Annex 1 - E&S issues table

Industry

Description of the issue

FMO engagement with the client

AFW

Improvements on housing for workers are delayed as a result of cash shortage.

FMO monitors the issue closely, and will press for investment in this part of the project as soon as the client's financial position improves.

AFW

The adequacy of water supply is a concern.

FMO supported a study and will continue to support water management by the client.

AFW

Delays in implementing the environmental and social action plan.

The client has agreed to increase environmental and social capacity.

AFW

Client management of environmental and social risks is deemed insufficient.

External expertise was engaged to define and implement a plan to better manage these environmental and social risks.

AFW

Lack of operational processes to identify and manage environmental and social risks.

FMO put a contractual condition to engage an external advisor to help develop policies and procedures for the management of environmental and social risks.

AFW

A delay in the execution of a labor audit.

FMO used its leverage to ensure satisfactory completion of the labor audit.

AFW

Identified risks related to dust explosion.

The client agreed to a remediation plan.

AFW

A client motor vehicle accident resulted in fatalities.

An investigation was conducted by the client, and FMO engaged in the identification and implementation of follow up actions to address the root causes of the accident.

AFW

Client did not put in place the equipment required to control emissions.

The client agreed to install the missing equipment.

AFW

Waste water monitoring showed values above limits.

FMO has requested a root cause analysis to work towards a solution.

AFW

The client's management system requires improvement in order to manage elevated environmental and social risks associated with business expansion.

FMO recommended several actions to address the short and long term risks. We also used our leverage to require the company to engage an expert to monitor the new activity and to develop an integrated management system to address the risks posed by the expansion.

AFW

Delays in addressing gaps in past and future resettlement.

FMO used its leverage to encourage the lead lender and the client to address the gaps.

AFW

Slow progress in the management of key environmental and social risks in combination with high contextual risk.

FMO uses its leverage to ensure the key risks are addressed.

AFW

Improvements on housing for workers are delayed as a result of cash shortage for the overall project.

Given good progress with other key environmental and social management measures, FMO will press for investment in this part of the project as soon as the client's cash position improves.

AFW

Occupational health and safety practices are deemed below acceptable standards.

FMO supports the client in reinforcing occupational health and safety and environmental and social risk management more broadly.

AFW

Legacy issues related to past resettlement.

FMO supports the client in developing a multi stakeholder platform that helps different parties to come together and work towards a resolution.

AFW

A work place accident resulted in multiple fatalities.

An investigation was conducted by the client, and FMO supported in the identification of follow up actions to address root causes. FMO will continue to monitor the implementation of these actions.

AFW

Absence of a storm water management system

The client agreed to make this a priority and has agreed plans to close this gap.

Diverse sectors

A workplace accident resulted in multiple fatalities.

A full investigation was conducted by the client, and FMO supported in the identification of follow up actions to address improvements in the client's occupational health and safety management system. FMO will continue to monitor the implementation of these actions.

Diverse sectors

Long working hours. Increased exposure to health and safety risks.

FMO used its leverage to get labor and working conditions improved.

Diverse sectors

National labor law and regulation are deemed insufficient in protecting labor rights.

FMO is using its leverage to encourage the client to improve labor and working conditions beyond national requirements.

Diverse sectors

The client's management system requires improvement to manage elevated environmental and social risks associated with business expansion.

The client has agreed to draft an action plan to bring its operations in line with international standards.

Diverse sectors

Delay in applying international resettlement standards.

Client has agreed to address the gaps with regards to international resettlement standards once the client’s financial position improves.

Diverse sectors

Environmental and social risk management deemed insufficient.

FMO uses its leverage to establish a better information flow and achieve client agreement on actions needed.

Diverse sectors

More understanding is needed of the impact of future project developments related to surrounding communities.

An external consultant was engaged to do a follow up study.

Energy

Community engagement and benefit sharing are deemed insufficient.

FMO has supported the client with the engagement of a social expert to help improve community engagement and benefit sharing.

Energy

A number of serious accidents, including fatalities, occurred.

FMO will continue to engage to better understand the root cause of these accidents, and the adequacy of the company’s health and safety management system.

Energy

Environmental and social risk management deemed insufficient.

FMO is working with the client to address the outstanding environmental and social and other operational issues.

Energy

Significant improvements deemed necessary with respect to several environmental and social risks.

The client has followed up on the recommended actions, and FMO continues to monitor the project closely.

Energy

Troubled relationship with part of the Indigenous Peoples community.

FMO supports the client in developing a multi stakeholder platform based on mutual trust and respect between the project and surrounding communities.

Energy

Client deemed to insufficiently meet requirements with respect to Indigenous Peoples.

FMO is seeking possibilities to increase leverage to get the requested actions implemented.

Energy

Environmental and social risk management requires improvement.

An external consultant provided guidance and training to the client's environmental and social team.

Energy

Civilians are disrupting project construction.

An external consultant was engaged to identify root causes for the opposition and work towards a solution.

Energy

A workplace fatality occurred.

FMO supports the client in the identification and implementation of follow up actions to address the root cause of the accident.

Energy

Impacts on biodiversity insufficiently identified and managed.

FMO supports the client to identify gaps in the environmental and social management system and more broadly address them.

FI

Environmental and social due diligence by the client is deemed insufficient.

FMO supports the client in improving its environmental and social risk management.

FI

An environmental and social policy has not been implemented consistently throughout the bank’s portfolio and monitoring of end-clients is lagging.

FMO used its leverage to encourage the client to further develop its environmental and social management system.

Fund

Client related environmental and social resources reduced while the portfolio remained unchanged.

FMO uses its leverage to encourage the client to increase environmental and social resources. Meanwhile, FMO has increased monitoring of this client.

Fund

The client underestimated the elevated ESG risk exposure associated with a business expansion.

FMO supports the company's environmental and social team and monitor progress made towards the implementation of additional environmental and social assessments.

Fund

Delayed environmental and social risk assessment by the client.

A consultant has worked closely with our client to support communications about the current status of environmental and social risk management.

Fund

Insufficient reference to international standards in the fund’s environmental and social management system.

FMO supports the fund manager to integrate environmental and social risk management with international standards.

Fund

Environmental and social risk management at a newly acquired facility deemed insufficient.

An external expert supports the client in developing and implementing an environmental and social management system.