1. The Environmental Guidelines as a whole
JBIC Guidelines for Confirmation of Environmental and Social Considerations

Here are JBIC's answers to Frequently Asked Questions (FAQs) about the Environmental Guidelines.


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1.1Q. Doesn't JBIC disseminate to the global community how it addresses environmental issues under the Environmental Guidelines?
1.2Q. If JBIC's Environmental Guidelines differ from those of other countries, will JBIC urge such countries to conform their guidelines to the Environmental Guidelines?
1.3Q. What measures have been taken to disseminate the Environmental Guidelines widely among all the interested people at home and abroad?
1.4Q. Terms like "environmental guidelines" and "environmental and social considerations" appear frequently. How does JBIC consider "environment" in the Environmental Guidelines?
1.5Q. In Section 1. of Part 1 of the Environmental Guidelines, there is the statement "In cases where it is involved in the planning and preparatory stages of a project, JBIC will take steps to encourage borrowers and related parties to undertake appropriate environmental and social considerations from the earliest stage possible." What steps will JBIC consider to take?
1.6Q. In the Environmental Guidelines, "confirmation of environmental and social considerations" and "environmental reviews" appear frequently. In what sense were these terms used?
1.7Q. What measures have been taken to prevent leaving out checks of all items which should be looked at in each project?
1.8Q. From its mandate, shouldn't JBIC make sufficient considerations for helping Japanese companies maintain international competitiveness?
1.9Q. Perhaps can't we expect JBIC to take speedy response because the Environmental Guidelines would result in more time taken for project appraisal?
1.10Q. In the Environmental Guidelines, the phrase "when necessary" is sometimes used. Why is it used?
1.11Q. Won't JBIC share common Environmental Guidelines with Nippon Export and Investment Insurance (NEXI) for the export credit portion of its operations?
1.12Q. How did the Environmental Guidelines set forth JBIC's role as a lender for projects?
1.13Q. Who will conduct environmental reviews and monitoring under the Environmental Guidelines?
1.14Q. In Section 1 of Part 2 of the Environmental Guidelines, the term "desirable" is used in several provisions. Is this consistent with provisions in Part 1?
1.15Q. How are human rights treated in the Environmental Guidelines?
1.16Q. How is the scope of stakeholders stipulated in the Environmental Guidelines?
1.17Q. What will the Environmental Guidelines do to take into account opinions of local residents affected by the project?
1.18Q. The Environmental Guidelines set forth that "JBIC may, if necessary, seek and make use of opinions from outside experts" (Section 3. (3), Part 1). In what specific situation will JBIC turn to experts?
1.19Q. In Section 1 (1) of Part 2 of the Environmental Guidelines it states, "a committee of experts may be formed." Does this mean JBIC may form a committee of experts to seek the opinions of outside experts?
1.20Q. In Section 6. (2), Part 2 of the Environmental Guidelines, it is set forth that "when project proponents and the host governments (including local governments) other than the borrower have important roles to play in terms of environmental and social considerations, the borrower shall endeavor to include these parties in entering into agreements". What situation is envisaged with "… have important roles to play …"?
1.21Q. Where is "Japan's national contact point on the OECD Guidelines for Multinational Enterprises" stipulated in Section 4.-(3) of Part 1 of the Environmental Guidelines?
1.22Q. Regarding nuclear power plant projects, how are checks for ensuring safety and so on, in the export of nuclear power generation-related materials and equipment, being carried out?
1.23Q. Please provide specific points to be checked in safety and other perspectives by the Ministry of Economy, Trade and Industry.
1.24Q. In addition to preventing and controlling the adverse environmental impact of individual projects, JBIC is also supporting projects that aim directly at environmental improvement. Does the Environmental Guidelines cover in their scope such activities?

 

1.1Q. Doesn't JBIC disseminate to the global community how it addresses environmental issues under the Environmental Guidelines?

A. JBIC is disseminating the concept of the Japan Bank for International Cooperation Guidelines for Confirmation of Environmental and Social Considerations (the "Environmental Guidelines"), which have been compiled by taking into account comments from the public, through briefings and information dissemination in international conferences of the Organization for Economic Cooperation and Development (OECD) as well as in consultation meetings with the governments of developing countries.

1.2Q. If JBIC's Environmental Guidelines differ from those of other countries, will JBIC urge such countries to conform their guidelines to the Environmental Guidelines?

A. In the process of revising Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (the "Common Approaches"), JBIC contributed to fruitful discussions by presenting contents of our own Environmental Guidelines and by making constructive revision proposals in cooperation with the Japanese government. JBIC will continue to contribute to the evolution of the Common Approaches in days to come.

1.3Q. What measures have been taken to disseminate the Environmental Guidelines widely among all the interested people at home and abroad?

A. JBIC is making active efforts to disseminate information relating to the Environmental Guidelines on the JBIC website and in its public information magazines. JBIC also explains to the industry how we implement the Environmental Guidelines, and exchange opinions with entities such as government ministries and agencies related to the environment in developing countries.
JBIC intends to continue its efforts to further improve the internal system supporting the Environmental Guidelines and to deepen their understanding among various concerned parties.

1.4Q. Terms like "environmental guidelines" and "environmental and social considerations" appear frequently. How does JBIC consider "environment" in the Environmental Guidelines?

A. The Environmental Guidelines classify issues of environmental and social considerations into three categories: those involving pollution prevention/abatement, the natural environment and the social environment. The social environment is also one of the important components of confirming environmental and social considerations. JBIC also defines "the environment" as the term that "refer not only to the natural environment, but also to social issues such as involuntary resettlement and respect for the human rights of indigenous peoples.".
At JBIC, the term "Environmental Guidelines" is considered easier to get used to than "Environmental and Social Guidelines" as an abbreviation. Meanwhile, in the JBIC Environmental Guidelines, confirming considerations for resettlement, and socially vulnerable groups like indigenous peoples is recognized to be very important. To make this point more explicit, JBIC has adopted the expression "Environmental and Social Considerations" rather than "Environmental Considerations" as the formal title.

1.5Q. In Section 1. of Part 1 of the Environmental Guidelines, there is the statement "In cases where it is involved in the planning and preparatory stages of a project, JBIC will take steps to encourage borrowers and related parties to undertake appropriate environmental and social considerations from the earliest stage possible." What steps will JBIC consider to take?

A. When JBIC makes equity participation in a company that conducts feasibility studies in the planning and preparatory stages of a project, JBIC considers that it can work on that company to include the environmental aspect in the scope of that study as shareholder. In addition, in the case that such company conducts the compiling of a master plan, JBIC considers to make a proposal that includes the concept of strategic environmental assessment as well.

1.6Q. In the Environmental Guidelines, "confirmation of environmental and social considerations" and "environmental reviews" appear frequently. In what sense were these terms used?

A. JBIC confirms the appropriateness of environmental and social considerations in 3 stages: screening, environmental reviews and monitoring. "Environmental reviews" are a component of the process of confirming environmental and social considerations. The Environmental Guidelines give the following stipulations.

For confirmation of environmental and social considerations, JBIC undertakes:
(a) classification of the project into one of the categories listed in Section 4. (2) of Part 1 (hereinafter referred to as "screening");
(b) reviews of environmental and social considerations when making a decision on funding, to confirm that the requirements are duly satisfied (hereinafter referred to as "environmental reviews"); and
(c) monitoring and follow-up after the decision on funding has been made (hereinafter referred to as "monitoring").

1.7Q. What measures have been taken to prevent leaving out checks of all items which should be looked at in each project?

A. At JBIC, sufficient use is made of the screening form and environmental checklists to ensure that all check items are covered, while further measures are used in combination to compliment this. For example, for projects classified in Category A, JBIC recognizes it as effective to confirm public consultation procedures and the status of information disclosure in the host country in order to avoid missing out check items. The Environmental Guidelines stipulates in Section 3-(3) of Part 1 that "For Category A projects (see Section 4. (2) of Part 1), JBIC checks the extent of stakeholder participation and information disclosure being undertaken for the project," and "JBIC may conduct surveys of proposed project sites by dispatching environmental experts to confirm environmental and social considerations if necessary", and JBIC is putting much effort into appropriate application of these provisions.

1.8Q. From its mandate, shouldn't JBIC make sufficient considerations for helping Japanese companies maintain international competitiveness?

A. Since it is recognized that striking a balance between environmental conservation and achieving sustainable projects is an important challenge on a global level, in drawing up the Environmental Guidelines, JBIC considered consistency between its mission of financial support for overseas business activities of Japanese companies and environmental and social considerations to be of extreme importance and thus gave it top priority.
In the future, JBIC will continue to confirm the appropriate environmental and social considerations. While being bound by this requirement, the Environmental Guidelines intends to give sufficient attention to maintaining and strengthening the international competitiveness of Japanese companies by making considerations for business confidentiality.

1.9Q. Perhaps can't we expect JBIC to take speedy response because the Environmental Guidelines would result in more time taken for project appraisal?

A. Whereas it is necessary to confirm to the full extent whether environmental and social considerations are appropriate depending on sector and the nature of an individual project, JBIC should not hinder the forward momentum of the project by delays in its appraisal procedures. In particular, this point should be kept in mind in the case of supporting projects undertaken by private enterprises.
For this reason, to seek greater speed while ensuring sufficient confirmation of environmental and social considerations, JBIC considers the following measures:

  • Conducting "screening" to identify projects with the potential to have significant adverse impacts on the environment. Such projects are subject to more elaborate confirmation of environmental and social considerations.
  • Making good use of a screening form, which compiled a set of questions for the borrowers and related parties, and checklists, which provide a list of items to be confirmed for each sector.
  • Sharing information and exchanging views with cofinancing other financial institutions and ECAs.
  • Making use of outside experts on the relevant specific sector in accordance with the nature and content of projects.

1.10Q. In the Environmental Guidelines, the phrase "when necessary" is sometimes used. Why is it used?

A. The Environmental Guidelines apply to the full diversity of projects. As such there is a range of different elements, including financial instruments (export loans, import loans, overseas investment loans, untied loans, etc.); the nature of projects (projects undertaken by private enterprises or by the government, projects on a project finance scheme, loans to the project which international organizations promote); and the timing incorporated in the projects. Thus, it is difficult to apply uniform standards to all the projects.
If the cases were carefully classified, there is a danger that the details would become overly complicated, and for some projects, flexible handling on a case-by-case basis is most appropriate. In consideration of these points, this term is used to make the Environmental Guidelines easier to read and more efficient.

1.11Q. Won't JBIC share common Environmental Guidelines with Nippon Export and Investment Insurance (NEXI) for the export credit portion of its operations?

A. Firstly, JBIC makes use of a variety of financial instruments to support projects implemented in developing countries, including export credits, overseas investment loans, import loans, untied loans, guarantees and equity participations. When doing so, as a policy-based financing institution, JBIC should basically require the same level of environmental and social considerations for projects it finances, according to the financial instruments it employs.
Secondly, credit by NEXI is in the form of insurance and as such the shape of its involvement in the project and the procedures differ from those of JBIC. This results in difficulty in making the Environmental Guidelines of both organizations completely the same. In actuality though, there are no large differences between the contents of the two guidelines.
As the Common Approaches encourage information sharing among ECAs, JBIC is working with NEXI to consider convenience for export credit users by:

  • Standardizing a screening form, which includes questions for the borrower; and checklists, which list up items to be confirmed for each sector.
  • Sharing information pertaining to environmental and social considerations;
  • Sending out a field study mission at the same time whenever possible; and
  • Exchanging views on findings of respective environmental reviews.

1.12Q. How did the Environmental Guidelines set forth JBIC's role as a lender for projects?

A. As a Japanese policy-based financing institution, JBIC will confirm the appropriateness of environmental and social considerations of all JBIC-financed projects, in accordance with the Environmental Guidelines. At the same time, JBIC extends positive support to projects contributing to environmental conservation, including global environmental conservation, and environmental improvement.
In the Environmental Guidelines, procedures and evaluation criteria are set forth for JBIC's confirmation of environmental and social considerations, to ensure that they are carried out in the appropriate manner in JBIC-financed projects. Also clearly stipulated are the details (Note) of requirements for environmental and social considerations for project proponents who implement projects. For this reason, if considerations are deemed inadequate, JBIC will ask for action to address this deficiency, and if appropriate environmental and social considerations are still not assured, JBIC may, as a policy-based financing institution, decide not to provide financing.
After the agreement of loan and investment is signed, monitoring takes place. If JBIC determines that there is a need for improvement in environmental and social considerations, it may ask the project proponent for appropriate action. Further, if the response of the project proponent is still unsatisfactory, JBIC may consider the suspension of disbursement. In this way, as a policy-based financing institution, JBIC intends to continue to actively address the issue of appropriate environmental and social considerations in projects.

  1. (Note) If the project proponent is to undertake the project in a sustainable manner, the international common recognition is that it should be equally responsible for the environmental and social considerations in the applicable project. The details of environmental and social considerations JBIC wants the project proponent to make, and the procedure are described in Section 1-2 of Part 2 of the Environmental Guidelines.

 

1.13Q. Who will conduct environmental reviews and monitoring under the Environmental Guidelines?

A. In the Environmental Guidelines, environmental reviews and monitoring must be conducted first by the project proponent who has close knowledge of and handles the project. Meanwhile, to ensure its transparency and objectivity, the following obligation of the project proponent were set forth in the Environmental Guidelines:

(1) "When assessment procedures already exist in the host countries, and the projects are subject to such procedures, borrowers and related parties must officially complete those procedures and obtain the approval of the government of the host country." (Part 2, Section 2)
(2) "ESIA reports are required to be made available in the country and to the local residents where the project is to be implemented." (Part 2, Section 2)
(3) "sufficient consultations with stakeholders, such as local residents, must be conducted … The outcome of such consultations must be incorporated into the content of the project plan." (Part 2, Section 1(5))
(4) "It is desirable that project proponents make the results of the monitoring process available to project stakeholders." (Part 2, Section 1(9))

1.14Q. In Section 1 of Part 2 of the Environmental Guidelines, the term "desirable" is used in several provisions. Is this consistent with provisions in Part 1?

A. The Environmental Guidelines consists of Part 1, which clarifies JBIC's basic policies and procedures, and Part 2, which sets forth more specific issues on environmental and social considerations for the projects financed by JBIC.
Among the provisions for the specific issues are those that are recommended ("desirable") and those that are mandatory ("must," "have to" or "should"). This term has been used in order to distinguish between the two.

1.15Q. How are human rights treated in the Environmental Guidelines?

A. Preface of the Environmental Guidelines state that "Environmental and social considerations refer not only to the natural environment, but also to social issues such as involuntary resettlement and respect for the human rights of indigenous peoples", and consideration for the social environment is also treated as an indispensable factor. With respect to the human right, as Section 1. (3) "Scope of Impact to be Examined" of part 2 treat "social concerns including respect for human rights" as one of the environmental impacts which should be investigated and examined, JBIC thus considers human rights as a constituting factor of this social environment.
On the other hand, the concept of human rights is broad. There is a full spectrum of human rights issues ranging from those at the national level to the project level. JBIC's Environmental Guidelines aim at weighing the environmental and social impacts caused by individual projects JBIC is involved in and will address specific issues at the individual project level. JBIC will be able to address human rights issues to the extent that there are clear standards.
Based on this concept, the issues to be examined have been clarified in the Environmental Guidelines. In concrete terms, the Environmental Guidelines state involuntary resettlement, the rights of indigenous peoples, and vulnerable social groups, including women and children as the item which should be confirmed at the project level.
Human rights issues that can be addressed most effectively at the state level are not covered by the Environmental Guidelines. It is desirable that human rights issues that can be addressed most effectively at the national level are addressed at the national policy level through diplomacy, and not covered by the Environmental Guidelines.

1.16Q. How is the scope of stakeholders stipulated in the Environmental Guidelines?

A. Stakeholders are defined in Section 1 of Part 1 as "stakeholders in the project concerned, including local residents and local NGOs affected by the project."
Those living in the area where there is a risk of being adversely affected by the project may become stakeholders, and they are not limited to those living at the project site. Such areas may extend into neighboring countries, and JBIC believes it should not exclude from stakeholders the people living in the vicinity of the project site only because they reside in different countries.
On the other hand, environmental assessment is conducted based on the systems in the project-dwelling country. And since consultations with the stakeholders will take place under this procedural framework, the question of how to hold consultations will be handled on a case-by-case basis by taking into account individual projects and conditions in the surrounding areas.

1.17Q. What will the Environmental Guidelines do to take into account opinions of local residents affected by the project?

A. JBIC considers it necessary to take into account opinions of the people likely to be affected by the project, including such socially vulnerable groups as women, children, the aged, the poor and ethnic minorities.
The Environmental Guidelines stated in Section 1(5) of Part 2, "sufficient consultations with stakeholders, such as local residents, must be conducted … The outcome of such consultations must be incorporated into the content of the project plan" and "Appropriate consideration must be given to vulnerable social groups, such as women, children, the elderly, the poor, and ethnic minorities … who may have little access to the decision-making process within society." In cases of "Involuntary Resettlement" and "Indigenous Peoples" too, it stipulates consultation with those affected peoples.
Furthermore, JBIC considers it important to collect information broadly in confirming environmental and social considerations. Section 5-(1) of Part 1 stated, "JBIC makes important information on environmental reviews……publicly available" and "JBIC welcomes information provided by concerned organizations and stakeholders."

1.18Q. The Environmental Guidelines set forth that "JBIC may, if necessary, seek and make use of opinions from outside experts" (Section 3. (3), Part 1). In what specific situation will JBIC turn to experts?

A. For example, in the process of confirming the appropriateness of environmental and social considerations in individual projects, when JBIC deems it necessary to seek advice based on specialized and technical knowledge, it will make use of outside experts. In this case, experts JBIC will turn to are not necessarily Japanese. They may well be local experts.

1.19Q. In Section 1 (1) of Part 2 of the Environmental Guidelines it states, "a committee of experts may be formed." Does this mean JBIC may form a committee of experts to seek the opinions of outside experts?

A. JBIC believes it is important to seek opinions of outside experts regarding projects that are likely to have a particularly large adverse impact or are highly contentious. JBIC has made positive use of opinions of outside experts such as consultants for projects that are considered to have a significant adverse impact.
On the other hand, it is JBIC's position that the process of seeking experts' opinions should take place as part of environmental and social considerations made by project proponents. Thus the provision setting forth the formation of a committee of outside experts was one of the items listed in Section 1, Part 2 of the Environmental Guidelines for environmental and social considerations in applicable projects.
Operational Policy 4.01 of the World Bank, also makes it the responsibility on the part of the borrower: "For Category A projects that are highly risky or contentious or that involve serious and multidimensional environmental concerns, the borrower should normally also engage an advisory panel of independent, internationally recognized environmental specialists to advise on all aspects of the project relevant to the EIA."

1.20Q. In Section 6. (2), Part 2 of the Environmental Guidelines, it is set forth that "when project proponents and the host governments (including local governments) other than the borrower have important roles to play in terms of environmental and social considerations, the borrower shall endeavor to include these parties in entering into agreements". What situation is envisaged with "… have important roles to play …"?

A. In some projects, the government plays an important role in addition to the borrower and the project proponent. For instance, there are cases in which involuntary resettlement occurs as a result of the project, and the government is expected to play a special role in providing compensation.
In such cases, it should be ensured, where necessary, that the government plays its role through an agreement and other arrangements between the project proponent and the government.

1.21Q. Where is "Japan's national contact point on the OECD Guidelines for Multinational Enterprises" stipulated in Section 4.-(3) of Part 1 of the Environmental Guidelines?

A. Japanese national contact points are as follows:

  • OECD Division of Economic Affairs Bureau, Ministry of Foreign Affairs
  • International Affairs Division of Minister's Secretariat, Ministry of Health, Labour and Welfare
  • Trade and Investment Facilitation Division of Trade and Economic Cooperation Bureau, Ministry of Economy, Trade and Industry

1.22Q. Regarding nuclear power plant projects, how are checks for ensuring safety and so on, in the export of nuclear power generation-related materials and equipment, being carried out?

A. When considering financing for projects in which equipment and materials related to nuclear power generation are exported, JBIC requests that the Ministry of Economy, Trade and Industry perform a check of the considerations pertaining to safety assurance and so on, in the corresponding export project.
The Ministry of Economy, Trade and Industry checks that the export is carried out based on appropriate safety considerations from the perspective of safety, radioactive waste and nuclear accident measures so that the project will not lead to nuclear accident or inappropriate disposal of nuclear waste in the export destination.

  1. (Note) A check of the considerations pertaining to safety assurance and so on is now discussed in Japanese government. And based on the result of the discussion, where necessary, JBIC will review this FAQ.

 

1.23Q. Please provide specific points to be checked in safety and other perspectives by the Ministry of Economy, Trade and Industry.

A. The Ministry of Economy, Trade and Industry checks with regard to the following three points.

  • Whether the partner countries and regions have systems in place so that safety regulations can be appropriately implemented
  • Whether the partner countries and regions have accepted and observed international agreements that are provided for the purpose of ensuring safety.
  • Whether the manufacturers of the export equipment have a clear perception that it is their responsibility to ensure quality and long-term maintenance, as well as to carry out the related training programs for the exported equipment.
  1. (Note) A check of the considerations pertaining to safety assurance and so on is now discussed in Japanese government. And based on the result of the discussion, where necessary, JBIC will review this FAQ.

1.24Q. In addition to preventing and controlling the adverse environmental impact of individual projects, JBIC is also supporting projects that aim directly at environmental improvement. Does the Environmental Guidelines cover in their scope such activities?

A. The Environmental Guidelines refers to projects that aim directly at environmental improvement. In its preface, there is an explicit statement: "JBIC will provide active support based on policies of the Japanese government for projects that promote environmental conservation, and for projects that contribute to the preservation of the global environment, such as reduction of greenhouse gas emissions."
Also, although not explicitly stated in the Environmental Guidelines, when JBIC approves financing projects, preferential terms and conditions are sometimes applied, in CDM/JI projects, new energy and energy conservation projects, projects for environmental measures, recycling and other environmental projects which satisfy certain requirements, and proactive support is given for such projects in this way.