Global Accountability The Equator Principles Will they further

Global Accountability The Equator Principles Will they further develop? ‘Growth, Conservation and Responsibility’ Seoul, 27 th Annual Conference IAIA 3 -9 June 2007 Maartje van Putten

History of the Equator Principles • • • Private banks follow Chad-Cameroon. 4 July 2003 10 banks, at present 51 IFC as the model or pressure of NGOs? Serious Stewardship or just PR? What is it and how will it evolve?

The Principles a Global Benchmark? • • • Globalization: Strong role private sector Loss of the factor State? FDI: 91% private sector 9% Public money Stronger than any other code of conduct Very promising IF implemented

Equator II an Improvement • Early Community Participation with affected communities • Stronger social and environmental Standards: child labor • Grievance Mechanism and Independent Review of assessment • Periodic Reporting • EPs apply to all new project financings (>10 Million $) • Upgrades existing facilities • Also project finance advisory

Still missing in the Principles • EPs do not apply to High-Income OECD countries • Do not apply to corporate loans, debt and security underwriting • Not yet: Problem Solving and Compliance review Mechanism as MFI’s have • Transparency in implementation weak

Structure of EPFIs • • Principles are voluntary EPFI’s have common website/secretariat There are not yet clear ‘Club-rules’. Fear for anti-trust rules.

Threats to the Principles? • • • Weakening of the Standards by EPFI’s Lack of Transparency criticism of NGO’s A scandal of ONE EPFI affecting group Competition with non-EPFI’s > China, India a. o. Quality assurance

Concluding Remarks • Globalization: Private Sector is taking over from Public Sector • Legal Liability is on its way • Invest in Chinese, Indian etc. Private Financial Institutions > adopt Principles • Create an Independent Problem Solving and Compliance Review Mechanism

Of course they can participate as soon as our planning is over Global Accountability The Netherlands Tel. +31 -651111553 How do we get there?