In 2012, a Chinese-owned mining company, EcuaCorriente, signed a deal with the Ecuadorean government to develop a copper mine in one of the most biodiverse and beautiful places on earth. Located in Ecuador's misty highlands, the Mirador mine has since been the target of protests, lawsuits and resistance from communities and organisations concerned about the mine's impact on water, biodiversity and indigenous peoples.
El Mirador is just one example of a foreign direct investment that has attracted intense controversy - an unwelcome side effect of a Chinese foreign policy that has encouraged Chinese companies to go global.
The "Going Out" policy is largely geared towards ensuring that China secures access to the natural resources needed to fuel its continued economic growth. As a result, over the past decade, China has poured investments into nearly all corners of the earth, from Europe, Southeast Asia, North America, Latin America, to even Antarctica. Today, China exceeds the World Bank as a provider of finance for development projects around the world.
But while the Going Out policy may have spurred a boom in Chinese overseas investment, another Chinese policy - the "Green Credit Directive" - may have the power to make sure those investments are environmentally responsible. Released by Chinese banking regulators in 2012, it requires Chinese banks to consider environmental and social risks when lending to companies and projects, and to halt or suspend financing when major environmental hazards (such as pollution, safety, resettlement, and even climate change) go unmitigated.
In particular, the directive requires Chinese banks, in their overseas lending, to ensure that borrowers abide by international norms.
As such, the directive is one of the world's most progressive environmental banking regulations. In comparison, governments in the US and Europe have done virtually nothing to hold banks responsible for the environmental impact of their lending. Nor have these governments done much to address the overseas social and environmental impacts of their multinational corporations.
But on the second anniversary of the directive today, controversies such as the ones surrounding the Mirador project continue unabated - a disappointing sign that the directive is not being implemented.
In Ecuador, civil society groups have informed potential Chinese lenders about the severe environmental and social problems the mine would cause. They detailed how the mine would devastate the region's water quality, trigger widespread soil pollution, and render the extinction of at least three amphibious and reptilian species. Such impacts are clearly out of line with international norms and violate the directive.
In addition, the groups pointed out how the mine has already violated Ecuadorean local and national laws, another breach of the directive. Unfortunately, there has been no indication that Chinese banks or regulators have acted.
Ensuring compliance with the Green Credit Directive is certainly no easy task. Chinese borrowers, such as resource extraction companies, are "late to the game" when it comes to developing international assets, and are loading up on environmentally, socially and politically risky projects.
Chinese banks still have a long way to go in developing robust environmental and social risk management systems. The China Banking Regulatory Commission does not have a department charged with overseeing compliance with the directive. However, if China is to improve its reputation as a global actor, it will need to take the directive seriously.
Michelle Chan is economic policy director at Friends of the Earth