By Business Reporter
DEVELOPMENT Bank of Namibia’s (DBN) head of lending, John Mbango, says, the bank’s value which describes sustainability states that the bank places emphasis on socially equitable and environmentally responsible business initiatives. These, he says, will have a long-lasting, positive impact on the economy.
Although DBN focuses on larger enterprises and infrastructure, the bank’s track record shows that it places a strong emphasis well-being of broader society and the environment. In terms of social initiatives, it supports social entrepreneurship, particularly in the fields of education and health. This, Mbango says, is matched by a history of generous donations to initiatives which do not qualify as recipients of finance, such as schools and community initiatives. In terms of the environment, he points to numerous projects that include water reclamation at the coast, recycling and renewable energy. Mbango says that sustainability involves a narrow focus on the middle to long-term social and environmental costs of operations financed by DBN. To illustrate the point, he says that the bank might be approached to finance a factory which has high levels of polluting emissions, but this would come at a high cost to future generations in the form of occupational diseases to workers and next door neighbours caused by the operation, as well as degradation of the environment in the operations area of influence.
This potential liability to the future, he says, is being mitigated by an environmental and social management system (ESMS) recently implemented by the bank which is made up of a policy framework, procedures and operational standards which gives guidance and strategic direction to DBN clients
In terms of applications for finance, Mbango says that the ESMS closely adheres to various sets of legislation and regulations at the local and national levels and international best practices. This, he says, points to the fact that the bank’s ESMS is not an additional requirement for borrowers, but rather a ratification that applicants adhere to requirements stipulated by law, which applicants will have to adhere to in order to obtain a social license to operate. Practical management for the bank and its applicants
Mbango says that DBN categorises and manages applications according to low, medium and high-risk environmental and social categories. In the low risk category, he says, the bank requests compliance with local environmental, occupational health, safety and labour laws. In terms of its ESMS, low-risk projects are not likely to directly or indirectly affect the environment adversely and are unlikely to induce adverse social impacts.In the medium risk category, the bank will also require environmental scoping according to the Environmental Management Act No 7 of 2007 and its Regulations of 2012, as well as an environmental and social management plan (ESMP). Medium-risk projects are likely to have detrimental site-specific environmental and/or social impacts that are less adverse than high risk projects. Likely impacts will be few, site specific, largely reversible, and readily minimised by applying appropriate management and mitigation measures or incorporating internationally recognised design criteria and standards. Mbango says high risk projects are likely to induce significant and/or irreversible adverse environmental and/or social impacts, or significantly affect sensitive environmental or social components. These projects require a full Environmental Impact Assessment process according to the Environmental Impact Assessment Regulations: Environmental Management Act, 2007 and List of activities that may not be undertaken without Environmental Clearance Certificate: Environmental Management Act, 2007.
In all instances, a full ESMP is required to be furnished to DBN for low, medium and high risk projects. Mbango concludes by saying that DBN views its ESMS as a natural element of good business and a requirement for each enterprise or project’s stakeholder satisfaction. The bank does not view its ESMS as a prescription for operations, but rather as a natural method to mitigate operational, reputational and liability risks of the project to communities, the environment, workers, shareholders in the business, and the bank. In implementing the ESMS, DBN has fulfilled all requirements of the African Development Bank (AfDB). The bank is currently in the process of accrediting itself with the Green Climate Fu nd.
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