MDG Carbon Safeguard Principles by decree

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									          304 East 45th Street                                                   Final draft. Not for circulation.
          New York, 10017 New York
          mdgcarbonfacility@undp.org


                           MDG Carbon Safeguard Principles
Projects which do not meet international conventions and standards are unsuitable for UNDP
and/or the MDG Carbon Facility. Therefore, project proponents are required to acknowledge that
these 13 principles will be adhered to under all circumstances, regardless of the status of
ratification of the conventions by the host country.

                              MDG Carbon Safeguard Principles1
Human Rights
   1. The project respects internationally proclaimed human rights
   2. The project is not complicit in human rights abuses
   3. The project respects dignity, human rights, cultural property and uniqueness of
      Indigenous Peoples
   4. The project does not involve involuntary resettlement
Labor Standards
   5. The project respects the employees´ freedom of association and their right to collective
       bargaining
   6. The project does not involve any form of forced or compulsory labor
   7. The project does not employ any form of child labor2
   8. The project does not involve any form of discrimination based on gender, race, religion,
       sexual orientation or any other basis.
   9. The project provides workers with a safe and healthy work environment
Environment
   10. The project takes a precautionary approach in regard to environmental challenges
   11. The project does not involve significant conversion or degradation of critical natural
       habitats, including those that are (a) legally protected, (b) officially proposed for
       protection, (c) identified by authoritative sources for their high conservation value, (d)
       recognized as protected by traditional local communities
Anti-corruption
   12. The project does not involve corruption at any level
Cultural heritage
    13. The project does not involve the alteration, damage or removal of any critical cultural
        heritage

PROJECT TITLE:
I am the authorized representative of the project. The project fulfils the above principles to the
best of my knowledge. Independent verification of adherence to these principles is welcomed by
the project. I understand that UNDP will terminate cooperation and consider public
announcement of the withdrawal if any of these principles are violated3.
Name:____________________________
Signature:_________________________                       Date:_____________________________

1
  These safeguard principles have been adapted from the Ten Principles of the Global Compact, the World
Bank Environmental and Social Safeguard Policies, the IFC Environmental and Social Standards and the
IFC Equator Principles.
2
  Child labor as defined by ILO conventions
3
  To be finalized by legal in context of individual projects.


MDG Carbon Safeguard Principles •           August 2006                                      Page 1 of 16
             304 East 45th Street                                                  Final draft. Not for circulation
             New York, 10017 New York
             mdgcarbonfacility@undp.org                                                                    .
Guidance on the Safeguard Principles
MDG Carbon will not consider any project that does not comply with international conventions and standards,
regardless of their status of ratification by the host country. Also, under no circumstances will MDG Carbon
accept infringement of any of its 13 Safeguard Principles.

If any of these principles are violated at any time in the lifetime of the project, the UNDP will not only terminate
the contract, but will also consider announcing withdrawal of the project itself through channels of its own
choice. The UNDP refuses all liability from damage incurring due to withdrawal of a project and the respective
announcement.4

A comprehensive list of all the UN Conventions and legal instruments related to human rights (these also
include labor, gender, race, religion, children and Indigenous Peoples issues) is available at:
http://www.ohchr.org/english/law/index.htm

Human Rights

Principles 1 and 2

 Background

       The origin of principles 1 and 2 is the 1948 Universal Declaration of Human Rights (UDHR), which set
       basic minimum international standards for the protection of the rights and freedoms of the individual. The
       provisions contained in the UDHR are regarded as forming a foundation of international law and, since they
       are considered to be international customary law, they do not require signature or ratification by the state to
       be recognized as a legal standard.

       The UDHR lays down the basic the premise that “all human beings are born free and equal in dignity and
       rights”. This equality premise implies that the human right principles condensed in the Declaration are to be
       enjoyed regardless of race, color, sex, language, religion, political or other opinion, national or social origin,
       property, birth or other status.

 Key issues

       The Declaration can be condensed in a number of basic rights. Some of those basic principles and rights are
       directly relevant at the project level, while others can only be specifically protected and promoted at the
       national scale, involving active engagement of national governments. In any case, the project has to be
       consistent with all the elements of the declaration:

       Life, Liberty and Security

       The rights to life, liberty and security preclude any form of slavery, servitude, torture or cruel, inhuman or
       degrading treatment or punishment by the project.

       In addition, at the national level, individuals must have access to a just legal system which grants equal
       protection by the law and sets procedures for judicial remedies before a court for human rights violations. In


4
    To be finalized by legal


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         304 East 45th Street                                                  Final draft. Not for circulation
         New York, 10017 New York
         mdgcarbonfacility@undp.org                                                                    .
   addition, individuals must be free from arbitrary arrest, have access to a fair trial before and independent
   court, be granted the presumption of innocence and not be subjected to retroactive penal laws.

   Personal and Political Freedoms

   The project must respect a person’s rights regarding privacy in matters relating to family, home,
   correspondence, reputation and honor and freedom of movement. In addition, freedom of thought,
   conscience, religion, opinion and expression are to be ensured, together with the right of peaceful assembly
   and association.

   Moreover, at the national level, individuals have the right to seek asylum, to a nationality, to marry and
   found a family, to own property and to take part in government.

   Economic, Social and Cultural Freedoms

   The project has to respect social security and the economic, social and cultural rights that are indispensable
   to human dignity and the free development of each individual’s personality. Individuals must receive equal
   payment for equal work and a favorable remuneration that that ensures for the worker and the worker’s
   family an existence worthy of human dignity. The project must also recognize the right to form and join
   trade unions, the right to rest and leisure, reasonable limitations on working hours and periodic holidays
   with pay.

   In addition, at the national level, the right to a standard of living adequate for health and well being,
   including food, clothing, housing, medical care, and to social services and security must be realized.
   Moreover, and if necessary, the rights to education and to participate in the cultural life of the community,
   including the protection of the moral and material interests resulting from any scientific, literary or artistic
   production should be promoted.

   The project would be complicit in human rights abuses if it authorized, tolerated, or knowingly ignored
   human rights abuses committed by an entity associated with it, or if it knowingly provides practical
   assistance or encouragement that has a substantial effect on the perpetration of human rights abuse.

 Relevant Conventions

      The Universal Declaration of Human Rights
      UN International Covenant on Economic, Social and Cultural Rights
      UN International Covenant on Civil and Political Rights

 Guidance materials

      Guide for Integrating Human Rights into Business Management - A joint publication of BLIHR, Global
       Compact Office and Office of the UN High Commissioner for Human Rights May 2006
       This publication – prepared by business for business – offers practical guidance on how to implement human
       rights within business practice. It is based on the accumulated experience of the ten companies in the BLIHR
       (ABB, Barclays, Gap, Hewlett-Packard, MTV Networks Europe, National Grid, Novartis, Novo Nordisk, Statoil
       and The Body Shop International). This experience is supplemented with practical examples of human rights
       implementation from other companies including BP, Carrefour, Cemex, Codelco, Copel, Eskom, Li & Fung
       (Trading), MAS Holdings, Shell, Taj Hotels, Tata Enterprises, Telefonica and Valeo. The final publication also
       benefited substantially from a wide range of thoughtful feedback provided on a consultation draft.




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             304 East 45th Street                                                      Final draft. Not for circulation
             New York, 10017 New York
             mdgcarbonfacility@undp.org                                                                        .
          Embedding Human Rights in Business Practice (Global Compact Office and the Office of the UN High
           Commissioner for Human Rights, 2004)
           This publication offers a thorough analysis of the human rights principles from the perspective of the UN,
           business, academia and civil society. Its main focus is the practical meaning of the principles for companies,
           presenting four detailed case studies and a policy report on business practice in different industries. The main
           conclusion drawn from these cases is that proactive efforts to address human rights concerns better equipped
           businesses to manage risks and helps secure and maintain their license to operate.
          Business Leaders Initiative on Human Rights Matrix
           The matrix provides an approach for mapping and assessing the connection between business and these rights.
           Specifically, the matrix provides insight into what is regarded as 'essential', 'expected' or 'desirable' behaviour.
          The Danish Institute for Human Rights, HRCA Tool
           The Human Rights Compliance Assessment is a diagnostic tool designed to promote corporate social
           responsibility by providing companies with useful information about how to avoid human rights violations in all
           aspects of their operations. It is a practical tool which has been mapped against the guidelines of the Global
           Reporting Initiative (GRI) and can assist companies with GRI and Global Compact reporting. The HRCA 'Quick
           Check' comprises approximately 10% of all the questions contained in the entire HRCA database and relates to
           some of the most essential human rights issues a company must consider in relation to its activities.
          Business and Human Rights website
           This comprehensive website is composed of links to a wide range of materials published by: NGOs; companies &
           business organisations; United Nations, ILO & other intergovernmental organisations; governments & courts;
           policy experts & academics; social investment analysts; journalists; etc. Updated hourly, the site receives over 1.5
           million hits per month (over 47,000 visits per month) from across the world. The site contains materials in English,
           Spanish, French, Portuguese and German. Among many other things, examples of company policies can be found
           here.

Principle 3

 Background

      Indigenous Peoples are often among the most marginalized and vulnerable segments of the populations.
      Their economic, social and legal status often limit their ability to defend their interest in, and rights to, lands
      and natural and cultural resources. They are particularly vulnerable if their lands and resources are
      transformed, encroached upon by outsiders, or significantly degraded. Their languages, cultures, religions
      and spiritual beliefs, and institutions may also be under threat. As a result, indigenous peoples are exposed
      to risks and impacts such as loss of identity, culture and natural resource-based livelihoods, as well as
      exposure to impoverishment and disease.

 Key issues

      There is no universally accepted definition of Indigenous Peoples. In these safeguard principles the term is
      used in a generic sense5, referring to a distinct social and cultural group possessing the following
      characteristics in varying degrees:

          Self-identification as members of a distinct indigenous cultural group and recognition of
           this identity by others
          Collective attachment to geographically distinct habitats or ancestral territories in the
           project area and to the natural resources in these habitats and territories
          Customary cultural, economic, social, or political institutions that are separate from those of
           the dominant society or culture
          An indigenous language, often different from the official language of the country or region

5
    As defined in the IFC Environmental and Social Standards (IFC, 2006)


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             304 East 45th Street                                                     Final draft. Not for circulation
             New York, 10017 New York
             mdgcarbonfacility@undp.org                                                                       .
      The characteristics that make Indigenous Peoples especially vulnerable determine the necessity of
      specifically addressing their uniqueness and vulnerability under the human rights framework. In this
      context, the project must foster full respect for the dignity, human rights, aspirations, cultures, knowledge,
      practices and natural resource-based livelihoods of Indigenous Peoples.

 Relevant Conventions

          International Covenant on Civil and Political Rights
          International Covenant on Economic, Social and Cultural Rights
          International Convention on the Elimination of All Forms of Racial Discrimination
          Convention on the Rights of the Child
          Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment of Punishment
          Convention on the Elimination of All Forms of Discrimination Against Women
          Convention on Biological Diversity
          ILO Convention 169 on Indigenous and Tribal Peoples

 Guidance materials

          Bonn Guidelines on Access to Genetic Resources and Fair and Equitable Sharing of the Benefits
           Arising Out of their Utilization (Secretariat of the Convention on Biological Diversity, 2002)
           Guidelines on establishing legislative, administrative or policy measures on access and benefit-sharing and/or
           when negotiating contractual arrangements for access and benefit-sharing.
          Performance Standard 7 – Indigenous Peoples, from the IFC´s Guidance Notes: Performance Standards
           on Social & Environmental Sustainability (IFC, 2006)
           Provides guidance on how to address Indigenous People’s issues and rights in the context of project development.
           It describes how private sector companies must uphold the rights of the affected communities of Indigenous
           Peoples, minimizing adverse impacts and establishing an ongoing relationship throughout the life of the project.
          Operational Policy OP 4.10 - Indigenous Peoples (World Bank, 2005)
           Underscores the need for Borrowers and Bank staff to identify Indigenous Peoples, consult with them, ensure that
           they participate in, and benefit from Bank-funded operations in a culturally appropriate way - and that adverse
           impacts on them are avoided, or where not feasible, minimized or mitigated.


Principle 4

 Background

      Involuntary resettlement6 refers both to physical displacement (relocation or loss of shelter) and to economic
      displacement (loss of assets or access to assets that leads to loss of income sources or means of livelihood)
      as a result of project-related land acquisition. Economic conditions of displaced persons and communities
      are usually negatively impacted as income based on land or natural resources is affected in rural areas and
      wage-based or enterprise-based livelihoods are disrupted in urban or peri-urban areas. In addition, social
      welfare is put at risk as the social and cultural continuity of affected communities is compromised,
      considering that cultures, identities, traditional knowledge and oral histories are often connected to and
      maintained through the use of land and its natural resources.

 Key issues



6
    As defined in the IFC Environmental and Social Standards (IFC, 2006)


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          304 East 45th Street                                                     Final draft. Not for circulation
          New York, 10017 New York
          mdgcarbonfacility@undp.org                                                                       .
    Resettlement is considered involuntary when affected individuals or communities do not have the right to
    refuse land acquisition that results in displacement. This occurs in cases of: (i) lawful expropriation or
    restrictions on land use based on eminent domain; and (ii) negotiated settlements in which the buyer can
    resort to expropriation or impose legal restrictions on land use if negotiations with the seller fail. Involuntary
    resettlement may cause severe long-term hardship, impoverishment, and environmental damage,
    diminishing the developmental impact of a project and affecting the reputation of the project developer,
    which is the reason why MDG Carbon will not engage in any project that involves involuntary resettlement
    of peoples.

    In the cases in which resettlement is accepted by the affected community, it will be conducted with regard to
    the principles for resettlement defined in the guidance materials.

 Relevant Conventions

       The Universal Declaration of Human Rights
       ILO Convention 169 on Indigenous and Tribal Peoples

 Guidance materials

       Operational Policy OP 4.12 – Involuntary Resettlement (World Bank, 2001)
        It includes safeguards to address and mitigate the impoverishment risks derived from involuntary resettlement
        caused by the projects carried out by the Bank’s Borrowers.
       Performance Standard 5 – Land acquisition and involuntary resettlement, from the IFC´s Guidance
        Notes: Performance Standards on Social and Environmental Sustainability (IFC, 2006)
        It provides guidance on how to address involuntary resettlement in the context of project development. It describes
        the principles and considerations to be regarded when the project displaces people from their original lands.
       Handbook for Preparing a Resettlement Action Plan (IFC, 2001)
        Provides step-by-step guidance through the resettlement planning process and includes practical tools such as
        implementation checklists, sample surveys and monitoring frameworks.
       Involuntary Resettlement Sourcebook (World Bank, 2004)
        Provides guidance on resettlement design, implementation, and monitoring, and, it discusses resettlement issues
        particular to development projects in different sectors, such as urban development, natural resource management,
        and the building of dams.



Labor Standards

Principles 5, 6, 7 and 8

 Background

    These four labor safeguard principles are derived from the ILO´s Declaration on Fundamental Principles
    and Rights at Work, adopted in 1998 by the International Labor Conference. All countries, regardless of
    their level of economic development, cultural values, or ratifications of the relevant ILO Conventions, have
    an obligation to respect, promote, and realize these fundamental principles and rights. These universally
    accepted values must also be applied at the company/project level.

 Key issues

    Principle 5. Freedom of association and collective bargaining



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           304 East 45th Street                                               Final draft. Not for circulation
           New York, 10017 New York
           mdgcarbonfacility@undp.org                                                                 .
   The existence of an open dialogue with freely chosen workers´ representatives improves communication
   between workers and employers, which helps them to find ways to resolve each other’s problems. Freedom
   of association and collective bargaining build the opportunity for constructive rather than confrontational
   dialogue, which leads to solutions that are beneficial not only to the enterprise and its stakeholders but to the
   society at large.

   Freedom of association implies a respect for the right of employers and workers to join associations of their
   own choice. This means that employers must not interfere in an employee’s decision to associate, and that
   employers´, unions´ and workers´ representatives can freely discuss issues at work in order to reach
   agreements that are jointly acceptable. In addition, workers and organizations should be able to take action
   in defense of their economic and social interests. Through collective bargaining, terms and conditions of
   work and the regulation of relations between employers, workers and their organizations are determined in
   the form of collective agreements.

   Principle 6. Forced and compulsory labor

   Forced or compulsory labor refers to any work or service that is extracted from any person under the
   menace of any penalty, and for which that person has not offered himself or herself voluntarily. This means
   that labor should be freely given and that employees should be free to leave in accordance with established
   rules.

   Since forced labor lowers the level of productivity and economic growth for society generally, companies
   must make sure that neither them nor their contractors and suppliers employ such practices, which can take
   several forms:

            slavery;
            bonded labor or debt bondage, an ancient practice in which both adults and children are obliged to
             work in slave-like conditions to repay debts of their own or their parents or relatives;
            child labor in particularly abusive conditions where the child has no choice about whether to work;
            the work or service of prisoners if they are hired to or placed at the disposal of private individuals,
             companies or associations involuntarily and without supervision of public authorities;
            labor for development purposes required by the authorities, for instance to assist in construction,
             agriculture and other public works;
            work required in order to punish opinion or expression of views ideologically opposed to the
             established political, social or economic system;
            exploitative practices such as forced overtime or the lodging of deposits (financial or personal
             documents) for employment

   Principle 7. Child Labor

   Child labor deprives children of their childhood and their dignity. Many of the children work long hours for
   low or no wages, often under conditions harmful to their health, physical, mental spiritual and social
   development. They are deprived of an education and may be separated from their families. In addition,
   children who have to work do not usually complete their primary education and are likely to remain illiterate
   and never acquire the skills needed to get a job and contribute to the development of a modern economy.

   Children, who enjoy the same human rights as adults, must also have distinct rights by virtue of their age.
   They must be protected from economic exploitation and work that may be dangerous to their health or
   morals and that may hinder their development. This does not mean that children should not be allowed to
   work, rather that there are standards that distinguish what constitutes acceptable or unacceptable work for


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         304 East 45th Street                                                    Final draft. Not for circulation
         New York, 10017 New York
         mdgcarbonfacility@undp.org                                                                      .
   children at different ages and stages of development. In this respect, MDG Carbon will adhere to ILO´s
   standards.

   ILO conventions recommend a minimum age for admission to employment or work that must not be less
   than the age for completing compulsory schooling, and in any case not less than 15 years. Lower ages are
   permitted (usually in countries where economic and educational facilities are less well-developed the
   minimum age is 14 years and 13 years for “light work”). In addition, the minimum age for hazardous work
   is set at 18 years.

    Developed countries                                       Developing countries
    Light work                13 years                        Light work                    12 years
    Regular work              15 years                        Regular work                  14 years
    Hazardous work            18 years                        Hazardous work                18 years
   Source: The Global Compact

   Principle 8. Discrimination

   In this context, discrimination is defined as “any distinction, exclusion or preference which has the effect of
   nullifying or impairing equality of opportunity or treatment in employment or occupation”, and is made on
   the basis of race, color, gender, religion, sexual orientation, political opinion, national extraction, social
   origin or physical or mental disability. Distinctions based strictly on the inherent requirements of the job are
   not discrimination, so non-discrimination means simply that employees are selected on the basis of their
   ability to do the job and there is not distinction, exclusion or preference made on other grounds.

 Relevant Conventions

      The Universal Declaration of Human Rights
      Convention on the Elimination of All Forms of Discrimination against Women
      International Covenant on Civil and Political Rights
      International Covenant on Economic, Social and Cultural Rights
      International Convention on the Elimination of All Forms of Racial Discrimination
      ILO Declaration on Fundamental Principles and Rights at Work
      ILO Convention 87 on Freedom of Association and Protection of the Right to Organize
      ILO Convention 98 on the Right to Organize and Collective Bargaining
      ILO Convention 29 on Forced Labor
      ILO Convention 105 on the Abolition of Forced Labor
      ILO Convention 138 on Minimum Age (of Employment)
      ILO Convention 182 on the Worst Forms of Child Labor
      ILO Convention 100 on Equal Remuneration
      ILO Convention 111 on Discrimination (Employment and Occupation)
      United Nations Convention on the Rights of the Child, Article 32.1

 Guidance materials

      Performance Standard 2 – Labor and working conditions, from the IFC´s Guidance Notes: Performance
       Standards on Social and Environmental Sustainability (IFC, 2006)
       It provides guidance on how to build constructive worker-management relationships. It addresses the need to
       promote the fair treatment, non-discrimination and equal opportunity of workers, compliance with national labor
       and employment laws, and the protection of the workforce by addressing child and forced labor.
      Good Practice Note: Addressing Child Labor in the Workplace and Supply Chain (IFC, 2002)



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             304 East 45th Street                                                      Final draft. Not for circulation
             New York, 10017 New York
             mdgcarbonfacility@undp.org                                                                        .
           Provides good practice approaches that business have successfully applied in managing risks associated with
           child labor in their own workplaces and those of their vendors and suppliers
          Good Practice Note: Non-Discrimination and Equal Opportunity (IFC, 2005)
           Provides guidance to IFC clients and other employers in emerging markets on promoting both equality and
           diversity, and overcoming discriminatory practices, while acknowledging that this can often be a controversial
           and difficult topic.
          The Danish Institute for Human Rights, HRCA Tool
           The Human Rights Compliance Assessment is a diagnostic tool designed to promote corporate social
           responsibility by providing companies with useful information about how to avoid human rights violations in all
           aspects of their operations. It is a practical tool which has been mapped against the guidelines of the Global
           Reporting Initiative (GRI) and can assist companies with GRI and Global Compact reporting. The HRCA 'Quick
           Check' comprises approximately 10% of all the questions contained in the entire HRCA database and relates to
           some of the most essential human rights issues a company must consider in relation to its activities.
          The World Bank’s “Toolkit” on Core Labor Standards
           General information on the ILO's four fundamental principles and rights at work. The Toolkit also provides
           links to other useful information sources.
          The Global Compact website
           Includes further information on the 4 labor principles, including possible strategies for companies and
           business to address labor issues.
          ILO website
           Includes a thorough explanation of the 4 labor principles, including theory and legal aspects
          ILO’s Committee of Experts on the Application of Conventions and Recommendations
           Reviews member countries’ implementation of ratified labor conventions on a periodic basis. A searchable
           database can access the Committee’s findings on country and issue violations.
          ILO’s Committee on Freedom of Association
           Investigates claimed violations of the right to organize or bargain collectively. This 9 member tripartite
           (government, employer and trade union) body reviews complaints on country compliance with the principles of
           freedom of association and collective bargaining, whether or not a country has ratified ILO Conventions 87 and
           98.


Principle 9

 Background

      Occupational health and safety refers to the range of actions aimed at protecting workers from injury or
      illness associated with exposure to hazards encountered in the work place or while working. Occupational
      health and safety practices include the identification of potential hazards and responses including design,
      testing, choice, substitution, installation, arrangement, organization, use and maintenance of workplaces,
      working environment and work processes to eliminate or minimize any risks to workers7.

 Key issues

      Safe and healthy working facilities and precautionary measures are essential to protect employees from
      work-related hazards and anticipated dangers in the workplace. However, the number and type of safety
      precautions to be provided by the employer will differ depending upon the industry and/or operation, unique
      concerns of the company, as well as the location of operation and the particular needs of vulnerable workers
      such as pregnant women. When an unanticipated danger is identified, action must be swiftly taken in order
      to remedy the defect and institute a prevention plan to deter future incidents. In addition, the company must


7
    As defined in the IFC Social and Environmental Standards (IFC, 2006)


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          304 East 45th Street                                                    Final draft. Not for circulation
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          mdgcarbonfacility@undp.org                                                                      .
    have a pre-established action plan designed to respond effectively to workplace accidents and health hazards
    in the event that all precautions fail.

    In addition, all workers must be trained on all tasks for which they are responsible prior to beginning a new
    assignment and at regular intervals. As a general rule, workers should not be exposed to harmful processes,
    chemicals, substances or techniques; however, sometimes exposure is unavoidable. In those cases, exposed
    workers must be provided with all protective equipment necessary, which will vary depending upon the
    nature of the work, at no cost8.

 Relevant Conventions

       ILO Convention 120 on Hygiene (Commerce and Office) Convention
       ILO Convention 155 on Occupational Safety and Health
       ILO Protocol 155 of 2002 to the Occupational Safety and Health Convention
       ILO Convention 161 on Occupational Health Services
       ILO Convention 162 on Asbestos
       ILO Convention 174 on Prevention of Major Industrial Accidents

 Guidance materials

       Performance Standard 2 – Labor and working conditions, from the IFC´s Guidance Notes: Performance
        Standards on Social and Environmental Sustainability (IFC, 2006)
        It provides guidance on how to build constructive worker-management relationships. It addresses discrimination
        and labor issues but also the promotion of safe and healthy working conditions.
       Environmental, Health and Safety Guidelines developed for the World Bank Group
        The EHS Guidelines are technical reference documents that address IFC´s expectations regarding the industrial
        pollution management performance of its projects. They are designed to assist managers and decision makers with
        relevant industry background and technical information. This information supports actions aimed at avoiding,
        minimizing and controlling environmental, health, and safety (EHS) impacts during the construction, operation,
        and decommissioning phase of a project or facility. The EHS Guidelines consist of the industry sector
        environmental guidelines contained in Part III of the World Bank Pollution Prevention and Abatement Handbook
        (PAAH) which went into official use on July 1, 1998 and a series of EHS guidelines published in the IFC website
        between 1991 and 2003. These guidelines have become globally applied references for private sector development
        with their use extending well beyond the World Bank group operations to a diverse external community, such as
        other international financial institutions, regulators, industry, academics, and commercial banks, including the
        international banks that have adopted the Equator Principles.
       Environmental and Social Guidelines for Occupational Health and Safety (IFC, 2003)
        This guideline contains the performance levels and measures that are normally acceptable to IFC and are
        generally considered to be achievable at reasonable costs by existing technology. The application of these
        guidelines may be adjusted to each project or site, taking into account variables such as host country context
        sponsor capacity and project factors.




8
 These requirements have been drawn from the Human Rights Compliance Assessment Tool developed by The Danish
Institute for Human Rights.


MDG Carbon Safeguard Principles •           August 2006                                     Page 10 of 16
              304 East 45th Street                                             Final draft. Not for circulation
              New York, 10017 New York
              mdgcarbonfacility@undp.org                                                               .
Environment

Principle 10

 Background

      The Rio Declaration established the link between environmental issues and development remarking that “in
      order to achieve sustainable development, environmental protection shall constitute an integral part of the
      development process and cannot be considered in isolation from it”

      The Declaration states that “the precautionary approach shall be widely applied by States according to their
      capabilities”. From a project perspective, this principle entails the idea of prevention rather than cure,
      acknowledging that it is more cost-effective to take early action to ensure that irreversible environmental
      damage does not occur.

 Key issues

      Precaution entails a number of key concepts9, such as:

               Safeguarding ecological “space”: respecting ecological margins so that we protect and widen the
                assimilative capacity of the natural environment. This means refraining from undesirable resource
                use.
               Proportionality or response: to show that selected degrees of restraint are not unduly costly. This
                means allowing for the possible greater dangers for future generations if important life support
                systems are undermined.
               Duty of care: placing the onus of proof on those undertaking an activity or carrying out change to
                demonstrate no environmental harm.
               Promoting intrinsic natural rights: allowing natural processes to function such that they maintain
                essential support for all life on earth.
               Paying for ecological debt: or compensating for past errors of judgment as indicated by the notions
                of “common but differentiated responsibility” enshrined in the UN Framework Convention on
                Climate Change.

      Although these concepts are broadly defined, they can be adapted at the project level. In addition to
      adopting a precautionary approach, projects will have to comply with all the relevant international
      environmental agreements. A list of the most important environmental conventions is provided in the
      section below.

 Relevant Conventions

         Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their
          Disposal
         Cartagena Protocol on Biosafety
         Convention on Biological Diversity
         Convention on Environment Impact Assessment in a Transboundary Context (Espoo Convention)
         CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora)
         Convention on Migratory Species (CMS)
         Convention on Wetlands of International Importance especially as Waterfowl Habitat (RAMSAR)
9
    As defined by The Global Compact


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        International Convention for the Prevention of Pollution from Ships (Marpol)
        Montreal Protocol on Substances that Deplete the Ozone Layer
        Rio Declaration on Environment and Development
        Rotterdam Convention on the Prior Informed Consent (PIC) Procedure for Certain Hazardous
         Chemicals and Pesticides in International Trade
        Stockholm Convention on Persistent Organic Pollutants (POPs)
        UNCCD (United Nations Convention to Combat Desertification)
        UNFCCC (United Nations Framework Convention on Climate Change)

 Guidance materials

        The Global Compact website
         Includes further information on how projects should apply this principle to their activities.
        International Institute for Environment and Development website
         Includes a broad array of guidance and publications in the areas of environment and development. It also has a
         special section on the MDGs.
        United Nations Environmental Programme, Division of Environmental Conventions website
         Includes relevant information on the MEAs (Multilateral Environmental Agreements) supported by the Division
         in the areas of atmosphere; biodiversity; biosafety; chemicals and wastes; land; oceans, seas and waters; and
         others..


Principle 11

 Background

     The conservation of natural habitats, like other measures that protect and enhance the environment, is
     essential for long-term sustainable development10. Habitat destruction constitutes the major threat to the
     maintenance of biodiversity. Habitats can be divided into natural habitats (land and water areas where the
     biological communities are formed largely by native plant and animal species, and where human activity has
     not essentially modified the area’s primary ecological functions) and modified habitats (where there has
     been apparent alteration of the natural habitat, often with the introduction of alien species of plants and
     animals, such as agricultural areas). Both types of habitat can support important biodiversity at all levels,
     including endemic or threatened species11.

 Key issues

     Critical habitat12 is a subset of both natural and modified habitat that deserves particular attention. Critical
     habitat includes areas with high biodiversity value, including habitat required for the survival of critically
     endangered or endangered species; areas having special significance for endemic or restricted-range species;
     sites that are critical for the survival of migratory species; areas supporting globally significant
     concentrations or numbers of individuals of congregatory species; areas with unique assemblages of species
     or which are associated with key evolutionary processes or provide key ecosystem services; and areas
     having biodiversity of significant social, economic or cultural importance to local communities.




10
   Operational Policy OP 4.04 – Natural Habitats (World Bank, 2001)
11
   IFC Environmental and Social Standards (IFC, 2006)
12
   As defined in the IFC Environmental and Social Standards (IFC, 2006)


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     In those cases where a proposed project is located within a legally protected area, it will have to meet the
     following requirements13:

              Act in a manner consistent with defined protected area management plans
              Consult protected area sponsors and managers, local communities, and other key stakeholders on
               the proposed project
              Implement additional programs, as appropriate, to promote and enhance the conservation aims of
               the protected area

 Relevant Conventions

        Convention on Biological Diversity
        Convention on Wetlands of International Importance especially as Waterfowl Habitat (RAMSAR)
        Convention Concerning the Protection of the World Cultural and Natural Heritage

 Guidance materials

        Operational Policy 4.04: Natural Habitats (World Bank, 2001)
         Seeks to ensure that World Bank-supported infrastructure and other development projects take into account the
         conservation of biodiversity, as well as the numerous environmental services and products which natural habitats
         provide to human society.
        Performance Standard 6 – Biodiversity Conservation and Sustainable Natural Resource Management,
         from the IFC´s Guidance Notes: Performance Standards on Social and Environmental Sustainability
         (IFC, 2006)
         Reflects the objectives of the Convention on Biological Diversity to conserve biological diversity and promote use
         of renewable natural resources in a sustainable manner. This Performance Standard addresses how clients can
         avoid or mitigate threats to biodiversity arising from their operations as well as sustainably manage renewable
         natural resources.
        IUCN Red List
         Elaborated by the World Conservation Union (IUCN), The Red List of Threatened Species provides taxonomic,
         conservation status and distribution information on taxa that have been globally evaluated using the IUCN Red
         List Categories and Criteria
        The IUCN Guidelines for Protected Area Management Categories (IUCN, 1994)
         They provide useful information on protected areas and outlines a number of distinct categories of protected areas.
        Global Environmental Facility (GEF) webpage
         GEF, which was established in 1991, helps developing countries fund projects and programs that protect the global
         environment. GEF grants support projects related to biodiversity, climate change, international waters, land
         degradation, the ozone layer, and persistent organic pollutants. IFC works with GEF to assist IFC clients to protect
         and enhance global biodiversity benefits associated with their operations
        The World Conservation Union (IUCN) webpage
         The World Conservation Union is the world’s largest and most important conservation network. Its mission is to
         influence, encourage and assist societies throughout the world to conserve the integrity and diversity of nature and
         to ensure that any use of natural resources is equitable and ecologically sustainable. It provides useful information
         on protected areas, conservation and biodiversity expertise, and other biodiversity and natural resources issues and
         has developed guidelines on protected areas including an outline of distinct categories of protected areas.
        The World Bank-WWF Alliance for Forest Conservation and Sustainable Use website
         Includes information on the identification and conservation of high conservation value forests and forest
         certification systems.



13
  As required in Performance Standard 6 from the IFC´s Guidance Notes: Performance Standards on Social &
Environmental Sustainability (IFC, 2006)


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Anti-corruption

Principle 12

 Background

     The origin of Principle 12 is the 2003 United Nations Convention against Corruption, which entered into
     force in 2005. Corruption has an impact not only on the private sector, impeding economic growth,
     distorting competition and posing serious legal and reputational risks, undermining the integrity of all
     involved and damaging the fabric of the organizations. It also constitutes a major hindrance to sustainable
     development, with a disproportionate impact on the poor and disadvantaged communities. The fact that laws
     making corrupt practices criminal are not always enforced is no justification for engaging in or accepting
     corrupt practices14.

 Key issues

     Corruption can take many forms. Transparency International (TI)´s definition is “the abuse of entrusted
     power for private gain”. This can mean not only financial gain but also non-financial advantages. Corruption
     is an evolving concept and a multifaceted phenomenon, which makes it difficult to construct a legal
     definition. That is the reason why the UN Convention Against Corruption adopted a descriptive approach,
     covering various forms of corruption that exist now, but also enabling States to deal with other forms that
     may emerge.

     Extortion

     The solicitation of bribes is the act of asking or enticing another to commit bribery. It becomes extortion
     when this demand is accompanied by threats that endanger the personal integrity or the life of the private
     actors involved15.

     Bribery

     Bribery is an offer or receipt of any gift, loan, fee, reward or other advantage to or from any person as an
     inducement to do something which is dishonest, illegal or a breach of trust, in the conduct of the enterprise´s
     business16.

 Relevant Conventions

        United Nations Convention against Corruption
        Organization for Economic Co-operation and Development (OECD) Convention on Combating Bribery
         of Foreign Public Officials in International Business Transactions

 Guidance materials

        Business against corruption: A framework for action, Implementation of the 10th UN Global Compact
         principle against corruption (Global Compact, 2005)
        Guidance document: Implementation of the 10th Principle Against Corruption (Global Compact2004)

14
   The Global Compact
15
   As defined in the OECD Guidelines for Multinationals (OECD, 1976)
16
   As defined in Transparency International’s Business Principles for Countering Bribery (TI, 2002)


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        Business against corruption - Case stories and examples (Global Compact, 2006)
        Global Compact transparency and anticorruption website
        World Bank anti-corruption website
        OECD Corruption website
        Transparency International website
         Transparency International (TI) has been at the forefront of the anti-corruption movement since it was formed
         in 1993. TI is a non-profit, independent, non-governmental organization dedicated to increasing government
         accountability and curbing both international and national corruption. Through its international secretariat and
         network of over 90 national chapters worldwide, TI works in a non-confrontational way with governments,
         civil society and the private sector to develop means to combat corruption.
        International Chamber of Commerce website
         The International Chamber of Commerce (ICC) has been concerned about corruption, bribery and extortion and
         their effect on international business for more than 25 years. The ICC has established a Commission on Anti-
         Corruption, whose objectives are to (i) publish and promote a study on countering private sector bribery, (ii)
         update and expand ICC publication Fighting Bribery: A Corporate Practices Manual, (iii) feed business views into
         the negotiations for a UN Convention against Corruption, (iv) monitor implementation of the OECD Convention
         on Combating Bribery of Foreign Public Officials in International Business Transactions, and (v) contribute to the
         development of an ICC work program on money laundering.
        The World Economic Forum’s Partnership Against Corruption Initiative website
         The Partnership Against Corruption Initiative (PACI) was officially launched at the Annual Meeting in Davos in
         January 2004. Using the Partnering Against Corruption - Principles for Countering Bribery (“PACI Principles”),
         which are a pragmatic sectoral step towards implementation of the Transparency International's Business
         Principles for Countering Bribery (“TI BPCB”), as a core document, the PACI encourages member companies to
         sign a support statement that officially acknowledges their commitment to the PACI Principles and thereby to the
         PACI. By signing the statement, companies commit to “zero tolerance” of corruption and bribery as well as to the
         development of an internal implementation program.


Cultural heritage

Principle 13

 Background

     The origin of Principle 13 is the 1972 UNESCO´s Convention Concerning the Protection of the World
     Cultural and Natural Heritage. This principle addresses the importance of cultural heritage for current and
     future generations. Cultural heritage17 refers to tangible forms of cultural heritage, such as tangible property
     and sites having archaeological (prehistoric), paleontological, historical, cultural, artistic, and religious
     values, as well as unique natural environmental features that embody cultural values, such as sacred groves.
     Intangible forms of culture, such as cultural knowledge, innovations and practices of communities
     embodying traditional lifestyles, are also included.

 Key issues

     Critical cultural heritage18 consists of (i) the internationally recognized heritage of communities who use, or
     have used within living memory the cultural heritage for long-standing cultural purposes; and (ii) legally
     protected cultural heritage areas, including those proposed by host governments for such designation.


17
   As considered in the IFC Environmental and Social Standards (IFC, 2006). For a definition of both cultural and natural
heritage, please refer to the text of the Convention (http://whc.unesco.org/world_he.htm)
18
   Ibíd.


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     When a proposed project is located within a legally protected area or a legally defined buffer zone, it has to
     meet the following requirements19:

              Comply with defined national or local cultural heritage regulations or the protected area
               management plans
              Consult the protected area sponsors and managers, local communities and other key stakeholders on
               the proposed project
              Implement additional programs, as appropriate, to promote and enhance the conservation aims of
               the protected area

 Relevant Conventions

        Convention Concerning the Protection of the World Cultural and Natural Heritage
        Convention on Biological Diversity
        Convention on the Safeguarding of Intangible Cultural Heritage
        Convention on the Protection of Underwater Cultural Heritage
        Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of
         Ownership of Cultural Property

 Guidance materials

        Performance Standard 8 – Cultural heritage, from the IFC´s Guidance Notes: Performance Standards
         on Social & Environmental Sustainability (IFC, 2006)
         Aims to protect irreplaceable cultural heritage and to guide clients on protecting cultural heritage in the course of
         their business operations. In addition, the requirements of this Performance Standard on a project’s use of cultural
         heritage are based in part on standards set by the Convention on Biological Diversity
        Akwé: Kon Guidelines (Secretariat of the Convention on Biological Diversity, 2004)
         Voluntary guidelines for the conduct of cultural environmental and social impact assessments regarding
         developments proposed to take place on, or which are likely to impact on, sacred sites and on lands and waters
         traditionally occupied or used by indigenous or local communities.
        The World Conservation Union (IUCN) webpage
         The World Conservation Union is the world’s largest and most important conservation network. Its mission is to
         influence, encourage and assist societies throughout the world to conserve the integrity and diversity of nature and
         to ensure that any use of natural resources is equitable and ecologically sustainable.
        World Heritage webpage
         Includes all the relevant and updated information on the Convention Concerning the Protection of the World
         Cultural and Natural Heritage, as well as the list of the cultural and natural heritage which the World Heritage
         Committee considers as having outstanding universal value.




19
  As required in Performance Standard 8 from the IFC´s Guidance Notes: Performance Standards on Social &
Environmental Sustainability (IFC, 2006)


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