Increasing emphasis on environmental compliance
Achieving environmental compliance is a key risk to investment for many projects and is increasingly becoming a prerequisite for both private and public funding. Since 2008 when Sierra Leone set up an overarching regulatory agency for the environment, compliance monitoring of companies has been progressively intensified. Many investors are however unaware of the requirements and costs for environmental compliance, which if not well understood could prove problematic.
Institutional, legal and regulatory framework
The Sierra Leone Environment Protection Agency (EPA-SL) is the principal agency charged with the responsibility of coordinating, monitoring, regulating and supervising environmental impact/mitigation compliance and management. The functions of the EPA-SL are defined in the main governing Act, the Environment Protection Agency Act, 2008 (EPAA, 2008). The Agency grants Environmental Impact Assessment (EIA) licences. Depending on the sectoral area of the investment, the parent Ministry, Department and Agency (MDA) also features to a lesser extent in the licensing process.
The EPAA, 2008 requires most companies (types of companies and requirements are listed in the Act) to obtain an EIA licence before the start of operations. There are also several other pertinent laws and regulations affecting the environment, depending on the sector in which the investment is made that should be taken into consideration. Some major companies that need to satisfy environmental requirements of major lending institutions do so in addition to the local regulatory requirements.
Companies usually contract their Environmental and Social Impact Assessment (ESIA) studies to one of several local companies recognised by the EPA-SL. The process involves screening, scoping, and full study stages. A groundtruthing process usually forms part of the screening stage, on completion of which approval to proceed with the full ESIA study is given by EPA-SL, along with specific guidelines on issues to be addressed during the study. This is followed by a scoping stage before embarking on the main study which may comprise investigations of several physical, biological and social aspects of the environment. The baseline situation is ascertained and impacts and mitigation measures recorded. The final report may comprise several individual sub reports which may include an Environmental and Social Impact Assessment (ESIA) report and an Environmental and Social Management Plan (ESMP). The ESMP may include several sub-plans some of which are an Environmental Health and Safety Plan, a Waste Management Plan, an Emergency Response And Contingency Plan, a Public Consultation and Disclosure Plan, Community Development Action Plan and a Closure Plan. Other sub plans may also be deemed necessary. An EIA licence is issued to a company after the EPA-SL certifies that the study has met its standards. Public disclosure of the ESIA report at several locations is a requirement by the EPA-SL.
Achieving environmental compliance
The requirement to obtain an EIA license is rigidly enforced for some sectors with major environmental impacts like mining. When the EIA license is granted, companies are obligated to produce quarterly and annual monitoring reports which are reviewed by EPA-SL. In parallel EPA-SL also carries out periodic audits and requires companies to take remedial action depending on their findings. The audits are usually based on ascertaining how well the project proponent adheres to the environmental and social management and monitoring measures stated in the ESMP document. There are penalties for non compliance. The capacity of the EPA-SL has improved considerably since its inception in 2008.
The cost to industry of compliance
The views of investors on environmental compliance costs are mixed. Contracting a local company to carry out ESIA studies would obviously cost money but considerably more money could be spent on an EIA license which must be renewed every year. Other costs to be factored into carrying out the ESIA study include groundtruthing fees and the conduct of Public Consultation and Disclosure Workshops.
The EIA licence fee is determined based on a matrix system that takes into consideration the environmental footprint of the project and various physical, biological and social impacts wrought by the project’s implementation. The fee also has a monitoring component which amounts to 20% of the calculated fee. There have been concerns from some investors that the fee does not take into consideration the sometimes unduly long time taken for some MDAs to approve projects and for the projects to get started, resulting in what they consider high fees at the start of the project. This matter is being considered by EPA-SL. It should be noted that for major projects affecting the environment like mining a financial assurance payment before the start of operations is now rigidly enforced.
A Community Development Action Plan (CDAP) is an integral part of the ESIA reports. This is formulated based on the impacts of the project on the surrounding communities and the results of consultations with the affected communities. The plan incorporates several intervention areas including education, health, water etc. The EPA-SL usually requires definite intervention measures and costs to be stated for a defined period-often five years. This is quite apart from any Corporate Social Responsibility measures which might be contemplated by the company but which are not obligatory.
There may be other community related benefits required by legislation in some sectors that need to be additionally considered. The needs of communities are high in Sierra Leone’s socio-economic setting and striking a careful balance between meeting the project-required needs of communities impacted by the project and the wider needs of many deprived communities, to which government facilities are unavailable often becomes a challenge.
There have been considerable improvements in Environmental compliance for various investments in Sierra Leone over the past decade. It behoves investors to fully understand the requirements and pursue compliance to avoid future problems. It should be noted that with many investments especially in the provinces a preponderant amount of the problems faced are social. It is therefore prudent for companies to be aware of not only the environmental, but also the social concerns of projects and address them.
Andrew Keili is an Executive Director of Cemmats, a multidisciplinary engineering and environmental consultancy in Sierra Leone-email firstname.lastname@example.org