|Social and Environmental Due Diligence Assessment|
Social and Environmental Due Diligence Assessments are indispensable in any transaction involving transfer of ownership, mergers or investment finance.
JGP has acted as lender’s environmental and social consultant appointed by the Interamerican Development Bank (IDB) and/or the International Finance Corporation (IFC) on several projects in Brazil and elsewhere in Latin America and Africa.
Typically, these services require a multidisciplinary team to assess expected environmental and social impacts on specific projects and/or investment programs for which finance is requested. Site reconnaissance as well as document review and extensive consultation with key stakeholders are critical aspects of the due diligence process. The adequacy of
project impact studies and of proposed mitigation and compensation is verified and a gap analysis with regard to bank standards is conducted.
Sponsor environmental, social and health and safety management systems, as well as contingency plans and emergency preparedness in general, are also assessed. The sponsor’s environmental and social record is taken into account pursuant to an assessment of reputational risks for the bank.
When projects involve potentially contaminated brownfield sites or ongoing operations which represent environmental risk, liability audits will be conducted as part of the due diligence assessment (go to Services – Liability Assessment).
A Corrective Action Plan to bridge gaps or correct specific project aspects is generally a sub-product of Social and Environmental Due Diligence Assessments.
On some projects, JGP has been retained to execute all environmental and social assessment procedures. On others, JGP’s involvement has been limited to specific aspects of the assessment.
Experience with Environmental and Social Due Diligence Assessments includes over 20 International Financial Institution (IFI) projects, including both infrastructure projects and industrial and agribusiness corporations.
Assessments of infrastructure projects have included telecommunications companies (Brazil and Nicaragua), electricity distribution companies (Brazil and Peru), toll-road concessionaires (Brazil, Chile, Peru and Mexico), urban mass transit projects (Brazil and Venezuela), an irrigation project (Peru) and an urban development company (Angola).
Industrial and agribusiness projects have included sugar and ethanol plants and associated supply chains, eucaliptus plantations and associated charcoal production, cosmetics manufacturing and supply chain, soybean production and export, vegetable oil plants and dairy products manufacturing,
JGP’s services have also been retained by buyers and/or sellers on several transactions involving transfer of ownership of energy generation projects and industrial plants. Over 15 hydroelectric projects have been evaluated for prospective buyers. This included very large projects (over 1,000 MW), as well as some small (under 10 MW) plants. Several industrial plants in operation have been audited. Brownfield sites have been assessed for various industrial and real estate clients.
As a result of the experience listed above, JGP is fully familiar with IFC and IDB Performance Standards, safeguard policies, guidelines and good practice notes.
Equator Principle Compliance Reviews
JGP has assisted clients with preparation of environmental and social documents necessary to meet the requirements of financial institutions that have endorsed the Equator Principles.
Scope of work under these assignments will vary significantly depending on the type of project for which finance is requested, but will generally include a critical review of environmental impact studies and an assessment of social and environmental impacts of the sponsor’s ongoing operations. Complementary assessment work is developed where necessary. Existing environmental management systems and procedures will be verified and improvements will be designed and implemented as necessary.
Real Estate Transaction Support
Environmental and Social Due Diligence required in support of real estate transactions may involve thorough liability surveys, risk analysis and stakeholder consultation. Detailed environmental baseline surveys are generally a necessary aspect of the assessment and will provide the basis for mapping of applicable legal environmental restrictions and quantification of site development potential
JGP’s services have been retained for environmental assessments of property on a wide variety of transactions. Detailed environmental surveys and mapping of environmental restrictions has been concluded on properties totaling over 10,000 hectares.