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Managing ESA in the Mediterranean

1. Workshop Introduction, Objectives and

Agenda

Jean-Roger Mercier, consultant

1 Managing ESA in the Mediterranean -

Jounieh April 2013

Without proper safeguards….

• Social conflicts and costly mistakes happen

Managing ESA in the Mediterranean - Jounieh April 2013

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In a world asking for more transparency and expecting institutional accountability, where information flows at electron’s speed, harming people or the environment without reason is immediately reported and institutions take reputational risks very seriously.

Chad Oil Production & Export

• Exxon-Mobil, head of the consortium, submits a first version of the EIA to the World Bank as a « courtesy » formality. WB rejects/comments and the preparation works are stalled for 18 months.

• In spite of the 25 m US $ spent on preparing the EA report, the inverstor does not notice that the pipeline route (1,000 km) crosses the future dam site in Lom Pangar -> 50+ m US$ to divert and secure the drowned pipeline

Managing ESA in the Mediterranean -

Jounieh April 2013 3

An institutional mistake

• The Albania Integrated Coastal Zone Management project (approved 2007) has been subject to a complaint at WB’s Inspection Panel (IP)

• The Country Director was caught red-handed having fabricated a letter to the Government

• The Director and her Vice-President were dismissed

• WB bashing in Albania was particularly vicious (chair of IP accused of having links with construction Mafia)


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A technical mistake • Tanzania Kihansi Hydroelectric Project (approved 1990

for funding by WB, EU, Norway and Sweden): EA approved though scope limited to dam impoundment

• Hydropower production starts without water rights up until 2000

• A scientist identifies an endemic species of toads and blows the whistle

• The international community comes to the rescue of the toad, makes it survive and Tanzania is forced to borrow 10+ m US$ between 2000 and now to design and implement the compromise between power generation and biodiversity conservation


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A Dam Project : Multiple Perceptions

Rather Positive Rather Negative

Regulator E&S (Compliance)

Environmental activist (Risks)

Politician (Votes)

Sector Economist (Reduced black-outs)

Local Communities (Jobs – before approval)

Builder (Profit)

Scientist (Facts)

Lender (Returns)


Jounieh April 2013

Perception may vary over time

Rather Positive Rather Negative

Local Communities (Impacts, lack of compensation

– after approval)


Jounieh April 2013

The cost of accountability

• In addition to the annual cost of maintaining 3 full-time high-level experts and their staff, the administrative cost to the World Bank lies in a bracket of 50,000 US$ to 2 million US$ for each complaint to the Inspection Panel

• 80+ complaints have been received in the 1993-2013 period

• It takes only two persons living in the project area to file a complaint to the Inspection Panel


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Avoiding mistakes

• Playing hide and seek: increasingly difficult in a fast and transparent world where elites are suspected of evil-thinking and evil-doing

• Playing by rules that are increasingly stringent on preventing harm done to the environment and to the local communities: designing mitigation/avoidance, implementing E&S measures and allowing recourse and redress.


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Workshop Objectives

Enable you to: • Understand the basics of Environmental and Social

Assessment (ESA) of projects and Strategic Environmental and Social Assessment (SESA) of plans, programs and policies

• Identify the instances where ESA or SESA are required • Identify the information sources on ESA/SESA good practice • Start managing the preparation, approval and follow-up of

ESA and SESA • Champion improvements in the design and implementation

of environmental and social assessments in their countries and the impact on decision-making of improved ESA analytical work


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Broad Workshop Agenda

• April 15 (today): Opening, setting the stage, the cost of environmental degradation, basics of ESA, first case study

• April 16: basics of Strategic ESA, second case study, presentation of field visit

• April 17: field visit, where the rubber hits the road

• April 18: common themes, the guidebook, future follow-up, certificates, closing


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Workshop Internal Dynamics

• Need to select, for Monday, Tuesday and Thursday, a chair and a rapporteur for the day,

• The chair manages the agenda, ensures time-keeping and works with the rapporteur to produce a report for the day

• The rapporteur takes notes and prepares, with the chair, a report for the day that is presented the next morning or the same evening


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2 Environmental and Social Assessment Overview

Jean-Roger Mercier, Consultant

April 15, 2013

Jounieh, ESA Workshop 13

Outline

• Where are we coming from?

• What countries do

• The Paris Declaration and its avatars

• Managing ESA in the real world

• Introduction to the case study

Unofficial Document 14

Where is ESA coming from?

• OECD countries require EIA since the 70’s

• Largely in response to social protests of the late 60’s: let protestors express themselves in a structured format

• 1972: Stockholm « poverty is the worst form of pollution » Non aligned countries

• EIA as a licensing/approval mechanism

• EIA continues to be the norm in practically all the national laws and regulations.


Moving to results

The term “environmental impact assessment” (EA) was coined with the idea that the assessment itself of the potential environmental impacts was the goal. The emphasis was on assessment. Once we achieved the then difficult task of predicting an impact, mitigation would follow somehow. How naive we were in the 1970s!

(Goodland and Mercier, World Bank, 1999)


The international scene

• 1985: European Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment

• 1989: World Bank Operational Directive 4:00 on Environmental Assessment

• 1990: World Bank Operational Directive 4:30 on Involuntary Resettlement

• Largely in response to late 80’s demonstrations (e.g. Narmada Dam in India)


Two amazing decades (1990-2010)

• Key events: – The Rio Conference (1992)

– World Commission on Dams (2000)

– Strategic Environmental Assessment European Directive (2001)

– Paris Declaration (2005)

– IFC’s performance standards (2006)

• Key trends – WB safeguard policies

– IFC, Export Credit Agencies and the Equator Principles


Converging at last?

• Donor harmonization: the African Development Bank prototype – Public and private sector financing under one

umbrella – Social (inc. Health) and environment – Includes Strategic Environmental and Social

Assessment (SESA) – Impacts and risks – 5 substantive operational « safeguards »

• Alignment between donors and country systems: a long road to travel


The five substantive safeguards

• Dealing with Gender and Vulnerable groups

• Involuntary Resettlement: Land Acquisition, Population Displacement and Compensation

• Biodiversity and Ecosystem Services

• Pollution Prevention and Control, Greenhouse Gases, Hazardous Materials and Resource Efficiency

• Labour Conditions, Health and Safety


Other key trends

• Role and importance of indigenous peoples

• FPIC: from consultation to Freee, Prior and Informed Consent (World Commission on Dams recommendation that got a new life in 2012 with IFC’s adoption)

• Recourse and redress mechanisms (Inspection Panel, IRM at AfDB)

• Public disclosure, now the norm


What countries do

• Countries do EIA, compensation for land acquisition and a few other things related to E&S

• EIA is usually required by law under certain conditions (focal points reports)

• EIA is usually managed by a division in an Environmental Department or Agency

• EIA is basically a licensing mechanism


EIA

• More often than none, EIA has been introduced in the legislation under the pressure of international donors

• Investors « do EIA » as a way of complying with requirements and of obtaining their license to operate


Land acquisition

• Projects requiring land acquisition should normally get a « Public Utility Declaration », inform the affected households and compensate them

• Some countries do, some don’t (China Beijing Olympic Games)

• In the best cases, compensations are established on a fair/equitable and up-to-date market value basis, and they are actually paid to the affected households


Other E&S issues

• Countries struggle with the implementation of the international conventions that they ratified (ILO all the way to Biodiversity, Climate change and wetlands)

• There is no such thing as « country system » with a unified entry point for environmental and social issues

• Some countries even go back on public consultation or disclosure



Session 4.1 Environmental and Social Assessment Alignment

Jean-Roger Mercier, Consultant

April 16, 2013


Outline


• Piloting the use of country systems

• Involving the private sector

• The national requirements (session 4.2)

Paris Declaration on Aid Effectiveness

• 1. We, Ministers of developed and developing countries responsible for promoting development and Heads of multilateral and bilateral development institutions, meeting in Paris on 2 March 2005, resolve to take far-reaching and monitorable actions to reform the ways we deliver and manage aid


Harmonization and alignment

• Three main areas

– Procurement

– Financial systems

– « Environmental Assessment »

• Commitments

– Help enhance national systems

– Make more and better use of country systems

– Harmonize among donors


« Environmental Assessment »

• Donors have achieved considerable progress in harmonisation around environmental impact assessment (EIA) including relevant health and social issues at the project level. This progress needs to be deepened, including on addressing implications of global environmental issues such as climate change, desertification and loss of biodiversity.


Paris Declaration (cont.)

Donors and partner countries jointly commit to:

• Strengthen the application of EIAs and deepen common procedures for projects, including consultations with stakeholders; and develop and apply common approaches for “strategic environmental assessment” at the sector and national levels.


• Continue to develop the specialized technical and policy capacity necessary for environmental analysis and for enforcement of legislation.

• Similar harmonization efforts are also needed on other cross-cutting issues, such as gender equality and other thematic issues including those financed by dedicated funds.



Outline




World Bank OP 4.00

• Piloting the Use of Borrower Systems to Address Environmental and Social Safeguard Issues in Bank-Supported Projects


The Bank considers a borrower’s environmental and social safeguard system to be equivalent to the Bank’s if the borrower’s system is designed to achieve the objectives and adhere to [Bank’s] applicable operational principles…. Before deciding on the use of borrower systems, the Bank also assesses the acceptability of the borrower’s implementation practices, track record, and capacity.


Simplistic View

• Equivalence: Legal and regulatory requirements

• Acceptability: Real practices and actual institutional arrangements

• Another example from the African Development Bank in the context of the preparation of a Capacity Enhancement regional initiative (« CESAR »)


The « ESA Barometer »

• 35 indicators to measure equivalence and acceptability in 3 sections and 9 sub-sections

• The sections

– « Texts »

– « Content »

– « Governance »

• Outcome: by operational standard and global


South Africa’s Example


Two flows of outcome

• Assessing the risk taken by the lender in using the country system in lieu of the lender’s

• Bridging the gaps through a dedicated capacity building programme

• First evaluations (World Bank): piloting the use of country systems has proven feasible in droplets, but extremely costly in terms of transaction costs, certainly not replicable on a large scale and in need of optimization



Outline




IFC’s Growing Empire

• Most Export Credit Agencies have adhered to IFC’s performance standards

• The World Bank has launched a two-year consultation process to review and update its safeguard policies. Anyone can participate at http://www.worldbank.org/safeguard


http://www.worldbank.org/safeguard

The Equator Principles

http://www.equator-principles.com/

• On April 15, 2013 Otkritie Bank (OJSC) became the first Russian bank to join the Equator Principles …. At present, 78 banks, including ABN Amro, BNP Paribas, Barclays, Bank of America, Citigroup, Credit Suisse, HSBC, Société Générale, and Unicredit have adopted the Equator Principles.





Next

• The national ESA requirements in Egypt, Lebanon and the Palestinian Territories


5- Strategic Environmental and Social Assessment


The link with Georges Zouain’s speech • ESA is an integrative tool to make better projects • ESA integrates environmental management,

social protection and economic development • ESA integrates many themes: labor conditions,

gender, biodiversity protection, cultural heritage, name it! But the contribution of each theme needs to be effective.

• Experts of each subject are needed to provide their input into the melting pot. A technical specialist is invaluable because (s)he has the knowledge, the experience and the tools.

• We need many Georges’ for a good ESA!

Outline

• Rationale for developing SESA

• The birth of SEA

• SEA at the national level

• The rise of SESA

Rationale

• The evidence from the Cost Of Environmental Degradation and from AFED supports Target 7 of the Millenium Development Goals (MDG) to show that environmental concerns have to be built into plans, programs and policies, not just projects

• This is what Strategic Environmental Assessment (SEA, later SESA) has been designed for, but only one of several tools (COED, EIA, payment for ecosystem services, enforcement, taxes, ….).

Outline





It really started in the early 2000’s

• Voluntary process: South Africa on a pilot basis

• Mandatory:

– World Bank’s screening of Development Policy Lending since 2004

– European Union for certain plans and programs since 2001

– National legislations: Lebanon since 2012

One of many definitions

• “A range of analytical and participatory approaches that aim to integrate environmental considerations into policies, plans and programs (PPPs) and evaluate the inter linkages with economic and social considerations” OECD/DAC 2006

Impact-centered SEA

Institution-centered SEA

SEA Good Practice Criteria

• Unofficial, but building on collective professional knowledge (IAIA)

• Listed in the binder

• Have been used and tested on a series of World Bank-funded « First Generation » SEAs

• Has permitted identification of several good practices, including the Egypt Energy-Environment Review

Outline





SEA Decree for Lebanon

SEA Decree for Lebanon

• This Decree aims at determining mandatory procedures to be followed for the assessment of potential environmental impacts of any policy, plan, program, study, investment or organization proposal that tackles an entire Lebanese region or an activity sector, in order to ensure that these activities are compliant with conditions related to health, public safety, the protection of the environment and the sustainability of natural resources.

SEA Decree for Lebanon (cont.)

• A planning and management method for combating or, at minimum, reducing sources of pollution and degradation of natural resources by way of assessing environmental impacts of policy, program, study, investment or organization proposals that tackle a Lebanese region or an activity sector, identifying necessary mitigation measures and enhancing positive outcomes on the environment and natural resources, prior to their acceptance or refusal.

SEA of NWSS

• Integral part of REGOKO

• Terms of Reference prepared by GoL with consultant assistance in fall of 2012

• SEA consultants being recruited and expected to start working mid-May 2013

• End of NWSS SEA expected by September 2014

SEA/NWSS Objectives

• To provide recommendations for optimizing the strategy in order to fully integrate major environmental social, and economic concerns;

• To test and demonstrate opportunities for practical application of the SEA in Lebanon; and

• To test and demonstrate applicability of methodological and procedural SEA approach outlined in the Lebanon SEA decree

SEA of NWSS - Scope

• National Water Sector Strategy per se, adopted March 2012, plus

• Strategy for the Wastewater Sector (SWS), adopted by the Council of Ministers in October 2012

• Strategy for Surface Water Storage (SSWS) included in the NWSS

SEA for NWSS - Tasks

• In-depth literature review • Scoping • Drafting and validation of a scoping report • Joint Lebanese Government-Plan Bleu review and

integration in scoping report (see institutional set-up proposed)

• Launching SEA study • Draft SEA report • Validation of draft SEA report • Final SEA report •

SEA for NWSS – Minimum Team

• Team leader

• SEA expert

• Social scientist

• Water Resource Management specialist

• Ecologist

• Water sector economist

Outline





SESA

• SEA was difficult enough, but incomplete • SESA in 2011 at the World Bank « ..depending on

the project, a range of instruments can be used to satisfy the Bank's EA requirement: environmental impact assessment (EIA), regional or sectoral EA, strategic environmental and social assessment (SESA), ..” (OP 4.01)

• Will hopefully help integrate SEA/CEA and PSIA/CSA into one single vehicle

• SESA percolates to ADB, French Bilateral, what else (EIB?)?

6- Where are ESA/SESA going?


Link with the field visit

• The impacts of waste have indeed diminished since investment in collection + treatment

• At what cost? To whom?

• Has there been a strategic reflection on the optimal location/organization of the waste treatment facilities?

• Is there a better use of the 1,000+ tons per day of organic waste?

• Is the saturation of the landfill site premature? If yes, why?

Outline

• The future of ESA/SESA at the international level

• The future in Egypt

• The future in Lebanon

• The future in Palestine

Future ESA/SESA Internationally

IFC/EP

World

Bank

Integration

ESA/SESA

•Already using IFC’s Performance Standards for co-funded projects •Has started the consultation process on review and update of safeguards •Watches closely the trends at other multilaterals

World Bank Consultation

Themes that are quasi-certain winners

• Gender

• Climate change and the adaptation needs

• Vulnerable groups (the disabled?)

• Labor conditions

• More dubious – Human rights

– FPIC

Focus on gender (Busan 2011) We must accelerate our efforts to achieve gender equality and the

empowerment of women through development programs grounded in country priorities, recognizing that gender equality and women’s empowerment are critical to achieving development results. Reducing gender inequality is both an end in its own right and a prerequisite for sustainable and inclusive growth. As we redouble our efforts to implement existing commitments we will:

a) Accelerate and deepen efforts to collect, disseminate, harmonize and make full use of data disaggregated by sex to inform policy decisions and guide investments, ensuring in turn that public expenditures are targeted appropriately to benefit both women and men

b) Integrate targets for gender equality and women’s empowerment in accountability mechanisms, grounded in international and regional commitments.

c) Address gender equality and women’s empowerment in all aspects of our development efforts, including peacebuilding and statebuilding.

Using country systems

• My personal impression: not before long and starting with the wealthiest borrowers

• The International NGOs are watching every step that major donors make in this direction and there will be no mercy on mistakes

• Better look into the benefits of upgrading national requirements

The floor is participants’

• The future in Egypt

• The future in Lebanon

• The future in Palestine

[email protected]

mailto:[email protected]

7- Common themes


Outline

• Governance

• Monitoring/quality enhancement

• Grievance and redress

• Institutional reforms and ESA « culture »

• Stakeholder involvement

Institutions Matter for Sustainable

Development

– Several researchers, incl. Hernando de Soto and Easterly, have shown that institutions matter more than other variables (such as monetary or macroeconomic policy) to foster economic growth

– WDR 2003: “failure to implement [so-called win-win options] is most often due to the social and political problems associated with distributing costs and benefits within and between groups and generations.”

Institutions are made up of sets of

• Formal Rules

– E.g. EIA has to be done for all new projects

• Informal Rules

– E.g. Large industries (that employ more than a 1000 people) are rarely closed down for not complying with environmental standards

Some elements of SEA could be used to design and implement rules aimed towards sustainability

Two Approaches to SEA

• OUTPUT-BASED PROCEDURE: Extension of EIA to plans and programs (sets of projects) and to environmental licensing – Land Use Plans

• CONTINUOUS PROCESS: Systematically mainstreaming environmental considerations into public policy formulation and implementation – SEA for Water Supply and Sanitation Reforms in

Colombia and Argentina – SEA for Energy Sector – SEA for Flood Protection in Argentina

Good Practice Lessons from Policy-based SEA

• Selectivity (maximize tiering benefits by starting at highest sectoral policy level)

• Identification of linkages • Generation of alternatives • Identification of winners and losers and how to give

the weakest a voice • Provide a forum for debate • Adequate analytical base • Public disclosure • Continuous learning

Implications for Adapting SEA for Institutions

• Focus on continuous process, rather than an output

• Use analytical tools to identify linkages

• Use stakeholder analysis to understand political economy

• Use inter-institutional coordination to – make sure the weakest have a “voice”

– develop consensus and set priorities

– to generate viable policy alternatives

Implications for Adapting SEA for Institutions (cont’d)

• Use indicators to – clarify problem definition

– provide a framework for monitoring

– promote accountability

• Learn by doing and improve based on lessons learned

• We call this tentatively a Sustainable Governance System (SGS), i.e. a system/mechanism to help integrate sustainability concepts in policy formulation

What is a SGS?

• In a priority sector, a SGS would consist of: – Identification of links between sector and

environment and natural resources

– Stakeholder Analysis

– An Inter-institutional Coordination Mechanism to set priorities, embody them in formal rules, and provide framework under which informal rules can be shaped

– Definition, monitoring and public disclosure of indicators of policy outcome to ensure accountability

– A Feedback Loop that embraces adaptive management

Identification of Links

• Maximize positive environmental externalities – E.g. maximizing public health benefits in Water Supply and

Sanitation through hand-washing campaigns

• Defer economic costs through efficiency improvements – E.g. Demand-Side Management in Electricity Sector

• Prevent or minimize potential harm to third parties – E.g. traffic accidents or noise pollution

Stakeholder Analysis

• Identify stakeholders and their interests

• Identify winners and losers

• Ensure that weakest are not disproportionately affected

• Identify dispersed interests

• Identify incentives and behaviors of different players

Inter-institutional Coordination

• Allow for the development of agreements between different parties – Typically many actions that affect sustainability

are under the mandate of several sectors

– Provides an opportunity for the weakest to have a voice

• Allow for priority-setting and durable commitments to be made

Indicator Monitoring and Disclosure

• Help to build constituencies, which in turn will shape informal rules

• Promote accountability on the part of the contract parties/stakeholders

• Help in the collection of primary data to build an analytical foundation

Feedback Loop for Adaptive Management

• Recognize it is difficult to get things right the first time

• Allow for the identification of errors and subsequent action to correct them

• Help to ensure social learning and continuous improvement

Layers of monitoring for a large project (Chad Oil Production/Export)

• The Oil consortium (systematic reporting)

• The Governments (capacity building)

• The private sector donors

• The public sector donors

• A specialized consulting company reporting on ESMP implementation every six months (Internet)

• An International Advisory Group (Internet immediate)

Monitoring/quality enhancement

WB’s Inspection Panel

ESA « Culture »

• Two ways to use the ESA process:

– As a service to investors to help improve project design and implementation

– As a power confrontational tool to block evil investments

• The two ways can actually be complementary if used well, but danger in limiting ESA « culture » to a power game

Stakeholder Involvement

• Much guidance on public consultation and FPIC

• But stakeholders include many more key players: – Other sectoral ministries to help check

consistency and use the right competencies

– Sub-national levels of government

– The private sector

– Medias

8- Comments on the draft guidebook


Proposed Approach

• Break-out groups to read the short presentation (target, format, ToC) of the future guidebook

• Discussion and recommendations along the following lines.

Key questions?

• Content of the guidebook

– Main section

– Appendixes

• Tone

• Balance between international practices and national requirements

• Refining the target readership

Reminder

• The burning questions

• Three useful links

– http://www.iaia.org

– SEA Toolkit of the World Bank at

• http://go.worldbank.org/XIVZ1WF880

– IFC Performance Standards

• http://www1.ifc.org/wps/wcm/connect/Multilingual_Ext_Content/IFC_External_Corporate_Site/Home_AR

http://www.iaia.org/

http://go.worldbank.org/XIVZ1WF880

http://www1.ifc.org/wps/wcm/connect/Multilingual_Ext_Content/IFC_External_Corporate_Site/Home_AR

http://www1.ifc.org/wps/wcm/connect/Multilingual_Ext_Content/IFC_External_Corporate_Site/Home_AR

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Managing ESA in the Mediterranean - plan-bleu · PDF fileManaging ESA in the Mediterranean 1. ... • Exxon-Mobil, ... •The international community comes to the rescue of