Research On The Equator Principles In International Project Financing

The "Equator Principles" is a financial industry benchmark for determining,assessing and managing social and environmental risk in project financing.The principles,drafted by the world primary finance institutions on the basis of the World Bank's International Finance Corp.(IFC) 's policies and guidelines,is now becoming an industry customs which establish guidelines to ensure that banks financed only projects that were "socially responsible and reflected sound environmental management practices." It is widely used in international financing and becomes an industrial standard.Its formulation and implementation is led by the International Finance Corporation.Basically,the contents of its core refer to the World Bank's International Finance Corporation(IFC) standards,guidelines and policies.IFC also helped the Equator banks training experts,its policy and practice direct impact on the nature of the Equator Principles.As of March 2009,there were 67 banks and financial institutions(together Equator Principles Financial Institutions or EPFI) around the world have agreed to be bound by in their project financing activities.Their business in more than 100 countries worldwide and the total amount of project finance of them was more than 80%of the total global market share of project financing.Since China is now becoming an giant investing country,the national and overseas environment requires the banking industry getting faster to get closer to the international financial system to be more competitive and to improve China's financial environment.That's also the reason why China should not be absent from the Equator Principles.The basic research thought of the thesis is to give a general introduction of Equator Principle,and explain its contents and the evolution of development firstly.From the international and domestic perspectives,this paper analyzes the features of Equator Principle with examples during its application in an empirical way.The discussion on the influences of international loan agreement and the liability of lender may be elaborated from the legal point of view as well.On all these points,the followings words would have some initial thoughts about the effects of Equator Principle which can improve and perfect the environment in China and the legal system of our society.And it would be combined with the current situation of participation to Equator Principle for those Chinese financial institutions.The paper is about 30,000 words,and has been divided into six parts.The first part is 'An overview of the Equator Principles'.This part introduces the process of the principles' creation and its development,content and impact.The author considers that following the development of companies' thoughts about social responsibility,we can find that environmental responsibility thoughts are their terminal target.The formation and sublimation of the environmental responsibility thoughts urge the theories and the fulfillments of the environmental finance.Commercial banks play a important role to fulfill social responsibility since China has been thoroughly impelling sustainable development.The EPFIs position themselves for the advocate of the development the financial rules,which objectively improve the bank's public image,and improve the image of the IRC's own too.The second part is 'Implementation of the Equator Principles'.This part introduces the implementation of the principle and some characteristics in this process.The focus of attention of equatorial banks is on conducting careful investigations.In fact,they act as non-government agents for environmental and social protection.Non- government organizations are the task force to reinforce and supervise the equator principle.They can achieve the unity of CSR(corporate social responsibility) and economical responsibility,with great importance to the society,finance circle and the institution themselves.The third part is "The empirical analysis of the Equator Principles'.This part introduces the 'equator bank report' and specially introduces two related cases.On the basis of the case study,this part highlights the significant impact of the Equator Principles and summarizes some problems in its implementation.The forth part is "The impact of the Equator Principles to international loan agreements and the liability of debtors'.The Equator Principles will make the provisions of the loan document added or modified,and the lenders with the legal liabilities.The fifth part is 'The status quo of China's finance institutions participating in the Equator Principles'.For a long time,we recognize insufficiently about the social responsibility of China's commercial banks.From now on,there has been only one bank has declared to adopt the Equator Principles.In October 2008,the Industrial Bank declared to adopt the Equator Principle.It is the first Equator Bank in China.The author considers that China's commercial banks should accept the equator principles and follow the trend of world banks' development. The sixth part is 'The revelation of the Equator Principles to China's legal system of environment and society'.The laws about environment and society are not complete and not be execute well.The author considers that the Equator Principles can give some reference to the China's legislation of environment and social laws which include both procedural and substantive ones.