Why Environmental Impact Assessments Fail to Protect Rivers

Paul Fisher
Tuesday, March 19, 2013

At a time when potentially harmful infrastructure projects such as large dams are experiencing an unprecedented boom worldwide, Environmental and Social Impact Assessments (ESIAs) – the only system in place to analyze and reduce their impacts – too often fail to protect ecosystems and communities.

The good news is that most countries now require a consideration of environmental and social consequences and some form of permission from environmental agencies for major infrastructure projects. In practice, however, most participants in the ESIA process (especially for hydropower projects) are not convinced of its utility, either of the process or the results. Despite the successes – a nearly global standard of requiring environmental assessments for large projects, the development of detailed environmental and social safeguards within international development banks, and the considerable efforts by civil society organizations to improve and monitor the procedures – the prevailing impression of ESIAs is that they are relatively ineffective at preventing or mitigating the damages they are meant to reveal.

The issues confronting ESIAs are complex. The process is weakened by the prioritization of infrastructure development over protection of ecosystems, an inadequate comparison of alternatives, poor timing of environmental and social studies, a focus on mitigation measures rather than prevention of harm, lack of accountability of all players involved, and a general disrespect of local people’s perspectives (especially in rural, traditional and poor areas) and their livelihoods, to name but a few major issues.

The top-down approach to “development” that underlies the construction of huge infrastructure projects has little in common with the kinds of approaches needed to protect local livelihoods and ecosystems. From this perspective ESIAs are caught in a clash of different development ideologies, a gap they are supposed to bridge but fail to achieve.

As someone with more than 15 years in the field of development cooperation and as a consultant on ESIA projects for some of the major international banks, I have found myself becoming increasingly disillusioned with the process. I entered the field seeing ESIAs as a tool that could help bring environmental concerns and local people’s perspectives to the forefront of decision-making for infrastructure projects, but over time, have begun to believe the task is often little more than an art of smoothing the way for projects. (To be fair, under the best circumstances, some of the recommendations made in the voluminous studies do lead to less harmful projects.)

In an attempt to understand how to improve the situation, I explored a few structural dilemmas and practical weaknesses of the ESIA process, from the perspectives of several players involved in the typical process. I hope to show how the different players, by following their own rationales and internal contradictions, together produce a result that makes tackling the core problems so difficult.

Project promoters:
ESIAs are widely seen by many project promoters as an unwieldy procedure that slows down project implementation and increases project costs. ESIA practitioners are still commonly thought of as "beetle-counters" who have been assigned rather ridiculous tasks and whose reports are hardly worth the paper they’re printed on "because they’ll just collect dust somewhere in a ministerial drawer."

While few project promoters go so far as to completely deny the necessity of environmental analysis, virtually all complain about the increasingly formalistic and bureaucratic procedures, and agree with the impression that the primary objective seems to be to satisfy the environmental departments of the financing banks.

Governmental Institutions:

During the past two decades, most countries have adopted environmental frameworks and require environmental impact assessments for infrastructure projects. However, in most developing countries the agencies in charge of protecting the environment are not the most powerful institutions and cannot always guarantee the application of national laws. In this context, the environmental and social staff of project implementing agencies generally have little say in the implementation of environmental mitigation measures, let alone in decision-making about the realization of projects.

To give just one example, an environmental NGO in the Caucasian country of Georgia recently exposed how a large hydropower project obtained environmental permission by decree after project works had already begun, despite a lack of environmental studies. Adding insult to injury, a law was then passed to enable project promoters to pay a lump sum to the government rather than take steps to prevent or mitigate environmental damages of their projects.

Implementing agencies too often lack technical capacity and management competence to oversee the scale of the projects that are being brought to them. Even when staff is qualified and competent in environmental and social safeguards, they are often overburdened by the size and number of projects they are expected to oversee, the complexities of mitigation measures to implement and monitor, and the long time scales involved in large construction projects.

It’s a set-up for failure: low-capacity institutions at the bottom of the power scale are given responsibility for the "management" of environmental and social consequences of the largest, potentially most destructive projects in their countries. Unfortunately, this is exactly what makes some countries more attractive for many project developers.

Development Banks:
Most big development banks have mandatory standards for ESIAs. These safeguards are regularly revised and updated, with input from civil society. A major problem with the system is that the ESIA process has become something of a “safeguard checklist.” This carries the danger of distorting the process into one that reflects the priorities of the banks more than the environmental and social issues at stake.

The following opening remarks of an ESIA review meeting at an international financier hints at another problem: "Keep in mind that this country has the largest natural reserves in the world, and this project is our first in this country. You may want to take this into account when evaluating this ESIA." Too often, projects’ economic and strategic rationales lead to compromise on environmental and social issues. To make banks the ultimate supervisor for environmental impacts brings inherent risks and potential conflicts of interest.

In order to cope with the increasingly complex requirements of ESIAs, specialized consultancy firms dominate the market today. Consultants almost never see the results of their work, which discourages their sense of responsibility and encourages a formulaic approach. They are often hired by project developers and thus have some level of commitment to the realization of the project. Some consultants are international, but increasingly, ESIAs have to be conducted by nationally registered ESIA experts in order to be accepted by the environmental institutions issuing the environmental permit. This may enhance ownership of the ESIA by the government, but risks increasing political influence on the ESIA, especially in the case of big hydropower projects, which are always supported by very powerful government institutions.

Local People:
In order to comply with international ESIA guidelines, consultations with project-affected people are nowadays more or less compulsory. For many international lenders, safeguards are explicit that consultations must be meaningful and appropriate. However, at the planning stage, people often have little notion of how a project will impact their lives and often have been led to expect that they will benefit from the project. In a number of “hot spots” for big dam projects (such as Laos and Ethiopia), the political situation is coercive and prevents people from speaking out. The way consultation and participation of local residents is usually carried out in ESIA processes contributes to general " meeting fatigue" and leaves project-affected people feeling that others will decide their fate.

Civil Society Organizations:
Ultimately, civil society organizations and local movements are the only stakeholder groups in the ESIA context who have a (more or less) intrinsic interest to improve the consideration of environmental and social consequences of infrastructure projects, and can maintain continuous pressure on other stakeholders and institutions. For the general public, the debate is too specialized to motivate their continued interest. Only the most catastrophic projects, with strong local resistance groups, create sufficient media attention to reach the public and prompt organizations to get involved in campaigning. A mixture of frustration and disillusioned pragmatism is the predominant feeling of civil society organizations involved in the ESIA process.

Improving the Process:
Clearly, stakeholders in the ESIA process are not always working toward the same end, and often use the process to “paper over” fundamental problems. Here are some structural limitations in the process and areas where it can be improved.

Consideration of Alternatives:
The comparison of technical and location alternatives, including a no-project alternative, is a compulsory part of every ESIA being done for the big development banks. Sadly, this critical step is very often not treated with respect. A detailed analysis of several alternatives incurs considerable costs and time. A fundamental flaw of the ESIA process is that the methodology is not designed to question whether a project should be built at all. This would need to happen at the Master Plan or Strategic ESIA level. When the project has already been deemed to be feasible, a decision for the project is not likely to be reversed by an ESIA.

An effective process to consider alternatives needs to be built into the project design process. As a first step, a comparison of different technologies and a strategic comparison of development alternatives should systematically happen early in the project selection process. Then a comparison of technical and location alternatives should be included in the design process and should be done in close cooperation with social/environmental staff.

Strategic ESIAs to properly compare project alternatives should be institutionalized and made compulsory. They should include independent cost-benefit analysis of all options, as well as external costs and climate change scenarios. Beyond the question of whether the project is feasible, the question of whether the project is appropriate should be critically reviewed and discussed with all stakeholders and then prominently considered in decision making. Beyond the question of costs and benefits is the broader question of societal values; this urgently needs to be included in the debate.

Timing and phasing:
The timing of ESIAs is another critical issue for the quality of assessments. The safeguards of many development banks require ESIAs as early in the project process as possible. Most development banks require full ESIA documents that are approved by the borrowing government before agreeing to financing. In practice this leads to two potential problems: Either ESIAs are used to justify a project that has been planned in detail, with no possibility of changing the design to reduce impacts; or ESIAs have to assess impacts for a still-vague project for which the technical design is not planned. The current approach requires the detailed ESIA document to be ready while the technical concept is still in the feasibility study stage.

Impact considerations can have a significant advantage early in the process, if they can influence the design of a project. Normally, because they need to be compatible with the framework of the banks, the level of detail required often does not match the project phase. For example, it seems cynical to establish a detailed Resettlement Plan including signatures on expropriation forms and thus begin “early displacement” of potentially affected people before decisions have been taken about the height of the dam, the size of reservoir area or even whether the dam will be built at all. Even though the desire for shorter ESIA time frames in order to get projects through bank reviews is understandable, a timeframe designed to conform to internal financing deadlines or government schedules sets the wrong priority. The level of analysis needs to be adapted to the critical impacts, the timing and phasing of the ESIA.

Ideally, ESIAs should be considered as a process throughout the entire project development cycle, involving several rounds of updates and different levels of details. The process should always start with a strategic ESIA to compare alternatives, followed by continuous updates of ESIA and Environmental Management Plans (ESMP) during project implementation and monitoring. The goal of such an "ESIA chain" is not an increased production of reports, but a more effective influence on the choice of the best alternative, project design, implementation and monitoring.

Lack of data, accuracy problems:
A thorough study of impacts on ecosystems requires a huge amount of data. This information is often not readily available and requires long research periods incompatible with the often much shorter project planning cycles. The constant time pressure of financing deadlines means ESIA research often makes major compromises on scientific data gathering and on involving the affected population in decision-making.  For example, hydro dams in hydrologically risky regions are based on inadequate flow records and do not systematically consider the potential effects of climate change. Existing data are sometimes used irrespective of their reliability (as in the case of most Central Asian countries, where the only existing statistical base is from the Soviet era, and is decades out of date). Critical studies of flora and fauna are rarely carried out in detail, and research into fish populations and migration patterns are beyond the scope of the normal ESIA contract and time frames. This practice is encouraged by the fact that even the most accurate analysis of biodiversity rarely halts projects. Moving project-affected species is a more common response. To give just one example, the French electricity company EDF is now offering a valley in the French Alps, which the company bought decades ago but was found to be unsuitable for a planned hydropower plant, to resettle protected species threatened by other hydropower plants planned for the region.

Data can also be interpreted to fit to a required outcome. The tools are generally well known: Overly optimistic cost-benefit scenarios, scientific modeling based on assumptions and variables that cannot easily be verified, or proposed technical solutions that suggest a mitigation of impacts that are not easily implemented or which are likely to fail (such as fish ladders at dams).
The only fact checking undertaken to control this is the review process by the financiers and national environmental institutions, and sometimes by civil society organizations monitoring the project.

There are no readymade solutions to tackle this problem. Two elements might help, however. First, the relevant information that leads to a decision to proceed with a project should be verified by an independent review. Second, a continuous monitoring by civil society organizations should be built into the project process. This is clearly not compatible with time pressure and short deadlines.

Presently, the assessment of impacts is heavily focused on suggesting implementable technical or monetary solutions. This is better than leaving problems unexamined and unsolved, but carries the incentive for ESIA researchers to downplay or disregard impacts for which no readymade solution exists, or to divert attention to side issues that can be solved easily rather than focusing on those that require time-intensive additional research or are expensive to implement.

There are two ways to address impacts with mitigation. I call them "mitigation by design" and "mitigation by management." Mitigation by design focuses on avoidance or minimization of impacts  – for example, reducing dam height to reduce resettlement, or designing transmission lines around villages or national parks instead of crossing them. "Mitigation by management" focuses on compensating for impacts and on measures that will reduce environmental impacts of construction (for example, reducing dust and noise during dam building).

Generally, "mitigation by design“ deserves more attention in ESIAs. To give an encouraging example, a hydropower project proposed for a major tributary of the Nile River in Burundi, Tanzania and Rwanda was modified from a reservoir dam into a run-of-river plant due to the results of environmental and social assessments. Initial plans would have inundated seasonally cultivated floodplains and resulted in a loss of livelihoods and displacement of more than 12,000 households in a densely populated area where lack of arable land is a major conflict issue. After a detailed assessment, the resettlement impacts were considered too high to justify the additional electricity production and the project design was changed to avoid most of the resettlement impacts. The process took several years, however, and the decision could theoretically have been taken at a much earlier stage of project planning.

Currently, ESIA studies tend to focus more on "mitigation by management," often resulting in Environmental Management Plans (EMPs) that follow a standard template and focus on issues of good construction principles. This leads to a situation where, for example, measures how to prevent dust on access roads being built for a project get as much or more attention than the more permanent impacts of the road construction itself.

Environmental Management Plans do normally contain useful advice, and if made part of the construction contract may draw attention to mitigation efforts that might otherwise be neglected. However, “Mitigation by management” cannot substitute for a thorough comparison of alternatives or a proper mitigation by design. More attention needs to be paid to seeking development projects that avoid the worst impacts in the first place.

Monitoring and Accountability:
The critical yet too often mismanaged tasks of monitoring and enforcing implementation and ensuring accountability for the environmental consequences of a project are twin flaws that cause much of the frustration associated with the ESIA process. Too often the recommendations of ESIAs are ignored or badly implemented, and the question of accountability remains unanswered. While there has been much improvement in monitoring processes (including due diligence procedures and environmental audits), many ESIAs and management plans are still not properly implemented.

Partly this has structural reasons. Responsibility for the prevention and mitigation of environmental and social consequences of projects is often assigned to a nation’s least powerful institutions (such as environmental agencies). And projects with huge consequences such as big dams are mostly being implemented in countries where the government does not place environmental and social concerns high on the agenda and where public resistance is weak.

International banks have proven they find it difficult to refrain from lending money to governments with neither the capacity nor willingness to follow ESIA recommendations. Ensuring that borrowing countries’ environmental agencies have sufficient environmental management capacity and enforcement power should be a prerequisite to a project moving to the ESIA stage. Governments who show a lack of willingness to avoid and minimize environmental and social impacts and respect international standards, or which have a negative track record, should generally not receive project financing.

Ultimately, we need greater public outcry to demand accountability from government institutions, international banks and international investors. An idea that would support this task would be to publicly disclose (on borrowers’ as well as banks’ websites) not only the ESIA reports, but also the implementation monitoring reports, so it is possible to follow the entire procedure. Also, independent, legal support for affected people by case workers or civil society organizations should be included in ESIA processes; support would need to go beyond the usual grievance mechanism, whose sole purpose seems to be to avoid lengthy court procedures that might delay construction.  Ensuring increased liability of project developers and banks in their home countries (including the possibility of being taken to court by affected people themselves and sued for damages) might have some positive effects.

People’s involvement for livelihood development:
Currently, public consultations are usually perfunctory and mainly used to appease local concerns. Mitigation measures (often larded with the promise of direct benefits or compensation payments) are put forth to help "waterproof" the project against criticism.
In order to be meaningful, public consultation would first need to raise the awareness of local residents about the negative effects they might experience, and take greater steps to ensure that the expression of critical opinions and suggestions for ways forward are allowed and valued. The focus on local development and livelihood improvement must also be strengthened. This would for example ensure the involvement of upstream and downstream communities of hydropower plants in project discussions – something that is not systematically taking place.

An entirely different approach to involving local people in the planning process is needed, including participatory project design and moving away from mitigation and compensation for negative impacts towards livelihood development. This may require a lot of time and democratic decision-making, and is therefore generally incompatible with usual infrastructure development and financing procedures, but if the goal is improving the development process, it is a critical step.

These suggestions will not resolve the major structural problem in the current ESIA approach. Yet step by step, the process could be greatly improved through increased consideration of alternative development options, better timing and phasing of ESIAs, the mitigation and accountability aspects, and not least the involvement of local people and a respect for their perspectives.