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Photo: Rubber plantation, Ratanikiri Province, Cambodia 

Social and environmental standards exist to protect people and ecosystems from the negative impacts of investment projects. They may be reflected in policies, guidelines or systems that developers, investors and financiers adopt to prevent and mitigate the negative impacts of their business activities. They should be implemented during the entire project cycle, from identification, design and preparation, through development and operation, to the closure of a project.

Chinese companies and financiers often lack strong institutional policies to deal with social and environmental issues. However, this is gradually beginning to change. China’s policy banks and commercial banks have adopted internal social and environmental policies. Chinese companies are increasingly making commitments to operate in a responsible manner when operating overseas, adopting their own policies and signing on to international principles and standards. Importantly, Chinese state institutions have recognized the need for improved social and environmental standards in overseas investments and in recent years have issued a number of guidelines for companies operating overseas.

The policies and guidelines adopted to date often lack detail when it comes to social and environmental responsibilities, and none have accountability mechanisms. However, they are becoming increasingly detailed and indicate ongoing high-level support for improving practices in overseas projects. As such, they can potentially be drawn on by communities seeking to protect their rights and the environment. This section covers some of the key state policies and administrative regulations that govern Chinese overseas investment, as well as social and environmental guidelines currently in place.