The main objective of Environment & Social Due Diligence (ESDD) is to determine the current status of the Project and identify the environmental and social issues that pose potential risks with respect to Indonesian regulations, International Finance Corporation (IFC) guidelines, and other social concerns, which could affect the Project Sponsor investment and/or any third party financing that may be applied towards the Project.
The example of results of ESDD usually to include:
(i) Confirmation of compliance of the proposed development plan for the Project with the applicable environmental and statutory requirements, including Project requirements under the Equator Principles (including categorisation), IFC Performance Standards, IFC EH&S guidelines, and other applicable standards and guidelines as stated above;
(ii) Determination of the environmental and social requirements of the Project are reflected in current and proposed contracts and agreements;
(iii) Identification of gaps in compliance against each of the 10 Equator Principles and 8 IFC Performance Standards, and provide recommendations to address deficiencies;
(iv) Identificat ion of (potential) issues relating to downstream development that may be material (if any), and provide recommendations to mitigate the issues;
(v) Cost estimation for implementing recommended measures, and also ongoing costs that may arise on account of maintaining E&S compliance;
(vi) Assessment on schedule implications of implementing recommended measures;
(vii) Recommendations in relation to the Operator’s resource planning and organizational design;
(viii) Recommendations for a Community Investment Program and Stakeholder Engagement Plan; and
(ix) Comments on adequacy of Abandonment & Restoration provisions in the Project development plan.