3. Description of the Environment Establishment of baseline for valued environmental components Base maps of all environmental components 4. Anticipated Environmental Impacts & Mitigation Measures Details of investigated environmental impacts Measures for minimizing and /or offsetting adverse impacts identified Irreversible and irretrievable commitments of environmental components Assessment of significance of impacts Mitigation measures 5. Analysis of Alternatives 15
Equator Principles As per Equator Principles, the EIA report should include: 1. Relevant social and environmental impacts and risks of the proposed projects 2. Proposed mitigation and management measures relevant and appropriate to the nature and scale of the proposed project. It provides an illustrative list of issues as given below: a. Assessment of the baseline social and environmental conditions b. Consideration of environmentally feasible and socially preferable alternatives c. Requirements under host country laws and regulations, applicable international treaties and agreements d. Protection of human rights and community health, safety and security (including risks, impacts and management of projects use of security personnel) e. Protection of cultural property and heritage f. Protection and conservation of biodiversity, including endangered species and sensitive ecosystems in modified, natural and critical habitats, and identification of legally protected areas g. Sustainable management and use of renewable natural resources (including sustainable resource management through appropriate independent certification systems) h. Use and management of dangerous substances i. Major hazards assessment and management j. Labor issues (including the four core labor standards), and occupational health and safety k. Fire prevention and life safety
Comparison between the Equator Principles and Indian Legislation Description of each alternative Summary of adverse environmental impacts of each alternative Mitigation measures proposed for each alternative and selection of alternative l. Socio-economic impacts m. Land acquisition and involuntary resettlement n. Impacts on affected communities, and disadvantaged or vulnerable groups o. Impacts on indigenous peoples, and their unique cultural systems and values p. Cumulative impacts of existing projects, the proposed project, and anticipated future projects q. Consultation and participation of affected parties in the design, review and implementation of the project r. Efficient production, delivery and use of energy s. Pollution prevention and waste minimization, pollution controls (liquid effluents and air emissions) and solid and chemical waste management Standards are the World Bank PPAH and IFC EHS guidelines.
6. Environmental Monitoring Program Technical aspects of monitoring the effectiveness of mitigation measures (incl. measurement methodologies, frequency, location, data analysis, reporting schedules, emergency procedures, detailed budget & procurement schedules) 7. Additional Studies Public consultation, risk assessment, Social Impact Assessment and resettlement and rehabilitation action plans Standards are set by the Central Pollution Control Board.
5. Comparison of Authorities and Agencies Indian regulation For Category A: Regulatory Authority: Ministry of Environment and Forests (MoEF) Assessment Agency: Expert Appraisal Committees (EACs) For Category B: Regulatory Authority: State Environment Impact Assessment Authority (SEIAA) Assessment Agency: State Level Expert Appraisal Committees (SEACs) 6. Comparison of Public consultation Agency Responsible Procedures Indian Regulation State Pollution Control Board (SPCB) or the Union Territory Pollution Control Committee (UTPCC) (a) a public hearing at the site or in Equator Principles The government, borrower or third party expert Project affected communities are to be Equator Principles Compulsory independent expert reviews of EAs and EMPs for Category A projects (and as appropriate for Category B) and an independent expert review of compliance, when judged necessary. The Principles do not specify under which conditions independent monitoring will be considered necessary for Category B.
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Comparison between the Equator Principles and Indian Legislation its close proximity (district wise), to be carried out for ascertaining concerns of local affected persons; (b) Obtain responses in writing from other concerned persons having a plausible stake in the environmental aspects of the project or activity. Time Details are provided in Annexure 5 Should occur after the screening and scoping are complete but before the appraisal phase. After completion of public consultation, the borrower shall address the concerns expressed during this process, make appropriate changes in draft EIA and EMP, and prepare the final reports. Absent consulted. Assessment documentation and Action Plan, or non-technical summaries thereof, have to be made available to the public by the borrower for a reasonable minimum period in the relevant local language and in a culturally appropriate manner. Should occur early in the assessment process and in any event before the project construction commences, and on an ongoing basis Borrower will take account of and document the process and results of the consultation, including any actions agreed resulting from the consultation. It shall be part of Environment management system. Borrower shall receive and facilitate resolution of concerns and grievances about the projects social and environmental performance.
Post-consultation
Grievance mechanism
7. Comparison of Monitoring Mechanisms Financial institutions, borrowers, agencies setting the standards and the compliance authority are the major agencies involved in the environmental and social issues of project finance. The interactions and responsibilities are shown in Figure 2 below. The first part represents the scenario in the context of EPs. In addition to adhering to host country compliance requirements, the borrower has to adhere to the requirements stipulated in the EMP and covenanted in loan documentation. Borrowers take responsibility for providing external or independent monitoring.
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Comparison between the Equator Principles and Indian Legislation Figure 2: Roles, Responsibilities and Relations between Agencies Involved
Agency for Compliance Monitoring (EFPI/Independent Expert/ Expert from Borrower Financial Institutions
Clients
Environmental & Social issues of a Project
Standards and Regulation
Agency Providing Standards and guideline: Host country regulator and IFC/World Bank
Clients
Financial Institutions
Environmental & Social issues of a Project Agency Providing Standards and guideline (CPCB: State Body) Standards and Regulation Agency for Compliance Monitoring (EFPI/Independent Expert/ Expert from Borrower (State Body)
In the Indian context, standards are set by the CPCB and MoEF, and the regulation and compliance is performed by the same agencies; as representatives of the state/government they serve as a neutral third party. The banks are not required to spend any resource investigating E&S issues, since the state body ensures the initial risk assessment and later the compliance. As a result, banks face greater risk since they take no role in assessing the environmental risks of the project which may affect them later.
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Comparison between the Equator Principles and Indian Legislation Comparison of Standards Indian regulation Environmental The standards are divided into Effluent standards, Emission standards, Noise standards and Hazardous Waste Management. Details in Annexure 6. The quantitative comparison of these standards is provided in the next section. Health and safety Issues List of possible onsite and offsite risks due to a project are provided. Also a list of most probable hazards/risks is outlined by the MoEF. The details are in Annexure 8. Onsite risks Exposure to fugitive dust, noise, gases, thermal and other emissions Housekeeping practices requiring contact with solid and liquid toxic wastes Emission/spillage etc. from storage & handling Exposure to explosive material Exposure to toxic chemicals Offsite Risks Exposure to toxic releases from offsite storage or related activities Contamination of ground/drinking water due to accidental releases or normal release in combination with natural hazard Deposition of toxic pollutants in vegetation or other sinks and possible sudden releases due to accidental occurrences Health and safety Issues There are elaborate conditions, requirements and management systems for both occupational and community health and safety issues. The outline is given here. Occupational Health and Safety General Facility Design and Operation Communication and Training Physical Hazards Chemical Hazards Biological Hazards Radiological Hazards Personal Protective Equipment (PPE) Special Hazard Environments Construction and Decommissioning Monitoring Community Health and Safety Water Quality and Availability Structural Safety of Project Infrastructure Life and Fire Safety (L&FS) Traffic Safety Transport of Hazardous Materials Disease Prevention Emergency Preparedness and Response Construction and Decommissioning Equator Principles Environmental The standards are divided into Effluent standards, Emission standards, Noise standards and Hazardous Waste Management. Details in Annexure 7
Comparison of General Standard - Emission Standards The PPAH and the CPCB have set different standards for permissible emissions. Only one parameterparticulate matteris common in both; it can be seen from the table that the
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Comparison between the Equator Principles and Indian Legislation PPAH sets a more stringent standard of 50 and 100 mg/m whereas the Indian regulations permit up to 150 mg/m. Pollutant Particulate mater World Bank PPAH Indian CPCB standard Concentration (micrograms per cubic meter) 50 (units with 50 150 MWe input) 100 (units with < 50 MWe input) 50 70 150 Not to exceed 2000 50 125 25 4 Fibres/cc Dust <2 mg/Nm3 0.2 15 35 50 1% 10
Annual arithmetic mean Max. 24 hour average Nitrogen oxides, Max. 24 hour average Sulphur oxide Annual arithmetic mean Max. 24 hour average Total fluoride Asbestos Mercury Chlorine Hydrochloric acid vapor and mist Sulphuric acid mist Carbon monoxide Lead
Comparison of General Standard - Effluent Standards The pollutants and parameters are mostly the same in the case of both the PPAH and Indian standards. However the permissible limit in Indian standards is more in almost all pollutants in comparison to the PPAH standard, as shown in the following table. This implies that if the project has to be assessed by the PPAH guidelines under the EPs, more stringent PPAH standards must be followed. Pollutant pH BOD COD Oil and Grease TSS Metals Heavy metals, total Arsenic Cadmium Chromium World Bank PPAH Indian CPCB standard Concentration (micrograms per cubic meter) 6-9 5.5 - 9.0 50 30 250 250 10 10 50 100 10 0.1 0.1 0.2 2
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Comparison between the Equator Principles and Indian Legislation Hexavalent Total Copper Iron Lead Mercury Nickel Selenium Silver Zinc Cyanide Free Total Ammonia Fluoride Chlorine, total residual Phenols Phosphorus Sulphide Coliform bacteria Temperature increase 0.1 0.5 0.5 3.5 0.1 0.01 0.5 0.1 0.5 2 0.1 1 10 20 0.2 0.5 2 1 <400 MPN/100 ml Maximum 3 C 0.1 2 3 3 0.1 0.01 3 0.05 5 0.2 5 50 1 1 5 2 Maximum 5 C
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Comparison between the Equator Principles and Indian Legislation Industry Specific Comparisons The Central Pollution Control Board in India has developed standards for effluents, emissions, waste and noise taking into account different industries, their operations and the nature of pollutants generated. Similarly the Pollution Prevention and Abatement Handbook of the World Bank Group has an exhaustive list of industry- specific standards. The CPCB has identified 17 industries as the most polluting industries in India (Annexure 3 b). In this section, pollution standards for 6 such industries are compared.
1. Chlor Alkali (Caustic Soda) Industry

The Indian standards specify three major pollutants: mercury, chlorine and hydrochloric vapor and mist. For chlorine, the permissible standard is more than that of the PPAH. For effluents, all the parameters are different in the two cases; hence it is not possible to compare. Emission Standards Parameter Mercury Chlorine Hydrochloric vapour and mist Effluent Standards Parameter pH Total concentration of mercury in the final effluent Mercury bearing wastewater generation (flow) TSS COD AOX Sulfites Chlorine 2. Cement industry The emissions standards maintained by PPAH/IFC and CPCB for the cement industry focus on different parameters. The Indian regulation specifies the permissible level of particulate matter emitted whereas the IFC guidelines specific limits for maximum emissions, oxides, pH and suspended solids in effluent. PPAH/IFC 6-9 20 150 0.5 1 0.2 Indian Maximum Limits, mg/l 5.5 to 9.0 0.01 10 kl/tonne of caustic soda produced PPAH/IFC 3 Indian Emission limit (mg/Nm3) 0.2 15 35
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Emission Standards PPAH/IFC Particulate Matter pH Maximum emission sulfur oxides nitrogen oxides Suspended solid in effluent 3. Aluminium Industry For the aluminium industry, most of the parameters are again different except the level of particulate matter. The limit for particulate matter set by Indian regulation is up to 150 mg/cubic meter whereas in PPAH it is only 30 mg/cubic meter. Although the Indian regulation does not set any standards for liquid effluents, overall it has a much more detailed set of standards. Emission Standards IFC/World Bank Parameters Particulate matter Hydrogen Fluoride Total Fluoride VOCs Effluent Standards Pollutants pH TSS Fluoride Aluminium IFC/World Bank 6-9 50 20 0.2 Indian Milligram/liter Emission Limits 150 mg/Nm3 250 mg/Nm3 1 % max. H=14 (Q)0.3 where, Q is emission rate of SO2 in kg/hr and H is stack height in 30 1 2 20 Indian Emission limit (mg/Nm3) 150 0.3 kg/tonne of Aluminium 6-9 50 milligram/ Nm3 400 mg/Nm3 600 mg/Nm3 50 milligram/lit Indian Emission limit (mg/Nm3) 400 (capacity 200 t/ay) 250 (capacity>200 t/day) -
Indian Emission Standards for Aluminium industry Alumina Plant Pollutants Raw Material Handling Particulate Matter ii) Precipitation Areas Particulate Matter Calcinations Carbon Monoxide Stack Height
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Comparison between the Equator Principles and Indian Legislation metres Smelter Plant Green Anode Shop Anode Bake Oven Pot-room Particulate Matter Particulate Matter Total Fluoride (F) Particulate Matter VSS HSS PBSW PBCW Stack Height 150 mg/Nm3 150 mg/Nm3 0.3 kg/tonne of Aluminium 150 mg/Nm3 4.7 kg/tonne of Aluminium produced 6.0 kg/tonne of Aluminium produced 2.5 kg/tonne of Aluminium produced 1.0 kg/tonne of Aluminium produced H=14 (Q) 0.3 , Q -emission rate of SO2 in kg/hr, H -stack height in mts.
4. Pesticide industry The Indian regulation does not provide any emission standards for the pesticide industry. The effluent standards are stricter in comparison to PPAH for pH and include a few more parameters such as presence of tin, zinc, arsenic, cyanide, nitrate and phosphate. Emission Standards Parameter Particulate matter VOCs Chlorine/ Chloride Effluent Standards Parameter pH BOD COD AOX TSS Oils and grease Phenol Arsenic Chromium Copper Mercury Tin Zinc Arsenic as As Cyanide as CN Nitrate as NO3 PPAH/IFC 6-9 30 150 1 10 10 0.5 0.1 0.1 0.5 0.01 Indian milligram/liter 6.5-8.5 100 100 10 1.0 1.0 .01 0.1 1.0 0.2 0.2 50 PPAH/IFC 20 20 5 Indian Maximum Limits, mg/l -
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Comparison between the Equator Principles and Indian Legislation Phosphate as P Active ingredient (each) Bioassay test 0.05 5 Minimum 90% survival of fish after 96 hrs with 90% effluent and 10% dilution water.
5. Petroleum refining For the petroleum refining industry, PPAH guidelines are more comprehensive than Indian emission standards, which specify only sulfur oxide limits. The Indian effluent standards are stricter, although Indian regulation omits parameters such as COD, Chromium, Benzene, and Nitrogen. Emission Standard Parameter Particulate matter Nitrogen oxides Sulfur oxides PPAH/IFC 50 460 150 Indian Milligrams/normal cubic meter Distillation: 0.25 kg/tonne of feed Catalytic Cracker: 2.5 kg/tonne of feed Sulphur Recovery Unit: 120 kg/tonne of sulphur in the feed -
Nickel and vanadium (combined) Hydrogen sulfide Effluent Standards Parameter
2 152
PPAH/IFC 6-9 30 30 150 10 0.1 0.5 0.1 .5 .05 .05 1 10 3 C
pH TSS BOD COD Oil and Grease Chromium hexavalent Chromium total Lead Phenol Benzene Benzo(a)pyrene Sulfide Nitrogen (total) Temperature increase 6. Pharmaceuticals Industry
Indian milligrams per liter 6-8.5 0.5 15 10 1 0.5 5 C
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Comparison between the Equator Principles and Indian Legislation For the pharmaceutical industry, the PPAH has set emission standards, while Indian regulation has not. By contrast the Indian regulation stipulates limits on more metal residue effluents than the PPAH. It has additional parameters such as lead, cyanide, sulfide, phosphate, bioassay test whereas it lacks few parameters such as COD, AOX and Cadmium. For a few parameters like BOD, TSS, phenol and Arsenic the PPAH standards are stricter. Emission Standards Parameter Active ingredient (each) Particulate matter Total Class A Total Class B Benzene, vinyl chloride, dichloroethane (each) Effluent Standards Parameter pH BOD COD AOX TSS Oil and grease Phenol Arsenic Cadmium Chromium (hexavalent) Mercury Lead Cyanide Sulfides (as S) Phosphate (as P) Active ingredients Bioassay test PPAH/IFC 6-9 30 150 1 10 10 0.5 0.1 0.1 0.1 0.01 0.05 Indian milligrams per liter 6-8.5 100 100 10 1 0.2 0.1 0.01 0.1 0.1 2.0 5.0 0.5 90% survival after 96 hours in 10% effluent PPAH/IFC 0.15 20 20 80 5 Indian Milligrams/ cubic meter -
IV. CONCLUSION
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Comparison between the Equator Principles and Indian Legislation The Equator Principles as a set of guidelines have the advantage of flexibility. The requirements for assessing environmental and social risks and ensuring mitigation are well described, through compliance with host country laws, appropriate IFC or World Bank standards, legal covenants, and the independent monitoring of compliance throughout the duration of the project loan. The biggest cause for concern is the self-governing nature of the principles. In Kimberley Gaskins words, there is the carrot of responsible behaviour yet it might not be sufficient to ensure compliance without the stick of regulations and punitive punishments. 9 The Indian regulations are detailed and unambiguous. The responsible authorities, accountability systems and monitoring mechanisms for compliance are well placed. The regulations are mandatory and legal action can be taken against the party who violates the same. All the same, there is a high degree of non-compliance. Although the process appears sound, there are loopholes in implementation. In many cases the EIA reports are not authentic; the public consultation does not take place as per the act; and the EIA reports are so voluminous and technical that it is not clear what impacts the project will actually have on local communities and the surrounding environment. Corruption and poor monitoring on the one hand, and strict actions against the polluters on the other, make the system even more inefficient. Clearly the Indian system is not working as intended. Since India does not fall within the definition of a high-income OECD country, compliance with both host country legislation and with the relevant IFC and World Bank guidelines will be a requirement should the Principles be applied. It is important therefore to ascertain the extent to which Indian procedures and standards meet with the IFC and World Bank requirements. Several aspects such as the environment impact assessment and environment management plan are similar in both cases. However, the PPAH and IFC EHS standards are more stringent and more comprehensive than the Indian Standards. In fact, emission standards are not specified for many industries in Indian regulations. The PPAH sets very specific standards for a long list of industries; there are two different sets of guidelines, for example, for pesticide formulation and pesticide manufacturing, whereas the CPCB standards have defined a common set of standards for the pesticide industry.. Similarly the PPAH has different guidelines for different kinds of fertilizers while Indian regulation sets standards only for the fertilizer industry. Consequently, adopting the Equator Principles will likely propel Indian banks to develop a more detailed and uniform risk appraisal process for reducing environmental and social risks, which, in turn, should protect and improve banks reputation and public image. At the same time, compliance with the Principles may lead to additional responsibilities and demand more human and financial resources for banks and their clients. Indian banks will no doubt have to develop internal policies to govern EP implementation. However, with a significant portion of the global project finance market applying the Equator Principles, and with the challenges of managing environmental and social risks becoming clearer, Indian banks should take concrete steps to integrate sustainability concerns into their project finance operations.
Article A Question of Principles by Kimberley Gaskin, Infrastructure Magazine, July 2007. Source: http://www.equator-principles.com/documents/A_question.pdf, accessed on 6th Feb 08
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Comparison between the Equator Principles and Indian Legislation The Equator Principles offer an enhanced and broadly accepted framework to assist Indian banks in addressing the environmental and social impacts of project finance. The participation of Indian banks in drafting the next iteration of the Equator Principles would ensure guidelines that make sense for India. For example, the emission and effluent standards to which the EPs adhere are stricter than the current Indian standards; thus banks may find it difficult to ensure compliance with the EP standards from their clients. Applying the more stringent standards to established projects would be difficult, as cleaner technologies, improved efficiency and better recycling/waste management systems would require additional financial investment and time. Therefore, placing responsibility on banks for ensuring that their clients adhere to the stricter standards might be unreasonable in the present scenario. However, if Indian banks agree to accept guidelines that clearly delineate their roles and responsibilities in ensuring environmental and social risk mitigation and management (which seems to be missing in the present system where the bank plays a passive role of receiving an environmental clearance certificate from the client), this would enable banks to retain better control over project risks and would improve bank-client cooperation. Indian Banks might collectively agree upon a set of guidelines that provides direction for banks to develop capabilities to assess, mitigate, manage and monitor environmental risks in their project finance operations; establishes a system of active engagement with clients; and fosters transparency to ensure compliance.
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REFERENCES 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. www.equator-principles.com http://cpcb.nic.in http://www.envfor.nic.in http://edugreen.teri.res.in www.planningcommission.nic.in http://www.mppcb.nic.in http://kspcb.kar.nic.in http://wmc.nic.in http://www.rbs.com/content/corporate_responsibility/policies/downloads/equato r_principles.pdf#search=%22equator%20principles%20filetype%3Apdf %20standards%22 http://www.banktrack.org http://www.environmental-finance.com/2006/0607jul/equator.htm http://www.environmentaldefense.org www.dams.org www.globalpolicy.org www.personal.barclays.co.uk www.ifc.org www.answers.com
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Comparison between the Equator Principles and Indian Legislation Annexure 1(a): The Equator Principles PREAMBLE Project financing, a method of funding in which the lender looks primarily to the revenues generated by a single project both as the source of repayment and as security for the exposure, plays an important role in financing development throughout the world.1 Project financiers may encounter social and environmental issues that are both complex and challenging, particularly with respect to projects in the emerging markets. The Equator Principles Financial Institutions (EPFIs) have consequently adopted these Principles in order to ensure that the projects we finance are developed in a manner that is socially responsible and reflect sound environmental management practices. By doing so, negative impacts on project-affected ecosystems and communities should be avoided where possible, and if these impacts are unavoidable, they should be reduced, mitigated and/or compensated for appropriately. We believe that adoption of and adherence to these Principles offers significant benefits to ourselves, our borrowers and local stakeholders through our borrowers engagement with locally affected communities. We therefore recognise that our role as financiers affords us opportunities to promote responsible environmental stewardship and socially responsible development. As such, EPFIs will consider reviewing these Principles from time-to-time based on implementation experience, and in order to reflect ongoing learning and emerging good practice. These Principles are intended to serve as a common baseline and framework for the implementation by each EPFI of its own internal social and environmental policies, procedures and standards related to its project financing activities. We will not provide loans to projects where the borrower will not or is unable to comply with our respective social and environmental policies and procedures that implement the Equator Principles. SCOPE The Principles apply to all new project financings globally with total project capital costs of US$10 million or more, and across all industry sectors. In addition, while the Principles are not intended to be applied retroactively, we will apply them to all project financings covering expansion or upgrade of an existing facility where changes in scale or scope may create significant environmental and/or social impacts, or significantly change the nature or degree of an existing impact. The Principles also extend to project finance advisory activities. In these cases, EPFIs commit to make the client aware of the content, application and benefits of applying the Principles to the anticipated project, and request that the client communicate to the EPFI its intention to adhere to the requirements of the Principles when subsequently seeking financing. STATEMENT OF PRINCIPLES EPFIs will only provide loans to projects that conform to Principles 1-9 below: Principle 1: Review and Categorization 30
When a project is proposed for financing, the EPFI will, as part of its internal social and environmental review and due diligence, categorise such project based on the magnitude of its potential impacts and risks in accordance with the environmental and social screening criteria of the International Finance Corporation (IFC) (Exhibit I). Principle 2: Social and Environmental Assessment For each project assessed as being either Category A or Category B, the borrower has conducted a Social and Environmental Assessment (Assessment) process2 to address, as appropriate and to the EPFIs satisfaction, the relevant social and environmental impacts and risks of the proposed project (which may include, if relevant, the illustrative list of issues as found in Exhibit II). The Assessment should also propose mitigation and management measures relevant and appropriate to the nature and scale of the proposed project. Principle 3: Applicable Social and Environmental Standards For projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, the Assessment will refer to the then applicable IFC Performance Standards (Exhibit III) and the then applicable Industry Specific EHS Guidelines (EHS Guidelines) (Exhibit IV). The Assessment will establish to a participating EPFIs satisfaction the project's overall compliance with, or justified deviation from, the respective Performance Standards and EHS Guidelines. The regulatory, permitting and public comment process requirements in High-Income OECD Countries, as defined by the World Bank Development Indicators Database, generally meet or exceed the requirements of the IFC Performance Standards (Exhibit III) and EHS Guidelines (Exhibit IV). Consequently, to avoid duplication and streamline EPFI's review of these projects, successful completion of an Assessment (or its equivalent) process under and in compliance with local or national law in High-Income OECD Countries is considered to be an acceptable substitute for the IFC Performance Standards, EHS Guidelines and further requirements as detailed in Principles 4, 5 and 6 below. For these projects, however, the EPFI still categorises and reviews the project in accordance with Principles 1 and 2 above. The Assessment process in both cases should address compliance with relevant host country laws, regulations and permits that pertain to social and environmental matters. Principle 4: Action Plan and Management System For all Category A and Category B projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, the borrower has prepared an Action Plan (AP)3 which addresses the relevant findings, and draws on the conclusions of the Assessment. The AP will describe and prioritise the actions needed to implement mitigation measures, corrective actions and monitoring measures necessary to manage the impacts and risks identified in the Assessment. Borrowers will build on, maintain or establish a Social and Environmental Management System that addresses the management of these impacts, risks, and corrective actions required to comply with applicable host country social and environmental laws and 31
Comparison between the Equator Principles and Indian Legislation regulations, and requirements of the applicable Performance Standards and EHS Guidelines, as defined in the AP. For projects located in High-Income OECD countries, EPFIs may require development of an Action Plan based on relevant permitting and regulatory requirements, and as defined by host-country law. Principle 5: Consultation and Disclosure For all Category A and, as appropriate, Category B projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, the government, borrower or third party expert has consulted with project affected communities in a structured and culturally appropriate manner.4 For projects with significant adverse impacts on affected communities, the process will ensure their free, prior and informed consultation and facilitate their informed participation as a means to establish, to the satisfaction of the EPFI, whether a project has adequately incorporated affected communities concerns. In order to accomplish this, the Assessment documentation and AP, or non-technical summaries thereof, will be made available to the public by the borrower for a reasonable minimum period in the relevant local language and in a culturally appropriate manner. The borrower will take account of and document the process and results of the consultation, including any actions agreed resulting from the consultation. For projects with adverse social or environmental impacts, disclosure should occur early in the Assessment process and in any event before the project construction commences, and on an ongoing basis. Principle 6: Grievance Mechanism For all Category A and, as appropriate, Category B projects located in non-OECD countries, and those located in OECD countries not designated as High-Income, as defined by the World Bank Development Indicators Database, to ensure that consultation, disclosure and community engagement continues throughout construction and operation of the project, the borrower will, scaled to the risks and adverse impacts of the project, establish a grievance mechanism as part of the management system. This will allow the borrower to receive and facilitate resolution of concerns and grievances about the projects social and environmental performance raised by individuals or groups from among project-affected communities. The borrower will inform the affected communities about the mechanism in the course of its community engagement process and ensure that the mechanism addresses concerns promptly and transparently, in a culturally appropriate manner, and is readily accessible to all segments of the affected communities. Principle 7: Independent Review For all Category A projects and, as appropriate, for Category B projects, an independent social or environmental expert not directly associated with the borrower will review the Assessment, AP and consultation process documentation in order to assist EPFI's due diligence, and assess Equator Principles compliance.
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Comparison between the Equator Principles and Indian Legislation Principle 8: Covenants An important strength of the Principles is the incorporation of covenants linked to compliance. For Category A and B projects, the borrower will covenant in financing documentation: to comply with all relevant host country social and environmental laws, regulations and permits in all material respects; to comply with the AP (where applicable) during the construction and operation of the project in all material respects; to provide periodic reports in a format agreed with EPFIs (with the frequency of these reports proportionate to the severity of impacts, or as required by law, but not less than annually), prepared by in-house staff or third party experts, that i) document compliance with the AP (where applicable), and ii) provide representation of compliance with relevant local, state and host country social and environmental laws, regulations and permits; to decommission the facilities, where applicable and appropriate, in accordance with an agreed decommissioning plan. Where a borrower is not in compliance with its social and environmental covenants, EPFIs will work with the borrower to bring it back into compliance to the extent feasible, and if the borrower fails to re-establish compliance within an agreed grace period, EPFIs reserve the right to exercise remedies, as they consider appropriate. Principle 9: Independent Monitoring and Reporting To ensure ongoing monitoring and reporting over the life of the loan, EPFIs will, for all Category A projects, and as appropriate, for Category B projects, require appointment of an independent environmental and/or social expert, or require that the borrower retain qualified and experienced external experts to verify its monitoring information which would be shared with EPFIs. Principle 10: EPFI Reporting Each EPFI adopting the Equator Principles commits to report publicly at least annually about its Equator Principles implementation processes and experience, taking into account appropriate confidentiality considerations. Exhibit I: Categorization of projects As part of their review of a projects expected social and environmental impacts, EPFIs use a system of social and environmental categorization, based on IFCs environmental and social screening criteria, to reflect the magnitude of impacts understood as a result of assessment. These categories are: Category A Projects with potential significant adverse social or environmental impacts that are diverse, irreversible or unprecedented;
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Comparison between the Equator Principles and Indian Legislation Category B Projects with potential limited adverse social or environmental impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures; and Category C Projects with minimal or no social or environmental impacts. Exhibit II: Illustrative list of potential social and environmental issues to be addressed in the Social and Environmental Assessment documentation In the context of the business of the project, the Assessment documentation will address, where applicable, the following issues: a) Assessment of the baseline social and environmental conditions b) Consideration of feasible environmentally and socially preferable alternatives c) Requirements under host country laws and regulations, applicable international treaties and agreements d) Protection of human rights and community health, safety and security (including risks, impacts and management of projects use of security personnel) e) Protection of cultural property and heritage f) Protection and conservation of biodiversity, including endangered species, sensitive ecosystems in modified, natural, critical habitats, and identification of legally protected areas g) Sustainable management and use of renewable natural resources (including sustainable resource management through appropriate independent certification systems) h) Use and management of dangerous substances i) Major hazards assessment and management j) Labor issues (including the four core labor standards), and occupational health and safety k) Fire prevention and life safety l) Socio-economic impacts m) Land acquisition and involuntary resettlement n) Impacts on affected communities, and disadvantaged or vulnerable groups o) Impacts on indigenous peoples, and their unique cultural systems and values p) Cumulative impacts of existing projects, the proposed project, and anticipated future projects q) Consultation and participation of affected parties in the design, review and implementation of the project r) Efficient production, delivery and use of energy s) Pollution prevention and waste minimisation, pollution controls (liquid effluents and air emissions) and solid and chemical waste management Note: The above list is for illustrative purposes only. The Social and Environmental Assessment process of each project may or may not identify all issues noted above, or be relevant to every project. Exhibit III: IFC Performance Standards on Social and Environmental Sustainability As of April 30, 2006, the following list of IFC Performance Standards was applicable: Performance Standard 1: Social & Environmental Assessment & Management System Performance Standard 2: Labor and Working Conditions Performance Standard 3: Pollution Prevention and Abatement 34
Comparison between the Equator Principles and Indian Legislation Performance Standard 4: Community Health, Safety and Security Performance Standard 5: Land Acquisition and Involuntary Resettlement Performance Standard 6: Biodiversity Conservation and Sustainable Natural Resource Management Performance Standard 7: Indigenous Peoples Performance Standard 8: Cultural Heritage Exhibit IV: Industry-Specific Environmental, Health and Safety (EHS) Guidelines EPFIs will utilise the appropriate environmental, health and safety (EHS) guidelines used by IFC which are now in place, and as may be amended from time-to-time. IFC is using two complementary sets of EHS Guidelines available at the IFC website (www.ifc.org/enviro). These sets consist of all the environmental guidelines contained in Part III of the World Banks Pollution Prevention and Abatement Handbook (PPAH) which went into official use on July 1, 1998 and a series of environmental, health and safety guidelines published on the IFC website between 1991 and 2003. Ultimately new guidelines, incorporating the concepts of cleaner production and environmental management systems, will be written to replace this series of industry sector, PPAH and IFC guidelines. Where no sector specific guideline exists for a particular project then the PPAHs General Environmental Guidelines and the IFC Occupational Health and Safety Guidelines (2003) are applied, with modifications as necessary to suit the project. The table below lists both the World Bank Guidelines and the IFC Guidelines as of March 1, 2006. Industry Specific EHS Guidelines: World Bank Guidelines (PPAH) 1. Aluminum Manufacturing 2. Base Metal and Iron Ore Mining 3. Breweries 4. Cement Manufacturing IFC Guidelines 1. Airports 2. Ceramic Tile Manufacturing 3. Construction Materials Plants 4. Electric Power Transmission & Distribution 5. Chlor-Alkali Plants 5. Fish Processing 6. Coal Mining and Production 6. Food and Beverage Processing 7. Coke Manufacturing 7. Forestry Operations: Logging 8. Copper Smelting 8. Gas Terminal Systems 9. Dairy Industry 9. Geothermal Projects 10. Dye Manufacturing 10. Hazardous Materials Management 11. Electronics Manufacturing 11. Health Care 12. Electroplating Industry 12. Life & Fire Safety 13. Foundries 13. Occupational Health and Safety 14. Fruit and Vegetable Processing 14. Office Buildings 15. General Environmental Guidelines 15. Offshore Oil & Gas 16. Glass Manufacturing 16. Polychlorinated Biphenyls (PCBs) 17. Industrial Estates 17. Pesticide Handling and Application 18. Iron and Steel Manufacturing 18. Plantations 19. Lead and Zinc Smelting 19. Port and Harbor Facilities 20. Meat Processing and Rendering 20. Rail Transit Systems 35
Comparison between the Equator Principles and Indian Legislation 21. Mini Steel Mills 21. Roads and Highways 22. Mixed Fertilizer Plants 22. Telecommunications 23. Monitoring 23. Tourism and Hospitality Development 24. Nickel Smelting and Refining 24. Waste Management Facilities 25. Nitrogenous Fertilizer Plants 25. Wastewater Reuse 26. Oil and Gas Development (Onshore) 26. Wildland Management 27. Pesticides Formulation 27. Wind Energy Conversion Systems 28. Pesticides Manufacturing 28. Wood Products Industries 29. Petrochemicals Manufacturing 30. Petroleum Refining 31. Pharmaceutical Manufacturing 32. Phosphate Fertilizer Plants 33. Printing Industry 34. Pulp and Paper Mills 35. Sugar Manufacturing 36. Tanning and Leather Finishing 37. Textiles Industry 38. Thermal Power Guidelines for New Plants 39. Thermal Power Rehabilitation of Existing Plants 40. Vegetable Oil Processing 41. Wood Preserving Industry
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Comparison between the Equator Principles and Indian Legislation Annexure 1(b): Significant Changes in the Latest Revision of EPs The Equator Principles Financial Institutions (EPFIs) launched a revised version of the Equator Principles (EPs) on 6 July 2006. Significant changes to the Equator Principles include: 1. They now apply to projects costing upwards of US$ 10 million instead of US$ 50 million. 2. They apply to projects covering expansion or upgrade of an existing facility, and extend to project finance advisory activities (formerly they applied to new projects only). 3. They refer to the recently revised IFC Performance Standards in addition to the applicable Industry Specific EHS Guidelines (IFC is currently updating these guidelines and the roll-out will be over the next 6-9 months, in the interim, the environmental, health and safety (EHS) guidelines are those of the 1998 Pollution Prevention and Abatement Handbook). 4. They clarify how the EPs should be applied in countries that are not defined as low and middle income by the World Bank. Under the old EPs projects in high income countries would have had to make reference to the IFCs EHS Guidelines, but not the old IFC Operational Policies. Under the revised EPs, projects in non-OECD (Organisation for Economic Co-operation and Development), and OECD countries that are not high income, need to make reference to both the new IFC Performance Standards and the applicable EHS Guidelines (2). 5. They clarify requirements on consultation and disclosure, independent review and covenants. 6. They include new principles on grievance mechanisms for projects as well as public reporting by EPFIs on the implementation of the EPs.
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Annexure 1(c): List of EPFIs (As of February 2008) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. ABN AMRO Bank, N.V. ANZ Banco Bradesco Banco de la Repblica Oriental del Uruguay Banco do Brasil Banco Galicia Banco Ita BankMuscat Bank of America BMO Financial Group BTMU Barclays plc BBVA BES Group Calyon Caja Navarra CIBC CIFI Citigroup Inc. CORPBANCA Credit Suisse Group Dexia Group Dresdner Bank E+Co EKF Export Development Canada FMO Fortis HBOS HSBC Group 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. HypoVereinsbank ING Group Intesa Sanpaolo JPMorgan Chase KBC la Caixa Lloyds TSB Manulife MCC Mizuho Corporate Bank Millennium bcp National Australia Bank Nordea Nedbank Group Rabobank Group Royal Bank of Canada Scotiabank SEB Societe Generale Standard Chartered Bank SMBC TD Bank Financial Group The Royal Bank of Scotland Unibanco Wachovia Wells Fargo WestLB AG Westpac Banking Corporation
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Annexure 1 (d): Top Project Finance EPFI in 1st Half of 2006
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Annexure 1 (e): Top Project Finance Non-EPFI in 1st Half of 2006
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Annexure 2: List of environmental legislation in India 41
Comparison between the Equator Principles and Indian Legislation 1. General Legislation 1986 - The Environment (Protection) Act authorizes the central government to protect and improve environmental quality, control and reduce pollution from all sources, and prohibit or restrict the setting and /or operation of any industrial facility on environmental grounds. 1986 - The Environment (Protection) Rules lay down procedures for setting standards of emission or discharge of environmental pollutants. 1989 - The objective of Hazardous Waste (Management and Handling) Rules is to control the generation, collection, treatment, import, storage, and handling of hazardous waste. 1989 - The Manufacture, Storage, and Import of Hazardous Rules define the terms used in this context, and sets up an authority to inspect, once a year, the industrial activity connected with hazardous chemicals and isolated storage facilities. 1989 - The Manufacture, Use, Import, Export, and Storage of hazardous Microorganisms/ Genetically Engineered Organisms or Cells Rules were introduced with a view to protect the environment, nature, and health, in connection with the application of gene technology and microorganisms. 1991 - The Public Liability Insurance Act and Rules and Amendment, 1992 was drawn up to provide for public liability insurance for the purpose of providing immediate relief to the persons affected by accident while handling any hazardous substance. 1995 - The National Environmental Tribunal Act has been created to award compensation for damages to persons, property, and the environment arising from any activity involving hazardous substances. 1997 - The National Environment Appellate Authority Act has been created to hear appeals with respect to restrictions of areas in which classes of industries etc. are carried out or prescribed subject to certain safeguards under the EPA. 1998 - The Biomedical waste (Management and Handling) Rules is a legal binding on the health care institutions to streamline the process of proper handling of hospital waste such as segregation, disposal, collection, and treatment. 1999 - The Environment (Siting for Industrial Projects) Rules, 1999 lay down detailed provisions relating to areas to be avoided for siting of industries, precautionary measures to be taken for site selecting as also the aspects of environmental protection which should have been incorporated during the implementation of the industrial development projects. 2000 - The Municipal Solid Wastes (Management and Handling) Rules, 2000 apply to every municipal authority responsible for the collection, segregation, storage, transportation, processing, and disposal of municipal solid wastes.
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Comparison between the Equator Principles and Indian Legislation 2000 - The Ozone Depleting Substances (Regulation and Control) Rules have been laid down for the regulation of production and consumption of ozone depleting substances. 2001 - The Batteries (Management and Handling) Rules, 2001 rules shall apply to every manufacturer, importer, re-conditioner, assembler, dealer, auctioneer, consumer, and bulk consumer involved in the manufacture, processing, sale, purchase, and use of batteries or components so as to regulate and ensure the environmentally safe disposal of used batteries. 2002 - The Noise Pollution (Regulation and Control) (Amendment) Rules lay down such terms and conditions as are necessary to reduce noise pollution, permit use of loud speakers or public address systems during night hours (between 10:00 p.m. to 12:00 midnight) on or during any cultural or religious festive occasion 2002 - The Biological Diversity Act is an act to provide for the conservation of biological diversity, sustainable use of its components, and fair and equitable sharing of the benefits arising out of the use of biological resources and knowledge associated with it 2. Forest and wildlife 1927 - The Indian Forest Act and Amendment, 1984, is one of the many surviving colonial statutes. It was enacted to consolidate the law related to forest, the transit of forest produce, and the duty leviable on timber and other forest produce. 1972 - The Wildlife Protection Act, Rules 1973 and Amendment 1991 provides for the protection of birds and animals and for all matters that are connected to it whether it be their habitat or the waterhole or the forests that sustain them. 1980 - The Forest (Conservation) Act and Rules, 1981, provides for the protection of and the conservation of the forests. 3. Water 1882 - The Easement Act allows private rights to use a resource that is, groundwater, by viewing it as an attachment to the land. It also states that all surface water belongs to the state and is a state property. 1897 - The Indian Fisheries Act establishes two sets of penal offences whereby the government can sue any person who uses dynamite or other explosive substance in any way (whether coastal or inland) with intent to catch or destroy any fish or poisonous fish in order to kill. 1956 - The River Boards Act enables the states to enroll the central government in setting up an Advisory River Board to resolve issues in inter-state cooperation. 1970 - The Merchant Shipping Act aims to deal with waste arising from ships along the coastal areas within a specified radius.
43
Comparison between the Equator Principles and Indian Legislation 1974 - The Water (Prevention and Control of Pollution) Act establishes an institutional structure for preventing and abating water pollution. It establishes standards for water quality and effluent. Polluting industries must seek permission to discharge waste into effluent bodies. The CPCB (Central Pollution Control Board) was constituted under this act. 1977 - The Water (Prevention and Control of Pollution) Cess Act provides for the levy and collection of cess or fees on water consuming industries and local authorities. 1978 - The Water (Prevention and Control of Pollution) Cess Rules contains the standard definitions and indicate the kind of and location of meters that every consumer of water is required to affix. 1991 - The Coastal Regulation Zone Notification puts regulations on various activities, including construction, are regulated. It gives some protection to the backwaters and estuaries. 4. Air 1948 The Factories Act and Amendment in 1987 was the first to express concern for the working environment of the workers. The amendment of 1987 has sharpened its environmental focus and expanded its application to hazardous processes. 1981 - The Air (Prevention and Control of Pollution) Act provides for the control and abatement of air pollution. It entrusts the power of enforcing this act to the CPCB . 1982 - The Air (Prevention and Control of Pollution) Rules defines the procedures of the meetings of the Boards and the powers entrusted to them. 1982 - The Atomic Energy Act deals with the radioactive waste. 1987 - The Air (Prevention and Control of Pollution) Amendment Act empowers the central and state pollution control boards to meet with grave emergencies of air pollution. 1988 - The Motor Vehicles Act states that all hazardous waste is to be properly packaged, labeled, and transported. Annexure 3 (a): Projects requiring environmental clearance from central govt10 1. Nuclear Power and related projects such as Heavy Water Plants, nuclear fuel complex, Rare Earths. 2. River Valley projects including hydel power, major Irrigation and their combination including flood control. 3. Ports, Harbours, Airports (except minor ports and harbours). 4. Petroleum Refineries including crude and product pipelines. 5. Chemical Fertilizers (Nitrogenous and Phosphatic other than single superphosphate).
10
Source: Schedule, EIA Notification 2006, Ministry of Environment and Forestry
44
Comparison between the Equator Principles and Indian Legislation 6. Pesticides (Technical). 7. Petrochemical complexes (Both Olefinic and Aromatic) and Petro-chemical intermediates such as DMT, Caprolactam, LAB etc.and production of basic plastics such as LLDPE, HDPE, PP, PVC. 8. Bulk drugs and pharmaceuticals. 9. Exploration for oil and gas and their production, transportation and storage. 10. Synthetic Rubber. 11. Asbestos and Asbestos products. 12. Hydrocyanic acid and its derivatives. 13. (a) Primary metallurgical industries such as production of Iron and Steel, Aluminium, Copper, Zinc, Lead and Ferro Alloys (b) Electric arc furnaces (Mini Steel Plants). 14. Chlor alkali industry. 15. Integrated paint complex including manufacture of resins and basic raw materials required in the manufacture of paints. 16. Viscose Staple fibre and filament yarn. 17. Storage batteries integrated with manufacture of oxides of lead and lead antimony alloys. 18. All tourism projects between 200m500 metres of High Water Line and at locations with an elevation of more than 1000 metres with investment of more than Rs.5 crores. 19. Thermal Power Plants. 20. Mining projects (major minerals) with leases more than 5 hectares. 21. Highway Projects (except projects on improvement work including widening and strengthening of roads with marginal land acquisition along existing alignments provided it does not pass through ecologically sensitive areas) 22. Tarred Roads in the Himalayas and or Forest areas. 23. Distilleries. 24. Raw Skins and Hides 25. Pulp, paper and newsprint. 26. Dyes. 27. Cement. 28. Foundries (individual) 29. Electroplating 30. Meta amino phenol
45
Comparison between the Equator Principles and Indian Legislation Annexure 3 (b): List of 17 Major Polluting Industries in India11 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Aluminium Caustic soda (Chlore alkali) WB Cement WB Copper and zinc smelting WB Distilleries Dye and dye intermediates Fertilizer industry Iron and steel WB Oil refineries petroleum refining WB Pesticides WB Petrochemicals WB Pharmaceuticals WB Pulp and paper WB Sugar WB Tanneries WB Thermal power plants Zinc
11
Source: http://cpcb.nic.in/Charter/charter.htm, http://pib.nic.in/feature/feyr2003/fjun2003/f030620031.html
46
Comparison between the Equator Principles and Indian Legislation Annexure 4: Checklist of Information to be furnished before EIA 1. Basic information on the project 2. Activities (general environmental information) Use of natural resource for construction and operation Risk to human health Solid waste Release of pollutants, hazardous and toxic substances to Air Noise pollution, vibration, light and heat Contamination of land or water Risk of accidents and safety issues Any consequential development which could lead to environmental effects 3. Environment Sensitivity in particular cases Protected areas Ecologically sensitive areas Water bodies State, national boundaries Places used for public access, recreation, tourist or pilgrim areas Sensitive man-made land uses (hospitals, schools etc) Areas containing important, scarce resources Over polluted areas Areas susceptible to natural hazards 4. Proposed Terms of References (ToR)
47
Comparison between the Equator Principles and Indian Legislation Annexure 5: Procedure for Public Hearing Process of Public Hearing Whoever apply for environmental clearance of projects, shall submit to the concerned State Pollution Control Board twenty sets of the following documents namely: (i) (ii) (iii) (iv) An executive summary containing the salient features of the project both in English as well as local language. Form XIII prescribed under Water (Prevention and Control of Pollution) Rules, 1975 where discharge of sewage, trade effluents, treatment of water in any form, is required. Form I prescribed under Air (Prevention and Control of Pollution) Under Territory Rules, 1983 where discharge of emissions are involved in any process, operation or industry. Any other information or document which is necessary in the opinion of the Board for their final disposal of the application.
Notice of Public Hearing The State Pollution Control Board shall issue a notice for environmental public hearing which shall be published in at least two newspapers widely circulated in the region around the project, one of which shall be in the vernacular language of the locality concerned. State Pollution Control Board shall mention the date, time and place of public hearing. Suggestions, views, comments and objections of the public shall be invited within thirty days from the date of publication of the notification. All persons including bona fide residents, environmental groups and others located at the project site/sites of displacement/sites likely to be affected can participate in the public hearing. They can also make oral/written suggestions to the State Pollution Control Board. For the purpose of the paragraph person means: (a) any person who is likely to be affected by the grant of environmental clearance; (b) any person who owns or has control over the project with respect to which an application has been submitted for environmental clearance; (c) any association of persons whether incorporated or not like to be affected by the project and/or functioning in the filed of environment; (d) any local authority within any part of whose local limits is within the neighbourhood, wherein the project is proposed to be located. Composition of public hearing panel The composition of the Public Hearing Panel may consist of: (i) Representative of State Pollution Control Board; (ii) District Collector or his nominee; (iii) Representative of State Government dealing with the subject; (iv) Representative of Department of the State Government dealing with Environment; 48
Comparison between the Equator Principles and Indian Legislation (v) Not more than three representatives of the local bodies such as municipalities or panchayats; (vi) Not more than three senior citizens of the area nominated by the District Collector. Access to the Executive Summary The concerned persons shall be provided access to the Executive Summaryof the project at the following places, namely:

District Collector Office; District Industry Centre; In the Office of the Chief Executive Officers of Zila Praishad or Commissioner of the Municipal Corporation/Local body as the case may be; In the head office of the concerned State Pollution Control Board and its concerned Regional Office. In the concerned Department of the State Government dealing with the subject of environment.
Time period for completion of public hearing The public hearing shall be completed within a period of 60 days from the date of receipt of complete documents as required under paragraph 1.
49
Comparison between the Equator Principles and Indian Legislation Annexure 6: General Environmental Standards in Indian Context A. Effluents
Parameter Suspended max. solids mg/l, Inland surface water 100 Public sewers 600 Land for irrigation 200 Marine/coastalareas (a) For process waste water (b) For cooling water effluent 10 per cent above total suspended matter of influent. (a) Floatable solids, solidsmax. 3 mm (b) Settleable solids, max 856 microns 5.5 to 9.0 shall not exceed 5oCabove the receiving water temperature 20 1.0 50 100 5.0 100 250 0.2 0.01 2.0 2.0 1.0 2.0 3.0 15 0.05 5.0 0.2 15 5.0 5.0
Particle size of suspended shall pass 850 solids micron IS Sieve pH value Temperature 5.5 to 9.0 shall not exceed 5oC above the receiving water temperature Oil and grease, mg/l max, 10 Total residual chlorine, 1.0 mg/l max Ammonical nitrogen (as 50 N),mg/l, max. Total kjeldahl nitrogen (as 100 N);mg/l, max. mg/l, max. Free ammonia (as NH3), 5.0 mg/l,max. Biochemical oxygen 30 demand (3 days at 27oC), mg/l, max. Chemical oxygen demand, 250 mg/l, max. Arsenic(as As). 0.2 Mercury (As Hg), mg/l, 0.01 max. Lead (as Pb) mg/l, max 0.1 Cadmium (as Cd) mg/l, 2.0 max Hexavalent chro-mium (as 0.1 Cr + 6),mg/l, max. Total chromium (as Cr) 2.0 mg/l, max. Copper (as Cu)mg/l, max. 3.0 Zinc (as Zn) mg/l, max. 5.0 Selenium (as Se) 0.05 Nickel (as Ni) mg/l, max. 3.0 Cyanide (as CN) mg/l, 0.2 max. Fluoride (as F) mg/l, max. 2.0 Dissolved phos- phates (as 5.0 P),mg/l, max. Sulphide (as S) mg/l, max. 2.0 Phenolic compounds (as 1.0
5.5 to 9.0
5.5 to 9.0
20 50 350 0.2 0.01 1.0 1.0 2.0 2.0 3.0 15 0.05 3.0 2.0 15 5.0
10 100 0.2 0.2 -
50

C6H50H)mg/l, max. Radioactive materials: (a) Alpha emitters micro curie mg/l, max. (b)Beta emittersmicro curie mg/l Bio-assay test
10-7
10-7
10-8
10-7
Manganese Iron (as Fe) Vanadium (as V) Nitrate Nitrogen
10-6 10-6 10-7 90% suivival of fish 90% suivival of 90% suivival of after 96 hours in fish after 96 fish after 96 100% effluent hours in 100% hours in 100% effluen effluent 2 mg/l 2 mg/l 3mg/l 3mg/l 0.2mg/l 0.2mg/l 10 mg/l -
10-6 90% suivival of fish after 96 hours in 100% effluen 2 mg/l 3mg/l 0.2mg/l 20 mg/l
B: Wastewater Generation Standards

Industry Integrated Iron & Steel Sugar Pulp & Paper Industries (a) Large pulp & paper (i) Pulp & paper (ii) Rayon grade pulp (b) Small pulp & paper (i) Agro-residue based (ii) Waste paper based Fermentation Industries (a) Maltry (b) Brewer (c) Distillery Caustic Soda (a) Membrane cell process (b) Mercury cell process Quantum 16 m3/tonne of finished steel 0.4m3/tonne of cane crushed 175 m3/tonne of paper produced 150 m3/tonne of paper 150 m3/tonne of paper produced 50 m3/tonne of paper produced 3.5 m3/tonne of grain processed 0.25 m3/KL of beer produced 12 M3/KL of alcohol produced 1m3/tonne of caustic soda produced excluding cooling tower blowdown 4 m3/tonne of caustic soad produced (mercury bearing). 10% below down permitted for cooling tower.
Textile Industries: Man-made fibre (i) Nylon & Polyster 120 m3/tonne of fibre produced (ii) Voscose Staple Fibre 150 m3/tonne of product (iii) Viscose Filament Yarn 500 m3/tonne of product Tanneries 28 m3/tonne of raw hide Starch Glucose and related products 8 m3/tonne of maize crushed Dairy 3 m3/kl of Milk Natural rubber processing industry Fertiliser 4 m3/tonne of rubber (a) Straight nitrogenous fertiliser (b) Straight phosphatic fertiliser (SSP & TSP) excluding manufacture of any acid (c) Complex fertiliser Biochemical oxygen demand (3 days at 27oC), mg/l, max.
51

5 m3/tonne of urea orequivalent produced (a) Straight nitrogenous fertiliser (b)Straight phosphatic fertiliser (SSP & TSP) excluding manufacture of any acid (c)Complex fertiliser Standards of nitrogenous and phospathic fertilisers are applicable depending on the primary product 0.5 m3/tonne of SSP/TSP
C: Emission Standards
Parameter Particulate matter (PM) Total fluoride Asbestos Mercury Chlorine Hydrochloric acid vapour and mist Sulphuric acid mist Carbon monoxide Lead Concentration not to exced (in mg/Nm3) 150 25 4 Fibres/cc and dust should not be more than 2 mg/Nm3 0.2 15 35 50 1% 10
Annexure 7: General Environmental Standards as per PPAH, World Bank Emission standards
52
Comparison between the Equator Principles and Indian Legislation Parameter/ Pollutant Particulate mater Nitrogen oxides, as NO2 Coal fired Oil fired Gas fired Sulphur oxide Ambient Air Conditions Pollutant Particulate mater Annual arithmetic mean Max. 24 hour average Nitrogen oxides, Max. 24 hour average Sulphur oxide Annual arithmetic mean Max. 24 hour average Effluent Standards Pollutant/Parameter pH BOD COD Oil and Grease TSS Metals Heavy metals, total Arsenic Cadmium Chromium Hexavalent Total Copper Iron Lead Mercury Nickel Selenium Silver Zinc Cyanide Free Total Ammonia Limit 6-9 50 250 10 50 10 0.1 0.1 0.1 0.5 0.5 3.5 0.1 0.01 0.5 0.1 0.5 2 0.1 1 10 53 Concentration (micrograms per cubic meter) 50 70 150 Not to exceed 2000 50 125 Limit (milligrams per normal cubic meter) 750 (260 ng/J) 460 (130 ng/J) 320 (86 ng/J) Not to exceed 2000
Comparison between the Equator Principles and Indian Legislation Fluoride Chlorine, total residual Phenols Phosphorus Sulphide Coliform bacteria Temperature increase 20 0.2 0.5 2 1 <400 MPN/100 ml Maximum 3 C
Annexure 8: Risks to Environment and Human Health (Indian Context) Impacts to environment and human health can occur from accidents (both on-site and offsite) or through general environmental degradation. Thus the potential for human/
54
Comparison between the Equator Principles and Indian Legislation environment exposure and the type of risks inherent in a particular activity should be considered. List of Activities involving Hazards/Risks Activity Schedule I of EIA Notification Nuclear Power Plant River Valley Project Air Ports, Ports/Harbours Petroleum Refinery Chemical fertiliser Pesticides Petrochemical Complex Bulk Drugs & Pharmaceuticals Exploration of Oil & Gas and their production, transportation and storage Synthetic Rubber Asbestos and Asbestos product Hydrocyanic acid and its derivatives Metallurgical industries Electric arc furnaces Chlor-alkali industry Integrated paint complex Viscose Staple fibre and filament yarn Storage batteries Tourism Project Thermal Power Plants Mining Activities Highway Projects Tarred roads in Himalayas Distilleries Significant probability of Hazard/Accident Pressure Wave / Toxic Gas Release / Heat Radiation/ Radioactivity/Accidental Releases Flooding, RIS Accidents, Natural Atmospheric hazards Pressure Wave / Toxic Gas Release / Heat Radiation Pressure Wave / Toxic Gas Release / Heat Radiation Toxic Gas Release / Heat Radiation Pressure Wave / Toxic Gas Release / Heat Radiation Toxic Gas Release / Heat Radiation Pressure Wave / Toxic Gas Release / Heat Radiation Toxic Gas Release / Heat Radiation Toxic Gas Release / Heat Radiation Pressure Wave / Toxic Gas Release / Heat Radiation Pressure Wave / Toxic Gas Release / Heat Radiation Pressure Wave / Heat Radiation Pressure Wave / Toxic Gas Release / Heat Radiation Pressure Wave / Toxic Gas Release / Heat Radiation Toxic Gas Release / Heat Radiation Pressure Wave / Toxic Gas Release / Heat Radiation Human Accident Pressure Wave / Toxic Gas Release / Heat Radiation Pressure Wave / Heat Radiation/ Radio Activity/ Tailing dam failure/Inundation/Subsidence/Acid Drainage Heat Radiation/ Traffic Accidents Heat Radiation/Landslides/Traffic Accidents Pressure Wave / Heat Radiation
55
Comparison between the Equator Principles and Indian Legislation Raw Skins and Hides Pulp and Paper Dyes Cement Foundries Electroplating Heat Radiation Pressure Wave / Toxic Gas Release / Heat Radiation Heat Radiation Pressure Wave / Heat Radiation Pressure Wave / Toxic Gas Release / Heat Radiation Toxic Gas Release / Heat Radiation
56

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Comparison between the Equator Principles and Indian Legislation

COMPARATIVE ANALYSIS OF THE EQUATOR PRINCIPLES AND INDIAN LEGISLATION

Prepared By Rupanwita Dash February 2008

Comparison between the Equator Principles and Indian Legislation

Comparison between the Equator Principles and Indian Legislation

Figure 1: The Equator Principles

Comparison between the Equator Principles and Indian Legislation

Principle 1. Review & Categorisation of projects

Using E&S screening criteria of IFC

Principle 2. Social & Environmental Assessment

Principle 4. Prepare Action Plan, E&S Management System

Principle 5. Consultation and Disclosure Principle 6. Grievance Mechanism

Principle 7. Independent review

Principle 8. Covenants linked to compliance

Principle 9. Independent monitoring and reporting

Principle 10. EPFI reporting

Status of Adoption and Implementation of EP by Financial Institutions 6

Comparison between the Equator Principles and Indian Legislation

EIA process in India

Comparison between the Equator Principles and Indian Legislation

Criteria/Basis of Categorization Time of Categorization

as defined by the World Bank Development Indicators Database

Form 1refers to Appendix 1 of EIA Notification 2006

Environmental & Social issues of a Project

Standards and Regulation

1. Chlor Alkali (Caustic Soda) Industry

Comparison between the Equator Principles and Indian Legislation

Nickel and vanadium (combined) Hydrogen sulfide Effluent Standards Parameter

PPAH/IFC 6-9 30 30 150 10 0.1 0.5 0.1 .5 .05 .05 1 10 3 C

Indian milligrams per liter 6-8.5 0.5 15 10 1 0.5 5 C

Comparison between the Equator Principles and Indian Legislation

Comparison between the Equator Principles and Indian Legislation

Comparison between the Equator Principles and Indian Legislation

Comparison between the Equator Principles and Indian Legislation

Annexure 1 (d): Top Project Finance EPFI in 1st Half of 2006

Comparison between the Equator Principles and Indian Legislation

Annexure 1 (e): Top Project Finance Non-EPFI in 1st Half of 2006

Comparison between the Equator Principles and Indian Legislation

Annexure 2: List of environmental legislation in India 41

Source: Schedule, EIA Notification 2006, Ministry of Environment and Forestry

Source: http://cpcb.nic.in/Charter/charter.htm, http://pib.nic.in/feature/feyr2003/fjun2003/f030620031.html

10 100 0.2 0.2 -

Comparison between the Equator Principles and Indian Legislation

Manganese Iron (as Fe) Vanadium (as V) Nitrate Nitrogen

B: Wastewater Generation Standards

Comparison between the Equator Principles and Indian Legislation

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