The IFC Performance Standards on Environmental and Social Sustainability (PS) have applied since 1 January 2012. They are the reference for private-sector projects financed by IFC and are applied by Equator Principles banks to projects in Non-Designated Countries, including Viet Nam.
The eight standards
1. Assessment and Management of Environmental and Social Risks and Impacts.
2. Labor and Working Conditions.
3. Resource Efficiency and Pollution Prevention.
4. Community Health, Safety, and Security.
5. Land Acquisition and Involuntary Resettlement.
6. Biodiversity Conservation and Sustainable Management of Living Natural Resources.
7. Indigenous Peoples.
8. Cultural Heritage.
PS1 sets the overall framework: the client maintains an environmental and social management system (ESMS) with seven elements: policy; identification of risks and impacts; management programs; organizational capacity and competency; emergency preparedness and response; stakeholder engagement; and monitoring and review. PS2 to PS8 apply according to the risks identified during assessment.
Selected thresholds
- Greenhouse gases (PS3): projects expected to emit more than 25,000 tCO2e per year must quantify emissions annually, covering direct emissions from facilities owned or controlled by the client and indirect emissions from off-site energy used by the project.
- Air quality (General EHS Guidelines): emissions should not cause ambient standards to be exceeded, applying national standards or, in their absence, the current WHO Air Quality Guidelines. As a general rule, a project should not contribute more than 25 percent of the applicable standard, to leave room for future development in the same airshed.
EHS Guidelines and Vietnamese law
The World Bank Group General EHS Guidelines are dated 30 April 2007 and are complemented by industry sector guidelines (cement, thermal power, health care facilities and others). Where national technical regulations differ from the EHS Guidelines, projects are expected to achieve whichever is more stringent. If less stringent levels are justified by project-specific conditions, the client provides a full justification showing that human health and the environment remain protected.
In practice, gap assessments tend to find differences in consultation and disclosure, management of contractors and primary suppliers, community health and safety, livelihoods of affected people without legal title to land, biodiversity assessment (natural and critical habitat) and greenhouse gas quantification. The Environmental and Social Action Plan (ESAP) is the tool for closing these gaps on a timetable agreed with lenders.