EQUATOR PRINCIPLES COMPLIANCE FOR UNDERSEA CABLE SYSTEMS FOR - - PowerPoint PPT Presentation

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EQUATOR PRINCIPLES COMPLIANCE FOR UNDERSEA CABLE SYSTEMS FOR UNDERSEA CABLE SYSTEMS

Neil Daetwyler

ENVIRON

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Presenter Profile

• Mr. Daetwyler is a Principal of
• ENVIRON. He has 35 years of

professional experience and specialises in project management, principally for the environmental and social aspects of complex international lender-financed international lender-financed

• projects. He spent almost ten years

as an engineering geologist in the UK, Europe, Africa and Asia Pacific before focusing on environmental consulting and project management. As an environmental consultant, he has lived and worked in Australia, Malaysia, Singapore and the USA. He currently resides in the UK and works internationally. Neil Daetwyler CEng CPEng CEnv Principal Email: ndaetwyler@environcorp.com Tel: (+44) 207 478 9800 Mobile Tel: (+44) 7841 277883

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What are the Equator Principles?

The Equator Principles (EP) represent a financial industry benchmark for determining, assessing and managing social & environmental risk in project financing (www.equator-principles.com). The Principles are based on an external and respected benchmark, namely key elements of the Environmental and Social Review Procedures of the International Finance Corporation (IFC), the private- sector lending arm of the World Bank Group.

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Why are the Equator Principles important for the cable industry?

Large submarine cable system projects are increasingly looking to external financing, rather than relying solely on internal funding by project shareholders. shareholders. Most of the International Finance Institutions (IFIs) involved with project financing have adopted the Principles (and are referred to as Equator Principles Financial Institutions or EPFIs).

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What if external financiers are not EPFIs?

As a result of loan syndication, even IFIs that are not formally committed to the Equator Principles usually require EP compliance by the projects to which they lend. lend. The social and environmental standards that underpin the EP have been widely used or adapted by financial institutions other than the EPFIs. Multi-lateral lenders (such as IDB, ADB, AfDB and EBRD) and ECAs require compliance with IFC standards or similar.

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What does Equator Principles compliance involve?

There are 10 Principles, the key requirements

• f which are:

An appropriate level of social and environmental An appropriate level of social and environmental assessment (to international standards) based on the EP classification. Compliance with social and environmental standards (either those of the IFC or national standards meeting or exceeding those of the IFC). Specific requirements relating to issues such as Social and Environmental Management Systems; Consultation and Disclosure; Grievance Mechanism; and Independent Review.

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SEACOM – an Equator Principles Case Study

The SEACOM cable system connects South Africa with India and Europe via landings in Mozambique, Place Image Here Tanzania, Kenya, Djibouti, India and Egypt, is privately-

• wned, and is funded in part

by project finance arranged through commercial banks. As a result the project is subject to the Equator Principles

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SEACOM – an Equator Principles Case Study

Despite the fact that the project includes cable landings in or close to highly sensitive locations:

a UNESCO World Heritage area (Ft. Jesus, Kenya); and a national Nature Reserve (Umlalazi, South Africa)

it was possible to have the project classified ‘B’ in respect of the Equator Principles.

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SEACOM – landing the cable adjacent to a World Heritage site

The cable landing site adjacent to the 16th century Fort 16th century Fort Jesus World Heritage site has been carefully constructed and reinstated

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SEACOM – landing the cable adjacent to a World Heritage site

... and considerable effort is being effort is being made to render the finished cable station compatible with its historic surroundings.

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SEACOM – landing the cable in a Nature Reserve

SEACOM imported specialised Horizontal Directional Drilling (HDD) equipment to South Africa and successfully installed the cable duct in a directionally- drilled borehole

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SEACOM – landing the cable in a Nature Reserve

...without disturbing the disturbing the wildlife in the Reserve.

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Conclusions

• 1. The application of the Equator Principles requires compliance

with international standards for social and environmental performance, in addition to those typically required by national regulators.

• 2. Minimising the cost and time impacts of Equator Principles
• 2. Minimising the cost and time impacts of Equator Principles

compliance requires careful project planning, particularly in respect of cable routing and the siting of terrestrial infrastructure such as beach manholes and cable stations.

• 3. Avoidance is the preferred option in relation to sensitive

resources (whether social or environmental). Nevertheless, cable systems can be located in highly sensitive areas provided that the rationale behind the routing and siting choices is carefully considered and adequately communicated to both regulators and the wider community

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Conclusions

4. EP compliance is often treated by project developers as a separate consideration to national environmental clearance processes, and is often addressed late in project design and

• planning. Early integration of EP processes has the potential

to both minimise costs and save time. to both minimise costs and save time. 5. Project developers should be aware that the requirements of the EP extend beyond social and environmental assessments (e.g. Labour standards, SEMS). 6. Major sub-sea cable systems are unusual (perhaps unique) in project finance in that they typically impinge on areas that are outside of national jurisdictions. This may lead to a requirement for an EP EIA, covering the system as a whole, in addition to national EIAs.

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Conclusions

The SEACOM project is an example where it was possible to achieve an EP classification significantly less onerous than those required by some of the landing country environmental regulators. Despite the fact that the SEACOM project includes cable Despite the fact that the SEACOM project includes cable landings immediately adjacent to a World Heritage area and a national Nature Reserve it was possible to have the project classified ‘B’ in respect of the EP. However, achieving this type of pragmatic EP classification

• utcome requires advocacy on the part of the developer, by way
• f a carefully and cogently argued recommendation to the

lenders.

2010

enabling the next generation of networks & services

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Pacifico Convention Plaza Yokohama & InterContinental The Grand Yokohama 11 ~ 14 May 2010 www.suboptic.org The 7th International Conference & Convention

• n Undersea Telecommunications