4. Development responses and policy-making
The following chapter looks at the most commonly used management tools to address environmental impacts of resource extraction, namely Strategic Environmental Assessment and Environmental Impact Assessment.
Identification of the impacts of an operation on the environment can be achieved using an Environmental Impact Assessment (EIA). However, in order for it to be triggered, there needs to be a comprehensive national policy framework which would allow for an EIA to take place at any cost. A Strategic Environmental Assessment (SEA) is a thorough institutional and legislative review of a given country's environmental policies. It is a process that ensures sustainability aspects are given a priority at all relevant executive and administrative levels.
Drawing on this knowledge, the chapter moves on to providing specific and practical macro-level recommendations for policy makers at the national level.
Environmental Impact Assessment
Environmental Impact Assessment (EIA) is a site-specific methodological examination of the probable environmental impacts of a given project. The recommendations of an EIA are compiled in an Environmental Statement (ES), which provides decision makers with an appraisal laying out the ecological risks associated with the development of a project. The process broadly contains five stages: screening, scoping, preparation of the ES, planning application and a consultation/public hearing.
An EIA tends to have a reactive character and is observed as a tool for integrating environmental concerns into EI project development. In the interest of transparency and legitimacy, assessments need to be independently monitored and evaluated. Additionally, public hearings are a key component of an EIA and are what make the assessment inclusive and sustainable. This process allows local communities to voice grievances and feel ownership of the EI project, thus increasing the chances of it gaining their support.
In the extractives sector, EIA processes were initially featured in the 1991 Berlin Guidelines on environmental stewardship. Since then, EIAs have played a key role in informing extractives projects' operational plans and critical paths.
Strategic Environmental Assessment
Strategic Environmental Assessment (SEA) is a macro-level, institutional assessment that identifies whether a government takes environmental concerns and safeguards into consideration. It ideally takes place on all administrative and institutional levels, across a range of ministries: mining and petroleum, energy, environment, health and safety, agriculture, infrastructure, and education amongst others.
SEA assesses how strong a legislative framework is and proposes means for improvement. Good practice dictates that laws and regulations clearly lay out the conditions for when an Environmental Impact Assessment (EIA) should be triggered. It is important that the legal language is not discretionary (using verbs such as "should", "can" or "may") - i.e. the conditions for when an EIA must be triggered need to be explicit. SEA is the mechanism for identifying such loopholes and legislative weaknesses, and addresssing them as seen fit.
The strategic assessment takes place at the earlier stages of decision-making cycle and it pursues a proactive approach to development proposals. Unlike EIAs, SEAs are interested in cumulative impacts to the environment and society and consider a broad range of potential alternatives.
National law and regulation
Countries have the sovereign right to legislate and regulate economic activities within their borders. This sovereign right extends to the exploitation and development of natural resources, recognised internationally.
A country's legal regime should provide the respective government with assurance that extractives sector licensees and contractors will undertake operations in an environmentally responsible and socially acceptable manner, or be obliged to relinquish the mineral right so that the land can be made available to another party for exploration and exploitation. Thus, the laws will need to clearly specify the mandate, authority and responsibility of different agencies. Furthermore, the legislative framework would need to ensure that overlaps and/or inconsistencies are avoided across the different laws, particularly between sector regulations (also called “soft laws”) and the (“hard”) laws underpinning them.
Regulations ought to focus primarily on technical and operational matters (such as licensing procedures, contract area, reports on operations, and operational standards) but may also include fiscal elements (such as royalty definitions, surface rental, fees, and fines), cost and volume audits, as well as general social and environmental requirements.
A solid mining or petroluem legislative framework ought to be in line with SEA-developed recommendations, and informed by context-specific EIAs.
Policy-making and prerequisites for success
The degree of efficiency of these systems and forms of assessment has been long debated, to the point of asking whether some EIAs and SEAs offer only “paper promises”. In jurisdictions where the environmental regulatory and enforcement regime is weak, there is an obvious financial incentive for companies to not prioritise environmental investments and compliance.
To avoid such incentives, in addition to clear and transparent guidelines, environmental policy further requires:
Sufficient funding/capacity to enforce regulatory compliance;
Knowledge (thereby avoiding instances of asymmetric information between government officials and investors);
Judiciary, i.e. both public access and an appeal mechanism for those affected by court decisions; and
Good governance, to ensure consistent honesty of purpose, and commitment to EMS objectives.