Environmental Assessment and the Project Cycle

Principles of Environmental Analysis

Environmental management is designed to ensure that the environmental consequences of all development policy, programme or project options are understood and adequately considered during the planning process. The term 'environmental' is used in its broadest context to encompass biological, physical and socio-economic components. Natural resources have intrinsic economic value and must therefore be sustained, as they are not inexhaustible.

Several basic principles underpin the concept of environmentally sound management practices. To ensure that such principles are effectively addressed, an environmental analysis must be undertaken early in the project cycle. In this way, adverse impacts can be identified, minimised or mitigated to avoid costly remedial measures after the event. Alternatives can be given due consideration and the positive aspects of all programmes, policies and development proposals can be optimised.

Compliance with environmental principles during development means accountable decision-making, an open participatory approach in the planning of proposals and consultation with interested and affected parties. It also provides an opportunity for public and specialist input throughout the evolution of the project. Thus an attempt is made to ensure that the long-term social benefits of the project outweigh the social costs.

The purpose of introducing environmental analysis procedures into the project cycles ensures that all the principles mentioned above are addressed by calling early attention to and delays in implementation due to unanticipated environmental problems.

Environmental Categorisation of Projects

Ideally all proposed projects should initially undergo an Initial Environmental Evaluation Report (IEE). Thereafter, the projects are assigned to one of three categories according to the expected degree of environmental impact. This in turn determines the type of EA required.

The categorisation of each project is made according to the physical and ecological characteristics of the site and its surroundings, the current land use and landscape character, cultural resources, socio-economic characteristics of the affected public, infrastructural services, existing social and community services and facilities, health and safety risks and current and predicted pollution levels, as well as the availability of cost-effective mitigation measures. (See Appendix IV).

Category A: Projects with significant adverse environmental impacts. These require a full Environmental Impact Assessment (EIA).

Category B: Projects with adverse environmental impacts but of a lesser degree and/or significance than category A impacts; the IEE will determine what issues the EIA should address. If necessary the analysis may be upgraded to Category A during assessment.

Category C: Projects unlikely to have adverse environmental impact or those which will improve the environment. An EIA is not normally required.

Appendix I provides the general criteria for categorising projects based on their potential environmental impact, and typical examples of projects under each category.

Appendix II provides the general criteria for categorisation based on location i.e. whether the project is in a designated or demarcated area or has features which are designated or demarcated.

Appendix I and Appendix II are only guidelines. The categorisation of the project is based on the conclusions of the IEE. The conclusions of the IEE and project classification will be included in the Project Proposal Report (PPR).

Introduction

For optimum sustainability of a project environmental considerations should be incorporated early on in the project cycle. Early environmental assessment is important, but other environmental considerations persist at all stages of the cycle. If bio-physical impacts exists, they have to be described or quantified through an environmental assessment (EA) comparing environmental impacts with and without the project and by project components. Environmental impacts have to be identified on a wider space and time scale than projects without impacts.

EA is a flexible procedure, which should vary in depth, breadth and type of analysis depending on the project. It is carried out during the project proposal stage and before appraisal. EA covers project-specific and other environmental impacts in the area of influence of a project.

Like economic, financial, institutional and technical analysis, environmental analysis is an essential part of project preparation and is, therefore, the proponent's responsibility. Close integration of the environmental analysis with the major aspects of the project cycle ensures that environmental considerations are given adequate weight in all stages of the project design.

Project Identification and Proposal

The IEE is completed during project identification and prior to the submission of the Project Proposal Report (PPR). The consultant and the proponent should agree on the contents of the IEE report (see Appendix III) and ensure that appropriate consultation with interested and affected parties has taken place. The conclusions of the IEE report will be incorporated in the environmental module of the PPR. The environmental category according to which further environmental analysis will take place will also be stipulated.

The EA category is assigned by the national environmental agency. Appendix I and Appendix II set out the criteria on which this categorisation is often based.

Project Appraisal

Following the PPR, the Environmental Specialist, environmental consultant or Project Leader will discuss the scope of the required EA and ToR with the project proponent. The ToR should provide for appropriate consultation and co-ordination with affected groups and NGOs active in the area.

The EA must form part of the overall project preparation. Thus, where the EA is prepared separately by environmental consultants there should be close liaison with the project preparation team.

The EA report should follow (to the extent relevant) the outline for project-specific EA reports as set out in Appendix V.

In cases where the consultant, environmental agency or the project team consider that the EA report warrants public scrutiny and comment, the full EA report should be made available upon request to interested and affected parties at least 60 days prior to final consideration of the project.

The findings and recommendations of the EA process should be clearly stated in the project's appraisal report and summarised in the Summary.

Project Implementation

The capability of the implementing agency, the adequacy of their environmental procedures and ability to comply with environmental requirements should have been examined at the time of appraisal. If these institutions are not found to be capable, a suitable mechanism to build or strengthen institutional capability should be considered where appropriate.

During implementation of the project, the Environmental Mitigation and Management Plan as developed during the EA and set down in the EA report should come into operation. Once the project has been implemented, the 'Environmental Monitoring Plan' as determined and set down in the project description should be made operational.

Project Monitoring

Once a year, all projects which required specific environmental treatment during implementation and operation should be monitored. These will usually be category A projects and some category B projects. A monitoring team should be engaged to determine, with the implementing agencies and communities, the extent to which mitigation and monitoring measures earlier agreed upon by the proponent and the Project Leader have or are being implemented. It is the task of the monitoring team to verify that environmental safeguards built into the project design are satisfactorily implemented by the proponent or implementing agency during the construction and operation of the project.

The monitoring team should examine and evaluate operation and maintenance arrangements, institutional commitments and any loan conditionally covering environmental planning and management requirements. The status and implementation of mitigatory measures and the results of the monitoring program should also be assessed.

Completion Report

The Project Completion Report should include a general assessment of any significant environmental impacts experienced during project implementation, particularly with reference to those issues considered at the time of project appraisal and on monitoring their implementation and effectiveness, if the project included environmental control measures. The report should include a final assessment of the degree to which the project satisfied proposed environmental requirements, the effectiveness of the mitigatory measures and institutional development, and whether any unanticipated effects occurred as a result of the project activities.

Evaluation

The evaluation plan should be developed early in the project cycle, preferably during the appraisal phase. This is particularly important for category A projects. EA should be combined with the evaluation of other aspects of the project, such as economic and social aspects. The evaluation should be carried out by evaluation specialists in consultation with environmental specialists.

Appendix I

Categorisation of projects based on potential environmental impact

Environmental analysis (EA) is conducted on all projects requesting Bank finance. Each project is classified according to one of the following three environmental categories - A, B or C.

The list of project categories below is indicative and illustrative; it is not exhaustive. It should also be stressed that it is the nature of a project that finally decides the degree to which EA is done, and not only the category to which it belongs. EA is an iterative process and flexibility must thus be maintained throughout.

Category A Projects

An EIA is undertaken for those projects for which significant environmental impacts have been forecast in the Initial Environmental Evaluation (IEE).

Projects in this category include environmentally sensitive areas, are usually large-scale, and may affect large numbers of people.

Impacts generated by these projects are likely to be comprehensive, broad and diverse. They may be irreversible and could lead to significant changes in land use and in the social, physical and biological environment. The project could cause the significant emission of harmful waste products; could displace or disrupt large numbers of people in the vicinity of the project; or could considerably increase the exploitation of non-renewable natural resources.

Normally, an Environmental Specialist or Consultant will be required as a full member of the project team to ensure compliance with national environmental requirements. The Environmental Specialist will participate from the earliest stages of the project, accompany field trips, assist in project preparation, monitoring the EA, and project appraisal. During project implementation, environmental monitoring will be undertaken by Environmental Specialists.

Illustrative Examples of Projects

River basin development
Large-scale water impoundment's (dams and reservoirs)
Forestry industries
Irrigation, drainage and flood control (large-scale)
Roads (near or through sensitive areas)
Large-scale power plants
Resettlement (and all projects with potentially major impacts on people)
Manufacture of pesticides or other hazardous and/or toxic materials
Wilderness or protected areas Land clearance and levelling
Reclamation and new land development
Any developments within the coastal zone.

Category B Projects

Projects in this category may have adverse environmental impacts that are of a lesser degree and/or significance than Category A impacts. Few if any of the impacts are irreversible. The project will cause some changes in land use or the social, physical and/or biological environment, but would not normally be large-scale or in an environmentally sensitive area. Mitigation measures for these impacts can be more easily prescribed.

Normally, an Environmental Specialist will act as consultant to the project team. The Environmental Specialist's assistance will be required in the formulation of the ToR for the EA. She/he will also assist in monitoring the EA to ensure the reports meet national environmental requirements. The Environmental Specialist may also participate in field trips and may conduct environmental monitoring during project implementation.

Illustrative Examples of Projects

Agro-industries (small-scale or no wet processing)
Renewable energy (electrical transmission, rural electrification)
Aquaculture and mariculture
Tourism projects
Water supply (without impoundment's or new river intakes)
Sanitation
Watershed projects (management or rehabilitation)
Rehabilitation, maintenance and upgrading projects (small-scale)
Industries (small-scale and without toxic or harmful pollution discharges)
Small business development
Farmer Support Projects

Category C Projects

An EIA is normally not required for Category C projects because the project is unlikely to have adverse environmental impacts. The social, physical and biological environment is not significantly affected. Impacts are negligible, insignificant or minimal.

Illustrative Examples of Projects

Health services
Nutrition services
Education
Family Planning
Institutional development
Most human resource projects

Appendix II

List of designated and demarcated areas and features

In addition to categorisation on the basis of project type (Appendix I), consideration should also be given to the area in which the project is located and the presence of any special features. The following list of designated and demarcated areas and features provides guidance on projects which require sensitive analysis. These lists are taken from the Republic of South Africa's Department of Environment Affairs 'Integrated Environmental Management Guideline Series, Guideline Document 1'.

'DESIGNATED AREAS OR FEATURES' refer to any area or feature already declared in terms of an Act of Parliament or by agreement between landowners and the State President or the Minister of Environment Affairs.

'DEMARCATED AREAS OR FEATURES' refer to any areas or features which are demarcated by a central, regional or local authority.

Designated areas or features Limited development areas Protected natural environments National, provincial and municipal game reserves Private nature reserves Mountain catchment areas Wilderness areas National Monuments

Demarcated areas or features Natural heritage sites Sites of conservation significance - Estuaries and lagoons to Streams and river channels and their banks Floodplains Wetlands Lakes Dunes Beaches Reefs Indigenous forests High potential agricultural land Caves Green belts or public open space in municipal areas Architectural precincts Buildings Battle sites, Burial sites Immovable property Landscapes Archaeological and palaeontological sites Graves and burial sites Conservation areas Off-shore islands Intertidal zones Lake areas Natural heritage sites Sites of conservation significance Islands in rivers Biotic assemblages and communities Habitat of Red Data Book species Bird migration sites Aquifers and aquifer-recharge areas Areas with high natural water table Damaged land Unstable soils Natural resource areas (including minerals) Sites of geological significance Geologically and geotechnically unstable areas Areas or sites of outstanding natural beauty Scenic drives and panoramic views Areas or sites of religious or spiritual significance Areas or sites of special social, cultural or historic interest State land Sites of special scientific interest

Appendix III

Initial Environmental Evaluation Report (IEE)

A. Introduction

This section should include: the purpose of the report, a brief project description a discussion of alternatives considered in planning.

B. Description of the Environment (in area affected by the project)

Furnish sufficient information to give a brief but clear picture of the existing environmental resources including the following (to the extent applicable): physical resources, ecological resources, cultural resources, and human and economic development and quality of life indicators.

C. Screening of Potential Environmental Impacts to identify issues of concern

This section should identify issues of concern. Mitigation and organisation measures, where appropriate, should also be recommended. Impacts should be discussed with interested and affected parties according to the following terms: Potential environmental problems due to project location; Environmental problems associated with project implementation; Environmental problems resulting from project operations.

D. Proposed Mitigatory Actions

This section should describe possible actions for the mitigation of the impacts identified above and for potential enhancement and rehabilitation measures.

E. Environmental Category

The environmental category should be stated and the rationale and justification for selecting this category set out. (See Appendix I, II, and IV.)

Where the project is classified as a Category C project, there is no need for further study, and the EE itself will complete the environmental analysis required for the project.

F. Recommendations

If further additional study is required, then the need, manner and time-frame for the EIA terms of reference (ToR) should be stated.

Appendix IV

List of projects for which initial environmental matrices have been prepared

In order to assist project leaders in deciding on the categorisation of a project, the following matrices or development projects commonly encountered in the DBSA have been prepared and can be obtained from the regional environmental specialists. Matrices cover the potential physical, biotic and socio-economic impacts that may be significant to a particular development. Large-scale urban developments, e.g. housing, colleges, institutions Roads and highways in urban areas Solid waste collection and disposal systems in urban areas Waste water collection, treatment, re-use and disposal in urban areas Construction of dams and reservoirs Electrification and telecommunication installation Irrigation and drainage schemes Plantation development or reforestation Rural roads development Livestock and rangeland management Tourism development Provision of water in rural areas Fisheries development (capture and culture)

Appendix V

Environmental Assessment Report (EA)

The EA report should be concise and focus on the significant environmental issues. The report's level of detail and sophistication should be commensurate with the project categorisation and with the potential impacts. The target audiences are the national environmental agency or authority, the donor's environmental team, environmental consultants, the implementing agency and the borrower. The EA should include the following sections:

A. Executive Summary

The Executive Summary should concisely present the conclusions of the study and the recommended actions.

The text should include: an explanation of how necessary adverse effects have been minimized, offset, or compensated for; an explanation of the use of any irreplaceable resources; major positive impacts; provision for follow-up surveillance and monitoring

B. Introduction

This should set out:

Purpose of the report including the identification of the project and project proponent; and brief description of the nature, size and location of the project;
Stage of project preparation;
Any other pertinent background information;
Extent of the EA: Scope of the study; magnitude of effort; person of agency performing the study; and acknowledgements;
Brief outline of the contents of the report.

Refer to other related issues in the appraisal report.

C. Policy, Legal and Administrative Framework

The policy, legal and administrative framework within which the EA has been prepared should be described here. If the project is co-financed, the other financiers' environmental requirements should be explained.

D. Project Description

Furnish sufficient details to give a very brief but clear picture of the following (include only applicable items):

Type of project
Need for project
Location (general location, specific location, project boundary and project site layout)
Size or magnitude of operation, including any off-site or associated activities that may be required by the project (e.g. Dedicated pipelines, access roads, power plants, water supply, housing, raw materials, and product storage facilities)
Proposed schedule for approval and implementation.

E. Description of the Environment

Provide sufficient information to give a brief but clear picture of the existing environmental resources and values including the following (in so far as applicable):

Physical resources (topography, soils, climate, surface water, groundwater, geology);

Ecological resources (fisheries, aquatic biology, wildlife, forests, rare and endangered species, wilderness and protected areas);
Socio-economic conditions: population and communities (numbers, locations, composition, employment); industries; infrastructural facilities (water supply, sewerage, flood control or drainage); institutions; transportation (roads, harbours, airports, navigation); land use planning (including dedicated area uses); power sources and transmission; mineral rights and development; tourism resources;
Quality of life indicators and cultural resources: public health, recreational resources, aesthetic values, archaeological sites, historic interest, etc.

F. Public Participation

This section should summarise the scoping exercise, the terms of reference for the EA, public meetings and participation. The names of persons or institutions receiving this and previous draft reports should be indicated as well as compliance with co-ordination and regulatory requirements, public hearings, press releases and notifications, a summary of the principal community or interest groups concerns should be given.

G. Environmental Impacts

This section of the report should evaluate the expected positive and negative impacts on each resource or value (quantified wherever possible) of the proposed project. Environmental impacts to be discussed should include those resulting from project location, design, construction, operation and final decommissioning or rehabilitation. Both direct and indirect effects should be considered, and the region of influence indicated. Where required, the impact on the global environment should be described. Opportunities for environmental enhancement should be explored. The extent and quality of available data, key data gaps and uncertainties associated with predictions should be identified. The EA report should identify the extent to which the proposed project would irreversibly curtail potential uses of the environment. Temporary effects during the construction or other phase of the project should be discussed separately.

H. Analysis of Alternatives

Where the environmental impact of the project is expected to be significant, the EA report should include the consideration of alternative projects or approaches which would achieve the same or equivalent results. Alternatives to the proposed investment design; locality; technology and operational alternatives; suitability under local conditions; and institutional, training and monitoring requirements should be compared and the environmental costs and benefits of each alternative examined. The discussion should be sufficient to indicate that all feasible alternative locations and/or systems have been considered. The alternatives for determining the best option from an environmental perspective should be considered and examined in the overall context of the project feasibility. These alternatives, including environmental costs and benefits, would be fully integrated into the overall economic assessment (Cost Benefit Analysis) conducted under the economic module.

I. Mitigation Plan

Feasible and cost-effective measures to reduce the identified potential adverse environmental impacts to acceptable levels should be discussed as well as opportunities for enhancing natural environmental values. The Mitigation Plan should state the capital and recurrent costs arising from mitigation as well as the institutional, training and monitoring needs of the measures. Work programmes and schedules should be included to ensure that the proposed environmental actions are in phase with engineering and other project activities throughout implementation. The plan should consider compensation options if mitigation measures are not feasible or cost-effective. The costs of these mitigation measures should be included in the overall cost benefit analysis of the project.

J. Institutional Requirements

This section of the report should describe the existence, role and capability of environmental skills, tools and equipment on site, at the implementing agent, government, local authority or NGO level. Based on these findings, recommendations should be made concerning the establishment, expansion or training of staff to the point that EA recommendations can be effectively implemented.

K. Monitoring Plan

The objective of the plan is to ensure that all necessary environmental protection measures are carried out on a continuous basis as envisaged in the EA report and that additional measures are taken for containing any adverse impacts not envisaged at the time of report writing. The plan should specify the type of monitoring, who should do it, the costs involved and any other inputs (including training) that may be required.

L. Conclusion

The conclusions of the EA study should be clearly stated, including the overall net gains which justify implementation of the project; an explanation of how adverse impacts have been minimised or offset and/or compensated for; an explanation of the use of any irreplaceable resources; and provisions for any follow-up or monitoring. This would constitute the environmental input into the overall project appraisal report.

The above article is based in part on Environmental Analysis: Requirements and Monitoring Procedures - Development Bank of South Africa (1994)

This page was last updated on 05 November 2001