A/HRC/4/99 page 9 say, 80 per cent of those impacted have accepted the sponsor’s proposals? He said that if FIs which have signed up to the Principles only finance projects with 100 per cent local acceptance, other projects will still go ahead financed by local or regional banks that do not follow Principles standards, potentially resulting in significantly greater risk to human rights. 30. Tadashi Maeda (Director General and Special Advisor for Energy and Resources, Japan Bank for International Cooperation) shared his experience introducing the 2002 environmental and social impact guidelines of the Japan Bank for International Cooperation (JBIC). The standards were developed through an intensive one-year consultation process involving stakeholders including civil society, NGOs, and academia. The standards prioritize proactive disclosure of information. For example, the results of screenings, reviews of proposals and projects and environmental impact assessments are all posted on the JBIC website. JBIC emphasizes that implementers must assume responsibility for the impact of their projects and consult with primary stakeholders, i.e. residents and local NGOs. For high-risk projects, JBIC sends out questionnaires, visits the project site to confirm the answers they have received, sometimes hires an outside consultant to review the project, and incorporates the outcomes into the loan documents. In one case the high level of site visits and engagement proved very costly, a cost that was ultimately charged to the taxpayers of Japan. Mr. Maeda discussed the challenge for export credit agencies which do not have a mandate to ensure sustainable economic development, therefore the main discussion in the current Organisation for Economic Co-operation and Development (OECD) negotiations over the “common approach” is about ensuring a level playing field. JBIC is committed to contributing to the OECD discussion and preventing a race to the bottom. He also discussed the possibility of inviting non-OECD members into these discussions with special status. 31. Sheldon Leader (research coordinator, Human Rights Centre, University of Essex) said that when putting the Equator Principles and IFC Performance Standards to work, it is important to ask what risks to these standards are potentially created by the specific features of project finance itself and what might be done to avoid those risks. A classic model of project finance is where a parent company, group of companies in a consortium, and project sponsors set up a project company or special purpose vehicle (SPV) that owns the assets of the project (e.g. a pipeline). The controlling equity in the SPV will be held by the project sponsors, and a loan is made to the SPV without recourse to parent companies. Pressures on human rights guarantees to local populations can arise from (a) insulating the parent from financial liability and focusing it on the subsidiary (SPV), e.g. inability of the SPV to meet large damages claims from local populations; (b) clauses in host Government agreements that freeze local law, opening a potential gap between the protection provided to project-affected people versus people elsewhere in the country; (c) an inclination to deal with damage to local populations via compensation after the damage has happened, rather than by slowing or stopping a project to put right any faults. Discussion 32. The discussion focused on the issue of standards for project finance and the implementation of such standards. Many participants acknowledged the need for greater harmonization of standards that relate to human rights in project finance, both across the finance sector and with existing international human rights standards and law (see also section II above). Harmonization is crucial as the industry has changed in recent years: because of the increase of