Don’t Bank on It
A coalition of U.S. and European banks are adopting new principles to guide the financing of projects, especially in the developing world. But environmentalists say the “Equator Principles” will not prevent the banks (which include Citigroup, Holland’s ABN Amro Holding, Britain’s Barclays, and Germany’s WestLB) from backing projects that lead to the destruction of rainforests, wetlands, and other natural habitat, and the disruption of local communities. Under the principles, which were drawn up by the International Finance Corporation (a private-sector arm of the World Bank), the institutions are agreeing “not [to] provide loans directly to projects where the borrower will not or is unable to comply with our environmental and social policies and processes.” Critics say the guidelines fail to protect critical areas and lack an enforcement mechanism.
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