guidelines for environmental appraisal at the dbsa

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)


Suggested citation

Development Planning Division. 2009. Guidelines for environmental appraisal at the DBSA. Technical Document Series No.1, DBSA: Midrand.

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Development Planning DivisionDevelopment Bank of Southern AfricaPO Box 1234Halfway House 1685South Africa

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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



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



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



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



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.



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



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.



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.



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



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.



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.



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.



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,



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:



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



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



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.



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



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.



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.



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.



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



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



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.



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;



(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.



(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.



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



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



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.



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



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



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.



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



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



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.)



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



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



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.



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.



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?



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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?



Rel

evan

t?(Y

es/N

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

?



Rel

evan

t?(Y

es/N

o)Ju

dgem

ent

(C/A

/I)Co

mm

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)



Rel

evan

t?(Y

es/N

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?



Rel

evan

t?(Y

es/N

o)Ju

dgem

ent

(C/A

/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?



Rel

evan

t?(Y

es/N

o)Ju

dgem

ent

(C/A

/I)Co

mm

ents

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)

?



Rel

evan

t?(Y

es/N

o)Ju

dgem

ent

(C/A

/I)Co

mm

ents

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?



Rel

evan

t?(Y

es/N

o)Ju

dgem

ent

(C/A

/I)Co

mm

ents

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



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.



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



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.



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



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



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

Documents