Assessment of the social and environmental risks of projects carried out abroad
In projects carried out abroad, if Finnvera’s liabilities for guarantees exceed EUR 10 million and the loan repayment period is more than two years, the project always undergoes an assessment of the environmental and social risks. A risk assessment is also conducted for projects under EUR 10 million if the project is considered to involve significant potential environmental or human rights risks.
In general, Finnvera’s project review encompasses the whole project even when export financing is granted, for instance, for an individual delivery of equipment.
Projects are divided into four categories: A, B, C and non-project. In Category A, the applicant must provide Finnvera with an external party’s report of the assessment of environmental and social impacts, and impacts are reviewed more extensively—the project may be, for instance, a pulp mill, a mine or a power plant. In Category B, the information required is more limited. No background studies are needed for Category C and non-projects. In 2017, ten Category A and Category B project reviews were conducted.
Granting financing for Category A projects requires that the information on environmental and social impacts is published 30 days before Finnvera signs the agreement on export financing. This allows stakeholders, at their discretion, to submit comments before the actual decisions are made.
Consideration of social impacts in projects
Social impacts refer to the project’s impacts on local communities and on persons involved in the construction and operation of the project. Social impacts include the human rights aspects associated with the project.
The impacts may relate, for instance, to the working conditions and rights of workers, the health and safety of local communities, the acquisition of land and forced relocation, the rights of indigenous peoples, and cultural heritage. Project-specific human rights factors are forced labour, child labour, and occupational health and safety issues threatening human life.