DDP
United Nations Environment Programme
Dams & Development Project
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P.O. BoX 30552, Nairobi, Kenya
Tel: +254 20 623891 Fax: +254 20 624763 ddpinfo@unep-dams.org
http://www.unep-dams.org
DDP

DDP

DDP Workshop on Ensuring Compliance, June 15–16 2004
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This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.

Table of Contents
FOREWORD
OUTCOME OF THE WORKSHOP
PROCEEDINGS
Introduction
Background
Organisation/Structure of the meeting
Participation
Opening Session
Session 1: Ensuring Compliance: An Overview
Session 2: Tools Available/Needed for Ensuring Compliance
Session 3: Stakeholder Roles and Responsibilities in Ensuring Compliance
Session 4: Presentation of Working Groups Reports
Session 5: Formulation of recommendations to the DD Forum and national dialogues
Session 6: Closing Session
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5
2
3
Annexes
1 Agenda
List of Participants
Background paper
Presentation by the keynote speaker
Report of the breakout groups
Working Group 1:
Working Group 2:
Working Group 3:
What is the role of dispute mechanisms in ensuring compliance?
What is the role of external compliance bodies?
What information should be made available to ensure compliance (who, when, where, how, quality)?
Working Group 4: Securing resources to ensure compliance
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42
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25
30
35
44
45
10
11
13
15
19
22
10
10
8
9
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8
4
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This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.
3

DDP Workshop on Ensuring Compliance, June 15–16 2004
These proceedings reflect the background, goal, programme, discussions and outcomes of the Workshop on Ensuring Compliance convened by UNEP-DDP on
June 15-16, at UNEP headquarters in Nairobi, Kenya.
DDP Secretariat has elaborated them on the basis of hand and tape recordings of the presentations and discussions.
The contents describe the general sense of the discussions, the main issues addressed and the range of opinions expressed. Therefore, while they follow the general flow of discussions, they do not attempt to reflect them precisely in the order that the opinions were issued.
The main outcomes of the meeting in terms of recommendations and issues to be dealt with are condensed in the executive summary. Recommendations reflect statements that have been identified as such from the sessions and have got support from the participants or at least no substantial objections were raised during their consideration in the final plenary session devoted to draw the conclusions from the meeting. Issues to be dealt with reflect substantive statements also emerging from sessions that had not reached such a generalised agreement. Due to inherent sensitivities associate with both categories of statements, the outcome of the workshop has been submitted to the consideration of participants before processing the final elaboration included in these proceedings.
Both recommendations and issues to be addressed, either emerging from plenary or working group sessions condense the set of substantive topics and issues that need to be dealt with at the country level when considering the integration of this strategic priority into the national policy and regulatory framework. In this regard the UNEP-DDP workshop on Ensuring
Compliance constitutes a relevant step forward in the dams and development debate aiming to promote improved decision making on dams and their alternatives.
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This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.

Outcome of the Workshop
On June 15 and 16 2004, the UNEP Dams and
Development Project (UNEP-DDP) convened a workshop on the sixth strategic priority identified by the
World Commission on Dams: ensuring compliance. The sessions of the workshop were organized around broad themes recommended by members of the Dams and
Development Forum (DD Forum) during their second meeting on September 25-26 2003 in Geneva,
Switzerland.
1
The output of the workshop is a set of recommendations and issues to be dealt with that reflect principles, criteria and strategies concerning the improvement of implementation of compliance mechanisms at the national level 2 . The goal is to enable their discussion in the context of national and regional multi-stakeholder dialogues and workshops, with a view to influence policies and procedures aiming to improve decision making on dams and alternatives. The text adopted for the recommendations and issues to be dealt with, either emerging from plenary sessions or from working group sessions as indicated below, are deliberately broad and general so that the various governments can consider them within their own specific policy contexts.
Issues discussed during the workshop included the roles and responsibilities of the various stakeholders involved in ensuring compliance, constraints on compliance systems and barriers for their implementation, tools for ensuring compliance and their relative strengths and weaknesses.
Among the roles and responsibilities identified were those at government level establishing compliance systems and meeting certain conditions at the planning stage, of donors in policing the implementation of the projects funded, the self-regulatory role of industry, the role of professional societies in disseminating best practices, the role of civil society in integrating third parties and the watchdog role of NGOs. Identified constraints on compliance systems included the costs in terms of both time and money; uneven power and capacity in terms of balance among the major actors involved; a lack of well-defined environmental and social standards; the effectiveness of compliance tools; and lack of access to information. The tools discussed involved appropriate regulatory frameworks, standards and guidelines, regulatory bodies, independent panels, monitoring systems, incentives and deterrents. Weaknesses discussed included the lack of capacity for implementation, governmental political will for enforcing license provisions, open access to information and public participation in certification programs.
Discussions from plenary sessions and working groups identified the set of recommendations and issues to be dealt with presented below that constitute a set of relevant principles, strategies, criteria and topics to be considered at the national level when strengthening or integrating ensuring compliance issues into regulatory frameworks to improve decision making, planning and management of dams and their alternatives.
1
2
UNEP-DDP, 2004. Second Dams and Development Forum Meeting: Proceedings. Nairobi.
The final set of recommendations and issues to be dealt reflected in this section has been elaborated by DDP Secretariat on the basis of a consultative process held during and after the workshop meetings. At the meeting, UNEP-DDP secretariat staff identified substantive issues that emerged as potential recommendations from the discussions at the various plenary sessions of the workshop. During the final plenary session, the statements were displayed as a rough draft and flagged for discussion by workshop participants. Based on the comments of participants and the level of agreement or no objection reached, they were categorised as recommendations or issues to be dealt with. Following the conclusion of the workshop, the UNEP-DDP secretariat refined and circulated them to workshop participants for final comments. These have been taken into account in the elaboration of this final document.
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.
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DDP Workshop on Ensuring Compliance, June 15–16 2004
Tools Available/Needed for Ensuring Compliance
Key issues to be dealt with at national level:
• The need to acquire a regulatory framework based on an agreed set of criteria.
• The need for appropriate standards and regulations at national /local level that may be complemented by international standards.
• Distinguishing between the different levels of compliance i.e. compliance between governments and developers, financiers and government in order to clarify specific contexts better.
• The importance of having an external audit/review of existing compliance mechanisms.
• Careful consideration of the links between the privatisation of public undertakings and access to information.
• Addressing communication gaps among the different stakeholders and interested parties
• The public disclosure of power purchase agreements as a means to ensuring transparency and accountability in dam projects
The following recommendations emerged from plenary discussions a.
Development of clear and enforceable social and environmental standards relating to dams.
b.
Inclusion of clauses from international conventions in contracts as a gauge to measure compliance (e.g.
the Aarhus convention).
c.
Use of independent witness bodies integrated by diverse organisations including civil society; d.
Use of environmental monitoring committees, such as the South African case study.
e.
Certification systems such as the ISO 14001 can play a role and could be promoted.
f.
Establishment of a joint bilateral independent compliance mechanism in the case of either joint, bilateral projects or projects with transboundary effects.
g.
Inclusion of provisions for penalties, including holdbacks to be paid in cases of non-compliance with respect to environmental obligations by contractors that could be built into the contracts.
Stakeholder Roles and Responsibilities in Ensuring
Compliance
Issues
❍ The streamlining of the roles and responsibilities of different government institutions.
❍ The responsibility of Multi-lateral Development
Banks for ensuring compliance after project loans have been repaid.
❍ The role of NGOs as watchdogs to help enforcing license provisions.
The following recommendations emerged from plenary discussions a) When standards and enforcement capacity is low the onus is on the stakeholders to agree on applicable standards.
b) There is a need for a way of communication to account for local knowledge and also need for legal safeguarding of the Environmental Management
Plan (EMP).
Capacity Building
Participants highlighted that the challenge is in enforcement and capacity for implementation. The need to strengthen capacities was reiterated in the various sessions. During the discussions the following issues and recommendations concerning capacity building emerged:
Key issues to be dealt with at national level:
• The particular need for capacity building of NGO’s and CBO’s regarding monitoring, compliance and enforcement.
• The consideration of compensation for time spent and costs incurred in monitoring bodies.
The following recommendations emerged from plenary discussions:
• To enhance human, financial and technical capacity needs particularly in developing countries to ensure compliance.
• To build capacity among leaders representing and negotiating for the rights of the affected people in the construction of dam infrastructure projects.
Role of dispute resolution mechanisms in ensuring compliance (Working Group 1)
Main issues identified by the group:
• Main role of dispute mechanisms is conflict avoidance and resolution.
• Agreement on potentially contentious social and environmental issues needs to be reached with all stakeholders prior to project implementation.
• Need to establish ground rules based on principles of integrity, impartiality and independence as the
6
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.

Outcome of the Workshop basis to conduct good faith negotiations between parties.
• Need for political good will by the government.
• Prior notification and information sharing in a transparent manner is critical to confidence building among the parties concerned.
• Creation of incentives is necessary in order to enable both parties to reach agreement before third party involvement in the dispute.
• Extralegal measures, for example, publicity campaigns and blacklisting could be used when one of the parties is reluctant to enter into an agreement.
• Need for a clear identification of appropriate mechanisms for ensuring compliance e.g.
government, regulatory bodies and an independent panel of experts.
Role of external compliance bodies (Working Group 2)
Main challenges identified by the group:
• The lack of local standards and deciding what alternative standards to choose.
• Effectiveness of the review panel in terms of time availed by the experts.
• Finding the right people and the right balance
(social, academic, environmental).
• Accountability of the panel. To whom will they be accountable?
• To address the issue of the role of public or private money involvement.
• The legal standing of a commission. How to empower it?
• The legal standing of the environmental action plan.
• International obligations. The role of NGO watchdogs’ organisations.
• Convincing decision makers: improving project’s image, benefiting the private as well as government; risk minimisation; confidence building with financers.
• Establishing the role for less formally established bodies. The role of NGOs.
• Accessibility of the compliance body to the public.
• Financing of the compliance body.
• Capacity building of the compliance body.
• Scope of the compliance body: should it be permanent or project specific?
Information to ensure compliance (Working Group 3)
Five key recommendations:
1.
Need to identify the necessary baseline information and ensure the availability of this information, including project specific issues, international standards and best practices. This type of venue is a good platform for that.
2.
Information needs to be up to date, accessible, timely and understandable in appropriate local languages. This statement includes several issues compressed into one and implies that the situation has to be continuously monitored. The relevant information should be made available in appropriate languages, which could include different forms of communication such as posters or pictures.
3.
Operators and developers should undertake regular monitoring of dam performance and make information publicly available through a verifiable mechanism. This is a long term process leading on from the collection of baseline information to the periodic monitoring by these parties.
4.
The information acquisition process should be widely known, including understanding of who has information and how to go about accessing it.
5.
Consequences of non-compliance, recourse and review mechanisms should be widely known, including consequences of non-compliance as incentives for compliance.
Securing resources to ensure compliance (Working
Group 4)
Key issues identified by the group:
1.
Who is complying and with what and clarifying whether addressing the planning or project level in terms of compliance and the parties that are involved.
2.
Classification of resources (legal, human, financial) to create the capacity and availability of those resources.
3.
Need to identify all stakeholders, either parties to or involved in the compliance process, and their rights, risks and responsibilities
4.
Scale and type of the project, that determine the process and the compliance model that will have to be applied.
5.
Appreciating the national context in terms of processes, capacity for compliance and understanding as well as of legal frameworks.
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.
7

DDP Workshop on Ensuring Compliance, June 15–16 2004
During the first meeting of the Dams and Development
Forum (DD Forum), convened on June 8-9 2002 in
Nairobi, forum members identified four of the World
Commission on Dams (WCD) strategic priorities as key issues to be dealt with in the context of the UNEP Dams and Development Project (UNEP-DDP) global dialogue.
These strategic priorities included comprehensive options assessment, gaining public acceptance, addressing existing dams and ensuring compliance. The proceedings of the first DD Forum meeting reflect the findings of working group discussions indicating concerns and priority topics for further detailed discussion.
3 Based on the recommendations of the UNEP-DDP steering committee during its third meeting, the UNEP-DDP secretariat has already convened workshops on all of these strategic priorities with the exception of gaining public acceptance, which is currently in the process of being organised. In addition, a fifth workshop regarding financing dams and sustainable development was convened in London on April 21-22 2004.
At the second meeting of the DD Forum, convened on
September 25-26 2003 in Geneva and directly following the workshop on comprehensive options assessment, forum members provided further guidance on the goals and issues to be addressed in the remaining workshops.
In recent times, the international debate on dams has taken place in the context of a rapidly evolving understanding of and dynamic approach to development and governance that lays increasing emphasis on transparent and participatory decision-making processes. Legitimacy and accountability are now considered to be integral aspects of decision-making processes that embrace a multistakeholder approach in the adoption of key decisions, made on the basis of full access to the necessary information and a thorough analysis of technical, economic, social and environmental aspects of proposed projects. This paradigm shift that seeks to ensure greater public trust and confidence in decision making processes also calls for comprehensive monitoring programs, evaluation procedures and incentive mechanisms that guarantee compliance with project commitments by all relevant stakeholders, especially in the crucial areas of environmental and social performance.
Compliance emerges then as a crucial element of the dam planning and management decision-making process.
This is recognized by its inclusion as one of the seven strategic priorities recommended by the WCD that constitute the conceptual platform for DDP activities.
The WCD final report and knowledge base are sources where key elements in terms of policies, criteria and guidelines associated with ensuring compliance can be identified for discussion. These are mainly related to regulatory and non-regulatory measures to ensure compliance with applicable regulations, criteria, guidelines and agreements at all critical stages of project planning and implementation.
Regulatory frameworks (laws, policies, criteria, guidelines, standards) play a crucial role in providing the principles, procedures, incentives and sanctions that govern the decision-making processes dealing with the often highly contentious issues related to dam planning and management. The role of government is deemed crucial towards establishing appropriate compliance systems and processes and overcoming barriers that conspire against their successful implementation. To ensure compliance, the broad range of stakeholders involved requires effective enforced or self-regulatory frameworks that define clearly their respective roles, obligations and responsibilities prior to and during the project implementation process.
International organizations have contributed to the development of a comprehensive set of technical, environmental and social guidelines applicable to dam planning and management. Examples of these are the
World Bank safeguard policies, ICOLD and IHA policy guidelines addressing environmental and social issues.
The private sector is also moving into a wider acceptance of compliance and enhanced accountability. In this regard, it is to be noted that the principles of corporate social responsibility (CSR), the “triple bottom line” concept for corporate reporting of economic performance, environmental sustainability and social responsibility, and systems such as the Global Reporting
3
UNEP-DDP, 2002. Proceedings of the First Dams and Development Forum Meeting, Nairobi, 8-9 July 2002. UNEP-DDP Secretariat,
Cape Town.
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This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.

Proceedings
Initiative (GRI) and ISO environment management standards are now widely embraced. Lessons in compliance may be learned from other sectors, such as mining, that also have a significant social and environmental footprint.
Nevertheless, the effectiveness of such regulatory and self regulatory frameworks within and across countries, international organizations and private sector firms remains uneven and hampered by a number of barriers dealing with policy, regulatory, institutional, information, human and financial resources alongside constructions and post-construction management including monitoring, operation and use of existing assets. In order to ensure compliance with criteria and guidelines during project implementation, various mechanisms have been proposed including independent review processes, independent certification, and various types of compliance incentives and sanctions.
This workshop on compliance is a component of the
DDP work program objective of promoting dialogue.
As recommended by Dams and Development Forum members during their second meeting in Geneva,
Switzerland in September 2003, the workshop was convened in conjunction with the workshop on WCD strategic priority three: addressing existing dams.
DD Forum members specified that the objectives of the workshop should be to: a) Critically identify and evaluate different perspectives and measures to ensure compliance and determine the effectiveness of various enforcement mechanisms; b) Provide clarification on the roles and responsibilities of the various stakeholders and the public and private sector in ensuring compliance; c) Link responsibilities for ensuring compliance with the tools for compliance and evaluating the effectiveness of these tools; d) Discuss the institutionalization of regulatory and non-regulatory measures to ensure compliance in the context of national legal frameworks and; e) Identify strategies for closing the gap between aspiration and reality where compliance issues are concerned.
In order to deal with these objectives, the Forum members suggested that discussions at the workshop should focus on the following topics:
• How to ensure a clear allocation of responsibilities among the various actors and ensure transparency in the dealings of each agency?
• What is the role of dispute resolution mechanisms in ensuring compliance?
• What is the role of external compliance bodies?
• What information should be made available to ensure compliance?
• How can governments secure the resources needed to ensure compliance?
UNEP-DDP based the structure of the agenda (see
Annex 1) and the contents of a background paper (see
Annex 3) for the workshop on the recommendations provided by the DD Forum during their second meeting.
Three thematic workshop sessions were planned to cover the following topics: overview of ensuring compliance, tools available or needed, stakeholder roles and responsibilities. In addition, breakout sessions were convened to discuss the four above mentioned topics.
DDP Coordinator opened the workshop with a presentation on the DDP project and the objectives and structure of the workshop. The workshop was chaired by Ms. Joji Carino, a UNEP-DDP steering committee member representing the Tebtebba Foundation, an indigenous people’s organization. Dr. Albert Mumma, a
Senior Lecturer of law specializing in international water law at the University of Nairobi, gave a comprehensive presentation on crucial issues to consider in ensuring compliance (see Annex 4). The discussions following this presentation as well as those emerging from the ensuing plenary sessions are summarized in the following pages.
During the second day of the workshop, participants were divided into four breakout groups to discuss the topics suggested by the DD Forum members mentioned in the preceding section. The reports from the working groups are summarized in Annex 5. After the breakout groups reported their conclusions to the plenary, the final session of the workshop focused on summarising and highlighting the recommendations and key issues to be dealt with and considered by the DD Forum and national dialogues. A rough set of statements emerging from plenary sessions as potential recommendations were identified by the UNEP-DDP Secretariat. These statements received comments from the workshop participants at the final plenary session that determined their consideration as a final output either as a recommendation or an issue to be dealt with depending on the level of consensus or no objection reached during the corresponding plenary discussions. The UNEP-DDP secretariat refined and then circulated the output to workshop participants for final comments which have been incorporated into the outcomes of the workshop.
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.
9

DDP Workshop on Ensuring Compliance, June 15–16 2004
45 participants representing a wide range of stakeholder groups involved in the dams and development debate attended the meeting. The list of participants is included as Annex 2. All stakeholder categories considered by DDP were represented in the meeting with the exception of one. Advocacy NGOs were the group better represented followed by intergovernmental organisations, research and government (policy). The governments of Kenya,
South Africa, Sri Lanka and Turkey were represented at policy level. Multilateral Development Banks (MDBS) were represented by the African Development Bank, the
Asian Development Bank and the World Bank. Twenty eight countries from all regions of the world were represented at the meeting with Africa and Asia being the regions that were better represented.
DDP Coordinator welcomed the participants and provided a brief presentation of the workshop background, goal, topics and objectives. He made an initial brief reference to the WCD process, core values and strategic priorities aimed at those participants that were unaware of them. While stressing that DDP´s activities were based on only the core values and strategic priorities, he made a quick reference to the corresponding
WCD key message and policy principles in order to highlight the key words and concepts underlying the issue of ensuring compliance. These dealt with:
• Meeting all commitments made for the planning, implementation and operation of dams.
• Complying with applicable regulations, criteria and guidelines, and project specific negotiated agreements.
• The application of incentives and mechanisms involving an appropriate mix of regulatory and nonregulatory measures, incorporating incentives and sanctions.
• The adoption of a consistent and common set of criteria and guidelines to ensure that compliance.
• The establishment of an independent and transparent review.
• The preparation of compliance plan for each project prior to commencement.
• Building costs of compliance into the project budget.
• The avoidance of corrupt practices.
• The development by public and private financial institutions of incentives that reward project proponents for abiding by criteria and guidelines.
The Coordinator then reflected on the specific objectives adopted for the workshop making emphasis on closing the gap between aspirations and reality in terms of clarifying the key topics and the roles and responsibilities of stakeholders called upon to deal with said topics at national level and the means, opportunities and challenges to improve compliance at a country level. The discussion topics were the presented making emphasis on the emerging key words that dealt with allocation of responsibilities, the role of dispute resolution mechanisms and of external compliance bodies, information and resources. In conclusion, the agenda proposed to carry out the consideration of all the issues in an organized fashion, including the contribution of the four breakout groups planned to deal with the main topics and the elaboration of the final product of the meeting at the final plenary session was presented to the participants.
Dr. Albert Mumma, Senior Lecturer at the Faculty of
Law of the University of Nairobi, specialising in water management law, was introduced and given the floor by the chair to deliver a presentation on ensuring compliance that would provide guidance to the discussions in the following plenary sessions.
He started by defining compliance and the main elements of a compliance system, referring to the attributes required for the rules, standards, criteria and guidelines that provide the basis for determining compliance or noncompliance emphasising the relevance of the perception of fairness. Incentives and deterrents were described in detail as a flip side of the same coin. He highlighted the relevance of regulatory agencies or independent monitors when referring to monitoring or auditing and of third party participation in terms of involvement and certification. He addressed dispute resolution mechanisms, stressing the need for integrity, impartiality and independence. After referring to the requirements of human, technical and financial capacity, he concluded that in order to ensure effective compliance, one must clarify the applicable rules, provide incentives and deterrence measures, institutionalize compliance monitoring and third party participation in compliance, nurture independent conflict avoidance and dispute resolution systems, and build capacity in compliance enforcement.
Following the keynote presentation, the chair opened the floor to discussions. It was emphasised that the challenge is implementation . The issue of appropriate standards and regulations was tabled. Reference was made to the World Bank and the application of existing national standards instead of its own safeguard standards.
It was explained that under the Bank’s “Middle Country
Strategy”, the Bank empowers countries that have good records of implementing their policies by encouraging
10
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.

Proceedings local experts to carry out assessments in their own contexts. Dr Mumma explained that implementation of compliance was a process that involved putting in place structures, policies, etc. Will power is a minor component of compliance. For purposes of sustainability, countries need to develop capacity. Where the internal system is capable of meeting minimal standards, there is no need for external rules . In a country that is not capable of enforcing adequate standards, the World Bank and others will but impose their own, external standards. In general countries tend to follow international standards, so differences in compliance standards between countries are smaller than they might first appear.
A comment was made on ISO tools in the sense that they do not guarantee public participation or access to information. It was indicated that the ISO program provides for third party involvement in certification. This does not imply that the program provides public access or that it is “public-friendly.” Third party involvement can also entail watchdog advocacy, which usually does not involve certification. The purpose of ISO is to improve internal processes.
It was highlighted that licenses do not include dispute resolution mechanisms. It was commented that in some developed countries, e.g. North America, governments can tell contractors what to do but governments generally do not enforce license provisions. Instead, watchdog
NGOs trigger legal actions and take the licensee to court if the company violates the provisions of the license.
With reference to tender procedures, Dr Mumma explained that a license is generally not the result of any negotiation between parties, except when a major project is involved. Tenders can be sought first, but after a successful bidder is identified, he will have to get a license.
In the case of large projects, the difference between licenses and contracts is minimal because the conditions are standard. Also, a larger amount of negotiation is involved because licensees tend to be big players and a
“take-it-or-leave-it” policy from the government can result in no infrastructure development. The Netherlands and a few other countries issue licenses that are like contracts, with conditions and consequences of violating conditions but more often licenses do not address enforcement, which is therefore left to general law, tribunals for technical issues and court for example.
The government may issue licenses but not enforce them and leave enforcement to third parties who will challenge the government for non-enforcement. This mechanism works well in countries where NGOs are very capable.
However, the reality is that legal enforcement might usually be a minimal proportion of response to noncompliance responses. This is because the government would rather prefer not going to court rather then suffering the embarrassment of losing the case. Therefore, unless the government is sure of winning, they will put pressure on the licensee behind closed doors. If the government takes enforcement actions by cancelling licenses, the licensees are likely to take the government to court and sue for imagined, forgone profits.
Issues raised during the discussions:
• The challenge is enforcement and capacity for implementation.
• There is a need for appropriate standards and regulations at national /local levels that may be complemented by international standards.
• NGOs have a relevant role as watchdogs to help enforcing license provisions
Ms. Carino made a brief introduction to the topic under discussion and then opened the floor for comments.
The transitional path followed by South Africa along
25-30 years in developing a set of legally enforceable set of criteria, guidelines and regulations, was highlighted.
The conclusion was that it is possible for a country to start at any given situation and then improve building the set regulatory framework but it takes time and energy.
The chair pointed out that different levels of compliance, i.e involving government and developer, special agreements with affected communities or related to government and financiers, exist and need to be differentiated when dealing with compliance issues.
The compliance process followed with the Maguga dam in Swaziland was described. It involved an initial stage of project classification including public consultation and agency acceptance. The EIA stage followed including comments made by the public, approval from the agency and issuing of an environmental compliance certificate.
This involved a mitigation plan that set out all facets of compensation and development to be implemented.
During the implementation, external independent auditors prepared quarterly project compliance and progress reports on the mitigation plan. Affected people participated throughout the process. An environmental review panel meets once a year and undertakes a full review of implementation and makes recommendations to the parties concerned. Specific reports assessing implementation, deviations and achievements are legally required before issuing the final completion certificate.
The process started in 1998, project was completed in
2002. A critical factor of success was strong leadership from affected people that guided and clearly stated their needs.
Compliance advisory ombudsman for private sector projects is working very well.
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.
11

DDP Workshop on Ensuring Compliance, June 15–16 2004
A useful tool is the inspection panel of the World Bank
(WB) although imperfect and it was recommended that
ECAs and private financiers should adopt similar mechanisms. The issue of existence of a national strong regulatory framework and the use of more stringent external standards as the alternative when the former is lacking was again raised in this regard. It was further added that confusion over responsibilities of different organisations adds complexity to this issue and the need for unifying roles was suggested. The voluntary establishment of IHA guidelines and compliance protocol was highlighted as a positive outcome of the dams and development dialogue fostered by DDP and incentives for this kind of approaches were recommended. Some criticism to the IHA compliance protocol was further voiced. The compliance mechanisms for environmental guidelines, including inspections panels, adopted by various Japanese funding agencies either governmental or private besides the official development bank, were pointed out.
Accuracy of specifications was deemed important for compliance and the level of detail should be the same as for engineering. It was further stated that the need for compliance mechanisms of past projects as regards MDB should be put in place. State is divided in diverse sectors that have different views and are responsible for setting standards, policies goals to be achieved (environment, social, and development) and this goes against the attributes of clarity and comprehensiveness required for compliance mechanisms. Setting uniform binding standards may require a drastic change at state level and therefore the problem exceeds compliance per se and involves the regulatory framework itself. The institution of the ombudsman in Lesotho that helps to speed up the process of sorting compliance issues involving affected people was posed as a positive example of the relevance of external compliance bodies. The issue of secrecy of information and business confidentiality was raised.
International conventions ratified by almost all states are a source of rules to measure compliance and should be included in the contract. This was proposed as an area where a lot of research and expertise is required and includes as well challenging issues of private international law that may be included within the context of international contracts.
The link between privatisation of public services and infrastructure and the access to information was addressed. The terms of the agreement between government and contractor are governed by contracts and this offers a challenge of access to information, meaning a differentiation of that information in the hands of public bodies – e.g regulatory bodies- from the other protected by the nature of the contract. Best practice, not common practice, is that unless proof is given that the information is really confidential, it should be open to the public, thus placing the burden of proof on government and private contractor. Current practices are still that fundamental information to the management of public interest is not disclosed. The issue of who makes the judgment was raised. It was indicated that in the
European Community, practice is that the decision rests on the regulatory agency that may be appealed in Court.
The example of a High Court decision in Uganda supporting the disclosure of a contract between government and a private contractor was brought to the attention of the audience as a leading case. According to the Aarhus Convention, all environmental information should be extracted and made open to the public.
The publication of power purchase agreements was also raised, with reference to the “Publish What You Pay” initiative in the oil sector that may be applicable to large dams.
Ensuring compliance requires financial and human capacities . In many countries, environmental agencies are brand new and lack human capacity. There is room for improving capacity specially compared to other areas like irrigation and hydropower. The people who elaborated the standards are specialist but those in government assessing it lack skill and knowledge. There is a need for strong action to build capacity. The recommendation emerging from the industry review process led by the World Bank was to have good governance in the country before doing big investments since risks are high. This may be well taken into consideration as regards dams.
Key issues:
• Acquiring a regulatory framework based on an agreed set of criteria is an important step towards achieving compliance.
• It is important to distinguish between the different levels of compliance i.e. compliance between governments and developers, financiers and government in order to clarify specific contexts better.
• A critical success factor in ensuring compliance is to build capacity amongst leaders representing and negotiating the rights of affected people.
• Need to streamline the roles and responsibilities of different government institutions.
• Specification of details in terms of a checklist to ensure compliance needs to be done prior to undertaking any project.
• Multilateral banks eg World Bank and Asian
Development Bank need to develop compliance mechanisms for addressing existing dams.
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Proceedings
• It is important to have an external audit/review of existing compliance mechanisms.
• Clauses from international conventions should be included in contracts as a gauge to measure compliance eg Aarhus Convention requires that all environmental information be made public.
• Link between the privatisation of public undertakings and access to information needs to be considered carefully.
• Human, technical and financial capacity is critical in ensuring compliance and therefore capacity building needs to be enhanced.
• Inspection panel, for example World Bank’s, ombudsman processes and external audits and self regulating frameworks like the IHA guidelines/ compliance protocol have been identified as important mechanisms for ensuring compliance
• In ensuring transparency and accountability in dam projects, power purchase agreements should be made public.
The chair introduced the session topic referring to the roles and tools in ensuring compliance. She introduced the different stakeholders and the rules and regulations that each group has and indicated that the focus of the session would be on stakeholder responsibilities and how they link with other stakeholders in order to improve compliance.
Discussions were started with the consideration of private sector role . The control of money was the tool suggested to seek solutions for compliance in the private sector.
Holdbacks were indicated as a potential useful tool to deal with social and environmental obligations for the private sector that should be incorporated into the contracts. An example was mentioned that the financier might hold 5% back during the project period to be devolved 3 years after the project. As regards resettlement issues, it was indicated that this is often a government affair and would require a different approach since the private sector is not often involved in resettlement schemes.
It was pointed out that tools and standards are well available to the engineering stakeholders. However for social and environmental needs, these guidelines and standards are required so that they can be applied and adhered to. There is a need for well defined social and environmental standards for the construction sector.
Reference was made to im balances between the capacity of stakeholders , especially communities and even some governments that should be enhanced and the strong capacity of private sector. Strengthening of civil society in monitoring and NGO witnessing were pointed out as mechanisms to ensure compliance. The availability of
IHA guidelines and compliance protocol was pointed out, the latter undergoing a consultation process with groups outside the promoting organisation that would be complete by the end of the year. Some criticism was also raised as regards the efficiency of the compliance checklist proposed. The use of witness NGO was suggested as a useful tool. The clear need for development of these kinds of standards and a more constructive approach toward guidelines and dialogues was voiced.
The need for accuracy in the specifications or regulations was indicated. The fragmentation of responsibilities and diversity of goals among the various sectors in government leading to multiplicity of regulatory frameworks was signalled as a drawback for the clarity, comprehensive and binding character mechanisms to ensure compliance. It was seen as a problem not of compliance itself, but of regulations. The role of MDBs in establishing compliance mechanisms for projects beyond the repayment period was once more tabled.
External review was also raised as a mechanism to help ensuring compliance
The Berg water project near Cape Town was brought to the attention of participants. It was commented that it includes a wide range of stakeholders in three main groups: government agencies (Water and Forestry,
Environment and Tourism) private sector (Contractors, consultants) and civil society (local communities, NGOs, other interested groups). There are two phases; prior and during implementation. During the first phase, an EIA needs to be developed by the proponent and submitted for approval to government. The record of decision established a requirement for an Environmental
Monitoring Committee (EMC) that included the local communities. The second requirement was the development of a social and environmental management plans, stating what will be done regarding communities and environment. The EMC involved in the development of the EMP and its sign off clears the way for government approval of the environmental plan that is required before work can be commenced. In phase two, all deviations of the plan need to be reported. The environmental monitoring committee works during this phase and requires an environmental officer full time on site and that is the ‘eye’ for the EMC. EMC liaises with project promoter. This is in addition to existing compliance mechanism within the companies. In response to a question about mandate and effectiveness
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13

DDP Workshop on Ensuring Compliance, June 15–16 2004 it was indicated that the binding document is the
Environmental Management Plan (EMP) as approved by ministry of environment. The document sets the boundary. It is ultimately the government that should take action.
The Pakistan experience with environmental monitoring groups was then presented, highlighting the role of IUCN and WWF. However there was no significant achievement attained in terms of monitoring the environmental programme. It was pointed out that in Pakistan, the role of the Environmental Protection Agency (EPA) is not clearly defined as regards mega water development projects. The lesson learnt was the need for an institutional set up establishing role for the environmental agency to ensure implementation and compliance with the EMP.
A participant commented that the Canadian experience was similar to that of South Africa. Holdbacks can be used to ensure compliance and that external auditors are included in schemes and taken seriously by project developers in the country. It was indicated that bonds are not generally used for environmental issues, but for performance and pay out of workers because there is need to make a claim and to prove negligence, which is a process that requires time. Holdbacks are easier to enforce as they only involve two parties.
The issue of compensation of civil society for their dedication and engagement was raised. Actual cost of transportation, devoting time to attend regular meetings, which may last a couple of days to a month is hard to compensate. The issue of providing some resources for monitoring bodies to improve their effectiveness and also make them more capable of doing their work was highlighted. The issue of enabling the various parties to play an effective role was also raised. It was commented that in South Africa provisions for meeting fees and providing for transport are in place. There is also an understanding that everybody in civil society should contribute their time for free. In the case of the Berg water system, the project is the one to supply an office and pay for the chair so there are limited funds to execute their tasks.
It was indicated that when there is non-compliance of multilateral environmental agreements and investments
–mostly through foreign funders- do not comply with standards and guidelines, the onus to secure the local standards rests on the stakeholders.
The issue of dealing with upstream non-compliance in the case of transboundary waters was raised. The communication gaps between the various stakeholders were pointed out. The different perception of impact between international experts and local communities was voiced. The need for effective communication to account for local knowledge and legal safeguarding of EMP was stressed. In addition, the need for capacity building, including competitive and transparent remuneration for tasks accomplished was voiced.
Having national capacity to ensure compliance was flagged as a preferred option and consequently the need to build it. Whenever it is not yet available, the need for an open, transparent and competitive selection process of the monitoring organisation was tabled. This should have an impact on the project cost but in a positive way adding a value that should be quantified. The role of the various actors involved in a project, local authority, banks, donors, government, and private sector, as regards responsibility to address compliance issues was interrogated. The question of who should respond for compliance issues was posed. The opinion was expressed that responsibility to every institution involved should be clear and that every project should have a grievance handling mechanism, particularly as regards the complaints made by the local community.
The issue of imbalance between stakeholders that emerged from the former discussions was highlighted. Reference was made to influential ministries or parties which are strong enough to see their interests well addressed through contracts or licenses while other parties feel that they do not have equal or sufficient weight to influence decisions or monitor the compliance of a given situation.
Social issues –e.g. resettlement-, usually linked to environmental issues, should equally be dealt with in management plans in order to deal with them before it reaches the grievances stage. The question how can one overcome compliance issues before getting to the grievances stage was posed.
With reference to IHA guidelines and compliance protocol, the issues of self-regulation and certification were addressed. It was pointed out that the sustainability guidelines had been signed by 82 members to benchmark themselves voluntarily and that the compliance protocol could be carried out by an independent third party. If governments agree to test this protocol, it could have a strong input at national level. Scepticism was voiced about the capacity of any sector of kicking out a member for non-compliance. It was stated that ISO could also play a role and that certification had really paid off and some examples of this were tabled (Switzerland,
Scandinavia). In this regard, options available were looking for certified ISO companies or its inclusion as a criterion. At this stage it was pointed out that IHA guidelines promote ISO international standards for environmental management systems.
14
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Proceedings
Issues:
❍
Holdbacks should be used as a compliance tool by the private sector;
❍
Clear and enforceable social and environmental standards relating to dams should be developed;
❍
There is need for capacity building of NGO’s,
CBO’s and governments regarding compliance and enforcement;
❍
The use of witness NGO’s should be applied;
❍
The use of environmental monitoring groups (i.e., the South African case study) should be applied;
❍
When standards and enforcement capacity is low, the onus is on stakeholders to maintain their own standards;
❍
Penalties should built into the contracts;
❍
There is a need for effective ways of communication to account for local knowledge. And also need for legal safeguarding of EMP.
❍
Certifications such as the ISO 14001 for
Environmental management Systems can play an important role and should be promoted.
The chair closed session 3 and asked DDP Secretariat to provide indications to the participants about the planned breakout group sessions, that constituted a central activity of the workshop.
DDP Secretariat organised the distribution of participants into four working groups according to their expressed preferences. The groups were assigned to discuss the following topics:
Working group 1: What is the role of dispute mechanisms in ensuring compliance?
Working group 2: What is the role of external compliance bodies?
Working group 3: What information should be made available to ensure compliance (who, when, where, how, quality)?
Working group 4: Securing resources to ensure compliance
All groups were requested to identify five key issues to be taken into account and addressed when dealing with the topic at the national level (challenges, opportunities, constraints and clarifications). In carrying out the exercise, it was indicated that the target audience to bear in mind was the national governments that have the capacity of institutionalising the recommendations into their policies and laws. The breakout groups deliberated for one and a half hours in separated rooms. Each group elected a moderator and a rapporteur to follow up the discussions and prepare the report to the plenary.
Ms. Carino opened the session and gave the floor to the rapporteur of working group 1.
Working group 1: What is the role of dispute mechanisms in ensuring compliance?
Mr. Alessandro Palmieri started the presentation by indicating that the group considered basically two possible situations. One situation in which there is no previous agreement between the parties to conform to certain environmental and social standards – i.e. a kind of environmental management plan or similar instrument.
Addressing non-compliance in this case is much more difficult. Depending on the governance system the option should be to adopt commission panels, which is basically a socio- political process.
The second situation is one in which the parties have agreed on how to implement social and environmental issues. In this case, the agreement should have a clause on conflict resolution mechanism. This was the case further elaborated by the group because it is the way forward. Assuming there is a claim by one party concerning non compliance of a certain aspect of the agreement, the case is made to the established conflict resolution mechanism. Usually both parties appoint their representatives and the two jointly appoint a third person. Therefore, a three person body or commission is put in place to rule the disagreement. By
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15

DDP Workshop on Ensuring Compliance, June 15–16 2004 doing that the parties agree to abide with the decision of said commission. This is an important point in the process.
The third person should be agreeable to both parties and all efforts of course should be made to hire a person who is recognized for his values based on integrity, independence etc. This group is expected to move beyond the party’s position exploring the interests of each party in the specific conflict issue and what are the different options to meet these interests. Options can go in favour of one party or the other or mixed. Then the body attempts to evaluate the options based as much as possible on objective standards, regulations and even international standards.
At this point, there should be range of options on which the two parties are expected to agree. The incentive for the two parties to agree is the fact that if they do not agree, the independent party will establish which the preferred option is, on its own. Therefore the two parties have an incentive to agree.
Liane Greeff added that group discussions emphasised the need for consultation with all interested parties as a part of the process. The issue of time scale associated with conflict resolution processes was raised, recognising that although initial focus is during planning and construction stages, impacts could happen over the lifetime of the dam and there should be an accessible dispute resolution mechanism throughout the whole process. Consideration was given to the many different levels of dispute that may arise and need to be tackled. Reference was made in the group discussions on the need for active extra legal mechanisms where no dispute resolution processes are really active. In this regard, independent arbitrators, ombudsmen, and the setting up of independent commissions were mentioned as possibilities.
Working Group Session 2: What is the role of external compliance bodies?
Ms. Anne Schuster delivered the report of the group. In an attempt to answer the question above, the group proposed to discuss three types of external bodies: a) Panel of experts; b) Regulatory agency or body and also less formal compliance bodies like c) NGOs and CBOs.
Regarding the regulatory body, it was not clear to the group to what extent they could be really considered an external or internal body. In the case of a private sector undertaking, the regulatory body functions as a clear external body whereas the project is entirely public, a part of the government would be regulating or monitoring another part of the government and a conflict of interests may arise.
The group devoted extensive time to discuss challenges, having in mind international panel of experts as a possible model of an external compliance body. Time allocated by experts to look at the issues during the project was one of the more evident challenges. Mostly these panels convened once or at least twice a year, which involves quite a long time frame. Questions like how much quality time can be allocated to the project, who can sit at the panel, how to get the right mix of expertise were posed. The issue of carefully drawing the terms of reference of the panel was highlighted, particularly since they are going to assess compliance within such ToR only. Closely related to this was the issue of how strong and effective the panel may be. The advisory nature of this compliance body was pointed out.
The lack of local standards or legislation, and even lack of standards enforced by the financial body opened the question of what to do in such a situation. Peer pressure and integrity pacts could be the only mechanisms that could work in such an environment. The group established that compliance is a voluntary issue that cannot be enforced. In this perspective, the triggering factor for a good compliance mechanism would be the extra credibility and confidence that is earned from the project viz a viz financiers. Interest of developers having a better image of the project itself may be a reason for putting in place a compliance scheme. This will also lead to lower financing cost and risk of the project. The presentation ended with a final reflection from the group as regards the institutionalisation of a permanent national compliance body to oversee not only one project and to be there for long. This would allow for capacity building efforts to establish a permanent agency.
Working Group Session 3: What information should be made available to ensure compliance (who, when, where, how, quality)?
Mr. WoonChong Um delivered the report of the group.
He indicated that the group was responsible for discussing how to share information to enhance the compliance
16
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Proceedings activities. At first, it was decided to identify a number of key actors/groups requiring different types of information like government, developers, financiers, operators and civil society. The latter was broken down into people who are affected directly as well as indirectly at the NGO, community and the wider public levels. The group discussed from each perspective understanding what type of information is needed from each of these groups, by when and how. More effort was spent to discuss the government and the civil society needs in view of time constraints and because it was thought that the developers, fundraisers and the operators are the originators of that information.
As regards government, the group went further to define its role because the government has several hats in terms of regulating body, implementer of projects as well as developer. While aware that in general specified information is needed by virtually everybody, the group considered that the government needs baseline information as soon as possible and in a regularly updated fashion. International standards need to be known by governments as well. It was signalled that through efficient knowledge management between the government, international institutions, international agencies and academic institutions, information can be shared. Of course government needs to know the project specific information to make decisions on projects.
The developers need to know the regulatory framework in terms of standards and laws, environment and social related decrees, regulations involving assessment and other guidelines. These are provided by the government and the funding agencies depending on the situation of the country. The developer needs to know the baseline information, which comes from various sources, the government, affected people, and scientific institutions,
NGOs etc. Operators need the regulatory framework, the contract obligations mainly from the developer and the same monitoring information.
Particular attention was given to the information needs of the civil society, mainly about project specific information. Depending on which perspective civil society is considered there are different information needs on various aspects of the project. But one common theme is that the information has to be understandable and easily accessible. Reference was made to specific needs like information required by neighbouring countries or academics assessing the long-term impacts of the initiatives.
As regards procedures on how to gain information, it was agreed that important and diverse information is out there held by different parties. Civil societies need to know what information is available, who holds this information and how to go about accessing it, and this procedure must be widely known. If there is a project that could have a significant impact on the microeconomic situation civil society needs to know what that is. Also these groups require having information concerning the applicable regulatory framework, the rights framework and possible recourse actions, baseline and contractual information. A lot of information is actually included in the contractual information in terms of obligations and rights so the relevant parts of the contract should be made available to the interested parties, particularly on issues related to resources and environmental aspects. On the basis of all this brainstorming the group identified five key issues.
The first thing is to identify what baseline information is needed and to ensure the availability of this information. Not only on the project specific issues but as well on international standards and best practices.
Second is that the information should be up to date , understandable, accessible, timely and in a proper language. . The third issue is related to second one: the operators and developers should undertake regular monitoring of dam performance and make information publicly available through a viable mechanism. This is a long-term process leading to purely baseline monitoring that has to be done by these parties and this information has to be made available to the right people and when needed. In terms of how do you get the information, the information acquisition process should be widely known . This again goes back to understanding who has the information, who should be asked for and how should it be got. And finally, consequences from noncompliance recourses and resolution mechanisms should be widely known . This raises the issue that the consequences of non-compliance may well be an incentive for compliance as well. The group also pointed out the third party role in the monitoring of noncompliance verification and how this kind of information from the third party can be incorporated into the process
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Please contact ddpinfo@unep.org for further information.
17

DDP Workshop on Ensuring Compliance, June 15–16 2004 of disclosing information. In closing the rapporteur noted that these were recommendations rather than issues emerging from the group.
Working Group Session 4: Securing resources to ensure compliance
Mr. Richard Taylor presented the report of working group
4. The group started discussing compliance with what and by whom and clarifying whether addressing the planning or project level in terms of compliance and the parties that are involved. The second key issue was defining resources in terms of legal, human and financial and therefore creating the capacity and availability of those resources. Not to make assumptions that government will have all the resources. The third key issue was the need to have a clear identification of the stakeholders involved that would be the parties involved with demonstrating compliance, but also all the stakeholders involved in the compliance process.
Discussion there in particular included building understanding of the systems that are in place especially at the local level and that was seen as something that would definitely be a requirement at the project level.
The fourth issue, the scale and type of the project would determine the process and the compliance model that will have to be applied. Not just the size of the project, but also the type of the project and perhaps the mechanism by which it is being developed would orientate the compliance process and therefore the resources needed for that.
And the fifth issue was the importance to have a national context in place. The participants made evident the large differences amongst countries in terms of processes, capacity for compliance and understanding as well as of legal frameworks. In this regard, developed versus developing countries situations were highlighted during the group discussions. In some cases, advanced frameworks are in place even with independent agencies that can bring actions against the government in case of deviations from legal requirements. On the other hand, other countries might require completely new entities to ensure that good practices are being followed and thereby the issues and challenges with regard to introducing a new entity in the country were discussed.
Who might champion for that, who might provide resources and in case of human resources whether they might be coming from inside or outside the country.
The challenge here was seen to overcome resistance to introduce changes into a pre-existing system and the opportunity to capitalise on the willingness to improve and incorporate the wider community. Resistance might be to the change or to the new model proposed. The clarification would bring us back to the first key issue that needs to be defined what is being complied with and by whom?
Plenary discussions
Once all four presentations were completed, the chair opened the floor for a few comments. Reference was made to the various types of compliance bodies discussed in the workshop. With regard to the government category, it was pointed out that it was needed to take into account that government cannot be considered as a homogeneous entity and principles and rules may be diverse and even contradictory. As regards the type of independent stakeholder orientated group or panel of experts, the issue of developing its terms of reference was raised, how representatives would be selected and how to award them responsibility and power to follow up and assess the process and eventually sanction it if this capacity is included. The need to define issues of power before the body exists and not afterwards was highlighted.
Clarification of the issue of compliance at planning level was requested. It was indicated that it refers to compliance with a certain set of principles, like needs and options assessment and consultation process. At that level the responsible authority has to demonstrate that the process has been followed and is acceptable to the community that it serves. Good governance and democratic norms and practices were flagged as proper mechanisms for ensuring compliance at the planning level. As regards the project level which involves a developer, government or private, and requires an appropriate set of compliance processes according to type and scale, it was raised the need to distinguish between planning or study period when the terms of reference of the actual programme will be negotiated and the construction/ post construction period when such programme will be adhered to. Therefore, it was highlighted that compliance starts right from the feasibility or planning stage.
18
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Proceedings
Ms. Carino started with a brief summary of what had been accomplished during the workshop. Dr. Albert
Mumma’s presentation, which went through the important elements of ensuring compliance and the points raised in the plenary one discussion were referred to. For compliance to happen a mechanism needs to be put in place. The appropriateness of using national law or standards and building up capacity as compared to international donor policies or standards was addressed.
Then the discussion focused on licences, contracts and tenders and the comparisons between those various ways of capturing agreements that may have to be complied with. As regards the norms for multi-national corporations, the differences in their home countries as compared to other countries were highlighted. Also that due to generalised use of international standards, differences with compliance standards between the home and foreign country is becoming reduced.
In the second session about tools and the measures to ensure compliance, some stakeholders shared their experiences. They comprised a historical overview from
South Africa on the regulatory framework that became much clearer and stricter in terms of compliance through the period 1970-90. An example shared of a project between Swaziland and South Africa highlighted that one of the success factors in getting compliance was the strength in quality of some of the local chiefs or local leaders to be able to negotiate good agreements that would allow them to get better conditions from the project. A presentation from Brazil highlighted the challenge of addressing multiple departments and ministries, of a whole range of existing multiple standards, not all these are necessarily coherent involving competition and conflict among them, and there are differential power and capacities to get each standard applied. The question emerging was about the possibility of streamlining these standards making them more coherent with each other. The point highlighted the multiplicity of standards to deal with. From the Mekong region countries the issue of limited capacity by governments to implementing existing regulations or frameworks was raised. Multilateral development bank comments triggered discussions regarding inspection panels and ombudsmen mechanisms. Other possible models were also highlighted and reference was made to an example from the extractive industries sector, the
“publish what you pay” model encouraging a greater transparency in revenue flows as well as what is being paid to governments. So transparency was highlighted.
IHA sustainability guidelines were also tabled as an additional tool.
Session 3 discussed the roles of stakeholders and connecting the roles of stakeholders with the various compliance tools. A number of groups highlighted issues in relation to governments including building their capacity to deal with power purchase agreements.
Transboundary issues concerning monitoring of compliance when the projects are in transboundary waters were raised. Other stakeholders and tools highlighted were the use of ISOs certification of management systems and again the IHA sustainability guidelines and compliance protocol from the professional organizations. Civil society underlined as regards monitoring the linkages between the social and environmental conditions. These should not be separated in dealing with environmental monitoring; otherwise it may have associated a social aspect that is not adequately covered. The weakness of NGOs to become part of processes of compliance was raised together with the issue of the compensation for the time community organizations or NGOs that they spend in monitoring bodies or in these compliance bodies. As regards the linkages among the various stakeholders the issues that were highlighted were again the differential power among different groups and that care and time should be taken in the building of multi-stakeholder bodies to ensure credibility and support of the groups being represented.
The communication gaps among the various stakeholders were also highlighted. In relation to the private sector, it was further discussed that some of the monetary incentives or deterrents such as the use of performance bonds and the practice of holdbacks and their application to social and environmental compliance. After these discussions at plenary sessions, the working groups discussed all those four different issues that were reported back to the plenary.
Before giving the floor to the DDP Secretariat to present the issues/recommendations emerging from the plenary sessions, the chair restated the goal and objectives of the workshop upon request of one of the participants.
The recommendations identified from Plenary Session
2 “Tools available or needed for ensuring compliance” were the following:
2.a. Capacity should be built among leaders representing and negotiating for the rights of the affected people in the construction of dam’s infrastructure projects.
2.b. Donors, bilateral, multilateral agencies including
ECAs should set up compliance mechanisms.
2.c. Human, financial and technical capacity needs to be enhanced particularly in developing countries to ensure compliance.
2.d. In ensuring transparency and accountability in dam projects, power purchase agreements should be made public.
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19

DDP Workshop on Ensuring Compliance, June 15–16 2004
The chair noted one addition from the same session:
2.e. Clauses from international conventions should also be included (For example the Aarhus convention may be referred in contracts as a gauge to measure compliance, to substantiate the requirement that environmental information should be made public).
The issue of information disclosure as regards the proposed recommendation 2.d on public purchase agreements was addressed first. A proposal was made to add a reference to the Aarhus convention in the text in order to adhere to the specific exemption on commercial information stated by said convention. This proposal gave way to lively and extended discussions among the participants. It was recalled that the commercial confidentiality exemption may not be involved to withhold information which is relevant for the protection of the environment. This means that all the information related to environment should be extracted and made public but the commercial confidentiality is an exemption to the public exposure. The relevance of information disclosure as regards power purchase agreements (PPA) in the case of dams was voiced. The nature of the exemption was discussed with reference to
Court decisions in Uganda concerning Bujagali dam that ruled in favour of the disclosure of the agreement. The
World Bank Inspection Panel had adopted a similar approach in this regard, only bound by commercial confidentiality. This commercial confidentiality as accepted by the Aarhus convention was explained in terms of ensuring private sector competitive bidding.
Further support to open and transparent access for everybody was voiced. The chair indicated that this discussion had been dealt with in session 2 when dealing with the need to carefully consider the link between the privatisation of the public undertakings and access to information. It was suggested that in this regard a recommendation might be addressed specifically to the financier or appropriate sector proposing that environmental obligations, including disclosure of the EMP, community monitoring, specific holdbacks and dispute resolution mechanisms, most probably involving third parties, should be presented as an appendix to the generally voluminous contract documents that deal with technical, constructing and commercial issues. Thus environmental information might be disclosed without affecting the commercial confidentiality. A comment was made that in fact people want not just environmental information but economic information so they can make an assessment of how useful the agreement is for the country.
In this regard, making information public in project contracts was deemed to be important in assessing economics, social environmental commitments and enabling the public to assess the viability of different projects, which are the best options. This was contested arguing that viability and options should be issues already assessed during planning stage and settled at the time the contract is drawn. The need to include the Aarhus convention reference in the text was further reiterated.
Further to PPAs, the need for information disclosure of contracts was generalised to the broader issue of water services privatisation in the context of power imbalance between government and private sector actors. A representative from Uganda reiterated that in his country the Court had already ruled the public nature of the PPAs and therefore cannot support abiding the statements of a convention opposing to it.
At this point it was remarked that this extensive discussion on PPA did not provide a correct picture for the whole sector since two thirds of the dams built were for irrigation.
Another opinion pointed out that many countries have not signed the Aarhus conventions because it gave recourse to the international court in the case of issues concerning transboundary waters. Adding the reference to the convention or dropping the recommendation was proposed at this stage. The Northern Inspection Panel outcome concerning Bujagali was presented as an exception rather than the basis for a rule. Also it was indicated that in the
Bujagali case there was no competitive bid in place so the disclosure had no commercial implications associated with it. At this stage, concern was raised about dealing with proposals that are not practical or cannot be implemented at the end of the day. Also to avoid a posture scrutinising governments assuming that they are not conscientious enough and establishing at this meeting rules that are unlikely to work.
Clarification was asked as regards the proposed recommendation 2.b requesting MDB to set up compliance mechanisms. The proponent argued that there are a number of examples worldwide where multilateral banks have not complied with unaddressed issues of repair operations related to their projects. A proposal was made not to mention specific institutions but address the need to develop compliance mechanisms for dams throughout the lifetime of the project. Further clarification was requested on the objective of the recommendation in the sense that if its to get MDBs help in addressing existing problems originating from the project which have gone beyond the repayment period the text should reflect it but should not talk about a compliance mechanism because that specifically relates to looking through how ADB and
World Bank have complied with their own regulations which will not necessarily translate into addressing the problems on the ground.
An opinion was raised that a specific policy on addressing outstanding social and environmental issues of the past projects was lacking in financial institutions. As regards addressing issues of the past it was emphasised that MDBs have already have a number of mechanisms in place like
20
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Proceedings safeguard policies, inspections panels and beyond that there is a need to establish dialogue with the government, which should not necessarily be sought through the
MDBs. A reference was made about the need for stronger government representation in the audience when issues concerning MDBs and country decision-making were addressed.
It was pointed out that the there is a weakness in that the alluded mechanisms only apply to the lifetime of the loans. It was seen quite reasonable that for future projects there should be some compliance mechanisms that go beyond loan repayment. It was highlighted that the
World Bank has established a precedent saying the past issues should be resolved with new loans. The examples mentioned were Pakistan and Zambia where components of those loans are being used to address problems from
30, 40 years ago. The existence of agreements with governments was syndicated as the characteristic of those specific cases. The need for a policy that addresses the issue was reiterated so that civil society would be able to look into the future and know how to use it and also the
MDBs responsibility in this context.
The Chair indicated that both issues discussed will be moved down to the category of issues that will need to be dealt with. Following some further discussions on the nature of the outcomes of the discussion, the suggestion proposed by the chair was adopted.
Then Ms. Carino requested DDP Secretariat to present the recommendations picked up from Session 3 deliberations. They were:
3.a. Holdbacks should be used in private sector related compliance tools;
3.b. Clear and enforceable social and environmental standards relating to dams should be developed;
3.c. There is need for capacity building of NGOs, CBOs and governments regarding compliance and enforcement;
3.d. Use of witness NGOs should be applied;
3.e. The use of Environmental Monitoring Groups such as in the South African case study should be applied;
3.f. When standards and enforcement capacity is low, the onus is on the stakeholders to maintain their own standards;
3.g. Penalties should be built into the contracts;
3.h. There is a need for effective communication mechanisms to account for local knowledge and the legal safeguarding of the EMP;
3.i. Certification such as the ISO 14001 for environmental managements systems can play an important role and should be promoted.
Regarding recommendation 3.a, it was suggested to rephrase the text taking into account that holdbacks are a tool that can be used for ensuring compliance with environmental obligations in a contract. A comment was made that a holdback could be considered included as a provision made for penalties to be paid for noncompliance alluded in bullet 3.g. The proponent indicated that he was trying to offer something that would help people solving problems and similarly mentioned the ISO 14001.
Regarding recommendation 3.d, it was proposed that a committee or group of NGOs should be considered rather than an individual NGO and that the capacity of the NGOs in the committee should be strengthened.
Further to this a concern was raised it was stated that this witness should not necessarily be an NGO. The issue was raised that it could be any independent body entrusted by everybody like a professional organization, academics, and of course an NGO. The point was agreed emphasising the need to include civil society otherwise the witness could be government and this does not warrant independence.
A question was posed regarding what processes the use of independent witnesses would be appropriate. Response was that this probably would be where resettlement and compensation programmes are being effected and certain agreements are being put in place. Then there should be those witnesses who are independent. This brought about the question of differences between witnesses and independent review panels. As regards monitoring, it was stated that there is no need to specify whether they are witnesses or panels or something else, but state that independent monitoring bodies should be established to oversee resettlement and compensation programmes.
The opinion was raised that the people itself can monitor this.
As regards the issue of resettlement, it was pointed out that the people have the right to go to the courts if they do not like the compensation package and resettlement procedures adopted. However, it was argued that additional types of mechanisms like independent monitoring bodies, external bodies may redress the issue before proceeding to the courts. These things need not be mutually exclusive and in some countries it might be the way to settle but in others there could be other mechanisms to deal with it. It was opined that regarding compensation and resettlement, it is better to settle the issue at the local level rather than going to the courts.
That court processes might be costly and lengthy, so people could suffer indirect costs that they cannot afford.
However, it was further indicated, country courts exist as a final dispute system and in a number of countries that is how these issues are settled. Following on the court issue, it was suggested to include a statement regarding special courts, legal arrangements or adjustments for speedy compensation process in mega projects. The chair
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.
21

DDP Workshop on Ensuring Compliance, June 15–16 2004 did not encourage this prescriptive approach specific to only some countries. Further consideration was made on this issue indicating that there are plenty of examples in many countries of affected people waiting many years for decision in courts. Finally, it was highlighted that courts are the final place for this conflict resolution so it was suggested that there is no need to state it in the recommendation as a final dispute resolution mechanism.
An issue not discussed in previous sessions was raised concerning the responsibility of bilateral governments in setting up independent compliance auditory panels or bodies or if the dam has transboundary issues that both governments agree on setting up such a panel together. The need for a will to agree was pointed out in the case of transboundary projects. The text proposed was “In case of either joint, bilateral projects or in the case of projects with transboundary effects, a joint bilateral compliance mechanism which is independent should be established”. Emphasis was made on that transboundary projects place a greater challenge than joint projects as regards consultation concerning impacts.
It was indicated that the need to access foreign credit can play a positive influence as regards disposition to agree. It was raised the need to take into consideration the transboundary affected communities in addition to the governments because in some cases governments are unable to act and the onus of requesting for their rights rests on the communities. The chair invited the proponents to find a better wording indicating that the issue was dealt with at the AED workshop and the proposal there was developing mechanisms for example exchange of information, prior consultation, further dialogue, etc.
A point was made on the need to state more clearly the stakeholders’ roles and responsibilities. The chair supported it since linkage between roles, responsibilities and tools was one of the goals of the meeting. So attention will be paid to make sure that each of these recommendations are clearly linked to which stakeholder and also if they are identifying a particular tool or mechanism.
As regards recommendation 3.e, it was suggested to better consider environmental monitoring committees rather than groups and avoid prescribing rather proposing one way of doing it, since it depends on the whole legal setup that one is working in.
Concerning recommendation 3.f, it was indicated that the understanding during the plenary session discussions was that when enforcement capacity is low, the stakeholders have to conclude their own agreements based on the relevant standards they wish to apply.
Stakeholders should agree on the standards rather than maintain. And should be said applicable instead of “their own” standards.
As regards bullet 3.g, it was indicated that putting penalties in the contracts does not cover the whole issue.
It was suggested to state that provisions should be made for penalties to be paid in cases of non-compliance with respect to environmental obligations by contractors and could be built into the contracts.
In relation to recommendation 3.i, the concern was raised about stating that ISO certification could play an important role. This opinion was supported on the basis that many people have expressed concerns about certifications systems. It was further suggested to limit the statement to “can play a role”. Also the reference to environmental management systems was objected since it was not relevant to the type of compliance being discussed in the meeting. The use of a prescriptive style like “should” in these recommendations was discouraged on the basis that it is not appropriate to use such strong language in reference to provision that the participants cannot enforce. The chair concluded the discussions on recommendations from session 3 4 .
The chair gave the floor to the Coordinator who closed the meeting expressing his hearty and deep appreciation to all the participants for attending the meeting, for having actively participated in the discussions providing invaluable contributions to the outcomes of the workshop. He expressed deep gratitude to Ms. Carino for her excellent job in steering these meetings to the substantive achievements attained and wished a safe trip to those going back to their countries
4
During discussions some participants suggested not to use the word “recommendations” referring to the workshop’s outputs but to change their title to some kind of issues to be addressed or documentation of opinions expressed. The concern was that sorting out the list of recommendations would take a long time discussing the details of each sentence because each and every one of those had important ramifications. This position was contested suggesting that those recommendations not agreed should be marked as issues for further discussions rather than making everything more neutral and taking away all recommendations. Summarising the discussions on this issue the chair concluded that statements not agreed would be moved down to the category of issues to be dealt with rather than stating them as recommendations coming from the workshop. She further indicated that the outcomes of the working groups identified as issues by the members would go forward as issues. For those that have identified them as recommendations they would go forward as recommendations. In all cases issues or recommendations would be attributed to the group and not to the entire workshop.
22
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.

Agenda
UNEP - DAMS AND DEVELOPMENT PROJECT (DDP)
Issue Based Workshop
ENSURING COMPLIANCE
United Nations Office at Nairobi, Kenya, 15-16 June 2004
AGENDA 5
13.30 to 14.30
14.00 to 14.30
14.30 to 16.00
14.30 to 15.15
15.15 to 16.00
16.00 to 16.30
16.30 to 18.00
Registration of participants 6
Opening Session
❍ Welcome to the participants
❍
Presentation of DDP Objectives and Work Program
❍ Defining the purpose and goals of the Workshop
❍
Brief description of workshop organization, activities and expected outputs
❍ Presentation of Recommendations from the Workshop on Addressing Existing Dams
Plenary Session 1: Ensuring Compliance: An Overview
Presentation on what compliance is, what the mechanisms to enforce compliance are, and what are the main problems with ensuring compliance
Plenary discussion
Coffee Break
Plenary Session 2: Tools Available/Needed for Ensuring Compliance
Discussion of what tools are available and/or needed for ensuring compliance
9.00 to 10.30
10.30 to 11.00
Plenary Session 3: Stakeholder Roles and Responsibilities in Ensuring Compliance
Discussion of the appropriate roles of various stakeholders for ensuring compliance and linkage of the various stakeholder categories with the provision and use of necessary tools
Coffee Break
5
6
The meeting was held in Conference Room 3, UN, Gigiri
Participants were accommodated at the Windsor Hotel, Nairobi. Transportation to and from the airport and UN Gigiri was provided to the participants.
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.
23

DDP Workshop on Ensuring Compliance, June 15–16 2004
11.00 to 12.30
12.30 to 13.30
13.00 to 14.30
14.30 to 15.00
15.00 to 16.30
16.30 to 17.00
Working Group Sessions
Workshop participants will divide into four breakout groups to discuss the following topics and formulate recommendations:
❍ What is the role of dispute mechanisms in ensuring compliance?
❍
What is the role of external compliance bodies?
❍ What information should be made available to ensure compliance (who, when, where, how, quality)?
❍
Securing resources to ensure compliance
Lunch
Plenary Session 4: Presentation of Working Groups Reports
Coffee Break
Plenary Session 5: Formulation of recommendations to the DD Forum and national dialogues
Closing Session
24
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.

List of Participants
List of Participants Addressing Existing Dams
Workshop, 14-15 June 2004, Nairobi, Kenya
Participants
1 Dr. Refaat Abdel-Malek
President/CEO
Montgomery Watson Harza (MWH) Energy and Infrastructure
Sears Tower, 233 South Wacker Drive
Chicago 60606-6392
United States of America
Tel: +1 312 831 3869
Fax: +1 312 831 39 99
Mobile: +1 312 296 8830
E-mail: refaat.a.abdel-malek@mwhglobal.com
2
3
Mrs. Cansen Akkaya
Deputy Department Head
The General Directorate of State Hydraulic
Works
BP INONU BULVARI
06100 Ankara, Turkey
Tel: +90 312 4183406
Fax: +90 312 419 3816/417 13 78
E-mail: cansenak@dsi.gov.tr
cansenak@hotmail.com
Mr. Flavia Braga Vieira
Researcher
IPPUR/UFRJ
P.O. Box RUA Prof. Estelitalins, 50/201
Laranjeiras 22245-150
Rio De Janeiro
Brazil
Tel: +55 21 2225790
Fax: +55 21 259 81923
E-mail : flaviab@attglobal.net
4 Ms. Joji Carino
Tebtebba Foundation
111 Faringdon Road
Standford-in-the-Vale
Oxon SN7 8LD
England
Tel: +44 1367 718889
Fax: +44 1367 718568
E-mail: tongrong@gn.apc.org
5
6
7
8
9
Ms. Jaroslava Colajacomo
Senior Campaigner
Campagna per la riforma della Banca Mondiale
BP Via Tommaso da Celano 15
00179 Rome
Italy
Tel: +39 06 782 6855
Fax: +39 06 7858 100
E-mail: jaro@crbm.org
Dr. Ute Collier
Dams Initiative Leader
World Wide Fund for Nature International
(WWF)
P.O. Box Panda House, Weyside Park
GU7 1XR, Godalming
United Kingdom
Tel: +44 1483 412549
Fax: +44 1483 426409
E-mail: ucollier@wwf.org.uk
Mr. Willie Croucamp
Manager Strategic Coordination
Policy and Regulation Branch
Department of Water Affairs & Forestry
P/Bag X313
Pretoria 0001, South Africa
Tel: +27 12 336 8810
Fax: +27 12 326 2630
E-mail : xca@dwaf.gov.za
Ms. Pianporn Deetes
Mekong Campaigner
Southeast Asia Rivers Network
P.O. Box 78 Moo 10, Suthep Rd.
Tambol Suthep, Muang
50200, Chiang Mai, Thailand
Tel. +66 53 278 334
Fax: +66 53 609
E-mail: pai@loxinfo.co.th
Ms. Christine Eberlein
Berne Declaration
Quellens N-25
8032 Zurich
Switzerland
Tel: +41 1 2777008/2777000
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.
25

DDP Workshop on Ensuring Compliance, June 15–16 2004
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11
12
13
14
Fax: +41 1 2777001
E-mail : eberlein@erb.ch
Mr. William Freeman
VP Planning and Development
Columbia Power Corporation
P.O. Box 9131
Victoria, British Columbia,
V8W 9B5
Canada
Tel: +(250) 387-0243
E-mail: bill.freeman@columbiapower.org
Mr. Samuel Gitonga
Area Branch Chairman
Kenya National Federation of Agricultural
Prod.
P.O. Box 43148
Nakuru
Kenya
Tel: 254 20 608324
Fax: 254 20 608325
E-mail : farmers@knfu.org
knfu@nbnet.co.ke
Ms. (Karen) Liane Greeff
Water Justice Programme Manager
EMG/NAWISA
P.O. Box 13378
Mowbray 7705
South Africa
Tel : +27 21 448 2881
Fax : +27 21 448 2922
Email : liane@kingsley.co.za
Mr. Joseph Hmar
President
Hmar Indigenous Peoples/Hmar Students
Association, Jim Higher Secondary School
P.O. Box Sangaiprou Mamang, Airport Road
795001 Impha
India
Tel: 91 385 245523/227
E-mail: joerhmar@rediffmail.com
Mr. Naeem Iqbal
Assistant Coordinator
SUNGI Development Foundation
P.O. Box House 7-A, Street 10, Sector F-8/3
44000 Islamabad, Pakistan
Tel: +92 51 228 2481-2
Fax: +92 51 2856 494
Email: naeemasu@hotmail.com
naeemasu1@yahoo.com
Website: www.sung.org
15
16
17
18
19
20
Mr. Mamadou Abdoul Kane
Ingenieur Principal Irrigation
Banque Africaine De Developpement
P.O. Box 323 1002 Tunis Belvedere
Tunisie,
Tunisia
Tel. +216 71 10 23 90
Fax: +216 71 253 167
E-mail : M.Kane@afdb.org
Mr. MD. Golam Kibria
Executive Director
BanglaPraxis
P.O. Box H#22, R#7,
Rupnagar Residential Area
Mirpur – 2, Dhaka
Bangladesh
Tel: +88 02 9010406
E-mail: banglapraxis@yahoo.com
Ms. Ann Lund
Programme Officer
Mekong River Commission
P.O. Box 6101
Vientiane, Lao PDR
E-mail: ann.lund@mrcmekong.org
Ms. Ikuko Matsumoto
Program Director
Friends of the Earth Japan
P.O. Box 3017-24, 2nd Floor, Mejiro,
Tshima-ku, 171-0031, Tokyo
Japan
Tel: +81 3 3951 1081
Fax: +81 3 3951 1081
E-mail: aid@foejapan.org
Mr. Aboubacry Mbodji
CODESEN Co-ordinator
Co-ordination for Senegal River Basin
P.O. Box 15 246 Dakar-Fann
Sicap Amitiè II n o 4024,
Allèes Seydou Nourou TALL
Dakar-Fann, Senegal
Tel: +221 865 0030
Fax: +221 824 6052
E-mail :ambodji1@yahoo.fr
Mr. Patrick McCully
Campaigns Director
International Rivers Network
P.O. Box 1847 Berkeley Way
94703, Berkeley, CA
United States of America
Tel: +510 848 1155
26
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.

List of Participants
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22
23
24
25
26
Fax: +510 848 1008
E-mail : patrick@irn.org
Dr. Francisco Mendes
Research Fellow
COPPE/UFRJ and Infrose – International
Network for Sustainable Energy
21941-972 Rio De Janeiro
Brazil
Tel: +55 21 2562 8805, +55 21 2553-0827
Res.
Fax: +55 21 2562 8805
E-mail : femendes@ajato.com.br
Ms. Elizabeth Mrema
Programme Officer
Division of Environmental Policy
Implementation
United Nations Environment Programme
P.O. Box 30552
Nairobi, Kenya
Tel: 254 20 62 4252
E-mail: elizabeth.mrema@unep.org
Dr. Albert Mumma
University of Nairobi
P.O. Box 30197
Nairobi, Kenya
Tel: 0722 378 323
Fax: 254 20 2744284
E-mail : cepla@nbnet.co.ke
27
28
29
Mr. Frank Muramuzi
President
National Association of Professional
Environmentalists (NAPE)
P.O. Box 29909
Kampala, Uganda
Tel: +256 41 534453
Fax: +256 41 530181
E-mail: nape@utlonline.co.ug
napesbc@afsar.com
Mr. Paul Noupa
Facilitator for the Panel of Independent Experts
IUCN-Regional Office for Central Africa
P.O. Box 5506
Yaounde,
Cameroun
Tel: (+237) 221 6496
Fax: (+237) 221 6497
Cell: (237) 964 1646
E-mail: paul.noupa@iucn.org
Mr. Joseph Opio-Odongo
Environmental Policy Specialist
30
31
32
United Nations Development Programme
P.O. Box 30552
Nairobi,
Kenya
Tel: 254 20 624647
Fax: 254 20 624648
E-mail: joseph.opio-odongo@undp.org
Mr. Engelbertus Oud
Senior Hydropower Planner
Lahmeyer International GmbH
P.O. Box Friedberger Strasse 173
61118 Bad Vilbel
Germany
Tel: +0049 6101 55 1470
Fax: +0049 6101 55 1419
Email: bert_oud@gmx.net
Mr. Alessandro Palmieri
Lead Dams Specialist
The World Bank
1818 H Street NW
Washington DC 20433
United States of America
Tel: +1 202 473 0357
Fax: +1 202 477 0565
E-mail : apalmieri@worldbank.org
Dr. Jean-Yves Pirot
IUCN-The World Conservation Union
Box 1196 Gland
Switzerland
E-mail: jup@iucn.org
Dr. Chumnarn Pongsri
Director, Environment Division
Mekong River Commission
P.O. Box 6101
Vientiane, Lao PDR
E-mail: chumnarnp@mrcmekong.org
Dr. Paul Roberts
Vice-President,
International Commission on Large Dams
P.O. Box 158 High St., Ashlea Gardens
0081 Pretoria
South Africa
Tel: (+27-12) 460-9100
Fax: (+27-12) 460-9100
E-mail : paul.roberts@worldonline.co.za
Hon. Philip R. Rotino
Member of Parliament, Sigor
Drought Zones Integrated Development
P.O. Box 364
Kapenguria,
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.
27

DDP Workshop on Ensuring Compliance, June 15–16 2004
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34
35
36
37
Kenya
Tel: 0722 595699/254 20 0733 422 916
E-mail: protino@gmsdzid.org
Mr. Bammana M. S. Samarasekera
Director (Asset Mgt & Water Mgt.)
Irrigation Department
P.O. Box 1138
Colombo
Sri Lanka
Tel: +94 1 258 6311
Fax: +94 1 258 4984
E-mail: dd_mnt@irrigation.slt.lk
Ms. Anne Schuster
Advisor
GTZ-German Technical Cooperation
Agency
P.O. Box Dag-Hammarskjöld Weg 1-5
65726 Eschborn
Germany
Tel: +49 6196 79 1350
Fax: +49 6196 7980 1350
Email: anne.schuster@gtz.de
Mr. Prabin Man Singh
Water and Energy Users’ Federation -Nepal
P.O. Box 2026
Kathmandu, Nepal
Tel: 00977-1 7729771
Fax: 00977-1 7419610
E-mail: wafed@ntc.net.np
singh-prabin@yahoo.com
Mr. Fred Smiet
Senior Water Adviser
Ministry of Foreign Affairs
P.O. Box 20061
2500 EB The Hague
Netherlands
Tel : +31 70 348 6114
Fax : +31 70 348 4303
Email : fred.smiet@minbuza.nl
Dr. Dongya Sun
China Institute of Water Resources and Hydropower Research (IWHR)
Flood Disaster Prevention Department
P.O. Box 366/No. 20 West Chegongzhuang
Road,100044 , Beijing
Peoples Republic of China
Tel: +86 10 685 15511 Ext. 1909
Fax: +86 10 632 04013
E-mail : sundy@iwhr.com, sun8841@sohu.com
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40
41
42
43
Mr. Richard Taylor
IHA - International Hydropower Association
Westmead House
123 Westmead Road
Surrey,
UK
Tel - +44 20 8652 6601
Fax - +44 20 8770 1744
Email: rmt@hydropower.org
Mr. David Tipping
Programme Officer
UN-Habitat
P.O. Box 47074
Nairobi,
Kenya
E-mail : david.tipping@unhabitat
Mr. Richard K. Twum Barimah
Executive Director
Non –Governmental Organisation
Volta Basin Development Foundation
P.O. Box 237, Accra
Ghana
Tel: +00233 244 451 023
Fax: +00233 21 256 120
E-mail: rtwumus@yahoo.com
Mr. Woochong Um
Principal Operations Specialist
Asian Development Bank
P.O. Box 6 ADB Avenue
0401 Mandaluyong City
Philippines
Tel: +632 632 4949
Fax: +632 636 2336
Email: wcum@adb.org
Ms. Elena Veligosh
Regional Training Expert
Royal Kaskonning
P.O. Box 35
Iritskogo St. Room 101, 03035, Kyiv
Ukraine
Tel: +380 50 383 4809/44 206 31 83
Fax: +380 44 204 81 84
E-mail: beligosh@mail.kar.net
Ms. Johanna Waenquist
Advisor
Swedish Society for Nature Conservation
Gsögatan 115
Stockholm, Sweden
Tel: +46 8 702 6500
E-mail: waernquist@hotmail.com
28
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.

List of Participants
44
45
Ms. Birgit Zimmerle
German Carajàs Forum
P.O. Box Turmstr. 10
10559 Berlin, Germany
Tel. +49 (0) 30 484 92727
Fax: +49 (0) 30 39889578
E-mail: birgit@zimmerle.net
Ms. Ping Zuo
Yellow River Water Conservancy Commission
Resettlement Bureau
No. 11, Jinshui Road, 450003 Zhengzhou
Peoples Republic of China
Tel: +0086 6023807
E-mail: Zouping@371.net
3
1
2
4
Mr. Alberto Calcagno
Coordinator
Dams and Development Project
Division of Environmental Policy
Implementation
United Nations Environment Programme P.O.
Box 303552
00100 Nairobi, Kenya
Tel: +254 20 623942
Fax: +254 20 624763
E-mail: alberto.calcagno@unep.org
Ms. Khin Ni Ni Thein
Senior Advisor
Dams and Development Project
Division of Environmental Policy
Implementation
United Nations Environment Programme
(UNEP)
P.O. Box 303552
00100 Nairobi
5
Kenya
Tel: +254 20 624517
Fax: +254 20 624763
Email: knn.thein@unep.org
Ms. Constance Hunt
Senior Advisor
Dams and Development Project
Division of Environmental Policy
Implementation
United Nations Environment Programme
(UNEP)
P.O. Box 303552
00100 Nairobi, Kenya
Tel: +254 20 624769
Fax: +254 20 624763
E-mail: constance.hunt@unep.org
Dr. Wanjiku Kaniaru
Associate Expert
Dams and Development Project
Division of Environmental Policy
Implementation
United Nations Environment Programme
(UNEP)
P.O. Box 303552
00100 Nairobi, Kenya
Tel: +254 20 624748
Fax: +254 20 624763
E-mail: wanjiku.kaniaru@unep.org
Mr. Rene Nijenhuis
Associate Expert
Dams and Development Project
Kenya P.O. Box 30552
00100 Nairobi
Kenya
Tel: +254 20 624791
Fax: +254 20 624763
E-mail: rene.nijenhuis@unep.org
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.
29

DDP Workshop on Ensuring Compliance, June 15–16 2004
7
1.
This briefing document as background information to assist the discussions during the workshop on
Ensuring Compliance that will be held on 15 and
16 June 2004 in Nairobi, Kenya. It briefly retraces what the WCD said in its Final Report and the concepts and principles underlying ‘Ensuring
Compliance’. In addition, it elaborates topics brought up by the 2 nd Dams and Development
Forum. These topics include:
❍
How to ensure a clear allocation of responsibilities among the various actors and ensure transparency in the dealings of each agency.
❍
The role of dispute resolution mechanisms in ensuring compliance.
❍
The role of external compliance bodies.
❍
The kind of information that should be made available to ensure compliance.
❍
How can governments secure the resources needed to ensure compliance.
2.
The key message concerning Ensuring Compliance that the WCD conveyed was as follows:
“Ensuring public trust and confidence requires that governments, developers, regulators and operators meet all commitments made for the planning, implementation and operation of dams.
Compliance with applicable regulations, criteria and guidelines, and project specific negotiated agreements is secured at all critical stages in project planning and implementation. A set of mutually reinforcing incentives and mechanisms is required for social, environmental and technical measures.
These should involve an appropriate mix of regulatory and non-regulatory measures, incorporating incentives and sanctions. Regulatory and compliance frameworks use incentives and sanctions to ensure effectiveness where flexibility is needed to accommodate changing circumstances.”
3.
The WCD further identified the application of the following 5 policy principles to ensure effective implementation of this strategic priority:
(i) A clear, consistent and common set of criteria and guidelines to ensure that compliance is adopted by sponsoring, contracting and financing institutions and that compliance is subject to independent and transparent review.
(ii) A compliance plan is prepared for each project prior to commencement, spelling out how compliance will be achieved with relevant criteria and guidelines and specifying binding arrangements for project-specific technical, social and environmental commitments.
(iii) Costs for establishing compliance mechanisms and related institutional capacity, and their effective application, are built into the project budget.
(iv) Corrupt practices are avoided through enforcement of legislation, voluntary integrity pacts, debarment and other instruments.
(v) Public and private financial institutions develop incentives that reward project proponents for abiding by criteria and guidelines .
4.
The Thematic Review on Regulation, Compliance and Implementation makes the point that regulation and compliance depends on the national context:
“Regulatory frameworks (laws, policies, criteria, guidelines and standards) provide the principles and procedures, incentives and sanctions that govern decision-making processes that potentially involve dam projects. Affected peoples, lenders, developers, consultants, government agencies and nongovernmental organizations all require effective regulatory frameworks in order to be clearly aware of their expected rights and responsibilities. In their absence, it is difficult, if not impossible adequately to address the range of issues that arise in the planning and project-cycle in which dams might be an option. Countries and organizations that have well developed and effective regulatory frameworks
7
The briefing document is has been elaborated by Mr. Rene Nijenhuis, DDP Secretariat and has been reviewed by Dr. Albert Mumma,
University of Nairobi.
30
This report was prepared by the DDP Secretariat and does not represent an official position of UNEP or the DDP Steering Committee.
Please contact ddpinfo@unep.org for further information.

Briefing Document on Ensuring Compliance are thus more likely to have efficient and more accountable decision-making processes. Countries with well-developed legal systems (including an independent judiciary) and institutions are also more likely to have an effective compliance and enforcement capacity. The lack of an effective legal system and institutional capacity will place a greater responsibility upon proponents, financiers and insurers to ensure that alternative arrangements are in place. But more regulation is not always the answer and regulation must be viewed in the context of the system under consideration.” 8
5.
The theory on (environmental) regulation commonly distinguishes between regulatory instruments (permits, ambient standards, bans), market-based instruments (demand side management, tradable permits, negotiated environmental agreements), and information-based instruments (environmental management systems, life cycle analysis, awards). Although in considering compliance focus is mainly on the regulatory instruments, these cannot be seen as stand-alone instruments to achieve objectives and change.
6.
The Thematic Review on Regulation, Compliance and Implementation identified a number of factors that inhibit compliance and the implementation of good practice. The Review also suggested a number of mechanisms and tools that could increase the likelihood of successful compliance and the implementation of good practice. The box below shows these factors, tools and mechanisms.
How to ensure a clear allocation of responsibilities among the various actors and ensure transparency in the dealings of each agency?
6.
In the field of compliance the level of responsibility between the various actors (developer, NGO, affected people, regulatory agencies, operators) varies. Based on these responsibilities and the type of governance system present in-country, different forms of compliance systems exist 9 . Specified compliance refers to a system whereby the government imposes obligatory standards on the regulated party. Negotiated compliance is a situation whereby regulators and the regulated interact in setting the obligatory standards. When a system of co-regulation exists, there is a high-level of interaction between parties, but the agreed standards are not mandatory. Finally, a system of self-regulation can exist whereby actors (operators, associations, international financing institutions) act unilaterally in setting standards that are not legally enforceable.
8.
The Thematic Paper listed the following four examples of dispute resolution mechanisms; (1) an international dams inspection panel or national inspection panels, (2) an international dams ombudsman, (3) an international forum for hearing complaints and (4) national forums for mediation or arbitration. Obviously these options and their effectiveness will largely depend on the degree of legitimacy such bodies would get and also on the extent of their agreed mandate. The field of dispute resolution –especially within the private sectormight also be able to come up with many potential options and structures where countries could benefit from.
9.
The information flow from private developers and government agencies (both enforcement agencies and operators) is fundamental to the degree other actors can exercise their roles, be it watchdogs or enforcers. The Aarhus Convention is a clear example whereby countries mutually have agreed on issues of –amongst others- access to information. The box below describes the contents of the Arhus
Convention on the principle of ‘access to information’
10. The question that should be further elaborated is the kind of information, including monitoring information that is required for effective compliance. What information should be provided and to whom? The timely provision of information can also be considered.
8
9
Cropper, A; Bradlow. D; Halle M 2000. Regulation, Compliance and Implementation, Thematic Review V4 prepared as an input to the
World Commission on Dams, Cape Town, www.dams.org
UNEP, Government strategies and policies for cleaner production- Draft
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DDP Workshop on Ensuring Compliance, June 15–16 2004
Factors inhibiting compliance
❍ Incompleteness, incoherence and ambiguity of regulations;
❍ Non-enforceability of international law;
❍ Under specification of social and environmental requirements and integration of these components into the implementation schedule of the projects;
❍ Corruption and lack of transparency at key points in the decision-making process;
❍ Lack of meaningful participation at key points in the decision-making process;
❍ Low levels of monitoring that effectively feed back into decision-making;
❍ Weak, or non-existent legal recourse and appeals mechanism, particularly for negatively affected and vulnerable groups;
❍ The absence of an independent judiciary;
❍ Lack of political will and interest;
❍ Lack of human, organisational and financial capacity.
Mechanisms and tools that can contribute to compliance
❍ Clear, rationalised and enforceable regulatory frameworks governing dams-related decision-making that define rights, responsibilities, risks and rewards of all stakeholders;
❍ Self-regulation through the appointment of in-house compliance officers;
❍ Independents and well-funded monitoring by multi-stakeholders groups or expert panels throughout the planning and project cycle to ensure not only implementation but quality;
❍ Integrity pacts in which all principals and agents contractually agree not to engage in bribery or corruption;
❍ Access to credit/equity or better terms of credit for agents that accepts and implement guidelines and criteria in timely and acceptable manner;
❍ Social and environmental performance bonds set aside specifically to help ensure that commitments in these areas are fulfilled;
❍ Contingency funds to increase the likelihood that the manifold unanticipated impacts of dam construction can be addressed;
❍ Appeals, recourse, and adjudication mechanisms in cases of non-fulfilment or conflict, such as multi-stakeholder monitoring groups, independent inspection panels, dispute resolution boards, or ombusdsmen at the national or international levels;
❍ Licenses that require periodic appraisal of the state of existing infrastructure and the range of options available for meeting societal needs;
❍ National or international certification systems that “stamp” good practices;
❍ Human and organisational capacity building;
❍ Reporting requirements, allowing stakeholders to compare performance with promised action.
Source: Cropper, A; Bradlow. D; Halle M 2000. Regulation , Compliance and Implementation, Thematic Review V4 prepared
11. Enforcement and compliance can be a costly affair as it usually involves a complex administrative system involving standards, permits, monitoring and physical testing. As enforcement is traditionally a government responsibility, these costs were often borne by them. The application of the ‘polluter pays’ principle by enforcement agencies has shifted the onus to a certain extent from government to developer in some countries in the recent years. The shift to self-regulation however still requires an independent end-control by the government (or lending institution).
12. In addition to shifting the bearer of the costs, the income of the enforcement agencies could be increased through the imposition of fines. The use of environmental bonds, already applied in other sectors such as the extraction industry, can be a useful means of securing finance for future noncompliance situations.
Important developments
13. This paper is only intended to provide a brief overview and scratches the surfaces of many interesting studies and research that has been carried out by more specialized organizations. However, two initiatives are well worth mentioning here.
Firstly, it concerns the work carried out by UNEP on the non-binding Guidelines on Compliance with and Enforcement of Multilateral Environmental
Agreements (MEA) adopted by the Governing
Council. Currently, UNEP is developing an innovative manual on the implementation of these
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Briefing Document on Ensuring Compliance guidelines. Although focusing on the specifications of MEA, the guidelines and manual seek to assist governments, international, regional and sub regional organizations, national enforcement agencies, NGO’s, the private sector and other stakeholders in enhancing implementation of
MEA’s. The linkages between the practical experiences that will be included in the manual might finds its application for the Dams and
Development debate on Ensuring Compliance.
Secondly, in 2003 the International Hydropower
Association issued Sustainability Guidelines followed this year by the (draft) Compliance Protocol. The protocol aims to provide an aid to IHA members in implementing and complying with the IHA Sustainability Guidelines.
The draft protocol is published on the Internet for comments. These guidelines form a clear example of ‘selfregulatory’ initiatives that can be developed.
Aarhus Convention
The information pillar covers both the ‘passive’ or reactive aspect of access to information, i.e. the obligation on public authorities to respond to public requests for information, and the ‘active’ aspect dealing with other obligations relating to providing environmental information, such as collection, updating, public dissemination and so on. The reactive aspect is addressed in Article 4, which contains the main essential elements of a system for securing the public’s right to obtain information on request from public authorities:
Presumption in favour of access: Any environmental information held by a public authority must be provided when requested by a member of the public, unless it can be shown to fall within a finite list of exempt categories.
‘Any person’ right: the right of access extends to any person, without his or her having to prove or state an interest or a reason for requesting the information.
Broad definition of ‘environmental information’: the scope of information covered is quite broad, encompassing a nonexhaustive list of elements of the environment (air, water, soil etc.); factors, activities or measures affecting those elements; and human health and safety, conditions of life, cultural sites and built structures, to the extent that these are or may be affected by the aforementioned elements, factors, activities or measures.
Time limits: The information must be provided as soon as possible, and at the latest within one month after submission of the request. However, this period may be extended by a further month where the volume and complexity of the information justify this. The requester must be notified of any such extension and the reasons for it.
Form of information: The definition of environmental information covers information in any material form (written, visual, aural, electronic etc). There is a qualified requirement on public authorities to provide it in the form specified by the requester. Charges: Public authorities may impose a charge for supplying information provided the charge does not exceed a ‘reasonable’ amount.
Exemptions: Public authorities may withhold information where disclosure would adversely affect various interests, e.g.
national defence, international relations, public security, the course of justice, commercial confidentiality, intellectual property rights, personal privacy, the confidentiality of the proceedings of public authorities; or where the information requested has been supplied voluntarily or consists of internal communications or material in the course of completion.
There are however some restrictions on these exemptions, e.g. the commercial confidentiality exemption may not be invoked to withhold information on emissions which is relevant for the protection of the environment.
Public interest test: To prevent abuse of the exemptions by over-secretive public authorities, the Convention stipulates that the aforementioned exemptions are to be interpreted in a restrictive way, and in all cases may only be applied when the public interest served by disclo sure has been taken into account.
Refusals: Refusals, and the reasons for them, are to be issued in writing where requested. A similar time limit applies as for the supply of information: one month from the date of the request, with provision for extending this by a further month where the complexity of the information justifies this.
Onward referral of requests: Where a public authority does not hold the information requested, it should either direct the requester to another public authority which it believes might have the information, or transfer the request to that public authority and notify the requester of this.
The Convention also imposes active information duties on Parties. These include quite general obligations on public authorities to be in possession of up to date environmental information which is relevant to their functions, and to make information ‘efffectively accessible’ to the public by providing information on the type and scope of information held and the process by which it can be obtained. It also contains several more specific provisions:
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DDP Workshop on Ensuring Compliance, June 15–16 2004
Internet access: Parties are required to ‘progressively’ make environmental information publicly available in electronic databases, which can easily be accessed through public telecommunications networks. The Convention specifies certain categories of information (e.g. state of the environment reports, texts of legislation related to the environment), which should be made available in this form.
State-of-the-environment reporting: Parties are required to produce national reports on the state of the environment at regular intervals not exceeding four years.
Pollutant release and transfer registers (PRTRs): PRTRs have proven to be a highly effective and relatively low cost means of gathering environmental information from the private sector and putting it into the public domain, thereby exerting a downward pressure on levels of pollution. However, very few countries in the region have established PRTRs. The
Convention requires Parties to take steps to progressively establish such registers.
Emergency situations: Public authorities are required to immediately provide the public with all information in their possession, which could enable the public to take measures to prevent or mitigate harm arising from an imminent threat to human health or the environment.
Source: www.unece.org/env/pp/contentofaarhus.htm
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Presentation of Keynote Speaker Dr Albert Mumma
Madam Chair, participants, thanks you. What I have been asked to do this afternoon, is to give an overview on the topic ensuring compliance and try to address three questions, three issues which are basically to look at what compliance is; to look at the mechanisms that are available for enforcing compliance and then to highlight some of the key problems that arise with effort to ensure compliance. All along of course we are looking at this in the context of the development of dams and therefore the issues of compliance that we do look at will be issues that relate compliance issues to development of dams. It is of course the case that compliance is generic issue that cuts across many other areas of human endeavour and the dams happens primarily to be just one of them.
What I would like to start with is a definition of compliance and the definition which I would like to use today is that compliance is a process of ensuring that rules, agreements and obligations are implemented, enforced and given effect. This is a definition, which attempt to capture the aspect of compliance that relates to the process itself and of course highlights the fact that compliance is not a single event. Compliance is not in fact simply an end result but it is an entire process that ensures that an end result is achieved. And to be effective compliance requires a number of parameters, the first one is that there must be rules, standards criteria and guidelines. So the first issue which I believe it is important to highlight is that effective compliance requires the existence of rules and later we shall look at the fact that these rules also meets certain criteria in order to promote proper compliance.
Secondly that it is necessary to put in place some incentives to compliance and equally important to have deterrents to non-compliance. So in addition to the rules there must be incentives and deterrents and thirdly, there must be in place a monitoring system and a benchmarks to be monitored, which are very important to ensuring that compliance does take place. The forth issue that I would like to highlight, is the fact of third party participation in the process of compliance. I use third party here really to be synonymous with the terminology of stakeholder participation but the point being made there is that essentially the process of compliance requires the participation of persons other than the people who are immediately engaged in bringing about compliance, who typically will be the developer and the regulatory authority. So there is a need for the third party participation. The fifth issue that I would like to highlight is dispute resolution and the need for an independent system and mechanisms for dispute resolutions with respect to the process of compliance. And finally and very important is the issue of institutional capacity for bringing about compliance.
These are basically a set of requirements, which are by now means exhaustive, but that are key to ensuring that there is in place an effective compliance system. Looking first at the issue of rules, rules provide the basis for determining compliance or determining noncompliance. What we are looking at here is that to determine compliance is an objective requirement that is based on the existence of rules, standard criteria and guidelines. And therefore by the same token if indeed there are no rules then it becomes very difficult to say authoritatively whether or not there is compliance or the extent to which there is non-compliance. To be effective, the rules themselves must meet a number of criteria. They must be clear and unambiguous, they must comprehensive, they must be binding they must be enforceable and they must be seen to be fair. Now these are quite important requirements. It is quite often the case that rules do exist and I do make the point that if you take the sum total of national and international laws you will find that with respect to the management and development of dams that there are a whole range of rules that are applicable. However whether or not these rules will facilitate effective compliance, depends on the extent to which they meet some of the criteria that we have highlighted here. Clarity and lack of ambiguity is an extremely important criteria because if you look at this from the point of view of disputes with respect to the issue of whether has been compliance, then to the extent that the rules are ambiguous it will be very difficult to say authoritatively whether there has been compliance and in fact, when you then get into a dispute situation what lawyers will do is look at the ambiguity in the rules and therefore say that there isn’t a clear obligation that needed to have been implemented. And so clarity is very important.
The second issue is of course is comprehensiveness that quite often you do have rules and quite often the rules are clear but it is not always the case that the rules are comprehensive. By comprehensive we mean that the rules
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DDP Workshop on Ensuring Compliance, June 15–16 2004 must cover all critical aspects of the situation being dealt with so that one can demonstrate that there has been failure to comply with some of the rules which are applicable to the issue in question so comprehensiveness is equally important.
The third point there with regard to rules is that the rules must be binding. If you look at the heading that we have to this particular topic then you can see that it refers to rules, standard criteria and guidelines. There are more, for instance one could talk of codes of practice.
Basically with respect to the management of dams as the case with respect to the management of other aspects of development there are a whole range of applicable rules and principals. Not all of those are binding. Certain aspects of those rules will be binding; other aspects of those rules will not be binding. Just to give one example, it is quite often the case that guidelines are not binding in nature. It is also quite often the case that standards are binding. And so in looking at the nature of rules that are in place a critical issue to look at is whether or not they are binding. I could also indicate that some of these rules will operate in the area of criminal law while other ones will operate in the area of private Law. So for instance some of these rules will have arisen from private contracts which are made between parties for instance between a developer and a contractor to that particular developer. And when you have a situation like that where in fact what you are looking at is private agreements then of course the question of the extent to which they are binding is quite important, but similarly it is important in the area of public Law where in fact where will be certain requirement that are simply by way of guidelines and therefore necessarily binding.
In Law we always think that a critical aspect to compliance is enforceability. Enforceability refers to the fact that where you have rules there must be in place a system of giving effect to those rules. Just to give you an example quite often people do have a situation in which they have lent and borrowed money. There is a debt so there is an obligation to pay but that obligation is not enforceable for many reasons perhaps the court system is not accessible or it is accessible but the person who owes the money is bankrupt and therefore even if you do get judgment you are not able to get enforcement of that particular judgment. And I could give you very many examples. So the critical point to make regarding enforceability is that it is not just enough to make your rules, the question of course is whether there are enforcement systems in place so those rules can be enforced. So that what we always talk about is where you have right there must also be a remedy and if you have a right alone without that remedy then that right is not going to be of much assistance.
And then finally the question of fairness: What I have indicated there with regard to the nature of rules is that in order to promote compliance the rules must be seen to be fair. That is a rather different thing from saying that the rules must be fair. To be seen to be fair is what often will inspire compliance. Quite often people have situations in which the rules that are in place are strictly speaking quite rational but people do not see that there is fairness in those rules. People think that they are being taken advantage of unfairly. And when people do perceive rules in that way then there is an incentive to try to avoid complying with those rules. There can even be a sense of heroism in trying to avoid complying with those rules. I think you do know many examples where people have operated in a situation of dictatorship where the rule say clearly that to criticise the leader is an offence but because the rule is not seen to be fair many people in fact feel quite heroic in having the leader criticized. So essentially the point we are making there is that compliance is dependant on the extent to which the rules are fair. Of course we have indicated that these rules can be found in the national and international laws and systems that exist. And if you look at the area of water resources management particularly if you look at the development of dams for example, then you do find that at international level, there is a whole range of laws that deal with the sharing of international water courses. These laws at the base of it require equity and require reasonable use of the shared water course and those laws will govern the issue of the development of dams and then we will also make provisions for the ways in which national resources are to be developed through for instance requirements for environmental impact assessments and obtaining various licences and permits. So depending on the particular country in question, there will always be a whole range of rules that are applicable.
Typically when you are looking at a particular project then the rules will have been distilled and summarized into a particular license document or into a series of license documents. However, it is good to highlight the fact that the licence document does not in fact constitute the sum total of the rules applicable but constitute the summary of the key aspect of rules but then still the relevant national laws and even the applicable international laws must be kept in mind in trying to determine the whole range of rules with which compliance is required. We then go on to look at the issue of incentives and make the point that basically incentives are the flip side of deterrents but in fact incentives and deterrents go hand in hand but for this particular purpose it is necessary to start looking at the question of incentives. In order to achieve compliance it is quite important that the system of rules in place are backed up by a series of incentives, which then make compliance, appear attractive.
On balance where people can avoid compliance, they will avoid compliance for the reason that typically
36
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Presentation of Keynote Speaker Dr Albert Mumma compliance involves cost. That in fact in order to be able to comply, one must organize ones affairs in such a way that you are in a position to comply and that means that some costs will be incurred. Either in foregoing certain opportunities or indeed investing in certain systems so that you are in position to comply. So for instance if you look at the area of the development of dams with respect to requirements such as environmental assessments, there is an associated cost both in terms of financial outplace but also in terms of time and also in terms of processes of consultation and so on. So costs do arise from compliance. Because of that it is not enough that the rules require compliance. It is quite important to make easier for the parties required to comply by adding some incentives into the bargain, some sweeteners so to speak.
And these incentives cover a whole range of mechanisms.
There are financial incentives, and financial incentives include for instance tax incentives, they include subsidies for major investments, they include reduced liability risks and costs and these are some of financial incentives which if you look at the literature are used to great effectiveness in trying to improve the prospects of compliance. For instance various countries will include in their legislation the possibility of giving tax holidays or tax breaks when people do take action which makes it possible to comply with certain laws like for instance they make investments in certain capital equipment or where its in some countries they will provide outright subsidies. But traditionally, of course putting oneself in a position to comply also will then lead to reduced liability risks because in a state of non-compliance quite often there are associated liabilities and risks of liabilities can have a financial impact on a companies profitability. And because of that, being in a state of compliance does reduce the risk of liabilities.
An incentive to compliance can also be in the form of performance bonds. Performance bonds are typically are found in the area of contract law, but they have also been introduced into the area of licensing. Essentially what they involve is that at the time of obtaining the licence or the permit, or indeed of entering the contract then the developer is required to place a bond. The bond can either be a bank bond or an insurance bond. Typically it is a sum of money which is place upfront and it is used to secure the performance of the obligations in licence or the contract. Basically the way it works is that whenever there is a breach of obligations, certain percentage or certain portion of that money is deducted.
And so if in fact there are frequent breaches, then you find that all of that money will be deducted. On the other hand if there only are few breaches or no breaches at all then at the end of the period or the end of the contract or of the licence, then the bond is released. In that sense a performance bond is a big incentive to compliance because it secures compliance upfront. Quite often it is expensive particularly if you are looking at long term undertakings such as for instances the operation of dam which you are looking at 25 or 30 years then it does mean that one ties money for quite a long time so it is very expensive, and because of that it is a powerful, a very powerful incentive to compliance.
The third issue, which I highlight, is the existence of internal compliance systems under the compliance plan.
As I have indicated, to be in a position to comply requires that certain actions and steps be deliberately taken that one puts oneself in a position to comply. One of those is that it is necessary to have in place a compliance system.
This compliance system can for instance involve health and safety systems for companies or an environmental management system. It is also quite often the case that that system can be externally audited and we will look at the requirement for third party participation in a while.
But basically the point is that compliance is not a chance activity that you don’t by accident so to speak find yourself able to comply. It requires that you have deliberately taken steps which will put you into a compliance system. And that is basically the internal compliance system that we are talking about. It may require the appointment of particular compliance officers such as health and safety officer it may require the investments of certain funds and it may even require putting in place certain information and reactions mechanisms.
All of those are necessary, but additionally it is necessary to have in place a compliance plan. Now a compliance plan is very rarely a requirement in legislation, it’s much more a requirement as a condition to a license. In a number of countries they have included as a condition to their licenses or permit the requirement that there should be a compliance plan and that compliance plan should meet certain benchmarks, certain standards. And where there is a compliance plan what it will indicate are the kinds of systems that have been put in place to ensure compliance and the costs, the provision of costs, the provision of funding to back up that compliance plan.
That also will be an incentive to compliance because if it is in fact a requirements of the licence that there should be a compliance plan then once it is put in place then the system in fact will drive the operation towards compliance rather than vice versa.
Peer pressure is also quite an important incentive to compliance and on the whole peer pressure depends on the society at large being aware and requiring that operators carry out their activities in a particular way. I have always give the example of the fact that if you look at countries where activity that is environmentally damaging is not viewed in a negative light, then people who have just been involved in a serious pollution incidence have absolutely no shame in wearing badges at the next national day badges which have been given
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37

DDP Workshop on Ensuring Compliance, June 15–16 2004 to them by the Head of State and they have no shame.
In the meantime they are running an operation, which has caused air or water pollution or whatever, that is because there is no peer pressure, there is no social censure. But the converse is where you do have social censure, where you have peer pressure then the result of an environmentally damaged activity is that in fact you do feel a sense of embarrassment, a sense of shame that you have in fact done something wrong. And one of the challenges, which we will be looking at in a short while, is how to bring out that perception of change.
Looking the question of deterrence, deterrence is as we indicated is really the converse to incentives. An important deterrent, in my view perhaps the most critical deterrent, is the presence of institutional capacity for enforcement. If you look at many poor countries, one of the reasons why there is such a widespread noncompliance is because of the absence of the capacity to enforce, the absence of the capacity to bring about compliance. And this absence is quite often to be detected within the enforcement authorities. So you are dealing with enforcement authorities, which lack technical, financial and human resources. And in truth are not in a position to enforce. They are not in a position for instance to carry out effective monitoring, so that they cannot detect incidence of non-compliance and even where they do detect these incidence they do not have the capacity to assemble the evidence that would be able to prove convincingly in a court of law that there has been noncompliance, and quite often are therefore not been in a position to deter non-compliance. So the presence of institutional capacity is a critical requirement to effective compliance in any system.
Secondly in addition to having institutional capacity, of course, is the requirement for actual enforcement. I think many of you will be familiar with the complaint, which is often made of the absence of enforcements. In many countries you are faced with a situation where the rules do exist, where the court systems do exist but very rarely is one prosecuted for environmental offences. Part of it has to do with the absence of social censure that we were talking about earlier, part of it has to do with other issues which we will talk about in a while, but critically the point to make here is that even if one does have institutional capacity of enforce, there must be actual enforcement, and that actual enforcement must be through for instance prosecutions and through the imposition of penalties, and that those two together would then be quite important.
The third issue which is financial loss relates back to the issue we talked about earlier of requirement for bonds for instance so that in a situation where there has been non-compliance, then of course there must be action to call in the bonds and the bonds must be forfeited as an example, or that there must be action to impose penalties in the form of fines. Now these if they do happen, will deter non compliance and then make the point that a deterrent to non compliance is also a well informed and a rights conscious public. I believe that it is very difficult for an enforcement authority on its own to be able to drive the process of compliance just through enforcement, through prosecutions and through imposition of penalties, because it is rare to find the enforcement authority that has all the resources required to bring about compliance with respect to the area of its enforcement authority. And so typically the support that is given by the public in the enforcement process is critical but for the public to be able to provide that support it is necessary that the public is well informed and that it conscious of its rights.
So to give you an example, if for instance you have an operator who is operating in breach of his license and therefore polluting the water courses or is abstracting more water than it should or in fact is refusing to release waters which in fact it is obligated under the license to do, then an important aspect of compliance is that the public complain, is that the public is conscious of these breaches and that the public make noise about it and insist on compliance. So a right conscious public who is well informed is very important criteria for effective compliance. And then there is the question of loss of future contracts, which is particularly important where one is dealing with government contracts. Increasingly, it is becoming the case that those who have engaged in activities that are disreputable for instance in corrupt practises are being blacklisted internationally in fact so that the prospect of being blacklisted in one country and then your possibility of getting jobs in another country is becoming a real deterrence to certain non-compliance behaviours. For instance as you know in bidding for jobs companies are required to indicate whether they have some litigation or prosecution against them in any other country they are operating and the prospect then of being dragged into court over an issue of non-compliance then becomes a real deterrence.
Then the final point, which we had made earlier, is the issue of increased operation costs arising from accidents, breakdowns, higher insurance premiums, staff morale and so on or of which relate to the prospect of noncompliance.
Compliance Monitoring: Monitoring as you know is the process of checking compliance standards to verify that compliance is occurring. In order to be able to ascertain that compliance is occurring or that non-compliance is occurring, it is necessary to have in place a system of monitoring. I make the point that effective monitoring requires internal and external action. Internal action relates to the point we make earlier that there must be a
38
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Presentation of Keynote Speaker Dr Albert Mumma compliance system in place. If there is a compliance system in place in any organization, then an aspect of that compliance system will be a self-monitoring system.
And that self-monitoring system will enable the entity to be able to detect and correct compliance problems as they arise. I always of course give the example of the situation of financial auditing and it would be quite unheard of for any successful operation to operate without having in place a system of financial checks and balances. But in the area of environmental management people quite often assume that you can actually have an operation going on without a system of internal checks and in fact it is not practical.
So self-monitoring is an important aspect of compliance, its problem of course is that it can constrain transparency and accountability. What that means is that there is of course a tendency to then sweep under the carpet to hide from the outside world the problems that are detected.
That if in fact an entity discovers that they have been engaged in some activities, which are causing environmental problems, they keep quiet about it. They may correct it but they don’t disclose the fact that it has happened and therefore it is necessary to introduce third party monitoring as well. And third party monitoring is carried out by external enforcement agencies but additionally in some situations by partner appointed external auditors. So for instance if you are dealing with contractors then you quite often find that the main contractor will carry out the external auditing of the subcontractors in order to be satisfied in its mind that the claims of the sub-contractor with regard to the quality of the product or with regard to the performance are really born out. And so you do have those two aspects of external monitoring. That the enforcement agency will carry out the external monitoring because it is required by law to do so but partner organizations will also quite often carry out external monitoring.
External monitoring is what can lead to enforcement action. Quite often internal monitoring will not although there are in some laws the requirement that the results of the internal monitoring should be submitted to the enforcement agency and if they disclose non-compliance that can also lead to enforcement action although it is not as common.
Looking at the issue of third party participation the point to make here is that it is quite often the case that enforcement agencies are at risk of what is called regulatory capture. Regulatory capture arises because those are in charge of regulating activities either are financially vulnerable in which case there can be corruption or they do not have the political influence and authority to avoid being under the control of the major players in that particular country. So for instance you can find the regulator who is in fact is not able to regulate big industries, big business in that country because big business is connected to politics and to political authority in that country. Or sometimes its outright corruption and bribery but the result of it is that the regulators are under the influence of the regulated and that is basically what we refer as regulatory capture.
Now regulatory capture is mitigated and sometimes avoided altogether where there is third party participation in ensuring compliance.
Similarly third party participation can supplement the regulatory capacity of the regulator, so for instance where the regulatory authority is under resourced, sometimes you find that the action of non-government organizations will supplement its capacity by carrying out monitoring by blowing the whistle and so on. So those two aspects to third party participation is quite important. What it comprises is that third parties should be involved in decision-making, and again I am sure in the context of environmental impact assessment you are quite familiar with the extent to which third parties are involved in decision-making and the requirement that they should be involved in decision-making at various critical stages.
But secondly, the third parties can be involved in systems of certification processes of compliance systems, and I give there the example of international standard organizations, which now has a system for certifying environmental management systems.
In that sense what the third party involvement is doing is to supplement what the regulatory authority would have done by confirming that there is in place a certain environmental management system or a certain quality assurance system which itself is likely to promote compliance. And the fact that it is being done by a third party, then means that the resources of the regulatory authority do not have to be deployed to the same extent to monitor and enforce. In order for third party involvement in compliance to be effective, it requires what we mentioned earlier that there should be a well informed a rights conscious and well-organized public.
Quite often the public do not have the information to be able to be engage meaningfully in promoting compliance. Quite often they do not know what their rights are but I think even more commonly they are not properly organized, either because they themselves lack resources or because they themselves are unclear as to what objective they should be pursuing and are engaged in internal conflicts and so on. But the point we are really making is that if in fact you have a public that is wellinformed, conscious of its rights and well organized then they can engage meaningfully in promoting compliance by participating in monitoring and by being in a position to engage in third party certification and so on.
Secondly, it is necessary to have a right to information.
In order for third parties to be engaged they must be able to have access to information. And in fact in one of the handouts that you do have is an indication there, is a
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39

DDP Workshop on Ensuring Compliance, June 15–16 2004 reproduction there of highlights from the Aarhus
Convention which has included requirement for access to information in the field of the environment and access to information is important because of what we said earlier that in order to participate effectively in compliance it is necessary that the public have access to information. The extent to which that access can be exercised depends then on the next point, which is that the entire system must be democratic and accountable.
On the whole if in fact the law simply says that you have access to information but you are operating in a system in a country where democratic rights are not respected, if you attempt to enforce your right to information it is quite likely that you will fall upon very hard times because you will be told that in fact you are engaging in something for which you will be punished severely. So in addition to having the right of access to information, the entire system must be facilitative and supportive of the exercise of these rights.
Looking at the question of dispute resolution we have indicated that it is very important that there is in place a proper system of dispute resolution. And this comprises three aspects: the issue of conflict avoidance, third party intervention and then judicial determination of rights and obligations. Conflict avoidance measures are measures, which minimizes the risk of conflict. They include prior notification, information sharing, good faith negotiations and other requirements. The point there is that there are measures which are designed to ensure that parties do not come into conflict because for instance parties have informed each other of what it is they are planning to do. So if you are dealing with an international shared water resource, that before an upper riparian country begins to dam the river they have notified the lower riparian country that they have shared the information about potential consequences of that damming and also that they have engaged in good faith negotiations to be able to resolve whatever problems may arise with regard to that particular undertaking. And if these measures work, as they should then on the whole conflicts will be reduced.
But where conflicts do arise, quite often it is the case that international law provides for third party intervention first and this is through fact-finding missions, inspection panels and mediation efforts. And these are efforts, which they recognize that a dispute has arisen either over the interpretation of facts, or over the consequences of a certain activity or something like that or over the costs that should be met, compensation that should be payable and then the third party is involved to try and find a solution to that dispute. And then of course if all fails then you go to judicial determination.
Now judicial determination is typically a process that people resort to when they have failed to avoid the conflict and when the involvement of the third party has not resolved the conflict. In which case you go to the courts or you go to an arbitration process and the value there is of course is that what you come out with is a binding decision. So whereas with regard to third party intervention the decision is not binding but is supposed to be arrived at through parties agreeing to it but with regards to judicial determination the courts will give you a binding decision. Then of course is the fact that for this kind of dispute resolutions systems to work then the mechanisms themselves must be mechanisms, which are seen as impartial and the judges must be people who are seen as independent. I think again we are all familiar with very many complains which we come across in which people say that in fact the courts are not reliable and those people are biased and so on. In which case this does not promote compliance but in fact it undermines compliance because then people do not accept the decisions that have been made.
Looking at the question finally of institutional capacity, I believe the point has been made that in fact capacity is critical to ensuring compliance. It requires human, technical and financial capacity. The reality is that not every country has systems and institutions that have the capacity to bring about compliance. And typically where your systems lack capacity or have inadequate capacity then the way to go is to design tailor-made compliance systems.
For example you can then regulate activity through the licence or through the contract that is entered into. And when one does that then it is in recognition of the fact that greater effort has to be made on this individual enterprise and this particular tailor-made system because the general regulatory framework is not capable of dealing with the compliance issues that arise. Increasingly, reliance is also placed on international compliance mechanism. I make the point there that quite often the standards and requirements of the home countries of multinational corporations are being called in to supplement the compliance efforts particularly of poor countries. By which we mean that sometimes you find the argument being placed put quite successfully that if a company with its head office in United States operates a subsidiary say in
Thailand, then it must meet the same standards in Thailand that it is required to meet in United States. That argument is contrary to the previous one which was that you simply meet the standards in Thailand and it’s based on the fact the recognition that sometimes the standards in the country abroad are not in fact adequate to deal with compliance issues that are required. So that is an effort to try and call in support the home country standards of multinational corporations.
Similarly funding agencies such as the World Bank for instance also have their own requirement for instance with regard to environmental impact assessments and these will
40
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Presentation of Keynote Speaker Dr Albert Mumma govern any project in which the World Bank is engaged in funding regardless of whether or not the country in which the project is being undertaken has its own environmental impact assessment requirements and that again is of course an effort to supplement the systems that exist in the countries where these activities are taking place.
And of course then finally is the question of capacity building for purposes of sustainability. The point there is that it is not prudent to simply rely on looking to home countries, to looking to multi lateral funding agencies in the end the capacity must be built in the country where the activity is taking place for purposes of sustainability.
Finally the concluding remarks are to rehearse what we have said. That to ensure effective compliance:
• One must clarify the applicable rules;
• One must provide incentives and deterrent measures;
• One must institutionalise compliance monitoring and institutionalise third party participation in compliance;
• One must nurture independent conflict avoidance and dispute resolution systems; and finally;
• Build capacity in compliance enforcement.
If in fact these were achieved, then it would be possible to have with respect to any compliance requirement a system that would be able to achieve effective compliance.
The converse of course is that these are not achieved.
Then it is very unlikely that there would be compliance because in that situation, there will always be factors which are inhibiting compliance.
Thank you very much Chair
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41

DDP Workshop on Ensuring Compliance, June 15–16 2004
Chairman, Rapporteur: Alesandro Palmieri, Liane Greef
Participants: Mamadou Abdoul Kane, Chumnarn
Pongsri, Robert Steele, Johanna Waenquist, Mbodji
Aboubacry, Bill Freeman, Richard Twum, Frank
Muramuzi, Albert Mumma, Wanjiku Kaniaru
Main issues identified by the participants included the following:
• Main role of dispute mechanisms is conflict avoidance and resolution.
• Agreement on potentially contentious social and environmental issues needs to be reached with all stakeholders prior to project implementation.
• Need to establish ground rules based on principles of integrity, impartiality and independence as the basis to conduct good faith negotiations between parties.
• Need for political good will by the government.
• Prior notification and information sharing in a transparent manner is critical to confidence building among the parties concerned.
• Creation of incentives is necessary in order to enable both parties to reach agreement before third party involvement in the dispute.
• Extralegal measures, for example, publicity campaigns and blacklisting could be used when one of the parties is reluctant to enter into an agreement.
• Need for a clear identification of appropriate mechanisms for ensuring compliance eg government, regulatory bodies and an independent panel of experts.
The following steps towards the creation of a dispute resolution mechanism were identified by the participants:
• Find an agreement based on the common interests of both parties.
• Information sharing on the issues concerned
• Options need to be assessed against legitimate standards (national and international) in order to enable both parties to move beyond their respective positions towards good faith negotiations. In addition, appropriate incentives need to be created.
Questions raised for clarification included:
• What is the level of dispute being considered?
• Is the time factor taken into account in cases of projects that have been completed without any prior consideration being given to compliance issues?
• What happens if there was no agreement in place?
In this case, it was suggested that the parties concerned could embark on consultative processes that could entail the establishment of commissions or Forums for the aggrieved parties.
• In the case of a third person dispute resolution model, how would the terms of reference be drawn and the representatives selected?
Chairman, Rapporteur: Ute Collier, Anne Schuster
Participants: Cansen Akkaya, Joji Carino, Ute Collier,
Willie Croucamp, Ikuko Matsumoto, Anne Schuster,
Christine Eberlein.
Main issues discussed by the participants included the following:
The group started clarifying the concept and identifying external compliance bodies. The first addressed was the
External Monitoring Committee integrated by the
Government, developer or promoter, private sector
(consultant/contractor) and civil society. The examples of South Africa (Environmental monitoring group
42
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Report of Breakout Groups included affected people, representatives of government and promoter, interested party) and Swaziland
(Committee integrated by two government representatives; implementing body; contractors, consultants including one for the comprehensive mitigation plan; and the Swaziland Environmental
Authority SEA) were commented. They are specific bodies for specific projects. The participation of the promoter was considered questionable.
Secondly the Environmental review panel integrated by external local or foreign experts involved in checking compliance with policies was considered. This body approves the EMP and puts an onus on the promoter to ensure compliance. In the case of Swaziland in addition to the external review panel, the SEA requires audits as well. SEA was considered to be an internal body as it is the regulatory agency.
The criteria for selecting the members of the panel are being external to the project and have expertise. It was clarified that external refers to the developers interests.
Regulatory agencies and implementing agencies can be both government. There might be a conflict of interest and therefore external panels are preferred. The ERPs are seen as external bodies from the process. These bodies issue external advice to the Commission that decides the actions to be taken.
In the case of Turkey it was indicated that the contractor prepares the EIA, that is checked by the State Hydrological
Agency. If the EIA is found acceptable, it is sent for approval to the Ministry of Environment. The Ministry reviews the report and provides approval involving a wide range of experts. After the project is approved a number of check ups takes place (monitoring of emissions for example). The whole world is an external body. As regards in country transboundary waters an inter river basin working group will be established including all stakeholders.
It was informed that in Switzerland, local, canton and national level commissions have been established. They are integrated by NGOs, private sector, financing sector and the government. This scheme was used to elaborate the energy policy.
The World Bank might demand the establishment of a panel of experts . The organisation sends out a supervisory mission each half year, which makes her own compliance advice. The panel members are approved by the Bank. It is an external advisory body.
IFC monitoring unit advises the IFC chairman directly.
They might make a country inspection upon request (can be asked by affected groups). It has several functions, that of ombudsman among them and might address compliance issues.
It was indicated that creditors might have their internal review panels .
As regards issues of compliance related with resettlement schemes it was pointed out that a number of government authorities are usually involved (cadastre, planning, etc.).
In case of complain everybody can go to court at any specific stage for the resettlement case. There is no specific body for these cases. It was emphasised that compliance is a voluntarily issue for governments. Positive effects should be highlighted.
As regards challenges the group identified:
• Lack of local standards and what alternative standards to choose.
• Effectiveness of the review panel is time, which might meet 2 weeks every six months.
• Finding the right people and the right balance
(social, academic, environmental).
• Accountability of the panel. To whom will they be accountable?
• To address the issue of public or private money involvement, that plays a role. Financial audits are part of it.
• The legal standing of commission. How to empower it.
• The legal standing of environmental action plan.
The preference was that it should be attached to permit, so there is a legal standing for citizens.
• International obligations. NGO watchdogs organisations play an important role.
• Convincing decision makers. In the case of South
Africa the triggering factor to establishing the system was to improve project image benefiting the private as well as government. Risk minimisation confidence building with financers.
• Establishing the role for less formally established bodies. The role of NGOs.
• Accessibility of body to the public.
• Financing of the body.
• Capacity building of this body.
• Scope of the body: should there be a permanent body or a project specific body.
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43

DDP Workshop on Ensuring Compliance, June 15–16 2004
Chairman, Rapporteur: Woochong Um, Asian
Development Bank
Participants: Flavia Braga, Constance Hunt, Naeem
Iqbal, Patrick McCully, Paul Roberts (partial attendance),
Dave Tipping, Reefat Abdel-Malek, Elena Veligosh
The group first decided to identify the key actors.
Different groups require different types of information.
These groups include developers, financiers, operators, civil society (including directly and indirectly affected people, NGO community and the wider public). The group discussed what type of information is needed for each of these groups, by when and how. More time was spent on government and civil society because other groups are the originators of a lot of the information that is needed and because of time constraints.
In terms of government, the different roles that government can play were first considered: as regulating bodies and project implementers/developers.
Governments need baseline information (which is needed by all stakeholder groups) as early as possible and in a regularly updated fashion. International standards should be known by the government. An efficient knowledge management between government, international institutions, international agencies, academic institutions will contribute to the sharing of information and standards that establish the specific context. Of course, government needs project-specific information to make decision of whether or not to proceed with the project and what are the benefits and costs. Government particularly needs to have a good idea of what are the negative impacts.
The developer needs to know the regulatory framework,
EIA guidelines and other guidelines. These could come from the government and/or from the funding agency, depending on country context. Developer needs baseline information from various sources – government, affected people, scientific institutions, NGOs, etc.
Financiers need project-specific information. The group did not have time to discuss project-specific information in detail, but again includes the regulatory framework, monitoring information from surveys and affected people, etc. Contractual information comes primarily from the developer.
Civil society needs project-specific information.
Depending on what part of civil society one is talking about, there is a need to have information on different aspects of the project, but a common theme is that the information needs to be understandable and easily accessible. Certain parts of civil society need cumulative effect information, especially neighbouring countries and the people who are looking at long-term impacts of initiatives.
Regarding the general public, it was thought that the topic of procedures on how to get information was very important. There is a lot of information out there, and different parties hold different information, so civil society needs to know what information exists, who has it and how to go about getting it. These procedures must be widely known. At the national level, the wider public needs to know whether a project is likely to have significant impacts on the macroeconomics of the country and, if so, what those impacts might be. With regard to the regulatory framework, the public needs to know what their rights are and what the possible avenues for recourse in the case of non-compliance are. The general public also needs baseline and contractual information. Much of the important information is included in contractual information in terms of obligations, rights and so forth. The relevant parts of contracts, such as information relating to social and environmental issues, should be made available to the relevant parties to the extent possible.
Five key recommendations:
1.
Need to identify the necessary baseline information and to ensure the availability of this information, including project specific issues, international standards and best practices. This type of venue is a good medium for that.
2.
Information needs to be up-to-date, accessible and understandable in appropriate languages and in a timely manner. This statement includes several issues compressed into one and implies that the situation has to be continuously monitored. The relevant information should be made available in
44
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Report of Breakout Groups appropriate languages, which could include different forms of communication such as posters or pictures.
3.
Operators and developers should undertake regular monitoring of dam performance and make information publicly available through a verifiable mechanism. This is a long term process leading on from the baseline information periodic monitoring by these parties.
4.
The information acquisition process should be widely known, including understanding of who has information and how to go about accessing it.
5.
Consequences of non-compliance and recourse and review mechanisms should be widely known, including consequences of non-compliance as incentives for compliance.
Committee (EMC) operating in South Africa was recalled.
The setting up of a compliance committee was paid particular attention. It was considered that a multistakeholders committee comprises of 5 entities. Four of them are due to demonstrate compliance and the affected people (to assess either positively or negatively). The issue of identification of mandate and ToR for the Compliance
Committee was raised. All group participants did not agree about the feasibility of proposing in general the establishment of such committee, since each country has its own laws and structure of responsibilities. Introducing a new committee into a country is not straightforward and easy – it is a challenge. There should be willingness for improvement – even if it just a matter of strengthening the already existing mechanism (particularly relevant for developing countries). So if it is proposed the need should be very well understood and well accepted. The issue of
Chairman, Rapporteur: Richard Taylor
Participants: Anne Lund, Francisco Mendes,
Engelbertus Oud, Khin Ni Ni Thein, Prabin M. Singh,
Joseph Hmar, Paul Noupa
Key issues identified by the group:
6.
Who is complying and with what.
7.
Classification of resources (legal, human, financial)
8.
Need to identify all stakeholders and their Rights,
Risks and Responsibilities
9.
Scale and Type of the Project
10. Appreciating the National Context
Levels: Policy level and Project level. There are two phases in the project development: planning and implementation. The latter is the stage where compliance should get into picture.
The group started considering the Project level. As regards what entities might need to demonstrate compliance the entities identified comprised: (i) investors and financiers;
(ii) contractors and consultants; (iii) developers, owners and/or operators and (iv) Governments. In relation to governments it was considered that they are not homogeneous bodies, they have different departments and have own sets of rules that are often contradictory.
As regards financial resources for compliance reference was made to investors and financiers that assume to have resources but not enough to ensure compliance. The source of finance was deemed critical in terms of credibility. As regards mechanisms to ensure compliance reference was made to the discussions in the morning.
The institution of the Environmental Monitoring reliability and confidence in a third party mechanism was pointed out.
A suggestion to establish a committee at the local level was posed. By doing so the gap between decision makers and local people could be narrowed – addressing the difficulties to get people’s complaint heard by the committee. Local people should know to whom they could send their requests and complaints. It was opined that local people should have direct access to rule creators.
Rules should be set for every one and they should be fair for everyone – rules have to be adapted to reality.
It was pointed out that the size of the project influences the approach to the compliance mechanism and what tools will be used to ensure compliance. Issues of scale, enforcement and building capacity on ensuring compliance were considered relate to it.
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45

DDP Workshop on Ensuring Compliance, June 15–16 2004
The group addressed issues of government roles in monitoring private sector developments, of project size and revenues during discussions. The issue on enforcement and empowering the authority to punish guilty non-compliance was raised, noting that the approach should vary as regards the different national processes that appreciation should be given for the different sets of rules in different countries. This involves also the legal management of grievances. The institution of the national prosecutor was brought as example.
It was agreed that consideration should be given to two kinds of resources: human resources/capacity building and funding resources. The issue of economic resources and funding aspects were addressed. The assumption is that the ability of governments to provide financial resources might be limited. Developed country government can/should support developing countries governments to build human-capacity and funding.
46
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EMP
EPA
ERP
GRI
ICOLD
IFC
IHA
ISO
IUCN
ADB
CBO
CSR
EC
ECAs
EIA
EMC
MEA
PPA
TOR
UNEP-DDP
WB
WCD
WWF
African Development Bank
Community Based Organisations
Corporate Social Responsibility
Ensuring Compliance
Export Credit Agencies
Energy International Agency
External Monitoring Committee
Environmental Management Plan
Environmental Protection Agency
Environment Review Panel
Global Reporting Initiative
International Commission on Large Dams
International Finance Corporation
International Power Association
International Organization for Standardization
The World Conservation Union
Multilateral Environmental Agreements
Power Purchase Agreement
Terms of Reference
UNEP Dams and Development Project
World Bank
World Commission on Dams
World Wide Fund for Nature
List of Abbreviations
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47

DDP Workshop on Ensuring Compliance, June 15–16 2004
48
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