Issue No. 11, January 2012
Key Updates to the IFC Sustainability Policy and Performance Standards
The International Finance Corporation (IFC) made substantial updates to its Performance Standards (PS), effective January 1, 2012. Building off of the IFC's Summary of Key Changes in the Sustainability Policy and Performance Standards, this summary intends to highlight changes that we believe could have the most substantial impact to extractive industries.
A theme running throughout all PS is that assessment, mitigation, and compensation measures should be proportional to the relative complexity, scale, and nature of a project and its associated impacts. This is particularly relevant to the extractive industry, where the project stages of an exploration and production program result in varying levels of impacts.
Efforts to increase transparency and effectiveness within the World Bank Group are driving some of the IFC changes, including the increased disclosure requirements. The IFC's new Access to Information Policy (AIP) requires increased public disclosure of project-level impact and risk information throughout project life cycles and earlier disclosure for high risk projects.
Independent assessments of the IFC PS in 2010 determined that there was lack of definition for Category B projects, and that many Category B projects should have been classified as Category A (full impact assessment required). As IFC focuses more on the risks and project context for determining project categorization starting in 2012, it is possible Category A determinations will increase, including for future extractive industry projects.
Updates to the Sustainability Policy
- Climate change, human rights, corporate governance, and gender commitments are strengthened
- Material project payments (e.g., royalties, taxes, profit-sharing) of extractive industry clients must be disclosed on a project-by-project basis or a corporation basis, and these clients are encouraged to disclose terms and conditions of exploration and exploitation contracts (a requirement starting in 2014)
Acorn International Notes
Acorn Notes is a series of periodic papers to share ideas regarding EHSS and sustainability management for international industry.
Issue 21 - March 2014: Above-ground Facilities and Stakeholder Engagement: Deploying the 'CAC'
Issue 20 - March 2014: A Starting Point for Shared Equity
Issue 19 - March 2014: What It Takes to Run a Great Consulting Firm
Issue 18 - February 2014: Considering Human Rights - Trends and Lessons in Oil and Gas Impact Assessments
Issue 17 - June 2013: Managing Environmental Health in International Development Projects
Issue 16 - January 2013: Integrating Environmental and Social Performance throughout the Project Lifecycle
Issue 15 - January 2013: The State of Shale Play in 2013
Issue 14 - August 2012: Building Environmental and Social Governance in Host Countries
Issue 13 - May 2012: Human Rights and Business: A New Era
Issue 12 - February 2012: Extractive Industries Confront Pressure for Greater Transparency
Issue 11 - January 2012: Key Updates to the IFC Sustainability Policy and Performance Standards
Issue 10 - June 2011: Oil & Gas and NGOs: New Rules of Engagement?
Issue 9 - February 2010: Annual Study of Sustainable Development Priorities
Issue 8 - January 2009: Annual Study of Sustainable Development Priorities
Issue 7 - May 2008: Top Ten Lessons Learned About Health Impact Assessment
Issue 6 - January 2008: Annual Study of Sustainable Development Priorities
Issue 5 - September 2007: Results of web forum with our International Partners
Issue 4 - January 2007: Annual Study of Sustainable Development Priorities
Issue 3 - May 2006: Suggestions and tips for safe international travel
Issue 2 - January 2006: Annual Study of Sustainable Development Priorities
Issue 1 - November 2005: The Top 10 "unspoken" criteria for determining the success of EIAs