A Guide to Environmental Auditing of Hydropower Projects

Transcription

1 Reguating and Monitoring Capacity Buiding for Environmenta Impact Assessment (EIA) of Hydropower Project in Nepa A Guide to Environmenta Auditing of Hydropower Projects Government of Nepa Ministry of Environment, Science and Technoogy With the assistance of Roya Norwegian Government and technica assistance of Norwegian Directorate for Nature Management Kathmandu, Nepa September 2006

2 Reguating and Monitoring Capacity Buiding for Environmenta Impact Assessment (EIA) of Hydropower Project in Nepa A Guide to Environmenta Auditing of Hydropower Projects Government of Nepa Ministry of Environment, Science and Technoogy With the assistance of Roya Norwegian Government and technica assistance of Norwegian Directorate for Nature Management Kathmandu, Nepa September

3 Pubisher: Government of Nepa Ministry of Environment, Science and Technoogy Secretariat Compex, Singhdurbar Kathmandu, Nepa Te: / Fax: E-mai: info@most.gov.np Website: This guideine has been pubished as a part of the project entited Reguating and Monitoring Capacity Buiding for Environmenta Impact Assessment (EIA) of Hydropower Project in Nepa jointy managed by the then Ministry of Popuation and Environment and the Norwegian Directorate for Nature Management. Citation: MoEST, Ministry of Environment, Science and Technoogy, Kathmandu MoEST: The materias in this pubication may be reproduced in whoe or in part and in any form for education or non-profit uses without permission from the copy right hoders provided an acknowedgement of the sources is made. The use of this pubication for rese or for commercia pubication purposes without prior permission from MoEST is stricty prohibited. Cover Photo: An Overview of Kuekhani Reservoir Photo Courtesy: Department of Eectricity Deveopment Printed at: Kumakh Printing Press Eraihiti, Banasthai, Ktm. Te: Avaiabe from: Government of Nepa Ministry of Environment, Science and Technoogy Secretariat Compex Singhdurbar Kathmandu Nepa The views and concerns of the organisation invoved in drafting this guide are retained as far as possibe and it does not refect the officia opinion of the pubisher in matters that contradict with existing poicies and aws.

4 Ref. No: Govenrment of Nepa Ministry of Environment, Science & Technoogy Peface , , , , Fax: E-mai: Website: Singhdurbar, Kathmandu Nepa Environmenta auditing (EA) is an emerging area of concern in Nepa and heps to understand environmenta performance of the proponent and stakehoders invoved in impementing the deveopment project. EA provides usefu information about the state of the environment on pre-project and post-construction stage in a given area. The auditing information aso provides a basis to seect environmenta protection measures to address environmenta probems of simiar nature in simiar ecosystem and may contribute to the improvement of environmenta conditions. The Environment Protection Act, 1996 and its Rues, 1997 urge to conduct environmenta auditing after two years of service provided by the project. The Ministry of Environment, Science and Technoogy (MoEST) has undertaken necessary steps to expedite environmenta auditing in the recent days and I beieve that this guide wi streamine this initiative. This guide has been deveoped as a part of the project on Reguating and Monitoring Capacity Buiding for EIA of hydropower projects in Nepa. The Project is being impemented with the generous financia assistance of the Roya Norwegian Government and technica inputs of the Norwegian Directorate for Nature Management. I woud ike to appreciate the Roya Norwegian Government for providing financia assistance and the Directorate for Nature Management for providing technica assistance to impement this Project. The Ministry woud ike to thank the Schoo of Environmenta Management and Sustainabe Management (SchEMS) in particuar Messrs. Ananda Raj Joshi, Binaya B. Adhikari, and Suman Piya of SchEMS, for their consuting services during the preparation of this guide. I woud aso ike to thank Mr. Vinod-Jnawai, Joint-Secretary, Mr. Manohar Khana, Under-Secretary and Ms. Neera Pradhan of the then Ministry of Popuation and Environment and Mr. Reider Hindrum, Long-Term Advisor of the Project for their support and inputs during the preparation of this guide. The Steering Committee members and the participants of the document finaization workshop are aso acknowedged for their vauabe inputs. I woud aso ike to thank Mr. Batu Krishna Uprety, Environment Officer and Chief of Environment Assessment Section of this Ministry in deveoping this guide in the present form. September 2006 (Ba Krishna Prasai) Secretary

5 Contents Preface Acronyms Chapter 1: Introduction Requirements for Environmenta Auditing Why Environmenta Auditing Types of Environmenta Auditing Trends in Environmenta Auditing Status of Environmenta Auditing in Nepa Reationship between Auditing and Monitoring Reationship between Auditing and Environmenta Management Pan 3 Chapter 2: Fundamentas of an Environmenta Audit Use of Environmenta Audit Choice of Audit Type Audit Frequency 5 Chapter 3: Designing an Audit Programme Programme Design for Auditing Identification of Audit Programme Goas and Objectives Seecting the Type and Scope of Environmenta Audit 6 Chapter 4: Programme Administration and Resources Programme Administration Programme Initiation Deveop an audit poicy Consuting Services Programme Management Issues and Activities Securing management support Mobiising quaified personne Audit programme performance measurement Reporting responsibiity Post-audit activities and corrective measures Resources and Toos for Auditing Pre-Visit Questionnaire Auditing Protocos Auditing pan Photography Aeria Photographs Reference Materias 9 Chapter 5: Auditing Activities and Report Writing Pre-Audit Activities Setting the Objectives and Scope Panning and Preparation for Site Visit Review of EIA and Monitoring Reports Review and Refining of Audit Protoco Preparing Project Management for the Audit On-Site Activities 11 (i)

6 5.2.1 Introduction with Project Management Site Interview with Pertinent Project Staff Site Wak-Through Review of Records and Documents Exit Interviews Use of Environmenta Auditing Checkist Debriefing from Audit Team Post-Site Activities Prioritizing Audit Findings Carifying Assignments for Audit Team Members Identifying and Gathering Additiona Data Audit Report Writing Preparation in the Fied Report Preparation Sampe Report Format Action Pan and Corrective Measures 13 Annexes 1 Post-Construction Environmenta Impact Audit Study of Kai Gandaki "A" Hydroeectric Project: Case Study 14 2 Sampe Audit Checkist 18 3 Fied-Testing of Environmenta Auditing Guide 19 4 List of Contacted Persons 24 5 Finaization Workshop on Environmenta Auditing Guide 25 6 List of Workshop Participants 26 (ii)

7 Acronyms ACRP ADB BOD COD DN DO DOED EA EIA EMP EPA EPR ESSD FGD GoN GWH ha HMG/N IEE kv MOPE MW NEA PAF PRA PVQ SchEMS SPAF TSS USEPA VDC Acquisition, Compensation and Rehabiitation Pan Asian Deveopment Bank Bioogica Oxygen Demand Chemica Oxygen Demand Norwegian Directorate for Nature Management Dissoved Oxygen Department of Eectricity Deveopment Environmenta Assessment Environmenta Impact Assessment Environmenta Management Pan Environment Protection Act Environment Protection Rues Environmenta and Socia Studies Department Focused Group Discussion Government of Nepa Giga Watt Hour Hectare His Majesty's Government of Nepa (then) Initia Environmenta Examination Kio Vot Ministry of Popuation and Environment (then) Megawatt Nepa Eectricity Authority Project Affected Famiy Participatory Rura Appraisa Pre-Visit Questionnaire Schoo of Environmenta Management and Sustainabe Deveopment Seriousy Project Affected Famiy Tota Suspended Soids United States Environment Protection Agency Viage Deveopment Committee (iii)

8 Chapter 1 INTRODUCTION Major hydropower deveopment projects in Nepa must conduct Environmenta Assessments (EAs), either Initia Environmenta Examination (IEE) or Environmenta Impact Assessment (EIA), before their impementation. Such assessments are generay conducted during the feasibiity study of the project. The Environment Protection Act (EPA), 1996 and Environment Protection Rues (EPR), 1997 (amendment, 1999) are the major ega instruments which provide overa guidance to EAs in Nepa. As per EPR, 1997, each project under consideration is first screened to determine whether it shoud undergo IEE or EIA. IEE foows reativey simper procedure. Scoping and pubic hearings are not required for IEE study as per EPA, 1996 and EPR, A ist of anticipated impacts and corresponding mitigation measures to be appied are, in genera, the fina products of an IEE. EIA, on the other hand, incudes a series of extensive steps such as scoping, pubic hearing, impact identification and prediction, aternative anaysis, mitigation measures, and environmenta monitoring and environmenta auditing. Rue 14 of EPR, 1997 ceary specifies the need of conducting environmenta auditing for the projects that are subjected to an EIA. As per this Rue, the responsibiity of undertaking an environmenta auditing is with the Ministry of Environment, Science and Technoogy (MoEST) and the auditing requirements shoud be incuded in the EIA report taking into consideration the Schedue 6 (matters to be mentioned whie preparing reports reating to EIA) of the EPR, The project proponent might aso conduct environmenta auditing to know its environmenta performance. Thus, the principe objective of this guide is to provide guidance to those which wi be invoved in environmenta auditing incuding project deveopers, contractors or consutants. It is conducted to ensure that environmenta performances carried out in order to compy with environmenta aws and standards are comprehensivey and systematicay reviewed. There is no detai on "how to" conduct environmenta audit in the existing guideines and aws. This guide describes the components of environmenta auditing and provides guidance about issues that arise and require to addressing during its conduction. It is intended to be informative not instructiona, and shoud be used in conjunction with the deveopment of auditing protoco in order to undertake a successfu environmenta auditing programme. 1.1 Requirements for Environmenta Auditing Rue 14 of the EPR, 1997 requires MoEST to undertake an environmenta audit of a project subjected to EIA after two years of the commencement of service. As per this Rue, MoEST is responsibe for carrying out environmenta auditing and maintain the updated records thereof. In addition, Schedue 6 of the EPR, 1997 requires the project proponent to deveop auditing format in the EIA report. 1.2 Why Environmenta Auditing? Environmenta auditing can be defined as "a systematic, periodic, documented and objective review of project activities reated to meeting environmenta requirements". An audit shoud assess the actua environmenta impact, the accuracy of prediction, the effectiveness of mitigation and enhancement measures, and the functioning of monitoring mechanism. Further, the review shoud be systematic and objective. The objectives of environmenta audits are to: Verify compiance with environmenta requirements; Evauate the effectiveness of in-pace environmenta management system; and Assess risk from reguated and unreguated practices. 1

9 Environmenta auditing has been universay accepted as one of the components of Environmenta Management Pan (EMP) and shoud be undertaken after construction, during operation, and upon the competion of the project decommissioning as we in the entire ife of the project. 1.3 Types of Environmenta Auditing The Nationa Environmenta Impact Assessment Guideines, 1993 has mentioned the foowing types of audits. a) Decision Point Audit: It examines the effectiveness of EIA as a decision-making too. b) Impementation Audit: It ensures that consented conditions have been met. c) Performance Audit: It examines the effectiveness of project impementation and management. d) Project Impact Audit: It examines environmenta changes arising from project impementation. e) Predictive Technique Audit: It examines the accuracy and utiity of predictive technique by comparing actua against predicted environmenta impact. f) EIA Procedure Audit: It criticay examines the methods and approaches adopted during the EIA study. Apart from the above-mentioned audit types, other types of audits such as waste minimization audit, workpace safety and hygiene audit, poution prevention opportunity assessment etc. coud aso be conducted taking into consideration the purpose of audit. Compiance and management audits are two other broad audit types often used in practice. The former is used to evauate project compiance status with the current environmenta requirements whie the ater is designed to evauate an organization's abiity to carry out its environmenta management programme. 1.4 Trends in Environmenta Auditing Chemica industries in USA were the first to initiate the environmenta auditing concept in the eary 1970s. As reguations became more compex, non-compiance costs increased, and the U.S. Environment Protection Agency (EPA) stressed the importance of conducting environmenta audits to reduce the compiance costs, and environmenta managers of severa federa agencies began to incorporate audits as essentia toos in their operations. As environmenta auditing has continued to gain acceptance in both the pubic and private sectors, new trends in auditing have emerged. Some of the recent deveopment in the fied of environmenta auditing incudes management audits, auditing standards and accreditation of auditors. 1.5 Status of Environmenta Auditing in Nepa Requirement for environmenta auditing in Nepa is being incuded in the EIA reports. The report incudes auditing parameters and methods. Manua for Preparing Environmenta Management Pan (EMP) for Hydropower Projects, 2002 provides a semi-detaied framework for environmenta auditing. Most of the projects having approved EIA reports are sti to be impemented thereby imiting environmenta auditing egay. Few hydropower projects in Nepa have conducted environmenta auditing, though their EIAs have not been approved through the prescribed ega procedure. The Puwa Khoa Hydroeectric Project in Iam district, the Modi Khoa Hydroeectric Project in Parbat district and Kaigandaki "A" Hydroeectric Project in Syanja district are the exampes of such projects. A post-construction environmenta impact audit study of Kai Gandaki "A" hydroeectric project was conducted by Environment and Socia Studies Department (ESSD) of Nepa Eectricity Authority (NEA) in Questionnaire administration, fied visit and Focused Group Discussion (FGD) were the main methods adopted for the study (Annex 1). 2

10 1.6 Reationship between Auditing and Monitoring Environmenta auditing is cosey inked with environmenta monitoring, conducted at project construction and operation phases. EIA report can serve as starting point and is, in fact, a good source of information for designing audit programme. Review of monitoring data is often an important basis for undertaking the audit. Monitoring is a continuous activity whereas environmenta auditing is one time activity in most cases. 1.7 Reationship between Auditing and Environmenta Management Pan EMP provides detais for the impementation of environment protection measures (benefit enhancement and adverse impacts mitigation measures), and conduction of monitoring at different stages. Whie environmenta auditing heps to evauate the project compiance status and identify new environmenta probems, if occurred. Auditing uses the information of compiance and effectiveness of such measures and compares with pre-project condition of environmenta resources. In this context, a cear inkage shoud be estabished amongst pan for the impementation of environment protection measures, monitoring and auditing parameters in the EIA report. It shoud aso consider the methods used for baseine data coection and conduction of monitoring and auditing. The differences in methods might affect the audit findings. 3

11 Chapter 2 FUNDAMENTALS OF AN ENVIRONMENTAL AUDIT As defined in section 1.2, environmenta auditing basicay incudes the review of project activities reated to meeting the environmenta requirements. Such reviews may be simpe or compex depending upon the compexity of the environmenta issues invoved and functioning of the inpace environmenta management programme. In the former case, audit activities such as site interviews, site wak-through, and review of project's environmenta monitoring report may be adequate. In the atter case, more compicated and time-consuming procedures such as samping, testing, and anaysis may be needed. However, in any situation, an audit shoud provide a systematic and objective evauation of past activities, descriptions of present status, and recommendations for future actions. Generay, there are three parties invoved in an environmenta audit. They are: Auditor: A person or a team conducting an audit; Auditee: A project or components of a project being audited; and The third party: The institution who want to know the resut of an audit. An environmenta audit coud be interna or externa depending upon the party/institution invoved as an auditor for the task of mandatory or vountary auditing. The foowing definitions and exampes woud hep carify these frequenty used terms: Interna: When an institution or organization conducts an audit of its own operations/projects to see the performance of its environmenta management programme. For exampe, when a hydropower company conducts an environment audit of its own project, it is referred as interna auditing. Externa: When an institution or organization conducts an audit to check how it has performed. For exampe, when MoEST or third party conducts an audit of a hydropower project, if is considered as externa auditing. Mandatory: When the aw requires an audit. For exampe, Environmenta auditing of any hydropower project subjected to an EIA is required by Rue 14 of EPR, 1997; MoEST conducts such audit. Vountary: When the aw does not require an audit. It is intended to improve the performance of the in-pace environmenta management system. For exampe, environmenta auditing of any hydropower project subjected to an IEE. 2.1 Use of Environmenta Audit Athough environmenta auditing is sti new for the deveoping word, the deveoped countries have neary 30 years of experience of using it. During this period, necessary improvements have been made. A remarkabe deveopment during this period is that the initia focus for compiance audit has graduay been shifted to management audit. Now, it has been estabished as beneficia in order to evauate the overa performance of the environmenta management pan particuary in the context of introduction of more stringent environmenta aws and standards and aso refine assessment methods and seection of environment protection measures. It has aready gained a wide acceptance in both pubic and private sectors. An environmenta audit heps to evauating the project's compiance status and is widey accepted as a mechanism for evauating the organization's abiity to carry out its environmenta management programme. Thus, the purpose of environmenta auditing shoud not be imited to pointing out the noncompiance areas ony rather it shoud aso be abe to trace out the root causes of such non-compiance. 4

12 2.2 Choice of Audit Type Seection of a type of audit is the component of audit programme design and it entirey depends upon its goas and objectives. A wide range of audit types with different names are avaiabe (see section 1.3) and a particuar audit type can be chosen with or without its fine tuning according to the need. Some audit programmes use ony one type of audit whie others use two or more than two types in combination. For exampe, when the objective of the audit is to examine the project's compiance status with the current environmenta standards, compiance audit aone can fufi the purpose. When the audit objective is to evauate the compiance status and unfod the underying causes of non-compiance, both compiance and management audit might be conducted. 2.3 Audit Frequency The use of term "periodic" in the definition of environmenta auditing refers to the fact that environmenta auditing shoud not be perceived as a one-time event. Severa factors pay roes in determining how often auditing shoud be conducted. Some major factors determining the audit frequency are: Audit goas and objectives; Nature of the project, ocation and associated environmenta risks; Resources avaiabe for carrying out the programme; Project's compiance status; Project's overa environmenta management history; and Wiingness and motivation of the project towards resoving the environmenta probems. On the basis of audit findings, audit report shoud ceary indicate when and how often the foowup audits are to be conducted. The time gap between the two audits may vary substantiay within the same project. However, the primary determining factor is the functioning of the environmenta management pan (EMP) of a particuar project. The better the EMP of a particuar project, the ess wi be the number of auditing required and more wi be the gap between each pair of audits. 5

13 Chapter 3 DESIGNING AN AUDIT PROGRAMME Auditing, in the past, was narrowy defined as a checkist-based approach for evauating compiance. Auditing now incudes the review of the impementation of environmenta management pan as a whoe. An audit programme can serve both identifying the barriers as against meeting environmenta goas as we as soutions for resoving probems. Hence, the designing of audit programme has tremendous importance in achieving the targeted environmenta goas. 3.1 Programme Design for Auditing Design of an environmenta audit programme requires carefu consideration of the desired goas and objectives. It aso requires the deveopment of strategy for conducting pre-audit, on-site audit and foow-up activities. Design factors that shoud be considered whie deveoping an environmenta audit programme incude: Scope of audit; Frequency of audit; Types of audit; and Leve of effort required. Considerations that infuence these audit design are: Resources avaiabe for carrying out the programme; Nature of the project operation and associated environmenta issues; Scope of the environmenta management pan; and Perception and support of the project. 3.2 Audit Programme Goas and Objectives The concerned agency (agency preparing for auditing) shoud ceary estabish ong-term goas for the audit programme. Its goas shoud be compementary to the project's goas for achieving an environmentay sound hydropower deveopment in the country. After estabishing the goas, it is necessary to deveop an impementation strategy by determining short and ong-term programme objectives. The primary short-term objective of the audit shoud focus on bringing the project into fu compiance with existing environmenta requirements. Longterm audit objectives shoud broaden the programme focus from strict compiance with current requirements to eiminate underying environmenta probems. 3.3 Seecting the Type and Scope of Environmenta Audit The agency shoud seect the type of audit to best meet the audit programme goas and objectives. Auditing activity is increasingy becoming speciaized. It is no onger imited to determining compiance with the current requirements. Instead, it can be used to identify and resove underying causes of compiance issues. A wide range of auditing types is being used to evauate current compiance status, future risk of non-compiance and opportunities for minimizing non-compiance. 6

14 Chapter 4 PROGRAMME ADMINISTRATION AND RESOURCES 4.1 Programme Administration The process of administering an environmenta audit programme is based on the framework and procedures outined in chapter 3. The success of an audit depends upon buiding a strong foundation and aunching it carefuy with proper strategy for each phase of the programme Programme Initiation A number of steps shoud be taken prior to the forma aunching of the audit programme. MoEST and other auditing agency shoud consider these steps preferaby under the direction of senior management Deveop an audit poicy The starting point of an environmenta audit programme is often the deveopment of an audit poicy. The poicy wi hep to ay the foundation for estabishing programme's purpose and functions. The poicy shoud incude a detaied description of the scope, goas, and objectives of the audit programme. It shoud aso incude discussion on how the audit programme wi be managed and administered. In addition, impementation programme shoud aso be deveoped at this stage. Some of the issues that shoud be addressed in the strategy incude (a) securing resources for funding the programme; (b) assigning roes and responsibiities for programme impementation; and (c) determining the best way of communication with the interested parties Consuting Services At the beginning, the auditing agency might take the consuting services to such audit. However, it shoud ceary provide the terms of reference before awarding for such services. In the ong-term, a team of officias comprising of various discipines might be trained on audit procedures and protocos as a part of capacity buiding and internaising the auditing activities Programme Management Issues and Activities Securing management support Success of an audit programme requires a commitment and fu support from the concerned higher authority during deveopment, performance and foow-up of audit findings and recommendations. Hence, programme manager/in-charge has to secure such support from higher authority prior to the impementation of the programme Mobiising quaified personne The quaity of the audit depends, to a greater extent, on the competency of the auditors. The audit team shoud be knowedgeabe about the auditing process, and proper use of methods and techniques. It is aso necessary to ensure the incusion of quaified personne in the audit team. The team shoud be provided with cear and specific roes and responsibiities Audit programme performance measurement Once an audit programme is underway, it is necessary to assess the consistency and objectivity of audit findings. This can be accompished by conducting a periodic review of the performance of the audit programme. To accompish the reviews, the concerned authority might use third party to evauate performance of the programme. 7

15 Reporting responsibiity Programme manager shoud deveop strategies for communicating the resuts of the audit report to management eves and institutions. As EIA documents are made pubic, it woud be appropriate to make the audit report pubic. This woud hep in making the EIA reports of simiar projects more practica and impementabe Post-audit activities and corrective measures The project management need to streamine the process for resoving compiance probems and other issues identified during the audit. The findings and recommendations shoud be impemented to promote compiance and make the project environment-friendy. Corrective action may invove obtaining funding, purchasing new equipment and training. A system of tracking and monitoring the impementation of the corrective actions woud be needed for arge and environmentay sensitive projects as we. 4.2 Resources and Toos for Auditing The resources and toos are particuary hepfu to the auditors and auditing activities. It may not be required for a audit types. However, auditors shoud be aware of and utiize potentia resources appropriate to the scope and type of audit they are performing Pre-Visit Questionnaire (PVQ) A pre-visit questionnaire (PVQ) consists of a series of written questions directed at the project environmenta manager to determine the nature and extent of any environmenta issues prevaiing at the project area. These questionnaires are aso meant to aert project environmenta manager about the areas of major concerns incuding the documents to be reviewed during the audit. PVQ can generay be designed with a carefu review of project EIA and monitoring reports. In order to gain the fu benefit from PVQ, the questionnaire shoud be taiored to the project being audited, as we as the type of auditing being conducted. A PVQ shoud generay be sent to the project office severa weeks prior to the audit and shoud be returned in time to provide the audit team with sufficient opportunity to review the project's responses and prepare for the site visit Auditing Protocos Protocos and checkists provide the audit team an outine for conducting on-site audit activities. It aows the team to evauate the record keeping, operationa and procedura eements of project's activities with respect to the reguatory requirements for a particuar compiance area. Protocos and checkists are essentia for assuring that an audit has adequatey addressed reguatory matters, project records and overa project environmenta practices. They provide a consistent approach that promotes comparison between pre- and post-project environmenta conditions. They are equay important for evauating the same faciity over a period of time. The auditing agency shoud aso deveop a generic auditing protoco for the project to be audited. The generic protoco can be used as a starting point for deveoping more targeted protoco that meets the project-specific needs Auditing pan An auditing pan shoud be prepared to accompish auditing in a timey and ordery fashion. The Manua for Preparing Environmenta Management Pan for Hydropower Projects prepared by the Department of Eectricity Deveopment (DoED) provides guidance for the preparation of the auditing pan. Auditing pan is, in genera, mentioned in the EIA reports as we. The pan is presented in a tabuar form separatey for each of the physica, bioogica and socioeconomic and cutura environment with coumn heading of parameter, indicator, ocation, methods and sources. The audit pan coud be compementary to the audit protoco, but not aternative to them. 8

16 4.2.4 Photography An ordinary camera or a digita camera coud be used to document project conditions and serve as a reminder to the auditor of specific areas and issues that require anaysis in the audit report. Another benefit of the photographs is that subsequent auditor or even the project personne can see the exact conditions that existed at the time of the audit. It woud aso be appropriate to use the movie-camera to demonstrate the actua conditions during the audit. It woud hep in comparing the pre-project and post-construction stage changes of the environmenta resources Aeria Photographs Aeria photographs are invauabe reference for reviews of project structures and and use status. Review of aeria photographs over a period of years can revea changes in and use. They shoud aso be kept as a part of the audit record if necessary Reference Materias Reference materias such as geoogica, and use and topographica maps and reevant reference books can be usefu in evauating detais about potentia environmenta risks posed by a project. These materias shoud be reviewed prior to project audit and shoud be kept as a part of the project audit record. 9

17 Chapter 5 AUDITING ACTIVITIES AND REPORT WRITING 5.1 Pre-Audit Activities An environmenta audit consists of severa activities conducted in three distinct phases: (i) pre-audit activities; (ii) on-site activities; and (iii) post-site activities. Setting of specific pre-audit activities is important and it shoud be conducted by the audit team prior to the site visit. Carefu preparation heps to ensure the audit team to accompish it successfuy. Pre-audit invoves activities such as (i) setting the objectives and scope of the audit; (ii) panning and preparing the audit team for site visit; and (iii) preparing the project management for audit Setting the Objectives and Scope Adequate orientation about the objectives and scope of the audit is necessary in order to ensure that the audit achieves the desired resuts. Cear and expicit objectives define the needs and expectations of the audit and estabish a benchmark against which the performance of the audit team can be judged. The scope determines the depth and boundaries of the investigation and determines what wi be assessed and verified through the audit process Panning and Preparation for Site Visit Carefu panning is crucia to ensure that imited time avaiabe for the site visit is most effectivey used. It aso minimizes the time necessary for foow-up activities after the site visit. The important factors that shoud be considered whie panning an audit incude: (i) objective and scope of the audit; (ii) project's compiance history; (iii) audit team's famiiarity with the site; (iv) resources avaiabe for conducting the audit; and (v) desired contents of the fina audit report. The agency responsibe for auditing shoud deveop a scope of work that ceary estabishes roes and responsibiities for each phase of the audit i.e., pre-audit, on-site and post-audit and it might conduct through consuting services. If in-house staffs are conducting the audit, the team eader shoud seect team members and assign roes and responsibiities to each of them Review of EIA and Monitoring Reports Every team member shoud review the EIA and monitoring report(s) with due focus on the respective fied such as physica, chemica, bioogica, socio-economic and cutura aspects of the environment. Carefu review of the EIA report heps to deineate the project baseine condition before the project construction and assess the project commitments and issues and concerns of stakehoders. Environmenta monitoring reports are ideay usefu for identifying the non-compiance and other probems areas Review and Refining of Audit Protoco Carefu review and adherence to the protoco, generay, aows one to deveop a sound audit programme. The audit team might revise the protoco to emphasize those areas that pose high risk or invove compex issues. Such revision woud be based upon the PVQ competed and returned by the project. Review and refinement of the protoco is aso necessary in order to adjust the required changes Preparing Project Management for the Audit The auditing agency shoud contact the project formay or informay prior to the site visit. Deveoping a positive reationship with the project is vita to the success of the audit. The matters to be communicated incude: 10

18 Objectives and scope of the audit; Critica person needed for interview; Records and documents that wi be reviewed during the site visit; and Time schedue 5.2 On-Site Activities Some of the important issues that an audit team must address during a site visit are summarised in this section. Introduction with project management, site interviews with pertinent staff, site wakthrough, review of record, and exit interview shoud be conducted as parts of on-site activities Introduction with Project Management The audit team shoud inform the project sufficienty in advance about the upcoming audit and shoud arrange an introductory meeting with the project before the site visit. This meeting woud hep to reassure the project management about the purpose of the audit, provide an opportunity to adequatey schedue site wak-through and interviews, and ensure the avaiabiity of documents and reports required by the audit team Site Interview with Pertinent Project Staff Interview with pertinent project staff is another hepfu activity. It can reduce severa hours of work. When addressing a specific environmenta issue, audit team members must be carefu to direct their questions to the appropriate individuas. The audit team can aso interview to carify uncear PVQ responses Site Wak-Through The site wak-through is the most important activity of the data coection phase of an audit. The success of the wak-through is, in part, a product of everaging the information coected in the PQV, interviews with project staff, and other pre-site visit efforts. The wak-through shoud incude a physica inspection of critica project components, as we as observation for evidence of mandatory reeases or other environmenta impacts such as discooured vegetation or water bodies. Auditors shoud stop at various points aong the wak-through and document their observations and findings in writing. This is the appropriate time to take photographs Review of Records and Documents The site visit shoud aso incude a systematic review of records and documentations. Data shoud be carefuy reviewed and reconcied against permit imits. In addition, the audit team shoud examine the project's environmenta record keeping procedures. Documentation and record reviews shoud aso incude review of correspondence and/or notice pertaining to past or present enforcement actions or agreements. It wi hep to trace the history of project's performance and to see whether the project is keeping documentation in a proper fashion Exit Interviews The team eader shoud conduct exit interviews. It woud be imited to a brief ora summary of findings and shoud be conducted with project management present. Auditors shoud avoid concusive statements about possibe vioations and potentia iabiity uness there is imminent danger of harm. Concusions regarding project status typicay shoud be discussed in fina audit report rather than in exit interview Use of Environmenta Auditing Checkist Annex 2 provides a framework of an audit checkist which at the start gives parameters to be considered foowed by project activities by which the parameters are affected. It aso provides a coumn on the impacts predicted during EIA study, impacts that actuay were occurred, measures 11

19 that were impemented to minimize the impacts, indicators used to measure the effectiveness, and finay the accuracy of prediction. The accuracy of prediction is expained as numbers of ikey impacts are predicted in EIA process. In the process of auditing, it is most desirabe to evauate, how many of the predicted impacts have actuay occurred during the project impementation Debriefing from Audit Team Whie debriefing, the auditing team shoud discuss the major findings and inform the project management that require immediate actions. The audit team shoud formuate recommendations for corrective actions. 5.3 Post-Site Activities The post site activities shoud be conducted upon competion of the on-site activities. Post-site activities focus mainy on gathering additiona data, if necessary Prioritizing Audit Findings The institution responsibe for auditing such as MoEST shoud deveop a system for prioritizing audit findings that aow for a consistent approach to addressing deficiencies. A consistent approach for addressing deficiencies incudes targeting areas that pose a greater risk to human heath and the environment. The system shoud recognize exceence in environmenta management. It is equay important to identify and highight sound environmenta practices as these set an exampe for other projects Carifying Assignments for Audit Team Members An audit report typicay contains an executive summary, a discussion of audit process, an overview of project and a discussion of findings and recommendations. The team eader shoud synthesise the fina report and write the audit findings in simpe and easiy understandabe anguage. However, a audit members shoud have the opportunity to review and comment upon the fina report Identifying and Gathering Additiona Data It is usua for audit team to identify additiona data needs foowing the site visit. The need to coect additiona data shoud be estabished, as eary as possibe and the team eader shoud coordinate requests for additiona data and foreword to the project. Additiona data needs typicay shoud focus on securing monitoring data, reports and other documentation and records. 5.4 Audit Report Writing The report is the zenith of the environmenta audit. The primary purpose of the report is to describe the findings of the audit and provide genera guidance to the project in achieving and maintaining compiance. A number of aspects shoud be considered whie writing the audit report and conducting the foow-up activities Preparation in the Fied During the fied visit, audit team members can initiate the report writing process by: 1. Reviewing and updating notes on a daiy basis to ensure that information is compete; 2. Aocating some time foowing interviews to summarize the resut in writing; 3. Deveoping a ist of findings; 4. Criticay evauating the audit findings; and 5. Preparing audit team debriefing Report Preparation The audit team shoud start preparing the report as soon as possibe upon the competion of site visit and post-site activities. The ist of findings woud be hepfu in initiating the job. The team 12

20 members shoud consider organizing the findings by compiance area. The audit team shoud adhere to a consistent format to ensure that subsequent audit reports are prepared in the same manner. The audit report shoud be cear and concise, with adequate supporting information. Adjectives (such as high, arge, significant etc.) and exaggerations (such as dangerous, crimina etc.) shoud be avoided. The report shoud provide a eve of detai that is adequate to aow the users to accuratey understand what is being described in the report. Overa, the report shoud be as short as possibe without compromising on necessary detai Sampe Report Format Audit reports can be organized in a number of ways depending on the objectives and scope of the audit. However, it is essentia that a ogica order be maintained. A sampe report format is described beow: Section I: Executive summary that highights the key findings and recommendations of the audit report incuding a summary of compiance status. Section II: Description of administrative aspect of the audit. This incudes the date the audit conducted, who at the project site was interviewed, who performed the audit, and any imitations regarding the audit scope and methodoogy. This section shoud aso provide data and information of pre-project condition, resuts of environmenta monitoring and audit data and information. It coud be presented in a comparative manner. Section III: Descriptions of audit findings Section IV: Recommendations or corrective actions for project compiance Annexes: Supporting data and information to provide reevant backup Action Pan and Corrective Measures An audit programme may aso incude provisions for foow-up actions on audit findings and recommendations. The audit report woud incude an indicative action pan to promote the impementation of corrective measures. The pan shoud indicate timing of actions impementation, necessary staffing, budget and reporting requirements. 13

21 Annex 1 Case Study Post-Construction Environmenta Impact Audit Study of Kai Gandaki "A" Hydroeectric Project Introduction The post-construction environmenta impact audit study was conducted in eary 2003 by Environment and Socia Studies Department of Nepa Eectricity Authority (NEA) as per the contract signed with the Kai Gandaki "A" Hydroeectric Project. This audit study is first of its kind for a arge hydropower project and is mainy targeted to fufi the purpose of Asian Deveopment Bank (ADB) oan covenant. The foowing professionas were incuded in the audit team: Civi Engineer Environmenta Engineer Ecoogist Forester Fish and Widife Expert Socio-economist Socioogist ACRP Expert Hydroogist oi Erosion Expert Objective and Scope of the Audit The objectives of the audit study were to: Coect post-construction environmenta and socia data of the project area; Find out the accuracy of the impact prediction; Assess actua environmenta impacts which occurred due to the impementation of the project; Evauate the variations and the effectiveness of impemented mitigation measures; Identify the remedia issues; and Suggest the corrective measures The scope of the study incuded review and assessment of the project documents, coection of fied data, coection of oca peope's and stakehoders' views, co-ordination of this study with the ine ministry, identification of remedia issues with corrective measures and preparation of the audit report. The study has covered three components of the project namey: access road, power generation faciities, and transmission ine. Limitations of the study Non-avaiabiity of proper auditing guideines has been mentioned as a major imitation of the study. It is aso mentioned that the study team did not find the audit guideines within ADB as we. The other imitations of the study mentioned in the report are: Review of a documents accumuated during the entire project period was hardy possibe due to imited time for the study; Data of different surveys (pre-project and post-project) might not be comparabe due to different methodoogies adopted; The present fish survey was conducted in the month of August and there is no baseine data for this month; and This study acks dry season data for the fish and water quaity in dewatered and reduced fow zones. 14

22 Audit Methodoogies Literature review, fied-visit, samping, questionnaire administration, interviews, and group discussions were the main methods adopted by the audit team. The team anaysed the data and prepared the draft report. A workshop was organized in Kathmandu to share and discuss the audit findings. Project Information Kai Gandaki "A" Hydroeectric Project is ocated in Syangja district of Western Deveopment Region, about 180 km west from Kathmandu. Project construction started in 1997 and was competed in May Commercia hydropower production was started from August The project has an instaed capacity of 144 MW. The average annua energy production is about 826 GWh. This is the argest hydropower project constructed so far in Nepa. The project basicay has three components: access road, power generation faciities, and transmission ine. The access road for the project starts at Batuwa, 82 km from Pokhara (3.5 km south of Gayang Bazar), in Siddartha highway and ends at the eft bank of the dam. Length of the access road from Jaipate to powerhouse is 8 km. Tota ength of the temporary and permanent access roads is about 28.5 km. Two access roads start at Jaipate and provide access to the dam site (Mirme) and powerhouse site (Betari). The main power generation faciities are ocated in the Shri Krishna VDC of Syangja district. The dam in Mirmi is a gated structure which is 44 meters high. The headrace tunne is 7.4 meters in diameter and is about 5,905 meters ong. The surge tank in Betari is 61.5m high (up to top of the highest wa). The powerhouse ies in the eft bank of the Kai Gandaki and is a semi-underground structure housing three francis turbines of 48 MW capacity each. The 132 kv transmission ine is spread in four districts namey: Syangja, Papa, Rupendehi and Kaski. The transmission component is divided into two portions: 44 km doube circuit to Butwa. A sub-station was constructed in Lekhnath Municipaity of Kaski district whereas the existing Jogikuti sub-station in Butwa was upgraded. The right-of-way of the 132 kv is 9m in each side from the centreine. Major Impacts of Constructiona and Operationa Phases The impacts of the projects constructiona and operationa phases have been mentioned as: A 5.3 km ong (65ha) reservoir has been created due to submergence of grassand, forestand and other ands; The diversion of fow from dam site has made the section from Mirmi to Badigad as dewatered section and fow in the riverbed was found amost dry in the month of Apri 2003; The construction and operation of the dam has caused an increase in water eve as we as sedimentation eve thereby causing serious threat to the Seti Beni Bazar and submergence of Shaigram Sheea (hoy stone); The scrap materias such as used cement bags, vehice tires, used drums containing oi etc. were dumped at Thuo Bagar on the eft bank of the Kai Gandaki River. This situation cas for water poution during the high food season. A tota of 11 fataities and 17,234 injuries occurred during the project construction. Barrier effect of the dam and prevention of the upward migration of the fish was noticed. A tota of 6,093 trees of Sa, Saj, Chiune, Sissoo, Khyar, Bakaino Ipi-Ipi was removed. In tota, for a three components, 371 hectares of and was acquired for pacement of project structures and faciities. Atogether 1,468 famiies ost their and (fuy or partiay). Out of these, 263 famiies were defined as SPAFs and 1,205 famiies as PAFs. The SPAFs experienced a oss of 50-60% of their assets and the PAFs ost 25% of their and, and ost fodder trees and ivestock by 50%. 15

23 A tota of 221 famiies ost their houses (65 for access road, 15 for main faciities, 11 for workshop, 126 for transmission ine aignment and 1 for Pokhara substation). A tota of 21 houses from 17 Bote famiies were acquired. Due to impounding of Kai Gandaki and Andhikhoa River, most of the present cremation sites aong the riverbanks upstream are submerged whereas the cremation sites in the downstream is affected by the reduced fow of Kai Gandaki River. Audit Findings Status of mitigation measures is as foows: A mandatory reease of 4 m 3 /s, i.e., ten percent of the minimum monthy fow to maintain the downstream aquatic ife was proposed in EIA report. During auditing, it was observed that there was no fow from the dam. Furthermore, no additiona 2 m 3 /s water was reeased on reigious days which caused significant impact on downstream reigious sites. A siren system to warn peope about very high fows is functioning but needs capacity increase to be more effective for ong-distance popuation. Bioengineering was introduced but needs to be continued in the access road section. More than three hundred thousand pants of different species were panted in the project area. The surviva rate has been observed as 40-50% ti A fish hatchery has been constructed for producing one miion fingerings, but its effectiveness remains to be seen. Payment of appropriate compensation has been made for the oss of and, house and other assets due to impementation of the project. An additiona rehabiitation grant has been provided at the rate of NRs. 1000/month for 4 months to the affected famiies. A grant to pay the government registration fee was aso provided as an incentive to those affected famiies who purchased and as repacement. The impact on house oss was compensated at repacement cost. Affected househods were aso provided the construction materias of their od house for reuse. The project has provided empoyment to 2,568 peope during construction and 225 peope during the operationa phase. Out of the tota aocated sum of NRs. 2.9 miion for micro-credit revoving fund ony a sum of NRs miion was spent in 28 different groups of affected famiies. About 3,000 househods have been eectrified in 11 VDCs of Syangjha, Gumi, Parbat and Papa districts. In addition to the committed mitigation works in the EIA report, severa community deveopment works on peopes' demand such as the renovation of Jagatra Devi tempe, estabishment of a primary schoo for Botes and support to schoo for room extension etc. were deveoped. Outstanding issues The foowings are the outstanding issues as mentioned in the report: Preparation of the operationa manua for power station regarding the environmenta issues such as mandatory reease of 4 m 3 /s, and additiona fows of 2 m 3 /s during reigious days; Increasing the intensity of the siren; A concusive study about the submergence probem in the Seti Beni Bazar; Pantation of 35 hectares in Rupendehi district and 17,415 seedings in transmission ine area; Impementation of community forest support programme for Khabar area; and Protection work for Seti Beni, housing for the remaining 10 Bote famiies, agricuture intensification programme, micro-credit revoving fund disbursement, and construction of cremation sheds etc. 16