GUIDANCE NOTE

ON IMPLEMENTATION OF THE EQUATOR

PRINCIPLES DURING THE COVID-19
PANDEMIC

EQUATOR
PRINCIPLES
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THE EQUATOR PRINCIPLES

Guidance on Implementation of the Equator Principles During
the Covid-19 Pandemic

Disclaimer: This document contains selected information and examples to support the
understanding of the requirements in, and implementation of, the Equator Principles and does not
establish new principles or requirements. The information and examples are provided without
guarantee of any kind, either express or implied, including, without limitation, guarantees as to
fitness for a specific purpose, non-infringement, accuracy or completeness. The guidance provided
does not constitute medical or legal advice and does not replace or override advice and requirement
from relevant public health organisations including the World Health Organisation, relevant national
public health authorities and national governments. No responsibility is accepted for the content of
any external references. Neither the Equator Principles Association nor Ramboll UK Limited shall be
liable under any circumstances for how or for what purpose users apply the information, and users
maintain sole responsibility and risk for its use. Equator Principles Financial Institutions should make
implementation decisions based on their institution’s policy, practice and procedures. No rights can
be derived from this publication. The Equator Principles Association and Ramboll neither owe nor
accept any duty to any third party and shall not be liable for any loss, damage or expense of
whatsoever nature which is caused by any third party’s reliance on the information contained in this
document.
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CONTENTS

PREAMBLE ..................................................................................................................................... 2
1 GUIDANCE FOR EPFIs .............................................................................................................. 4
1.2 General Considerations ................................................................................................... 4
1.2 Managing Equator Principles Compliance Due Diligence ................................................. 5
1.2A Scoping the ESDD and the Role of Advisers ........................................................................ 5
1.2B Site Visits During Covid-19 .................................................................................................. 5
1.2C: Reaching Signing and Financial Close.................................................................................. 6
1.2D: Post Financial Close Monitoring and Compliance ............................................................... 8
1.3 Learning Lessons Going Forward ..................................................................................... 9
2 GUIDANCE FOR BORROWERS ................................................................................................. 9
2.1 Planning and Assessment Prior to Financial Close ........................................................... 9
2.2 Planning the Response Post-Financial Close .................................................................... 9
2.2A: Governance and Management Response ........................................................................... 9
2.2B: Management Plans ........................................................................................................... 10
2.3 Managing EPs / EPFI Compliance Risks ...........................................................................11
2.4 Engagement and Communication...................................................................................11
2.4A Engagement with Lenders ................................................................................................ 11
2.4B Engagement with Workforce ............................................................................................ 12
2.4C Engagement with Communities and Other Third Parties ................................................. 12
2.5 Managing Health Risks ...................................................................................................13
2.5A Workforce ......................................................................................................................... 13
2.5B Local Communities ............................................................................................................ 13
2.6 Welfare and Livelihoods.................................................................................................14
3 LIST OF GOOD PRACTICE REFERENCES AND SOURCES ............................................................15
LIST OF ABBREVIATIONS ...............................................................................................................17
ANNEX 1 Good Practice Checklists for EPFIs ..............................................................................18
ANNEX 2 Good Practice Checklists for Borrowers ......................................................................20
ANNEX 3 Summary of Key Factors in Evaluating Covid-19 Compliance Risks ..............................23

1 June 2020
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PREAMBLE
The Covid-19 pandemic has had a significant effect on markets and supply chains across the globe.
Consequently, there are material implications on financing including that applicable transactions
continually meet the environmental and social (E&S) requirements of the Equator Principles (EPs).
The objective of this Guidance Note is to provide practical guidance for both Equator Principle
Finance Institutions (EPFIs) and Borrowers on how to manage Covid-19 related risks to EPs
compliance and it is intended to apply to both EP3 and EP4 transactions.

The Guidance Note considers managing the impacts and risks of: (i) Covid-19 related restrictions on
EPFIs’ Environmental and Social Due Diligence (ESDD) process both prior to loan signing and
Financial Close; (ii) Covid-19 on Borrowers’ ability to meet the E&S requirements of EPFIs and loan
provisions; and (iii) Covid-19 on the health, safety and welfare of the workforce and local
communities associated with EPs applicable Projects.

Figure 1 Guidance Note Document Map

The Guidance Note is set out to provide recommendations for EPFIs and Borrowers in Section 1 and
Section 2 respectively, with cross-references identified were relevant. The Guidance Note also

2 June 2020
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provides a list of external good practice sources and materials (Section 3), good practice checklists
for EPFIs and Borrowers (Annex 1 and Annex 2 respectively), and a summary of key risk factors to be
considered when evaluating Covid-19 compliance risks (Annex 3). The Guidance Note Structure,
including primary cross-linkages, is shown in Figure 1.

3 June 2020
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1 GUIDANCE FOR EPFIs

1.2 General Considerations
The Covid-19 pandemic poses a number of risks to compliance for transactions falling under the
requirements of the EPs. A risk-based approach can be helpful when determining the extent and
depth of detail to which such risks within individual transactions need to be assessed. Risk-based
reviews may include consideration of regional context (including known status of Covid-19 and
healthcare capacity in region or country), Project risks (EPs categorisation, nature and status of
Project, type and size of workforce etc.) and HSES management capacity of the Borrower (including
past HSES performance and outline management response to Covid-19). A summary of key factors
that are likely to have a material effect on compliance risk as a consequence of Covid-19 pandemic is
provided in Annex 3.

Given the severity of impact and global reach of the Covid-19 pandemic EPFIs may wish to undertake
review of the potential effects on their assets and activities. It may be appropriate and efficient for
some EPFIs to take a sectoral and geographical approach to identifying EPs compliance risks across
their Project Finance portfolio. Compliance review at the Project-level can then be focused on
priority risks.

EPFIs may work with their agents and advisers, including the Lenders’ Environmental and Social
Consultant (LESC), to review the adequacy of the Borrower’s response against good practice as
identified in Section 2. For Projects yet to reach signing and/or Financial Close, it is important that
the Environmental and Social Due Diligence (ESDD) undertaken by the EPFI and its advisers confirms
that the Borrowers’ assessment and management of environmental and social risks includes
adequate consideration of Covid-19. For Projects in construction or operational phases during the
pandemic, the assessment of the Borrower’s Covid-19 response may form part of scheduled
monitoring activities (including visits) and/or review of Borrower self-monitoring reports. However,
additional interim Covid-19-specific reviews may be appropriate depending on the Project risk and
the timing of the scheduled monitoring visit or reporting period.

During the Covid-19 recovery period it may be especially important to ensure that economic
imperatives (e.g. at the national, local and Project/Borrower level) do not over-ride compliance
requirements. For identified high-risk Projects EPFIs may wish to undertake a thorough assessment
of Covid-19 related risks. A particular focus may need to be given to maintaining dialogue and
oversight of ramp-up activities as Covid-19 restrictions are relaxed to ensure that these are
undertaken in line with all applicable E&S requirements.
References: See Section 3 Reference 14

4 June 2020
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1.2 Managing Equator Principles Compliance Due Diligence

1.2A Scoping the ESDD and the Role of Advisers
The scope of, and approach to, the ESDD needs to consider both Covid-19 related restrictions on the
ESDD process and the Borrower’s management response to pandemic. Liaison with advisers will be
important in setting and agreeing the scope of the ESDD in a timely manner. Engagement with any
other lenders to agree the ESDD scope will also be important and, where appropriate, all-lender
communication may help accelerate decision making.

The scope of work of the LESC should be sufficient to ensure that it encompasses assessment of any
pandemic situation. Where the LESC is already appointed, the EPFI may liaise with them to ensure
that this is the case and agree additional scope amendments with the Borrower and LESC if
necessary. Where the LESC is yet to be appointed, then it is recommended that their proposed
scope of work addresses both Covid-19 specific and general pandemic risks. Specific Covid-19
review requirements to be addressed in the LESC scope of work may include:
• Performance of Covid-19 constrained site visits (combination of approaches identified in
Section 1.2B below may be considered).
• Review of the Borrowers’ approach to pandemic risk management.
• Ensuring specific liaison with the lenders' technical consultant on emergency and business
continuity aspects.

It is also recommended that loan documentation provisions for post-Financial Close monitoring visits
be drafted to provide flexibility for how such visits are performed including options for 'blended'
approaches as appropriate.

1.2B Site Visits During Covid-19 Potential Key Risk Project Scenarios
The ability of EPFIs and their advisers to undertake • Lack of visibility of Project performance
in-field site visits of Borrowers’ Projects/facilities, during the period of travel restriction may
be especially important where (i) the EPFI
either as part of the pre-Financial Close ESDD or as
and LESC have not previously been to site
part of post-Financial Close monitoring, is likely to be (e.g. during pre-Financial Close ESDD; (ii)
affected by travel restrictions during the pandemic. there have been significant concerns with a
Borrower’s prior compliance performance;
Options to overcome such restrictions should be
(iii) a Project is entering a key development
developed taking into consideration the materiality phase; or (iv) site visits are required to
of compliance risks and the specifics of the Project determine completion of key milestone
including Conditions Precedent.
and its location. Options may include:
• Some aspects of ESDD reviews are
• Delay of site visit. This may be relevant, for especially difficult to perform remotely,
example, for monitoring visits on mature and/or particularly in relation to stakeholder
steady-state Projects that are well-understood meetings which may be difficult to achieve
in all contexts regardless of alternative
by the EPFI/LESC and that have a good engagement options (especially where
compliance record during the loan period to options are limited by technology
date. In the case of such Projects with frequent availability, cultural context etc.)

5 June 2020
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site visits (multiple per year) it may be reasonable to reduce the number of physical monitoring
visits and rely on Borrower self-monitoring reports. (See also Section 1.2C for specific issues
related to delaying site visits during the pre-Financial Close ESDD.)
• Virtual site visits. Virtual site visits may be considered where the EPFI/LESC is unable to travel
to site. These can combine remote videoconferencing (with shared screen for presentations)
combined with remote visual aids. Visual aids may include drone video footage, photography
from the Borrower, time lapse photography, orbital satellite imagery and real-time
video/communication between remote LESC and Borrower personnel moving around site
and/or other stakeholders. Virtual visits require detailed planning on agenda and approach,
and information data requests (including requests for visual footage) are ideally received and
reviewed in good time prior to the virtual visit.
• Use of local consultants. This is appropriate where the local consultants can be overseen
remotely by the LESC or where the EPFI is satisfied that the local consultant is suitably
experienced and independent. Blended options of local consultants onsite with remote liaison
and capacity building from international LESCs may also be effective, especially where there
may be concerns over the experience and/or independence of available local consultants under
the Covid-19 scenario. In some cases, this may require additional consultants to be identified
and new contracting agreements to be put in place at short notice. There may also be travel
restrictions on local consultants, although these are likely to be lifted more quickly than for
international consultants.
• Increased remote communications between EPFIs, their advisers and Borrowers beyond formal
virtual visits may also be appropriate in the form of calls, emails and information updates etc..

The Project context is an important consideration in determining the proposed approach to be

adopted for site visits under Covid-19 restrictions and specific aspects to be considered include local
communication networks/technology support, data security issues, issues with importing technology
(e.g., options may be limited by the availability of technology locally) and cultural context (e.g., for
remote stakeholder engagement). It is also recommended that the functionality and operability of
key technology to be used for virtual visits be tested in advance where possible.

It is also important that the changing situation with regards to the ability to travel to specific Project
locations is monitored and approaches amended accordingly.

1.2C: Reaching Signing and Financial Close Potential Key Risk Project Scenarios
Prior to loan signing/Financial Close, key aspects of • Situations where contract procurement
the ESDD in the context of Covid-19 restrictions relate has already occurred before
signing/Financial Close
to ensuring that: (i) a robust EPs compliance ESDD can
• Situations where significant construction
be completed; (ii) the Borrower has been able to has started before signing/Financial Close
complete all material assessments and planning

6 June 2020
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activities necessary to meet EPs compliance; and (iii) E&S provisions with the loan documentation
take due account of Covid-19 related risks and uncertainties.

Restrictions on site visits may limit the ESDD possible prior to signing or Financial Close, even where
alternative/virtual site visits have been undertaken as described in Section 1.2B. EPFIs may review
the risks associated with such limitations in the ESDD to determine their ability to confirm the level
of EPs compliance prior to signing and/or Financial Close. This issue may not occur in cases where
Financial Close will also be delayed due to concurrent delays in the Borrower being able to
commence construction (for example due to restrictions on worker influx/availability of workers)
provided that by the time that construction can commence, then LESC/EPFI visits would also be
feasible. In addition, there may be a material effect on the Project schedule itself that would need
to be taken into account when finalising loan documentation.

To facilitate rapid Financial Close in such a scenario, the ESDD may be advanced as far as possible
prior to the physical site visit. In such cases the EPFI may wish to request the LESC to provide
detailed opinion on the residual risks to the ESDD in the absence of a physical site visit. Where such
residual risks are low and well understood the EPFI may choose to proceed to signing with a
Conditions Precedent for physical site visits to occur and confirm EPs compliance prior to Financial
Close/first disbursement. However, to do so it would need to be confirmed that there were no
potential risks related to, for example, Export Credit guarantee periods or government commitments
if Covid-19 restrictions persist for a significant period (e.g. several months or longer). Other
potential issues with this approach may occur where:
• Construction has started prior to Financial Close and hence significant work may be undertaken
prior to Financial Close with limited ability for in-field independent review and which may be
difficult to retrospectively assess by future physical site visits once Covid-19 travel restrictions
have been eased. In such cases efforts to undertake interim virtual site visits during
construction are recommended even if Financial Close is delayed until a physical site visit can be
undertaken.
• Procurement has been completed prior to Financial Close with insufficient contractual
provisions related to EPs compliance.
• The workforce is locally available and may mobilise on easing of travel restrictions well before
the EPFI/LESC may be able to visit the site. In some instances this may be resolved by the use of
local consultants subject to the considerations presented in Section 1.2B.

For relevant Projects the pre-Financial Close ESDD will include review of the Borrowers
Environmental and Social Impact Assessment (ESIA) and Environmental and Social Management Plan
(ESMP). The ESDD review of these documentations may need to take into consideration both any
limitations in their development due to Covid-19 restrictions, and also whether Covid-19 risks have
been adequately addressed within them. Covid-19 aspects to be considered by the Borrower in the
development of the ESIA and ESMP are further discussed in Section 2.1.

7 June 2020
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The E&S provisions within the loan documentation will need to reflect potential Covid-19 risks and
impacts but also provide for implementation of relevant mitigation measures. These may be
considered by the EPFI on a case -by-case as part of the loan negotiation with support from their
advisers. Aspects to be considered may include, but not be limited to, the following:
• The definition of force majeure to include reference to the time period of disruption where
force majeure can be claimed.
• Drafting of the definition of material E&S incidents and remedial actions/cure periods (including
with respect to event of default) to adequately address disease/pandemic related impacts.
• Where possible and appropriate, link the timing of key E&S compliance actions (e.g. Equator
Principles Action Plan (EPAP) deliverables) to Project milestones rather than calendar dates.
• Aspects related to the scope of work of the LESC and monitoring visits to address Covid-19 as
described in Section 1.2A and Section 1.2B. This may include requirements on the Borrower to
ensure that agreed appropriate technology is available to facilitate virtual site visits.
• Ensuring detailed requirements for self-monitoring reporting by the Borrower, for example
increased frequency and use of visualisation (e.g. drone footage, time-lapse photography etc.).

References: See Section 3 Reference 9

1.2D: Post Financial Close Monitoring and Compliance

EPFIs can work with their advisers and Borrowers to identify any areas where Covid-19 restrictions
may limit the ability of the Borrower to meet compliance requirements (e.g. loan covenants and
EPAP actions) during post-Financial Close monitoring. EPFIs may wish to encourage Borrowers to
undertake a review of their compliance risks as outlined in Section 2.2 in order to identify any such
risks as early as possible and where feasible prior to any actual non-compliance occurring. In
determining how to respond to such situations, risk-based reviews (see also Section 2.2) may be
useful to enable EPFIs to focus on time-critical actions which, if not performed in a timely manner,
may lead to significant E&S impacts that may be difficult to retrospectively remediate. In such cases
alternative and/or additional mitigation/remedial actions may need to be developed and agreed
(this should follow any cure periods allowed for in the loan documentation). Potential mitigation
actions may include: suspension, delay, or amendment of Project activities to remove any actual E&S
impacts; provision of additional support to affected parties; and/or identification of additional
impact offsets. Where time-criticality is not identified, or where those Project activities to which the
compliance requirement is associated are similarly delayed, it may be appropriate to agree a
rescheduling of the required compliance action (see Section 1.2C for how E&S provisions may be
drafted to help accommodate such situations in future transactions).

For aspects related to performance of site monitoring visits during the post-Financial Close phase,
see Section 1.2B.

8 June 2020
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1.3 Learning Lessons Going Forward

As the pandemic and associated impacts evolve, EPFIs may wish to undertake periodic review of the
Covid-19 response with regards to EPs compliance across its portfolio, and in particular on its
identified higher risk Projects, to identify any lesson learned and areas for improvement. This may
cover both Borrower responses and the effectiveness of existing and modified compliance assurance
approaches to identify good practices and whether additional controls (for example via EPFI/LESC
ESDD review or loan requirements) could be generalised for use in future. This may be at both the
individual EPFI level and the wider Project Finance sector level (for example working across the EPs
Association). The review may cover, inter alia, specific Covid-19 aspects relevant to longer term
Covid-19 scenarios (including evolving approaches as, for example, travel restrictions evolve),
general pandemic scenarios and wider regional/global business interruption scenarios.

2 GUIDANCE FOR BORROWERS

2.1 Planning and Assessment Prior to Financial Close
Borrowers are required to develop an ESIA and ESMP for Category A and (where appropriate)
Category B Projects as defined in the EPs. Any limitations in the development of the ESIA due to
Covid-19, for example due to limited ability to undertake stakeholder engagement or baseline study,
should be clearly identified by the Borrower. In addition, the ESIA and ESMP may need to include
specific consideration of Covid-19 risks and impacts. See Section 2.2B and Section 2.4 for guidance
on consideration of Covid-19 in Stakeholder Engagement Plans (SEP), Emergency Preparedness and
Response Plans (EPRP) and Covid-19 Community Response Plans. Covid-19 risks and management
responses should also be considered within procurement, interface planning and construction
methodologies.

2.2 Planning the Response Post-Financial Close

2.2A: Governance and Management Response
Borrowers should establish a multi-disciplinary team to plan their Covid-19 response with roles and
responsibilities clearly identified. This team must have senior management buy-in as well as
coordination with relevant internal (including shareholders as appropriate) and external (e.g. local
authorities, emergencies and communities etc. as appropriate) stakeholders. Further guidance on
governance and management response to Covid-19 is provided in references 3, 10, 14 and 16 in
Section 3.
References: See Section 3 References 3, 10, 13 and 16

9 June 2020
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2.2B: Management Plans

Risk registers and EPRPs should be updated and/or Potential Key Risk Project Scenarios
developed in the light of Covid-19. Project risks, • Remote facilities
including those associated with EPs compliance, should • Critical facilities (e.g. offshore)
• Developing countries with limited
be identified and scenarios developed, including credible
health care
worst cases, as part of the plan updates. The plans • Key vulnerable groups (including
should address impacts to workers, communities and Indigenous Peoples)
the environment, and should involve Health and safety, • Countries with poor human rights
records
environmental and social teams in their development. • Construction phase projects with large
EPRPs should consider actions in event of Covid-19 cases migrant workforce
within the Project, on-site medical response/facilities, • Countries with poor control of Covid-19,
e.g. with limited data and control
quarantine procedures/facilities, medevac in remote
measures or where spread of pandemic
areas, etc.. The plan should take due account of: may be under-reported
• the potential extended duration of the pandemic • Countries where the Covid-19 infection
peak is yet to be reached
and potential future infection 'waves'
• Negative perception in local community
• the context of the pandemic in specific locations of project as route for Covid-19
and geographies, including specific consideration of infection
areas where under-reporting is likely and/or where • Key risks when national restrictions start
to lift. Need for projects to determine if
peak infection rates may not have been reached. risk profile of project requires longer
term/different restrictions for general
Consideration should be given to developing a dedicated national restrictions

Covid-19 Community Response Plan (CCRP) addressing

direct and indirect Covid-19 impacts to communities and Project impacts on communities (e.g.
changed impacts and risks due to Covid-19). Projects in some locations, for example in remote
areas, may be, or be perceived to be, a significant route of disease spread to local communities and
this should be considered in the CCRP where appropriate. See also Section 2.4 in relation to
guidance for addresses Covid-19 risks within stakeholder engagement.

Management of change should be established as part of response procedures to ensure review and
update in line with the evolving pandemic situation, legal requirements and guidance. This should
include daily reviews of Covid-19 updates from the World Health Organisation (WHO), national
public health authorities and national/local government. In addition, as the pandemic evolves,
Borrowers are recommended to undertake periodic review of their Covid-19 response in order to
identify any lessons learned and areas for improvement for inclusion in future contingency planning.
This may include specific Covid-19 management in future, general pandemic risk management and
wider business disruption topics.

Scenarios for the period of lifting of restrictions and recovery should also be included in the EPRP.
This should include prevention and response for 'second wave' effects.

10 June 2020
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2.3 Managing EPs / EPFI Compliance Risks Potential Key Risk Project Scenarios
Covid-19 is likely to affect the Borrower's ability to meet • Key risk areas include actions likely to
lead to significant E&S impacts/risks if
compliance requirements, for example as set out in permit
not implemented on time schedule
conditions, actions and measures specified in loan (e.g. implementation of RAP/LRP
covenanted plans (e.g. EPAP, ESMP, SEP, Resettlement actions, repair/maintenance activities
etc.)
Action Plans (RAP), Livelihood Restoration Plans (LRP) etc.),
and also to undertake required repair and maintenance
activities. Such compliance may be affected by restrictions on meetings with community groups,
access to specialist services (for example closed laboratories, inability of specialists to travel to site,
restrictions on import of materials) etc.. As part of the review of Covid-19 compliance risks, the
Borrower should include development of mitigation actions, which should be communicated to
relevant stakeholders. The review should include consideration of any third-party actions such as
government led resettlement as relevant. The review should place a primary focus on those aspects
that have the potential to result in significant E&S risks and should specifically distinguish between
critical actions required in the short-term (e.g. to avoid significant E&S impacts that may be difficult
to retrospectively remediate) and those that may be reasonably delayed without significant E&S
impact (e.g. technical compliance issues with no immediate direct E&S impact or where suitable
mitigation can be identified). See Section 2.4A for liaison with lenders over compliance risks.

2.4 Engagement and Communication Potential Key Risk Project Scenarios

2.4A Engagement with Lenders • Remote facilities
Adequate communication from Borrowers to Lenders on • Safety critical facilities (e.g. offshore)
their Covid-19 response is essential. This should include • Developing countries with limited
health care
details of identified key compliance risks, the proposed • Construction phase projects with
management response and any significant residual risks large migrant workforce
as outlined in Section 2.2. Where relevant, Borrowers • Scenarios where engagement is
critical to managing significant
and EPFIs should look for proactive input from the LESC social/environmental risks in relation
and other advisers and agents in this process. The to ongoing project activities - e.g.
Borrowers’ overall approach to managing Covid-19 risks active resettlement/livelihood
restoration actions.
can be reported to EPFIs as part of routine self-
• Meaningful engagement may be
monitoring, LESC monitoring visits (as feasible - see difficult to achieve in every context
Section 1.2A) and/or dedicated interim updates (for regardless of alternative engagement
options (especially where options are
example where the next scheduled report or visit is
limited by technology availability,
several weeks or months away). Borrowers should cultural context etc.)
report any key residual compliance risks to EPFIs as early • Negative perception in local
as possible and where feasible prior to any actual non- community of project as route for
Covid-19 infection
compliance occurring. Significant outbreaks of Covid-19
and any Covid-19 deaths within the workforce should be reported as soon as reasonably possible (in
line with existing good practice this is likely to be required under reporting clauses within loan

11 June 2020
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documentation). Any collective retrenchment should be notified to EPFIs and a retrenchment plan
developed (see also Section 2.6).

2.4B Engagement with Workforce

The Borrower should communicate its approach to Covid-19 management to its workforce (including
contractors) and provide information and advice about the virus. Engagement methods should
ensure the ability to provide frequent updates. It is important to avoid out-of-date information in a
rapidly evolving situation and it is recommended a central information portal/location is provided
where the workforce can access all the latest information and guidance. Borrowers should consider
the need for a 24-hour emergency hotline. Communications also need to be designed to avoid risks
of stigma associated with infection in line within available good practice (e.g. see reference 24 in
Section 3). See Section 2.6 for engagement regarding any necessary reduction in labour.

2.4C Engagement with Communities and Other Third Parties

Borrowers need to review how existing planned/committed engagement activities may be affected
by Covid-19 restrictions (e.g. by restrictions on social gatherings etc.) and develop mitigation and/or
alternative engagement processes as necessary and feasible. This should include consideration of
those engagement activities that are critical in the immediate future (and, for example, have the
potential to result in significant adverse social/environmental that may be difficult to retrospectively
remediate if not implemented) and those that can be deferred to when Covid-19 restrictions are
relaxed without resulting in significant E&S impacts. Alternative engagement processes may include:
• Consideration of opportunities for engagement through local actors such as women and youth
leaders, local authorities, traditional leaders, etc.
• Implementation of additional training for Community Liaison Officers to ensure they can
effectively deliver key messages, particularly to the most vulnerable and where Project impacts
will be significant.

The Borrower should further communicate information to local communities on the Project's
response to Covid-19, including control of workforce-community interactions, any necessary
changes to procedures (e.g. EPRP, grievance mechanism etc.), the Projects approach to controlling
Covid-19 risks in the workforce and any aspects of support being offered by the Project to the local
community (e.g. medical support, provision of Personal Protective Equipment, transport support etc.
- see also commentary on Covid-19 Community Response Plans in Section 2.5B). This should include
review of appropriate stakeholders (based on existing registers/lists) and include a focus on any
identified vulnerable groups. Engagement will be especially important where Projects may be
perceived to be a significant route of disease spread, for example in some remote locations.
Proactive response and assistance may be a useful approach to gaining/improving trust within local
communities.

12 June 2020
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Covid-19 engagement methods should be mindful of managing social stigma of Covid-19 (see WHO
guidance). In addition, alternative engagement methods should consider the need to ensure
anonymity (where appropriate, e.g. to prevent reprisals) and limitations in reach (e.g. vulnerable and
other groups with limited access to electronic networks, social media etc.).
References: See Section 3 References 1, 8, 11, 23

2.5 Managing Health Risks Potential Key Risk Project

2.5A Workforce Scenarios
Borrowers should develop a range of actions/procedures to • Remote locations with difficult
travel links and/or limited health
manage worker risks. These must align with latest care infrastructure.
guidance/requirements at national/regional levels and WHO • Construction phase projects,
guidelines, and the roles and responsibilities defined by the especially with large migrant
workforce.
Borrower should include ensuring that up-to-date • Risk period when national/regional
information is maintained at the Project level. As measures (e.g. on
appropriate the Borrower should liaise with national/local travel/quarantining) are relaxed
• Countries where spread of
authorities to ensure alignment and appropriate
pandemic either may be under-
collaboration. Topics to be covered are provided in the reported or where peak is yet to
Checklist in Annex 2. be reached.
• Developing countries with limited
References: Refer to applicable guidance including advice, guidance health care
and requirements from WHO (see https://www.who.int/health-
• Negative perception in local
topics/coronavirus#tab=tab_1), national public health authorities and
national/local governments. See also additional guidance in community of project as route for
references 4, 8, 12, 12, 18, 19, 23 and 25. In additional sector-specific Covid-19 infection
guidance is available from the WHO (ref 26) and other sources (e.g.
see references 3, 6 and 16).

2.5B Local Communities

Borrowers should review potential risks on local communities, including direct and indirect impacts
of Covid-19 and any Covid-19 related Project impacts (e.g. worker-community interfaces, how any
Project changes during to Covid-19 may affect communities, etc.). The Borrower should then assess
its mitigation approach to Project-related impacts and also identify any opportunities to support
communities mitigate wider Covid-19 risks/impacts either through new initiatives or building on
existing programmes. The latter may include sharing/provision of resources (medical facilities,
equipment, transport, test kits, food for vulnerable people in isolation etc.). Such approaches may
be included within a dedicated Covid-19 Community Response Plan (see also Section 2.1).
References: See Section 3 Reference 1

13 June 2020
__________________________________________________________________________________

2.6 Welfare and Livelihoods Potential Key Risk Project Scenarios

Where travel restrictions lead to workers remaining on • May affect all projects, but especially
locations/sectors/projects with:
site for longer rotations, fatigue management
o limited government support
procedures (e.g. reduced shifts, additional non-working o vulnerable/ disproportionately
days) may need to be considered. Where reduction in affected elements of workforce
(including women, casual
the workforce is required:
workers, specific hardship cases)
• Workers/worker representatives should be • Developing countries with limited
consulted during the process of evaluating the health care
different viable options. • Countries with poor Covid-19 control
• Countries with poor human rights
• Options for avoiding redundancy should be records
considered in the first instance (e.g. remote • Where high-risk supply chains used
working, flexible, paid/unpaid leave, reduced
hours/pay, furloughing where available etc.) with retrenchment taken as a last option.
• Reductions in workforce should be undertaken incrementally where possible and regularly
reviewed.

Consideration should also be given to specific impacts on vulnerable workers (e.g. hardship cases,
where women may be disproportionately affected, casual workers, consideration of support for
workers with childcare issues, etc.). Supply-chain workers may also disproportionately impacted by
the pandemic, including being at increased risk of exposure to Covid-19, interruption of safeguard
mechanisms, lack of health care provision, and loss of livelihood. Borrowers should assess any
vulnerable high-risk supply chains and ensure that adequate engagement with primary supply chain
providers.

Borrowers should also assess the economic impacts that any suspension of the Project may have on
the local supply chain and indirect employment in the local community. Key risk/vulnerable groups
should be identified and considered within support programmes (see commentary on Covid-19
Community Response Plans in Section 2.5B).
References: See Section 3 Reference 3, 6, 11, 18 and 19

14 June 2020
__________________________________________________________________________________

3 LIST OF GOOD PRACTICE REFERENCES AND SOURCES

1. AngloAmerican: Community Response Action Plan: Site Planning Guidance and Template
(https://www.angloamerican.com/~/media/Files/A/Anglo-American-
Group/PLC/sustainability/covid-19-community-response-planning.pdf)
2. ADB: Managing Infectious Medical Waste during the Covid-19 Pandemic
(https://www.adb.org/publications/managing-medical-waste-covid19)
3. CDC: Covid-19 guidance for employers (https://assets.cdcgroup.com/wp-
content/uploads/2020/03/14182319/CDC_Covid-19-Guidance-for-Employers.pdf)
4. CDC: Covid-19 guidance for investors and financial institutions on job protection
(https://assets.cdcgroup.com/wp-content/uploads/2020/04/20171325/CDC_Covid-
19JobProtection_A4_20-April-2020.pdf)
5. CDC Covid-19 guidance for managing risks in the construction sector
(https://assets.cdcgroup.com/wpcontent/uploads/2020/04/14151613/Managing-Covid-19-risks-in-
theconstruction-sector-14-April-2020.pdf)
6. EBRD: Covid-19 briefing note: Labour requirements (https://www.ebrd.com/covid19-labour-
requirements.pdf)
7. EBRD: Covid-19 briefing note: Workplace risk assessment checklist (https://www.ebrd.com/covid19-
workplace.pdf)
8. EBRD: Covid-19 briefing note: Stakeholder engagement (https://www.ebrd.com/covid19-
consultation.pdf)
9. EPs Guidance for EPFIs on Incorporating Environmental and Social Considerations Into Loan
Documentation (https://equator-principles.com/wp-
content/uploads/2017/03/ep_guidance_for_epfis_on_loan_documentation_march_2014.pdf)
10. FMO: Risks and Crisis Management: The Role of Good Corporate Governance (https://www.fmo.nl/covid-
19-guidance-documents)
11. KfW/DEG: Covid-19 Guidance for Employers (https://www.deginvest.de/DEG-Documents-in-
English/Range-of-Services/Covid-19-ESG-Guidance_DEG.pdf)
12. KfW: Board Guidance: Crisis management (https://www.deginvest.de/DEG-Dokumente/Unsere-
L%C3%B6sungen/Leitfaden-Krisenmanagement.pdf)
13. IDB Invest: Corporate Governance: Covid-19 and the Board of Directors
(https://www.idbinvest.org/en/download/publication/52197/attachment/9724)
14. IDB Invest: Guidance for infrastructure Projects on Covid-19: A rapid risk profile and decision framework
(https://www.idbinvest.org/en/publications/guidance-infrastructure-Projects-covid-19-rapid-
risk-profile-and-decision-framework)
15. IDB Invest: Maintaining Agriculture Operations during the Covid-19 Pandemic
(https://idbinvest.org/en/download/9815)
16. IFC: Tip Sheet for Company Leadership on Crisis Response: Facing the Covid-19 Pandemic
(https://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/ifc+cg/resource
s/guidelines_reviews+and+case+studies/tip+sheet+for+company+leadership+on+crisis+response+-
+facing+the+covid-19+pandemic)
17. IFC: Interim Advice for IFC Clients on Preventing and Managing Health Risks of Covid-19 in the Workplace
(https://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustai
nability-at-ifc/publications/publications_tipsheet_covid-19-ohs)
18. IFC: Interim advice for IFC clients on supporting workers in the context of Covid-19
(https://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-
at-ifc/publications/publications_tipsheet_covid-19_supportingworkers)

15 June 2020
__________________________________________________________________________________

19. IFC: Childcare in the Covid-19 Era: A Guide for Employers

(https://www.ifc.org/wps/wcm/connect/2e12d33a-ce55-46b2-aae5-ee8304a6506a/202004-Childcare-
Covid-19-Guide-for-Employers.pdf?MOD=AJPERES&CVID=n5gSBnQ)
20. IFC: Interim advice for IFC clients on developing a Covid-19 emergency preparedness and response plan
(EPRP) (https://www.ifc.org/wps/wcm/connect/bd11d905-7827-44e0-b1f2-
f10c2a80f8a7/Tip+Sheet_Interim+Advice_EPRP_COVID19_May2020.pdf?MOD=AJPERES&CVID=n9hSVji)
21. WHO general advice, guidance and requirements from WHO see https://www.who.int/health-
topics/coronavirus#tab=tab_1
22. WHO: Getting your workplace ready for Covid-19 (https://www.who.int/docs/default-
source/coronaviruse/getting-workplace-ready-for-covid-19.pdf)
23. WHO: Social Stigma associated with Covid-19 (https://www.who.int/docs/default-
source/coronaviruse/covid19-stigma-guide.pdf?sfvrsn=226180f4_2)
24. WHO Covid-19 Situation Reports (https://www.who.int/emergencies/diseases/novel-coronavirus-
2019/situation-reports/)
25. WHO sector-based guidance for healthcare, education, food and agriculture and solid waste and waste
water management (see WHO web pages)

See also applicable requirements and guidelines from relevant national/local public health
authorities and national/local governments.

16 June 2020
__________________________________________________________________________________

LIST OF ABBREVIATIONS

CCRP Covid-19 Community Response Plan

EPs Equator Principles
EPAP Equator Principles Action Plan
EPFI Equator Principles Finance Institution
EPRP Emergency Preparedness and Response Plan
E&S Environmental and Social
ESDD Environmental and Social Due Diligence
ESIA Environmental and Social Impact Assessment
ESMP Environmental and Social Management Plan
HSES Health, Safety, Environmental and Social
LESC Lenders’ Environmental and Social Consultant
LRFP Livelihood Restoration Plan
RAP Resettlement Action Plan
SEP Stakeholder Engagement Plan
WHO World Health Organisation

17 June 2020
__________________________________________________________________________________

ANNEX 1 Good Practice Checklists for EPFIs

General Considerations

1 Take a risk-based approach to assessment of Covid-19 impacts on Project compliance with

E&S requirements
2 Where appropriate take a sectoral and geographical approach to risk assessment across the
relevant transaction portfolio
3 For identified high-risk Projects request information of the Borrowers’ management
response to Covid-19
4 Utilise support from the LESC in undertaking the risk assessment and to assess Borrowers’
Covid-19 management responses on relevant Projects
Reference Sources: See reference 14

Scoping the ESDD and the Role of the LESC

1 Define the scope of the ESDD:

A The ESDD needs consider both how Covid-19 related restrictions on the ESDD process
and the Borrower’s management response to pandemic.
B Define and agree the ESDD scope in liaison with advisers (including the LESC) and,
where applicable, other lenders.
2 Include general pandemic and Covid-19 specific requirements in LESC scopes of work (pre-
signing/FC) and then reflected in loan documentation. Requirements to be considered
include:
• Performance of Covid-19 constrained site visits
• Review and monitor Borrowers’ approach to pandemic risk management
• Ensuring specific liaison with the lenders’ technical consultant on emergency and
business continuity aspects

Site Visits Under Covid-19 Restrictions

1 Where travel restrictions limit the ability to undertake site visits, agree optimal approaches
to site visits in discussion with agents, LESC and Borrower. Approaches to site visits include:
• Delay of site visit
• Virtual site visits (see below)
• Use of local consultants
• Combinations of the above
2 Good practice for virtual site visits includes:
• good planning, ensure that there is a clear agenda and that the necessary information
and Borrower personnel is available
• the visit may have to be structured in a series of conference calls
• technology options for consideration include videoconferencing, drone footage, time-
lapse photography, orbital satellite imagery, video/photographic evidence and real-
time video footage/communication (using Project personnel onsite)
• final technology selection should be based on feasibility, best ensuring provision
relevant information and ability to check gaps and uncertainties as identified in
previous review and assessment
• technology should be tested prior virtual visit
3 Identify limitations of agreed approach to site visits and assess associated risks to the ESDD
to develop management approach

18 June 2020
__________________________________________________________________________________

4 Consider joint LESC/technical consultant virtual visits

ESDD Prior to Signing/Financial Close

1 Identify limitations of ESDD due to Covid-19, optimise mitigation approaches and assess
associated risks within decision making
2 Ensure general E&S provisions are tested for adequacy and resilience of approach to Covid-
19 and similar pandemic/business continuity scenarios
3 Include specific provisions within the loan documentation to manage potential Covid-19 risks
and impacts, including consideration of:
• The definition of force majeure to include reference to time period of disruption
• Definition of material E&S incident and remedial action/cure to address pandemic
related impacts
• Link the timing of key E&S compliance actions (e.g. EPAP deliverables) to Project
milestones rather than calendar dates
• IESC scope of work and monitoring activity (including visits) to address Covid-19
4 ESDD review of the ESIA and ESMP (where required) should take into consideration:
• Any limitations in their development due to Covid-19 restrictions
• Whether Covid-19 risks have been adequately addressed
Reference Sources: See Reference 9.

Post Financial Close Monitoring and Compliance

1 Liaise with advisers and Borrowers to identify any areas where Covid-19 restrictions may
limit the ability of the Borrower to meet compliance requirements (e.g. loan covenants and
EPAP actions). Specific actions are summarised below
A Request Borrowers to undertake a review of their compliance risks in order to identify
any such risks as early as possible and where feasible prior to any actual non-
compliance occurring.
B Undertake risk-based reviews to enable focus on time-critical compliance risks
C Developed mitigation actions for any identified compliance risks (options may include:
suspension, delay, or amendment of Project activities to remove any actual E&S
impacts; provision of additional support to affected parties; and/or identification of
additional impact offsets.)
2 Review the Borrowers management of Covid-19 (benchmark against the good practice
outlined in Annex 2 and against any agreed Borrower Covid-19 response plans).

19 June 2020
__________________________________________________________________________________

ANNEX 2 Good Practice Checklists for Borrowers

Planning and Assessment Prior to Financial Close

1 Where Borrowers are required to develop an ESIA and ESMP in line with the EPs the
Borrower should ensure that:
• Any limitations in the development of the ESIA due to Covid-19, for example due to
limited ability to undertake stakeholder engagement or baseline study should be
clearly identified.
• The ESIA and ESMP include specific consideration of Covid-19 risks and impacts

Management Response – Post Financial close

1 Establish Covid-19 response committee/management team.
2 Back-up members identified in case of illness within the committee/team and other key HSES
roles
3 Development of Covid-19 response plan and/or update existing management plans as
appropriate. The response plans should address the identification and management of
impacts and risks to workers, communities, the environment and E&S compliance
requirements.
4 Develop scenarios to underpin response plans including covering input from environmental
and social teams
5 Update risk registers and ERPP for Covid-19 risks and response (including in event of Covid-
19 cases)
6 Consider development of specific Covid-19 Community Response Plan
7 Include unlock scenarios and associated risks in all the above plans, including the EPRP
8 At relevant stages undertake management review of Covid-19 response to identify lessons
learned and areas for improvements
Reference Sources: Refer to applicable guidance including references 3, 10, 13 and 18

Assessment of Compliance Risks with Lender Requirements

1 Borrower to assess all forward compliance requirements with focus on key risk activities,
develop mitigation actions and communicate with relevant stakeholders (including lenders).
2 The assessment should evaluate and distinguish between critical actions required in the
short term and actions that may be reasonably delayed (with potential mitigation)
3 Proactive communication with lenders/LESC/ICA on Covid-19 response and risk management
– ensure that any significance compliance risks are communicated as early as possible
4 Provide comprehensive Covid-19 response plan that includes both direct and indirect
impacts on the Project including material aspects of the Project (programme, supply chain,
workforce etc) and the parameters associated with this

Stakeholder engagement
1 Develop a Covid-19 specific communication procedure for the workforce.
2 Provide 24-hr emergency hotline
3 Update SEP to include both:
• modification of existing planned/committed engagement activities to meet Covid-
19 restrictions as necessary
• engagement activities focused on the Borrower's response to Covid-19

20 June 2020
__________________________________________________________________________________

4 Consider alternative engagement approaches during Covid-19 as necessary, including for

instance:
• social media
• traditional media (radio, TV, newspapers)
• leaflets
• signage
• telephone
• questionnaires (online, telephone or text/WhatsApp etc.)
• Covid-19 hotline
• Opportunities for engagement through local actors – such as women and youth
leaders, local authorities, traditional leaders, etc.
5 Consider whether additional training for CLOs is required to ensure they can effectively
deliver key messages, particularly to the most vulnerable and where Project impacts will be
significant.
6 Limitations in alternative methods need to identified and associated risks understood.
Reference Sources: Refer to applicable guidance including references 1, 8, 11, 23

Managing health risks - workforce

1 Covid-19 procedures to be developed and implemented – topics (A to L) to be considered
are, but not limited to, those listed in A to L below. These must be in line with national/local
requirements and latest WHO guidance and other reference guidance is also provided below.
A Communications (information and training - see also engagement above)
B Isolation/care for sick and potentially infected staff
C Identification of vulnerable workers (incl. older employees, those with underlying
health conditions etc.)
D Quarantine of staff travelling to site (if required and aligning with national/regional
requirements - gain agreements where necessary/appropriate to provide Project-
operated quarantine facilities as alternative to local authority quarantine facilities (if
any)). This should include consideration of the Covid-19 status in the Project location
and the main countries of origin of the workforce.
E Testing of staff
F Social distancing - procedural (e.g. use of 'closed' teams etc.) and infrastructural
(physical separation systems/work zones, homeworking where possible, division
between essential and non-essential teams)
G Hygiene including personal (coughing control, handwashing), cleaning of work and
communal areas (including deep clean of any areas potentially exposed to virus), food
preparation)
H Ventilation and air filtration of confined areas (include consideration of areas where
open-windows are not an option)
I Covid-19 PPE (workers and medical staff)
J Health provision (staff training, PPE, isolation facilities, medevac arrangements,
management of contaminated medical waste etc.)
K Workforce transport and access to site (including reduced bus occupancy, temperature
testing etc.)
L Worker accommodation (including above aspects applied to accommodation)
2 Management of Change should be established as part of procedures to ensure review and
update in line with evolving situation, legal requirements and guidance. This should include
daily reviews of Covid-19 updates from the WHO, national public health authorities and
national/local government.

21 June 2020
__________________________________________________________________________________

3 Consider on a risk-basis the need for Covid-19 response procedures (e.g. quarantining) that
may go beyond national/local authority requirements.
4 Liaise with contractors to ensure adoption of appropriate and consistent measures (including
at interfaces)
5 Liaise with local medical facilities to identify available facilities, seek opportunities for
collaboration and identify any opportunities to provide assistance.
Reference Sources: Refer to applicable guidance including advice, guidance and requirements from WHO
(see https://www.who.int/health-topics/coronavirus#tab=tab_1), national public health authorities and
national/local governments. See also additional guidance in references 3, 7, 11, 17, 18, 22 and 24. In
additional sector-specific guidance is available from the WHO (ref 26) and other sources (e.g. see references
3, 6 and 16).

Managing health risks – local communities

1 Assess and manage Project-related Covid-19 risks to local communities
2 Assess non-Project related direct and indirect Covid-19 risks to local communities and seek
opportunities to support through new initiatives and/or building on existing programmes
Reference Sources: See reference 1.

Welfare and Livelihoods

1 Engage with workers/representatives on any labour reduction measures

2 Implement labour reduction incrementally and consider options avoiding redundancy with
retrenchment as a last option
3 Any collective retrenchment should be notified to lenders and a retrenchment plan
developed.
4 In high-risk supply chains engage with primary suppliers to ensure continued control of
forced labour and child labour risks
Reference Sources: Refer to applicable guidance including references 3, 6, 11, 18 and 19.

22 June 2020
 __________________________________________________________________________________

ANNEX 3 Summary of Key Factors in Evaluating Covid-19 Compliance Risks

Status of Financing Project Setting/Context Geographic Context
Pre-Signing/Financial Close • Category A Projects • Developing countries with limited health care
• No site visit undertaken and ability to do so • Remote facilities • Countries with poor human rights records
restricted • Safety critical facilities (e.g. offshore) • Countries with limit/no welfare support in event of
• Risks may be exacerbated if significant construction • Key vulnerable community groups identified retrenchment
has started prior to signing/FC (including Indigenous Peoples) • Countries with poor control of Covid-19
• Key assessments and engagement activities by • Negative perception in local community of project • Countries where spread of pandemic either may be
Borrower not completed may be compromised as route for Covid-19 infection under-reported or where peak is yet to be reached
Post Signing/Financial Close • High-risk supply chains used • Danger that economic imperatives at national, local
• Key E&S compliance milestones (e.g. E&S • Vulnerable/ disproportionately affected elements and project/Borrower level over-ride compliance
Conditions Precedents to drawdowns, ESAP of workforce (including women, casual workers, requirements
deliverables) due imminently that may be affected specific hardship cases)
by Covid-19 restrictions

Borrower Capacity Project Status Pandemic Status

• Concerns identified with Borrower’s prior E&S • Construction phase projects with large migrant • Risk period when national/regional measures are
compliance performance workforce relaxed:
• Evidence of key Covid-19 management and • Project activities ongoing/imminent: o Danger that economic imperatives at national,
response measures not provided by Borrower o related to key E&S sensitivities local and project/Borrower level over-ride
o where stakeholder engagement* is critical to compliance requirements
managing significant E&S risks o Second wave risks
Examples may include active resettlement, • Evolving global and regional status of pandemic
livelihood restoration, construction in critical
habitat etc.
• Project activities suspended / potential need for
workforce reduction
• Covid-19 cases reported in Project workforce
*Note: Meaningful engagement may be difficult to
achieve in all contexts regardless of alternative
engagement options, especially where options are
limited by technology availability, cultural context etc.
23 June 2020