The Usual Suspects: Environmental Management Risks and your project
Updated: Aug 18, 2020
This post was co-authored by André Ras.
In my previous post, I discussed a specific set of environmental management risks which are likely to appear in your project risk register. It is important to note that these risks are not a pure compliance issue. The National Environmental Management Act (1998) states that "sustainable development requires the integration of social, economic and environmental factors in the planning. implementation and evaluation of decisions to ensure that development serves present and future generations". It is therefore important to see these risks in the context of ensuring long term sustainability, while also meeting other objectives, such as return on investment and job creation.
When considering risks for your project risk register, there are some lenses that need to be adopted during the risk identification process:
The risk the environment poses to the project execution, which includes events such as floods, wash aways and public protest.
The risk the project poses to the environment, which includes carbon emissions, loss of species, loss of land use and so forth.
The risk the operational facility has on the environment, which includes events such as leaking into a watercourse, crash and burn of boilers or crashing trucks.
The risk the environment poses to the operational facility, which may include climate change and increased heat waves, flood, increased storm intensity and rising sea levels.
The risk inexperience in environmental management practices poses to the project objectives. This may include extended time for authorizations, rework of specialist studies, non integrated permit applications and so forth.
The consequences of poor adherence to environmental management practices and conditions. This may include contractors not adhering to environmental management plans, public protests, and the triggering of new authorization activities.
To identify the most important project implementation risks related to environmental management, I went through my risk register archives and created a list of the common ones. I then had my colleague André Ras (https://www.linkedin.com/in/andre-ras-a9b89439) and Jaana-Maria van der Merwe (https://www.linkedin.com/in/jaana-maria-van-der-merwe-319538/) to review the list to make sure that I don't speak "engineer", but "environmental manager". Andre did an extensive review of these and presented some practical treatments to some of the risks. Most of the content related to the risks themselves is his work and I thank him for that.
You can use these risks as input to your risk workshops. The following caveats apply:
It is not a complete list of risks and you have to review your specific context to identify other environmental risks. Please don't blame me if your list is not complete.
Some of the risks are applicable to the project development phase of the project and some to the project execution phase, which in turn might be a function of the environmental laws in your country. While developing the risk register during the development phase, it is important to include risks which might realize during project execution and decommissioning. This will give the team the opportunity to Design for the Environment, and reduce and eliminate unnecessary impacts on the environment. An assessment of the residual impact that cannot be designed out - may then be used early on to begin estimating possible offset costs.
Please ensure that the risks in your risk register are aligned to the country laws in which you operate.
Each of the risks are discussed in terms of the (i) short risk name, (ii) a risk event description and (iii) short discussion.
The risks below exclude any issues related to the procurement process for the appointment of suitable environmental managers and companies. The issues (and there are many) related to procurement will be discussed in a later post.
After extensive discussion, Andre and I came up with the following 11 risks:
Risk no 1: Poorly identified protected areas / areas of environmental concern
There is a risk that the project has not complied with environmental regulations in terms of screening.
There is a risk that the project has been inappropriately screened.
Within each municipality, these protected areas ought to be documented and available in a GIS (https://youtu.be/-ZFmAAHBfOU) The environmental specialist ought to even run a title deed search on each property affected by the project and see what restrictions are registered on each property.
The main causes for this type of risk are as follows:
The environmental team has been brought on board late in the development phase and not had the opportunity to do the necessary due diligence.
The environmental team may not be up-to date with contemporary environmental management practices.
The environmental practitioner is a start-up / lowest price tenderer and is still cutting their teeth on your project.
The following link notes that this is now a compulsory regulatory requirement:
Risk no 2: Inadequate public participation processes
There is a risk that the public participation process has not been tailored to the complexity of the project, nor the public’s capacity to participate on specialist subject matter.
There is a risk that the project has been inappropriately shared / communicated to stakeholders.
There is a risk that participation fatigue or distrust during the public participation process may result in poor public participation.
Although the time frames for Interested and Affected Parties (IAP) engagement are stipulated in regulation, these may be considered as minimum time frames. The Department of Environmental Affairs have been known to respond to public complaints on “insufficient time” instructing the proponent to “do whatever is necessary to ensure the IAPs are sufficiently engaged”. If the project is complex and specialist studies are extensive, then take it upon yourself to be generous in your time for participation and convince the project proponent to make resources available to enable all stakeholders to understand the technical matter and the issues potentially affecting them. Getting the social licence to operate early on, may win the project weeks of red-tape in the end.
Sometimes it helps to hold “public open days” where the specialists talk through their studies and answer questions. My colleague Andre Ras (Transnet) said that for the Durban Berth Deepening Project, the EAP did this, with information sessions planned throughout the day, to make provision for shifts and school-traffic schedules.
Risk no 3: Unclear requirements regarding permitting
There is a risk that the project has not complied with environmental regulations in terms of screening.
There is a risk that the project has been inappropriately screened to establish which mediums will be affected and which permits will be required.
There is a risk that the project team has not engaged the authorities appropriately through a Pre-Application Meeting (or a series of meetings for more complex projects) to set up for integrated permitting across organs of state.
Again, these risks stem from organisational or project design where (i) the environmental team has been brought on board late in the development phase of the project, or (ii) the environmental team is not sufficiently experienced with environmental management or that (iii) while the project may have been initiated years ago, the environmental regulatory framework has not been kept up to date. Another reason for this realizing might be that the environmental team was not involved as a key player, supporting decision making for the project.
Risk no 4: Delays in granting of environmental licences and permits
There is a risk that all environmental regulatory obligations (waste licence, water use licence, authorization, discharge permits, other permits, etc) will “not be met in time”.
This is a pure planning issue where the schedule does not include reasonable time frames for the environmental approvals. It usually comes down to a schedule which was developed without the input of a savvy environmental manager or service provider, or they have estimated time frames based on their personal experience without adjusting for the project's unique complexity or simplicity. I have also seen cases where executives mandated time frames which are impossible to achieve.
Risk no 5: Environmental approvals require design changes
There is a risk that authorization conditions issued by the Department of Environmental Affairs may require design changes to take place.
These design changes are commonly based on recommendations made by the specialists who participate during the environmental impact analysis (EIA) process. If the engineering and design team have access to an experienced the Environmental Assessment Practitioner (EAP) and environmental team, and are open to the outputs from an appropriate stakeholder engagement process, these changes will be known internally before the authorities mandate them. The root cause of this is either hubris or inexperience from then engineering team.
It is recommended that the engineering report submitted as part of the application, contain sufficient detail regarding the process followed in refining the preferred option so that layman stakeholders can be made aware of the significant time and cost investment already made in screening alternatives and the environmental benefit of the proposed alternative.
I had a case long ago where a new quay had to be built and it could either have been a caisson or a deck-on-pile design. Caissons are big blocks placed on a prepared sea bed and then filled with sand where deck-on-pile is a series of piles (pillars) drilled into the sea bed, which supports some kind of concrete structure. The environmental approval of the port stipulated the water surface area of the port, which meant that the design should avoid making the water area less.
Risk no 6: Design triggers a listed activity
There is a risk that the new designs will trigger a listed activity, which may require a new application for an environmental impact assessment.
The schedule of activities which require Environmental Authorization are presented in the Listing Notices. The environmental consultant or manager ought to be aware of draft bills or proposed amendments that are being circulated for comment which may materially affect the project. Professional bodies normally keep their members updated on any proposed changes and transitional arrangements often allow projects already underway to complete under the old regulations. The benefit of having an open, transparent, channel of communication with the relevant Authorities cannot be understated.
Risk no 7: Environmental Authorization appeals
There is a risk of appeals to the environmental authorization (or other permits) by aggrieved interested and affected parties.
With a proper stakeholder engagement methodology and engagements that take place early in the project – the stakeholders and their requirements should be well known. The earlier these requirements are known, the earlier appropriate treatment plans may be implemented.
Risk no 8: Non-compliance to Environmental Management Plan
There is a risk that the contractor will not adhere to the requirements of the EMP (spillages, contamination, waste, air emissions hazardous substances), which may cause project standing time.
Although these matters are normally contractually contained and managed, suitable contingency plans should be in place should these risks realize.
Risk no 9: Funder (i.e. World Bank and International Finance Corporation) requirements
There is a risk that additional specialists may be required to comply with all the funder contractual requirements related to environmental management.
There is a risk that the funding agency's environmental management and compliance requirements are underestimated.
This was a significant issue on a project which I worked on. The environmental manager on the project was not experienced in dealing with complex projects, especially when dealing with the funding agency's extensive environmental management and reporting requirements. Additional resources had to be brought in on regular intervals, to ensure that reports were completed and submitted in time. It was a major pain in the life of the project manager. The lessons from this project are as follows:
It is easy to underestimate funding agency's the environmental compliance and reporting requirements if you or your company hasn't dealt with them before. They require specialist studies, additional specialist resources, reviews and the conducting of environmental management plans, regular audit, site visits and extensive reports of a high quality that meet specific funder requirements.
Should this risk realize, issues related to roles and responsibilities between the project owner, engineer, contractors and sub-contractors will most probably arise, together with claims and disputes regarding who needs to pay for the extra work and resources.
This risk may be amplified when there are large differences in competencies and environmental management maturity between the Client, Engineer on the one hand, and inexperienced contractors on the other. It is therefor important to ensure that the contractors have appropriately experienced environmental managers as part of their team.
When tendering for projects which are funded by organisations such as the World Bank and International Finance Corporation, please ensure that appropriate environmental resources are included in then tender human resource planning and costing.
Risk no 10: Cost of biodiversity off-sets
There is a risk that the land required for biodiversity off-sets might be more expensive than budgeted.
This one I got from John Boyle (https://www.linkedin.com/in/john-boyle-61549726/), an Australian project risk management consultant. If the project disturbs a sensitive ecosystem or woodland, the project needs to to buy equivalent land to offset the loss created by the project. Appropriate land is often difficult to find, and therefore more expensive than budgeted.
Risk no 11: Environmental permits not granted
There is a risk that permissions required from the Department of Environmental Affairs (permits, licenses, authorizations) will not be granted.
This is not a risk, but the consequence of actions by the project team. Potential environmental fatal flaws should be identified during the screening process and through early engagement with the relevant authorities. When reviewing the risk treatment strategies (Accept, Avoid, Mitigate, Transfer), avoiding environmental fatal flaws is the easiest route. Avoid trying to build the plant in the middle of the wetland!
In the context of "the usual suspects", the risks related to environmental management may appear to be deceptively simple, and to ignore or see them as compliance will most likely be detrimental in achieving your project's objectives. A lot of the pain related to environmental management can be removed by following the following simple rules:
Know which authorizations need to be in place. If you don't know that they are, use an experienced environmental practitioner to assist.
Allow sufficient time in the project schedule for these authorizations and possible appeals.
Start the processes early and engage with the Department of Environmental Affairs in time regarding the project objectives and authorization requirements.
Ensure that the project designs take environmental requirements into consideration, from the earliest designs onwards.
Have appropriately experienced environmental practitioners as part of the project team during the project development and execution phases, and listen to what they advise regarding requirements and authorizations.
Allow for early engagement with stakeholders to ensure that where possible, stakeholder concerns are either responded to or addressed, earlier rather than later.
SOUTH AFRICA 1998. National Environmental Management Act. 107.
Copyright 2020 Dr. Francois Joubert