10.1 Environmental and Social Institutional Arrangements

Box 10.1 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 general environmental protection requirements can result in significant reduction of environmental hazards and risks.

A key principle is that institutional strengthening of the environmental authority is generally the most crucial issue for countries with large mineral or petroleum 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, because social issues are less amenable than environmental impacts to scientific measurement and compliance criteria. They require different skills sets from environmental issues.

A ministry for women can also be very effective in addressing social issues. In many developing countries, women are often more aware of both social risks and opportunities.

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

1. 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

petroleum investments, with a strong presence on the ground at EI sector operations and in nearby communities. 2. Ensuring that the institutional arrangements and capacity are in place so that any serious environmental or community incidents can be controlled rapidly and investigated thoroughly with results disseminated to communities and actions taken to prevent any reoccurrence. 3. Developing strong coordination and collaboration between the environmental and social authorities and the EI sector authorities in reviewing and approving a. environmental and social impact assessments, b. environmental and social management and monitoring plans, and c. environmental and social monitoring arrangements and results, especially for states with limited environmental and social capacity, and with staff with only limited experience or little knowledge of minerals and petroleum projects and their impacts. 4. Supporting and facilitating civil society participation in environmental and social monitoring, which can lead to many more positive environmental and social impacts if mandatory processes ensure that all stakeholders and interested parties have unrestricted access to environmental and social performance data and to key documents (such as environmental and social impact assessments and environmental and social management plans that specify compliance criteria and the obligations and commitments of the investors and operators).

contribute to the process, playing different but complementary roles:

1. Parliament. Ideally responsive to, and representative of, the differing strands of public opinion, parliaments or legislatures can play a unique role in identifying consensus policies and legislation. They should be consulted on all key issues, but at the same time expected to participate through the legislative and parliamentary oversight processes. 2. The Executive. The executive arm of a resource-rich government has a central role—in preparing policies and drafting legislation as enforcing, and managing these.

Consultation with each group affected by its actions will increase the likelihood of their acceptance and sustainability. Investor home-country governments can also play an important role in promoting or enforcing good governance practice on the part of their companies. 3. Industry. Beyond the investment and commercial operations roles, oil, gas, and mining sector industries should be reaching out to the societal groups their operations most affect, with consultations and informational programs on their plans and performance. They should

296 OIL, GAS, AND MINING