CHAPTER TWO

2. SETUPS OF ENVIRONMENTAL AND SOCIAL IMPACT

ASSESSMENT
2.1. International and National Experience

The international Study of the Effectiveness of Environmental and Social Impact Assessment
(ESIA) is a joint exercise by a number of partner countries and international organizations. It
was initiated and led by the Canadian Environmental Assessment Agency (CEAA) in
collaboration with the International Association for Impact Assessment (IAIA). A pilot
feasibility phase of the study, begun at IAIA in 1993 at Shanghai, concluded at the
International Summit on Environmental Assessment held immediately before IAIA in 1994
in Quebec City. With direction from Summit representatives, the study comprised a selected
review of the recent progress and performance of ESIA. Broadly stated, the purpose of the
study was to take stock of the status of ESIA practice, identify major strengths and
limitations, and brief process managers and practitioners on measures and options to meet the
challenge of sustainable development.

Environmental and Social Impact Assessment (ESIA) is described as one of the more
successful policy innovations of the 20th Century. Today, it is a formal process used in more
than 100 nations and organizations to help decision makers consider the environmental
consequences of proposed actions. The question is whether ESIA can remain a relevant and
effective tool into the 21st Century, responding to the demands of a changing world. The
International Study of the Effectiveness of ESIA was established to review this question. It
was taken forward under the direction of an international steering committee consisting of
partner countries and organizations.

The study focused on four categories of themes:

 foundations of ESIA, focusing on guiding values and principles;

 new dimensions in ESIA, focusing on the application of sustainability concepts,
strategic environmental assessment, and cumulative and large-scale effects;
 process strengthening, focusing on the relationship of ESIA to decision making; and
 capacity building, with particular reference to needs of developing countries.
In recent years, the world-wide adoption of ESIA has significantly expanded the acting of
practice, added new roles and professional responsibilities, and brought changing
perspectives to what constitutes sound performance. Two trends stand out in the advances
made to date in ESIA process development and application. First is the widespread
establishment of ESIA systems by many developing nations and by nations in transition.
Second, is the emergence in several industrialized nations of a second generation, integrated,
making processes more closely linked to national planning and decision-making process.

Three critical challenges to the contemporary practice of ESIA can be identified:

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  sharpening ESIA as a tool for sustainability assurance, so as to provide guidance to
the larger process of decision making;
 ensuring the practical application of the integrated, second-generation ESIA process,
particularly in the light of public sector resource constraints and the lack of consensus
regarding sustainability criteria; and
 quality control into the ESIA process to help bridge the gap between its practice and
potential.
Internationally, ESIA is becoming a multi-purpose process, with increasing emphasis given
to promoting long term, societal goals that reflect and express the ideals of sustainable
development. These include:
 safeguarding valued ecological processes and heritage areas;
 avoiding irreversible and unacceptable loss and deterioration of natural capital; .
 ensuring development is adjusted to the potentials and capacities of the resource base;
 optimizing natural resource use, conservation and management opportunities;
 protecting human health and community wellbeing; and
 addressing distributional concerns related to the disturbance of people and traditional
lifestyles.
As a widely used (though not the only) process for meeting these objectives, ESIA also meets
a number of supporting and secondary aims. These are considered to include the following:
 improving coordination among participating agencies and actions;
 fostering better designed and planned development projects, i.e., greener and more
cost-effective;
 empowering community development and building local capacity through public
participation;
 introducing environmental values and accountabilities across a range of institutions;
and
 internalizing environmental costs and damages in industry consistent with the polluter
pays principle.
2.2. Legal and Policy Framework of ESIA

During the 199Os, there have been a number of important developments with respect to ESIA
legal and institutional frameworks at both national and international levels. Changes to well-
established ESIA regimes: Major reforms and repairs to long standing ESIA processes have
been completed (e.g., Canada, New Zealand), initiated (e.g., Australia) or are pending (e.g.,
European Commission EIA Directive). The New Zealand Resource Management Act (RMA,
1991) is possibly the most far reaching piece of sustainability legislation enacted by any
country. The Canadian Environmental Assessment Act (1995) retains many elements of the
previous Environmental Assessment and Review Process (1973). ESIA legislation in
developing and transitional countries: Post-Rio (1992), many developing countries have
enacted ESIA laws. This is one of the most remarkable and possibly under-appreciated trends
in the field. Approximately 70 developing countries have ESIA legislation in place and a
number of others are in the process of drafting new or amended statutes. Usually, provision
for ESIA is incorporated within a framework environmental law which does not influence out
the details of the process. However, there are also a number of ESIA-specific laws, decrees,
rules, and regulations (e.g., Nigeria, 1992; Paraguay, 1993; Uruguay, 1994). Countries in

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transition (CITs) in Central and Eastern Europe represent a special case with respect to ESIA
process development. Some ClTs have associate status with the European Union. The
European Commission and individual member states have strengthened their internal
procedures for assessing development assistance activities. Other donor countries have made
environmental sustainability a policy objective of their aid programs and have introduced
procedures for policy and program assessment (e.g., Canadian International Development
Agency (CIDA). An OECD Development Assistance Committee Task Force (1994) has
identified measures for improving consistency among EA policies, procedures, and practices
of bilateral donors. The measures include the formulation of “Framework Terms of
Reference” and a “Comprehensive Guideline” that respectively identifies the principles and
procedural requirements for sound ESIA. Parallel developments have been taking place in
and among multilateral institutions, including the World Bank, the African Development
Bank, the Asian Development Bank and the European Bank for Reconstruction and
Development.

2.3. Applicable Environmental Standards

Environmental standards are administrative regulations or civil law rules implemented for
the treatment and maintenance of the environment. Environmental standards are typically set
by government and can include prohibition of specific activities, mandating the frequency
and methods of monitoring, and requiring permits for the use of land or water. Standards
differ depending on the type of environmental activity.

Environmental standards may be used to produce quantifiable and enforceable laws that
promote environmental protection. The basis for the standards is determined by scientific
opinions from varying disciplines, the views of the general population, and social context. As
a result, the process of determining and implementing the standards is complex and is usually
set within legal, administrative or private contexts.

The human environment is distinct from the natural environment. The concept of the human
environment considers that humans are permanently interlinked with their surroundings,
which are not just the natural elements (air, water, and soil), but also culture, communication,
co-operation, and institutions. Environmental standards should preserve nature and the
environment, protect against damage, and repair past damage caused by human activity.

The most comprehensive approach is to seek the universal applicability of standards. This is
easier to achieve with multilaterally or globally negotiated standards, more difficult with
standards that are set unilaterally or negotiated multilaterally with a claim to global
applicability. The smaller the circle of countries involved, the greater the contradiction
between the negotiating mandate and the claim for universal applicability. Where the
environment is concerned, problems occur on different levels. For example, the exploitation
of a coal deposit leads to environmental problems at local level and is a purely national
matter. The pollution of a river flowing through several countries is a regional problem, and a
limited international one. Global environmental problems stem partly from regional causes
(climatic changes brought about by destruction of the rain forest in some countries) and partly
from global causes (worldwide CO 2 emissions). It therefore makes little sense to treat all
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problems equally; specific national regulations to prevent destruction of the countryside are
hardly suited for application globally. However, as a rule it can be said that environmental
standards should apply globally if the damage to the environment is global, especially if its
causes are of a global nature. Here responsibility and the circle of countries affected agree,
despite differences in their ability to deal with these problems. A claim for global
applicability therefore also implies harmonization of the environmental standards themselves.

2.4. Social and Environmental Baseline Conditions

The baseline conditions are the physical, chemical, biological, social, economic, and
cultural setting in which the proposed project is to be located, and where local impacts (both
positive and negative) might be expected to occur. We collect baseline data to serve two
purposes in the ESIA study. First, it helps us understand the current conditions of the
area, and how the project needs to be implemented considering these conditions. Second, it
helps us assess and predict the possible environmental changes that could occur, once the
project is underway.

Baseline data are the data collected about various factors of the project study. This includes-

 Physical- the area, the soil properties, the geological characteristics, the topography,
watershed properties, etc.
 Chemical- water, air, noise and soil pollution levels, etc.
 Biological- the biodiversity of the area, types of flora and fauna, species richness,
species distribution, types of ecosystems, presence or absence of endangered species
and/or sensitive ecosystems etc.
 Socioeconomic- demography, social structure, economic conditions, developmental
capabilities, displacement of locals, etc.
 Cultural- location and state of archaeological and/or religious sites.

2.5. Triggered Safeguards and Risk Considerations

Safeguard policies are essential tools to prevent and mitigate undue harm to people and their
environment during the development process. When identifying and designing a project,
safeguards should help assess the possible environmental and social risks and the impacts
(positive or negative) associated with a development intervention. During project
implementation, safeguards should help define measures and processes to effectively manage
risks and enhance positive impacts. The process of applying safeguard policies can be an
important opportunity for stakeholder engagement, enhancing the quality of project proposals
and increasing ownership.

Most International Financing Institutions (IFIs) require the application of safeguards to

approve projects, and while protocols and formats vary, the issues considered are common.
Environmental safeguards (as well as Social Safeguards) are a cornerstone of IFI support to
sustainable development. The objective of these policies is to avoid or, when avoidance is not
possible, to minimize and mitigate adverse project impacts on the environment and affected
people, and to help borrowers (and grant recipients) strengthen their own safeguard systems
and develop the capacity to manage environmental risks. Key environmental safeguard

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considerations include biodiversity conservation, sustainable natural resource
management, pollution prevention and reduction, pesticide use and greenhouse gas
emissions. Safeguard policies provide guidelines for IFI and borrower/country staffs in
identifying, preparing, and implementing programs and projects. They also provide a
mechanism for integrating environmental concerns into development decision-making.

Some IFIs, such as the Asian Development Bank (ADB), have a single safeguard policy
statement that addresses both environmental and social impacts and includes specific
requirements that borrowers/clients are obliged to meet when delivering safeguards for
projects supported by the Bank. Other IFIs, such as the World Bank (WB), adopt separate
sets of environmental and social safeguard policies. However, they emphasize the
importance of addressing environmental and social impacts and risks comprehensively; the
World Bank has an umbrella environmental assessment policy and specific environmental
safeguard policies to address critical issues in natural habitats, forests, pest management,
physical cultural resources and safety of dams. As in the case of the Asian Development
Bank, these policies must be addressed as an integral part of the environmental assessment
process.

Many countries have strengthened their own environmental policies and regulatory
frameworks; however, others continue to have less developed systems and often rely on
policies and procedures established.

The fundamental principles associated with risk assessment studies were articulated in the
1970s, with the planning and conduction of such studies moving toward maturity in the
following decades. Early risk assessments focused on human health and traditionally
encompass components on hazard (risk) identification, dose-response assessment, exposure
assessment, and risk characterization. ESIA studies were also initiated in the 1970s, with their
primary focus in the initial decade toward impacts on physical/ chemical and ecological
components of the environment. Human health risks were often not addressed or only
marginally considered in ESIA studies; however, water resources development project ESIAs
in developing countries often focused on disease transmission and resultant health impacts as
a consequence of construction worker carriers and the enhancement of mosquito breeding
conditions.

Risk assessment studies in many countries were initially directed toward regulatory issues
such as establishing environmental quality standards, and on the hazardous effects of
synthetic chemicals on humans. In more recent years the emphases have been expanded
toward ecological risks and non-hazardous effects on humans. Adaptations of classical risk
assessment studies have also been directed toward environmental problem assessments and
remediation needs. Remedial action programs for uncontrolled hazardous waste sites, called
Superfund sites in the United States, have incorporated risk assessment principles in the
comparison of alternatives and decision making associated therewith.

Increased attention is now being given to ecological risks in relation to contaminant

assessments and environmental management programs. Ecological risk assessment has been
defined as a process that evaluates the probability or likelihood those adverse ecological
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effects will occur (or have occurred or are occurring) as a result of exposure to stressors from
various human activities. Such effects can occur on non-human ecological components
ranging from organisms, to populations and communities, to ecosystems. Stressors can be
chemical, physical, biological, or radiological in nature, with the major portion of current
interest related to the use and/or current or previous disposal of industrial chemicals or
pesticides. A given ecological risk assessment study could be narrow (one ecological
component, one stressor, and one human activity) or comprehensive (multiple ecological
components, multiple stressors, and multiple activities).

Both human health risk assessment and ecological risk assessment within the ESIA process
can be accomplished using one to several of the following approaches:

(1) addressing actual or perceived risks using a descriptive or qualitative approach;

(2) calculation or determination of a relative risk index based on information on several
selected factors;
(3) relative comparisons of the perceived risks of the alternatives being evaluated; and/or
(4) a quantitative, probabilistic approach focused on actual risks of the alternatives being
evaluated.

Risk assessment considerations can include human health and/or ecological risks, and
combinations thereof. Such considerations can be focused on only one aspect of the project
being addressed (e.g., use of pesticides in vegetation management), or on one phase (e.g.,
construction or operation or discharging), or on the entirety of all aspects and phases.

It is timely to incorporate risk assessment tools in the ESIA process. The possibilities range
from the determination of relative risk indices for single issues such as the choice of
pesticides or herbicides in forestry or range management plans, to the use of environmental
pathways modeling and risk calculation for industrial plant and/or waste site emissions, to the
use of quantitative probabilistic calculations for industrial or power plant accidents or for
highway/railway accidents and associated chemical spills. The potential benefits of the
inclusion of risk assessment include:

(1) the encouragement for integrated thinking (such as for environmental transport pathways
and associated health/ecological effects) by the interdisciplinary teams conducting EIA
studies;
(2) the opportunity to focus attention on risk reduction activities such as waste minimization,
pollution prevention, and mitigation measures; and
(3) the inclusion of emphases on emergency response measures in the event of accidents and
associated environmental perturbations.
Environmental safeguards are triggered if a project is likely to have potential environmental
risks & impacts. Triggered safeguards and risk considerations include:

1. Screening and categorization

2. Environmental assessment
3. Examination of alternatives
4. Environmental management
5. Consultation and complaint compensation

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 6. Information disclosure
7. Monitoring and reporting
8. Biodiversity conservation and sustainable
natural resources management
9. Pollution prevention and abatement
10. Health and safety
11. Physical cultural resources

The objectives of the Environmental and Social Safeguards Policy are to:

 Provide for environmental, social and gender screening of projects;

 Determine and assess environmental, social and gender risks and impacts of projects,
including through consultations with stakeholders and vulnerable communities;
 Ensure access to information and full participation in the decision-making process for
stakeholders, especially vulnerable communities;
 Create safeguards and mechanisms to mitigate risks and negative environmental,
social and economic impacts associated with projects;
 Ensure access to justice in environmental matters in regard to social safeguard and
gender issues for affected parties in the form of a functional and efficient Complaint
Mechanism; and
 Cooperate with partners to build capacity in risk mitigation and facilitate
implementation of environmental, social and gender safeguards, and monitoring and
evaluation.