Our legal documentation has a minimum requirement that all applicable statutes, regulations and rules be upheld throughout a project’s duration. In the South African mining context, for example, applicable legislation includes the Mineral and Petroleum Resources Developmental Act and the National Environmental Management Act.

In mining-specific transactions in South Africa a mandatory environmental impact assessment (EIA) has to be performed and an environmental management plan (EMP) has to be submitted to the government. An EMP addresses the impacts covered in the relevant EIA and how any environmental impacts or risks will be mitigated. An EMP must also specify a mining company’s site rehabilitation plans once commercial mining operations are terminated in a specific location.

The execution of an upfront EIA is a prerequisite when applying for project finance through Standard Bank. If an EIA indicates that a planned project’s existing or potential environmental impacts will be too high or too risky, we will not finance or support, in any manner, the envisaged transaction or project. In addition, we also stipulate that project custodians must undertake ongoing reviews of a project throughout its lifetime to ensure statutory requirements are upheld. In the event of non-compliance or non-performance, the project-finance beneficiary will be in breach of contract.

In South Africa, our legislative requirements are deemed to be adequate to govern projects in the country. When dealing with projects elsewhere where local environmental laws are inadequate, we stipulate compliance with internationally acceptable environmental guidelines in addition to adhering to any local laws of a particular country.

In terms of infrastructural projects, we require a record of decision from the Department of Environmental Affairs and Tourism. In these projects, there is always an obligation on the concession company to ensure that environmental issues are dealt with adequately. This approach has been specified for several major development projects in which the group has been involved, including:

the Incwala project near Rustenburg in South Africa;
the Kansanshi project near Solwezi in Zambia;
the renovation and upgrade of the Port of Maputo in Mozambique;
the Department of Trade and Industry Campus in Pretoria;
the Bakwena toll road project between Pretoria and the Botswana border with South Africa;
the Gautrain rapid-rail project in greater Johannesburg and Pretoria; and
the refinancing for the N4 East toll road project.

Trading in carbon credits

One of our core focus areas is the provision of financing for the mining, metals and energy sectors in emerging markets. Standard Bank is also involved with the related field of carbon credits, which accrue when such industries reduce their emissions of greenhouse gases (most of which contain undesirable hydrocarbons). It is widely considered in the international scientific community that the so-called greenhouse gases cause pollution and contribute to global warming and therefore to global climate change.

We have an exclusive cooperation agreement with one of the world’s leading carbon credit advisory and trading institutions, EcoSecurities. We are working with them on behalf of major South African industrial companies to monetise carbon credits arising from pollution-control and energy-efficiency investments.

In addition, Standard Bank and EcoSecurities are working with certain project finance customers in South Africa to develop and implement a global carbon credits trading strategy in line with emissions reductions from some of its forestry plantations in South Africa, Europe, North America and elsewhere. Our joint carbon credits advisory team is also working on projects such as a geothermal power project in Nicaragua (using volcanic steam), a woodchip biomass power project in Brazil and a wind power project in Russia. This is a rapidly developing market, which is not only an exciting business opportunity, but also a constructive way to contribute to a global environmental and social cause.