Equator Principles Banks: The New Global Regulators

To get a project off the ground, many mining proponents will need to demonstrate compliance with the environmental and social regulations of their financiers in accordance with the Equator Principles (EP). The EP is an agreement amongst more than 75 of the world's leading banks and financial institutions to apply international regulations and conduct due diligence to manage environmental (meaning resource efficiency, pollution prevention, biodiversity and management of living natural resources) and "social" (meaning labour, OHS, indigenous rights, human rights, resettlement and cultural heritage) risks for projects they finance. Under the EP, financial institutions sit in the role of "regulator" overseeing EP implementation for a financed project. In the post EP world, bankers are the new global regulators of environmental and social practices and regulatory compliance is the qualifying condition for investment by EP banks. With the release of the expanded EP III, this new paradigm will only be reinforced.