Equator Principle 5
Contents
Equator Principle 5: Stakeholder Engagement
Principle 5 is about Stakeholder Engagement. For all Category A and Category B Projects the lender will require the client to demonstrate effective Stakeholder Engagement, as an ongoing process in a structured and culturally appropriate manner, with Affected Communities, Workers and, where relevant, Other Stakeholders.
For Projects with potentially significant adverse impacts on Affected Communities, the client will conduct an Informed Consultation and Participation process.
The client will tailor its consultation process to:
- the risks and impacts of the Project;
- the Project’s phase of development;
- the language preferences of the Affected Communities;
- their decision-making processes; and
- the needs of disadvantaged and vulnerable groups.
This process should be free from external manipulation, interference, coercion and intimidation.
To facilitate Stakeholder Engagement, the client will, commensurate with the Project’s risks and impacts, make the appropriate Assessment Documentation readily available to the Affected Communities, and where relevant Other Stakeholders, in the local language and in a culturally appropriate manner.
The client will take account of, and document, the results of the Stakeholder Engagement process, including any actions agreed resulting from such process. Disclosure of environmental or social risks and adverse impacts should occur early in the Assessment process, in any event before the Project construction commences, and on an ongoing basis.
Indigenous People
Lenders recognise that Indigenous Peoples may represent vulnerable segments of Project's Affected Communities.
All Projects affecting Indigenous Peoples will be subject to a process of Informed Consultation and Participation, and will need to comply with the rights and protections for Indigenous Peoples contained in relevant national law, including those laws implementing host country obligations under international law.
IFC Performance Standard 7 paragraphs 13-17 detail the special circumstances that require the Free Prior and Informed Consent (FPIC) of affected Indigenous Peoples, which include any of the following:
- Projects with impacts on lands and natural resources subject to traditional ownership or under the customary use of Indigenous Peoples,
- Projects requiring the relocation of Indigenous Peoples from lands and natural resources subject to traditional ownership or under customary use,
- Projects with significant impacts on critical cultural heritage essential to the identity of Indigenous Peoples, or
- Projects using their cultural heritage for commercial purposes.
Globally for Projects that meet these special circumstances, the lender will require a qualified independent consultant to evaluate the consultation process with Indigenous Peoples, and the outcomes of that process, against the requirements of host country laws and IFC Performance Standard 7.
Where Stakeholder Engagement, including with Indigenous Peoples, is the responsibility of the host government, lenders require the client to collaborate with the responsible government agency during the planning, implementation and monitoring of activities, to the extent permitted by the agency, to achieve outcomes that are consistent with IFC Performance Standard 7.
If a process of good faith negotiations that meets the consultation requirements of IFC Performance Standard 7 has been followed and documented, but it is not clear if FPIC has been achieved, the lender will determine, with supporting advice from the consultant, if this qualifies as a justified deviation from the requirements of IFC Performance Standard 7, and whether the client should pursue additional corrective actions to meet IFC Performance Standard 7’s objectives.
