9.9 Management and Oversight

Effective management capacity and monitoring are critical to ensuring compliance with the requirements set out in the preceding section. Governance systems for oversight can take different forms. One approach which may be best suited for smaller less sophisticated countries is a prescriptive/audited approach from the authorities. For in countries where there is more capacity, the requirements in the legal regime could be supplemented by placing more responsibility on the operator to work with codes of conduct developed by the operator and agreed with the authorities. Both systems need the capacity within the authority to manage the workload. To some extent this will be dependent on the size of the industry in a particular country, so that where there is a single mine for example;, the level of oversight should reflect that  – no point in this, in order to avoid setting up something over- elaborate.

 

Box 9.5: Environmental and Social Institutional Arrangements

Environmental protection and closure issues are common to many countries and good regulatory frameworks are generally available. Thus the fundamental issue is not so much the design of environmental legislation and regulation, but more the capacity of the environmental agency to monitor and enforce the laws and regulations.

Without adequate enforcement capacity, even the best designed regulations will be largely ineffective.   With good capacity, even rather general environmental protection requirements can result in significant reduction of environmental hazards ad risks.  Thus, a key principle is that institutional strengthening of the environmental authority is generally the most crucial issue for countries with large minerals or hydrocarbon projects.  

Social issues involve both mitigation of risks and enhancement of local benefits such as local procurement. 

A second key principle is that social issues are best addressed by a social ministry since social issues are less amenable to scientific measurement and compliance criteria as environmental impacts and require different skills sets from environmental issues. 

A women’s ministry can also be very effective in addressing social issues because women are generally much more aware of both social risks and opportunities than men, who focus largely only on employment and income.

Building strong and sufficient government capacity for environmental and social issues involves:

  • Having the necessary budget, employment conditions and capabilities to hire and retain sufficient well qualified and experienced staff to address the environmental and social impacts of mineral and hydrocarbon  investments with a strong presence on the ground at mineral and hydrocarbon operations and in nearby communities;
  • Ensuring that the institutional arrangements and capacity are in place so that any serious environmental or social/community incidents can be controlled rapidly and investigated thoroughly with results disseminated to communities and actions taken to prevent any re-occurrence;
  • Developing strong coordination and collaboration between the environmental and social authorities and the sector authorities in reviewing and approving: (a)  environmental/social impact assessments; (b) environmental/social management and monitoring plans; and (c) environmental/social monitoring arrangements and results,  especially for countries with weak environmental/social capacity and with staff with only limited experience or knowledge of minerals and hydrocarbons projects and their impacts; and
  • Supporting and facilitating civil society participation in environmental and social monitoring can lead to much more positive stronger environmental and social impacts where mandatory processes ensure that all stakeholders and interested parties have unrestricted access to environmental and social performance data and to key documents such as ESIAs and ESMPs that specify compliance criteria and the obligations and commitments of the investors and operators.

 

Organizational Capacity. The laws should clearly specify the authority and responsibility of different institutions regarding mining sector environmental and social protection. For countries which have developed their environmental monitoring capacity, the environmental ministry is responsible for policy and establishing laws and regulations and a national environmental protection agency or local level environmental authorities are responsible for enforcement of the law and regulations.  The law and regulations should clearly specify which environmental authority is responsible for monitoring and enforcement and should also specify the procedures for companies to follow in preparing and submitting environmental and social performance data and the procedures for verification and independent testing by the environmental authorities. The environmental authority should have been able to put in place the institutional arrangements and capacity needed to respond to serious environmental incidents or accidents, so that they can be controlled rapidly and investigated thoroughly with results disseminated to communities and actions taken to prevent any re-occurrence of the problem.  Where possible the environmental authority should maintain staff at operations on a permanent basis. In presenting their plans for approval by government, project sponsors may be reasonably required to demonstrate that they have the organizational capacity to comply with laws and regulations as they relate to social and environmental impacts and with undertakings given in the ESMP and closure plan. Environmental performance data that is provided to government by the operator should also be provided as well to local communities in the local language with at minimum annual updates.  

Capacity Building. Many countries have weak environmental oversight and enforcement capacity.  Governments should make every effort to see that the environmental agency has sufficient staff with adequate knowledge and experience of all the key sectors of the economy including oil gas and mining, adequate budgets for both wages and other costs (i.e., computers, data and record keeping systems as well as vehicles and costs of operational travel) in order to be able to hire and retain competent staff, provide training and have a strong presence on the ground, including at mine sites. Very close collaboration between the environmental authority and the technical staff at the sector ministry in reviewing and approving environmental and social impact assessments and management plans and environmental monitoring results, can help compensate in countries with weak environmental capacity and environmental staff that have only limited experience or knowledge of oil, gas and mining.

Social Aspects. In more advanced developing countries where there is a social ministry or a women’s ministry, those ministries should be responsible for social and gender issues respectively.  But, in countries where such ministries do not exist, social issues should be the mandate of whichever agency has the designated authority in the matter – or if this does not exist whichever agency has the most expertise or was most involved in establishing social mitigation measures and local development initiatives for the mining sector or for a particular mining project.  

Monitoring and Reporting. Good practice would require both internal and external auditing of the project sponsor’s compliance with applicable measures and undertakings throughout the project life, and regular public reporting of those audits. This requires the environmental authority and the sector ministry to work together to have a well-defined and comprehensive monitoring program in place to identify currently serious or potentially serious environmental issues such as water quality and availability impacts, protection of bio diversity and natural habitats and safe handling and storage of hazardous materials and to have active interventions to reduce risks.

Additional Reading:

  • Equator Principles; link to website. These are a credit risk management framework for determining, assessing and managing environmental and social risk in project finance transactions.

 



Within This Chapter

Mining Specifics

Oil & Gas Specifics

Africa

Latin America

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  • John: the locals who are happy for their mthnoly 150$ will loose their teeth in a few years because of mercury contamination, they and their children will develop all forms of cancer, will they be able to buy medication with that money? eeee, hayer… read more