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Version 1.0 2009
Guidelines for environmental appraisal at the DBSA
Development Planning Division Technical Document Series No. 1
Final Draft 1 March 2010
Guidelines for environmental appraisal at the DBSA (Version 1.0)Page 2
Development Planning Division Technical Document Series No. 1
Suggested citation
Development Planning Division. 2009. Guidelines for environmental appraisal at the DBSA. Technical Document Series No.1, DBSA: Midrand.
Published by
Development Planning DivisionDevelopment Bank of Southern AfricaPO Box 1234Halfway House 1685South Africa
Telephone: +27 11 313 3048Telefax: +27 11 206 3048Email: [email protected]
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This document may be reproduced for non-profit and teaching purposes. Whether this document is used or cited in part or in its entirety, users are requested to acknowledge this source. Please use the suggested citation given above.
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Series Editor: Andrew PatersonSeries Publication Coordinator: Lyn Sumners
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Contents
1. Introduction 51.1 Overview 51.2 Purpose of the guidelines 51.3 Scope of the guidelines 6
2. Environmental appraisal 62.1 The role of environmental appraisal 62.2 Principles of environmental assessment 72.3 Environmental appraisal and sustainable development 8
3. Overarching environmental issues 83.1 DBSA policies for the environmental appraisal module 83.2 The DBSA investment process 103.3 Integration with other appraisal modules 113.4 Information required for environmental appraisals 113.5 Responsibility for environmental appraisals 123.6 Risk categorisation of projects 123.7 Environmental appraisal in SADC 143.8 Public disclosure and participation 15
4. Environmental appraisal guidelines 154.1 Overview 154.2 Initial screening 164.3 Site visits 164.4 Environmental risk appraisal of projects 174.5 Environmental risk appraisal of programmes 214.6 Financial intermediaries 214.7 Agency agreements 224.8 Other DBSA investment products 224.9 Loan conditions 234.10 Loan negotiations 244.11 Project implementation 24
5. Review process 255.1 Review procedures 255.2 Responsibilities 26
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6. References 26
Appendix 1: Extract from the National Environmental Management Act No. 107 of 1998 27
Appendix 2: Criteria for assessing institutional capacity for environmental management 30
Appendix 3: Format for environmental assessment of existing infrastructure projects 31
Appendix 4: Categories of project risk 33Category 1: High risk 33Category 2: Medium risk 34Category 3: Low risk 34Category 4: Financial intermediary 35
Appendix 5: Project, programme and consolidated reports 361. Project reports 362. Programme reports 373. Consolidated project and programme reports 38
Appendix 6: Contents of EIA reports 39
Appendix 7: Guidance note for EIA reviews 41
Appendix 8: Terms of reference for consultants 52
Appendix 9: Sensitive geographic areas and environmental sites 53
Appendix 10: Environmental requirements for financial intermediaries 54
Tables 55
Abbreviations 55
Terms and definitions 55
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1. Introduction
1.1 Overview
The Development Bank of Southern Africa (DBSA) is a development finance institution that finances the creation of infrastructure in South Africa and the southern African region. Although wholly owned by the government of South Africa, the DBSA serves all of the member countries of the Southern African Development Community (SADC).
The Development Bank of Southern Africa Act, No. 13 of 1997, defines the primary purpose of the Bank as promoting economic development and growth, human resource development and institutional capacity building by mobilising financial and other resources from the national and international private and public sectors for sustainable developmental programmes and projects. This requires it, among other objectives, to do the following:
Appraise, plan and monitor the implementation of development programmes and projects. z Fund or mobilise funding, in line with the regulations to the Act, for initiatives aimed at zminimising or mitigating the environmental impact of development programmes or projects.
In terms of these provisions, the DBSA is committed to promoting sustainable development and building the institutional capacity of its borrowers. It recognises that the integrated and sustainable management of the environment, now and in the future, is the basis for sustainable development in all areas of human activity. In terms of this commitment, the DBSA developed a policy framework for environmental appraisal, which comprises the environmental policy of the DBSA Group and the procedural framework outlined in this document.
All programmes and projects proposed for DBSA support must undergo environmental appraisals based on the guidelines outlined in this document. These guidelines are intended to guide and assist environmental analysts and specialists in producing consistent and high-quality environmental appraisals to enhance the DBSA’s decision-making and, hence, sustainable development.
For ease of use, in the rest of this document, references to “projects” should be understood to include “programmes”, unless otherwise indicated. Also, the terms “environmental analyst” and “environmental specialist” are used interchangeably, unless otherwise specified.
1.2 Purpose of the guidelines
The purpose of these environmental appraisal guidelines is to facilitate the application of the DBSA’s internal environmental appraisal process; they are designed to ensure the easy and consistent application of the environmental appraisal module. The guidelines allow the early, systematic and
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structured consideration of environmental issues in proposed projects, thereby ensuring that they are environmentally sound and in line with the Bank’s mandate and policies. In addition, the guidelines will contribute to building the capacity of environmental specialists in the Bank and in financial intermediaries supported by the DBSA.
1.3 Scope of the guidelines
The environmental appraisal guidelines in this document cover all projects supported by the Bank, whether directly, through financial intermediaries or in terms of agency agreements. This document also includes specific appraisal requirements for operations outside South Africa.
Technical assistance grants for studies or projects that do not involve the provision of infrastructure are excluded, particularly as these have no impact on the environment. However, the responsible environmental analyst must still carefully review the scope or terms of reference of all projects to ensure alignment with the Bank’s mandate and compliance with its principles and environmental policy.
2. Environmental appraisal
2.1 The role of environmental appraisal
The overarching purpose of the environmental appraisal module is to:
Ensure that projects supported by the DBSA are environmentally sound and sustainable. zIdentify and evaluate the environmental risks associated with them. zEnsure that the borrowers implement appropriate mitigation measures to address such risks. z
The DBSA follows a lifecycle approach to projects by assisting borrowers in designing an appropriate system for environmental management and helping to build their capacity to fulfil their environmental obligations. The DBSA does not, however, manage the environmental concerns associated with any project on behalf of the borrower. The borrower remains completely responsible for managing these and, in its ongoing interaction with borrowers, the DBSA avoids creating any dependency by the borrower in this regard.
In the appraisal process, the DBSA aims to achieve the following:
Identify opportunities to maximise the developmental and environmental benefits of projects zand promote sustainable development.Assist management in deciding whether to support a project, based on its environmental risks. zMinimise the environmental risks and liabilities of both the project and the DBSA. z
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Assist the borrower in obtaining any legislated environmental authorisations that may zbe necessary.Assist borrowers in building their environmental capacity. z Identify ways to prevent, minimise, mitigate or compensate for the environmental risks zand/or impact associated with projects.Assist in the development of conditions to be included in the loan agreement with borrowers. z
The environmental appraisal module at the Bank is, therefore, a decision-making tool that supports the DBSA in managing its business risks and increasing its developmental impact.
2.2 Principles of environmental assessment
The principles underpinning an environmental assessment, whether a strategic or environmental impact assessment (EIA), are set out in section 2 of the National Environmental Management Act (NEMA), No. 107 of 1998, and reproduced in Appendix 1. Section 2(3) of the Act specifically requires development to be socially, environmentally and economically sustainable.
The DBSA, as an organ of the state, is bound by the principles established in this statute. It uses the definition of the environment provided in section 1 of the Act, which reads as follows:
“Environment means the surroundings within which humans exist and that are made up of:
(i) the land, water and atmosphere of the earth(ii) micro-organisms, plant and animal life(iii) any part or combination of the (i) and (ii) and the interrelationships among and
between them(iv) the physical, chemical, aesthetic and cultural properties and conditions of the
foregoing that influence human health and well-being.”
This definition is also in line with the national standard on the environmental assessment of sites and organisations, SANS 14015:2003/ISO 14015:2001, which defines the environment as “surroundings in which an organisation operates, including air, water, land, natural resources, flora, fauna, humans, and their interrelation”.
Although the NEMA and SANS 14015 definitions include people as part of the environment, the DBSA appraises the socio-economic impact of its projects in the social appraisal module. This inevitably results in overlaps between the social and environmental appraisal modules, and the results of these modules must be integrated before the findings of all six of the appraisal modules (the other four being technical, economic, financial and institutional) are consolidated.
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2.3 Environmental appraisal and sustainable development
The guiding principle of the appraisal process is to ensure that Bank-supported interventions are economically, socially and environmentally sustainable, in accordance with the principles of sustainable development outlined in the NEMA. Integral to these principles, particularly the precautionary principle, is the requirement that the environmental risk of a proposed project must be properly assessed and managed. Four sources of environmental risk must be considered in environmental appraisals. These are:
z Environmental impact: Risks emerging from the nature and impact of the project could include, for example, the potential of a waste disposal site to pollute groundwater, or of road fill contaminated with heavy metals to lead to toxic runoff. Legal requirements: z Non-compliance with the legislative regime is a significant source of risk. Legal risks can include siting requirements such as planning authorisation and EIA approvals, operating requirements such as water permits, and environmental liability regimes that link the proponents of a project to any existing or future contamination. Institutional capacity: z Any limitations of the capacity of an institution to fulfil environmental requirements during the implementation, operation and maintenance of a project can present a significant risk. Public and political concerns: z Environmental issues have a high potential for reputational risk and even conflict owing to public and political concerns.
Environmental assessments are not limited to risks – the Bank also appraises the environmental benefits of projects. In line with the Bank’s policy and the sustainability principles, the appraisal process actively considers ways to improve environmental benefits, for instance by exploring alternatives that may have a larger positive impact on the environment.
Appraisals of projects within South Africa are based on the NEMA principles. Appraisals of private sector projects outside of South Africa, especially those with a high environmental risk, must use international good practice on social and environmental assessment, particularly the Performance standards on social and environmental sustainability of the International Finance Corporation (2006).
3. Overarching environmental issues
3.1 DBSA policies for the environmental appraisal module
The DBSA Board approved the current environmental policy in 2005 (see the DBSA website). This policy requires all Bank operations to be carried out in an environmentally and socially responsible manner, deriving the maximum environmental and social benefits. The policy is in line with the DBSA’s commitments in terms of the UNEP Finance Initiative (in 2004, the DBSA became
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a signatory to this initiative between the UNEP and the financial sector). The Initiative recognises that sustainable development depends on a positive interaction between socio-economic development and environmental protection, which balances the interests of the current and future generations. It views sustainable development as a collective responsibility of government, business and individuals, and requires financial institutions to adopt best practice in environmental management.
In line with this commitment, projects can only qualify for DBSA support if they fully comply with the Bank’s environmental policy and adhere to the procedural framework outlined in this document. The environmental policy outlines three fundamental principles of the appraisal process, namely:
Compliance with national and regional policies, legislative and regulatory requirements zrelated to the environment, as well as any relevant international obligations Stewardship of environmental products and services both within and outside the Bank z An environmental management system (EMS) that assists in improving the environmental zperformance of the Bank’s investment portfolio
In implementing these appraisal guidelines in line with the environmental policy, the following internal policies apply:
All projects being considered for support are subject to an environmental appraisal; this must be zsubmitted to the project manager, in writing, according to the format outlined in this document. The appraisal must be conducted by an environmental analyst, and such an analyst must ztherefore be on every project team that does appraisals. All documentation and communication used and decisions taken in the appraisal must be zclearly referenced and justified in the appraisal report. The environmental specialist in the Advisory Unit must review all appraisal reports for high-risk zand SADC programmes and projects, to provide input and share knowledge with other members of the Environmental CoP. All projects in the high-risk category must have environmental management plans (EMPs) in line zwith the EIA process. No environmental appraisal report can be changed without consultation with the relevant zenvironmental analyst. No funds can be disbursed without the appropriate authorisations from the regulatory authority; zconsequently, any requirement for an environmental authorisation or permit will be a suspensive condition in the loan agreement. The DBSA will not fund a project if the environmental risk assessment remains high after zmitigation. Any conditionality pertaining to credit lines on projects must be identified and addressed in zthe appraisal.
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3.2 The DBSA investment process
The process flow for investment applications can broadly be divided into the following seven steps:
1. Process the application2. Mobilise project resources and information3. Recommend an investment proposition4. Process the investment decision5. Conclude the contract 6. Deliver implementation assistance 7. Project implementation completion
The process is sequential and follows the phases of the lifecycle of the project. The length of this process depends on the nature and type of project and the institutional capacity of the client for environmental management. The primary elements of the investment process flow are described below:
1. Process the application: In this step, development needs are identified, a development intervention is conceptualised and an application is made to the DBSA for funding. After registering the application, the project manager screens it against the mandate of the Bank and requests a project team, including an environmental analyst, to be assigned. Using the available information, the environmental analyst determines the environmental risk category of the project and issues a request for any additional information required.
2. Mobilise project resources and information: Once established, the project team assists the borrower in the design and preparation of the project, if necessary. The environmental analyst assesses the adequacy of the information provided by the client and, where appropriate, assists the client in fulfilling the requirements outlined in this document.
3. Recommend an investment proposition: When all of the required information has been obtained, the project team undertakes a detailed appraisal of the sustainability of the proposed project, according to the appraisal guidelines for the six modules. At this stage, additional environmental information is analysed, particularly for medium- to high-risk projects (as per Appendix 4). The team’s findings and recommendations provide the basis for a decision about providing investment assistance, as well as the terms and conditions for any investment loan.
4. Process the investment decision: After the completion of the appraisal, DBSA management reviews the investment appraisal report and its recommendations. Depending on the type and value of the project, the proposal serves at the Development Intervention Committee, Corporate Credit Committee or Board Investment Committee, where a decision is taken about support for the project.
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5. Conclude the contract: Following the approval of the proposal by the relevant investment review committee, the contract is concluded with the client. This involves the negotiation and agreement on the primary terms and conditions of the loan agreement. Any environmental requirements suggested in the appraisal report will be part of the negotiations and, once agreed upon, included in the loan agreement as either suspensive or further terms and conditions.
6. Deliver implementation assistance: This process entails disbursing funding and monitoring the implementation of the project, according to the terms and conditions in the loan agreement. The DBSA monitors all projects under implementation to ensure full compliance with these terms and conditions, including environmental conditions.
7. Project implementation completion: Project completion reports review the results of the implementation, generate lessons learnt, and recommend surveillance or monitoring arrangements. The Bank continues to monitor the project for the duration of the loan term. The completion report includes a section on environmental performance, which reflects environmental compliance.
Section 4 of this document details the procedural requirements for each of these steps. In view of the importance of the evaluation function, a separate and independent unit has been established to conduct evaluations. These studies compare the actual impact of the project, including on the environment, with the impact anticipated in the appraisal process, and assess the effectiveness of any mitigation measures.
3.3 Integration with other appraisal modules
Unit managers, in conjunction with project managers, appoint members of the project team, generally from the same region. (In the Equity and Investment Banking and the Project Finance Units, however, the project manager selects the analysts.) Every project team must include an environmental analyst, as noted above, to conduct the environmental appraisal.
To be effective, the environmental appraisal must be integrated with the full appraisal report and its findings aligned with those of the other appraisal modules. The environmental analyst should interact closely with the technical, institutional and social analysts.
3.4 Information required for environmental appraisals
To expedite the environmental appraisal, the borrower should be informed as soon as possible about the information that the DBSA requires. The nature of the required information depends on the type of project and its initial risk categorisation.
In some cases, the borrower may need advice about legal procedures for obtaining permits and other environmental authorisations. When assisting clients in this regard, the environmental analyst must
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bear in mind the issue of environmental liability. The analyst may not recommend specific consultants to the borrower, intervene, or take steps to obtain permits on its behalf. Guidance may be given only on procedural requirements.
The DBSA reserves the right to request additional information about the project at any time. Technical assistance may be offered to assist clients in obtaining all the information needed for the environmental appraisal.
3.5 Responsibility for environmental appraisals
The borrower: z The borrower is responsible for environmental management of the project and, accordingly, for all the costs associated with the environmental assessment. The borrower must also provide adequate information in good time to allow the environmental analyst (and the team) to conduct a proper appraisal to facilitate decision-making. This information includes relevant environmental study reports, environmental permits or authorisations, and any other records deemed necessary for the appraisal. In addition, the borrower must allow reasonable access to the project site. It is imperative for the borrower to take the responsibility and ensure that the environmental appraisal leads to environmentally sound projects.
The DBSA: z The Bank establishes a project appraisal team for every registered project application; in line with these guidelines, this team will include an environmental analyst. The specific tasks of this analyst include the following:
Assess the early review report in conjunction with the project manager, screen the project and �provide an initial risk categorisation. Inform the borrower about the environmental information required for the appraisal, based on �the risk categorisation of the project. Conduct the environmental appraisal of the project in accordance with these procedural �requirements.
The environmental analyst may, at the request of the borrower, offer advice on the preparation of terms of reference for EIAs, legal procedures for obtaining permits, and the environmental management of the project. Further, the analyst may be requested to draw up terms of reference for external consultants to review, for example, an EIA or other technical reports. A proposed framework for such terms of reference is presented in Appendix 8. As noted, the analyst may not recommend specific consultants to the borrower, intervene, or obtain the relevant permits on its behalf.
3.6 Risk categorisation of projects
Proposed projects are classified into four categories based on the type, location, sensitivity and size of the project, as well as the nature and intensity (or magnitude) of the environmental impact associated with the project. The purpose of this classification is to assist in decision-making during the appraisal process, and indicate what information or permits and authorisations may be required.
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The categories are:
Category 1: High risk
A project in Category 1 is likely to have a significant and irreversible adverse impact on the environment, and could lead to significant changes in land use and in the social and biophysical environment.
The DBSA requires an EIA for any project in this category, regardless of legislative or regulatory requirements. Note that South African law requires an EIA for all activities identified under section 21 of the Environment Conservation Act, No. 73 of 1989, and section 24(5) of the NEMA.
In addition, the Bank requires all projects in this category to have an EMP in line with the EIA to ensure that environmental risks are properly mitigated. An EMP is a recognised tool that can provide assurance that the project proponent has made adequate provision for the mitigation of its environmental impacts.
The Integrated Environmental Management (IEM) Information Series, No. 12 (DEAT, 2004a) reflects on methods and procedures for mitigating and monitoring environmental impact. It may assist DBSA staff in reviewing EIAs and related documents (including EMPs), as well as clients developing and implementing the EMP.
Category 2: Medium risk
A project in Category 2 has a potentially adverse impact on the environment, but less so than Category 1 projects.
In this category, the country’s legislative and regulatory requirements for EIAs apply. If the project is not a regulated activity, the requirements of the environmental assessment apply.
However, the responsible analyst must still indicate the level of environmental assessment required. This may be an assessment of the site (facility) or organisation, a basic EIA or a full EIA, depending on the type of project or a combination of other factors, such as the sensitivity of the geographic area or natural environment.
Category 3: Low risk
A project in Category 3 is unlikely to have a significant adverse impact on the environment.
Since these projects have no adverse impact on the natural environment, they are readily appraised with limited environmental information. However, they remain subject to a screening process similar to projects in the previous categories, in order to identify potential issues for further investigation.
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Category 4: Financial intermediaries
This category entails Bank investments through financial intermediaries. The funding is lent in turn to subprojects, some of which may have a significant adverse impact on the environment (see Appendix 10).
The environmental analyst remains responsible for categorising all projects, regardless of category, and must also determine what environmental information is required for the appraisal. This must be appropriately motivated in the appraisal report. As a minimum requirement, the project must adhere to the legislative and regulatory requirements of the country where it will be implemented.
To facilitate categorisation, an illustrative list of projects under each category is provided in Appendix 4; note that the list is not exhaustive.
Finally, where a project involves the refinancing of existing infrastructure projects, the Bank requires a comprehensive assessment of the environmental performance of the organisation and the facility concerned for all Category 1 and 2 projects, even where these are not affected by the legislative and regulatory requirements for EIAs.
The proposed approach to and format for assessment of existing infrastructure projects is presented in Appendix 3. An international standard for the environmental assessment of an organisation, SANS 14050:2003, provides additional guidance on the planning, implementation and reporting of such an assessment.
3.7 Environmental appraisal in SADC
As noted, these environmental appraisal guidelines apply to all DBSA-supported projects, including in the rest of the SADC region. In the region, different countries have different approaches depending on their legislative regimes, and a project should be assessed against the legislative and regulatory requirements of the country concerned (Walmsely & Tshipala, 2007). If there is no enabling legislation for environmental assessment or effective regulations for implementing the provisions of the enabling legislation, the borrower will be required to implement a process based on the framework outlined in this document.
The review process should be aligned to internationally recognised standards for environmental assessment. As indicated earlier, it is strongly recommended that all high-risk private sector projects outside South Africa be reviewed against the standards of the International Finance Corporation (2006). The standards cover the following issues: social and environmental assessment and management systems; labour and working conditions; pollution prevention and abatement; community health, safety and security; land acquisition and involuntary resettlement; biodiversity conservation and sustainable natural resource management; indigenous people; and cultural heritage.
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The Bank will likewise apply international standards for environmental quality to projects in countries that lack legislative requirements to this effect. The main standard used is the Environmental, health, and safety (EHS) guidelines of the World Bank (2007), which provides technical guidance on good industry practice. Should borrowers argue for a different standard, a recommendation to this effect must to be based on specialist investigations, comprehensively documented in the EIA or environmental due diligence (EDD). To assist the analyst with a review of the EIA, particularly for projects in the SADC region, the main components of an EIA report and guidance notes are provided in Appendices 6 and 7 respectively.
The DBSA reserves the right to apply standards, in terms of both procedural requirements and environmental quality standards, that go beyond legislative and regulatory requirements.
3.8 Public disclosure and participation
In compliance with Principle 10 of the Rio Declaration on Environment and Development (UNEP, 1992), South African legislation and regulations on activities that must have EIAs also set out requirements for public participation. These requirements enable interested and affected parties to engage with the authorities and project sponsors on any proposed development project.
The DBSA, as a development finance institution, views public participation as a critical component of the EIA process, as it enhances collective decision-making and project ownership and helps to broaden development impact. Therefore, the DBSA requires public consultation on all Category 1 projects and any Category 2 projects that must have an EIA, in line with the DBSA Act and the Bank’s policy on environmental sustainability.
In addition, as part of the appraisal and ongoing monitoring, the environmental analyst must, where feasible and appropriate, engage with all relevant stakeholders, including local communities and environmental or other interest groups. Such engagement will fulfil the public consultation requirements for projects under Category 3, for which a formal EIA process is not required. The IEM Information Series No. 3 (DEAT, 2004c) reflects on approaches to stakeholder engagement (broadly defined to include public participation and consultation) and techniques to facilitate environmental appraisal. It may be useful to both DBSA staff and clients.
4. Environmental appraisal guidelines
4.1 Overview
This section provides further details on the risk assessment methodologies used in environmental appraisal in the Bank. It outlines the main steps in conducting an appraisal and then reflects procedural requirements for the assessment and management of environmental risk. The environmental appraisal, being primarily qualitative, involves planning the process, gathering and validating information,
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evaluating the information, and reporting on the appraisal. As outlined below, the process comprises three main steps, namely project screening, a site visit and the environmental appraisal.
4.2 Initial screening
The major task in implementing the environmental appraisal guidelines is the initial screening of the project to determine, among others, the appropriate risk category. The screening commences after a project has been accepted into the pipeline based on its fit with the DBSA’s mandate, policies and priorities. The DBSA requires an environmental screening of all projects, regardless of their potential environmental risks. This screening or project categorisation is based on the early review report prepared by the project manager, the borrower’s project proposal, and any other baseline information available to the environmental analyst.
The environmental analyst assigns the proposed development project or credit line to one of the following four categories (see section 3.6):
Category 1: High risk zCategory 2: Medium risk zCategory 3: Low risk zCategory 4: Financial intermediary z
The analyst has the discretion to impose requirements that differ from those of the above categories. Any such deviation must be motivated in the project appraisal report for discussion with the project manager and team. The analyst may also call on other professionals, whether internal or external, to assist in the initial screening decisions.
Once a risk category has been assigned, the analyst outlines the information needed, including legislative and regulatory requirements, and communicates this to the borrower in conjunction with the project manager.
At this stage, all existing environmental investigations, audits and EIAs are verified. Any alternative opportunities that may yield additional environmental benefits are also identified for consideration in the proposed project. However, since project planning is often at an advanced stage when borrowers approach the Bank for funding, opportunities for influencing the project in this way may be limited.
4.3 Site visits
The environmental specialist undertakes at least one site visit before the appraisal, to inform the risk categorisation and to assess the types of risks that are likely to be encountered before and after mitigation. During the field visit, the analyst does the following:
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Assess the sensitivity of the site, the potential environmental risks from project activities, zand the potential for intervention to promote alternative designs. Assess the institutional capacity of the borrower for environmental management. z Establish relationships with, among other important contacts, project designers, engineers zand interested and affected parties.
A site visit is particularly important when no EIA or scoping report has been submitted or when they are incomplete, as it enables the analyst to identify the potential environmental impact of the project and develop a risk table for the appraisal report. Also, when the DBSA has previously financed projects as part of an ongoing programme with a borrower, the site visit allows the analyst to assess the environmental performance of both the borrower and the projects.
4.4 Environmental risk appraisal of projects
The environmental analyst uses all the relevant documentation, including EIA or environmental due diligence reports, information from site visits, discussions with regulatory authorities and interested and affected parties, and the relevant guidelines to identify the environmental risks of the project and the phases in which they are likely to occur. In some cases, the documentation supplied by the borrower may be inadequate. The environmental analyst will then consult with the project manager to, for example, redo all or part of the EIA, obtain other documents, or request expert reporting on sectoral issues and a review of the EIA, for which additional funding may be needed.
An appraisal cannot be comprehensive and sound without an adequate information base. The Bank therefore requires the analyst to report on the adequacy and source of the information. Appendix 5 outlines further requirements for documenting the quality and adequacy of the information reviewed for the appraisal report. The methodology for the review of an EIA is given in Appendix 7; see also DEAT (2004b).
The Bank also requires an environmental risk table for all projects. The broad methodology for constructing the table is outlined in the rest of this section.
For each risk identified, the magnitude of its consequences (or impact) is assessed and given a rating of low, medium or high. The criteria for the rating could include the following:
Nature of the impact zSensitivity of the environment zExtent of the impact zIntensity or severity of the impact zDuration of the impact zPotential for cumulative effects z
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Potential for non-compliance with regulatory requirements zImpact on endangered species zPotential for lender liability zPotential for reputational risk z
This list is not definitive, and analysts are encouraged to identify criteria that may be more appropriate for a particular project. Any criteria used in the rating should be documented in the appraisal report. When projects form part of a programme that has already been assessed, the norms and criteria identified in the programme appraisal report should be used.The table below identifies possible ways of deciding on the rating.
Table 1: Qualitative measures of magnitude
CriteriaRating
Low Medium High
Scale of impact LocalisedOn site
Fairly extensive Regional
NationalInternational
Sensitivity of the environment
Not in a sensitive environment
In a sensitive environment, but impact localised and reversible Mitigation measures easily prescribed
Project situated in sensitive areas specified in Appendix 9
Potential for cumulative impact
None Limited Extensive
Non-compliance with regulatory requirements
Full compliance Applications in place Non-compliance
Impact on endangered species
Little or noneUnlikely to be adverse
Some, but mostly reversible
Significant loss of speciesIrreversible Diverse and comprehensive negative effects
Potential for lender liability
Little or none Some Significant
Potential for reputational risk
Little or none Some Significant
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The probability of the risk event occurring is then assessed, as per Table 2.
Table 2: Qualitative measures of probability
Descriptor Description
High The event is likely to occur in most circumstances
Medium The event may sometimes occur
Low The event may only occur in exceptional circumstances
Table 3 combines the magnitude of the impact of each risk and the probability of the risk event occurring, to yield an overall rating for each risk.
Table 3: Qualitative risk assessment matrix
ProbabilityMagnitude of consequence (impact)
Low Medium High
A (High) High/low High/medium High
B (Medium) Medium/low Medium Medium/high
C (Low) Low Low/medium Low/high
The ratings in Table 3 are interpreted as follows:
High/low: The chance of the event occurring is very high but the potential impact is low.High/medium: The chance of the event occurring is high but the potential impact is moderate.High: The chance of the event occurring and the potential impact are both high.Medium/low: The chance of the event occurring is moderate and the potential impact limited.Medium: The chance of the event occurring and the potential impact are both moderate.Medium/high: The chance of the event occurring is moderate and the potential impact high.Low: The chance of the event occurring and the potential impact are both low.Low/medium: The chance of the event occurring is low and the potential impact moderate.Low/high: The chance of the event occurring is low and the potential impact high.
The initial risk assessment is done before mitigation measures are in place. Once these measures have been identified, the magnitude, probability and overall risk are reassessed, based on the expected effects of the mitigation measures. Note that the proposed mitigation measures must be practical and involve concrete actions in the EMP, as well as adequate financial provision. General statements of intent, with a limited capacity to implement the required actions, must not be used to reduce the impact ratings, as the risk will remain high.
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The analyst should also explicitly consider the effect of the borrower’s institutional capacity on the magnitude and probability of each of the identified environmental risks.
The results of the risk assessment are detailed in the environmental appraisal report and summarised as per Table 4 below.
Table 4: Summary risk assessment of a project
Environmental risk
Magnitude Probability Risk rating (without
mitigation)
Proposed mitigation measures
Magnitude Probability Risk rating (with
mitigation)
Specify environmental
risk
H, M, L H, M, L H/M, etc. Detail mitigation measures
H, M, L H, M, L H/L, etc.
An overall risk rating for the project should also be given before and after the mitigation. This is done as follows: as part of the initial screening, a project is classified into one of the categories identified earlier, based on its nature, the magnitude of potential adverse effects and the sensitivity of the project site, among other criteria. Individual risks are then assigned risk ratings in terms of their probability and magnitude profile. Once mitigation measures are in place, the ratings of individual risks are reassessed, as per Table 4, and the whole project is then reassessed according to where it lies in the broad category. For example, if the broad category is medium, the project may be medium/high, medium or medium/low. This gives the allocation of the overall risk category.
In the loan risk spread provided by the Risk Management Unit, environmental risk is allocated 20 points. Table 5 proposes a method for allocating these 20 points, after the borrower has agreed to the mitigation measures.
Table 5: Application of the loan risk spread
Overall environmental risk rating
Risk-rating points allocated (from loan risk spread
summary)Risk spread Risk-rating
class
High 0 Unacceptable
HighHigh/medium 3 Doubtful
High/low 5 Weak
Medium/high 9 Vulnerable
MediumMedium 11 Acceptable
Medium/low 13 Satisfactory
Low/high 15 Good
LowLow/medium 17 Very good
Low 20 Excellent
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4.5 Environmental risk appraisal of programmes
As noted, the DBSA also funds investment programmes that involve several different projects. The Bank requires all of the projects in a programme to be appraised individually.
In some programmes, the individual projects are listed or even described upfront. In this case, the analyst must try to obtain enough information to identify the nature and type of the projects, and determine the project category. The analyst can use the information obtained by the borrower when the projects were identified and also request additional baseline information, especially for projects with significant environmental risks. The institutional rating and the risk categorisation of individual projects are then used to assign an overall risk rating to the programme.
In other cases, information on the projects may not be available at the time of the appraisal. Under these circumstances, the emphasis is on the risk profile of the programme and the institutional capacity of the borrower for environmental management. Appendix 2 lists criteria for assessing institutional capacity; other criteria can be motivated where required. On the basis of these criteria, the borrower risk will be evaluated as high, medium or low. The institutional rating and the risk profile of the programme are then used to assign an overall risk rating to the programme.
The rest of the process to apply the loan risk spread is the same as for projects, and the results are presented as per Table 6 below.
Table 6: Summary risk assessment of a programme
Projects, project types and/or sectors (Infrastructure programme)
Risk classification Institutional capacity risk
rating
Overall risk rating
Electricity reticulation
High, medium, low High, medium, low
Based on the risk of the project and the risk rating from the institutional capacity assessment
Sanitation reticulation
As above As above As above
4.6 Financial intermediaries
The DBSA’s support to financial intermediaries presents special considerations in the appraisal process. As is the case with some programmes, the environmental analyst may have very little information on the projects that will be supported through the on-lending of funds, other than perhaps the sectors under consideration.
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In general, the analyst follows the same approach as for the appraisal of programmes. The emphasis is on the overall risk category of the projects being considered for funding and the financial intermediary’s institutional capacity for environmental management. However, the DBSA’s environmental requirements for on-lending projects may differ from those for directly financed programmes, as outlined in Appendix 10.
The DBSA requires projects funded by financial intermediaries to be environmentally sound and sustainable. Therefore, if they do not already have the appropriate policies, financial intermediaries must establish an environmental appraisal policy and procedural framework as part of their overall credit review policy. The existence and/or adequacy of the borrower’s environmental appraisal policy framework is assessed as part of the appraisal of the credit line.
The analyst, in conjunction with the project manager, should inform the financial intermediary of the requirements outlined in Appendix 10 as early as possible in the appraisal process.
4.7 Agency agreements
The DBSA’s investment portfolio also includes projects supported through credit lines that the Bank has with other development finance institutions. Most of these institutions have attached environmental conditionalities to their lines of credit. When appraising projects, the environmental analyst should ensure that any environmental conditionalities are included in the environmental appraisal and, more importantly, that the ultimate borrower (or financial intermediary) adheres to them. Where the agencies have not such procedural requirements or conditionalities to their support, the environmental guidelines set out in this document apply, with due regard for international good practice.
4.8 Other DBSA investment products
In addition to traditional loans, the DBSA provides a range of innovative products, such as equity investments, bids and bonds. The environmental appraisal of these products faces special challenges stemming from the diversity of the implementing institutions and their varied capacity for environmental management.
In most cases, Bank lending through these products is not targeted at specific projects. Therefore, the focus of the environmental appraisal is on the institutional capacity for environmental management and the profile of the projects to be funded by such products. In addition, to ensure that these financial products result in projects or operations that are environmentally sound and sustainable, adherence to the DBSA’s internal policies and environmental requirements as outlined in these guidelines is strictly monitored.
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Therefore, the environmental analyst must ensure that the loan agreement includes clauses for compliance with all of the relevant environmental legislative and regulatory requirements, as well as the requirements for monitoring and reporting environmental risks. Where feasible, the analyst and the project team must monitor these conditions for each individual project financed by such products.
In line with the DBSA’s focus on ensuring that the projects supported by these financial products are environmentally sound and sustainable, it is committed to strengthening the environmental management capacity of the borrowers. In the assessment, the environmental analyst must identify any limitations or inadequacies in this capacity for possible support through technical assistance.
The assessment should use the criteria in Appendix 2 and preferably also the national standard for the environmental appraisal of sites and organisations (SANS 14015).
4.9 Loan conditions
The DBSA ensures compliance with its mandate, policy and guidelines on environmental management by incorporating appropriate conditionalities in the legal agreements with its borrowers. The two main types of conditionalities are suspensive conditions and further terms and conditions.
z Suspensive conditions: The acquisition of an environmental authorisation or permit, where required, is always a suspensive condition – the DBSA requires proof that the authorisation or permit has been obtained before any funds can be disbursed to the project. Where non-compliance with certain requirements would affect the environmental risks of a project to such an extent that the DBSA could suffer significant liability, such requirements must also be made suspensive conditions.
Further terms and conditions: z These aim to ensure that the borrower complies with the environmental conditions identified in the loan agreement. They may include, for example, requirements for preparing and reporting on an environmental mitigation and management plan.
The environmental analyst, in conjunction with the project manager, must clearly indicate the issues to be included in the legal agreement with the borrower. The legal advisor will assist in drafting such environmental conditions; they should be precise and indicate exactly what is required. Before the borrower signs loan agreement, the analyst must verify that these environmental conditions have been included in the agreement.
The main mitigation measures to lower the environmental risks of the project should form part of the loan agreement and be drawn through to the contract documents, tender documents and the bill of quantities. As part of the monitoring during the implementation phase, the environmental analyst should verify that the borrower adheres to the relevant clauses in the loan agreement.
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4.10 Loan negotiations
If the investment proposal is approved, the product or loan contract is concluded. This entails a formal agreement on the scope of the project, the terms and conditions for its delivery, the preparation and presentation of the contract to the borrower, the negotiation of the contract, the signing of the contractual agreement and, where applicable, the issuing of a letter of compliance with the suspensive conditions.
The investment loans are negotiated between the project manager and the relevant operational structures in conjunction with the legal advisor and the borrower. However, in the implementation of these appraisal guidelines, the responsible environmental analyst may, if required, form part of the team to assist the project manager in the negotiations, particularly on projects with significant environmental risks.
4.11 Project implementation
4.11.1 Project monitoring
The DBSA recognises the importance of monitoring during the implementation and operational phases. The environmental aspect of monitoring aims to do the following:
Ensure that the borrower complies with environmental conditions and other environmental zrequirements reflected in the loan agreement. Monitor the effectiveness of the relevant mitigation measures. zArrange for timely response if these measures are inadequate. z Build the borrower’s capacity for monitoring and measuring the environmental performance zof the project.
All the environmental conditions or provisions in the loan agreement must be monitored; the environmental appraisal should recommend a monitoring plan to this end. The plan must be commensurate with the nature of the environmental risks and must focus on the phases of the project that have significant adverse environmental potential. Since the effectiveness of these plans depends on the borrower’s EMP and its capacity to implement the monitoring and measurement requirements in its management system, the environmental analyst must consider the borrower’s institutional capacity when developing the monitoring plan.
In addition, the monitoring plan should identify the type of reports required. After every site visit, a project monitoring report must be produced, identifying the environmental conditions monitored, the findings and the recommendations. For Category 1 projects, periodic internal and/or external audits of the EMP or EMS are required. External audits must be conducted by third-party auditors
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and may be a condition in the loan agreement. As part of the monitoring process, the environmental analyst must review the borrower’s environmental performance in the monitoring report.
4.11.2 Non-compliance
As noted earlier, the borrower is solely responsible for the environmental management of the proposed programmes and projects. It is, therefore, required to meet all the environmental obligations in the loan agreement. Should the borrower fail to meet these obligations, the environmental analyst must investigate the reasons for non-compliance and report the findings to the project manager in writing. The project manager and team must discuss the investigation with the borrower so as to redress the situation and, where feasible, institute preventive measures to avoid a recurrence.
4.11.3 Project completion
The project completion report is the responsibility of the project manager, in consultation with the team members. Project completion normally commences after the loan has been fully disbursed or on closure of the DBSA’s contractual obligations. The completion report consolidates the results and experiences of the implementation phase, and recommends arrangements for the continued surveillance of the project. For Category 1 projects, the inclusion of environmental issues in the completion report is highly recommended, and it is also strongly recommended for Category 2 projects. This part of the report must reflect the level of compliance with the environmental conditions stipulated in the loan agreement and can also identify or strengthen environmental performance criteria for the surveillance phase. The environmental performance outputs for monitoring purposes include, but are not limited to, audit reports, progress reports on the EMP, and compliance reports.
4.11.4 Project evaluation
Further to the project completion requirements outlined above, the DBSA’s Operations Evaluation Unit conducts independent evaluations of projects, which also address environmental performance. The output of an evaluation is a consolidated report of the main learning experiences and recommendations for consideration in future projects. For Category 1 and 2 projects, it is highly recommended that environmental expertise, preferably the environmental specialist in the Advisory Unit, be included in post-project evaluations.
5. Review process
5.1 Review procedures
The Bank is committed to continual improvement of its management systems to ensure that its delivery processes remain effective. In line with this commitment, this document on environmental
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appraisal guidelines should be considered as a working document that requires periodic review to reflect best practice and international, regional and national legislative developments. These guidelines will be reviewed at least biannually; however, the Environmental CoP will formally note ad hoc material changes to the guidelines in response to policy and legislative requirements, for inclusion in the next review. In this case, the description of the issue, the recommended solution and the date of the meeting of the Environmental CoP must be noted. All material changes to the guidelines will be approved by the relevant Knowledge Management structures within the Bank and, unless specified otherwise, changes will take effect immediately.
5.2 Responsibilities
The environmental specialist who coordinates the Environmental CoP is also responsible for ensuring the review of the environmental appraisal guidelines. This responsibility includes undertaking all administrative activities related to this process and carrying out the review of the guidelines in consultation with all CoP members.
6. References
DBSA (Development Bank of Southern Africa), 2005. Environmental policy. DBSA, Midrand.DBSA (Development Bank of Southern Africa), 2006. Procedures for environmental appraisal at the
DBSA, Development Paper 15, Midrand. DBSA (Development Bank of Southern Africa), 2008. DBSA corporate strategy, Internal document.DEAT (Department of Environmental Affairs and Tourism), 2004a. Environmental management plans.
Integrated Environmental Management Information Series 12. Pretoria.DEAT (Department of Environmental Affairs and Tourism), 2004b. Review in environmental impact
assessment. Integrated Environmental Management Information Series 13. Pretoria.DEAT (Department of Environmental Affairs and Tourism), 2004c. Stakeholder engagement.
Integrated Environmental Management Information Series 3. Pretoria.International Finance Corporation. 2006. Performance standards on social and environmental
sustainability. Washington, D.C.UNEP (United Nations Environment Programme), 1992. Rio Declaration on Environment and
Development. www.unep.orgWalmsley, B & Tshipala, KE, 2007. Handbook on environmental assessment legislation in the SADC
region. DBSA & Southern African Institute for Environmental Assessment (SAIEA), Midrand. World Bank. 2007. Environmental, health, and safety (EHS) guidelines. Washington, D.C.
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Appendix 1: Extract from the National Environmental Management Act No. 107 of 1998
Chapter 1: National environmental management principles
1. Principles
1.1 The principles set out in this section apply throughout the Republic to the actions of all organs of state that may significantly affect the environment and:
(a) shall apply alongside all other appropriate and relevant considerations, including the State’s responsibility to respect, protect, promote and fulfil the social and economic rights in Chapter 2 of the Constitution and in particular the basic needs of categories of persons disadvantaged by unfair discrimination;
(b) serve as the general framework within which environmental management and implementation plans must be formulated;
(c) serve as guidelines by reference to which any organ of state must exercise any function when taking any decision in terms of this Act or any statutory provision concerning the protection of the environment;
(d) serve as principles by reference to which a conciliator appointed under this Act must make recommendations; and
(e) guide the interpretation, administration and implementation of this Act, and any other law concerned with the protection or management of the environment.
1.2 Environmental management must place people and their needs at the forefront of its concern, and serve their physical, psychological, developmental, cultural and social interests equitably.
1.3 Development must be socially, environmentally and economically sustainable.
(a) Sustainable development requires the consideration of all relevant factors including the following:
(i) That the disturbance of ecosystems and loss of biological diversity are avoided, or, where they cannot be altogether avoided, are minimised and remedied;
(ii) that pollution and degradation of the environment are avoided, or, where they cannot be altogether avoided, are minimised and remedied;
(iii) that the disturbance of landscapes and sites that constitute the nation’s cultural heritage is avoided, or where it cannot be altogether avoided, is minimised and remedied;
(iv) that waste is avoided, or where it cannot be altogether avoided, minimised and reused or recycled where possible and otherwise disposed of in a responsible manner;
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(v) that the use and exploitation of non-renewable natural resources is responsible and equitable, and takes into account the consequences of the depletion of the resource;
(vi) that the development, use and exploitation of renewable resources and the ecosystems of which they are part do not exceed the level beyond which their integrity is jeopardised;
(vii) that a risk-averse and cautious approach is applied, which takes into account the limits of current knowledge about the consequences of decisions and actions; and
(viii) that negative impacts on the environment and on people’s environmental rights be anticipated and prevented, and where they cannot be altogether prevented, are minimised and remedied.
(b) Environmental management must be integrated, acknowledging that all elements of the environment are linked and interrelated, and it must take into account the effects of decisions on all aspects of the environment and all people in the environment by pursuing the selection of the best practicable environmental option.
(c) Environmental justice must be pursued so that adverse environmental impacts shall not be distributed in such a manner as to unfairly discriminate against any person, particularly vulnerable and disadvantaged persons.
(d) Equitable access to environmental resources, benefits and services to meet basic human needs and ensure human well-being must be pursued and special measures may be taken to ensure access thereto by categories of persons disadvantaged by unfair discrimination.
(e) Responsibility for the environmental health and safety consequences of a policy, programme, project, product, process, service or activity exists throughout its life cycle.
(f) The participation of all interested and affected parties in environmental governance must be promoted, and all people must have the opportunity to develop the understanding, skills and capacity necessary for achieving equitable and effective participation, and participation by vulnerable and disadvantaged persons must be ensured.
(g) Decisions must take into account the interests, needs and values of all interested and affected parties, and this includes recognising all forms of knowledge, including traditional and ordinary knowledge.
(h) Community wellbeing and empowerment must be promoted through environmental education, the raising of environmental awareness, the sharing of knowledge and experience and other appropriate means.
(i) The social, economic and environmental impacts of activities, including disadvantages and benefits, must be considered, assessed and evaluated, and decisions must be appropriate in the light of such consideration and assessment.
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(j) The right of workers to refuse work that is harmful to human health or the environment and to be informed of dangers must be respected and protected.
(k) Decisions must be taken in an open and transparent manner, and access to information must be provided in accordance with the law.
(l) There must be intergovernmental coordination and harmonisation of policies, legislation and actions relating to the environment.
(m) Actual or potential conflicts of interest between organs of state should be resolved through conflict resolution procedures.
(n) Global and international responsibilities relating to the environment must be discharged in the national interest.
(o) The environment is held in public trust for the people, the beneficial use of environmental resources must serve the public interest and the environment must be protected as the people’s common heritage.
(p) The costs of remedying pollution, environmental degradation and consequent adverse health effects and of preventing, controlling or minimising further pollution, environmental damage or adverse health effects must be paid for by those responsible for harming the environment.
(q) The vital role of women and youth in environmental management and development must be recognised and their full participation therein must be promoted.
(r) Sensitive, vulnerable, highly dynamic or stressed ecosystems, such as coastal shores, estuaries, wetlands, and similar systems require specific attention in management and planning procedures, especially where they are subject to significant human resource usage and development pressure.
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Appendix 2: Criteria for assessing institutional capacity for environmental management
The criteria below can be used in assessing a borrower’s institutional capacity for environmental management.
Performance indicatorsRating
Low capacity Medium capacity High capacity
1. Borrower’s understanding of its legislative responsibilities regarding the environment, specifically EIAs
No understanding Some understanding Full understanding of legal requirements, which are procedurally integrated in an EMS
2. Level of compliance with environmental legislation:
South Africa: Environmental Conservation Act, National Environmental Management Act and Water Act
SADC: Relevant national legislation or international guidelines
Borrower in conflict with regulatory authorities about environmental requirementsOutstanding permit requirementsInstitution fined or taken to court by regulatory authorities in the last two years
Outstanding permit requirements, but borrower working with regulatory authorities to bring institution into compliance
No outstanding permit requirementsRequirements of legislation fully integrated into project planning procedures
3. Allocation of responsibility for environmental management
No manager allocated the responsibility for environmental managementNo environmental policy or procedures supporting the environment
Formal appointment of manager with responsibility for environmental concerns (not necessarily a dedicated person with sole responsibility)
Dedicated person at management level with sole responsibility for environmental management Supported by EMS
4. Existence of a viable EMS
No EMS Some environment-related procedures being developedEnvironmental policy being developed
EMS in place Annual review of EMSRecommendations implemented to improve performance
5. Borrower involvement in environmental issues
No involvement in environmental awareness initiatives, such as clean-up campaigns, recycling initiatives, etc.
Some initiatives, such as clean-up campaigns
Good communication initiatives linked to implementation of EMSInvolvement in Agenda 21 or similar initiativesLeadership role in environmental initiatives
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Appendix 3: Format for environmental assessment of existing infrastructure projects
The list below provides an example of a table of contents for an environmental assessment. This list is extensive, and will not necessarily apply in full to all projects under consideration.
Executive summary
1. Introduction
2. Facilities 2.1 Physical description 2.2 Facility operation 2.3 Location 2.4 History and environmental setting 2.5 Ownership 3. Review of environmental management 3.1 Environmental management structure 3.2 Emergency, security and safety plans 3.3 Community interaction by company (facility) 3.4 Environmental insurance coverage 3.5 Allocation of environmental responsibilities 4. Environmental status 4.1 Assessment of legal compliance 4.2. Air emissions 4.3 Raw water and waste water 4.4. Material handling, storage and transport 4.5. Hazardous materials management 4.6. Oil-filled electrical and hydraulic equipment (PCBs) 4.7. Asbestos, mineral dust and fibres 4.8. Waste management 4.9. Housekeeping 4.10 Noise, vibrations and other physical factors 4.11 Radioactive materials 4.12 Contaminated ground water and land 4.13 Cleaner technology initiatives 4.14 Energy and energy conservation 4.15 Waste reduction
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5. Product issues
6. Occupational health and safety status 6.1 Assessment of legal compliance 6.2 Accident reporting, recording and investigation 6.3 Health and safety management 6.4 Site safety procedures 6.5 Medical monitoring programme 6.6 Noise and vibration exposure 6.7 Chemical and material handling 6.8 Temperature exposure 6.9 Personal protective equipment and training 6.10 Emergency response capability and training 6.11 Training programmes 6.12 Tests for sustainable development 7. Conclusions and recommendations 7.1 Conclusions 7.2 Recommendations and cost estimates 7.3 Terms of reference for further information and studies 8. Appendices These include, but are not limited to, details of persons consulted, copies of environmental
authorisations, EMPs and other relevant documentation.
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Appendix 4: Categories of project risk
The application of the environmental appraisal depends critically on the risk categorisation of programmes or projects. The categories below, based largely on South Africa’s EIA regulations, provide guidance on the risk categorisation of projects. These categories are strictly illustrative, as noted in section 3.6.
Category 1: High risk
The impact on the environment generated by these projects is likely to be comprehensive, broad and diverse. Some effects may be irreversible and could lead to significant changes in land use and in the social, physical and biological environment.
Types of project include:
Large dams and reservoirs, levees or weirs affecting river flow zCanals and channels, including diversions of the normal flow of water in a riverbed zWater transfer schemes between water catchments and impoundments zLarge sewage works and associated infrastructure zSchemes for the abstraction and utilisation of ground or surface water for bulk supply z
purposesLarge-scale irrigation and drainage schemes zLarge-scale sanitation works zLarge-scale forestry zLarge-scale agro-industries zLarge-scale industrial plants zMajor new industrial parks zMajor oil and gas developments, including large pipelines zLarge ferrous and non-ferrous metal operations zLarge port and harbour developments zStructures associated with communication networks, as well as access roads to these z
structures Projects with large resettlement components, as well as projects with a major effect on zhuman populationsProjects affecting tribal or indigenous populations zLarge thermal and hydropower developments z Projects that include the manufacture, use or disposal of environmentally significant zquantities of pest control productsManufacture, transportation and use of hazardous and/or toxic materials zDomestic and hazardous waste disposal operations z
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Projects that pose serious occupational or health risks zProjects that pose serious socio-economic concerns zRoads, railways, airfields and associated infrastructure zTourism (including hotel projects) zTextile plants zManufacture of construction materials that may be hazardous z
Category 2: Medium risk
These projects may have an adverse impact on the environment, but this is generally of a lesser degree or significance than that of high-risk projects. Few, if any, of the resulting changes are irreversible, and mitigation measures can more easily be prescribed.
Types of project include:
Water supply projects (without impoundments or new river intakes) zSmall-scale industry zMedium- to small-scale sanitation projects zWater purification plants zAquaculture and mariculture projects zFarmer support projects zReservoirs for public water supply zSmall-scale agro-industries zElectrical transmission zRenewable energy (e.g. wind farms, except large hydroelectric power projects) zSmall-scale rehabilitation, maintenance and modernisation projects zManufacture of non-hazardous construction materials zGeneral manufacturing zTelecommunications zGreenfield projects in existing industrial estates zPipelines (depending on the route) z
Category 3: Low risk
A project in this category is unlikely to have a negative impact on the environment. The social, physical and biophysical environments are not significantly affected.
Project types include:
Health service projects zInstitutional development and capacity-building projects z
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Advisory assignments zTechnical assistance zRights issues zSecuritisation zInternal reticulation of existing urban developments z
Category 4: Financial intermediary
Investments in financial intermediaries involve the extension of credit lines to other financial institutions. These investments can be:
Targeted through a financial intermediary at an institution whose operations may have an zadverse environmental and/or social impact, and/or Directly to specific subprojects, which again may have an adverse impact on both the natural zand social environments.
Appendix 10 discusses this category in more detail.
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Appendix 5: Project, programme and consolidated reports
The required contents of project reports, as well as the recommended contents of programme and consolidated reports are given below.
1. Project reports
The required table of contents for project reports is given below, with an explanation of each section.
Project title, project number, borrower and implementing agent
At the beginning of the reportClear identification of the project and borrower
Purpose of the report A statement that the report documents the results of the environmental appraisal of the project
Project overview
An overview of the project, identifying:Issues to be considered in the appraisalThe need for the projectAny alternatives
Appraisal methodology
Details of the methodology, including:Specifics about site visits, key documents and personnel consulted, information and documentation reviewed discussions held, etc.Any assumptions or limitationsDetails of agency (credit line) requirements
Environmental assessment process
Details of the environmental assessment process, including:A statement on its adequacy Motivation or discussion of deviations from the guidelinesAn opinion, with supporting argumentation, on the quality and adequacy of information provided, such as the EIA, scoping report and EMP
Legislative and regulatory issues
Any project-related legislative or regulatory issues and their status, e.g. EIA requirements or water permits
Institutional capacity for environmental management
An assessment of the institutional capacity of the borrower for environmental management (high, medium or low)Proposals on the need for technical assistance
Environmental risk assessment
For each environmental risk identified in the tables appended to the appraisal report (Appendix 1):An explanation of the assessment of the magnitude of the impact and the probability of the risk, and details of the criteria usedA description of mitigation measures and their effect on the risk ratings The effect of the institution’s capacity for environmental management, in view of the magnitude of the impact and the probability of the risk
Developmental impact The environmental benefits, in terms of the environmental sustainability of the project (if any)A recommendation on possible environmental indicators for the project
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Credit lines For relevant projects:A statement that the project is allocated to a specific credit line The environmental conditionality and how this has been met
Monitoring requirements
Recommendations on approaches to the monitoring requirements, based on:The risk assessmentThe point in the project lifecycle where the risks occur e.g. during the construction phase
Conditions for inclusion in the loan agreement
Suspensive or further terms and conditions
ConclusionA summary of the results of the environmental risk assessmentKey issues that emerge from the appraisal processAny environment-related project issues
References Any documentation usedPersonal communications referred to in the report
Appendix 1 Summary table on environmental risk assessment
Appendix 2 Recommended contents for the consolidated appraisal report
2. Programme reports
The proposed table of contents for programme reports is given in the table below, with suggested details for each section.
Programme title, programme number, borrower and implementing agent
At the beginning of the reportClear identification of the programme and borrower
Purpose of the report A statement that the report documents the results of the environmental appraisal of the programme
Programme overview An overview of the programme, including:Details of the location of the projects, if availableA discussion of projects, in tabular form, if sufficient detail is availableIdentification of projects that require an EIA, due diligence report and/or EMP
Appraisal methodology Details of the methodology, including:Specifics about site visits, key documents and personnel consulted, discussions held, etc.Any assumptions or limitationsDetails of agency (credit line) requirements
Legislative and regulatory issues
On the basis of the projects described, an initial identification of potential legislative and regulatory issues and requirements, e.g. possible listed activities in terms of South African EIA regulations
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Institutional capacity for environmental management
An assessment of the institutional capacity of the borrower for environmental management (high, medium or low)Proposals on the need for technical assistance
Environmental risk assessment
A risk profile for the projects included in the programme, on the basis of the categorisation of the projects (Appendix 4), with Appendix 9 (on sensitive sites) as additional guidance An overall risk rating for the programme, based on the above risk profile and the institutional capacity of the borrower
Developmental impact The environmental benefits of the programme (if any)Possible environmental indicators for the projects within the programme
Norms and criteria The norms and standards for appraising individual projects within the programme
Monitoring requirements Details of suggested monitoring requirements
Conditions for inclusion in the loan agreement
Suspensive or further terms and conditions
Conclusion Key issues that emerge from the appraisal processThe overall environmental risk rating Any environment-related programme issues
References Any documentation usedPersonal communications referred to in the report
Appendix 1 Summary table on environmental risk assessment
Appendix 2 Recommended contents for the consolidated appraisal report
3. Consolidated project and programme reports
The consolidated appraisal report should summarise the main findings of the environmental appraisal under the following headings:
Environmental status zEnvironmental assessment process zLegal and regulatory issues zInstitutional capacity for environmental management zEnvironmental risk assessment and tables zMonitoring requirements z Loan agreement requirements (The project manager is to ensure that these zform part of the loan agreement.)
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Appendix 6: Contents of EIA reports
The table of contents will vary between projects; however, the main components should be addressed, namely:
Environmental status zEnvironmental impact zAnalysis of alternatives zEnvironmental management plan zExecutive summary z
1. Introduction
2. Legal and policy compliance
3. Project description and environmental standards to be adopted
4. Public consultation programme
5. Description of the existing environment Describe e.g. the physical resources, such as topography, soils, climate, air quality, water resources
and geology; ecological resources; and socio-economic issues.
6. Environmental impacts and analysis Assess at least the following: any positive and negative effects on the environment; the adequacy
and outcome of the public consultation; mitigation measures; and residual negative effects on the environment.
7. Analysis of alternatives Describe each feasible alternative, taking into consideration the extent and significance of its
environmental impact, and the possibility for its mitigation.
8. Environmental mitigation and management plan Comment on the suitability of the proposed EMP.
9. Monitoring and supervision plan
Guidelines for environmental appraisal at the DBSA (Version 1.0)Page 40
Development Planning Division Technical Document Series No. 1
10. Environmental risk assessment As a minimum, quantify any potential for the project to give rise to an adverse reaction locally,
nationally and internationally, as well as any direct lender liability for the Bank. Consider the following criteria: nature of impact, extent, duration, intensity and the likelihood of its occurrence.
11. Conclusion and recommendations
12. Appendices
Guidelines for environmental appraisal at the DBSA (Version 1.0)Page 41
Development Planning Division Technical Document Series No. 1
Appendix 7: Guidance note for EIA reviews
This guidance note for EIA review was developed by the Southern African Institute of Environmental Assessment (SAIEA). It is available on the SAIEA website: http://www.saiea.com
This review form provides a structure that helps the reviewer to assess the EIA’s various components in a scientific way. However, the reviewer must try at the same time to maintain a perspective of the “bigger picture” and to consider whether the EIA report makes sense as a whole, and if the process was conducive for planning.
This review form is divided into the following sections:
1. Methodology utilised in compiling the EIA report2. Legal, policy and administrative requirements3. Description of the project4. Assessment of alternatives to the project5. Description of the environment6. Description of impacts7. Consideration of measures to mitigate impacts8. Non-technical summary9. General approach
Instructions to reviewers
1. For each question, consider first whether the information is relevant to the project. If not, mark it “no” and go to the next question.
2. If the information is relevant, read that section of the EIA report and establish whether the information provided is:
Complete or comprehensive (C): All information required for decision-making is available. zNo additional information is required even though more may exist. cceptable or adequate (A): The information presented is incomplete, but the omissions zdo not prevent the decision-making process from proceeding. Inadequate (I): The information presented contains major omissions. Additional information zis necessary before the decision-making process can proceed.
Guidelines for environmental appraisal at the DBSA (Version 1.0)Page 42
Development Planning Division Technical Document Series No. 1
Complete this table
Name of the project
Country where the project is to be located
Name of company that compiled the EIA report
Date that the EIA report was completed
Name of reviewer
Address of reviewer
Date of review
Narrative report (reviewer’s general opinion of the EIA report):
Introduction zSummary opinion zMethodology for the review zStakeholder engagement and assessment of impacts zConclusion z
Summary appraisal of the EIA report (to be completed only after the detailed assessment has been done)
Judgement (C/A/I) Comments
Methodology utilised in compiling the EIA report
Description of the project
Assessment of alternatives to the project
Description of the environment
Description of impacts
Consideration of measures to mitigate impacts
Non-technical summary
General approach
Please grade the overall report as follows: (tick or shade the box of your choice)
Excellent: � The EIA report contains all relevant information required for decision-making on the project. There are no gaps.Good: � The EIA report contains most of the required information that is relevant to the particular circumstances of the project; the gaps are relatively minor.
Guidelines for environmental appraisal at the DBSA (Version 1.0)Page 43
Development Planning Division Technical Document Series No. 1
Satisfactory: � The information presented is not complete; there are significant omissions but in the context of the proposed project, the omissions do not prevent a decision on whether the project should be allowed to proceed. Inadequate: � Some of the information has been provided, but there are major omissions. In the context of the proposed project, these must be addressed before a decision can be taken on whether the project should be allowed to proceed.Poor: � The required information has not been provided or is far from complete. In the context of the proposed project, the omissions must be addressed before a decision can be taken on whether the project should be allowed to proceed.
In your opinion… Yes No PartiallyDon’t know
Did the EIA process include genuine public participation?
Did the proponent or the authorities unduly influence the consultants?
Did the EIA report focus on the 5 most important issues?
Is the EIA report of acceptable quality?
Will the EIA report help to make a more informed decision about the project?
Guidelines for environmental appraisal at the DBSA (Version 1.0)Page 44
Development Planning Division Technical Document Series No. 1
Rel
evan
t?(Y
es/N
o)Ju
dgem
ent
(C/A
/I)Co
mm
ents
1.
Met
hodo
logy
1.1
Doe
s th
e re
port
set
out
the
assu
mpt
ions
and
lim
itatio
ns o
f the
stu
dy?
1.2
Doe
s th
e re
port
cle
arly
exp
lain
the
met
hodo
logy
use
d in
the
EIA
, pub
lic
part
icip
atio
n pr
oces
s an
d in
eac
h sp
ecia
list s
tudy
?1.
3 D
oes
the
repo
rt in
dica
te w
hat d
ata
are
inad
equa
te o
r abs
ent?
1.4
Did
the
EIA
pro
cess
incl
ude
genu
ine
stak
ehol
der c
onsu
ltatio
n?
1.5
If so
, wer
e th
e ge
nera
l pub
lic a
nd/o
r aff
ecte
d co
mm
uniti
es in
clud
ed in
the
cons
ulta
tion?
1.6
Wer
e ca
paci
ty-b
uild
ing
prog
ram
mes
requ
ired
to e
nabl
e in
form
ed
stak
ehol
der i
nvol
vem
ent a
nd a
re th
ey d
escr
ibed
?1.
7 H
ave
the
view
s of
sta
keho
lder
s be
en m
eani
ngfu
lly in
corp
orat
ed in
to th
e fin
ding
s of
the
EIA
?1.
8 D
oes
the
repo
rt in
clud
e lis
ts o
f int
eres
ted
and
affec
ted
part
ies
cons
ulte
d,
as w
ell a
s th
eir o
rigin
al s
ubm
issi
ons
and
com
men
ts?
2.
Lega
l, po
licy
and
adm
inis
trat
ive
requ
irem
ents
2.1
Hav
e th
e re
leva
nt in
tern
atio
nal t
reat
ies,
con
vent
ions
and
agr
eem
ents
be
en li
sted
with
refe
renc
e to
whe
re a
nd h
ow th
ese
oblig
atio
ns h
ave
been
m
et o
n th
is p
roje
ct?
2.2
Hav
e th
e re
leva
nt p
olic
ies
of th
e co
untr
y be
en li
sted
with
refe
renc
e to
w
here
and
how
the
oblig
atio
ns h
ave
been
met
on
this
pro
ject
?2.
3 H
ave
the
rele
vant
law
s an
d re
gula
tions
of t
he c
ount
ry b
een
liste
d, w
ith
refe
renc
e to
pro
ject
com
plia
nce?
2.4
Hav
e th
e re
leva
nt s
tand
ards
and
gui
delin
es fo
r com
plia
nce
been
list
ed?
2.5
Has
the
EIA
adm
inis
trat
ive
proc
ess
been
des
crib
ed to
geth
er w
ith p
roje
ct
com
plia
nce?
3.
Des
crip
tion
of t
he p
roje
ctLa
nd re
quir
emen
ts
3.1
Has
the
land
ow
ners
hip
stat
us b
een
desc
ribed
?3.
2 H
as th
e la
nd re
quire
d fo
r the
pro
ject
and
any
ass
ocia
ted
serv
ices
bee
n de
scrib
ed a
nd c
lear
ly s
how
n on
an
appr
opria
tely
sca
led
map
?3.
3 Fo
r a li
near
pro
ject
, has
the
land
cor
ridor
and
nee
d fo
r ear
thw
orks
bee
n de
scrib
ed a
nd s
how
n on
an
appr
opria
tely
sca
led
map
?3.
4 H
as th
e re
inst
atem
ent a
fter
use
of t
empo
rary
land
-tak
e be
en d
escr
ibed
?3.
5 H
ave
loca
l, re
gion
al a
nd n
atio
nal p
lans
, e.g
. str
ateg
ic e
nviro
nmen
tal
asse
ssm
ents
, str
uctu
re p
lans
, int
egra
ted
deve
lopm
ent p
lans
, en
viro
nmen
tal a
ctio
n pl
ans
and
zoni
ng p
lans
, bee
n re
view
ed in
ord
er to
pl
ace
the
proj
ect i
nto
cont
ext?
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t?(Y
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o)Ju
dgem
ent
(C/A
/I)Co
mm
ents
Pro
ject
des
crip
tion
3.6
Hav
e al
l the
pro
ject
com
pone
nts
been
des
crib
ed, i
nclu
ding
a p
roce
ss fl
ow
shee
t, w
ater
bal
ance
, sui
tabl
e di
agra
ms
and
layo
ut p
lans
, for
exa
mpl
e?
3.7
Is th
ere
a lif
ecyc
le a
naly
sis?
3.8
Hav
e th
e te
chno
logi
es to
be
used
bee
n de
scrib
ed, w
ith a
mot
ivat
ion
as to
ho
w th
ey c
ompl
y w
ith B
ATN
EEC
and
BEO
prin
cipl
es?
3.9
Hav
e th
e so
cial
issu
es re
late
d to
the
proj
ect b
een
desc
ribed
, e.g
. num
ber
of e
mpl
oyee
s, p
ropo
rtio
n fr
om lo
cal c
omm
unity
, tra
nspo
rtat
ion,
ac
com
mod
atio
n, s
uppo
rt s
ervi
ces,
recr
eatio
n fa
cilit
ies,
em
ploy
men
t st
ruct
ures
, ski
lls b
reak
dow
n, b
lack
eco
nom
ic e
mpo
wer
men
t, tr
aini
ng,
skill
s tr
ansf
er, e
tc.?
W
aste
and
em
issi
ons
3.10
Hav
e th
e so
urce
s, ty
pes
and
quan
titie
s of
was
te g
ener
ated
dur
ing
diff
eren
t sc
enar
ios
for c
onst
ruct
ion
and
oper
atio
n be
en e
stim
ated
, e.
g. a
ir em
issi
ons,
pro
cess
effl
uent
, run
off, n
oise
and
vib
ratio
ns, o
dour
, liq
uid
and
solid
was
te?
3.11
Hav
e th
e pr
edic
tions
in th
e re
port
bee
n sc
ient
ifica
lly c
alcu
late
d, w
ith th
e re
sults
cle
arly
pre
sent
ed fo
r diff
eren
t sce
nario
s?3.
12 H
as a
risk
ass
essm
ent b
een
perf
orm
ed, i
nclu
ding
the
iden
tifica
tion
of
expo
sure
pat
hway
s, p
roba
bilit
y an
d co
nseq
uenc
es?
3.13
Doe
s th
e re
port
dis
cuss
way
s in
whi
ch th
e w
aste
s ca
n be
redu
ced,
recy
cled
or
reus
ed?
3.14
Hav
e th
e w
ays
in w
hich
was
tes
will
be
stor
ed, h
andl
ed o
r tre
ated
prio
r to
disp
osal
bee
n ex
plai
ned?
3.15
Has
the
rece
ivin
g en
viro
nmen
t whe
re s
uch
was
te w
ill b
e di
spos
ed b
een
iden
tified
and
des
crib
ed?
Pro
ject
inpu
ts3.
16 A
re th
e na
ture
and
qua
ntiti
es o
f mat
eria
ls n
eede
d du
ring
cons
truc
tion
and
oper
atio
n cl
early
indi
cate
d, e
.g. w
ater
, pow
er, l
ubric
ants
, raw
mat
eria
ls,
ore,
str
uctu
ral c
ompo
nent
s or
fill?
3.
17 H
ave
the
site
s fr
om w
here
thes
e m
ater
ials
will
be
sour
ced
been
iden
tified
an
d as
sess
ed in
term
s of
impa
cts,
in th
e EI
A re
port
?3.
18 H
ave
the
impa
cts
of tr
ansp
orta
tion
of a
ll m
ater
ials
, per
sonn
el a
nd v
isito
rs
to th
e pr
ojec
t site
dur
ing
cons
truc
tion
and
oper
atio
n be
en a
sses
sed?
3.19
Hav
e th
e m
eans
of t
rans
port
ing
mat
eria
ls, p
rodu
cts,
wor
kers
and
vis
itors
to
and
from
the
site
dur
ing
cons
truc
tion
and
oper
atio
n be
en e
xpla
ined
?
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Development Planning Division Technical Document Series No. 1
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evan
t?(Y
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o)Ju
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ent
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/I)Co
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ents
3.20
Has
the
proj
ect t
imet
able
bee
n cl
early
set
out
for e
ach
proj
ect p
hase
: co
nstr
uctio
n, o
pera
tion,
dec
omm
issi
onin
g an
d cl
osur
e?4.
A
lter
nati
ves
4.1
Wer
e al
tern
ativ
es to
the
proj
ect c
onsi
dere
d in
the
EIA
?4.
2 If
alte
rnat
ives
wer
e co
nsid
ered
, are
the
reas
ons
for s
elec
ting
the
prop
osed
al
tern
ativ
e ad
equa
tely
des
crib
ed?
4.3
If al
tern
ativ
es a
re d
escr
ibed
, hav
e th
eir m
ain
envi
ronm
enta
l im
pact
s be
en
com
pare
d cl
early
and
obj
ectiv
ely
with
thos
e of
the
prop
osed
pro
ject
?4.
4 H
as a
pre
dict
ion
of th
e lik
ely
futu
re e
nviro
nmen
tal c
ondi
tions
in th
e ab
senc
e of
the
proj
ect b
een
deve
lope
d (n
o-go
opt
ion)
?4.
5 D
oes
the
EIA
ass
ess
vario
us “w
ithin
-pro
ject
” alte
rnat
ives
(e.g
. des
ign,
lo
catio
n)?
5.
Des
crip
tion
of t
he e
nvir
onm
ent
5.1
Hav
e th
e ar
eas
expe
cted
to b
e si
gnifi
cant
ly a
ffec
ted
by th
e va
rious
asp
ects
of
the
proj
ect b
een
indi
cate
d w
ith th
e ai
d of
sui
tabl
e m
aps?
5.2
Hav
e th
e la
nd u
ses
on th
e pr
ojec
t site
(s) a
nd in
the
surr
ound
ing
area
s be
en
desc
ribed
and
thei
r use
and
non
-use
val
ues
adeq
uate
ly a
sses
sed?
5.3
Hav
e th
e bi
ophy
sica
l com
pone
nts
of th
e en
viro
nmen
t lik
ely
to b
e aff
ecte
d by
the
proj
ect b
een
iden
tified
and
des
crib
ed s
uffici
ently
for t
he p
redi
ctio
n of
impa
cts?
5.3.
1 Cl
imat
e (w
ind,
pre
cipi
tatio
n, te
mpe
ratu
re, e
vapo
ratio
n, e
tc.)
5.3.
2 G
eolo
gy (r
ock
type
, str
uctu
re, g
eoch
emis
try,
etc
.)5.
3.3
Soils
(agr
icul
tura
l and
reha
bilit
atio
n po
tent
ial)
5.3.
4 To
pogr
aphy
(slo
pes,
sig
ht li
nes)
5.3.
5 Su
rfac
e hy
drol
ogy
(floo
d lin
es, r
unoff
, flow
s, s
uppl
y, u
sers
, w
etla
nds,
dam
s, la
kes)
5.3.
6 G
roun
dwat
er (a
quife
rs, y
ield
s, p
erm
eabi
lity,
use
rs, g
radi
ents
, etc
.)5.
3.7
Hyd
roch
emis
try
(org
anic
, ino
rgan
ic, p
hysi
cal)
5.3.
8 A
ir qu
ality
(am
bien
t and
sea
sona
l)5.
3.9
Flor
a (v
eget
atio
n ty
pes,
div
ersi
ty, e
ndem
ic, e
ndan
gere
d, a
lien
and
inva
sive
spe
cies
)5.
3.10
Ter
rest
rial f
auna
(pop
ulat
ions
, div
ersi
ty, e
ndem
ic, e
ndan
gere
d,
alie
n an
d in
vasi
ve s
peci
es)
5.3.
11
Aqu
atic
eco
logy
(pop
ulat
ions
, div
ersi
ty, e
ndem
ic, e
ndan
gere
d,
alie
n an
d in
vasi
ve s
peci
es)
Guidelines for environmental appraisal at the DBSA (Version 1.0)Page 47
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evan
t?(Y
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o)Ju
dgem
ent
(C/A
/I)Co
mm
ents
5.4
Hav
e th
e so
cial
com
pone
nts
of th
e en
viro
nmen
t lik
ely
to b
e aff
ecte
d by
th
e pr
ojec
t bee
n id
entifi
ed a
nd d
escr
ibed
suffi
cien
tly fo
r the
pre
dict
ion
of
impa
cts?
5.4.
1 So
cial
str
uctu
re o
f loc
al c
omm
unity
5.4.
2 D
emog
raph
ics
5.4.
3 Sk
ills
5.4.
4 Em
ploy
men
t5.
4.5
Com
mun
ity fa
cilit
ies
and
serv
ices
5.4.
6 A
men
ities
5.4.
7 Se
ttle
men
t pat
tern
s5.
4.8
Aes
thet
ics
(vis
ual,
nois
e, o
dour
, sen
se o
f pla
ce, a
ir qu
ality
, qua
lity
of li
fe, e
tc.)
5.5
Hav
e th
e cu
ltura
l com
pone
nts
of th
e en
viro
nmen
t lik
ely
to b
e aff
ecte
d by
th
e pr
ojec
t bee
n id
entifi
ed a
nd d
escr
ibed
suffi
cien
tly fo
r the
pre
dict
ion
of
impa
cts?
5.5.
1 Si
tes
of s
pirit
ual a
nd/o
r rel
igio
us s
igni
fican
ce5.
5.2
Site
s of
cul
tura
l sig
nific
ance
5.5.
3 Si
tes
of h
isto
rical
sig
nific
ance
5.5.
4 A
rcha
eolo
gica
l site
s5.
6 H
ave
the
econ
omic
com
pone
nts
of th
e en
viro
nmen
t lik
ely
to b
e aff
ecte
d by
the
proj
ect b
een
iden
tified
and
des
crib
ed s
uffici
ently
for t
he p
redi
ctio
n of
impa
cts?
5.6.
1 Lo
cal,
regi
onal
and
nat
iona
l eco
nom
ic in
dica
tors
5.6.
2 M
ultip
lier e
ffec
t5.
6.3
Forw
ard
and
back
war
d lin
kage
s5.
6.4
Loca
l spe
ndin
g5.
6.5
Sect
oral
str
engt
heni
ng5.
6.6
Impo
rt a
nd e
xpor
t pot
entia
l5.
6.7
Tax
base
and
reve
nue
gene
ratio
n5.
6.8
Reso
urce
eco
nom
ics
5.6.
9 Co
st-b
enefi
t ana
lysi
s5.
7 H
ave
the
auth
ors
of th
e EI
A re
port
ade
quat
ely
cons
ulte
d th
e la
test
lit
erat
ure
and/
or u
npub
lishe
d re
port
s an
d/or
dat
a re
leva
nt to
the
stud
y,
and
cite
d th
eir s
ourc
es?
5.8
Hav
e th
e sp
ecia
list s
tudi
es b
een
peer
-rev
iew
ed?
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evan
t?(Y
es/N
o)Ju
dgem
ent
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/I)Co
mm
ents
6.
Des
crip
tion
of i
mpa
cts
Impa
ct id
enti
ficat
ion
6.1
Hav
e di
rect
and
indi
rect
/sec
onda
ry e
ffec
ts o
f con
stru
ctio
n, o
pera
tion
and,
w
here
rele
vant
, aft
er-u
se o
r dec
omm
issi
onin
g of
the
proj
ect b
een
clea
rly
expl
aine
d (in
clud
ing
both
pos
itive
and
neg
ativ
e eff
ects
)?6.
2 H
ave
the
abov
e ty
pes
of im
pact
s be
en in
vest
igat
ed in
so
far a
s th
ey a
ffec
t th
e fo
llow
ing:
6.2.
1 A
ir qu
ality
6.2.
2 Su
rfac
e w
ater
6.2.
3 G
roun
d w
ater
6.2.
4 So
ils6.
2.5
Noi
se6.
2.6
Land
scap
e6.
2.7
Vege
tatio
n6.
2.8
Terr
estr
ial e
colo
gy a
nd b
iodi
vers
ity6.
2.9
Aqu
atic
eco
logy
6.2.
10 H
isto
ric a
nd c
ultu
ral h
erita
ge6.
2.11
Lan
d us
e6.
2.12
Peo
ple
and
com
mun
ities
6.2.
13 S
ense
of p
lace
6.2.
14 T
rans
port
atio
n an
d tr
affic
6.2.
15 A
nei
ghbo
urin
g co
untr
y (t
rans
-bou
ndar
y im
pact
s)6.
2.16
Loc
al, r
egio
nal a
nd n
atio
nal e
cono
mic
indi
cato
rs6.
3 Is
the
inve
stig
atio
n of
eac
h ty
pe o
f im
pact
app
ropr
iate
to it
s im
port
ance
fo
r the
dec
isio
n, a
void
ing
unne
cess
ary
info
rmat
ion
and
conc
entr
atin
g m
ainl
y on
the
5 ke
y is
sues
?6.
4 A
re c
umul
ativ
e im
pact
s co
nsid
ered
?6.
5 H
as c
onsi
dera
tion
been
giv
en to
impa
cts
that
mig
ht a
rise
from
non
-st
anda
rd o
pera
ting
cond
ition
s (i.
e. e
quip
men
t fai
lure
or u
nusu
al
envi
ronm
enta
l con
ditio
ns s
uch
as fl
oodi
ng),
acci
dent
s an
d em
erge
ncie
s (i.
e. ri
sk a
sses
smen
t)?
Mag
nitu
de o
f im
pact
s6.
6 A
re im
pact
s de
scrib
ed in
term
s of
the
natu
re a
nd m
agni
tude
of t
he c
hang
e oc
curr
ing
and
the
natu
re (l
ocat
ion,
num
ber,
valu
e, s
ensi
tivity
) of t
he
affec
ted
rece
ptor
s?6.
7 H
as th
e tim
esca
le o
ver w
hich
the
effec
ts w
ill o
ccur
bee
n pr
edic
ted
such
th
at it
is c
lear
whe
ther
impa
cts
are
shor
t, m
ediu
m o
r lon
g te
rm, t
empo
rary
or
per
man
ent,
reve
rsib
le o
r irr
ever
sibl
e?
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6.8
Whe
re p
ossi
ble,
hav
e pr
edic
tions
of i
mpa
cts
been
exp
ress
ed in
qu
antit
ativ
e te
rms?
Oth
erw
ise,
hav
e qu
alita
tive
desc
riptio
ns b
een
defin
ed?
6.9
Whe
re q
uant
itativ
e pr
edic
tions
hav
e be
en p
rovi
ded
is th
e le
vel o
f un
cert
aint
y at
tach
ed to
the
resu
lts d
escr
ibed
?D
ata
and
met
hods
6.10
Hav
e th
e m
etho
ds to
pre
dict
the
natu
re, s
ize
and
scal
e of
impa
cts
been
de
scrib
ed a
nd a
re th
ey a
ppro
pria
te to
the
impo
rtan
ce o
f eac
h pr
ojec
ted
impa
ct?
6.11
Hav
e th
e im
pact
s of
the
envi
ronm
ent o
n th
e co
nstr
uctio
n an
d op
erat
ion
of
the
proj
ect b
een
cons
ider
ed?
Eval
uati
on o
f im
pact
sig
nific
ance
6.12
Doe
s th
e in
form
atio
n in
clud
e a
clea
r ind
icat
ion
of w
hich
impa
cts
may
be
sign
ifica
nt a
nd w
hich
may
not
?6.
13 H
as th
e si
gnifi
canc
e of
eff
ects
bee
n di
scus
sed
taki
ng a
ccou
nt o
f ap
prop
riate
nat
iona
l and
inte
rnat
iona
l sta
ndar
ds o
r nor
ms,
whe
re th
ese
are
avai
labl
e?6.
14 W
here
ther
e ar
e no
gen
eral
ly a
ccep
ted
stan
dard
s or
crit
eria
for t
he
eval
uatio
n of
sig
nific
ance
, is
a cl
ear d
istin
ctio
n m
ade
betw
een
fact
, as
sum
ptio
n an
d pr
ofes
sion
al ju
dgem
ent?
6.15
Hav
e th
e m
agni
tude
, loc
atio
n an
d du
ratio
n of
the
impa
ct b
een
disc
usse
d in
the
cont
ext o
f the
val
ue, s
ensi
tivity
and
rarit
y of
the
reso
urce
or
envi
ronm
ent?
7.
Mit
igat
ion
Des
crip
tion
of m
itig
atio
n m
easu
res
(in E
IA)
7.1
Has
the
miti
gatio
n of
neg
ativ
e im
pact
s be
en c
onsi
dere
d an
d, w
here
fe
asib
le, h
ave
spec
ific
mea
sure
s be
en p
ropo
sed
to a
ddre
ss e
ach
impa
ct?
7.2
Whe
re m
itiga
ting
mea
sure
s ar
e pr
opos
ed, h
as th
e si
gnifi
canc
e of
any
im
pact
rem
aini
ng a
fter
miti
gatio
n be
en d
escr
ibed
?7.
3 W
here
app
ropr
iate
, do
miti
gatio
n m
etho
ds c
onsi
dere
d in
clud
e m
odifi
catio
n of
pro
ject
des
ign,
con
stru
ctio
n an
d op
erat
ion,
the
repl
acem
ent o
f fac
ilitie
s/re
sour
ces,
and
the
crea
tion
of n
ew re
sour
ces?
7.4
Is it
cle
ar to
wha
t ext
ent t
he m
itiga
tion
met
hods
are
like
ly to
be
effec
tive?
7.5
Has
the
EA re
port
cle
arly
exp
lain
ed w
hat t
he c
osts
of m
itiga
tion
are
likel
y to
be,
and
com
pare
d th
ese
to th
e be
nefit
s (in
clud
ing
the
cost
s of
non
-m
itiga
tion)
?
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Com
mit
men
t to
mit
igat
ion
7.6
Hav
e de
tails
of h
ow th
e m
itiga
tion
will
be
impl
emen
ted
and
func
tion
over
th
e tim
e sp
an fo
r whi
ch th
ey a
re n
eces
sary
bee
n pr
esen
ted,
i.e.
in a
n EM
P?M
onit
orin
g pr
opos
als
7.7
Has
the
EIA
pro
pose
d pr
actic
al m
onito
ring
arra
ngem
ents
to c
heck
the
envi
ronm
enta
l im
pact
s re
sulti
ng fr
om th
e im
plem
enta
tion
of th
e pr
ojec
t an
d th
eir c
onfo
rmity
with
the
pred
ictio
ns m
ade?
7.8
Has
the
EIA
pro
pose
d Li
mits
of A
ccep
tabl
e Ch
ange
that
the
deve
lope
r can
us
e to
trac
k im
pact
s an
d tr
igge
r man
agem
ent i
nter
vent
ion?
7.9
Doe
s th
e sc
ale
of a
ny p
ropo
sed
mon
itorin
g ar
rang
emen
ts c
orre
spon
d to
th
e po
tent
ial s
cale
and
sig
nific
ance
of d
evia
tions
from
exp
ecte
d im
pact
s?En
viro
nmen
tal e
ffec
ts o
f mit
igat
ion
7.10
Hav
e an
y ad
vers
e en
viro
nmen
tal e
ffec
ts o
f miti
gatio
n m
easu
res
been
in
vest
igat
ed a
nd d
escr
ibed
?7.
11 H
as th
e po
tent
ial f
or c
onfli
ct b
etw
een
the
bene
fits
of m
itiga
ting
mea
sure
s an
d th
eir a
dver
se im
pact
s be
en c
onsi
dere
d?8.
N
on-t
echn
ical
sum
mar
y8.
1 Is
ther
e a
non-
tech
nica
l sum
mar
y th
at w
ill e
asily
be
unde
rsto
od b
y a
layp
erso
n?8.
2 D
oes
the
sum
mar
y co
ntai
n a
brie
f but
con
cise
des
crip
tion
of th
e pr
ojec
t an
d th
e en
viro
nmen
t, a
n ac
coun
t of t
he m
ain
issu
es a
nd m
itiga
tion
mea
sure
s to
be
unde
rtak
en, a
nd a
des
crip
tion
of a
ny re
mai
ning
or r
esid
ual
impa
cts?
8.3
Doe
s th
e su
mm
ary
incl
ude
a br
ief e
xpla
natio
n of
the
over
all a
ppro
ach
to
the
asse
ssm
ent?
8.4
Doe
s th
e su
mm
ary
prov
ide
an in
dica
tion
of th
e co
nfide
nce
that
can
be
plac
ed in
the
resu
lts?
8.5
Doe
s th
e su
mm
ary
indi
cate
whe
ther
the
proj
ect i
s or
is n
ot
envi
ronm
enta
lly a
ccep
tabl
e?9.
G
ener
al a
ppro
ach
Org
anis
atio
n of
the
info
rmat
ion
9.1
Is th
e in
form
atio
n lo
gica
lly a
rran
ged
in s
ectio
ns?
9.2
Is th
e lo
catio
n of
the
info
rmat
ion
iden
tified
in a
n in
dex
or ta
ble
of
cont
ents
?9.
3 W
hen
info
rmat
ion
from
ext
erna
l sou
rces
has
bee
n in
trod
uced
, has
a fu
ll re
fere
nce
to th
e so
urce
bee
n in
clud
ed?
9.4
Doe
s th
e re
port
or a
ppen
dice
s co
ntai
n th
e te
rms
of re
fere
nce
for t
he E
IA?
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9.5
Are
the
cred
entia
ls o
f the
repo
rt a
utho
rs a
nd s
peci
alis
ts p
rese
nted
, with
a
clea
r ind
icat
ion
of th
eir r
espe
ctiv
e co
ntrib
utio
ns?
Pre
sent
atio
n of
the
info
rmat
ion
9.6
Has
info
rmat
ion
and
anal
ysis
bee
n off
ered
to s
uppo
rt a
ll co
nclu
sion
s dr
awn?
9.7
Has
info
rmat
ion
and
anal
ysis
bee
n pr
esen
ted
so a
s to
be
com
preh
ensi
ble
to th
e no
n-sp
ecia
list,
usi
ng m
aps,
tabl
es a
nd g
raph
ical
mat
eria
l as
appr
opria
te?
9.8
Are
the
map
s at
an
appr
opria
te s
cale
and
sho
w c
oord
inat
es, n
orth
sig
n,
cont
ours
, dra
inag
e, s
ettle
men
t, la
ndm
arks
, adm
inis
trat
ive
boun
darie
s,
etc.
in re
latio
n to
the
prop
osed
pro
ject
site
?9.
9 H
as s
uper
fluou
s in
form
atio
n (i.
e. in
form
atio
n no
t nee
ded
for t
he d
ecis
ion)
be
en a
void
ed?
9.10
Hav
e pr
omin
ence
and
em
phas
is b
een
give
n to
sev
ere
adve
rse
impa
cts,
to
subs
tant
ial e
nviro
nmen
tal b
enefi
ts, a
nd to
con
trov
ersi
al is
sues
?9.
11 Is
the
info
rmat
ion
obje
ctiv
e?
9.12
Are
all
the
spec
ialis
t stu
dies
and
app
endi
ces
pres
ent?
Gen
eral
com
men
ts
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Appendix 8: Terms of reference for consultants
Sometimes an analyst may be requested to draw up a terms of reference for external consultants, for example to review documentation. The following format is suggested:
BackgroundIntroduce the nature, its history, how it fits into the overall context of the DBSA’s mandate, and its broad purpose.
AssumptionsSet out the critical issues that form the basis of the terms of reference, which are assumed to be in place and are a prerequisite for the task.
ObjectivesOutline the purposes of the task and what it is expected to achieve.
OutputsState the deliverables that will be required.
Proposed activitiesOutline the methodologies that will be used to achieve the outcomes.
Project managementNote who will manage the project and how this will be done.
Resource requirementsDescribe the types of specialists or human resources required and their experience, as well as any other resources or materials that may be needed to complete the task.
Expected timeframe and reporting requirementsNote what deliverables are expected and the deadlines for their delivery.
Proposed budgetOutline the costs of the tasks, the overall cost and the cash flows.
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Appendix 9: Sensitive geographic areas and environmental sites
1. Geographic areas (in terms of South African EIA regulations)
An area protected by any legislation or identified by any policy or plan for the conservation zof biological diversity An area protected by any legislation or identified by any policy or plan for the conservation zof water resources An area protected by any legislation or identified by any policy or plan for the conservation zof landscape or geological features An area or structure protected by any legislation or identified by any policy or plan for the zconservation of archaeological, paleontological, architectural or cultural sitesThe core areas of biosphere reserves z An area designated by the Republic of South Africa in terms of any international agreement, ztreaty or convention to which it is a party
2. Environmental sites
Coral reefs zMangrove swamps zSmall islands zTropical rain forests zAreas with erosion-prone soils, e.g. mountain slopes zAreas prone to desertification, e.g. arid and semi-arid zones zProtected areas zWetlands of national or international importance zAreas that harbour endemic, vulnerable, protected and/or endangered species zAreas of unique scenery zAreas of particular scientific interest zAreas of particular historical or archaeological interest zAreas of importance to threatened ethnic groups zAreas of cultural importance z
Source: Department of Water Affairs and Forestry (2004) Intent to identify under Section 24(2) of the National Environmental Management Act, 1998 (Act no. 107 of 1998) as amended: The geographical areas based on environmental attributes in which specified activities may not commence without environmental authorisation from the competent authority, as well as geographical areas in which specified activities may be excluded from authorisation by the competent authority, and activities that may not commence without environmental authorisation from the competent authority. Government Gazette, 25 June 2004, No. 2650331 pp.31-41. Accessed at: http://www.dwaf.gov.za/dir_ws/waterpolicy/vdFileLoad/file.asp?ID=109 – date accessed: 20 Feb 2010
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Appendix 10: Environmental requirements for financial intermediaries
1. When a financial intermediary accesses funding from the DBSA, it is required to ensure that the DBSA’s environmental policy, procedures and guidelines are adhered to and that national environmental legislative and regulatory requirements, including public participation and consultation and disclosure requirements are complied with.
2. As subprojects financed through financial intermediaries may result in adverse environmental and/or social changes, any such subprojects must be subject to the same procedures as those projects supported directly by the DBSA.
3. The financial intermediary must screen the proposed subprojects and categorise each one in line with procedures outlined in this report (see section 3.6).
4. Before approving a subproject, the financial intermediary shall verify that appropriate environmental assessment studies have been carried out and the necessary approvals obtained from the relevant authorities. The requirements for environmental assessment on subprojects are the same as for those projects directly financed by the DBSA (see sections 3.6 and 4.2).
5. Further, the financial intermediary shall ensure that sub-borrowers undertake public consultations for subprojects in Category 1. For subprojects in Category 2, the financial intermediary may determine that certain special issues may require the sub-borrower to consult with potentially affected stakeholders. In such cases, the sub-borrower shall proceed with the consultations and document the findings. The findings of these consultations will be subject to a periodic review, as determined in the monitoring requirements of the credit line facility.
6. As is required for DBSA-financed projects, during the project implementation and supervision phase, the financial intermediary shall verify that the sub-borrower implements and monitors the EMP, including requirements established in the environmental authorisations issued for the subproject for Categories 1 and 2. Compliance in this regard will be assessed during a review of the credit line facility and the financial intermediary is required to produce objective evidence to determine the level of compliance with this requirement.
7. Whenever non-compliance with the requirements of the financial intermediary’s own environmental policy, procedures, EMP or, where applicable, the environmental authorisation on subprojects in Categories 1 and 2 is noted, the financial intermediary shall review its environmental risk assessment, management policy and procedural framework. For subprojects currently under implementation, the financial intermediary requirements before the environmental and social management plan (ESMP)/EMP with the sub-borrower (Category 1 and 2).
8. The financial intermediary shall submit to the relevant environmental analyst or specialist periodic reports on the implementation of its environmental risk assessment and management procedures, and the overall environmental performance of its investment portfolio under the credit line facility.
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9. The environmental analyst on the project team, together with the relevant environmental specialist from the Advisory Unit, shall review the reports and offer advice accordingly. The results of the review shall be discussed with the financial intermediary and, where necessary, the DBSA may facilitate the implementation of recommendations to address identified risks or gaps.
Tables
Table 1: Qualitative measures of magnitudeTable 2: Qualitative measures of probabilityTable 3: Qualitative risk assessment matrix Table 4: Summary risk assessment of a project Table 5: Application of the loan risk spread Table 6: Summary risk assessment of a programme
Abbreviations
BATNEEC best available technology not entailing excessive costBEO best environmental optionCoP Community of PracticeDBSA Development Bank of Southern Africa (Pty) LtdEIA environmental impact assessmentEMP environmental management planESMP environmental and social management planEMS environmental management systemIEM integrated environmental managementISO International Organisation for StandardisationNEMA National Environmental Management ActPCB polychlorinated biphenylSADC Southern African Development CommunitySANS South African National Standard
Terms and definitions
The list below provides the definition of several technical terms used in this document. Note that some generic terms may have a more specific application within the DBSA.
Environment The natural surroundings within which an organisation operates, including air, water, land, natural resources, flora, fauna, humans and their interrelations
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Environmental appraisal Process followed to integrate the consideration of environmental sustainability issues into the overall appraisal of DBSA-supported programmes and projects
Environmental aspect Element of DBSA-supported programmes or projects that interact with the environment
Environmental due diligence Process or procedure for the identification, gathering and evaluation of information on the environmental aspects, impact and risks of DBSA-supported programmes and projects, in order to inform the decision-making process
Environmental impact Any change to the environment, whether adverse or positive, associated with DBSA-supported programmes or projects
Environmental management A document or plan that identifies the environmental benefits plan and risks of a project and reflects how proposed mitigation
measures will be implemented and managed throughout the lifecycle of the project; it includes the following:
Definition of mitigation measures �Actions required for each measure, where applicable � Implementation arrangements, including responsibilities, �resources and timeframes
Environmental management The part of the overall management system that includes system organisational structure, planning activities, responsibilities,
practices, procedures, processes and resources for developing, implementing, achieving, reviewing and maintaining the environmental policy
Environmental policy Statement by the organisation of its intentions and principles in relation to environmental matters, which provides a framework for action
Environmental risk A measure of the potential threats to the environment posed by certain activities, which combines the probability that events will lead to the degradation of the environment with the magnitude of the consequences (or impact) of that degradation
Financial intermediaries Institutions that have lines of credit with the DBSA
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Infrastructure programme A set of projects designed to address overarching issues of infrastructure delivery, in which individual projects may initially be known and listed upfront; described in general terms; or not described at all.
Interested and affected party Individual or group of people interested, concerned or affected by a proposed development
Project categorisation Process of screening proposed development programmes and projects in terms of their potential environmental risks and benefits
Screening Process of determining whether a proposed project requires an environmental assessment, and the appropriate depth of any such assessment
Sustainable development The integration of social, economic and environmental sustainability factors into the investment decision in order to ensure that DBSA-supported programmes and projects are sustainable
Guidelines for environmental appraisal at the DBSA (Version 1.0)Page 58
Development Planning Division Technical Document Series No. 1
Guidelines for environmental appraisal at the DBSA (Version 1.0)Page 59
Development Planning Division Technical Document Series No. 1