Environmental standards [EBRD

The standards in the EBRD Environmental Policy (2003) are based on national and international best practice in the areas of ecology, worker protection and local communities.

These standards are applied to all projects through loan agreements and other legal documents. They are also incorporated into country and sector strategies, donor activities, and to internal EBRD operations.

Where the EBRD invests directly in a project the project must comply with:

National law for environment, health, safety and employment;
European Union environment, health and safety standards, where applicable; and
The International Labour Organization's fundamental Conventions concerning the abolition of harmful child labour, the elimination of discrimination at the workplace; and the elimination of forced and compulsory labour.

Where the EBRD provides financing via financial intermediaries (FIs) those FIs are required to comply with the EBRD's environmental procedures for FIs which involves the implementation of a system of environmental risk management. Recipients of EBRD-finance via FIs are required to comply with national legislation for environment, health, safety and employment.

Under the terms of their agreements with the EBRD, FIs are prohibited from financing certain types of projects and have to refer to the Bank before financing some environmentally high risk projects - see the Exclusion and Referral list below. The FIs also have to provide the Bank with annual environmental reports.

Ecology

Years of ecological destruction and neglect have left many of the EBRD countries of operations with a serious environmental legacy.

Though often set at demanding levels, environmental standards were typically not enforced. Fines were low, often arbitrary, and paid as part of the overhead. Major polluters often escaped significant financial penalties.

Industrial facilities were obsolete, pollution control equipment was worn out or non-existent, energy and resource efficiency was low, and environmental protection was not a priority for governments or citizens. Companies focused on production targets and environmental management capacity was weak. Environmental disasters were treated as state secrets, and public participation in environmental decision making was very limited.

Reduced life expectancy in many transition countries is likely to be related to, in part, environmental degradation. Air pollution, contaminated drinking water, overuse of chemicals and pesticides, inappropriate management of hazardous waste, poor occupational health and safety regimes, and reduced investment in the health sector have all taken their toll.

Toxic waste management in many countries was poorly organised. Industries produced thousands of tonnes of toxic waste, which was not properly stored or treated, resulting in soil and ground water pollution. In many countries industrial soil contamination liability is still not regulated.

The EBRD aims to address this legacy by investing in environmentally oriented projects. When considering a project, the Bank looks at future environmental impact as well as risks and liabilities associated with past and current activities. Issues covered include water use and waste water treatment, air emissions, waste handling, use and disposal of hazardous materials, site contamination, and overall environmental management.

Worker protection: Health and safety

Health and safety in the workplace is an important consideration for the EBRD. In order to mitigate existing problems, the Bank appraises health and safety issues of every project as part of its environmental due diligence procedure. In projects where risks are high - chemical plants, refineries, extractive and textile industries - consultants are engaged to ensure that safety is provided for in project design and is being adequately managed.

Worker protection: Labour standards

Since the revision of the Environmental Policy (2003) all new projects must meet, in addition to national employment law, three core labour standards. Identified by the United Nations as “essential human rights in the workplace”, these prohibit forced labour, harmful child labour and discrimination. All EBRD countries are ILO members and thus committed to respect these standards, even if they have not ratified the specific ILO conventions.

The EBRD believes that good labour practices resulting in a well-treated workforce can lower staff turnover and enhance productivity, benefiting the business of EBRD clients. It also improves their position in the market, where increasingly international companies require their suppliers to comply with the core labour standards.

ILO core labour standards on:

Community-specific issues

Under the Environmental Policy (2003) all Bank-funded projects involving resettlement, indigenous peoples or cultural heritage must meet the International Finance Corporation safeguard policies for:

Involuntary resettlement (0.2Mb)
Project sponsor are required to mitigate adverse impacts of physical and/or socio-economic resettlement, and to ensure that displaced populations benefits from the project

Indigenous peoples (0.2Mb)
If the lifestyle and/or socio-economic status of indigenous peoples could be affected by a project, the project sponsor is required to mitigate adverse impacts. Sponsors also have to enable the indigenous peoples to benefit from the project, and to participate in planning that affects the

Cultural property (0.1Mb)
The EBRD seeks to prevent adverse project related impacts on cultural property and archaeological heritage

When financing infrastructure projects, the Bank assess to what extent the move to cost-covering tariffs may create problems of affordability for certain consumer groups; in such cases the Bank will seek to mitigate the adverse social impacts with the help of support schemes.