Strategic Environmental Assessment and Integrated Water Resources Management and Development

Economic and Sector Work Environment Department World Bank June 29 2007

Table of Contents
ABBREVIATIONS.............................................................................................................................................IV ACKNOWLEDGEMENTS.................................................................................................................................V EXECUTIVE SUMMARY ...............................................................................................................................VI 1 INTRODUCTION.......................................................................................................................................XIV WATER AND ENVIRONMENT CHALLENGES .........................................................................................................XIV SUSTAINABLE DEVELOPMENT NETWORK VISION.................................................................................................XIV INTEGRATED WATER RESOURCES MANAGEMENT ................................................................................................XV ENVIRONMENT PLANNING TOOLS....................................................................................................................XVII COMPLEMENTARITIES AND OPPORTUNITIES.......................................................................................................XVIII OBJECTIVES OF ESW...................................................................................................................................XVIII METHODOLOGY.............................................................................................................................................XIX REPORT STRUCTURE........................................................................................................................................XX 2 INTEGRATED WATER RESOURCES MANAGEMENT: ISSUES AND RESPONSES...............XXI WATER, ENVIRONMENT, POVERTY AND GROWTH...............................................................................................XXI Environmental water resources issues ................................................................................................xxii GOVERNMENT RESPONSES POLICIES, STRATEGIES, PROGRAMS, PLANS AND PROJECTS.............................................XXIV Integrated approach ............................................................................................................................xxv Participation and stakeholder involvement .........................................................................................xxv Economic instruments and private sector involvement........................................................................xxvi WORLD BANK SUPPORT FOR IWRM............................................................................................................XXVII Policy reform .....................................................................................................................................xxix River and lake basin management........................................................................................................xxx Investment projects...............................................................................................................................xxx PROGRESS IN MAINSTREAMING ENVIRONMENT IN IWRM ................................................................................XXXI STRATEGIC ENVIRONMENTAL ASSESSMENT: EVOLUTION AND EFFECTIVENESS....XXXIV BACKGROUND............................................................................................................................................XXXIV CHARACTERISTICS OF EFFECTIVE SEAS......................................................................................................XXXVIII Institutional controls for SEAs........................................................................................................xxxviii Operational competence of SEAs ...........................................................................................................xl SEA IN THE WATER SECTOR..........................................................................................................................XLI 4. LESSONS FROM GLOBAL WATER SECTOR SEAS....................................................................XLVI SEA CASE STUDIES.....................................................................................................................................XLVI ANALYTICAL METHOD....................................................................................................................................54 INSTITUTIONAL DRIVERS .................................................................................................................................54 PROCEDURAL METHODS..................................................................................................................................55 SUBSTANCE...................................................................................................................................................58 INCLUSION OF ENVIRONMENT IN WATER POLICIES ..............................................................................................62 SEA SUPPORT FOR INTEGRATED WATER RESOURCES MANAGEMENT....................................................................63 LESSONS FROM TANZANIAN WATER SECTOR REFORMS..............................................................67 WATER AND ENVIRONMENT ISSUES...................................................................................................................68 WATER AND ENVIRONMENT REFORMS...............................................................................................................70 The National Water Policy....................................................................................................................70 The Environment Management Act........................................................................................................70 EXISTING EXPERIENCE WITH SEA....................................................................................................................71 CONTRIBUTION OF SEAS TO IWRM................................................................................................................76 Integrated approach .............................................................................................................................78

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Promoting participation and stakeholder involvement..........................................................................79 Employing economic instruments..........................................................................................................79 UNDERSTANDING OF IWRM WITHIN WATER RELATED SECTORS .........................................................................80 CONCLUSION..................................................................................................................................................81 CHAPTER 6. A FRAMEWORK FOR USING SEAS FOR IWRM...........................................................83 SEA SUPPORT FOR IWRM............................................................................................................................83 OUTCOMES FROM ESW..................................................................................................................................84 ASSISTANCE FOR OPERATIONS..........................................................................................................................87 RECOMMENDATIONS .......................................................................................................................................88 APPENDIX A. ENVIRONMENTAL ASPECTS FOR INCLUSION IN WATER RESOURCES INSTRUMENTS..................................................................................................................................................93 DEVELOPING A NATIONAL WATER POLICY........................................................................................................93 DEVELOPING WATER RESOURCE LEGISLATION, REGULATIONS AND GUIDELINES......................................................94 DEVELOPING RIVER/LAKE BASIN MANAGEMENT PLANS ....................................................................................94 ESTABLISHING RIVER/LAKE BASIN INSTITUTIONS................................................................................................94 MANAGING TRANSBOUNDARY WATER RESOURCES ............................................................................................95 DRAWING UP SECTORAL PLANS AND STRATEGIES................................................................................................95 MAKING INFRASTRUCTURE INVESTMENTS...........................................................................................................95 APPENDIX B. WATER RELATED ENVIRONMENTAL ISSUES...........................................................96 SURFACE WATERS..........................................................................................................................................96 GROUNDWATER..............................................................................................................................................97 CLIMATE CHANGE..........................................................................................................................................98 APPENDIX C. WATER-RELATED ENVIRONMENTAL ISSUES BY SECTOR.................................99 APPENDIX D. CASE STUDIES OF SEA IN THE WATER SECTOR...................................................102 CASE STUDY 1. SEA FOR WATER SUPPLY/SANITATION REFORM IN COLOMBIA..................................................103 CASE STUDY 2. RAPID WATER RESOURCES ASSESSMENT, TANZANIA................................................................108 CASE STUDY 3. SEA FOR THE PLAN OF MAIN RIVER BASINS, CZECH REPUBLIC................................................114 CASE STUDY 4. NEPAL MEDIUM HYDROPOWER SEA......................................................................................121 CASE STUDY 5. SEA FOR WATSAL LOAN, INDONESIA................................................................................127 CASE STUDY 6. ENVIRONMENTAL FLOW ASSESSMENT, PIONEER CATCHMENT, QUEENSLAND.................................132 CASE STUDY 7. SEA OF MHLATHUZE CATCHMENT, SOUTH AFRICA.................................................................137 CASE STUDY 8. SEA FOR WATER RESOURCES PLANNING, PALAR BASIN, INDIA................................................143 CASE STUDY 9. NAM THEUN II HYDROPOWER DEVELOPMENT , LAO PEOPLES DEMOCRATIC REPUBLIC..................149 CASE STUDY 10. TRANSBOUNDARY DIAGNOSTIC ANALYSIS AND STRATEGIC ACTION PROGRAM, LAKE VICTORIA, EAST AFRICA.......................................................................................................................................................154 APPENDIX E. INTEGRATION OF ENVIRONMENT INTO WATER POLICIES............................161 RECOGNITION OF ENVIRONMENTAL FLOW AND ALLOCATION PRIORITY.................................................................161 COMPREHENSIVENESS ...................................................................................................................................162 ENVIRONMENTAL ASSESSMENT.......................................................................................................................163 MECHANISMS FOR ENVIRONMENTAL WATER PROVISION.......................................................................................163 ECONOMIC INSTRUMENTS AND WATER CONSERVATION......................................................................................164 ENVIRONMENTAL REPRESENTATION.................................................................................................................165

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Abbreviations
ALT Binational Autonomous Authority of the TDPS Hydric System (Lake Titicaca) CBO Community based organization CEA Cumulative impact assessment CEA Country environmental assessment CWRAS Country water Resources Assistance Strategy DRC Democratic Republic of the Congo DWAF Department of Water Affairs and Forestry (South Africa) EFA Environmental flow analysis (assessment) EIA Environmental Impact Assessment EMA Environment Management Act 2004 (Tanzania) GDP Gross domestic product GEF Global Environment Facility GIS Geographic Information System GWP Global Water Partnership IAIA international Association for Impact Assessment IRC International Resource Centre (on water supply, sanitation and hygiene, the Netherlands) IUCN International Union for the Conservation of Nature IWRM Integrated water resources management LVEMP Lake Victoria Environmental Management Project NAWAPO National Water Policy (Tanzania) NELSAP Nile Equatorial Lakes Strategic Action Program NGO Non-government organization NSGRP National Strategy for Growth and Reduction of Poverty (Tanzania) OED Operations Evaluation Department (World Bank) PLSRPP Policy, Legislation, Strategy, Program, Plan RBM River basin management RWRARapid water resources assessment (Tanzania) SAP Strategic action program SEA Strategic environmental assessment SecEA Sectoral environmental assessment SDN Sustainable Development Network (World Bank) SIA Strategic impact assessment SSEA Strategic/sectoral social environmental assessment TDA Transboundary diagnostic assessment UNDP United Nations Development Program UNECE United Nations Economic Commission for Europe UNEP United Nations Environment Program UNESCO United Nations Educational, Scientific and Cultural Organization WATSAL Water resources sector adjustment loan (Indonesia) WMA Water Management Area (South Africa) WSS Water supply and sanitation

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Acknowledgements
This ESW was prepared by a team comprising Rafik Hirji (TTL, ETWWA), Richard Davis (consultant), Kisa Mfalila (consultant), Marcus Wishart (YP, AFTU1), Fernando Loayza (Strategic Environmental Assessment Specialist, ENV), and Bob Livernash (consultant). The team is grateful for the support it received from all individuals within and outside the Bank. Laura Tlaiye and James Warren Evans provided overall guidance. Kulsum Ahmed provided guidance during development of the project concept and facilitated access to SEA team and experts to support the overall process. Guy Alaerts, Arati Belle, John A Boyle, Ladisy Chengula, Satish Choy, Santiago Enriquez, Jakob Granit, Nagaraja Rao Harshadeep, Mudassar Imran, Sumith Pilapitiya, Poonam Pillai, Martin Smutny, Ernesto Sanchez-Triana, Dirk Versfeld, Ilse Steyl, provided information on the various case studies. Maher Abu-Taleb, Paula Posas, Maria Sarraf, Barry Sadler, Albert Tuinhof also provided valuable information. Helpful comments were provided by Vahid Alavian, Stefano Pagiola, Salman Salman, Charles di Leva, Harshadeep Nagaraja Rao, Winston Yu Daniel Gross, Harvey van Veldhuizen and Xiaokai Li at the project concept review meeting. Barbara Miller, Jakob Granit, Alessandro Palmieri, Harshadeep Nagaraja Rao, Jiri Dusik, Salman Salman, and Ernesto Sanchez-Triana provided valuable comments before and during the decision meeting. Ernesto Sanchez-Triana (SASES), Dr Jiri Dusik (SEA expert, Czech Republic), and Harshadeep Nagaraja Rao (AFTNL) were peer reviewers.

Executive Summary
World Bank Commitment to Sustainability 1. Through the formation of the Sustainable Development Network, the World Bank has elevated its commitment to environmental responsibility. Making the environment a core element in Bank work means that the Bank has to upstream environmental issues in its dialogue with countries, and that countries need the capacity for including environmental concerns into their policy, planning, management, investment processes. Strategic Environmental Assessments 2. Strategic Environmental Assessments (SEAs) have been developed by the environment community as instruments to bring environmental concerns into the strategic levels of decision making policies1, legislation, strategies, plans, and programs (PLSPP). SEAs were developed to tackle concerns that Environmental Impact Assessments (EIAs) were not fully effective because many of the environmental issues resulted from earlier, strategic decisions. 3. SEAs have been used for a variety of purposes, including developing a shared understanding of environmental issues, building a consensus on the way to tackle these issues, identifying issues to be tackled in depth in project-level EIAs, developing investment plans, in national, regional and transboundary settings. Essentially SEAs allow decision makers to take advantage of environmental and social opportunities while managing environmental and social risks in a strategic setting. Environment and Water Resources 4. The environment and water resources have a dual relationship. On the one hand the environment is a water using sector - terrestrial and aquatic life requires good quality water in sufficient quantities and qualities for survival and productivity. On the other hand, the environment provides services that maintain the water resource in a useable state for all sectors. 5. Water resources are becoming degraded from a variety of human activities: flow patterns are disrupted through water abstractions, return flows and barriers across rivers and streams; lake levels drop through excessive abstractions and interceptions in source areas; water quality declines through point and diffuse source discharges of industrial, urban and agricultural pollutants; wetlands are being lost through land use conversion and poor management; groundwater resources are being drawn down through over-use, or polluted through seawater intrusion, agro-chemicals or human wastes. All these insults degrade the services offered by the environment to water dependent sectors.
1

The term policy is used in this report to mean specific statements of government intent and direction, rather than in the more generic sense of a high-level instrument such as legislation or regulations.

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6. Climate change further complicates the management of these issues. Flows will change further as regions receive either more or less precipitation, and temperature rises increase evaporation; groundwater recharge will increase or decrease; and water quality will be affected. Adaptation to climate change will put further stress on water resources with shifts in land use; population movements; and increasing disputes over access to water. Integrated Water Resources Management 7. Within the water resources community, Integrated Water Resources Management and Development (IWRM) is now the accepted paradigm. (From hereon IWRM will include both management and development) According to the Global Water Partnership IWRM consists of three principles: a multi-sectoral approach to water resources management; participatory methods; and treatment of water as an economic good. Under IWRM, water for environmental purposes is regarded as both a legitimate use of water, equivalent to water for consumptive purposes as irrigation, water supply/sanitation, and hydropower, and fundamental to the provision of environmental services. 8. The World Bank has supported IWRM in its 2003 Water Resources Sector Strategy. However, the latter recognized that few countries were interested in adopting all IWRM principles and that an approach of principled pragmatism was needed, whereby IWRM principles should be pursued when opportunities arose. 9. The Bank has helped introduce IWRM through three entry points policy reform, river and lake basin management institutions, and investment projects. Effectiveness of IWRM 10. The evidence from global surveys and regional assessments shows that IWRM is increasingly being accepted at national level, with water resources policies and legislation incorporating IWRM principles. However, there is much slower operationalization of these principles at regional and local levels in developing countries. Where implementation has happened, it has been piecemeal with some principles being adopted and not others. The limited information indicates that provision of water for environmental purposes has not been widely practiced in developing countries2. 11. SEA, applied in the water sector, offers an additional mechanism to promote environmental concerns within water resources management. There is a family of approaches to SEAs, ranging from impact-centered SEAs to institution-centered SEAs the former assess the potential environmental impacts of the PLSPP, whereas the latter assess the capacity to identify and manage environmental impacts. Some existing World Bank instruments, such as Sectoral EAs, Regional EAs, and CWRASs and the GEFs TDA/SAPs, fall within the family of SEAs.

Even in developed nations, there are few nations such as Germany that have adopted a formal Environmental Policy for Water Resources Management (Federal Ministry of Environment, Nature Conservation and Nuclear Safety, 2001).

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Assessing Effective SEAs 12. There are two broad requirements for effective SEAs: drivers need to be in place to ensure that SEAs are initiated and the recommendations are adopted SEAs should follow the procedures established by each country and possess the appropriate substantive content. 13. Six drivers (institutional controls) proposed for EIAs judicial oversight by courts of law, procedural requirements from legislation and regulations, evaluative oversight from supervisory institutions instrumental requirements from development partners professional standards from professional associations and guidelines public pressure are also generally applicable to SEAs, although some need to be modified to account for the characteristics of SEAs. 14. The International Association for Impact Assessment suggest three criteria for assessing the procedural competence of SEAs (accountable, participative and iterative) and three criteria (integrated, sustainability-led, and focused) for assessing the substantive competence. A fourth substantive criterion influential previously suggested by the Bank3, was added for this analysis. SEAs in the Water Sector 15. Relatively few SEAs have been applied in the water sector, especially in developing countries. However, a small number of regions have considered or have introduced systematic procedures for conducting SEAs in the water sector, including the UNECE, EU, South Africa, Tamil Nadu State, India and Tanzania. 16. Even though they originate from different disciplines, SEAs and IWRM share many objectives with regard to WRM but they differ in analytical approaches and terminology. Their common characteristics include application at different spatial scales, multi-sectoral decision making, stakeholder participation, use of quantitative data, monitoring and evaluation, and broadening perspectives beyond immediate sectoral issues. The Netherlands Commission for Environmental Assessment has noted the advantages of applying SEA in the water sector. The Ten Case Studies 17. Seven case studies of SEAs were selected from Bank funded or implemented projects in the water sector. These were augmented with three other water sector SEA case studies, one from a developed country, one from a country in economic transition and one from a developing country. These 10 case studies provided geographically diverse examples from a number of sectors water supply/sanitation, hydropower, water resources, and environment and at strategy, program and plan levels. No specific SEAs of national water policies or legislation were identified.
3

This additional criterion was first used in Ahmed, K., J.R. Mercier, and R. Verheem (2005). Strategic Environmental Assessment Concept and Practice. Environment Strategy Note 14, World Bank, Washington DC.

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18. The case studies were analyzed to identify their drivers and their use of the procedural and (modified) substantive criteria suggested by the IAIA. Institutional Drivers of SEAs 19. No judicial drivers were used in the case studies, while procedural and evaluative drivers were used infrequently. Instrumental drivers were commonly relevant although they were often used voluntarily rather than from a formal requirement. Professional drivers were often relevant and public pressure was often an important factor. There were multiple drivers for all case studies. Procedural drivers were not effective unless accompanied by other controls such as public pressure or strong evaluative drivers. 20. There were a number of cases where SEAs were initiated in the absence of any of the six drivers because of a belief by government or institutions that it was the correct approach to take. These instances were usually encouraged and supported by a development partner. Trust between the development partner and the government was an important factor when the governments were venturing into these new procedures. Procedural Competence 21. A number of lessons about analytic procedures emerged from the case studies. First, the terms of reference must be clear and well formulated for the SEA to be influential. Secondly, the composition of the team needs to be balanced between the sectors contributing to the study and the team leader needs to have a breadth of understanding of the inter-connections between economic, social and environmental factors. Third the assessment methods need to be suited to the characteristics of the issues 22. Consultation is essential but does not always need to be widespread; however, it is important to include the stakeholders who will be affected by the decision. The consultation and participation process should be planned to ensure that participants are well briefed and are involved at the appropriate stages of the process. 23. The spatial scale of the SEA matters. If the area is large, appropriate tools need to be used to conceptualize problems and to engage all stakeholders. 24. SEAs can span strategic scales. Institution-centered SEAs typically examine the capacities of institutions, the relevance and consistency of policies and legislation, mechanisms to involve vulnerable groups, and political economy factors that affect the implementation of plans and programs that trigger the SEAs. Substantive Competence 25. SEA should be seen as a process rather than a specific study. The process of interacting with different stakeholders, examining causative influences and longer term consequences, and integrating environmental, social and economic considerations is often as important as the output from the SEA study. This process should commence as early in the preparation of the PLSPP as possible and continue after the study has been completed. 26. The most effective case studies were institution-led SEAs which brought about fundamental changes in national policies, legislation and institutions. These have

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been undertaken at opportune times when there was political receptivity to change. Ins ome cases, economic arguments played a key role. However, these changes usually took many years and the development partners and the governments needed to stay committed over this extended period. 27. SEAs need not be environment-led. Some effective SEAs in the case studies were primarily driven by factors other than the environment, although environmental sustainability played an important role. 28. Some successful SEAs led to full implementation of water related programs such as the establishment of basin water offices. 29. Effective SEAs were often relatively cheap, costing less than US$100,000. Water Policies and Environmental Integration 30. Because no policy-level water sector SEAs were identified, the water policies of three countries South Africa, Tanzania, India and one State Victoria, Australia were examined for their inclusion of environmental considerations. 31. All four policies recognized the legitimacy of water for the environment but the level of detail and commitment to implementing this recognition varied significantly. The Indian water policy mentioned many of the six criteria but provided no depth or detail. The South African and Tanzanian policies devoted specific sections of their policies to environmental considerations. On the other hand, the Victorian policy was built around the concept of environmental sustainability. SEA Support for Multi-Sectoral Water Management 32. Two of the SEA case studies explicitly recognized that they were contributing towards IWRM principles. All case studies, by definition, raised environmental sustainability questions. A number of them were undertaken by multi-sectoral task forces, potentially contributing to a multi-sectoral approach to water resources management and all but one case study considered multi-sectoral impacts. 33. Some of the SEAs had long term influence in supporting integrative approaches to water sector management. One the Tanzanian RWRA study has catalyzed changes in policy and legislation that have supported multi-sectoral approaches; another the Palar Basin SEA has led to a rollout of water resources SEA studies across Tamil Nadu State, India; and a third the Colombia WSS SEA has led to progressive reforms of water management including greater multi-sectoral involvement. SEA Support for Participative Management 34. Some institutions, initially skeptical of stakeholder involvement, became advocates of increased stakeholder participation in their usual work as a result of their experiences during the SEA. In two cases, this interest led to legislative requirements for public participation. 35. A number of the SEAs contributed to decentralization of water resources institutions and the establishment or strengthening of basin institutions for operational management.

SEA Support for Economic Instruments 36. The SEAs did not focus on use of economic instruments for water resources management, although one advocated charges to control water use and the discharge of pollution, and another advocated permits for the use of fish and to provide a source of finance for water resources operations. There was little consideration of demand management. 37. One case study was focused on improving private sector investment including through reduced and more defensible water quality standards. Tanzanian Pilot Study 38. A series of water sector crises during the 1990s, many containing environmental aspects, brought home to water resources managers the need to implement the principles of IWRM particularly multi-sectoral management, decentralized decision making, stakeholder participation and inclusion of environmental water requirements. These principles were embodied in the 2002 Tanzanian National Water Policy. 39. More recent water problems have illustrated that other water using sectors need to participate in the reforms and harmonize their policies, legislation and strategies if these advances in water sector management are to be effective. SEAs would be suitable instruments for coordinating these changes across sectors. Recommendations 40. Given the positive experience with institution-centered SEA, an important part of the SEA should be focused on assessing the underlying institutional and governance factors. This is particularly important given the fact that changes take place over a period of time and are typically driven by incremental changes in behavior and related underlying incentives. Assessing institutional factors helps to understand and incorporate these aspects in the eventual SEA recommendations. 41. Given the wide range of strategic levels of decision making policies, legislation, strategies, plans, and programs, it is not possible to provide a single template (or terms of reference) for conducting SEAs for use by Bank operations staff that would be all encompassing. Appendix A provides a number of environmental aspects that could be included in the terms of reference for an SEA that examined environment aspects of water resources PLSPPs. SEAs can also examine sectoral policies and legislation for consistency with water resources and support for environmental considerations, and the capacity within a country for recognizing and managing water related environmental issues. 42. A framework for using SEA to mainstream environmental concerns into water resources managing could consist of four parts: Environmental and water resources professionals need to widen their understanding so that the compatibilities between their disciplinary terminology, techniques and approaches are exploited. An enabling environment where sectoral policies are harmonized to a) mutually support IWRM principles including environmental protection; b) undertake SEAs where appropriate; c) allow a range of SEA types can be used to meet different needs; and d) promote stakeholder participation in SEAs.

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Transboundary SEAs4 require a mutually agreed plan of action and should be overseen by a high level committee. The Bank can help develop this enabling environment by using its influence and knowledge to help introduce SEAs and build up experience. An understanding needs to be developed, particularly among senior decision makers, of the benefits of SEAs. Understanding how to work in multidisciplinary SEA teams can only be gained from practical experience, possibly mentored by international experts. Water resources and environmental data, collected through monitoring and analysis, underpins SEAs in this sector. The SEA team leader needs to have broad experience to be able to deal with the diversity of sectoral issues arising in water resources management. The terms of reference for the SEA should be clear, the analytical procedures should be suited to the problem and the stakeholder participation should be carefully planned.

UNECE (2003). Protocol on Strategic Environmental Assessment to the Convention on Environmental Impact Assessment in a Transboundary Context. Geneva, Switzerland.

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1 Introduction
The recent formation of the Sustainable Development Network has elevated the Banks commitment to promote environmental and social sustainability as a cornerstone of development. Integrated Water Resources Management (IWRM) has been the accepted management paradigm for efficient, equitable and sustainable management of water resource since the early 1990s. However, as will be discussed in this report, IWRM has, at best, been implemented in a disjointed way in developing countries. To the extent that IWRM has been implemented, environmental considerations have received little attention. This ESW argues that Strategic Environmental Assessment (SEA) offers an additional planning tool for introducing environmental considerations into water resources management. The ESW uses a literature review, analysis of ten global case studies, an in-depth pilot study at a country level and review of 4 national and state water resources policies to draw lessons and develop recommendations, based on experience, for Bank staff and clients in developing countries to expand the use of SEA in IWRM. Water and Environment Challenges The 2003 Water Resources Sector Strategy committed the World Bank to re-engage in high risk and high reward water resources infrastructure projects (including large dams) for water supply, irrigation and drainage, hydropower and flood control. Figure 1 shows the global trend in dam development over the past century and the growth in Bank lending for dam related projects between 1950 until 1980 and the subsequent decline due, in part, to increased complexities associated with changing societal values and attitudes and external pressures resulting from poor environmental and social performance. The recent reengagement, based on better understanding of the vulnerabilities of poor nations to climate variability and change and the role of water in growth and poverty alleviation5, lessons learned from the World Commission on Dams, and the Banks experience on water and environmental issues will include support for investments in small, medium and large dams, inter basin water transfers, conjunctive use of surface and groundwater, as well as institutions and systems for improving the management of water resources. Support will be provided via individual projects, sector-wide programs and development policy based lending, all to be delivered in an environmentally and socially responsible manner. Sustainable Development Network Vision The vision statement for the Banks Sustainable Development Network (SDN) has elevated the institutions commitment to environmental responsibility. It not only calls for mainstreaming the environment, but entrenches environmental sustainability as a core element of the Banks work for enhancing the quality of growth and reducing poverty
5

Grey D. and C.W. Sadoff (2006). Water for Growth and Development. Thematic Documents of the IV World Water Forum. Comision Nacional del Agua: Mexico City. 2006.

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while safeguarding the needs of the future generations. It has also reinforced adaptation to climate change as an important priority in the Banks water resources agenda (Box 1).

6000 5000 number of dams 4000 3000 2000 1000 0

Dam safety policy Resettlement guidelines Environmental guid.

World Bank share (%) 4% 3% 2% 1%

To realize this vision, much greater emphasis will need to be placed on mainstreaming the environment into upstream processes such as policy, programmatic and investment dialogue. This will require the Bank to have the capacity, policies and procedures for supporting this dialogue, and client countries to have institutions, systems, procedures and human capacity that are capable of incorporating environmental concerns into policy, planning, management and investment processes and decision making. Integrated Water Resources Management The World Banks 1993 Water Resources Management Policy promoted a multi-sectoral approach to the planning and management of water resources, a fundamental shift from the sector based investment planning practiced prior to 1990s. The policy integrated the Dublin Principles6 and explicitly recognized the environment (wetlands and fisheries) as a legitimate use of water (like agriculture, energy, industry, livestock, mining and urban and rural supply). However, the Bank continued to largely rely on its safeguard policies to address environmental and social issues in water resources investment planning and design
6

The 1992 Dublin Conference on Water and the Environment endorsed four principles for water resources management: recognizing freshwater resources are finite and vulnerable and need to be managed in a comprehensive manner that considers multi-sectoral uses, linking water quantity and quality, land use and water use, and the water environment; water development and management should be participatory; women play a central role in water management; and water should be treated as an economic good.

1 19 900 00 19 1909 10 19 1919 20 19 1929 30 19 1939 40 19 1949 50 19 1959 60 19 1969 70 19 1979 80 19 1989 90 -1 99 8
Figure 1 World Bank contribution to global dam development

<

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decisions. Hardly any systematic effort was made to address the environment in the water resources policy dialogue. The Water Resources Sector Strategy (2003) adopted the concept of Integrated Water Resources Management (IWRM), endorsed by the Global Water Partnership, for managing and developing water resources in a sustainable manner (Figure 2). The Strategy recognized water for the environment as an important water use (a tooth of the comb). It also considered environmental management - pollution control, source protection, allocation of water for environment and conservation of wetlands - as a key element of IWRM (the blue handle of the IWRM comb). Following the Water Resources Sector Strategy the Bank has introduced Country Water Resources Assistance Strategies (CWRAS) for countries facing water resources challenges to guide investment and promote the use of IWRM principles in those countries. Box 1. Effects of Climate Change on Water Resources Climate change will affect both the supply side and the demand side of water resources. Rainfall is projected to increase at all times of year in polar regions, while both increases and decreases are projected elsewhere at different times of the year. The variability of rainfall will increase with more intense storms and longer dry periods. Thus, increases in precipitation are forecast in tropic regions during rainy seasons and over the Pacific. Temperature rises will generally lead to increased evapo-transpiration. The effect of these complex changes on water availability is difficult to forecast for specific regions, although some effects are clear. Thus, coastal aquifers will become increasingly saline with sea-level rise and increased storm events. The increase in temperatures implies an overall increased demand for water for crops, livestock and human use, although there will be shifting patterns of demand as people adjust to temperature, precipitation, extreme events and water availability.
Source: IPCC (2007). Climate Change 2007: The Physical Science Basis: Summary for Policy Makers. IPCC Secretariat, WMO, Geneva, Switzerland.

There is no unambiguous definition of IWRM although its broad principles are clear: Multi-sectoral approach to water management Stakeholder participation and devolution of responsibility Use of economic instruments and private sector participation To date these principles have been promoted by development partners and adopted by countries in a piecemeal rather than holistic manner. Although IWRM advocates that water for the environment is a legitimate use within multi-sectoral management and there is growing awareness about its importance, the reality is that there has been only limited implementation of aspects of environmental water management in IWRM, such as the management of water quality, control of non point sources of pollution, protection of watersheds and recharge areas, the protection of wetlands and provision of environmental flows7. Environmental water management is still generally addressed in an ad hoc manner
7

Environmental flows are still generally only assessed in selected cases and allowed for when an infrastructure project is proposed. Under IWRM, they should be included in water policies and laws and in

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and rarely as a key element of IWRM. This is particularly problematic in client nations that have weak environmental policies or laws or environmental agencies lack influence and authority. Under such circumstances, environmental considerations in IWRM are often given less priority and they play little role in decisions about water allocation, water quality management, source protection, or the protection of water dependent ecosystems.

Integrated Water Resources Management

Infrastructure for management of floods and droughts, conjunctive use of surface and groundwater, multipurpose storage, water quality management and source protection Policy/Institutional framework for supply side and demand management options Management instruments Political economy of water management Water for People Water for Food Water for Energy Water for Environment Other uses

Water by usage

Figure 2 Conceptual Framework for Integrated Water Resources Management (adapted from the Global Water Partnership)

Environment Planning Tools The environment profession introduced environmental impact assessment (EIA) as a planning tool in the early 1970s to integrate environmental considerations into project planning and decision making. Since then EIA practice has evolved and matured and there are many guidelines available to address the environmental impacts of development projects, including for water related sub-sectors such at the International Hydropower Association Sustainability Guidelines, and the IPTRID Sustainability Guidelines for Drainage, etc. The World Bank has produced EA Sourcebooks and EA Updates covering a wide range of EA related topics, including those covering various water sectors. More recently, the environment profession has developed several approaches that complement the traditional project-specific EIA. Realizing that, even with high quality EIAs, structural factors affected the social and environmental outcomes of development projects, strategic tools were developed to move environmental considerations upstream from project-level analysis. Strategic Environmental Assessment (SEA) extends the process of integrating environmental and social considerations from a project level to the levels of policies, legislation, strategies, programs and plans (PLSPP). Country

river basin planning as a legitimate water use, along with other consumptive and non-consumptive uses.

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Environmental Analysis (CEA) was developed as a diagnostic tool by the World Bank for evaluating systematically the environmental priorities in client countries, the environmental implications of key policies, and countries capacity to address priorities. The shift in Bank lending from a project basis to development policy based lending, programmatic lending and sector-wide lending has provided further impetus for accelerating the use of such strategic tools. This ESW focuses on the role of SEAs. Complementarities and Opportunities Even though SEA (applied to water resource planning and development) and IWRM originated from different professional interests and sectoral concerns, they share many concepts and characteristics. Both include the integration of environmental and social considerations into multi-sectoral decisions; both emphasize the importance of participatory and consultative approaches to decision making; both incorporate monitoring and evaluation of outcomes; and both seek to broaden the perspectives of planners beyond immediate sectoral issues. Thus, SEAs offer an additional tool to IWRM to introduce and integrate environmental considerations into water resources planning and management, and thereby support IWRM. Opportunities to improve the integration of environmental issues in water resources by promoting the use of SEA occur at many levels developing a national or sector water policy, drawing up river basin plans, establishing a river basin institution, implementing a national irrigation masterplan, identifying hydropower or urban water supply options, supporting transboundary water resources management and development, or instituting sectoral strategies or programs. The International Association for Impact Assessment (IAIA) has published a set of good practice principles for SEAs. While these principles provide guidance on the procedural and substantive aspects of SEAs, it is clear that, to be effective, SEAs also need to be embedded in an appropriate enabling environment and championed and driven by strong and powerful influences. The institutional drivers proposed for this purpose for EIAs8 are also applicable to SEAs. Objectives of ESW The overall goal of the ESW is to assist water resources and environment professionals within the Bank and client countries use SEAs to effectively implement the principles of IWRM. It has the following specific objectives: (a) delineating the environmental issues related to IWRM,

Ortolano L., B. Jenkins and R.P. Abracosa (1987). Speculations on when and why EIA is effective. Environmental Impact Assessment Review 7 285-292.

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(b) identifying opportunities for SEAs to contribute to management of these environmental issues in water resources, (c) using the literature and selected case studies to identify procedural and substantive factors and institutional drivers that lead to effective SEAs in the water sector at policy, strategy, program and plan levels, (d) observing the introduction of SEA in a developing country (Tanzania) as an indepth pilot study to identify practical issues arising from the introduction of SEA for the water sector, and (e) recommending how the Bank can use SEAs to improve the integration of environmental issues in its lending for water resources planning and management. The ESW contributes to the Banks program to promote the use of SEAs for upstreaming environmental considerations into Bank activities9. The outputs from this study will be included in the Banks SEA toolkit10 as well as the Banks water resources website. Methodology The data collection and analysis is based on four activities. First, a literature review of IWRM and SEA is used to understand the evolution of and linkages between SEAs and IWRM and to identify opportunities whereby SEA may be able to assist the promotion of environmental sustainability issues in water resources. Second, the ESW uses 10 case studies of SEA within the water sector to draw lessons on the diverse ways in which this instrument has been used to upstream and integrate environmental considerations into water resources planning and management decision making. The case studies, covering water sector policies, strategies, programs and plans, are analyzed using the (modified) IAIA good practice principles and the institutional drivers that initiated and sustained them, as well as their contribution towards implementing IWRM. Draft case studies were also reviewed by the respective Bank TTLs and non Bank experts. Because there are few policy-level SEAs available on water resources, the third activity consisted of an examination of the water resources policies of three countries (India, Tanzania and South Africa) and one state (Victoria, Australia) for their inclusion of environmental concerns related to water resources. Lastly, an in-depth pilot study in Tanzania has also been used to examine the opportunities and the practical issues that arise when SEA is introduced into a developing country that is

World Bank (2001). Making Sustainable Commitments: An Environment Strategy for the World Bank. World Bank, Washington DC. 10 http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/ENVIRONMENT/0,,contentMDK:2088594 1 ~menuPK:2450778~pagePK:148956~piPK:216618~theSitePK:244381,00.html

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undergoing water and environmental policy reforms11. Tanzania was selected as a pilot for several reasons: it possesses diverse water resources, including three large transboundary lakes, many river systems and some major aquifers water and environment plays an important role in key sectors of the economy it is embracing progressive water sector and environment sector reforms, including the introduction of SEAs and an innovative water policy it has already implemented diverse water resources related SEAs the pilot would benefit several water related programs that are currently supported by the Bank. Report Structure The ESW is organized in six chapters. Following this introduction, environmental issues in water resources are described in Chapter 2, along with an overview of IWRM and the extent to which it has been adopted and implemented in developing countries. Chapter 3 describes the different types of SEAs, the IAIA criteria for effective implementation, the drivers for initiating SEA, and the World Banks experience with SEAs and similar instruments. The ten case studies of SEAs in the water sector and the four water resources policies are analyzed in Chapter 4. Chapter 5 describes the pilot application of six water sector SEA case studies in Tanzania. The final Chapter summarizes lessons from the 10 case studies, the four national water policies, and the pilot study to make recommendations on the Banks use of SEA to strengthen the inclusion of environmental issues in water sector lending. Appendix A provides a list of opportunities for including environmental concerns in water resources at various strategic levels - policy, legislation, institutions, transboundary management, sector strategy and infrastructure planning. Appendix B describes water related environmental issues; Appendix C tabulates these issues by sector; Appendix D contains the 10 case studies; and Appendix E provides an analysis of the integration of environmental issues into the water policies of four jurisdictions3 national and 1 state.

11

The Tanzanian pilot study has been produced as a separate report: World Bank (forthcoming). Strategic Environmental Assessment: Enhancing Capacity for Integrated Water Resources Management and Development in Tanzania. World Bank, Washington, DC.

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2 Integrated Water Resources Management: Issues and Responses

In this chapter, the key environmental considerations for IWRM are described in terms of their impacts on the quantity and quality of surface waters and groundwater. The chapter discusses integrated water resources management (IWRM) as the accepted paradigm for managing water resources and describes how environmental sustainability is a key principle underpinning IWRM. IWRM is being increasingly accepted at national policy and programmatic level in developing countries but it is not being implemented widely. Even where some elements of IWRM are being implemented, there is little evidence that they adequately address environmental issues to ensure sustainability. Water, Environment, Poverty and Growth The environment and water resources have a dual relationship. On the one hand the environment is a water using sector - terrestrial and aquatic life requires good quality water in sufficient quantities and qualities for survival and productivity. On the other hand, the environment provides services that maintain the water resource in a useable state for all sectors. This dual relationship is commonly represented as a comb (Figure 2), where the handle and back of the comb represents the water resource maintained in a healthy state by good environmental management. The teeth, one of which is the environment, represent the sectors that are reliant on the water resource. The Banks 2003 Water Resources Sector Strategy argues for both better management of water resources and more investment in infrastructure to make these resources available for multiple uses of water-irrigation, energy, fisheries, urban, rural, industrial, livestock and mining supply. Environmental concerns need to be integrated into decisions about both ongoing water management and decisions about new infrastructure improved management of water resources includes protection of environments that provide essential ecosystem services, while upstream and downstream environmental and social disruptions from the construction and operation of additional infrastructure should be minimized by careful planning. Inadequate water management hits the poor especially hard, because they are usually more reliant on the resource, have fewer options to cope with scarcity and poor water quality, and have less say in decisions. Poverty leaves fewer choices and so the poor are often forced to locate in high risk, less desirable, less productive areas such as degraded lands and watersheds, along polluted waterways, in the vicinity of sewage treatment facilities, wastewater disposal sites or in unprotected floodplains. These areas are often more

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susceptible to floods, the water is more likely to be contaminated with agro-chemicals and sediments, and they are more prone to water borne diseases. Environmental water resources issues Water resources become degraded or their use becomes unsustainable for many reasons. These issues arise from the demands placed on water resources from all water using sectors, including agriculture, power generation, water supply and sanitation, industry, tourism, livestock, transportation, mining, forestry, fisheries and urban development. Rivers. Changes in the flow regimes of rivers affect physical habitat, food sources and environmental cues (such as spring flushes triggering breeding behavior in some fish species) for aquatic species. Irrigation without adequate drainage can increase soil and water salinity and impact many uses. Water quality degradation from bacteriological and chemical pollution can increase the morbidity and mortality of organisms; changes in nutrient concentrations from sewage and fertilizer runoff can affect the foodchain; while increases in sediment concentrations blanket habitats and reduce light penetration, affecting photosynthesis. Introduced fauna and flora can affect riverine biodiversity and cause nuisances to human uses. Lakes. Lake levels respond to changes in inflows and outflows, with consequent drying or flooding of shoreline habitat and wetlands. Temperature changes lead to shifts in stratification levels with consequent effects on biogeochemistry and foodchains. As in rivers, chemical pollution, effluent discharges and sediment loads can affect lake biota in diverse ways. Introduced flora and fauna can also have major impacts on biodiversity and productivity. Lakes are particularly sensitive long-term indicators of climate change, integrating over short term temperature fluctuations to expose long-term changes. Figure 3 identifies the problems affecting 28 lakes in a recent global review12. The arrows in the figure pointing downward indicate worsening conditions, horizontal indicate stable conditions and upward indicate improving conditions. Overall, the trend shows worsening conditions in the quality of the lake environment. Groundwater. Groundwater tables rise and fall in response to changes in recharge and extractions. Rising water tables can cause water logging and loss of land productivity. Ecosystems, such as some wetlands, depend on access to shallow aquifers and dry out or flood as levels change. Also streams and lakes that are dependent on groundwater systems during dry seasons can dry out as watertable levels drop. Human activities can pollute groundwater in the same way as surface water, although this is more likely to affect human use of the groundwater than ecosystems. Wetlands. Wetlands are being lost rapidly around the world through conversion to agricultural and urban uses, with loss of the many services that they perform for people.

12

ILEC (2005). Managing Lakes and their Basins for Sustainable Use: A Report for Lake Basin Managers and Stakeholders. International lake Environemnt Committee Foundation, Kusatsu, Japan.

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They are affected by changes in river flows and groundwater abstractions and are polluted with urban runoff and sewage, industrial effluent and agro-chemicals. Some of the affected wetlands are internationally important, recognized by the Ramsar agreement. Climate change. Climate change is a cross-cutting issue that impacts on surface and groundwater quantity and quality as well as demand for water for multiple uses. Appendices B and C and Water Resources and Environment Technical Note A113 provide more detailed descriptions of these issues.

Figure 3.

13

Hirji, R. and R Davis (in press). Water Resources and Environment Technical Note A.1. Environmental Aspects of Water Resources Management. World Bank, Washington DC.

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Issues affecting 28 lakes studied in a recent global review

Government responses policies, strategies, programs, plans and projects The 1992 Dublin Conference on Water and the Environment and the subsequent Environmental Summit at Rio de Janeiro laid the foundations for Integrated Water Resources Management (IWRM), now the accepted paradigm for managing water resources. IWRM is closely linked to sustainable development. According to the Global Water Partnership14, IWRM seeks to advance a countrys social and economic development in ways that do not compromise the sustainability of vital ecosystems. There is no unambiguous definition of IWRM15. Instead it consists of a number of principles, most of which pre-date the Dublin Conference. These principles, which have been subsequently expanded, extended and adapted to local circumstances, are: Utilizing an integrated approach for water management in association with River Basin Management (RBM) Promoting participation and stakeholder involvement Employing economic instruments, private sector involvement and liberal economic principles Mollinga16 argues that each concept emerges from a different history and these principles, particularly the first, should be seen as forming an envelope that allows different constituencies to attach different meanings or emphases to the principles to interact with each other and negotiate the operalization of these meanings and their combinations. Thus, the implementation of IWRM in a particular country may incorporate some or all of these principles with different emphases given to the various interpretations of integrated, participation, and economic approach. More recently, lake scientists have also argued that lake management (traditionally, the domain of limnologists, fisheries experts and environmental engineers and scientists) is also a part of IWRM17. The benefits of IWRM arise from the process as much as from the end product. The increased understanding arising from sectors working together, the gathering and sharing of knowledge and information during the study, and the consideration of catchment-wide uses

14

GWP 2004. Informal Stakeholder Baseline Survey. Current Status of National Efforts to Move towards Sustainable Water Management using an IWRM Approach. Stockholm, Sweden. 15 GWP 2000. Integrated Water Resources Management Background Paper 4. Stockholm, Sweden. 16 Mollinga P. (2006). IWRM in South Asia: A Concept Looking for a Constituency. In PP. Mollinga, A. Dixit and K. Athukorala (Eds). Integrated Water Resources Management: Global Theory, Emerging Practice and Local Needs. SAGE Publications, New Delhi, Thousand Oaks, London. 17 ILEC (2005). Managing Lakes and their Basins for Sustainable Use: A Report for Lake Basin Managers and Stakeholders. International Lake Environment Committee. Kusatsu, Japan.

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and impacts and the debates about alternative options themselves result in benefits for water resources management. Integrated approach Integration is an umbrella term that includes the bringing together of components of both natural and the human management systems18. The natural systems to be integrated include: Freshwater and coastal zones Land and water management Water for consumptive and non consumptive uses and water for aquatic ecosystems Surface and groundwater Water quantity and water quality Upstream and downstream water users Integrating decisions across these different land and water components within a river basin (RBM19) or a lake basin (Integrated Lake Basin Management) ensures that decisions about land use and land management are taken with an understanding of their potential impact on all water resources within the basin. While the links between activities within a watershed and effects on receiving waters are obvious to technically trained people and those who have been affected by some notably disastrous sectoral decisions, it is a lesson that is still to be absorbed by non-specialists as well as planners, engineers and scientists in many nations around the world. Ministries remain organized on sectoral lines with nearly impermeable barriers between them and with technically competent staff who are motivated to pursue narrow sectoral objectives. Consequently, human management systems also need to be linked so that decisions in one sector do not impact unnecessarily on other sectors. The environment (for example, National Parks, fisheries, wetlands) is a legitimate waterusing sector that is often neglected or given a very low priority in water allocation and water quality decisions, primarily because it has few or weak advocates. Yet as evidenced by well known examples such as the Aral Sea, Lake Chad, and the Yangtze River, if environmental considerations are not fully incorporated into decisions, then the ecosystem services on which many of the consumptive needs rely can be undermined to the detriment of all water users. Participation and stakeholder involvement Stakeholder involvement includes both sectoral level involvement of organized entities and utilities such as irrigation, industry, livestock, mining, hydropower and water supply authorities as well as local level organizations representing irrigator and community groups. The former typically are involved at national level, while the latter are involved in decisions at basin and sub-basin levels. In the case of water resource development projects, the stakeholders include communities that are both upstream and downstream of the development. In the case of dam development, the latter have traditionally been left out of
18 19

GWP 2000. Integrated Water Resources Management Background Paper 4. Stockholm, Sweden. World Bank (2006). Integrated River Basin Management: From Concepts to Good Practice. Briefing Note 1. An introduction to Integrated River Basin Management. World Bank, Washington DC.

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negotiations and are only now being recognized in many countries. The Dublin Principles specifically identified women as needing to be included in decision making because of the special role that they play in provision of water in many developing countries. The extent of participation can vary from the provision of information to affected groups, to canvassing the objectives and requirements of the affected groups, to full inclusion of interested groups in decisions20. There are a number of benefits from stakeholder participation21 including improving public acceptance of decisions, improving the quality of alternatives because of the wider range of expertise available, reducing the risk that opposition from disaffected groups will delay implementation of decisions, and a greater likelihood of compliance with agreements reached during negotiations. Building participation in water resources decisions also contributes to the wider effort to promote good governance and accountability in government decision making. However, stakeholder participation is not easy. It often proves difficult to engage sectoral interest groups, even at national level, in decisions about water resources management; at basin or local level, experience has shown that it takes many years to develop stakeholder groups where there has not been a tradition of individual involvement. Even in countries, such as India, where there has been an active civil society operating within a democracy, there are few institutional mechanisms for inclusive water resources management. Decisions can be delayed as ways are found to build stakeholder inclusion and time is spent explaining issues to those without backgrounds in water management. One of the principal tenets of IWRM is that operational responsibility for the allocation and management of water resources should be devolved to the river basin level with policy development being retained at national level. It is often difficult to implement this in practice. New river basin organizations are sometimes opposed because they would reduce the power of those in national institutions; it can be difficult to train staff used to the engineering aspects of water management in the skills required for water resources management; and new basin level organizations lack the resources to operate effectively. Decentralization is particularly difficult in transboundary basins where institutions at different stages of development and with different policy and legal imperatives need to coordinate. Economic instruments and private sector involvement Treating water as an economic good and setting a price that reflects its value is a rational approach when good quality water is in short supply and governments want to promote conservation, encourage innovation and educate water users about the consequences of their decisions. The GWP advocates that the price of water should reflect the full cost of water provision:

20 21

World Bank (1996). World Bank Participation Sourcebook. World Bank, Washington DC. World Bank (2003). Stakeholder Involvement in Options Assessment: Promoting Dialogue in Meeting Water and Energy Needs. A Sourcebook. World Bank, Washington DC.

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the full supply cost due to resource management, the operating and maintenance expenditures and capital charges, the opportunity costs from alternative water uses, and the economic externalities including environmental costs.

However, the experience of implementing this principle is mixed. In some parts of the world, innovative approaches are being used to introduce mechanisms such as water user charges, pollution charges, fish levy, payment for environmental services to offset the cost of managing the water resources (over and beyond the water tariffs charged to drinking water) as well as to support environmental stewardship. In other parts of the world, it has proven divisive as consumers do not recognize the legitimacy of these costs and object strongly to paying for a resource that had previously been free. Charging for an essential commodity such as water is seen as discriminatory when many people are impoverished and lack ready access to such basic requirements. In addition, these objections are strengthened in some parts of the Middle East by the special place of water in the Koran and the ritual role of water in Islam. Governments have turned to the private sector22 to manage water resources institutions, particularly water supply and sanitation, irrigation, and in hydropower infrastructure, to:

bring technical and managerial expertise and new technology into the sector, improve economic efficiency in the sectorin both operating performance and the use of capital investment, inject large-scale investment capital into the sector or gain access to private capital markets, reduce public subsidies to the sector or redirect them from the groups now served to the poor and those not now served, insulate the sector from short-term political intervention in utility operations and limit opportunities for intervention by powerful interest groups, make the sector more responsive to consumers' needs and preferences.

While private sector involvement has achieved many of these aims in some cases, it has also failed in a number of instances and the provision of these water services has reverted to government managed institutions. World Bank Support for IWRM The World Banks 1993 Water Resources Policy advocated a multi-sectoral approach to water resources management. It enunciated the Dublin Principles following the 1992 Rio Summit but, as a subsequent OED review found, these principles were difficult to put into practice. Given this, the 2003 Water Resources Sector Strategy advocated that IWRM be pursued with principled pragmatism meaning that the principles of IWRM should be promoted, in a piecemeal manner if necessary, when opportunities arise while still pursuing the overall goals of efficiency, equity and sustainability.
22

World Bank 1997. Toolkits for Private Participation in Water and Sanitation. World Bank, Washington DC.

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CWRAS were introduced into Bank work following the 2003 Water Resources Sector Strategy to bring coherence to the Banks support for water management across the resources and service spectrum. They identify key strategic water resources issues within a country where the Bank can play an important role in assisting with water resources development and management, including environmental issues (Box 2). Typically, they include an analysis of water resources from a multi-sectoral perspective for guiding the Banks policy dialogue and investment planning and emphasize the Banks commitment to IWRM. Box 2. Country Water Resource Assistance Strategies and the Environment Seventeen CWRAS were analyzed to determine the extent to which they had included the water-related environmental issues (Appendix B). All 17 CWRAS had taken these issues into account, although to different extents. The CWRAS for Bangladesh, China, Ethiopia, Kenya, Mekong, Yemen, Tanzania, Philippines and the East Asia Regional SEA had extensive treatment of these issues, particularly issues concerning changes in flows, watershed degradation and water quality. However, several of them were weak on issues regarding changes in groundwater, loss of wetlands, rising water table and invasion of aquatic weeds. All CWRAS emphasized the need for an integrated approach to water management. For example, the Yemen CWRAS emphasize the need for reviving watershed management programs using an integrated approach with more focus on upstream communities. The IWRM concept has been significantly treated in all the CWRAS either in support of the concept, use of the concept or in disfavour of the use of the concept especially in developing countries. For example, the Ethiopian CWRAS states that while developed countries are appropriately focused on the implementation of IWRM, Ethiopia and other developing countries may do better to adopt a principled and pragmatic approach to management while putting greater emphasis on concurrent investments. There are three entry points by which the Bank can assist developing countries implement IWRM: reforms to national water policy, legislation, regulations and institutions; establishment or strengthening of water resources management authorities or river or lake basin-level management institutions; and investment projects for single and multiple purpose water use. Box 3 provides an example of Bank assisted water policy reform in Indonesia targeting the first two entry points. Box 3. Indonesia Water Sector Reforms
During the 1960s and 70s Indonesian water sector policy emphasized water resource development. By the late 1990s, however, the water sector faced deteriorating infrastructure and a degrading natural resources base. There was limited coordination between agencies, a low level of stakeholder participation, lack of funds, and no effective management agencies at

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the river basin level. The resource problems included water shortages and conflicts, watershed degradation and sedimentation, and rising water pollution. The reform-oriented government that followed the Suharto regime requested Bank assistance to reform the sector. A Water Sector Adjustment Loan (WATSAL) was approved in mid 1999 with the following objectives: 1. Improve the National Institutional Framework for Water Resources Development & Management, 2. Improving the Organizational and Administrative Framework for River Basin Management, 3. Improve Regional Water Quality Management Regulatory Institutions and Implementation, 4. Improve Irrigation Management Policy, Institutions and Regulations. The first objective was achieved with a National Water Council being formed, a new National Policy for Water Resources Management being approved, new laws on water resources management and private sector involvement being passed, and improved institutional arrangements for data collection and management. The second objective was only partially achieved, with much of the preparatory work being completed for river basin management but not implemented during the loan period. The regulatory framework for water quality was achieved although the framework was not implemented in six river basins during the period of the loan as planned. The irrigation sector reforms in the fourth objective were successful with policy, legal, regulatory and administrative frameworks being established and implemented nationwide. Source: World Bank, 1999. Indonesian, Water Sector Adjustment Loan. Presidents Report. World Bank, Washington DC.

Policy reform A national water resources policy provides a comprehensive umbrella under which IWRM principles can be implemented systematically with cross-sectoral support. The Bank has provided assistance through a variety of instruments for countries to reform their water resources policies, legislations, and institutions in line with IWRM principles and the countrys economic and social objectives. Water resources policies commonly include IWRM concepts such as cross-sectoral management, separation of regulatory and service delivery functions, devolution of operational responsibility to basin-level, involvement of all stakeholders in decisions and formation of these stakeholder groups, protection of aquatic environments, water resources investments and, sometimes, charging for water use. The institutional structure needs to be changed to reflect these principles. The traditional centralized water resources department (which is often a relatively weak part of a consumption-oriented Ministry such as Water Supply or Irrigation) needs to be transformed

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into an independent institution focused on policy development and coordination across sectors; basin level operational authorities usually need to be established; and representative stakeholder groups need to be formed. Often aspects of these policy changes are incorporated into law. These aspects include authorizing the new institutions, clarifying their functions and powers, authorizing charges for water use, mandating stakeholder involvement, and detailing environmental protection through establishment of water quality standards, provisions for environmental flows and protection of water sources. River and lake basin management The Bank has helped countries establish river and lake basin organizations by funding office infrastructure and equipment, hydrometric and water quality monitoring networks, providing technical advice based on IWRM experience in other countries, and helping form water user associations. Experience shows that it takes many years for basin level organizations to be effective. Both the Bank and the GEF have supported basin-level organizations for transboundary river and lake basins, although they are primarily coordinating institutions and fora for discussion rather than operational institutions. Thus, the Bi-National Autonomous Authority for Lake Titicaca (ALT) was established in 1996 by Bolivia and Peru to promote collaborative work in the lake basin. The GEF/UNDP has supported ALT with grants for biodiversity conservation and development based on the regions unique ecological features. Investment projects Bank-supported sectoral investment projects (most commonly in water supply/sanitation, irrigation, hydropower developments and flood control) can also contribute towards the principles of IWRM by promoting sectoral involvement in participatory decision making, ensuring that the investments met environmental and social requirements, and, in some cases, establishing water user representative groups that can participate in national or basinlevel decisions. Thus, projects funded through sectoral Ministries can be used to reinforce IWRM investments funded through the Ministries responsible for water resources.

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Progress in Mainstreaming Environment in IWRM IWRM principles are being slowly adopted by national governments. In 2003, the GWP conducted an informal baseline stakeholder survey on the readiness of 108 countries to meet the 2002 World Summit on Sustainable Development action target for water resources management and efficiency plans23. About 13% of countries surveyed had made good progress towards a more integrated approach, and a further 47% had taken some steps in this direction. The remaining countries had hardly made any progress. This level of adoption had improved two years later when the GWP assessed 95 countries for their initiation of new measures to strengthen water resource management and included IWRM elements in their policy documents24. Approximately 21% of the countries had plans or strategies well underway and a further 53% had initiated the development of an IWRM strategy/plan. However, as described above, IWRM comprises a number of semiindependent principles that are implemented opportunistically depending on country circumstances. Neither survey examined the practical implementation of these individual IWRM principles. Other evidence shows that practical implementation of IWRM lags considerably behind the progress in establishing national frameworks. The World Bank, in an informal survey of India, Philippines, Nigeria, and Yemen during 1999/2000 prior to writing its Water Resources Sector Strategy, found that IWRM was being increasingly adopted in principle but practical implementation was lagging. The UNEP examined the practical impediments to IWRM implementation in developing countries25 and found that they included: lack of proper coordination of management activities lack of appropriate management tools inability to integrate water sector policies institutional fragmentation insufficiently trained or qualified manpower shortfalls in funding inadequate public awareness limited involvement by communities, non-governmental organizations (NGOs) and the private sector. A study by IRC26 confirmed that while IWRM principles are internationally accepted and that many governments had developed IWRM policies and legislation, movement towards practical application of IWRM remained slow, and the 2006 World Water Development Report27 concluded that there is now an urgent need to
23

GWP 2004. Informal Stakeholder Baseline Survey. Current Status of National Efforts to Move towards Sustainable Water Management using an IWRM Approach. Stockholm, Sweden 24 Global Water Partnership (2006). Setting the Stage for Change. Stockholm, Sweden. 25 Rast, W. 1999. Overview of the status of implementation of the freshwater objectives of Agenda 21 on a regional basis. Sustainable Development International, Vol. 1, pp. 5357. 26 J.T. Visscher, P. Bury, T.Gould and P. Moriarty (1999). Integrated water resource management in water and sanitation projects: Lessons from projects in Africa, Asia and South America. Occasional Paper OP31. IRC International Water and Sanitation Centre, Delft, The Netherlands.

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move beyond these preliminary (policy and legislative) steps to widespread implementation of IWRM. There is however very little information from these studies on the extent to which IWRM has served as a vehicle for promoting environmental water considerations in practice. The informal World Bank survey noted that, in India, environmental concerns (environmental flows, protection of water quality and control over pollution) had not been integrated into IWRM and that the environment was seen as an add-on rather than a central issue. Another examination of IWRM in South Asia28 found that ecological concerns were just beginning to be addressed within water resources policies, despite considerable lobbying by environmental groups, and that they were seldom included in practice. The IRC study examined the extent to which IWRM principles had been incorporated into eight water supply/sanitation and three IWRM projects in developing countries. The study found that stakeholder involvement is accepted in theory but poorly implemented and not accompanied by support from the higher political levels; decentralization of institutions is often not accompanied by legal frameworks; introduction of charging for water supply is receiving increasing emphasis but that the charging structure needs to protect basic water users; and the role of women is narrowly interpreted when included at all. Although the study did not specifically investigate the integration of environment into water resources, it found that water source and catchment protection was increasing but was poorly coordinated between levels and sectors. Despite an understanding in all 11 projects that pollution, deforestation and over-abstraction put pressure on water quality and quantity, little attention was actually given to water catchment protection in the eight WSS projects, although there was greater emphasis in the three IWRM projects. The evidence then is that IWRM is becoming increasingly accepted in national water resources policies and strategies but its practical uptake is still lagging in many countries. Even where some IWRM principles are being implemented in practice, with only a few exceptions, these do not usually include principles aligned to environmental protection or ecosystems management. That is, IWRM is not acting as an effective instrument for mainstreaming environmental sustainability into water resources management in

27

UNESCO 2006. Water a Shared Responsibility. The United Nations World Water Development Report 2. UNESCO, Paris, France. 28 Mollinga P.P., A. Dixit and K. Athukorala (Eds) (2006). Integrated Water Resources Management: Global Theory, Emerging Practice and Local Needs. SAGE Publications, New Delhi, Thousand Oaks, London

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developing countries yet. In the developed nations there are few nations such as Germany that have adopted a formal Environmental Policy for Water Resources Management (Box 4). Box 4. Environmental Policy: Water Resource Management in Germany The German water resources policy embodies a precautionary approach to the protection of water resources. The environmental policy strives to balance the natural functioning of ecosystems while guaranteeing access to public water supplies at federal, regional and local levels. In the long term, water resources management must be organized so as to: (a) maintain or restore the ecological balance of waters, (b) guarantee reliable water supplies in terms of quantity and quality, (c) ensure that all other water uses serving public welfare continue to be possible Water resources policy is based on the following principles: (i) priority of prevention, (ii) cooperation of all parties concerned, (iii) allocation of costs on the basis of polluter pays principle and full recovery of costs With the task performed on the basis of subsidiarity and decentralization. A precautionary environmental policy calls for not only for fending of imminent dangers and remedying damage already caused, but also, and primarily, for protecting and making sparing use of natural resources. The EU Water Framework Directive had added the following new elements into water resources management in Germany: 1. river basin management in 10 catchments, 2. integrated management of groundwater and surface waters, including lakes, estuaries and coastal waters, 3. definition of biological and chemical quality objectives, 4. remediation obligations with binding deadlines.
Source: Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (2001) Environmental Policy: Water Resources Management in Germany.

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Strategic Environmental Assessment: Evolution and Effectiveness

Strategic Environmental Assessment (SEA) provides an important pathway for introducing environmental concerns into water resources management at the strategic level of policies, legislation, strategies, programs and plans (PLSPP). SEAs are now recognized to include a wide range of instruments that assess both the potential impacts of PLSPPs and the institutional capacity to integrate environmental and economic considerations. SEAs have not been widely employed in the water sector although their application is growing. SEAs share characteristics with IWRM. The International Association for Impact Assessment has provided criteria for evaluating the procedural and substantive aspects of SEA. The institutional drivers used to explain EIA effectiveness are also suited to explain SEA implementation. These criteria and drivers are described in this chapter and will be applied to evaluate selected case studies of water sector SEAs in the next chapter. Background At around the time that the water sector was proposing that environmental concerns be integrated into water resources through IWRM, the environment sector was promoting Strategic Environmental Assessments (SEAs) as a tool for integrating environment into the strategic levels of decision making in many sectors, including the water sector. SEAs complement Environmental Impact Assessments (EIAs) by undertaking environmental assessments of PLSPPs. Thus, SEA both upstream (i.e. shift towards the strategic level) and mainstream (that is, weave directly into the decision making) environmental and social concerns29. Strategic here refers to all the stages of decision making that precede the decision to go ahead with a specific project or a set of projects (Figure 4). There are a number of characteristics that make SEAs strategic and distinguish them from EIAs30. In particular, SEAs are set in the context of broader visions, goals and objectives, helping choose a strategy for action and the means to an envisioned end so that environmental impacts can be avoided, minimized or mitigated at the earliest possible stage of the decision making process.

29

The OECD defines SEA as analytical and participatory approaches that aim to integrate environmental considerations into policies, plans and programmes and evaluate the inter linkages with economic and social considerations. OECD (2006). Good Practice Guidance on Applying Strategic Environmental Assessment (SEA) in Development Co-Operation. DAC Network on Environment and Development Co-operation, OECD, Paris. 30 B Noble (2000). Strategic Environmental Assessment: what is it and what makes it strategic? Journal of Environmental Assessment Policy and Management, 2(2), 203224.

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There are a wide range of SEAs type studies, also called para-SEAs in the literature, which do not meet formal specifications of strict definitions of SEA but which have some of their characteristics or elements and share the same overall purpose of assessing environmental concerns to enable these issues to be taken into account in decision-making and in the preparation and implementation of PLSPP31. Hereafter we will include both SEAs and SEA-type studies under the generic term SEA, unless there is a need to distinguish them. SEAs constitute a family of approaches that can be broadly classified on a continuum from impact-centered SEAs to institution-centered SEAs. The former assess likely environmental and social effects and propose mechanisms to avoid, mitigate or compensate these effects. In focusing on a proposed sector-wide investment or instrument, they share similarities with EIAs, although shifted upstream to the strategic decision making level. Impact-centered SEAs for programmes and plans are often carried out at the regional level.

Policy

Legislation

Strategy

Plans Program s

St ra te gi c

Project

Ta cti ca l

} } }
}

SEA SEA SEA EIA

Figure 4 The relationship between policy, legislation, strategies, plans and programs and projects (Source: World Bank 2007. Strategic Environmental Assessment: Enhancing Capacity for Integrated Water Resources Management and Development in Tanzania)

Institution-centered SEAs focus on the analysis of institutions and governance structures and frameworks because of the non-linear and overtly political nature in which policies and their supporting legislations are developed32. Institution-centered SEAs are normally applied to policy and legislation because of the greater remoteness of these levels of
31

Dalal-Clayton B. and B. Sadler (2005). Strategic Environmental Assessment: A Sourcebook and Reference Guide to International Experience. EarthScan, London, Sterling VA. 32 World Bank 2005. Integrating Environmental Considerations in Policy Formulation: Lessons from Policy-Based SEA Experience. Report 32783. Environment Department, World Bank, Washington DC.

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decision-making from specific actions whose impacts can be assessed. Figure 5 illustrates conceptually the shift from impact-centered to institution-centered SEAs at different levels of decision-making. Institution-centered and impact-centered SEAs are closely related to the IWRM comb (Figure 2). The former lie in the handle and back (blue part) of the comb because they typically involve assessments of cross-sectoral collaboration, capacity for environmental protection, and legislative and policy backing. For example, SEAs are being proposed as important tools to identify climate adaptation strategies (i.e. finding opportunities to integrate both local and global environmental considerations into PLSPPs). The latter lie in the teeth of the comb because they are sector-specific assessments WSS, food production, energy, etc - of the impacts of particular programs or plans. In reality, some SEAs are both institution-centered and impact-centered a SEA for a large infrastructure program may include an assessment of capacity for undertaking EIAs and the adequacy of legislation, as well as the potential impacts of the investment. SEAs vary in other ways too33: as either stand-alone processes running parallel to core planning processes, or as processes integrated into the planning, policy/decision-making processes. solely focussed on environmental impacts or integrating all three dimensions of sustainability - environment, social and economic. applied for a variety of purposes from ascertaining the environmental consequences of an existing PPP, to providing inputs into developing a PPP supporting, facilitating and improving its development so that it addresses environmental dimensions effectively34. engaging a broad range of stakeholders or limited to expert policy analysts. conducted in a short time frame or over a long period. employing a quick analysis while others require detailed analysis. producing a finite, output-based activity (e.g. a report), or being a more continuous process that is integrated within decision-making, focused on outcomes, and that strengthens institutional capacity. This variety illustrates that SEAs nowadays cover a much wider range of applications than just being EIAs that have been upstreamed from projects to programs and plans. Many of these varieties of SEAs are included in the case studies examined in Chapter 4. This diversity of approaches to SEAs means that some existing instruments developed by different sectors and different institutions to better integrate environmental issues into

33

OECD (2006). Good Practice Guidance on Applying Strategic Environmental Assessment (SEA) in Development Co-Operation. DAC Network on Environment and Development Co-operation, OECD, Paris. 34 The diversity of purposes for SEA has grown significantly over the last decade and is now broad enough to require an analysis of different approaches and methods.

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strategic decision making are now regarded as types of SEAs. Examples within the World Bank include Sectoral and Regional Environmental Assessments and Country Water Resources Assistance Strategies. The GEFs Transboundary Diagnostic Analyses (TDA) and Strategic Action Programs (SAP) are also examples of SEA type studies (Box 5). Box 5. Transboundary Diagnostic Analyses and Strategic Action Programmes The transboundary diagnostic analysis (TDA) process has been devised by the GEF International Waters focal area to help overcome the problem of lack of coordination over the management of international waters. It identifies and analyzes the scientific, technical, and socioeconomic information relevant to determining the major problems hindering the sustainable use of international waters and their resources, as well as the transboundary nature, magnitude, and significance of the various elements as they pertain to water quality, quantity, biology, habitat degradation, and/or conflicts; identifies the root causes of the problems; and ideally, provides information and understanding on the types and magnitude of the programs and activities needed to address the problems. A properly conducted TDA will serve as a comprehensive database for the subsequent development of a strategic action program (SAP) comprised of activities, projects, and remedial measures needed to ensure the sustainable use of a transboundary waterbody and its resources to the overall benefit of all drainage basin inhabitants. The joint development of a TDA provides riparian countries with a forum for cooperating and collaborating in the exchange of information, and for working together to develop common management goals. It also contributes to transparency and accountability as part of the development of wider regional cooperation. This cooperative element is probably as valuable as is the assemblage of scientific information. For this reason, the GEF recommends that the development of the TDA be overseen by a high-level (preferably inter-ministerial) committee from all countries to provide strong country ownership of the identified problems and preliminary actions. Source: Mee, L., A. Hudson and M. Bloxham (2005). The TDA/SAP approach in the GEF International Waters Programme: An Overview. Presented at the Third Biennial International Waters Programme, Salvador, Bahia, Brazil.

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Institution-centered

Impact-centered

Level of decision

1. Policy 2. Legislation 3. Strategy 4. Programs 5. Plans

Figure 5. The relationship between type of SEA and level of decision-making (Source: World Bank 2007. Strategic Environmental Assessment: Enhancing Capacity for Integrated Water Resources Management 6. Projects (EIA) Development in Tanzania.) and

Characteristics of Effective SEAs There are two broad requirements for effective SEAs: drivers need to be in place to ensure that SEAs are initiated when needed and the recommendations are adopted; SEAs should follow the procedures established by each country and possess the appropriate substantive content. Sadler35 terms the drivers the institutional controls and the procedural and substantive criteria the operational competence of SEA systems. Both institutional controls and operational competence will be used to analyze water sector SEA case studies in the next chapter. Institutional controls for SEAs Ortolano et al36 introduced six mechanisms of control, or drivers, that underpin and promote the preparation and implementation of EIAs (Box 6). In general, these drivers also apply to SEAs although there are differences of emphasis and implementation that are described in the Box.

Box 6. Drivers for EIA Implementation

Judicial drivers. The courts have a formal role in ensuring that government agencies

implement EIA provisions in the relevant legislation. Judicial drivers are widely used in
35

Sadler B. (1995). Environmental Assessment in a Changing World: Evaluating Practice to Improve Performance. International Study of the Effectiveness of Environmental Assessment. Canada Environmental Assessment Agency, Canada. 36 Ortolano L., B. Jenkins and R.P. Abracosa (1987). Speculations on when and why EIA is effective. Environmental Impact Assessment Review 7 285-292.

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the USA where the judiciary has a constitutionally sanctioned role in reviewing government procedures. Judicial drivers are less important for SEA than for EIA, since SEA is normally undertake by government agencies that are not subject to the same legal sanctions as private sector developers undertaking EIAs.
Procedural drivers. The legislation, regulations and guidelines provide formal drivers

over the procedures to be followed when conducting EIAs. However, procedural drivers are seldom effective without the availability of other drivers such as judicial or evaluative drivers. By themselves they can lead to well written EIAs that are ignored. Procedural drivers for SEA can be established through either legislation or through administrative orders or Cabinet directives. Administratively driven SEAs have the advantage that they can be more flexible in cases where strict adherence to legislated assessment requirements may not be possible.
Evaluative drivers. Evaluative drivers exists when the institution responsible for

assessing the quality of EIAs is able and willing to impose sanctions if the EIA is unacceptable. Most EIA legislation provides for the imposition of penalties for noncompliance; however, there can be political pressure to avoid prosecution of transgressors. Unlike EIAs, SEAs are normally conducted by government agencies and so it is important that strong evaluative drivers are present. In some countries there is an independent agency for assessing the quality of SEAs but the critical factor is civil societys demand for accountability in strategic decision making.
Instrumental drivers. The requirements of international development partners provide an

additional driver for EIAs. Thus, Mawalyosi and Hughes (1998) found that almost all the examples of EIA in Tanzania had been undertaken because of the requirements of international development partners. Instrumental drivers can play a central role in introducing SEAs in developing countries where legislative and administrative drivers are absent.
Professional drivers. The professional code of conduct of planners and other

professionals undertaking or advocating EIAs (e.g., IAIA) can act as a powerful driver

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for EIA quality. This driver requires that individuals are well trained in EIA and that their professional organizations are independent of government, have strong codes of conduct and able to impose their professional expectations on their members. Although professional drivers can be powerful influences in developed countries, they are usually weak in developing countries where professional planning and environmental agencies are relatively new and do not have much influence.
Public drivers. These drivers, applicable to both EIA and SEAs, rely on an informed

public or civil society who are motivated and confident enough to make their views known to government. They may be more relevant in developed countries which have a tradition of active public engagement in the decisions of government, but may also be important in developing countries.
Source: Modified from Ortolano L., B. Jenkins and R.P. Abracosa (1987). Speculations on when and why EIA is effective. Environmental Impact Assessment Review 7 285-292.

Operational competence of SEAs A number of reports provide criteria to assess the operational competence of SEAs37. Perhaps the most comprehensive are the criteria developed by IAIA (2002), following a series of workshops and widespread consultations with experienced practitioners. These criteria were developed primarily for impact-centered SEAs. An additional criterion influence that has previously been used in World Bank documents has been added to assess the long-term impact of the SEA (Box 7). Box 7. Characteristics of Good Quality SEA Process
Process Criteria Accountable Is it clear which are the leading agencies for the strategic decisions to be taken. Is the study carried out with professionalism, rigor, fairness, impartiality and balance. Is the study subject to independent checks and verification Documents and justifies how sustainability issues were taken into account in decision making. Participative Informs and involves interested and affected public and government bodies throughout the assessment process. Explicitly addresses their inputs and concerns in documentation and decision making. Has clear, easily-understood information requirements and ensures sufficient access to all relevant information.
37

Office of the Deputy Prime Minister (2005). A Pracatical Guide to the Strategic Environmental Assessment Directive. Office of the Deputy Prime Minister, London; IEMA (undated). Strategic Environmental Assessment Environmental Report (ER) Review Criteria. http://www.iema.net/download/membership/corporate/SEA-SA Review Criteria.pdf; IAIA (2002). Strategic Environmental Assessment: Performance Criteria. IAIA Special Publication No. 1. International Association for Impact Assessment, Fargo, North Dakota, USA; Bonde J. and J. Simpson (1999). Environmental Appraisal Review Package for Development Plans. http://www.ceu.hu/envsci/eianetwork/publications/bonde99.html

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Iterative Ensures availability of the assessment results early enough to influence the decision making process and guide future planning. Provides sufficient information on the actual impacts of implementing a strategic decision, to judge whether this decision should be amended and to provide a basis for future decisions. Substantive Criteria Integrated Ensures an appropriate environmental assessment of all strategic decisions relevant for the achievement of sustainable development. Addresses the interrelationships of biophysical, social and economic aspects. Is tiered to policies in relevant sectors and (transboundary) regions and, where appropriate, to project EIA and decision making. Sustainability-led Facilitates identification of development options and alternative proposals that are more sustainable. Focused Provides sufficient, reliable and usable information for development planning and decision making. Concentrates on key issues of sustainable development. Is customized to, the characteristics of the decision making process. Is cost- and time-effective. Influential Improves the strategic decision and influences future policies by raising awareness and changing attitudes towards sustainable development Source: Modified from IAIA (2002). Strategic Environmental Assessment: Performance Criteria. IAIA Special Publication No. 1. International Association for Impact Assessment, Fargo, North Dakota, USA.

In spite of its importance, stakeholder participation has been found to be one of the weaker aspects of both EIA and SEA development. Often involvement has been merely provision of information or selective consultation with non-government organizations (Sadler 1996). However, Australia, US and Netherlands provide some good practice examples of public involvement for PLSPP development. For example, in the Netherlands, public consultantion on plans occurs at two stages in scoping and in reviewing the draft report. Inputs are solicited through both written comments and through public hearings. SEA in the Water Sector Relatively few SEAs have been carried out in the water sector compared to SEAs in other sectors such as transport and land use planning. Most water sector SEAs have been conducted in developed countries, although SEAs in the water sector in developing countries are emerging. Many of these have been supported by multi-lateral lending institutions. Thus, the World Bank has funded numerous Sectoral and some Regional

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Environmental Assessments for water resources38 and, more recently, has developed 17 CWRAS. Other examples of water sector SEAs in developing countries include the SEA into the Botswana Water Master Plan 1991, the Regional EA into flood protection in Argentina, the transboundary EA of the Nile Basin, and the examples contained in Chapter 5 of this report. Some regions and countries have introduced systematic requirements and procedures for conducting SEAs in the water sector: The UNECE Protocol on SEA39 requires that contracting countries conduct domestic and transboundary SEAs during the elaboration of programs and plans in a number of sectors, including water management, when those programs and plans will lead to projects that would require EIAs. These include dams, inter-basin transfers, wastewater treatment plants, irrigation schemes, and groundwater abstractions. The EU Directive on Strategic Environmental Assessment requires that all plans and programs that are likely to have an effect on water (Box 8) need to be assessed with an SEA40. The South African Department of Water Affairs and Forestry (DWAF) considered SEA as a tool for use in catchment management and planning when it became clear that a wider frame of information was needed by decision-makers with the introduction of the National Water Act 1998 (Case Study 7, Appendix D). Although SEA was not subsequently used as a specific approach in other catchments, the ideas behind SEA have been influential in guiding IWRM in other catchments. The pilot study of SEA in the Palar basin in India (Case Study 8, Appendix D) proved to be a successful method for developing a framework for IWRM and the SEA process is being extended to other sub-catchments in Tamil Nadu State. The 2004 Tanzanian Environment Management Act 2004 identifies water developments as one of four types of developments where an SEA is specifically required at a pre-project stage. However, these regional systematic requirements for water sector SEAs have yet to produce a significant body of such studies and so there is not yet a baseline of water sector SEA practice against which to assess individual studies. There are many more para-SEAs in the water sector, such as environmental flow assessments (EFA), some of which will be used in the case studies in the next two chapters.

38

Green K. and A. Raphael 2002. Third Environmental Assessment Review (FY 92-00). World Bank, Washington DC.

39

UNECE (2003). Protocol on Strategic Environmental Assessment to the Convention on Environmental Impact Assessment in a Transboundary Context. Geneva, Switzerland. 40 European Commission (2001). Assessment of the Effects of Certain Plans an Programmes on the Environment. Directive 2001/42. European Commission, Brussels, Belgium.

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Box 8. EU Water Framework Directive and SEA Directive The Water Framework Directive (WFD) was adopted by the European Parliament in 2000 and was to be established in national legislation by end 2003. It contains many of the principles of IWRM including managing water quantity and quality for surface and groundwater, treating water as having an economic value, and enhancing consultation and participation. Its key requirement is the production of river basin management plans by all member EU countries. The SEA Directive, adopted by the Parliament in 2001, requires member countries to introduce legislation by mid-2004 for SEAs of any plans and programs that may affect the environment water plans are identified specifically. SEAs of the river basin management plans are the major area of overlap between these Directives, although land use plans are potentially another topic which would fall under both Directives. Article 11 of the SEA Directive states that coordinated procedures should be developed where there are such overlapping requirements for assessment. To satisfy both Directives, these procedures need to include baseline data, assessment of alternatives, mitigation measures, monitoring procedures, and consultation and participation. Thus, the Directives are focussed on assessing impacts and an institutioncentered approach may not meet the Directive requirements. Once these coordination procedures are in place, then both Directives can be expected to ensure that environmental considerations are included in river basin management plans and possibly land use plans that affect water quality. Source: Carter J. and J. Howe (2006). The Water Framework Directive and the Strategic Environmental Assessment Directive: Exploring the Linkages. Environmental Impact Assessment Review, 26, 287-300. There are common characteristics and approaches in SEA and IWRM (Box 9). They both: identify and support priority setting and integrate environmental and social considerations into higher level decisions (see Figure 3), are applied at national, basin and transboundary scales, place considerable emphasis on participatory and consultative approaches to decision making, use factual approaches and quantitative data where possible, incorporate monitoring and evaluation of outcomes, and seek to broaden the perspectives of planners beyond immediate sectoral issues.

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Box 9 SEA Suitability for Water Resources The Netherlands Commission for Environmental Assessment lists the following advantages of applying SEA in water resources: Integrated Approach. SEA, with its emphasis on a transparent, participatory approach, is well suited to handling the multi-sectoral nature of water resource management, including environmental water needs and water quality management. External Effects. SEA can provide a structured and transparent mechanism for negotiation and decision making in national and international river basins. Within a river basin, upstream and downstream stakeholders have to agree on plans for water management. In other words, SEA provides the principles for developing water resource management plans at river and lake basin level. Cumulative Effects. A number of water resource interventions are, individually, relatively small but, in aggregate, can have major impacts. Examples include smallholder irrigation, groundwater wells, rainwater harvesting in source areas, and pollution from artisanal mining activities. SEA allows these cumulative impacts to be addressed at an aggregate level. Changing Management Perspectives. SEA can support the establishment of a clear policy analysis and decision framework to guide decentralised water management. It is increasingly common to manage water resources at the level of basin water boards or water user associations. The resulting process of decentralisation, involvement of civil society and public-private partnerships requires a clear policy framework. SEA is an excellent tool for developing this framework. Source: The Netherlands Commission for Environmental Assessment (2004). The International Water Sector & Strategic Environmental Assessment: Views and Experiences. Key Sheet 2. Netherlands Commission for Environmental Assessment, Utrecht, The Netherlands. There are also potential differences between SEA and IWRM. In particular, the former are focused on environmental considerations, while the latter include multiple water-related sectors and issues, including issues that do not have a prominent environmental dimension. The linkage between SEA and IWRM is explicitly recognized in the SEA of the Palar Basin in India (Case Study 8 in Appendix D) where the method used employed characteristics of both IWRM and SEA practice. If integrated river basin management is the concept that a river basin should follow, then SEA has the potential to become a useful application tool that could be put into practice by river authorities41.

41

Modak P. (2003). Development of a SEA based Framework for Sustainable Management of Palar River Basin. A Discussion Note. Palar Basin Management and Development Board.

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The opportunities offered by SEA to improve the integration of environmental issues in IWRM occur at many levels developing a national or sector water policy, drawing up river basin plans, identifying hydropower or urban water supply options, supporting transboundary water resources management and development, or instituting sectoral strategies or programs (see Appendix A). Some case studies of these opportunities are examined in the next Chapter.

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4. Lessons from Global Water Sector SEAs

Ten case studies of SEAs into strategies, programs and plans in the water sector from around the world were assessed for (i) the types of institutional controls (drivers) and (ii) their inclusion of the operational competence criteria of the IAIA. The extent to which they promoted the principles of IWRM was also assessed. Even though integrating environmental principles into policies is central to IWRM, no SEAs of water policies were identified for inclusion in the case studies. Consequently, four National and State water policies were reviewed to understand the degree to which each incorporated environmental issues. Summary lessons were drawn from this examination into improving the institutional environment within which SEAs are conducted and the procedural and substantive aspects of SEAs. SEA Case Studies Ten SEAs (Appendix D) in the water sector were examined to derive lessons on the implementation of SEAs at transboundary, national and basin levels. The aim was to identify the factors that contributed to the success of these SEAs in terms of their institutional rivers, procedural methods, and substance. The SEAs also provided lessons on the integration of environmental concerns into IWRM. All Bank funded SEA and SEA-type studies in the water sector were scanned, and those undertaken since 1995 with good documentation in English and staff available for interview were selected. Multiple examples of the same type of study (e.g. GEF TDAs/SAPs) were dropped. Attempts were made to balance sectoral and geographical coverage. CWRASs were examined separately. This resulted in six Bank funded case studies (including a Bank implemented GEF project) and one study funded by the Asian Development Bank and the World Bank. These were supplemented by a water-sector strategic study from a developed country (Australia), one from a country in economic transition (Czech Republic)42 and one from a developing country (South Africa). Overview of Case Studies There were no SEAs of water resources policies, although some strategy and program SEAs examined national policies, legislation and regulations (see following section). Impact and institution-centered SEAs occurred at both program and strategy levels. The only SEA at plan level considered only biophysical impacts of development scenarios. The Nam Thuen II SEAs43 were unusual in that they were part of the environmental assessments for a specific project. Although project specific, they have been included here
42

The SEA of the Plan for Main River Basins in the Czech Republic was suggested by Dr Jiri Dusik, peer reviewer. 43 Both a Cumulative Impact Assessment (CEA) and a Strategic Impact Assessment (SIA) were undertaken for the Nam Thuen II project.

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as program SEAs since these particular studies were more strategic than just an EIA and examined the sustainability of programs of development beyond the hydropower plant itself. In the case of the SIA study, the potential impacts from the Laos PDR hydropower development program was examined. The SEAs covered spatial scales from small catchments to large transboundary regions. The Lake Victoria Lake Victoria Environmental Management Project Phase II (LVEMP-II) TDA/SAP was the only case study that was fully transboundary in nature, although the Nam Theun II SIA also looked at proposed sectoral developments within countries bordering Laos and their strategic implications for the proposed Nam Theun II development. Transboundary SEAs are more complicated not only because of sovereignty considerations, but also because of the different policies and legislation governing such studies in each country, the different traditions and histories of environmental management, the different levels of development and skills available, and the different objectives and development goals in each country. The case studies (Table 4.1) illustrate the diversity of origins, sectors, purposes, and methods for SEAs. While the categorization of SEAs introduced in Chapter 3 is useful for structuring this diversity, the reality is that many of the cases span these categories. Thus, the Lake Victoria TDA/SAP is both institution- and impact-centered; the WATSAL SEA spans sectors (water resources and irrigation); and the Mhlathuze case study spans two spatial scales (catchment and Water Management Area). SEAs cannot always be assigned easily to a particular strategic level. Although the Colombia SEA was initiated to support a national sectoral program, it examined the adequacy of specific sectoral policies and legislation. Its recommendations include, amongst other things, relaxing the stringent but ineffective pollution control regulations and legislation. In Figure 6 the case studies have been assigned to strategic level (policy/program/plan) of the primary instrument that they were intended to support. These case studies also illustrate how SEAs can serve the diverse purposes (column 5, table 4.1) noted in the OECD report44. Four of the 10 SEAs (Colombia Czech Republic, Nam Theun II) were established to assess either the potential social and environmental impacts of a specific draft instrument an impact-centered SEA or the institutional structures (Indonesia WATSAL and Colombia WSS) within which a proposed program was to operate institution-centered SEAs. The other six SEAs were undertaken before a specific instrument had been formulated. Three Pioneer and Mhlathuze catchment studies and the Lake Victoria TDA/SAP were used to provide information for a plan, program or strategy about to be developed (the Mhlathuze SEA had a second objective to explore the potential of SEA for catchment water allocation planning across South Africa). The remaining three SEAs Nepal Hydropower SEA, Tanzanian RWRA and Palar Basin SEA - were not used to either assess draft instruments or to provide specific environmental input into a new instrument about to be developed. Instead their purpose was to better
44

OECD (2006). Good Practice Guidance on Applying Strategic Environmental Assessment (SEA) in Development Co-Operation. DAC Network on Environment and Development Co-operation, OECD, Paris.

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understand, clarify and structure complex situations and develop a framework for action. Thus, the Nepal Hydropower SEA was used to develop an agreed way forward after the divisiveness of the debate over the Arun III power project.

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Table 4.1 Characteristics of ten case studies of SEAs in the water sector
Case Study 1 2 Case Study Water and Sanitation Sector SEA, Colombia Rapid Water Resources Assessment, Tanzania Sector and sub-sector Water Supply and Sanitation urban and rural water supply Water Resources urban and rural water supply hydropower (Energy) Water Resources flooding, water allocation, Energy hydropower catchment protection Water Resources flooding, catchment degradation Environment biodiversity Water Resources rural water supply forestry Water Resources urban and rural water supply urban wastewater Energy hydropower irrigation flood protection Water resources catchment protection fisheries transport wastewater treatment Strategy irrigation (Agriculture) environment (Fisheries, Wetlands) Strategy wastewater treatment Program environmental water Program urban and rural water supply irrigation environmental water Plan irrigation Plan irrigation industry Strategy industrial wastewater Program urban and rural water supply fisheries industry Strategy urban and rural water supply hydropower tourism Information Trans-boundary Assessment Regional Structuring Basin Information Basin Information Basin Assessment National Structuring National Assessment National Structuring National Strategic Level Program Purpose1 Assessment Scale National

SEA of Plan for Main River Basins, Czech Republic SecEA of Hydropower Development Program, Kingdom of Nepal SEA of Water Resources Sector Adjustment Loan, Republic of Indonesia

6 7

Environmental Flows Assessment, Water Allocation Plan, Pioneer Catchment, Australia SEA of Mhlathuze Catchment, South Africa SEA of Palar Basin, India

SIA and CEA of Nam Theun II Hydropower Project, Republic of Laos

10

Transboundary Diagnostic Analysis/Strategic Action Program, Lake Victoria Basin, East Africa

Note 1. Assessment means the SEA assessed either environmental impacts (impact-centered) or environmental capacity (institution-centered); information provision means the SEA preceded the PLSPP and was used to provide environmental information for it; structuring means that the SEA was used to structure a complex situation.

Level of decision

Impact-centered

Institution-centered

Policy Legislation Strategy Programs Plans

CZ NP PN ML NT2 LV2 WS PL RW CB

Key: CZ=Czech Republic; LV2=LVEMP II; PL=Palar Basin; RW=RWRA; NP=Nepal hydropower; NT2= Nam Theun II; WS=WATSAL; CB=Colombia WSS; PN=Pioneer Catchment; ML=Mhlathuze Catchment

Figure 6 The 10 case studies and their use of impact-centered and institution-centered approaches

The SEAs also diverged considerably between those that relied on formal analytical methods and those that were heavily reliant on participative methods. For example, the Pioneer Catchment study used a rigorous analytical procedure, the Benchmark methodology, to assess environmental flow needs. It was conducted as a scientific exercise with no stakeholder input. The Tanzanian RWRA study used the judgment of 11 professionals from several government ministries to identify priority sectoral issues and river and lake basins requiring priority action. The WATSAL SEA, on the other hand, did not use a formal methodology but relied upon stakeholder input to formulate its recommendations. Some studies combined analytical and stakeholder-driven approaches. Thus, the Nepal Hydropower SEA used a formal screening and ranking methodology to identify the most promising options in a power development program, but used stakeholder input to establish the suite of hydropower sites to be assessed, the criteria to be used for the assessment and the weights to be given to the different criteria. Finally, the Pioneer Catchment was the only study that considered only environmental issues; the rest integrated environmental issues with development and management needs related other water using sectors. All the other studies included social issues (health issues in the case of the Czech Republic SEA) and two (Nepal Hydropower study, Colombia WSS study) included explicit financial/economic considerations in their assessment of issues and recommendations for sustainable options.

Table 4.2 summarizes the major environmental-water issues and the major outcomes to which the SEA contributed.

Table 4.2 Major water-related environmental issues and outcomes that the case studies contributed towards
Case Study Water and Sanitation Sector SEA, Colombia Water Related Environmental Issues Pollution of waterways leading to health problems Stringent and cumbersome environmental regulations Inappropriate tariffs for wastewater discharges Water allocation conflicts Watershed degradation Water quality degradation Water supply and health impacts Groundwater table decline Threat to Wetlands Pollution from wastewater and industrial discharges Flooding Groundwater pollution Catchment degradation Provision of environmental flows Flooding Water pollution from industry, domestic use and agriculture Loss of freshwater and estuarine biodiversity Water over-allocation Pressure for water licenses under new National Water Act Access to water water pollution Sand mining Land degradation Loss of riverine and source area biodiversity Loss of flows in section downstream of dam Potential impacts on lower Mekong River Decline in lake level with impacts on littoral zone Soil loss and sedimentation Excess nutrient and eutrophication Major Outcomes New water sector legislation Updated environmental regulations Capacity building for regulators and WSS operators Upgrades to WSS New water policy and bill Institutional reforms Improved stakeholder involvement Investments in three priority basins as second phase Investments (including river and lake basin plans) in all nine basins in the third phase (ongoing) Relocation of wastewater treatment plants Minimizing ecological impacts from flood protection measures

Rapid Water Resources Assessment, Tanzania

SEA of Plan for Main River Basins, Czech Republic

SecEA of Hydropower Development Program, Kingdom of Nepal SEA of Water Resources Sector Adjustment Loan, Republic of Indonesia Environmental Flows Assessment, Pioneer Catchment, Australia SEA of Mhlathuze catchment, South Africa SEA of Palar Basin, India

Prioritized list of hydropower developments Widespread acceptance of the hydropower program Improved attractiveness for private sector investment Widespread stakeholder acceptance of reforms Greater pressure for future consultation Better targeted and accepted development projects Credible environmental flows input to Water Allocation Plan Improved water allocation rules for catchment Helped change attitudes to IWRM within national department Provided evidence of over-allocation Framework for managing water resources and integrating environmental considerations Transfer of experience to other river basins in Tamil Nadu State

SIA and CEA of Nam Theun II Hydropower Project, Republic of Laos

Assessment of regional and cumulative impacts of hydropower and other development

TDA/SAP, Lake Victoria Basin, East Africa

Agreed set of regional priorities for Basin countries Supported environmental management components of LVEMP-II project

Aquatic weeds Loss of native fish species Degradation of fringing wetlands

Provided strategic issues for LVBC

Analytical Method The case studies were analysed to identify their institutional drivers (Box 5) and to assess the extent to which they met the procedural and substantive criteria proposed by IAIA (Box 6). This analysis provided insights into the factors that made some SEA studies successful and the circumstances in which the success occurred. The analysis was based on both documentation and interviews. Documentation was initially obtained from published sources, including the archives in the case of the Bank led case studies. Interviews were then arranged with the team leaders of the projects where these were available and with other team members where the team leader was not available. The interviews were either in person or by telephone. The interviews particularly focused on the motivations for the study and its subsequent influence since this information was seldom documented. Additional documentation was collected during these interviews. All but one of the draft case studies were sent to team leaders for checking before being finalized45. Institutional Drivers Table 4.3 provides an overview of the drivers that operated in the 10 case studies. None of the case studies resulted from a judicial driver, while procedural drivers were relatively infrequent, reflecting the lack of legislation requiring SEAs. Although instrumental controls were the most frequent drivers, they were often used voluntarily by developing countries. That is, the countries were interested in undertaking SEAs with advice and support from the development partner. Multiple drivers provide robustness. The case studies make it clear that there is usually not just a single driver for an SEA but a multitude of influences. Thus, a legislative or instrumental requirement may act as the primary driver, but public or professional pressure can be a background, but very powerful, force. In some cases, such as Nam Theun II and the Nepal Hydropower study, international public pressure as expressed by international NGOs played an important role. Also the drivers are not static but can change during the development and implementation of the SEA. There were a number of case studies (Colombia WSS, Nepal Hydropower, WATSAL) where government resistance (or indifference) gave way to support as the study progressed. The Czech Republic case study illustrates how ineffective a procedural driver can be, if it is not backed up by other influences or sanctions. The SEA was undertaken to fulfill a formal legislative requirement but there was no enthusiasm to take advantage of the opportunity to make the Plan of Main Watersheds more environmentally or socially sustainable. The Pioneer Catchment environmental flows analysis was also initiated because of a legislative driver but in this case it was backed up by strong public and professional expectations and an effective evaluative mechanism. This implies that usually multiple drivers promote the effectiveness of SEAs.

45

The Nam Theun II case study was not sent to the TTL for checking because of time constraints.

Good practice can act as a driver. In a number of instances (Table 4.3) none of the recognized drivers triggered the SEA. Instead there was simply recognition by the government, often supported by an external influence, that a SEA study was the best approach to establishing a systematic strategy. This occurred clearly in the Palar Basin, Tanzanian RWRA, Mhlathuze catchment and WATSAL case studies and there were strong elements of wanting to conform to international best practice in the Nam Theun II case study. For example, the RWRA study was influenced by the need to take action to address a nation-wide water crisis resulting during the 1991-3 drought on the one hand and the enthusiasm of Tanzanian water resources managers for comprehensive, integrated approaches following the 1992 Dublin conference. The Nam Theun II, Nepal Hydropower and WATSAL SEAs occurred at a time when the respective governments wanted to publicly demonstrate their openness; the first and second to help attractive private sector investment, and the third because it followed the end of a long-term repressive regime. Trust is an important element. Trust between government agencies or between the government and the development partner is a critical, but often unvoiced, component when the government has little or no experience in strategic assessments. Trust was central to the initiation of the Colombia, Nepal Hydropower, Nam Theun II and Palar Basin SEAs. In the cases of both the Colombia and the Nepal Hydropower SEAs, the governments were initially skeptical, but some institutions became strong supporters of the process (the Ministry of Economic Development in Colombia and the Planning Commission in the case of Nepal). Sectoral development-oriented Ministries remained unconvinced and saw their task as constructing and operating infrastructure. The Colombia case study shows the importance of being patient and waiting for the alignment of interest and opportunity; not everyone is ready to support SEA outputs immediately. Procedural Methods The objectives of the SEA must be clear. The terms of reference for the Czech Republic SEA did not give adequate guidance for enhancing the environmental sustainability of the Plan for Main River Basins. Similarly, the regional TDA and SAP for the Lake Victoria Basin provided weak design and uncoordinated programs of action for the basin countries when the TDA and SAP were meant to be complementary. In the SEA of the Mhlathuze catchment, the terms of reference for the study were changed and were diffuse and one of the major clients for the work had not been formed at the time. Consequently the direct results of this case study were quite limited (although it had significant influence within the national Department of Water Affairs and Forestry).

Table 4.3. Drivers of SEA case studies

Case Study Water and Sanitation Sector SEA, Colombia Rapid Water Resources Assessment, Tanzania SEA of Plan for Main River Basins, Czech Republic SecEA of Hydropower Development Program, Kingdom of Nepal SEA of Water Resources Sector Adjustment Loan, Republic of Indonesia Environmental Flows Assessment, Water Allocation Plan, Pioneer Catchment, Australia SEA of Mhlathuze Catchment, South Africa SEA of Palar Basin, India Required in legislation Oversight by Environment Ministry (weak) Voluntary following dialogue with World Bank Voluntary following dialogue with World Bank Required under legislation Oversight by Water Ministry Interest in engaging in international best practice Interest in engaging in international best practice Expectation by managers and scientists Professional interest in trialing SEA Voluntary following dialogue with World Bank Required by development partners Required by development partners Support from professional staff emerged during SEA Interest in engaging in international best practice Basin governments supported TDA/SAP Pressure from international NGOs Support from stakeholders emerged during SEA Stakeholders expected involvement Support from stakeholders emerged during SEA Support from stakeholders emerged during SEA Pressure from international NGOs Judicial Procedural Evaluative Driver Instrumental Voluntary following dialogue with World Bank Voluntary following dialogue with World Bank Professional Interest developed during SEA Interest in engaging in international best practice Public

SIA and CEA of Nam Theun II Hydropower Project, Republic of Laos TDA/SAP, Lake Victoria Basin, East Africa

The professional composition and leadership of the team is important. The diagnosis of problems and recommended solutions depends on technically competent study team members. Diverse skill sets on the team, as in the Tanzanian RWRA, resulted in a more robust analysis. The SEA needs to be led by a person with a broad overview of the issues as well as an understanding of environmental and water resources management. It is notable that there were a number of instances where the Environment Ministry was a reluctant partner in the SEA or was unable to provide the necessary leadership. This occurred in the Colombia WSS SEA and the Czech Republic SEAs. It was the Planning Commissions, rather than the Environment Ministry, that recognized the benefits from the SEAs in Indonesia and Nepal and promoted their further use. Consultation is important, but need not be widespread. The stakeholders that need to be consulted can vary significantly and yet still be appropriate, depending on the objectives of the SEA. The Tanzanian RWRA and the Nepal Hydropower SecEA were both influential strategic studies. Yet consultation in the Tanzanian RWRA was restricted to the waterrelated Ministries and the draft was shared at a national stakeholder forum, while the latter SEA engaged in wide-spread consultation with all stakeholders from an early stage. The RWRA study was intended to give strategic direction to the Tanzanian government while the Nepal study was designed to provide national consensus on a medium-scale hydropower development program following a divisive clash over a large-scale hydropower project. In the case of the Pioneer catchment Environmental Flow Assessment, stakeholders were not consulted at all (although the final report was posted on the internet) because their concerns were being sought though a separate process. Consultation needs to be planned for local circumstances. The Czech Republic SEA illustrates the importance of having a consultative plan. In that case, the lack of a plan meant that there were no defined target groups or transmission pathways for information. Central stakeholder groups such as local governments were only aware of the SEA report if they had the initiative to locate it on the web. On the other hand, the Palar Basin SEA was staged so as to first build capacity and confidence within the technical support team (check title) before engaging the wider stakeholder community. The design of the consultations has to take into account the circumstances of each case. Given the level of distrust of the central government in Indonesia because of corruption and lack of autonomy, the consultations for the WATSAL SEA were facilitated by NGOs assisted by local CBOs to help build trust. For the same reason, the study team returned to all stakeholder groups, at considerable cost and time, in order to build confidence in the actions of the new government. Spatial scale matters. The Palar Basin provides an example where the scale of the study area was too large for the consultative approach. Many stakeholders had only local knowledge and did not understand the extent of issues elsewhere in the Basin. This is being rectified in the follow-on studies which will be carried out at sub-basin scale. Similarly, the attempt to up-scale the Mhlathuze Catchment SEA to the larger Water Management Area failed, partly because of difficulties in engaging with multiple communities with diverse objectives.

Independent review. Only one of the SEAs was independently peer reviewed. In that case, Mhlathuze Catchment SEA, the study was reviewed extensively because it was an exploratory effort to assess the value of SEA for catchment planning. These reviews were very revealing and provided the Department with a much deeper understanding of the SEA strengths and weaknesses. It is not clear why this quality assurance process was not used more often, especially in cases where professional controls were weak and there was no strong evaluative driver. The SEA procedures should match the circumstances. The assessment methods need to be able to cope with the characteristics of the SEA. The Lake Victoria TDA/SAP was the most complex of these case studies. Its analytical method gave equal weight to all basin countries even though some of the major issues (e.g., the recent rapid Lake Victoria level declines) did not affect some of the smaller upstream countries (e.g., Burundi and Rwanda). This resulted in a skewed set of priority actions (with land degradation ranked as a higher priority compared to declining lake levels). The case studies provide a number of examples where the assessment methods were different but each was well suited to the circumstances e.g. the screening and ranking method for the Nepal SecEA, and the planned consultative approach in WATSAL. SEAs can span strategic scales. There are a number of examples where institutioncentered SEAs were undertaken to support a strategy, program or plan but where they examined higher and lower strategic decision making instruments. The Colombia and WATSAL SEAs and the Nam Theun II SIA and CEA made recommendations for reforming the legislative, strategic and policy frameworks so that programs and projects could be more effective. On the other hand the Nepal Hydropower and WATSAL SEAs, and the Nam Theun II SIA recommended the EA framework to be employed when development projects were to be assessed. Substance SEA is not an event but a process. The process of interacting with different stakeholders, examining causative influences and longer term consequences, and integrating environmental, social and economic considerations is often as important as the output from the SEA study. SEA values the process of stakeholder participation as much as it values the outcome itself46. The SEA process should commence at the earliest possible stage (Box 10) and continue after the specific SEA study has been completed. Effective SEAs can provide operational input into different stages of water resource planning, often spanning many years after the SEA study is completed. This is illustrated by the Tanzanian RWRA and Colombia WSS SEA case studies. In the latter case, the SEA influenced the design of a subsequent investment load and three consecutive Programmatic Development Policy Loans. An SEA of water resources in Mexico also shows the adoption of SEA for on-going basin-level IWRM planning (Box 11).

46

Anon (2003). Workshop on Action Planning for Sustainable Management of the Palar River Basin A Report. December 2003.

Box 10. SEA of Hydrological and Irrigation Plans, Castilla y Len, Spain Castilla y Len is the only regional government in Spain requiring SEAs of plans and programs for key development sectors. The joint SEA of the hydrological plan for the Duero Basin (essentially the Castilla y Len region) and the irrigation plan for the region was a classic impact-centered SEA with the objectives of identifying potential environmental impacts and to developing more sustainable alternatives. It was also used to develop a method for conducting SEAs of EU Structural Fund plans and programs to be applied across the EU. The hydrological plan, produced by the national government, was largely focused on the development of irrigation infrastructure as a means to overcome the regions structural problems of low economic development, an ageing population, an abandonment of rural areas. The regional irrigation plan, in turn, provided details on the new irrigation areas and likely crops to be irrigated. The SEA showed that the proposed plans would lead to high financial costs and significant negative impacts on the environment. The SEA suggested that the actions proposed in the plans should be modified in order to achieve better effectiveness and efficiency in terms of: (i) the investment of public funds, (ii) the use of water resources, and (iii) the conservation of biological diversity. However, it is not clear whether these alternatives were adopted. The study highlighted the strong linkages between economic and environmental outcomes and the consequent need for early and continuous collaboration between environmental and development authorities when such plans are being produced. The SEA concludes that the emphasis needs to shift away from post hoc assessment of draft plans, as in this pilot study, towards a wider process starting with the early definition of objectives and strategies. Source: Hedo D. and O. Bina (1999). Strategic environmental assessment of hydrological and irrigation plans in Castilla y Len, Spain. Environmental Impact Assessment Review, 19, 259-73.

Box 11. Mexico: SEAs for Integrated Water Resources Management Three of Mexicos 13 hydrologic-administrative regions are water stressed, with water availability values below 1,700 m3/person/year. According to the 2001 Water Quality Index, 94 percent of Mexicos water bodies are polluted and, on a national level, only 18 percent of municipal wastewater and 15 percent of industrial wastewater are treated prior to discharge into water bodies. To address these issues and improve the sustainability of water resources in Mexico, the World Bank has been supporting the Government balance socioeconomic development with environmental protection and improvement through a series of Programmatic

Environment Development Policy Loans. These include specific provisions to support development of the water sector. Initially, the implementing agencies did not take advantage of the Banks early offers of technical assistance and workshops on particular topics such as SEA. However, through continued engagement and demonstrated benefits, SEA has now become an integral part of water resources management in Mexico. For example, strategic assessments of the water sector have resulted in a number of important amendments to the National Water Law, including i) decentralization of water resources management functions to Water Basin Agencies; ii) the definition, creation and implementation of a Water Financial System; iii) an integrated management of water resources; and, iv) the improvement of the public water rights registry. The economic valuation of policy interventions in the water sector prepared by the Bank has also assisted in implementing a unified strategy to promote sustainable water resources management in overexploited basins and aquifers. Under the leadership of the National Water Commission, SEA has been acknowledged as a valuable tool and integrated into IWRM. In an effort to improve sustainability, contain the deterioration of water resources, and improve water productivity, IWRM Plans are being developed for severely overexploited and contaminated basins and aquifers. Central to this process is the integration of environmental and social considerations into the planning process through SEAs at the basin level. Source: World Bank (2007). PAD for Mexico Integrated Management of Basins and Aquifers Project. World Bank, Washington DC. SEAs need not be environment-led. The Tanzanian RWRA study, and the Colombia and WATSAL SEAs were effective in improving environmental governance but were not driven by environmental issues. Thus, the Colombia SEA was primarily driven by the need to reduce regulatory barriers to private sector investment and to rectify the structural causes of health related problems. All three were pragmatic and examined a wide range of factors that were impeding efficient operations in: irrigation, hydropower, water supply/sanitation, health, protection of water sources (RWRA, Tanzania); health, water supply/sanitation (WSS SEA, Colombia); and flood control, irrigation, water supply/sanitation, protection of water sources (WATSAL, Indonesia) It is arguable that these SEAs would have been regarded as peripheral and therefore less influential if they had been restricted to just environmental and/or social issues. SEAs can catalyze shifts in approach. A number of the SEAs Tanzanian RWRA, Colombia WSS SEA, SEA of Palar Basin, WATSAL WSS SEA, and Mhlathuze catchment SEA - illustrate how a strategic study can widen the views of staff and decision-makers. This, in turn, lays the foundation for major shifts in approach to water resources management and reforms to the sector. In the cases of the Tanzanian RWRA, Palar Basin and Mhlathuze catchment these shifts in approach led to the introduction of some of the principles of IWRM in practice.

Successful pilot SEAs can lead to full programs. The successful development of the three priority Basin Water Offices in Tanzania has now been expanded to nine Offices covering the whole of the country. Similarly, the Palar Basin SEA showed how to systematically develop a plan of action with community support. This plan is being rolled out across 63 sub-basins within Tamil Nadu State, India. Political economy matters. Most effective SEAs were those that address or were carried out in the context of important political issues. The RWRA, the WATSAL SEA and the Colombia SEA illustrate the power of responding to politically recognized crises. In addition, the Colombia case study and the Mexico SEA (Box 10) illustrate the importance of developing economic arguments to show the benefits of undertaking environmental reforms; not all case studies were reliant on economic arguments for influence if there were powerful political imperatives for action (e.g. Pioneer catchment EFA). Early outputs maintain interest. The Palar Basin SEA showed that there needed to be clear outputs from an early stage to maintain the interest of stakeholders who were not familiar with consultative processes. The feedback to stakeholders in the Nepal Hydropower SecEA and the WATSAL SEA served the purpose of providing early outputs. Effective SEAS need not be costly. Table 4.4 provides the costs and durations of the SEA case studies. Some of the most effective examples were completed in less than 12-15 months and cost less than US$100, 000 - a fraction of the cost of the strategy/program/ plan that they were supporting. For example, the Colombia WSS SEA at a cost of $28,000 influenced the $40m 2001 Water Sector Reform Assistance Project, the $150m 2005 Sustainable Development DPL, the $70m 2005 Water and Sanitation Sector Support Project and the $200m second Sustainable Development DPL (in preparation). However other effective SEAs were extended and expensive exercises. The cost and time taken are related to whether widespread consultation is required and that, in turn, is related to the purpose of the SEA.
Table 4.4. Cost, duration, consultation of case studies.
Case Study
Water Supply/Sanitation SEA, Colombia RWRA, Tanzania SEA of Main River Basins, Czech Republic Power Development SecEA, Kingdom of Nepal Water Resources Sector Adjustment Loan SEA, Indonesia Pioneer Catchment Study, Australia SEA of Mhlathuze Catchment, South Africa SEA of Usutu-Mhlathuze WMA, South Africa Palar Basin SEA, India Nam Theun II Power, Republic of Laos Lake Victoria TDA/SAP, NELSAP Region

Duration
3 months 15 months 18 months 14 months 4 months N/A 24 months 36 months 12 months N/A 30 months $28,000 $50,000 $26,000

Cost

Extent of Consultation*
Moderate Limited Limited Extensive Extensive None Moderate Moderate Moderate Limited Extensive

Level of Influence
High High Low Moderate Moderate Moderate Low Low High Moderate Moderate

$1,200,000 $70,000 N/A $280,000 $700,000 $20,000 N/A $1,000,000

* Limited means primarily confined to government Ministries; Moderate means selected public consultations as well as Ministries; Extensive means widespread public consultations, sometimes involving multiple rounds.

Inclusion of Environment in Water Policies No SEAs of water resources policies were identified in preparing this ESW. This leaves an important gap in the case studies because environmental concerns need to be incorporated into national water policies to give high level direction to water sector plans and programs. To help fill the gap, three national water policies and one State water policy were analyzed to gauge the extent to which environmental concerns have been incorporated into water policy in the absence of specific SEAs. The four water policies were assessed against six criteria recognition of environment, comprehensiveness, environmental assessment, mechanisms for environmental water, economic instruments, and environmental representation (Table 4.5 and Appendix E). All four policies recognized the legitimacy of providing water for the environment, but their comprehensiveness of environmental issues varied greatly. The Victorian policy dealt only with water quantity and river health (aquatic ecology) issues, whereas the other three also covered water quality. The South African policy placed emphasis on managing the whole water cycle, whereas the Indian policy is focussed on surface water with some attention to groundwater. Only the Victorian policy describes the role of groundwater in ecosystem functioning.
Table 4.5. Summary of inclusion of environmental concerns in water policies for South Africa, Tanzania, India and Victoria (Australia).
South Africa Environmental recognition Comprehensiveness
Yes Water quantity, quality, ecology. Surface, groundwater Transboundary

Tanzania
Yes Water quantity, quality, ecology Surface, groundwater Transboundary EIA, no SEA Environmental water reserve High priority

India
Yes Water quantity Surface, some groundwater

Victoria, Australia
Yes Water quantity, ecology Surface, groundwater Transboundary EIA, no SEA Environmental water reserve No priority stated Market mechanisms Environmental levy Trading environmental allocations

Environmental assessment Environmental water mechanisms

EIA, no SEA Environmental water reserve High priority

EIA, no SEA No reserve Medium priority

Financial instruments

Consider

Gradually adopt

No

Yes Yes No Yes

Environmental representation

All four policies endorse the need for environmental assessments of large scale water projects. However, none provided support for strategic environmental assessments of PLSPP. The South African, Tanzanian and Victorian policies propose the use of a reserve of environmental water that would have high priority in water allocation. The

Indian policy assigned environmental water to position four in priority of allocation but provided no discussion of how this would be achieved. The Indian policy does not mention use of financial instruments to promote water conservation and environmental protection; the South African policy proposes to give consideration to financial instruments; the Tanzanian policy says that water pricing and trading will be gradually adopted; and the Victorian policy provides details of the use of financial instruments including the trading of environmental water allocations on the water market. The South African, Victorian and Tanzanian legislation allow for environmental representation on the institutions governing water resources; the Indian policy does not mention the composition of institutions, primarily because this is a matter for the States. This topic by topic analysis masks the great difference in the extent to which the environment is integrated into the policies. The Indian policy mentions many of the environmental issues, but provides no direction or depth about tackling them. On the other hand, the South African and Tanzanian policies devote specific sections of their policies to environmental issues and provide sufficient detail to give direction to guide further elaboration in legislation, strategies and programs. The South African water policy is considered global good practice from an environmental perspective. However, in both the South African ad Tanzanian water policies, the environmental aspects are relatively small components of policies that are primarily devoted to development, conservation (for consumption) and equity issues. The Victorian White Paper takes a radically different approach. The whole policy is premised on the assumption that consumptive water use is fundamentally dependent on environmentally healthy river and groundwater systems, and so the need to maintain and restore environmental functions (and maintain environmental integrity) permeates the policy. SEA Support for Integrated Water Resources Management Two of the SEAs Palar Basin and Nepal Hydropower SecEA explicitly commented that the studies contribute to IWRM, and the Mhlathuze catchment SEA study was specifically undertaken to explore the use of SEA for IWRM at catchment level. The Palar Basin was seen as a mechanism for introducing some of the IWRM principles in the absence of IWRM institutions or activities. The case studies show that SEA can contribute to each of the three principles that underlie IWRM. Integrated Approach. Multi-sectoral taskforces. Five of the SEAs - WATSAL Indonesia, RWRA Tanzania, Water Supply/Sanitation Colombia, Lake Victoria SAP47, and the Nepal Hydropower SecEA contributed to the integration of human management systems by utilizing task forces comprised of staff from different sectoral Ministries. Three other studies were undertaken by international consultants and one, the Czech Republic SEA, was undertaken by staff from the Faculty of Forestry and Environment and the Laboratory of Landscape
47

The Lake Victoria regional SAP was developed by international consultants. However, they drew on the five national TDAs each of which was developed by national inter-sectoral tasks forces.

Ecology within the Ministry of Agriculture. In principle the multi-sectoral task forces would expose sectoral staff to a wide range of issues and approaches and make the need for an integrated approach to water resources management more apparent. The reality can often be less satisfactory with the lead Ministry dominating the task force, and staff from other Ministries being disengaged because they view the Task Force as not really being their responsibility. From the information available, it is not possible to determine the extent to which all Ministries actively engaged in these task forces. Multi-sectoral assessments. All but the Pioneer Catchment Environmental Flow Analysis assessed impacts on multiple water-dependent sectors. The Nam Theun II CIA considered the cumulative impacts from hydropower development on irrigation, forestry, biodiversity, mining, water supply, fisheries, agriculture, and human health. However, the Pioneer Catchment study did consider impacts arising from water abstractions for irrigation, stock and domestic use, and urban water supply. Integration across natural systems. The Palar Basin, Colombia, Nepal, WATSAL, RWRA, and Lake Victoria TDA/SAP studies recognized the need for environmental protection of water source areas as well as in-stream protection; the Pioneer catchment, Nam Theun II CIA, and WATSAL all assessed impacts in both freshwater and estuarine systems; the Pioneer catchment, Palar Basin, Colombia and Czech Republic case studies included considerations of the connectivity between surface and groundwater; and the Pioneer catchment, Nam Thuen II CIA and SIA studies, and the Nepal Hydropower SecEA considered both upstream and downstream impacts from potential development sites. The new Water Management law proposed in Colombia includes provision for environmental flows that protected aquatic ecology. These examples illustrate how the SEAs contributed to the integration of environment into natural resources decision making. Long-term influence on IWRM. Some of the SEAs had long term influence in supporting integrative approaches to water sector management. The Tanzanian RWRA was the catalyst for major reforms of the water sector in Tanzania, including strengthening multisectoral management approaches at both basin and national levels, and greater attention to the environmental protection of water source areas and water-dependent ecosystems. The success of the Palar Basin SEA has led to this participative, multi-sectoral approach being replicated (albeit at a smaller scale) in 63 sub-basins across Tamil Nadu State. Although IWRM is not widely practiced in India, the SEA has opened the door for some of its principles to be introduced under another name. The Colombia SEA led to progressive reforms of the water sector including a new National Water Resources Management law, supported by a World Bank DPL that introduces conservation of important aquatic ecosystems and multi-sectoral participation on a new National Water Council. Although the South African government decided not to formally proceed with SEA as the tool for catchment management following the Mhlathuze pilot study, it did adopt much of the thinking behind the SEA in its reorientation to a multi-sectoral, participative approach to catchment management. Participation

SEAs left legacy of participation. The SEAs have probably had more influence on promoting participatory approaches to decision making than any other aspect of IWRM. All but the Pioneer catchment, Nam Theun II SIA and CIA, and the Tanzanian RWRA promoted involvement by stakeholders in the SEA. In some cases this proved so successful, particularly in highly centralized decision making environments, that the government or particular Ministries adopted participatory approaches more widely. The Nepal National Planning Commission, although initially skeptical of the SEA, became convinced of the value of widespread public participation and intended to engage in similar participatory exercises for contentious decisions in other sectors. The consultations that were central to the SEA for the WATSAL loan in Indonesia were so successful that the Government adopted this approach through the National Planning Agency and the Ministry of Home Affairs. The Indonesian Inter-Agency Task Force subsequently maintained public consultation as an essential part of the water reforms during 2000 2003; consultations were used in other strategic water supply planning; and participation was introduced into programs under the governments own budget until mid2003. Even though the current Indonesian government has retreated from many of these participatory approaches, there is now an understanding within institutions of the potential of widespread public consultations. SEAs can lead to legal requirements for participation. The Tanzanian RWRA study did not draw on public information. However, over the following decade, it led to major water sector reforms that included a particular focus on increasing participation in decisions at river and lake basin level. The Colombia SEA led to legislative changes that included, inter alia, a new Water Management law being drafted that authorized public participation in water resources management48. Thus, apart from directly demonstrating the benefits of participatory approaches, SEAs can indirectly bring about changes that include greater participation by affected stakeholders. SEAs can promote transparency. The Lake Victoria regional SAP recommended greater public availability of information, especially on pollution levels, to contribute towards transparency of water resources management and effective access to judicial and administrative proceedings to enable all stakeholders to exercise their rights and obligations effectively. The Colombia SEA also made recommendations to improve transparency of decision-making, partly to reduce the incentives for collusive behavior by managers responsible for overseeing water utilities. Assist decentralization of decision-making. A number of the SEAs contributed to decentralization of water resources institutions and the establishment or strengthening of basin institutions for operational management. This is most apparent in the Palar Basin SEA where the study was designed to provide a framework for giving direction to the Palar Basin Development and Management Board. This was one of the first river basin
48

World Bank (2006). Republic of Colombia. Mitigating Environmental Degradation to Foster Growth and Reduce Inequality. Report No. 36345 CO. Environmentally and Socially Sustainable Development Department, LAC Region. Washington, DC.

authorities in South Asia and had had no model on which to base its operations. River basin authorities had been authorized under a 1981 amendment to the 1974 Water Utilization Act in Tanzania and two had been established at the time of the 1994 RWRA study. However, they were under-resourced, lacked direction and were not widely accepted by sectoral agencies. The RWRA study identified the priority four basins and provided a clear recommendation for strengthening these river basin organizations. Economic Instruments and Private Sector SEAs introduced economic instruments. A number of SEAs advocated the introduction of economic instruments to control water use, the discharge of pollution and to provide a source of finance for water resources operations. The Lake Victoria regional SAP proposed the use of economic instruments (e.g. a fish levy) to foster sustainable development by implementing economic incentives for environmentally friendly technologies, the phasing-out of subsidies which encourage the continuation of nonenvironmentally sound technologies, activities and practices, and the introduction of user fees. Similarly the Colombia WSS SEA recommended that pollution charges and wastewater standards be modified to promote private sector involvement in water supply. The new water law that was suggested by the SEA and developed through ongoing dialogue includes a provision for water fees that reflect the economic value of water and can include the costs associated with the conservation of the natural ecosystems. The RWRA reinforced the use of the water user charges on the basis of bulk water use for major users (hydropower, irrigation, and urban water supply). Limited consideration of demand management. Only one of the case studies the Mhlathuze catchment SEA considered the use of demand management through pricing as a means of restraining the over-allocation of water. However, the outputs of the study were not taken up because the catchment authority had not been formed. Limited use of SEAs for private sector participation. Improving opportunities for private sector participation in water supply was one of the driving forces for the Colombia SEA and many of its recommendations are intended to attract private sector investment. These include more rational water quality standards, more transparent oversight of water utilities, improved procedures for environmental assessments, and legislative changes to authorize these changes. The government of Indonesia, through the WATSAL loan, also sought to increase private sector investment in water related activities and one of the concerns raised in the SEA stakeholder consultations was the introduction of charges for private sector users of water.

Lessons from Tanzanian Water Sector Reforms

This chapter, based on an in-depth pilot study, complements the analysis in Chapter 4. It examines six case studies of SEA to promote water resources management within a country in an evolving institutional environment. A sequence of crises led to a recognition within the water sector that the sector needed to be managed according to the principles of IWRM, resulting in a new National Water Policy (NAWAPO) and subsequent reforms. Recently, new environmental legislation has required that SEAs be conducted for all policies, legislation, programs and plans the water sector is specifically identified as one of four priority sectors. The case studies illustrate the progress in implementing SEAs under this evolving enabling environment as well as some of the lessons that have emerged. However, a recent water crisis has shown that these early advances in water resources sector reforms need to be harmonized across water-dependent sectors if they are to be effective. Tanzania was selected for the pilot study49 for several reasons. Tanzania possesses diverse water resources, including three large transboundary lakes, many river systems and some major aquifers that provide a diversity of environmental-water issues50. Managing these issues is central to Tanzanian economic growth and poverty reduction (Box 12). It is embracing progressive water sector and environment sector reforms, including an innovative national water policy and the introduction of SEAs through the Environmental Management Act (2004). It has already undertaken a number of SEA type studies, including some in the water sector, providing an opportunity to examine these experiences under a single, but evolving, enabling environment. The pilot would also benefit several ongoing water related programs supported by the Bank. Finally, lessons from the Tanzanian pilot are complementary to those from the global case studies reviewed under Chapter 4. Box 12. Importance of Water to Tanzania Water shortages affect most of the main sectors of the Tanzanian economy. Agriculture, is predominantly rain-fed and is susceptible to droughts and floods; irrigated agriculture experiences water shortages because of competition from other water using sectors and uncontrolled irrigation expansions; industry is hampered by blackouts from water
49

The main output from the pilot study was a technical paper (World Bank (2007). Strategic Environmental Assessment: Enhancing Capacity for Integrated Water Resources Management and Development in Tanzania, World Bank, Washington DC.) . It provides a framework for introducing SEA into Tanzanias water sector. The paper was developed following extensive consultations, including a multi-stakeholder workshop. Apart from contributing to the completion of the paper, the consultations and workshop raised awareness about SEA and its potential for assisting in water resources management in Tanzania, and provided information for the regulations then being written for SEA and the completion of the draft water resources legislation. 50 World Bank (2006). Tanzanian Water Resources Assistance Strategy. World Bank, Washington DC.

shortages for hydropower generation; mining, the fastest growing sector, partially relies on water for hydropower and for processing; and tourism depends on water for both visitor use and to maintain wildlife habitat. Fisheries currently accounting for about 11 percent of export earnings, is not affected by drought or flood, but is affected by concerns over water quality and changes in aquatic habitat. Access to adequate good quality water is central to improving social development. Coverage of domestic water supply remains low and women and children are particularly affected by the time spent gathering water. The poor, in particular, are affected by unreliable and poor quality and/or contaminated sources of water.
Source: World Bank (2006). Tanzanian Water Resources Assistance Strategy. World Bank, Washington DC.

Water and Environment Issues Until the passing of the EMA in 2004, Tanzania did not have legislative requirements for environmental assessment, including EIA for project developments. Its water resources development and management occurred in an atmosphere where little attention was paid to environmental issues, unless required by external institutions such as development partners. However, a series of crises that had water-related environmental aspects occurred during the 1990s and catalysed major changes in the water sector. Mtera Crisis The Mtera dam on the Great Ruaha River is the main structure for regulating the two hydropower plants on the Rufiji River the Kidatu plant (220MW) and the Mtera plant (80MW). The Mtera reservoir reached full capacity in 1990, after which the water levels declined with serious consequences for hydroelectric generation. The consequent reduction in generation resulted in load shedding and rationing of electricity nationwide during 1991 93. The causes of the decline in reservoir level were strongly disputed. The generating authority, TANESCO, blamed uncontrolled upstream abstractions for irrigation while the farmers blamed the low rainfall conditions at the time. Others claimed that poor operational procedures at the reservoirs were the problem. Technical studies were conducted to determine the real causes of low storage levels and inflows and they concluded that the primary cause of the low reservoir levels was the increased demand for electricity and inadequate supply resulting in ad hoc responses leading to poor operational procedures at the Mtera. Usangu Plains and Ruaha National Park The water shortages in the Great Ruaha River also resulted in intense competition between irrigators and pastoralists for water, particularly during the dry season. In the Usangu Plains, upstream of the Mtera reservoir, water scarcity caused tensions over access to both land and water. There was a perception among farmers that increasing numbers of cattle were placing greater demand on water and forage during the dry season both within and around the wetlands of the Plains. At the same time, the gradual expansion of areas under

irrigation by farmers decreased land that was previously available for grazing and the availability of water for livestock. The pastoralists and their cattle trespassed on cultivated fields to access water sources during the dry season, causing severe damage to the crops and cultivated fields, intensifying the hostility between farmers and pastoralists. The Great Ruaha River flows through the Great Ruaha National Park and provides the basis of the wildlife-based tourism industry in that area. The drying of the river caused the animals to move away from the river, affecting the income from tourists. Wetlands on the Usangu Plain have also been affected. The western wetland has almost disappeared and the eastern wetland, which is important for grazing, game animals and fishing during the wet season, has shrunk substantially. As a result of the pressures on the water resources of the Rufiji Basin, the government of Tanzania has put greater emphasis on the Rufiji Basin Water Office and, with external support, has instituted water user associations to assist management of irrigation water use. Pangani Falls Hydropower Station When the Pangani Falls Hydropower station (68MW) was nearing completion in the early 1990s, it was found that inflows into the Nyumba ya Mungu (NYM) regulating reservoir were much lower than predicted because of uncontrolled upstream abstractions for irrigation. NORAD, the funder of the power station, asked the government to take strong action to better manage water resources in the Pangani basins. As a result, the government initiated actions to strengthen the Pangani Basin Water Office. Following the regulation of the river by NYM, large portion of the largest wetland in the Basin, the Kirua swamp, have dried up51 with loss of fisheries and recessional agriculture. Flows into the estuary have also been affected but the environmental consequences are not known. Lower Kihansi Hydropower Plant The Lower Kihansi hydroelectric plant was constructed on the Kihansi River within the Rufiji Basin during the mid-1990s. Although a preliminary environmental analysis had concluded that there were no significant environmental issues, it did not consider impacts downstream of the proposed dam. Subsequent ecological studies conducted as part of the monitoring during project construction in 1996 found an endemic toad (Kihansi Spray Toad) in a rare wetland system in the Kihansi Gorge located downstream from the dam. Operation of the hydroelectric plant would drastically reduce the spray which sustains the wetland due to the abstraction and diversion of much of the river flow. Once discovered, temporary measures were taken to safeguard the ecosystem, including a captive breeding program for the toad, the construction of an artificial spray system in the gorge and the implementation of an Environmental Management Plan. The flow required to maintain the ecosystem was not known, and as a consequence, the process of granting a water right for generating hydropower and setting aside water for ecosystem needs was complex and highly contested largely because there was no policy that recognized environment as a legitimate use of water, because there was for no experience and capacity
51

IUCN (2003). The Pangani River Basin: A Situation Analysis. IUCN, Geneva, Switzerland.

in the country to technically define and address such use and also because of the substantial economic tradeoffs resulting from reduced hydropower production. Following extensive scientific studies, a final water right for the hydroelectric plant was granted to TANESCO by the Rufiji Basin Water Board in June 2004. It stipulates an environmental flow requirement of 1.5- 2.0 m3/s to be coupled with measures to ensure the conservation of the Kihansi Gorge as stipulated in the Environmental Management Plan. Water and Environment Reforms These crises reinforced the outcome of the RWRA that a multi-sectoral approach to the management of water resources was essential, at least in the heavily used and stressed Rufiji and Pangani river basins. They also contributed to a recognition by water managers that the environment is an important user of water and needed to be included in water allocation decisions. At the same time the Lower Kihansi controversy illustrated the limitations of an EIA process that was largely externally driven and the need for a more systematic approach to environmental decision making. This includes thorough EIAs to be conducted prior to all major infrastructure investments and the need to include environmental considerations into sectoral development policies, legislation, programs and plans. The National Water Policy The Tanzanian NAWAPO of 2002 was introduced in response to some of these serious water resources management challenges. The NAWAPO is developed around the principles of IWRM and proposes: devolution of responsibility for operational matters to River/Lake Basins and catchments; greater reliance on a multi-sectoral approach; treating water as a social and an economic good; and according second priority to environmental uses of water (basic human needs are the first priority). The environmental aspects of NAWAPO include provision of water for environmental flows, improved control over pollution through requirements for pollution permits and establishment of water quality standards, reductions in diffuse source pollution through education, and promotion of water conservation and recycling. The Strategy for implementing the NAWAPO was finalized in 2006, and the Water Resources bill (including provisions for basin water resources plans) has been drafted and is expected to be passed by Parliament in late 2007. The bill requires that water resources management plans are drawn up for all river and lake basins, including provisions for water allocation between water users. The Environment Management Act The EMA (Act 20 of 2004) provides additional planning tools to tackle water-related environmental problems. It deals with the protection of environmentally sensitive areas; the control of pollution and wastes; setting environmental quality standards; and restoring environmentally degraded areas. It contains detailed provisions for undertaking Environmental Impact Assessments (EIAs) for development projects and introduces Strategic Environmental Assessments (SEAs) for all policies, legislation, regulations,

programs and plans that may affect the environment. In particular, SEAs need to be carried out before details are finalized for policies, programs, plans and projects for hydropower stations and other water uses. The EMA provides a number of drivers for SEAs. It authorizes public participation in environmental management at all levels of decision making, including in EIAs and SEAs; it provides for the Division of Environment within the Vice-Presidents Office to act as the evaluative driver for SEAs; and, by specifying the types of PLSPP requiring SEAs, the EMA itself acts as a procedural driver. Existing Experience with SEA Although SEAs were not required prior to the passage of the EMA, six SEAs had been carried out in Tanzania over the past 15 years in the water sector. These studies were generally undertaken in response to development partner requirements and included both impact-centered and institution-centered studies. Two cases, the Rapid Water Resources Assessment (RWRA) and the Lake Victoria TDA/SAP are described as Case Studies 2 and 10 in Appendix D; the other four cases are described in Boxes 13-16. The issues and outcomes from the six cases are summarized in Table 5.1. Box 13. The TDA/SAP for Lake Tanganyika The Lake Tanganyika Biodiversity Project (1995 to 2000) was funded by the GEF with the aim of helping the riparian states (Tanzania, Burundi, DRC, Zambia) produce a system for managing and conserving the lakes biodiversity. The project team, drawn from the four countries, investigated fishing and agricultural practices, potential sites for underwater national parks, legal systems of land ownership, lake conservation and developmental needs. The project produced a TDA/SAP (Box 4) for the lake and a Convention on the Sustainable Management of Lake Tanganyika. Drivers Being funded under the GEFs Biodiversity Focal Area rather than the International Waters Focal Area, the TDA/SAP was not strictly required by the GEF. However, the riparian countries agreed that a scientifically-based examination of the issues facing the lake would form a basis on which management agreement could be reached. Thus, the primary driver was a voluntary recognition of the need for a strategic environmental assessment. Local and international public and professional concern over the environmental status of the lake acted as a secondary driver. The TDA/SAP The main threats facing the lake were agreed between the riparian at an initial workshop in 1996. A series of national level consultations were held so that each country could engage in regional consultations armed with agreed national priority environmental issues. These regional consultations were conducted by a Planning Group where each

country was represented by a team of members with a range of skills and knowledge of the lake management problems. A preliminary TDA was drafted in November 1998, and finalized in March 2000. It identified the main threats to biodiversity and sustainable use of Lake Tanganyika resources as: 1) unsustainable fisheries, 2) excessive sedimentation, 3) increasing pollution, and 4) habitat destruction. The general action areas against these threats are: 1) reduction of fishing pressure, 2) control of sedimentation, 3) control of pollution, and 4) habitat conservation. As well as examining impacts the TDA/SAP looked at institutional structures, including harmonization of laws, for improving the lakes management. Outcomes The SAP, containing the national actions to tackle these issues, was adopted in July 2000 at the closure of the Project. The Convention was adopted at the same time, binding the four riparian countries to implement the measures contained in the SAP. The transboundary Lake Tanganyika Authority (LTA) has been established to coordinate the management of the lake. However, there are some jurisdictional issues. One of the major issues facing the lake, sedimentation, requires management of the surrounding catchments and this area is not within the LTAs jurisdiction. Also, in the Tanzanian part of the lake, the Tanzanian government has established a Lake Tanganyika Basin Water Office and it is not clear how these two agencies will coordinate. A new GEF funded project, the Lake Tanganyika Management Planning Project (LTMPP) was launched in mid 2002. The aim of the new project was to prepare an implementation plan for the Strategic Action Plan, including the recruitment of additional donors to complement the GEF funding.
Source: West K. (2001). Lake Tanganyika: Results and Experiences of the UNDP/GEF Conservation Initiative (RAF/92/G32) in Burundi, D.R. Congo, Tanzania and Zambia. UNDP.

Box 14. Future Dar es Salaam Water Supply Options Dar es Salaam obtains most of its water from two main offtakes on the Ruvu River with a smaller amount from the Mtoni River. The Ruvu River is unregulated and vulnerable to floods and droughts. Shallow aquifers are also used to supplement water supply in parts of the city. Continued population growth in Dar es Salaam is placing the city in a precarious position for water supply, especially during the dry season when river levels fall. A long-term Master Plan is being drawn up for supplying Dar es Salaam with water. That study has reviewed 26 surface and ground water, inter-basin transfer, and desalination options. A preliminary review of the environmental and social impacts of

these options was a key part of the study (an impact-centered SEA) along with technical and economic analyses of the options. Drivers The SEA was undertaken as part of the preparation for the World Bank supported Dar es Salaam Water Supply and Sewerage Project (an instrumental driver). Although the EMA was in force at the time of the options study, it did not act as a formal driver since the regulations and guidelines for SEA had not been drafted. However, its presence was indicative of the intentions of the government and caused the funding agencies supporting the study, relevant Ministries and other government agencies to agree on the procedure to be followed in the SEA. The SEA The SEA was primarily a desktop study that collated and reviewed existing reports and information in consultation with key stakeholders. Field research and investigations were undertaken to indicate the nature and extent of potential social and environmental impacts. Detailed and deep well investigations were also undertaken. Consultations were primarily with government agencies and there was only limited input to the study from the groups affected at, and downstream of, each potential site. The 26 options were ranked in terms of their technical soundness, economics, and impacts and mitigation costs. The two highest ranked options were a small dam at Kidunda for regulating the Ruvu River and groundwater pumping from the newly discovered deep coastal Kimbiji aquifer. The small dam would induce some flooding of the ecologically sensitive Selous Game reserve and require that a small number of inhabitants (300 400) be resettled involuntarily. Preliminary result suggest that there are almost no environmental impacts from taping the Kimbiji aquifer because it has an unusually high recharge rate and so may be sustainable in the long term. The SEA was tiered to EIAs of these options by proposing: the key social/environmental factors to be addressed by an EIA, a preliminary strategy and work plan for undertaking an EIA, the use of an International Panel of Experts to guide the EIA process, and sensitive social/environmental issues requiring special attention. Outcomes The SEA has clearly narrowed the number of potential water sources to two, of which the Kimbiji aquifer has the least environmental and social costs. The relative financial costs have yet to be finalized. The study has only recently been completed and its influence on the choice of water supply options has yet to be seen. However, it has served to illustrate the value of integrating environmental and social criteria early in the decision making process and assessing a wide range of options in a transparent manner.
Source: World Bank 2007. Strategic Environmental Assessment: Enhancing Capacity for Integrated Water Resources Management and Development in Tanzania. World Bank, Washington DC.

Box 15. Pangani Basin Environmental Flows While establishing environmental flow requirements is part of the NAWAPO, Tanzania has yet to develop an agreed methodology for either establishing the water required for maintaining ecosystem services or for making decisions on water allocation between environmental and consumptive water needs. The IUCN has supported the development and testing in the Pangani basin of an environmental flow assessment (EFA) technique that is suited to the limited data and limited technical skills typically available in Tanzania. Drivers The study was not driven by a formal procedural requirement although the NAWAPO inclusion of environmental flows and the problems of establishing the environmental flow requirements in the Lower Kihansi were powerful inducements for developing an agreed method in Tanzania. There was strong public and institutional support for the SEA, given the history of water allocation problems in the Pangani Basin. The SEA The team undertaking the assessment comprises staff from a number of Basin Water Offices, the National Environment Management Council, the Ministry of Water, and academics. The team is led by South African consultants. The intention is to increase the depth of skills in EFA in Tanzania. The EFA will establish the environmental flow needs of freshwater and estuarine ecosystems under eight development scenarios using a scenario evaluation tool. This information, and the tool, will be used subsequently when the Pangani Basin water resources management plan is developed to help reserve water for environmental benefit. Outcomes The study is still in progress. However, it has the potential to feed directly into the Pangani Basin water resources management plan, ensuring that environmental water requirements are included in the plans. With the participation of other Basin and agency staff, the study may also lead the inclusion of environmental water requirements in other basin plans. The EFA pilot is costing about $500,000 and, although the EFA technique has been developed for the Pangani Basin, it is not clear that it is transferable to other basins where this level of funding might not be available.
Source: World Bank 2007. Strategic Environmental Assessment: Enhancing Capacity for Integrated Water Resources Management and Development in Tanzania. World Bank, Washington DC.

Box 16. NELSAP SSEA The Nile Equatorial Lakes (NEL) region, covering the Malawi, Tanganyika and Victoria Lake basins and the basins of the Rufiji, Victoria Nile and Tana rivers, experiences a

growing deficit of electricity, estimated to be from 1,500MW (base scenario) to 8,600 MW (transformational growth scenario) by 2020. The countries of the region (Uganda, Kenya, Tanzania, Rwanda, DRC and Burundi) agreed that a regional approach to meeting this deficit is likely to be less costly, more environmentally responsible and better fro economic growth than pursuing independent development. To help identify the preferred power generation and transmission program, a Strategic/Sectoral Social and Environmental Assessment (SSEA) was conducted between 2003 and 2007. Drivers The SSEA was not required under either national legislation52 or the rules of the World Bank the relevant development partner. However, it was regarded by the Bank as good practice under the 2001 Environment Strategy and agreed by the NEL countries, albeit reluctantly in some instances. The SSEA fulfilled a recommendation from the Inspection Panel into the Bujagali Hydropower plant in Uganda that a strategic overview be undertaken before power development options were selected for funding. The SSEA This strategic study assessed 13 hydropower, three renewable, five geothermal, and five thermal generation options and grid inter-connections against risk, social, environmental and cost factors using multi-criteria analysis. Risk was represented through qualitative indicators, while the other three criteria ere represented quantitatively. The best evaluated options, with minor trade-offs and impacts, totaled 2612 MW; the remaining options (1412 MW) had impacts and trade-offs that were more severe. Cumulative impacts were addressed from a river basin perspective and assessed from a qualitative and not quantitative perspective. Additional work on cumulative impacts was undertaken during the third phase of the SSEA to deepen the analysis. These results were approved by Bank management. The effect of climate change on the regions water resources was also included in the assessment. It showed that there was a high probability of increased runoff and power generation in the northern and central-west parts of the region, while the southern parts were likely to experience changes in seasonality of runoff making regulating storages less effective. These options were assembled into a program of power development investment to 2020 that would add 2686MW to the regions generating capacity and meet the medium growth scenario. The SSEA was primarily a technical study undertaken by a team of power experts. It was overseen by a steering committee of country power experts and senior water resources experts from the NELSAP countries together with representatives from the funding agencies and Sudan and Egypt because of potential downstream issues. Stakeholder consultations were held as part of the study but were not highly influential. Outcomes The SSEA has only recently been completed and its influence is yet to be determined. However, the engagement of all governments during the process makes it likely that the
52

The Tanzanian Environmental Management Act 2004 requires that SEAs be undertaken for hydropower plants (Chapter 5). That section of the Act was not operational at the time of the SSEA because the regulations had not been drafted.

study will be the basis for a regional power development strategy with minimal environmental and social impacts. The SSEA took 4 years to complete much longer than the initial estimate. This was partly because the complexity of the task was under-estimated, partly because the team initially lacked the necessary breadth of social and environmental skills and partly some important topics such as the cumulative impacts and the effects of climate change were not initially dealt with. Working with the six NELSAP and two downstream countries was a challenge and locating the data and information was more time consuming than anticipated.
Source: SNC-Lavalin (2007). Strategic/Sectoral, Social and Environmental Assessment of Power Development Options in the Nile Equatorial Lakes Region. Final Report. SNC-Lavalin, Montreal, Quebec.

Contribution of SEAs to IWRM The SEA case studies discussed above have contributed to the mainstreaming of IWRM principles in Tanzania over the last decade, including the inclusion of environmental requirements in water resources management. The RWRA study laid the groundwork for the NAWAPO, and so contributed to the strengthening of river basin organizations, acceptance of environmental water needs, and recognition of the importance of a multisectoral approach to water resources management. The Lower Kihansi crisis reinforced the need to include environmental considerations into water allocation decisions, to the point where it was a significant influence in the establishment of the EMA of 2004. The Lake Tanganyika and Lake Victoria TDA/SAPs reinforced this emphasis from the environment perspective by illustrating how management of lake basins is essential to achieving environmental outcomes. The Dar es Salaam Future Urban Water options study and the NELSAP SSEA study mainstreamed the inclusion of environmental criteria along with economic and social criteria in options assessment and the development of sectoral programs and plans.

Table 5.1. Summary issues and outcomes of Tanzanian SEAs

Case
Rapid Water Resources Assessment, Tanzania Lake Victoria Basin , East Africa

Water Related Environmental Issues

Watershed degradation Water quality degradation Water allocation conflicts Groundwater table decline Localized effluent discharges Unsustainable fisheries Watershed degradation and siltation Habitat destruction Upstream and downstream environmental effects of potential dam, including flooding of part of Game Reserve Environmental impacts from deep groundwater usage Reduced flows in Pangani River from excessive water abstraction Impacts on estuarine ecosystem functions from flow changes Loss of water to wetlands and fish breeding

Major Outcomes
New water policy and bill Institutional reforms Improved stakeholder involvement Investments in three priority basins as second phase Investments in all nine basins in the third phase (ongoing) Agreed TDA and SAP for lake and basin Convention between riparian countries Formation of Lake Tanganyika Authority Identification of two water supply options that minimize environmental and social impacts Environmental issues to be treated in EIA Analysis of environmental effects of eight development scenarios Too, for use by PBWO in water allocation planning Development of EFA technique suited to Tanzanian conditions Training of staff from other jurisdictions Regional power development program agreed by countries (to be confirmed) Transparent decision process including environmental and social impacts attractive to private sector funding Responds to World Bank Board requirement following Bujagali Inspection Panel Agreed set of regional priorities for Basin countries Supported environmental management components of LVEMPII project Provided strategic issues for LVBC

Lake Tanganyika TDA/SAP

Dar es Salaam Future Urban Water Supply Options SEA

Pangani Basin Environmental Flow Assessment

NELSAP Strategic/Sectoral, Social and Environmental Assessment of power Options

Impacts of hydropower development on upstream and downstream communities Effects of hydropower development on wetlands and estuaries Greenhouse gas emissions from thermal power generation Cumulative environmental impacts from multiple developments within a river basin Impact of climate change on water availability Decline in lake level with impacts on littoral zone and navigation Soil loss and sedimentation Excess nutrient and eutrophication Aquatic weeds Loss of native fish species Degradation of fringing wetlands

Integrated approach An institution-centered SEA promoted environmental integration. These six water resources examples illustrate how one SEA - the RWRA study contributed significantly to establishing the enabling environment that subsequently promoted some of the other strategic environmental studies. The NAWAPO and draft legislation that resulted from the RWRA study require basin level water resource plans to be established. Environmental water provisions are to be accorded high priority within these plans. The Pangani Basin EFA study is the only basin wide environmental flow study in Africa (outside South Africa) being conducted to provide the environmental water requirements for a basin plan. Also the regional TDA/SAPs of Lakes Victoria and Tanganyika were strongly supported within Tanzania and provided examples of the NAWAPO emphasis on the importance of transboundary water management. Different levels of understanding in sectoral agencies. As a result of the RWRA and the institutional initiatives that followed from it, the experiences of the Lower Kihansi hydropower plant, the Mtera crisis, and the Pangani Falls hydropower plant crisis, there is now a good appreciation within the Ministry of Water of the importance of taking an integrated approach to water resources management. However, there remain different degrees of understanding and adoption of IWRM principles across other sectors, including the Environment sector, and many key lessons have yet to be internalized. Environment mainstreamed in lake management. The Lake Tanganyika and Lake Victoria SEAs have the potential to ensure that environmental issues are mainstreamed in the management of those two lakes. In the case of Lake Tanganyika, the TDA/SAP has led to the establishment of a Lake Tanganyika Authority with the specific objective of protecting the internationally important biodiversity of that lake. In the case of Lake Victoria, the TDA/SAP has only recently been completed, but is likely to be influential in the operations of the new Lake Victoria Basin Commission and the Bank/GEF LVEMP-II project (under preparation). The Lake Victoria, Lake Tanganyika, and RWRA studies also promoted a cross-sectoral approach to water resources through the teams that undertook the studies. The institutions that were established as a result of the studies have internalized environmental concerns in their work the first two at basin level and the third nationally. On the other hand, the Lake Tanganyika TDA/SAP was led by environmental institutions and lacked an appreciation of the close connection between the lake and its surrounding basin. The establishment of the Lake Tanganyika Authority (and not a Lake Tanganyika Basin Authority) without a clear mandate over the basin will complicate the management of environmental issues that arise within the basin. Options assessments can integrate environmental criteria. The NELSAP SSEA assessment of power options was specifically designed to include environmental along with social and economic criteria in its selection of preferred development options. Although ultimately successful, the study was hampered by a limited understanding of multi-criteria approaches that allowed social and environmental considerations to be integrated with

technical assessments. Given the initial difficulties with limited environmental skills (subsequently rectified), this study illustrates the importance of having a balanced set of skills on the team led by a person with a wide perspective. The Dar es Salaam Future Urban Water Supply SEA also integrated environmental with social and economic criteria to arrive at the preferred development options. Both studies were intended to reduce and minimize impacts in future investments. Neither study was intended to leave a long-term environmental legacy. Transboundary studies need special attention. Two of these case studies (Lake Tanganyika and Lake Victoria TDA/SAPs) were transboundary and a third was a regional study with some transboundary options (NELSAP SSEA). The difficulties of undertaking separate national assessments of environmental issues in a consistent manner and then combining them into an agreed transboundary set of issues and responses is best illustrated in the Lake Victoria case (Case Study 10, Appendix D). This case study and the NELSAP SSEA also illustrate the importance of choosing an analytical method that suits the problem multicriteria analysis with mixed quantitative and qualitative data in the case of the NELSAP SSEA. It is important to have a high level steering committee representative of all the countries for these studies, in order to ensure that all countries own the results of the study. Promoting participation and stakeholder involvement Engage the affected stakeholders. The first of these studies the RWRA confined its stakeholder engagement to just the Ministries engaged in the study. However, the extent of stakeholder participation in the strategic studies has increased since then with, for example, widespread input at national and regional levels into the Lake Victoria TDA/SAP process. Although there are now requirements for stakeholder participation in the EMA and the NAWAPO, these instruments have not been the primary drivers for participatory approaches. Participation has been driven by both instrumental requirements of international donors and the recognition by the agencies themselves that participation leads to more robust plans and programs. RWRA accelerated the formation of basin level management. The RWRA facilitated the fundamental shift towards river and lake basins as the management units. It advocated that the two existing basin organizations be strengthened and that seven additional basin organizations be established with operational responsibility for water resources management. Thus it played a major role in establishing the current basin structure for water management in Tanzania. Employing economic instruments Economic instruments not widely explored. These SEAs did not widely explore the use of economic instruments for environmental management, although the RWRA did recommend the use of water user charges for major users to reflect the cost of providing the resource and the Lake Victoria SAP endorsed the use of a fish levy to charge for the exploitation of a natural resource, with part of the revenue raised to be used for resource protection.

Understanding of IWRM within Water Related Sectors Differential understanding of IWRM across sectors. While the water resources sector in Tanzania has developed a good appreciation of many of the principles of IWRM, the level of understanding lags in other water related sectors. The 2004-6 drought again emphasized the need to take an integrated approach to water resources53. Water shortages again led to low reservoir levels and cuts in power production with impacts on industrial production; conflicts between irrigators and pastoralists; and diminished flows into National Parks and environmentally sensitive areas with impacts on biodiversity as well as reduced tourist income. The electricity shortages affected industrial and commercial production and had a significant impact on the national economy with the 2006/7 economic growth being reduced from 7% to 5.9 %. One of the key problems was that the water sector reforms were not coordinated with reforms in other water-dependent sectors. Energy policy lacks water resources appreciation. At present the 2003 Energy Policy contains no discussion of the electricity sub-sectors dependence on water resources. The Policy discusses other sectors only in terms of their demand for energy. The policy considers environment only in the defensive sense that energy production should minimize environment impacts and adhere to environmental requirements. The strategy does not allow for the impact of other sectors environmental performance on energy production, such as the impacts of poor agricultural and forestry management on erosion and sediment transport leading to siltation of dams and wear on turbines. Irrigation planning will require SEA. The Tanzanian government plans to quadruple the area under irrigated agriculture as part of its national development strategy. The Irrigation Master Plan, which identified suitable locations for an expansion of irrigation, was an engineering study that did not take full account of the impacts of this planned expansion on other sectors, including the environment sector. Some of the main areas identified for further development contain sensitive wetlands and National Parks, or are already under stress because of water demands from hydropower or existing irrigation. An SEA will be conducted of the Master Plan and the new Irrigation Policy as part of the conditionality for the multi-donor Agriculture Sector Development Program. Wetlands management needs coordination. There has been no over-arching national wetlands policy or strategy in Tanzania, although the National Wetland Working group, reporting to the National Wetland Steering Committee, has the task of coordinating management of wetlands. A number of national, regional and local institutions have responsibilities for aspects of wetlands management, and various policies and legislation refer to aspects of wetlands management. The Ministry of Natural Resources and Tourism (MNRT) has now drafted a national wetlands strategy54 which recognizes these complexities although it does not resolve them. Illustrating the potential overlaps, the
53

World Bank (2006). Water Resources Assistance Strategy: Improving Water Security for Sustaining Livelihoods and Growth. World Bank, Washington DC. 54 Draft National Wetlands Management Strategy 2007-2017. Ministry of Natural Resources and Tourism, Dar es Salaam, Tanzania.

MNRT has recently initiated an environmental flow assessment of the Usangu wetlands, although this initiative appears to be uncoordinated with the concurrent efforts by WWF to secure funds for an environmental flow assessment in the Usangu area. An SEA into wetland management would bring these coordination issues to the fore and provide an opportunity to resolve them. Need for coordination of land and water policies. The 1995 Land Policy recognizes, inter alia, that land degradation is causing destruction of waterways and environmentally sensitive areas. Under the Land Act No.4 1999, the Minister of Lands has power to declare areas such as mangrove swamps, wetlands, and land near a river bank or shoreline to be potentially hazardous. However, these powers and similar powers for prevention of degradation of forested lands under the Forest Act 2002 are not coordinated with the powers of the Water Minister under the draft Water Resources Act. Institution-centered SEAs would be suitable instruments for examining these sectoral PLSPPs and recommending the changes needed to bring about a consistent approach to water resources management. Conclusion The RWRA study in the early 1990s provided a framework for reforming water resources management in Tanzania. This was a response to a series of water resources crises, each which also included environmental aspects, reinforced the messages that a multi-sectoral approach was needed for water management and that the environment was a legitimate and necessary user of water. The Ministry of Water absorbed and internalized these lessons and, with assistance from development partners, has promoted an innovative water policy that has decentralize operational decision making to river and lake basins, promoted multisectoral management at national and basin levels, formed water user associations and promoted stakeholder participation, and pioneered environmental flow assessments for inclusion in basin plans. However, the recent 2004-2006 drought illustrated that it is not sufficient for just the Ministry of Water to be undertaking these reforms. All relevant Ministries need to harmonize their PLSPPs so that they are consistent with an environmentally sensitive multi-sectoral approach. Appendix A provides some of the issues that may be useful to include in these PLSPPs. Sectoral Ministries also require the capacity to engage in IWRM. Ministry staff, especially senior decision-makers, need to be introduced to SEA and IWRM and the benefits to all sectors of actively engaging in participative management of water resources. This would include the Ministry responsibilities under the EMA and may include the development of sector specific guidelines for SEA for some sectors55. Sectoral Ministry staff could also be
55

Impact Development Management Consultancy (2006). EMA Implementation Support Programme. Presented at National Stakeholders Workshop on the Draft Capacity Building Programme for Implementation of the Environmental Management Act 2004, Bagamoyo, Tanzania.

invited to participate in studies such as the current Pangani Basin EFA to gain familiarity with water resource and environment issues and to build experience in working in multisectoral teams. With support, professional organizations (power engineers, foresters, etc) could also contribute to introducing multi-sectoral management of water resources through their training programs and professional support activities.

Chapter 6. A Framework for Using SEAs for IWRM

In this chapter, the evidence from the 10 case studies, the four national water policies and the pilot study in Tanzania shows that SEAs have contributed towards mainstreaming some of the principles (related to environmental sustainability) of IWRM. These studies also highlight some of the weaknesses of SEAs in mainstreaming water resources management principles. The lessons from these analyses are used to develop advice for operations and recommendations for promoting and broadening the use of SEA in water resources management. SEA Support for IWRM This ESW has focused on the integration of environmental concerns into water resources management at the strategic level. Box 17 highlights how the specific objectives of the ESW have been addressed within this report. SEAs are set in the context of broader visions, goals and objectives, helping choose a strategy for action and the least negative means to an envisioned end so that environmental impacts can be avoided, minimized, compensated or off-set at the earliest possible stage of the decision making process. Box 17. ESW Objectives Delineating the environmental issues related to IWRM Chapter 2 and Appendices B and C; Identifying opportunities for SEAs to contribute to management of environmental issues in water resources Chapter 4, Chapter 5 and Appendices D and E; Using the literature and selected case studies to identify procedural and substantive factors and institutional drivers that lead to effective SEAs in the water sector at policy, strategy, program and plan levels - Chapter 3; Observing the introduction of SEA in a developing country (Tanzania) as an in-depth pilot study to identify practical issues arising from the introduction of SEA for the water sector Chapter 5 and technical report (footnote 3); Recommending how the Bank can use SEAs to improve the integration of environmental issues in its lending for water resources planning and management Chapter 6 and Appendix A. Chapters 2 and 3 showed that IWRM and SEA share the common concern of integrating the environment into decision making. They have other features in common, including the importance of participatory methods, the need for an inclusive, multi-sectoral approach, and the recognition that the process is as important as the outcome. Whereas environmental integration into decisions is the central objective of SEA, it is not a central concern of IWRM. The evidence suggest that IWRM itself is only being implemented slowly and piecemeal in developing countries and that environmental issues are not being

effectively incorporated into water resources decision making systematically through this paradigm. The 10 case studies in Chapter 4 provided lessons on the application of institution-centerd and impact-centered SEAs in the water sector. The SEAs were used for a number of purposes from post-hoc assessment of draft strategies, plans and programs to providing environmental input to strategies, plans and programs yet to be formulated, to helping structure and map out a strategy for managing complex situations. The Tanzanian pilot study (Chapter 5) provided a different perspective. It examined a sequence of SEA studies carried out under a single, although evolving, enabling environment and showed how the reforms in the water sector, including a growing understanding of environmental issues, have evolved and the weaknesses related to inadequate harmonization with the other sectors and capacity limitations are a threat to a fully integrated approach to water management. Outcomes from ESW SEAs have successfully promoted IWRM. The case studies and the Tanzanian pilot study make it clear that SEAs have been successful in promoting the inclusion of environmental concerns into water resources decisions, as well as some of the other principles of IWRM. All SEA case studies, by definition, promoted the inclusion of environmental matters into water sector decision making, although only some institution-centered SEAs had a long term impact. All but one addressed multi-sectoral issues, and were conducted by multidisciplinary teams, contributing to the longer term multi-sectoral approach to water resources management. Most of the case studies promoted public participation in waterrelated decisions (including in countries where there was little tradition of participation), to the point where some government institutions adopted participatory methods for their own activities. Some SEAs promoted greater transparency of water resources decision-making, although it was not clear that this was a long-term change. The four national water policies illustrated different levels of commitment to environmental considerations. While all four included recognition of the legitimacy of environmental concerns, the extent to which they integrated environmental matters into water resources differed greatly. The Victoria (Australia) water policy showed how environmental considerations can be mainstreamed into the water policy, although the policy was restricted to water flow and river health issues. Box 18 (taken from Appendix A) provides opportunities for including environmental considerations in water policies. Box 18. Including Environment in National Water Policy Recognizing the role of environment Make the linkages between environmental health, human health and economic growth clear in water policies Recognition of the legitimacy of environment as a water-using sector with equal standing to other water-using sectors

Environmental Impact Management Establishing river classification system for establishing environmental objectives for river reaches Assignment of a priority to water for the environment when allocations are being made from surface and groundwater Recognition of the importance of services provided by healthy aquatic environments for water using sectors Establishing water quality standards that protect aquatic environments Establishing mechanisms to license and control effluent discharges from point and non-point sources Recognizing the need to protect surface and groundwater source areas Protecting environmentally productive areas such as wetlands, floodplains, mangroves, estuaries and near-shore areas. Controling introduced plant and animal species that have environmentally detrimental effects Inclusion of climate change and managing its effects on water resources as well as aquatic environments Controls over Environmentally Deleterious Activities Use of economic instruments (pricing, markets, etc) to control demand and assign saved water and income streams to environmental benefit Use of EIA and SEA for water resource developments, plans, programs and strategies to promote environmental inclusion Ensuring environmental representation on national, basin and catchment water resource institutions Including adequate opportunities for public participation, including from environmental groups, in decision making International Obligations Meeting international obligations over environmental protection (Ramsar sites, etc) Ensuring environmental issues are included in transboundary water resource management SEAs are adaptable instruments for water resources policy and institutional reforms. The 10 case studies provided insights into the wide diversity of ways in which SEAs can influence the inclusion of environmental concerns into water strategies, programs and plans at national, basin and trans-boundary scales. Thus, the SEAs were used for a number of purposes from the conventional assessment of draft strategies, plans and programs; to providing environmental input to strategies, plans and programs yet to be formulated; to helping structure and map out a strategy for managing complex situations. Water using and dependent sectors need to coordinate their reforms. The Tanzanian pilot study illustrated how the water sector had embraced the principles of IWRM, including recognition of the environment as a legitimate water user. However, the major lesson to emerge from this pilot study was that this was not sufficient for effective water resources management. Other water dependent sectors also need to adopt policies that promote a

participative approach to water resource management including the importance of providing water to maintain environmental functions. The SEA process is as important as the product. Institution-centered SEAs that examine impediments to improved water resources management, including the incorporation of environmental concerns, can set in train processes that lead to fundamental changes in water management over many years. Box 19 illustrates three such examples. These institution-centered SEAs are more influential in the long run than are impact-centered SEAs that identify and ameliorate environmental impacts from specific PLSPPs. Box 19. Using SEAs to Bring about Fundamental Change Colombia WSS SEA The SEA into WSS in Colombia identified several structural impediments to increased private sector involvement. These included cumbersome procedures for obtaining environmental licenses, poorly designed pollution charges, and high and inappropriate environmental standards that required large tariff increases. Environmental, economic and social aspects of water were neglected, the regulatory framework was intrusive, and there was a lack of capacity in the institutions overseeing water utilities. As a result of the SEA, the government of Colombia decided to harmonize existing legislation, streamline environmental license processes for water projects, evaluate and mitigate environmental risks in operational contracts, and involve the relevant authorities in developing new tariff schemes that would incorporate well-defined environmental charges. Some of these initial reforms were not deep enough and the World Bank has subsequently helped the government through three Programmatic DPLs to amend the environmental license system and draft a new water resources management law which encompasses all aspects of water management, including the right of access to water, water availability and coverage and water quality. The use of SEA has now gained prominence within the country and one of the objectives of the ongoing DPL II is to support three policy-based Strategic Environmental Assessments (SEAs) relating to water resources management. Indonesian WATSAL SEA The SEA into the WATSAL loan to Indonesia was based on extensive consultation with stakeholders at provincial, regional and local levels. The issues that emerged from these consultations included inadequate inter-sectoral coordination, lack of enforcement of pollution regulations, need for a more holistic river-basin approach, and the disproportional influence of large irrigators. The WATSAL loan tackled some of these structural problems by strengthening environmental assessments of water projects, improving stakeholder representation on basin committees, increasing support for WUAs, and ensuring that the reforms did not entrench the role already played by dominant groups at district and village levels. Although there was initial enthusiasm to take these reforms further, there was a return to a more centralized approach in 2003 before a new government was elected in 2004.

The Tanzanian RWRA study The 1994 RWRA study laid the groundwork for significant reforms and investments. Policy, legislative, institutional and capacity impediments to water management were identified and a strategy was mapped out for overcoming them by adopting may of the elements of IWRM. Over the subsequent decade a new water policy was adopted including significant environmental provisions; legislation was drafted to give force to this policy; and institutions were reformed with decentralized river basin organizations being either strengthened or established. Several of the subsequent water management SEAs (which can be traced, at least partially, to the RWRA) illustrate the growing awareness of environmental water issues. For example, the Pangani basin EFA is a leading example of including environmental considerations in river basin management, being the first such study in Africa outside South Africa. The Dar es Salaam options study and the NELSAP SSEA regional study highlight the value of integrating environmental factors into the early assessment of option portfolios. Environmental considerations need to be included throughout the process. The case studies make it clear that SEA should be integrated through the development of the PLSPP. Subjecting a draft PLSPP to a post hoc environmental assessment is as limiting for SEAs as it is for EIAs, as is illustrated by the Czech Republic case study and the pilot study in Castilla y Len (Box 10). In the case of water resource plans, environmental inputs are needed for the analysis of the current situation, setting up objectives, elaboration of specific actions to achieve these objectives, and the preparation of implementation and monitoring systems. SEA needs to provide insights during these key stages of the planning process. The SEA report which is eventually produced at the end of this process only documents the SEA and ensures its accountability; the real impact has occurred during the planning process itself. While there is strong evidence from the case studies and the Tanzanian pilot study that SEA does promote environmental and other improvements in water resources, it is also clear that SEA is not a panacea. Reforms are often required over the long term and all water dependent sectors need to be actively engaged in these reforms. SEAs can map out the path but only concerted action across sectors can bring about the necessary changes. Assistance for Operations Given their diversity of approaches and purposes, it is not possible to provide a single template (or generic terms of reference) for conducting SEAs. SEAs can be used to assess whether environmental considerations are adequately incorporated into existing PLSPPs and, if not, make recommendations on their inclusion. Appendix A lists some of the environmental aspects that could be incorporated into the terms of reference for these SEAs into national or state water policy and legislation, river basin management plans and institutions, and water sector plans and strategies.

SEAs can also assess consistency and support for recognizing and managing environmental issues across water dependent sectors. The topics that could be included in the terms of reference for such SEAs are: Recognition of environmental policy and legislation as the umbrella under which sectoral environmental issues are handled. Assignment of powers between Ministers and institutions without duplication for handling water-related environmental issues, including responsibility for issuing licenses and permits, levying charges and fines, and monitoring compliance. Responsibility for establishing water related environmental standards without duplication between Ministries and authorities. Clear procedures that avoid duplication between Ministries for assessing environmental water requirements, pollution control permits and source protection procedures. Sectoral participation in water resources management committees at national, basin and local levels. As illustrated by the Colombia WSS SEA and the Tanzanian RWRA, SEAs can also be used to assess capacity in the country for recognizing and managing water related environmental issues. Potential topics for these terms of reference include: Formation of environmental units within water related sectoral Ministries with responsibility for compliance with environmental legislation and regulations. Adequate procedures for detecting and managing environmental issues from monitoring data, including environmental stress in river systems and aquifers. Capacity for establishing, overseeing and assessing EIAs and other environmental assessment procedures in water resources. Inclusion of SEA and EIA in water management courses at University and other tertiary institutions. Professional training in SEA and EIA for current water sector staff, including senior decision-making staff. An understanding of obligations and procedures under international treaties and transboundary agreements. Adequate opportunity for public and professional involvement in water resources management. Recommendations World Bank water resources and environmental specialists constitute the primary audience for the following recommendations, although the ESW and these recommendations may also be of value to their counter-parts in developing countries. A framework for using SEA to help integrate these concerns could consist of: Bridging the different professional perspectives of the environmental and water resources practitioners Building enabling environments and sectoral harmonization that are supportive Developing the capacity for conducting SEAs in water resources, and Designing and conducting effective SEAs.

Bridging the water and environment disciplinary perspectives 1. Environment and water resource specialists need to widen their understandings. Because SEA and IWRM come from different disciplinary backgrounds, there is a need to bridge their separate, but overlapping perspectives, if SEA studies are to be used as effective tools to implement IWRM principles. SEA practitioners would need to understand the principles of IWRM and how it is being promoted and implemented through World Bank and other institutions. These activities provide entry points for SEA studies at policy, river basin, and infrastructure investment levels, as has been illustrated in the Tanzanian pilot study. At the same time, water resource specialists will need to understand the evolving practice of SEA and its potential for assisting IWRM using both impact and institution centered SEAs. 2. SEA and IWRM terminology and procedural steps should be used to bridge rather than divide. The different and evolving terminologies used by the environment sector (e.g. screening and scoping and impact-centered and institution centered) and water resource sector (e.g., the Dublin Principles, including subsidiarity and) or different interpretations of the same terms (e.g. the term policy) need to be understood and reconciled so that commonalities are more apparent and procedural steps are clearer. 3. Support and build on ongoing water and environment sector reforms. Some nations (including Tanzania) are still in their early stages of implementing environmental reforms including EIAs, and it is important to build on their experience and not discard such practice and introduce SEAs as a panacea to the limitations of EIAs. SEAs are complementary tools and processes to EIAs (Figure 4) and could be integrated into legal and procedural frameworks though either reforms of the existing EIA systems or through strengthening of requirements for carrying out environmental analyses which may already be contained in the various planning procedures for water resource planning/management. Enabling environment for effective IWRM 4. Harmonization across the water sector is necessary. The Tanzanian pilot study illustrates the importance of having sectoral policies, legislation and strategies that are harmonized with water resources policies. An integrated approach to water resources management cannot be carried out by water resources agencies alone; water dependent sectors need to include IWRM principles, including integrated management, in their policies, legislations and strategies. 5. Water resources policies can and should support SEAs. Environment policies can require and mandate SEAs, and water resources policies should be made consistent with this requirement (Tanzanian pilot study)56. The Bank, through dialogue, can promote the benefits of institution-centered SEAs in the water sector (consistent with the respective environment policy) and can assist countries reformulate their policies and legislations when opportunities arise. The alternative is to include requirements for conducting SEA for certain water resource planning and management process into the relevant water sector policies. This option enables
56

This approach is consistent with a recent review of SEA legislation in nine countries. Ahmed K. and Y. Fiadjoe (2006). A Selective Review of SEA Legislation: Results from a Nine Country Review. Environment Strategy Paper 13. World Bank, Washington, DC.

6.

7.

8.

9.

water management and environment authorities to adapt any applicable generic SEA requirements to the specific nature of the respective water resource planning/management processes. However, coordination is essential to ensure that there are not duplicate requirements and procedures developed under water and environmental policies and legislations. The analysis of country water policies showed that, at least in that sample of four policies, none of the water sector policies supported strategic environmental assessments. Public involvement in water management is important. The case studies illustrated the importance of professional and public drivers (Nepal Hydropower SecEA, Nam Theun II, WATSAL, RWRA, Lake Victoria TDA/SAP) in water sector SEAs. Actions that improve public participation, promote disclosure, and build a sense of inclusion in decisions will all contribute towards an environment where water sector SEAs can be effective. Transboundary water SEAs are inherently complex. Because of the multiple enabling environments, different levels of knowledge and skills, and the varied objectives of basin countries, transboundary water sector SEAs require an agreed plan of action and oversight by a committee of senior decision makers57. Transboundary SEAs can be facilitated through international legal instruments for bi-/multi-lateral cooperation between the countries (e.g. such as various regional agreements for protection of international river courses or the Protocol on SEA to the Convention on Environmental Impact Assessment in a Transboundary Context). Bank influence can convert skepticism to support. The Bank can use its influence and knowledge to promote the trialing of SEA in water resources in countries where there may be initial skepticism. The case studies and Tanzanian pilot study provided a number of examples (Colombia WSS SEA, WATSAL SEA, Nepal SecEA, Nam Theun II, NELSAP SSEA and Lake Victoria TDA/SAP) where Bank support was central to these SEAs. A long-term commitment is required to see a measurable impact on water sector reforms. There needs to be sustained and long-term commitment by the Bank and developing countries to integrate environmental concerns into the enabling environment. The Tanzanian RWRA case study illustrates how it takes many years and successive investments to move from the initial understanding of the need for water sector reform to the formulation and implementation of new policies, legislation, institutional changes and integrated river basin management and development plans, and water resources investments. Other examples include the WATSAL SEA and the Nepal SecEA.

Capacity for Water Sector SEAs 10. Support from senior decision-making levels is critical. It is particularly important that senior decision makers in environment and water institutions understand the complementarities between SEA and IWRM. Information provided during the

57

The GEF has identified this as a critical success factor for TDA/SAPs, and was used in the Lake Victoria and Lake Tanganyika TDA/SAPs.

Tanzanian pilot study58 showed that, even where technical level staff had training in SEA in their university degrees, it was not used because there was no understanding or support at the decision making levels. 11. Need for water sector staff to understand different SEA approaches. The modern SEA system consists of a broad family of approaches. Staff of environment and water resources institutions should be trained in the range of opportunities offered by these different approaches. 12. Long-term water resources monitoring underpins SEA. The information base needed to apply analytical SEAs in the water sector requires a long-term water resources monitoring and analysis program. This should include environmental monitoring as well as hydrological and water quality monitoring if the necessary information is to be available for SEA studies. The Lakes Victoria and Tanganyika TDA/SAPs, the Pangani EFA, the Pioneer catchment EFA, the Nam Theun II and the NELSAP SSEA all relied on monitoring data for their analyses. 13. Training and on-job experience are important. There should be a concerted effort to develop SEA expertise in the water sector through training programs and on-job experience in developing countries. The Pangani Basin environmental flows study in Tanzania and the Nepal Medium Hydropower SecEA provide examples where international expertise is used to guide and develop local expertise in environmental assessment. 14. Learning is as important as initial success. Even imperfect SEAs can if the lessons from their undertaking are evaluated and considered by the relevant agencies help in the development of SEAs systems. The RWRA SEA spawned a succession of SEA-type studies that progressively built up expertise within the Tanzanian water resources sector. Design and Conduct of Water Sector SEAs 15. Multi-disciplinary teams and integration are essential for successful SEAs. Water resources management is inherently multi-sectoral, and the team members need to have a breadth of understanding of the range of issues and their inter-connectedness (NELSAP SSEA and Lake Victoria TDA/SAP provide lessons on the need for this breadth of expertise from the beginning of the study). This includes an appreciation of the importance of the environment in providing water for consumptive purposes (the handle of the comb). 16. Team leadership is critical in Water sector SEAs. Ideally, the SEA team leader needs to have broad experience, be able to embrace multi-disciplinary viewpoints, have a solid understanding of the SEA processes and tools, and an understanding of IWRM principles and its analytical approach. Such people are rare, even in developed countries. 17. Clear terms of reference are essential. It is essential to have clarity in the terms of reference for the SEA. They should provide the reason for the SEA, a specific statement of its objectives, the spatial, temporal and institutional scope of the SEA, the methodology to be followed, the breadth and mechanisms of consultation
58

World Bank (2007). Strategic Environmental Assessment: Enhancing Capacity for Integrated Water Resources Management and Development in Tanzania. World Bank, Washington DC.

required, an outline of the procedure to be followed, the time to be taken, and the reporting mechanism and pathway by which it will be influential (Mhlathuze catchment and the Czech Republic SEAs provide examples where clarity was lacking) The terms of reference need to be understood, discussed and agreed among the relevant decision-making, planning and environmental authorities. Where there are overlapping requirements between environmental and water resources legislation, there should be clearly stated procedures for ensuring that the requirements of both legislations are met. 18. Include a focus on the water sector institutional dimension. Given the positive experience with institution-centered SEA, an important part of the SEA should be focused on assessing the underlying institutional and governance factors (Box 18). This is particularly important given the fact that changes take place over a period of time and are typically driven by incremental behavior changes and related underlying incentives. Assessing institutional factors helps to understand and factor in these aspects in the eventual SEA recommendations. 19. Carefully planned participation pays off. However, there should be a specific stakeholder identification and engagement stage that considers the groups that are central to the decisions being addressed and states how they are to be engaged. A number of SEAs, including WATSAL and the Nepal Hydropower SecEA, illustrate this.

Appendix A. Environmental Aspects for Inclusion in Water Resources Instruments

Developing a National Water Policy Recognizing the role of environment Make the linkages between environmental health, human health and economic growth clear in water policies Recognition of the legitimacy of environment as a water-using sector with equal standing to other water-using sectors Environmental Impact Management Establishing river classification system for establishing environmental objectives for river reaches Assignment of a priority to water for the environment when allocations are being made from surface and groundwater Recognition of the importance of services provided by healthy aquatic environments for water using sectors Establishing water quality standards that protect aquatic environments Establishing mechanisms to license and control effluent discharges from point and non-point sources Recognizing the need to protect surface and groundwater source areas Protection of environmentally productive areas such as wetlands, floodplains, mangroves, estuaries and near-shore areas. Control over introduced plant and animal species that have environmentally detrimental effects Inclusion of climate change and managing its effects on water resources as well as aquatic environments Controls over Environmentally Deleterious Activities Use of economic instruments (pricing, markets, etc) to control demand and assign saved water and income streams to environmental benefit Use of EIA and SEA for water resource developments, plans, programs and strategies to promote environmental inclusion Ensuring environmental representation on national, basin and catchment water resource institutions Including adequate opportunities for public participation, including from environmental groups, in decision making International Obligations Meeting international obligations over environmental protection (Ramsar sites, etc) Ensuring environmental issues are included in transboundary water resource management

Developing Water Resource Legislation, Regulations and Guidelines Legislate for above policy components such as water quality standards, river classification, water allocation mechanisms, surface and groundwater source protection, enforcement mechanisms, composition of institutions, and public participation Include regulations on establishing water quality standards, effluent discharge standards, environmental flow assessments, inclusion of climate change in water related decisions, control of introduced species, and stakeholder participation. Provide guidelines and best management practices on erosion control and source area protection, riparian zone management, wetland protection and management, and estuarine protection. Developing River/Lake Basin Management Plans Establish basin objectives that include environmental protection and restoration objectives Source Area Protection Include provisions for protection of surface and groundwater source areas from degradation Prevention of Pollution Include controls over effluent discharges from urban wastewater, industry, mining and other point sources Include mechanisms for reducing diffuse source pollution using participatory methods, education, demonstrations, etc Environmental Water Allocation Undertake credible assessments of environmental water needs for water for environmental benefit as well as for provision of environmental services for domestic use, fisheries, economically important plants, social and religious needs, etc. Include transparent and fair procedures for balancing environmental and other water needs when flow and water quality decisions are being made Include provisions for upstream and downstream environmental water needs if infrastructure development is proposed Environmental Representation Include environmental representation in the production and implementation of plans Ensure appeal mechanisms allow for fair assessment of environmental concerns Establishing River/Lake Basin Institutions Ensure representation of river/lake basin boards of environmental interests. Include sufficient capacity for environmental monitoring, assessments, regulations and enforcement of water issues within institutions Provide resources for water flow and water quality infrastructure to ensure that environmental water provisions are maintained

Provide training and resources for coordinating across water using sectors and environment Provide resources for enforcement of water allocation and water quality decisions

Managing Transboundary Water Resources Develop common visions for transboundary waters that include environmental goals Identify transboundary environmental resources requiring protection (wetlands, fish breeding areas, etc) Harmonize water quality and other regulations across borders Assess transboundary environmental impacts of national decisions TDA/SAP concepts can be useful for developing transboundary action programs Include Environmental Ministries on boards of transboundary institutions Drawing up Sectoral Plans and Strategies Include environmental representation on teams developing sectoral plans Include provisions for stakeholder participation in sectoral planning, including from environmental representatives Use opportunities for impact- and institution-centered SEA of sectoral plans and programs to promote their sustainability Use plans and strategies to develop capacity within sectoral institutions for environmental awareness and conformity with environmental legislation Include provisions in sectoral plans for participation in IWRM at national and basin levels Include provisions for EIA of potential environmental impacts of development Making Infrastructure Investments Ensure EIAs have strong terms of reference including upstream and downstream environmental flow and water quality issues, effects of climate change on the facility, assessment of cumulative impacts, secondary impacts Ensure that EIAs are commissioned early, delivered on time and acted on in project-level decisions Implement EMPs to mitigate environmental impacts of developments Include provisions for environmental expertise within infrastructure operating authorities Establish a monitoring and reporting program that will track environmental changes

Appendix B. Water Related Environmental Issues

Surface Waters Changes in flow. Excessive abstractions of water from rivers and lakes for irrigation, urban supply, inter-basin transfers, or other consumptive purposes can significantly decrease downstream flow rates and diminish aquifer recharge. Conversely, large discharges of water from irrigation areas or urban sources can modify the downstream flow patterns. These, in turn, lead to modified downstream aquatic ecosystems, desiccation of wetlands, reduced capacity for diluting waste discharges, and lowered water tables and seawater intrusion in coastal aquifers. Apart from abstractions, barriers across rivers for storage or regulation (such as dams for flood control, urban and irrigation water supply and hydropower generation) and estuaries (such as barrages and harbors) can cause changes in flow patterns, increase stratification, and impede the movement of aquatic biota. These changes directly impact downstream communities by, for example, reducing the productivity of rivers, lakes and estuaries and reducing fish populations because of changes in breeding cues and changes in physical habitat. Changes in flow quantities alter water levels in both rivers and lakes with detrimental effects on sensitive riparian areas such as wetlands and floodplains. These changes can alter the hydrodynamics of lakes, affecting water quality and habitat. In rivers, changes in flow velocity can affect migratory and breeding behavior of some species, as well as affect sediment transport and deposition. The effects of over-abstraction and impoundments in rivers and lakes are most acute in the arid and semi-arid regions of the world. Flows that are specifically intended to maintain the environmental benefits from river systems for peoples are termed environmental flows. There is growing experience in developing countries in the provision of environmental flows, although it remains one of the weaker aspects of water resources management. Watershed degradation. Changes in land use in watersheds can release large loads of sediments and attached contaminants into waterways and coastal zones. Typically this arises in the headwaters where steeper upland areas subject to higher rainfall are converted from forestry to agriculture, although any land use conversion, such as urban expansion, that removes groundcover can cause erosion and sedimentation of waterways and can also impact coral reefs in the nearby marine areas. Poor management of agricultural land is another source of sediment in many countries. As a result of this degradation, downstream areas can become blanketed in sediment; the lifespan of reservoirs and the output from hydropower plants can be reduced; water supply pumping equipment can be damaged from abrasion; and aquatic life can be affected through reduced primary production and loss of important habitats.

Water quality. Pollution from point sources such as sewage treatment plants, factories, mining operations, and drainage from irrigation districts increases the cost of using the water, affects ecosystem functioning, and impacts on public health. The principal causes of water pollution are: poor sanitation and uncontrolled wastewater discharges from urban areas; discharge of untreated stormwater contaminated by urban wastes; waste-streams from mining and industrial developments containing heavy metals, organic matter and chemicals. Diffuse (or non-point) source pollution is also a major cause of contamination in many areas, especially where there is little enforcement over the use of agro-chemicals as well as artisanal mining operations. Pollutants from both point and non-point sources are a threat to human health, environmental health and industries such as fisheries and National Parks, that are dependent on high quality water. Riverine and estuarine system health. Healthy riverine and estuarine systems require functioning wetlands, floodplains, lakes and riparian areas which mediate important services such as pollutant removal, amelioration of floods, and provide habitat for economically important fauna and flora. However, these areas can be damaged through agricultural and grazing activities, through land use conversion and through barriers such as dykes and embankments and flow reduction. In addition, loss of fauna and flora from pollution, over-fishing and loss of habitat can reduce the biodiversity of river and estuarine systems. Introduced plants and animals can also impact on endemic flora and fauna and reduce the services provided by these ecosystems. Groundwater Changes in groundwater tables. Groundwater systems are being depleted in many parts of the world, particularly arid and semi-arid areas, because of over-pumping for urban and irrigation uses. But changes in the recharge zones of groundwater systems can also affect groundwater levels with urban expansion and increased evapo-transpiration from vegetation reducing the quantities of water reaching aquifers. Conversely, there are some areas where land use conversion from extensive vegetation to broad-scale agriculture has reduced evapo-transpiration and caused groundwater tables to rise, or where excessive application of irrigation water has resulted in water-logging and salinization. These changes affect groundwater dependent ecosystems, such as some wetlands, baseflow dependent riverine systems, aquifer and cave ecosystems, and deeply rooted vegetation. In areas where there is a close hydrologic connection between surface and groundwaters, they can affect water levels in rivers, wetlands and lakes. Groundwater quality. Lack of, or poorly operating, sanitary facilities in both urban and rural areas can contaminate aquifers with pathogens and nutrients, threatening the health of communities dependent on these groundwaters. Agro-chemicals, industrial and mining contamination can also infiltrate shallow aquifers, especially if soils are permeable, threatening human health. There are regions of the world where people are exposed to high

concentrations of toxic elements that occur naturally in groundwaters, such as arsenic in parts of Bangladesh and fluorine in the East African Rift Valley. Climate Change Global warming is altering regional climates in ways that are still to be fully understood. Some regions will experience increases in precipitation, some decreases; some will experience increased cloudiness, some less; and all will experience increases in temperature and sea levels. In most regions there will be an increase in climate extremes, leading to more frequent and more extreme floods and droughts. These changes will impact both surface and groundwater systems in diverse ways. Total quantities of surface runoff and groundwater recharge will be increased or decreased, and the timings and periodicity of these replenishment events will change. Water quality in rivers, estuaries and waterbodies will be affected from the temperature rises and changes in flow. Coastal communities will be affected by both sea-level rise that salinize coastal aquifers and from increases in storm frequency. There will also be second order effects on water resources, arising from changes in sectoral water use, shifts in production and associated demands on water, population movement away from increasingly arid areas and from vulnerable coastal zones, and changes in water quality as a result of increased temperatures.

Aquatic Ecosystems Loss of Aquatic Habitat Elimination of Species Introduction of Species Elimination/Degradation of Wetlands Reduced Ecosystem Productivity Water Quality Oxygen Depletion Nutrient Loading Nutrient Depletion Elevated Turbidity Degraded Water Quality Contaminants in Runoff

Appendix C. Water-Related Environmental Issues by Sector

Irrigation & Drainage Agriculture Livestock & Range Mgt Agro industry Dams Well Systems Treatment Facilities Distribution Networks Treatment Facilities Effluent Disposal/Reuse Sludge Disposal Dams Transmission Corridors Hydropower Collection Systems Sanitation Construction Maintenance Traffic Use Dams Channel Modifications Dikes & Levees Detention Basins Flood Control Artisinal gold mining Commercial gold mining Sand and gravel extraction Timber Harvesting Logging Operations Forestry Solid Waste Urban Runoff Cleaning Mining Urban Devt

Water Supply Industry Transportation Fisheries (Nile Perch) National Parks (Tourism) Reclamation/Land Devt

Effluent Discharge of Contaminants Precipitation of contaminants Atmospheric Precipitation Risk of Hazardous Materials Spills Risk of Groundwater Contamination Disposal of Dredge Materials/Sludge Hydrology Altered Hydrologic Regimes Reduced Peak & Ave Flow Rates Alteration of Surface Drainage Patterns Alteration of Surface Groundwater Regime Water Table Drop Waterlogging of Soils Saltwater Intrusion into Estuary and River Erosion Soil Erosion Sedimentation of Reservoir and Reduced Storage Capacity Changes in Riverine/Estuarine Morphology Soil Degradation-Less Moisture Retention Soil Compaction-Less GW Recharge Slope InstabilityIncreased Potential for Landslides and Slumps Public Health Increased incidence of disease Local climatic changes, creating habitat for insect disease vectors

Risk of injury/death to humans, animals Water Use Land Subsidence Soil Salinization Increases in Agricultural Diseases and Pests Due to Extended Growing Season Unplanned or Involuntary Settlements Resource Competition Water & Food Fuelwood and Construction Material Deforestation Erosion From Settlements on Steep Slope Poaching Other Increased Seismic Risk Navigational Hazards Barriers to Migration/Movement Loss of Recreational Opportunities

Appendix D. Case Studies of SEA in the Water Sector National Water Sector SEAs
Case Study 1. Case Study 2. Case Study 3. Case Study 4. Case Study 5. SEA for Water Supply/Sanitation Reform in Colombia Rapid Water Resources Assessment, Tanzania SEA for the Plan of Main River Basins, Czech Republic Nepal Medium Hydropower SEA SEA for WATSAL Loan, Indonesia

River Basin SEAs

Case Study 6. Case Study 7. Case Study 8. Case Study 9. Republic Environmental Flow Assessment, Pioneer Valley, Queensland SEA of Mhlathuze Catchment, South Africa SEA for Water Resources Planning, Palar Basin, India Nam Theun II Hydropower Development, Lao Peoples Democratic

Transboundary SEAs
Case Study 10. Transboundary Diagnostic Analysis and Strategic Action Program, Lake Victoria, East Africa

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Case Study 1. SEA for Water Supply/Sanitation Reform in Colombia Background59 Colombia has achieved high levels of water supply and sanitation (WSS) service connection with approximately 44% and 25% of the rural population connected to water supply and public sewerage or septic tanks in 1997 respectively. At that time 84% of the urban population was connected to water supplies and about 75% had sewage connections. By 2000 urban coverage rates had reached 90% and 85% for water supply and sanitation respectively. However, the good coverage rates mask shortcomings in the quality of service. Water rationing and intermittent supplies are common in most water supply systems; only slightly less than 50 percent of all drinking water is treated; there is insufficient pressure in the water supply systems adding to the risk of bacterial contamination; sewage collection systems do not have sufficient hydraulic capacity to handle wastewater flows; and only about 5% of wastewater receives any kind of treatment. In addition, private sector participation (PSP) in the water sector is lower than anticipated. The reasons for the slower than expected spread of PSP are twofold: first security problems of the country deter foreign operators and investors; second, carrying out PSP processes is complex and difficult and discourages PSP60. Under the 1991 constitution, municipalities have responsibility for providing WSS services. The constitution provides the legal framework for reforms in the water sector by clearly separating service provision and policy making, and by allowing PSP in the infrastructure sector. By 2000, private sector involvement in large and some medium-sized cities had resulted in an expansion of coverage, increases in service continuity, and more efficient utility management. However, the reforms did not extend to smaller cities and rural areas. Furthermore, the sectors regulatory framework remained inadequate, often constituted an obstacle to further investment, and neglected the sectors social and environmental considerations. In 2000, the Government of Colombia prepared a project proposal for the World Bank to help increase private service involvement in WSS services in medium sized cities and smaller municipalities, and to improve the financial sustainability of utilities where the private sector had already become involved. Given the issues facing the WSS sector and following earlier experience in Argentina, the Bank suggested that a SEA be undertaken as part of the project preparation. The SEA Study The SEA was undertaken by a team of consultants with backgrounds in engineering, economics, and law. The Ministry of Economic Development, responsible for water
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This case study draws heavily from Snchez-Triana E. and S. Enrquez (2005). Using Strategic Environmental Assessments for Environmental Mainstreaming in the Water and Sanitation Sector: The Cases of Argentina and Colombia . Sustainable Development Working Paper No. 26. Latin America and Caribbean Region, Environmentally and Socially Sustainable Development Department, World Bank, Washington DC. 60 World Bank 2001. Colombia Water Sector Reform Assistance Project, Project Appraisal Document. World Bank, Washington DC.

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supply and sanitation services, and the Ministry of Environment formed an advisory committee that would set the sectors priorities, oversee the implementation of agreed solutions, build consensus on environmental aspects, and address emerging issues. The SEA focused on the deterioration of water quality and inefficient water use associated with WSS, and on the impacts that would be associated with the works to be financed under the proposed project. Based on the earlier experiences in Argentina, the team realized that the institutional impediments to improvements in WSS services, including the reluctance of the private sector to invest outside of major metropolitan areas, would not be uncovered using a conventional impact-centered SEA. Instead the SEA would need to investigate the policy environment and the way in which its application by government institutions affected the decisions of the private sector. This required an analysis of the positions, interests, and interrelations of decision makers and other relevant actors. Solutions would need to take account of the realities of the political environment including the decision-makers political or normative views, realistic opportunities for environmental mainstreaming, the degree of support that could be raised amongst different stakeholders, and the countrys capacity to implement changes. Not all policy problems can be fixed at a stroke and reforms need to be supported through ongoing dialogue between governments and development partners. The study found that three regulatory instruments cumbersome procedures for obtaining environmental licenses, poorly designed pollution charges, and high and inappropriate environmental standards that required large tariff increases discouraged private sector involvement and hindered the expansion of WSS coverage. In addition, municipalities lacked the technical capacity to develop proposals for PSP that were attractive to the private sector. There were serious deficiencies in national institutions too. The Ministry of Economic Development was oriented towards the execution of specific investment projects and environmental, economic, and social aspects of water were neglected. The regulatory framework developed by Drinking Water and Basic Sanitation Regulatory Commission was too intrusive and subsidies distorted financial performance. And the Public Service Superintendence which supervised legal compliance was unable to supervise utilities, which numbered over 1,700 and had very heterogeneous characteristics. The SEA recommended that policy reforms were needed. These included modifications to water pollution charges and waste-water discharge standards and corrections to the deficiencies associated with EIA regulations with the aim of reducing the legal uncertainty generated by environmental regulations and attracting private investment. The proposal included mechanisms to streamline and improve project assessment including environmental impact assessment and public participation, and to strengthen the environmental capacities of the Ministry of Economic Development, the municipalities and the water utility operators. The consultants provided recommendations to improve transparency and accountability and the ability of the Ministry of Environment to oversee the implementation of national policies in regional jurisdictions.

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The SEA recommendations were accepted by the Ministries of Economic Development and Environment, albeit reluctantly by the latter Ministry. Both Ministries agreed to work jointly to implement the SEA action plan, harmonize existing legislation, streamline environmental license processes for water projects, evaluate and mitigate environmental risks in operational contracts, and involve the relevant authorities in developing new tariff schemes that would incorporate well-defined environmental charges. As a result of the SEA, the World Bank funded project included an environmental component that contained some of the SEAs recommendations. However, the reforms did not sufficiently reduce barriers for private investment. For instance, the modifications introduced to the pollution charges were superficial and critical aspects, such as the selection of the charged pollutants and the methodology for setting abatement goals, remained untouched. However, the Bank and the Government continued to discuss the SEA recommendations. The assessment for a subsequent investment loan61 used the SEA, and a DPL for sustainable development62 included several of the SEA recommendations such as the amendment of the environmental license system and preparation for a new water resources management law. A second DPL is in the pipeline and a third is envisaged to further reforms to Colombias environment and water sectors. This case study provides a benchmark example of an institution-centered SEA that was conducted independently of the policies being assessed and that was highly influential in improving environmental performance in the water sector. Institutional Drivers The SEA study was primarily driven by the Banks positive experience with an earlier SEA for a WSS investment loan in Argentina (an instrumental driver). And the Banks standing and leverage in Colombia persuaded the two principal Ministries to participate. The Ministry of Economic Development did not want to undertake any more investigations than strictly necessary to comply with the World Bank requirements and agreed to participate when assured that the study would take only a few months. The Ministry of Environment participated reluctantly because the Ministry of Economic Developments interest in the study was seen as an intrusion onto their (Environment Ministry) territory. As the study progressed the Ministries became more supportive. The Ministry of Economic Development accepted the reports conclusions, but the suggested environmental regulatory modifications faced strong resistance from stakeholders within the environmental sector who initially limited the scope of the proposed reforms63. However, the reforms are continuing to progress as dialogue continues, largely as a result of a strong
61

World Bank 2005. Water and Sanitation Sector Support Project in Support of the First Phase of the Water and Sanitation Sector Support Program. Project Appraisal Document. World Bank, Washington DC. 62 World Bank 2005. Programmatic Development Policy Loan for Sustainable Development. Project Document. World Bank Washington DC.
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Snchez-Triana E. and S. Enrquez (2005). Using Strategic Environmental Assessments for Environmental Mainstreaming in the Water and Sanitation Sector: The Cases of Argentina and Colombia. Sustainable Development Working Paper No. 26. Latin America and Caribbean Region, Environmentally and Socially Sustainable Development Department, World Bank, Washington DC.

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coalition of institutional supporters built up by the SEA report. Being able to quantify the economic cost of poor quality WSS services was an important element in gaining influence, as was being sensitive to the political economies of the reforms and accepting that not all reforms could be carried out immediately. Although the new environmental legislation is not yet drafted, it may include provisions for SEAs such as the study described here, to be carried out on other policy and strategy proposals and so shift the current reliance on instrumental drivers to national legislative drivers. Process Competence Accountability. The Ministry of Economic Development was clearly the client for the SEA study and, once they saw the preliminary findings, they became active champions of the process and advocated the adoption of many of the recommended actions. The study was undertaken professionally and competently by the consultants within the limited time available. While the study was assessed by the government institutions it was not subjected to an independent verification. Participative. Two nationwide workshops were organized during the study: the first to collect stakeholder perspectives on the scope of the assessment, and the second to present an advanced draft of the report and solicit additional comments. The SEA team attempted to incorporate the perspectives of vulnerable groups by identifying the sectors environmental impacts that clearly affected them. In addition, the Ministries of Economic Development and Environment held consultations with government agencies, private utility operators, academics, professional associations, NGOs, and public defence groups to build consensus around the SEA report. The two major Ministries were kept informed of progress and assessed preliminary findings as the study progressed. Iterative. The study was designed to be available in time to influence the preparation of the project and, in fact, a component of the project was devoted to implementing some of the SEA recommendations. The SEA report continued to influence government dialogue with the Bank to the point where the structural recommendations were implemented through three Programmatic DPLs intended to help reform the policy and management of the environment and water sectors. The SEA study documented its findings and cast them in terms that were relevant to decision makers in economic and financial terms, in terms of meeting MDGs, and with a recognition of the political realities operating at the time. Substantive Competence Integrated. The study went to the fundamental reasons technical, legal, institutional - for the poor performance of existing WSS operations and the limited involvement of the private sector. It linked environmental performance to social and health issues and, where possible, put these issues in financial terms. The study was vertically integrated in that it linked outdated and limited policies and legislation to the poor performance of the utilities and the regulatory institutions and, ultimately, to the inadequate service received by consumers and limited coverage of WSS services in medium sized cities and rural areas.

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Sustainability-led. The major outcome of the SEA study was the development of a plan of institutional and technical reforms that would place water sector management on a more sustainable basis and improve aspects of environmental oversight of water sector investments and operations. Focused. The study focused on the root causes of the difficulties faced by the WSS sector and collated persuasive evidence about the causes of these problems. The issues it focused on WSS coverage for those outside major cities, improved service, health issues, environmental safety for poorer sections of society, - are at the heart of sustainable development and the MDGs. The SEA study took 3 months to complete (although discussions on the recommendations continued for some years) and cost approximately $28,000. Given the far reaching changes triggered by the report and the potential environmental and WSS benefits, this represents an excellent rate of return. Influential. The influence of the SEA was far-reaching but not immediate. It engendered debate amongst stakeholders in the water and environment sectors and led to progressive changes to the legal and regulatory systems, environmental assessment and management, participative processes that, in turn, improved the enabling environment for private sector investment in the water industry. These were supported by a series of World Bank investment and development policy loans. Lessons Learned This SEA provides important lessons on the usage of SEA rather than on the technical aspects of conducting them. It turned around the usual approach How does this policy affect the environment? to ask How do the environmental standards and procedures impede both development policies and environmental protection? It illustrates how an environmental instrument can be used to further development and poverty alleviation as well as environmental protection by putting its findings and recommendations in terms that are meaningful to politicians and senior decision makers. This includes use of economic and financial arguments and linkages to national goals such as poverty reduction and MDGs. While this approach led to a reduction in the stringency of environmental standards, it also made them more relevant and acceptable. The assumption was that it was better to have standards that industry regarded as relevant and achievable than ones that were widely ignored as being irrelevant and unachievable. It also illustrates the importance of building support amongst a wider constituency than just the lead agency and working patiently over a number of years to implement reforms. The influence of an SEA can be felt a number of years as opportunities arise to implement components of a reform program. Finally, it clearly illustrates that an SEA need not be costly or time consuming to be influential if it is focused on the core questions, builds a constituency, and presents its findings in a way that is relevant to decision makers.

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Case Study 2. Rapid Water Resources Assessment, Tanzania Background Tanzanias early post-independence period was focused on the development of rural and urban water supplies with the goal of access to safe water for all citizens by 1991. The Water Utilization and Control Act (1974) and subsequent amendments provided the legal framework for the sector including water allocation, water pollution control, water user charges, water quality standards, and river basin water offices. Water was treated as a free good, planned centrally by the Ministry responsible for Water and delivered through Regional Water Engineers who reported to the Ministry. Seventeen of Tanzanias 20 regions had a Water Master Plan which focused with the engineering and development aspects of rural and urban water supply. A review in 199364 of the Water Supply and Sanitation Program showed that, after nearly 20 years, water supply coverage remained low with only 42 percent of the rural and 54 percent of the urban population having access to safe and potable water supply. Not only was coverage low, but the quality of service was also deficient. Shortage of water coupled with inadequate sanitation facilities and sewerage systems and solid waste disposal facilities has led to increasing environmental pollution and health hazards. The reasons for this poor performance included non-involvement of the beneficiaries, inappropriate technologies, and continued centralization. In response, the government adopted a National Water Policy in 1991 that placed emphasis on community participation, decentralized management, use of appropriate technologies, cost sharing for rural water supply, and cost recovery for urban water supply. However, the Policy focused on development aspects of the water and placed little emphasis on conservation and management of the water resource itself. Apart from the difficulties with water supply and sanitation, there were growing water use conflicts in the Pangani and Rufiji river basins, where most of Tanzanias irrigated agriculture and hydropower generation is concentrated. Small scale conflicts occurred between farmers upstream and downstream of one another. On a larger scale, there were conflicts between the agriculture and hydropower sectors because irrigation takes place upstream of hydropower plants in the Rufiji and Pangani basins, and is poorly regulated and controlled. In the Pangani basin, the construction of the New Pangani Falls Development was under threat from a serious water shortage even before its construction had been completed. This prompted the Norwegian Government, the primary funding source, to cease supporting the power sector in Tanzania. There were also conflicts between irrigation and environment and hydropower and environment in the Ruaha Basin and these had generated national and international attention. Each of the three major sectoral water users water supply/sanitation, agriculture, and hydropower had formulated their water use plans independently and there was no
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Njau F.Z. (1994). Tanzania's Water Sector Review Process. Chapter Three, Proceedings of the Seminar on Water Resources in Tanzania. Rafik Hirji and Franqois-Marie Patorni (Eds). Tanga, September 12-16, 1994. World Bank, Washington DC.

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integration between the plans. None of the plans addressed water use for the environment even though the environment contributes to the national economy and livelihoods of many Tanzanians. Consequently, it was recognized that an integrated Water Resources Management Strategy needed to be developed to guide both the medium and long term development and management plans for the water sector. The strategy would need to encourage cooperation among different Ministries and institutions and be environmentally sustainable. The Rapid Water Resources Assessment A three phased approach was used to develop and implement the IWRM strategy. The first phase, in conjunction with the water supply and sanitation review, was initiated by a Rapid Water Resources Assessment (RWRA) focusing on water resources to identify the issues and to develop an action plan. The RWRA commenced in early1994 with technical and financial support from DANIDA and the World Bank.65 Its objectives were: To integrate hydrological considerations, cross-sectoral water uses, land use, water quantity and environmental and public aspects in water and sanitation; To inventorise and analyze existing information to assess surface water and subsurface water availability and sectoral land and water including environmental issues; To establish national and basin-wide priority issues on river basin management and the formulation of strategies that will address those issues.

The RWRA66 was undertaken as a desk study based on the regional Water Master Plans, national energy and irrigation plans, and other cross sectoral information (including information on hydrology, health, wetlands and pollution). The RWRA was carried out for the Ministry of Water, Energy and Minerals. It was implemented by an inter-disciplinary and multi-sectoral team led by the Ministry of Water, and with staff from the Ministries of Agriculture, Environment, Forestry, Natural Resources and Health. The RWRA concluded that, across the country, there was adequate water available for the foreseeable future although there were potentially water shortages and emerging conflicts over water use in specific parts of some river basins. However, there were serious issues arising from inadequate water supply and sanitation in both urban and rural areas, inadequate enforcement of water rights, lack of control over water pollution, degradation of aquatic ecosystems, weak water management institutions, lack of policy on shared watercourses, inefficient water use in the irrigation sub-sector, conflicts between water users in stressed basins, and outdated legislation controlling water resources. The RWRA also found serious inadequacies in inter-sectoral coordination of water use and management, limited representation of stakeholders in decision making, insufficient incentives for efficient water use, occurrences of serious water pollution, and very limited data on which rational allocation decisions could be based.
65

The World Banks 1993 Water Resources Management Policy Paper provided a framework to guide these reforms. 66 United Republic of Tanzania (1994). Rapid Water Resources Assessment Report. Ministry of Water, Energy and Minerals. Dar es Salaam, Tanzania.

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At the basin level, the RWRA identified four out of the nine basins as priority basins requiring urgent action. The Rufiji and Pangani basin faced serious water allocation problems and acute water use conflicts, the Wami-Ruvu Basin faced problems over unregulated supply and growing needs for Dar es Salaam water supply, while the Lake Victoria basin experienced serious environmental degradation due to increasing pollution, wetlands degradation, over fishing and increasing watershed degradation. It recommended that introduction of an integrated approach to water resources management be implemented in two subsequent phasesinitially at the national level and in priority river basins (Rufiji, Pangani, Ruvu-Wami and Lake Victoria basins), and subsequently throughout the country. The priority tasks at river basin level were: Rufii Basin - a comprehensive water resources management plan including watershed management; Pangani Basin - a comprehensive water resources management plan including watershed management, a water quality and pollution monitoring program, and incentives for groundwater development Ruvu/Wami Basin - a comprehensive water resources management plan that makes the water supply for Dar es Salaam a priority; and, Lake Victoria Basin - a detailed survey of pollution sources and abatement proposals, a plan on the utilization of Lake Victoria waters, and a water quality monitoring program. The recommendations of the review were accepted by the government of Tanzania and subsequently implemented through a series of projects supported by the World Bank and bi-lateral donors. The national water policy was revised in 2002, new water resources legislation has been drafted, water sector institutions are presently being restructured, the existing three River Basin Offices were strengthened and the remaining six basin water offices have been established, irrigation efficiency has been improved in 15 rehabilitated pilot irrigation schemes, water supply and sanitation services have been improved in eight urban towns and 13 districts, and transboundary water management has been initiated in the Lake Victoria and Lake Tanganyika Basins and in the Ruvuma River basin. A new $951 million water sector support program67 has recently been initiated to consolidate and extend these water management improvements across the country, including in all urban areas, all districts and in all the nine river and lake basins. The RWRA was primarily an institution-centered SEA with a focus on the underlying policy and institutional reasons for the poor performance of the water supply and sanitation program, the conflict over access to water and the broader water resources challenges. Its purpose was to structure a water development and conservation strategy to be implemented over the subsequent decade. Institutional Drivers
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World Bank 2007. Tanzania Water Sector Support Program. Project Appraisal Document. World Bank, Washington DC.

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The World Bank assisted the government in the design of the RWRA but there was no procedural or instrumental driver for the study. Rather, the primary drivers for the study were a combination of local and external factors. The RWRA was conceived at a time when local awareness on water resources issues was heightened because of the nation-wide drought and water crises in the Pangani and Rufiji basins which impacted many key sectors of the economy and livelihoods of the people. In addition, Tanzanian professionals, through participation in major global meetings, became aware of the growing international consensus on responding to water resources challenges, such as those facing their nation. In 1993, the World Bank had issued its Water Resources Management Policy calling for a more holistic manner approach to the management of water resources. The conclusion of the 1993 World Bank mission for the National Environment Action Plan was that it was more important to first address the water resources issues and challenges before focusing on just the environmental aspects of water resources. As a consequence, environmental issues were integrated in the RWRA. There was thus a meeting of professional minds amongst the Tanzanian experts and World Bank staff that facilitated the RWRA, although its success was directly related to the fact that it was largely driven and owned by the Tanzanians. While there were public concerns about the state of water resource, the widespread impact of drought, the concerns were focused on local issues pollution, conflicts over access, etc and they were not clearly addresses into a coherent public policy issue and therefore a public diver for the RWRA study. Nevertheless, the political drive to initiate reforms, starting with the RWRA, partly arose from these public concerns. Procedural Competence Accountable. The Ministry of Water, Energy and Minerals was responsible for water management at national level and was the client for the RWRA. It was responsible for organizing and implementing water reforms. The study was undertaken comprehensively and impartially. It was a collation and synthesis study rather than an analytical study based on new information. While it did not break new ground, it added some new information and organized existing information into a coherent picture and provided a direction for future water resources management. The study was not independently peer reviewed. The RWRA was initiated because of concerns about the sustainability of the (then) current water resources development patterns and so the study documented the seriousness of these issues and how they might be taken into account through an integrated approach. Participative. All major water-dependent and water related Ministries were represented on the Study Team and so there was strong participation at national level. A major stakeholders workshop was held in September 1994 to review the draft findings of the RWRA. However, the RWRA did not invite broader public participation. While this simplified the analysis, it meant that the task of developing widespread support for the water reforms was left to a later stage. Even though all water-dependent Ministries participated in the study, not all were convinced of the need for an integrated approach. Some sectors, such as the power sector, retained a core belief that their role was to generate power and the provision of water was not their concern.

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Iterative. The RWRA results were not driven by an external timetable, although indirect pressure from external partners (such as the Norwegian Government) may have played a role and so were available to feed into the development of the Strategy for water resources management. The information content of the RWRA study was sufficiently developed to provide directions for the strategy and the subsequent National Water Policy. Substantive Competence Integrated. The RWRA included environmental issues and responses in its scope, but the assessment of strategic directions did not take particular note of them. Similarly the interrelationship between environmental, social and economic objectives was clear within the study, although this was not emphasized. Thus, the RWRA pointed out the difficulties in water allocation and the importance of source protection, watershed management and pollution control, identified important wetlands, and placed considerable emphasis on social factors, including the conflicts that were then occurring between water users in the Pangani and Rufiji Basins. The study was tiered downwards with broad recommendations for the critical issues to be included in the plans for the four priority basins. It was also tiered upwards with recommendations for national reforms, including policy and legislative changes. These included transboundary management as well as inter-sectoral reforms. Sustainability-led. The rationale for the RWRA was to develop a more sustainable water sector in Tanzania. Consequently, the recommended approach to developing the Strategy was designed to be more decentralized at the river basin level and sustainable than the existing centralized, uncoordinated, sectoral development-oriented approach to water resources planning and management. Focused. The RWRA collated the first national Tanzanian database on water resources. While this was insufficient for basin-level panning, it provided a credible basis for the recommendations contained in the report. One of the recommendations was, in fact, the need to improve flow and water quality monitoring for drawing up water allocation and water quality plans. The report was commissioned in order to give direction to the proposed water reforms and overseen by the Ministry responsible for the reforms and so it was inevitably customized to the decision-making environment. The study took about 15 months and cost about US $50,000 and so was cost and time effective. Influential. The RWRA report was highly influential and provided the strategic direction for Tanzanias subsequent water reforms, including a new national water policy, a devolved institutional framework, greater awareness of environmental protection, and the need for a collaborative approach to management. It provided the basis for development assistance from multi-lateral and bi-lateral donors. While it raised awareness of integrated water resources management, particularly amongst the members of the Study Team, the task of fully engaging all sectors in this approach has yet to be completed, but is ongoing. Lessons Learned A relatively modest investment in a strategic assessment proved to be highly influential in re-orientating the direction of water management in Tanzania, partly because it was initiated when there was a rising interest internationally in integrated approaches to water

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resources management, partly a response to the 1991-93 water crisis and partly because it was conducted by an inter-sectoral team. While the consultations were confined to Ministries represented on the Study Team, they were sufficient for the purposes of this study. The report had credibility within the Tanzania government and with multi-lateral and bi-lateral development partners. However, the lack of widespread public and institutional consultation at all levels meant that the messages about the central importance of an integrated approach to water management were not widely absorbed within some sectoral institutions. There has been a slow but growing understanding of this important concept, as shown by sectoral policies and legislation, although there are some sectors which still retain a singular focus on their core business. It takes considerable time to bring about these changes in attitude. The study did not focus on environmental issues because they were not seen to be an issue in their own right. Rather environmental considerations were included in the broader context of the water-related problems facing Tanzania which had manifest themselves as water shortages, conflicts over access to water, and water quality problems. The review was carried out by Tanzanian nationals within government institutions. This improved the sense of ownership of the results within government circles and helped build capacity and confidence within those institutions. This probably was the most important factor that contributed to the effectiveness of the RWRA.

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Case Study 3. SEA for the Plan of Main River Basins, Czech Republic Background The Czech Republic has a long history of water management, which can be divided into two main phases - before and after the fall of communist regime in 1989. Until the early 1990s, water was managed as a branch of the national economy and largely seen as an input to the industry, energy and agriculture sectors. Although the Water Act passed in the 1970s included several provisions for environmental protection, there was very limited enforcement of those provisions. The Water Act introduced a Water Management Master Plan (1975) that contained measures to safeguard the water demands of the national economy but has almost no provision for environmental protection. The economic transformation after 1989 led to significant changes also in water management, including decentralization of water management, conversion of water companies and River Boards (later reinstated as State enterprises by the Ministry of Agriculture) to various types of the business organizations (but always owned by the State), with responsibilities for the enforcement of economic instruments such as fees and charges for water abstraction and wastewater discharges. The accession of the Czech Republic to the EU in May 2004 led to implementation of several water related directives, particularly the Water Framework Directive (WFD) that introduced IWRM principles into water management in the Republic. The current institutional framework for water management in the Czech Republic is specified in the 2001 Water Act. The jurisdiction in shared between the Ministry of Agriculture, Ministry of Environment, Ministry of Health, Ministry of Transport and Ministry of Defence. The Ministry of Agriculture is the central authority for regulating the use of water. Its jurisdiction covers the main watercourses as well as small watercourses (managed by the Czech Forests and Agricultural Water Management Administration) and groundwaters in the Czech Republic. Since 2003 there has been a National Committee for Water Management Planning supported by regional committees at river basin level comprising representatives of ministries, regional authorities, relevant institutions, NGOs etc. The Ministry of the Environment is responsible for water protection, including protection of the quantity and quality of surface and groundwater, flood protection, the protection of water sources and of natural water accumulation areas68. The Ministry of Health is responsible (in cooperation with the Ministry of Environment) for bathing water. The Ministry of Transport is responsible for navigation, and the Ministry of Defence exercises authority in territory administered by the Czech Army. Operational administration and management of surface water and groundwater is based on eight natural hydrological basins and hydrogeological units and is provided by five River Basin Administrations - the Elbe River Board, the Vltava River Board, the Oder River Board, the Ohre River Board and the Morava River Board which report to the Ministry of Agriculture. There are also
68

These are areas set aside for possible water reservoirs, dry polders, etc. Although they may never be used for water accumulation, they are not able to be used for other purposes.

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International Commissions for the Protection of the Elbe, Oder and Danube Rivers which are responsible for multilateral international co-operation, as well as national commissions established by the Ministry of Environment for co-operation and managing trans-boundary watercourses. Under the 2004 Strategy for Water Management, the main principles of water management are69:

improvement of water resources management and water management infrastructure, including implementation of relevant EU directives, leading to effective and sustainable water use and reduction of detrimental impacts on the status of aquatic ecosystems ensuring the provision of water and wastewater treatment services without detrimental effects on the environment and for socially tolerable prices protection from impacts of extreme hydrological events floods and droughts enhancing performance of water management institutions (including research and development, international cooperation and coordination and optimization of water services)

These principles apply to all national authorities involved in water management (i.e. River Boards, water authorities, etc.). The Strategy includes IWRM principles. The five River Boards in cooperation with the regional authorities are preparing River Basin Management Plans (RBMP) for the eight river basins. At the same time a Plan of Main River Basins was prepared by the Ministry of Agriculture in cooperation with the Ministry of Environment, other central water administrative authorities and regional authorities in 2006 for the three main river basins, i.e. the Elbe, Morava and Odra river basins. The latter Plan will set the national strategy for water sector and planning at River Basins level. It specifies framework objectives for surface water and groundwater management, for the protection of surface water and groundwater and aquatic ecosystems, for sustainable use of these waters, and for protection against the adverse effects of these waters and for catchment. These framework objectives will then be adopted and made specific in each of the Basin RBMPs. Once endorsed, the Plan of Main River Basins of the Czech Republic, together with the RBMPs, will replace the 1975 Water Management Master Plan. The principles and objectives of protection of water as a natural resource are stated in the State Environmental Policy70. SEA is under the Environmental Impact Assessment Act of 2004. The new procedural requirements for SEA (introduced through amendments in 2004) in this Act are more extensive and detailed than either those contained in the previous EIA Act of 1992, and transcend the requirements of the EU Directive 2001/42/EC. Under the 20041 Act, SEA is required for policies and strategies, as well as for plans and programmes (as required under Article 3 of the EU Directive), and is obligatory on the national and
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Ministry of Agriculture, 2004. The Strategy for Water Management Policy of the Ministry of Agriculture from the period from 2004 till 2010. Ministry of Agriculture, Prague, Czech Republic. 70 Ministry of Environment 2004. State Environmental Policy of the Czech Republic 2004-2010. Ministry of Environment, Prague, Czech Republic.

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regional levels. Documents at the local level have to undergo a screening procedure to find out if SEA is required or not. SEAs are carried out in two phases. The proponent for an activity under the Act provides the responsible authority (the Ministry of Environment for national and regional activities) with a description of the policy, strategy, programme or plan. If the SEA is obligatory under the Act, the responsible authority determines the scope and procedures for the SEA. If it is optional under the Act, a scoping and screening exercise is carried out and, if an SEA is required, then the responsible authority issues the scope and procedures. This first phase is termed the fact-finding procedure. In the second phase, the SEA report is prepared in accordance with the Act and the scope and procedures. The proposal, together with the SEA report, is subject to a public hearing and review by the relevant authorities, including those responsible for environment and health. Based on the SEA report and the consultation process, the supervising authority issues the final SEA statement. This specifies if the respective concepts can or cannot be approved from the environmental point of view and includes conditions for implementation. The statement is required for final approval of the activity by the responsible authority although that authority does not have to accept all recommendations in the statement. However, the approving responsible authority has to publicly explain how the requirements in the SEA statement have been taken into account and, if some have not been accepted, reasons why they have not been accepted. The SEA of the Plan of Main River Basins SEAs were required for both the River Basin Management Plans and the Plan for Main Rivers. The Ministry of Environments fact-finding statement specified the following scope for the SEA:

the links between the Plan and the relevant national strategic documents the effects of the Plan on species and habitat, landscape protection, and public health especially for proposed dams, measures for the flood protection etc. the contribution of the Plan to the revitalization of the landscape, protection against the soil erosion, and retention of landscape values. the likely impacts of the Plan on water quality the extent to which the Plan supports the effective use of the water resources the likely impacts of the Plan on non-renewable natural resources.

The SEA for the Plan for Main Rivers Basins commenced in April 2005, after the Plan preparation had commenced. The SEA study was treated as an independent exercise and did not influence the Plan preparation, although there were discussions between the leader of the SEA team and the planning team. The SEA was submitted to the Ministry of Environment in September 2005. Impacts of the measures proposed by the Plan were scored using a simple 3-part system positive impact, no impact, negative impact. These assessments, together with measures to mitigate them or compensate for impacts, indicators of impacts, and projects that could be subjected to EIAs were included in the SEA report. The Plan together with the SEA was submitted to the

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Ministry of Environment in September 2006. The Ministry adopted all conditions proposed by the SEA report:

To locate waste water treatment facilities away from flood risks and ensure their linkage to regional waste management plans. To minimize effects on the ecological characteristics of the water streams and water related ecosystems when implementing technical measures for flood protection and for the accumulation of the surface waters. To prepare the regulation on the use and application of sediments from waste water treatment facilities. To respect the conditions given by the SEA for the particular measures during the Plan implementation. To publish the settlement of all comments received during the Plan preparation and the SEA on the web page of the Ministry of Agriculture.

With its concurrent development with the Plan, this SEA is an example of a semiintegrated, impact-centered SEA carried out at national strategy level71. Instrumental Controls The SEA was initiated because of legislative (procedural) requirements in the Environmental Impact Assessment Act. That, in turn, was largely driven by requirements in the EU Directive 2001/42/EC. Its very unlikely that the SEA for the Plan would have been initiated if there had not been this explicit requirement in the legislation. The Ministry of Agriculture (as the proponent of the Plan) believed that the SEA was not necessary since the Ministry of Environment was part of the planning team and the 2001 Water Act already required public participation in the Plan. The Ministry of Environment has oversight of the SEA process and provides final advice to the Ministry of Agriculture based on the SEA report and public comment. However, they are more focused on carrying out procedural obligations than objectively assessing the content and quality of the SEA. Thus, the Ministry of Environment provides the evaluative control over the SEA although there is no independent assessment of the quality of the SEA. At the same time, the Ministry of Environment was involved in the preparation of the Plan and believed that conflicts could be solved directly during the preparation of the Plan. This dual role of the Ministry reduced its ability to act as an independent evaluator of the SEA. Public interest was focused on the Plan itself rather than on the SEA and so the SEA was not promoted through public drivers. It is too early to comment on the extent to which the recommendations in the SEA will be carried out as the Plan is implemented but, given the paucity of drivers for the initiation of the SEA, there is a strong possibility that the recommendations will be adopted in a minimal way. Process Competence
71

Although termed a Plan, the instrument is like a policy or strategy document in establishing the highlevel national direction for the three main River Basin Management Plans.

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Accountability. Although the lead Ministry for the Plan was clearly the Ministry of Agriculture, there was less clarity about the role of the Ministry of Environment. It was both a partner in the production of the Plan and was responsible for the SEA which contained recommendations on the implementation of the Plan. The SEA was developed by a 5-person team led by experts from the Czech Agriculture University (Faculty of Forestry and Environment, Laboratory of Landscape Ecology) and included external experts. The study was carried out professionally but it was not subjected to independent peer review. The SEA study clearly identified and documented its examination of potential impacts from the Plan and made this information available to the Ministry of Environment and the general public. As required under the legislation, the Ministry published the recommendations of the SEA and its acceptance of them. Participative. The Plan and the SEA met the formal participative requirements. The Water Act required public consultation for the draft Plan, so the SEA legislative requirement for consultation partially duplicated this requirement. Drafts of the Plan were published on the web page of the Ministry of Agriculture and comments were sought. The draft Plan was presented to meetings of the National Committee for Water Management Planning during Plan preparation, and occasionally at regional level but only as additional information rather than for debate. The Ministry of Environment published a notification of the SEA in the SEA Information System, seeking comments from the public and relevant authorities and public hearings were organized to receive comments on the final SEA. Numerous comments were received from regions, municipalities, and general public largely as a result of initiatives from interested parties in publicizing the availability of the draft plan for comment. The Ministrys formal compliance with the legislation did not elicit much public response. All comments received were published on the web page of the Ministry of Agriculture as required in the SEA recommendations. Access to the internet is growing rapidly in the Czech Republic and this would ensure that regional and local authorities had access to the SEA report if they thought to check the Ministry site. In spite of these legislatively required steps, there was no clear strategy for public participation in the SEA. The issue was not addressed in the fact-finding statement, the SEA report or the final SEA statement. The SEA process could have used the existing network, consisting of a national committee for planning and river basin committees in order to facilitate public involvement in river basin planning, but did not do so. The SEA could also have used (at least partly) the strategies for public involvement or operational plans for public participation endorsed in all river basins in 2006. Some parts of the SEA report are difficult to understand, and their purpose is not clearly explained. The nontechnical summary in the SEA report released to the public includes only a brief description of the process and provides neither a summary of the significant environmental effects of the plan nor instructions on how to comment on the plan. The most contentious public issue was the list of 205 areas proposed in the Plan as reserves for the accumulation of the surface waters. The affected municipalities and NGOs expressed their opposition to this list and mounted a campaign to have it removed from the Plan. After much public discussion and negotiations with the Ministry of Agriculture, the list was removed from the Plan. However, neither the planners nor the SEA team

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approached the affected municipalities to explain the consequences from the expected declaration of these areas. Iterative. The SEA was commenced after the Plan preparation stage had commenced. It was potentially able to influence the Plan preparation through ongoing discussions between the SEA leader and the Plan preparation team. However, there were no significant changes to the Plan as a result of this interaction largely because the SEA did not identify any environmental risks or likely adverse effects from the Plan. Substantive Competence Integrated. The SEA was confined to environmental and health aspects of the Plan and did not explore social or economic aspects. However, these aspects were integrated by the Planning team within their deliberations. The SEA is tiered to project EIAs. The RBMPs are already tiered under the Plan for Main River Basins and the SEA makes recommendations for the content of EIAs that may be emerge from the RBMPs. Sustainability-led. The SEA process itself did not clearly identified sustainability issues but some of the environmental aspects addressed by the SEA could be understood as sustainable and these led to modifications to the Plan that were more sustainable. The final SEA recommendations that were accepted by the Minister related more to future implementation issues than to the content of the Plan. Focussed. The SEA process and report assessed a wide range of potential impacts across air, water, soils, fauna and flora, forests, ecosystems, and health. The procedure for drawing up the SEA was focused on meeting the requirements of the legislation. Thus, the SEA report was delivered together with the Plan to the Ministry of Environment allowing the Minister to assess the SEA proposals and make a decision on accepting them. The SEA was completed rapidly and efficiently within 18 months (April 2005- December 2006), taking 160-170 person-days to complete. Influential. There were two pathways for the SEA to influence the Plan through interactions between the SEA team and the planning team during the plan preparation, and through recommendations by the SEA team in their report to the Ministry of Environment. The first pathway was not used the two studies were largely carried out as separate processes. The Minister accepted all recommendations in the SEA report. The major change required in these recommendations strict conditions on the areas for surface water accumulation was already complied with because of pressure from local authorities and other interest groups. Other recommendations, such as better elaboration of the Plans handling of areas for nature protection, were not significant and did not require major changes to the Plan. Nevertheless they can be influential on the RBMPs and any subsequent project developments if the recommendations are enforced. Lessons Learned The SEA of the Plan of Main River Basins was prepared in line with requirements of relevant legislation. However these requirements were interpreted in a formal and minimal sense and the SEA was not used to its full potential to improve environmental aspects of decision making.

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The SEA did not commence until after the Plan had commenced and was not used to influence the Plan development the Ministry of Agriculture posted the SEA and the settlement of comments on its website as required in the SEA statement but did not inform affected authorities or those who provided comments to the SEA that the information was now publicly available. This limitation may have been related to the lack of diverse drivers for the SEA the legislation and EU Directive were the only real drivers for the SEA, and so the Ministrys response was to treat the SEA as simply a legal requirement.

The lack of interest in actively using the SEA seems to be because no-one understood how SEA can assist in the preparation of the Plan and what benefits it can bring, not even the Ministry of Environment who were represented on the planning team. The conditions included in the final SEA statement to improve the environmental performance of the RBMPs during implementation were fully accepted by the Ministry of Environment. However, given the minimalist approach adopted to the production of the SEA, it is unclear whether these recommendations will be influential on the RBMPs and subsequent project developments. The following points are needed for better public participation:

Clearly defined strategy for public participation with definition of the target groups and the expected benefits defined in the beginning of the process. Direct distribution of information to the municipalities possibly affected by the Plan with an active attempt to engage them in the SEA. Better structure of the SEA report including a clear description of the methodology used and a brief summary of results.

Finally, there is a need to clarify the role of the competent authority for SEA. A more active engagement by the competent authority, in this case the Ministry of Environment, would contribute to a better overall SEA. This would include better specification of the scope of the assessment (not necessarily directly in the fact-finding statement, but more precise specification could be done during the planning process, when the structure and the content of the Plan was clear), and better guidelines for the assessment process. Also there is a potential conflict of interest when the Ministry which was a partner in the development of the Plan is also the authority responsible for overseeing and approving the SEA.

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Case Study 4. Nepal Medium Hydropower SEA

Background With its steep rivers and high flows fed by snowmelt from the Himalayas, and winter and monsoon rains, Nepal is ideally suited to hydropower generation. However, just over 600MW (less than 1.5%) of the economically feasible potential of about 43,000 MW has been developed. All but 92MW of this hydropower is from run-of-river schemes with daily pondage storage. There is also a small amount of thermal power generation and a further 65MW is imported from India72. Although about 40% of the population has access to electricity, this is largely concentrated in the urban areas. Only 30% of the rural population has access to electricity. Domestic demand is increasing at about 5% and is estimated to require about 1000MW peak capacity by 2012, rising to 1800MW by 202073. Given the potential and the proximity to India, the Government of Nepal has identified hydropower exports as a priority export market. Northern India is estimated to require an additional 10,000 MW in 2006 rising to 34,000MW by 201274, with the whole of India projected to require an additional 100,000MW by 2017. However, Nepal has been unable to develop its hydropower potential and tap that market. In fact, within recent years, Nepal has been a net importer of power from India, with 101 GWh exported in 2006 and 266GWh imported. Power development during the 1990s was guided by the National Hydropower Policy (1992) which had the objectives of a) exploiting water resources to supply electricity to urban and rural areas, b) enhance hydropower to meet industrial needs, c) promote private sector investment in hydropower development, and d) conserve the environment by supplying clean hydropower. The Environmental Protection Act (1997) required environmental assessment, including stakeholder consultation, for all relevant projects. While there was some foreign private sector investment in the sector under this regulatory framework, it was not sufficient to meet the needs of the growing domestic demand, let alone develop power for export. The Hydropower Policy was revised in 2001, specifically to increase private sector involvement in the sector. The revised Policy calls for the creation of a more competitive environment, including introduction of more transparent and investment friendly procedures, and proposes procedures to reduce social and environmental impacts. In the mid-1990s, the 200MW, $1082 million Arun III was the major hydropower project under development. Part of the output from Arun III was to meet domestic demand and the balance was to be exported to India. At the time, it would have more than doubled the existing generation capacity in the country. However, in spite of requiring little
72

2006 data from Karki A.K. (2006). Opening Nepal Hydropower Investment and Accessing Indian Electricity Market. Nepal Electricity Authority. 73 Gautam U. and A. Karki (2005). Nepal: Thermal energy for export. South Asian Journal 9, 74 Karki, A.K. 2006). Opening Nepal hydropower Investment and Accessing Indian Electricity Market. Presentation from managing Director, Nepal Electricity Authority, Kathmandu, Nepal.

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resettlement and having only a small reservoir for daily peak generation, the project was controversial because of potential environmental damage from associated works and the inadequate compensation offered to the displaced population. Following an adverse report from the Inspection Panel, the Bank decided to withdraw from the project and the development ceased. The controversy over Arun III fuelled a wider debate within Nepal (that included international NGOs) over priorities for investment amongst small, medium and large-scale hydropower plants. Instead of the previous reliance on a few large hydropower projects, the government decided to follow a 2-track approach. On the first track, immediate demand would be met though construction of some small, quickly constructed hydroprojects and the rehabilitation and upgrading of existing facilities. The second track involved assembling a portfolio of medium sized power plants (10-300MW range) that would meet domestic power demand in the medium term. These medium sized projects would be funded through a mixture of public and private sector funds, including through a power development funds (PDF) established by the government. Although the PDF was primarily intended for the medium sized hydropower projects it could also be used for smaller or larger projects or for export-oriented projects if necessary. In general, export oriented power developments would be dealt with separately. A Sectoral EA75, funded by the World Bank under the Power Sector Efficiency Project, was used as a major input to selecting the portfolio of medium sized power projects. Apart from adding environmental and social criteria to the traditional economic criteria for project selection, the SecEA process would also make investment in power projects more attractive for the private sector by reducing risk and increasing public acceptability of the projects. The Sectoral Environmental Assessment76 The SecEA, conducted over 1996 and 1997, described Nepal's past and expected future load growth and then undertook a generic assessment of options for grid and off-grid supply in different regions of the country. These included micro, small, medium and large hydropower plants; thermal options based on imported fuels; non-conventional options including wind power, biomass and bio-fuel generation, and solar photovoltaic systems; supply-side efficiency improvements in transmission and distribution systems; and demand-side management. The SecEA confirmed the broad consensus that medium-scale hydropower offered the best way forward to meet the expanding grid supply needs although renewable sources offered considerable potential for meeting rural demand. However, contrary to the claims of some NGOs, renewable sources would only supplement rather than substitute for medium sized
75

His Majestys Government of Nepal 1997. Power Development Project. Sectoral Environmental Assessment. Ministry of Water Resources, Kathmandu, Nepal. 76 The SEA description is taken from Case Study 2 in Stakeholder Involvement in Options Assessment: Promoting Dialogue in Meeting Water and Energy Needs. A Sourcebook. BNWPP/ESMAP. World Bank, Washington DC.

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hydro power generation. The study also recommended the phasing out of subsidies to help to reduce wasteful usage and curb demand. The broad outline of the procedure for developing the portfolio of medium sized projects for the PDF was developed jointly by the government, the Nepal Electricity Authority and the World Bank. An Inter-Agency Steering Group, comprising Ministries responsible for water, power, environment, social and regional development and roads and the National Planning Commission, was established to lead the process. The Steering Group oversaw a multi-disciplinary professional Study Team, consisting of seconded professionals from NEA, government departments, and the private sector, undertook the assessment. International consultants were responsible for the technical quality of the study teams work, to introduce new tools and methods and to provide on-the-job training. Stakeholders were involved from the outset in identifying options, specifying and weighing the evaluation criteria, and reviewing the results at each key stage. Initially, public notices were placed in the local media to explain the purpose of the exercise and schedule of activities, a website and public information office were established, and government departments, NGOs, civil society, professional and private sector organizations, and embassies and resident missions of donors active in the sector were briefed on the methodology and timetable for the SecEA. The NEAs initial list of 60 potential sites was increased to 138 through public submissions. A three-part process - screening, coarse ranking, and fine ranking - was used to narrow down these potential project sites. The screening criteria were developed with stakeholder input and published for comment before being used. They included technical, social and environmental issues. Forty four sites were selected from the screening analysis. These were published in newspapers and the screening report was sent to stakeholders for comment. A formal multi-criteria analysis was then used for coarse ranking, based on data collected from visits to the 44 sites by engineering, environmental and social units from the Study Team. Baseline surveys were held with community members including women, poor and marginalized groups. Using the formal analysis, 22 sites were selected for proceeding to fine ranking. Preliminary project layouts, rapid social appraisals and initial EIAs were conducted for these 22 sites to provide a more detailed data base. The ranking criteria were refined through workshops and meetings with civil society and professional groups. After reviewing the results of the fine ranking analysis, the Steering Group recommended a portfolio of 7 projects with 3 reserves. These were presented at a public meeting which received full media coverage. After reviewing comments received, the Steering Group recommended the final selection of 7 projects. Since the SecEA was completed, two of these have been identified for development. The World Bank has been requested to fund Kabeli A, while the Government of Nepal would fund Rahughat Khola. The SecEA also established the EIA and SIA procedures to be used for the projects funded under the PDF. These procedures are based on Nepals Environmental Protection Act and Environmental Protection Rules (1997), and meet World Bank safeguard policies. Project 123

EIAs are required to contain an Environmental Management Plan (EMP), an Acquisition Compensation Rehabilitation Plan (ACRP), a Resettlement Action Plan (RAP) and a Vulnerable Community Development Plan (VCDP) where applicable. The SecEA was completed in April 1997. The World Bank funded Nepal Power Development Project77, under which the PDF would be established to provide long-term financing to the private sector for the priority plants, was approved by the Bank Board only in April 2003 because of slippage in project effectiveness resulting from protracted discussions over the applicability of OP 7.50, changes in the scope of the project, and the appointment of the PDF administrator prior to negotiations. The SecEA is an example of an impact-centered SEA (with some institution-centered aspects) carried out independently of the sectoral development program it was assessing. Institutional Drivers The World Bank was the immediate driver for the SecEA. While it was not a mandatory requirement, a thorough, community-based analysis of development options was seen by the Bank as the appropriate way to respond to the strong national and international opposition to the development of large-scale hydropower plants in Nepal. Government Ministries, while agreeing to the SecEA, were initially sceptical of its value. However, after gaining some experience, they came to appreciate the importance of using the SecEA to lay a solid basis for future investment during the course of the study, but were disappointed when it did not lead to immediate investments by the World Bank and other lenders in the priority projects. The Planning Commission has remained a strong supporter of the process for their work in other sectors; the energy sector institutions are more reserved about its worth. Thus, the Planning Commission represents a potential professional driver for future SEAs, not necessarily in the water sector. The public pressure that led to the termination of the Arun III project acted as a strong background driver for the SecEA. Process Competence Accountable. There was a clear line of responsibility from the Study Team to the InterAgency Steering Group which put forward the recommendations for the priority hydropower development projects and EIA procedures. The actual commencement of these priority projects was less clear since it entailed the establishment of the PDF and the willingness of the private sector to take up the projects. The SecEA was carried out professionally with advice from experienced international consultants. A recognized multi-criteria screening and weighting and ranking process was used. There was considerable effort, in the wake of the Arun III controversy, to ensure it was seen to be an open and fair process. The final SecEA report does not provide full details of how sustainability was included in the assessment process, although the information made available publicly during the SecEA did provide these details.
77

World Bank 2003. Kingdon of Nepal Power Development Project. Project Appraisal Document. World Bank, Washington DC.

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Participative. The assessment process from selection of the initial set of potential sites and the selection criteria to be used to the opening of the final recommendations for public comment was handled in a highly participative manner. Travel is difficult in parts of Nepal. Nevertheless, the Study Team held consultations with the communities at all 44 sites selected for the coarse ranking. The issues and concerns raised during these consultations were taken account of in the assessment process although they are not included in the final SecEA documentation. Thus, the initial list of potential sites provided by the NEA was doubled in size because of public suggestions. Iterative. The assessment was completed in time to contribute to the formation of the PDF as one of the components of the Nepal Power Development Loan and, to a lesser extent, the new Hydropower Policy which promoted private sector investments in the energy sector. There was an excellent set of information from the assessment on the impacts of the potential development projects, such that the recommendations from the Steering Group could be modified in light of new circumstances. Overall, the SecEA provided a strong basis for future decision making. Substantive Competence Integrated. The SecEA considered the full range of options from thermal generation, to hydropower, to alternative energy sources, to demand management. The final recommendations included a mix of generation options for different purposes. The screening and ranking study to develop the portfolio of hydropower projects was designed to include environmental, social and economic considerations (and their interactions) in the selection of projects and the level of detail of these assessments increased as the list of potential project sites was narrowed. Cumulative effects were considered where there were sequences of hydropower projects on specific river systems. The study was tiered downward to the project level in that it recommended an environmental and social assessment framework for the prioritized projects. It was tiered upward in that it fulfilled the (then) Hydropower Policy by improving the basis for private sector investment in an environmentally and socially acceptable way. Sustainability-led. Unlike a traditional impact-based SEA, this study did not consider more sustainable options to an existing policy, program or plan. Instead it used environmental sustainability as a principle criterion in the progressive selection of a portfolio of preferred hydropower plants. Focused. The study was tightly focussed on the task of laying a defensible basis for future power development in Nepal and was designed to be integrated into the characteristics of the decision process. Although the cost of $1.2 million was high, the benefits were significant. The study took 14 months to complete. Influential. The SecEA definitely improved the decision making environment and contributed to the goal of attracting private sector investment. However, for other reasons (increased risks because of insurgency, delays in agreeing on the loan to establish the PDF) the SecEA did not lead to the immediate development of hydropower plants. It was also

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influential in illustrating the benefits of conducting an open consultative process and has led the Nepal Planing Commission to be a champion for consultative processes in future. Lessons Learned78 The use of an open, consultative selection process, immediately following extensive controversy over power development proposals, proved to be an excellent mechanism for building trust and laying an agreed basis for future development. In addition, the portfolio was improved because of the participation in terms of scale, regional spread, and project type. However, the time needed to conduct such an extensive consultative process was seriously underestimated. The process was originally envisaged to take 3 months it finally took 14 months. Once stakeholders became involved, the concerns they raise and their requests for more information or analysis had to be met. Sufficient time and notice was also needed for people to digest new information, for representatives to consult their constituencies, and for people to form opinions. The cost of conducting such an inventory and assessment exercise is high and may not be affordable for all countries. Using a multi-disciplinary study team had the advantage that the study team was able to respond to stakeholder needs as the process evolved and as stakeholders gained confidence that the process was not dominated by single interests. National safeguard policies can be moved upstream in the planning processes. Projects that would have had adverse environmental impacts either within conservation areas, or where flow regimes would have been affected in downstream conservation areas were eliminated at an early stage. The databases, spreadsheets, and other tools developed in the options assessment processes need to be maintained. In this case study, seconded staff from the agencies responsible for power development and licensing were included as key members of the study team for this purpose.

78

These lessons are drawn from Case Study 2 in Stakeholder Involvement in Options Assessment: Promoting Dialogue in Meeting Water and Energy Needs. A Sourcebook. BNWPP/ESMAP. World Bank, Washington DC.

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Case Study 5. SEA for WATSAL Loan, Indonesia Background79 By the late 1990s, the Suharto government had been in power in Indonesia for over 30 years. It was criticised for widespread corruption, centralized and closed decision making, lack of accountability, and pursuit of economic policies at the expense of environmental protection. It was replaced in 1998, following the severe Asian economic crisis, by a more reform minded government under President Habibie. The new government set the stage for wide ranging reforms in late 1998 by declaring a shift towards regional responsibility for managing natural resources and environmental protection. These moves towards greater government transparency, together with criticisms of the World Banks past operations in the country, fostered a new determination for more open and effective communication with civil society. At that time the water sector was facing a number of problems including growing water shortages and inter-sectoral competition, water pollution, environmental damage, flooding, downstream watershed degradation impacts and declining physical and fiscal sustainability of existing irrigation infrastructure facilities. Management was weak with centralized decision making and limited participation, lack of cost recovery and an absence of funds for operations, under-investment in infrastructure, and little coordination between waterdependent sectors. The Bank agreed to support major reforms to the water and agricultural sectors through a sector adjustment loan (SECAL)80. The reforms included establishment of a national water council or apex coordinating body, a national water resources policy together with associated legal, regulatory and administrative instruments; reform of the Jatiluhur River Basin Authority, and establishment of four new selffinancing river basin management agencies; establishment of Basin Water Coordination Committees, Provincial Water Coordination Committees and Hydrological Units in key river basins; stakeholder representation on Provincial and Basin Water Coordination Committees; an improved regulatory framework, and use of fiscal incentives to reduce pollution; establishment of a system of water use rights for water allocations, and an improved wastewater discharge permits system; establishment of frameworks that enable self-governing Water User Associations (WUAs) to operate;
79

This section is taken from unpublished draft material by P. Pillai P. and J.R. Mercier and also from Alaerts, G. 2000. Environmental Assessment for Sector Adjustment Loans: The Case of the Indonesia Water Resources Sector Adjustment Loan. Environment and Social Safeguard Note 3. East Asia Environment and Social Development Unit. Washington D. C.: The World Bank. 80 World Bank 1999. Indonesian Water Resources Sector Adjustment Loan, Presidents Report. World Bank, Washington DC.

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reform of national and local irrigation administrations; and development of a national water resources management information system and data base. The problems in the sector had been increasingly severe during the 1990s and, by the late 1990s, there was considerable willingness amongst the professional staff in the Ministry of Public Works and in the Bureau of Water Resources and Irrigation (BWRI) for these reforms. Local government had also become increasingly vocal about the need for change. The longer term objectives were to make the reforms sustainable by building professional expertise within the country, facilitating a process of reaching inter-governmental consensus and internalized "ownership" of the reforms, and improving sector management by improving its capacity to attract subsequent donor support. The loan was prepared during 1998 and early 1999. It was approved by the World Bank Board in April 1999. The loan was executed through Inter-agency Task Force on Water Sector Policy Reform, under the joint chairmanship of the National Development Planning Agency and the Public Works Ministry. The Taskforce had a broad based membership including sectoral Ministries, the two existing river basin organizations, provincial Public Works Departments, the national scientific organizations and NGOs The Sectoral Environmental Assessment The Terms of Reference for the SEA stated that the assessment would provide information on the possible outcomes of the reforms, assess the risks associated with these reforms, and outline mitigation options for any anticipated negative impacts. The SEA also looked at the Environmental Impact Assessment procedures applied for water sector interventions, and the proposed revisions to the EIA process to provide more transparent, impartial and objective evaluations. The study was prepared by the Inter-agency Task Force on Water Sector Policy Reform, so ensuring close coordination between the SEA study, the WATSAL project and the overall water sector reforms. The study was built around widespread public consultation rather than analytical work. These consultations broke with the previous history of centralized decision-making and ensured that the views of potentially affected people and other relevant interest groups at province, district and village levels were taken into account81. Three provinces (West Sumatra, West Java and South Sulawesi), were selected for the consultations. At province level, the consultations were primarily with provincial government institutions. At District level, consultations were with district representatives of provincial government organizations, social service and civil society representatives, while at the local level, the emphasis was almost entirely on village representatives. The meetings were facilitated by NGOs to promote openness and avoid bias. They, in turn, hired local facilitators within each province. Detailed descriptions of these consultations were contained in the SEA report (available in English and Indonesian) together with the responses from the Task
81

Inter-Agency Task Force on Water Sector Policy Reform (1999). Sectoral Environmental Assessment, Water Sectoral Adjustment Loan.

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Force to the issues and suggestions. A national consultation was held in Jakarta and there was a separate meeting with NGOs in each province on sustainability issues. After the SEA report was drafted, second round consultations were held with the same groups to explain the extent to which their comments had been used to get their feedback and engage in further discussion. The issues that arose during these consultations included: Lack of sectoral coordination in water resources management Rarity of enforcement of pollution regulations Lack of transparency and consistency in managing water rights, including the issuance of licenses Need for a more holistic river-basin approach to water resources management Disadvantage of weaker irrigators users compared to more powerful stakeholders and Lack of support from government agencies. These issues were responded to in the SECAL and the reforms by strengthening environmental assessments of water projects, improving stakeholder representation on basin committees, increasing support for WUAs, and ensuring that the reforms did not entrench the role already played by dominant groups at district and village levels. Institutional Controls At the time of the SECAL, the Bank did not require an environmental assessment of sector adjustment loans although the breadth of application of the EA Policy (OP4.01) was under review. However, OD8.60 stated that adjustment loans should consider their environmental implications and so, in keeping with promoting sound environmental management of its lending activities, the East Asia and Pacific region of the Bank decided to support a sectoral EA for the loan. The SEA came about primarily because of the coincidence of the Government of Indonesias interest in promoting openness and consultation and the Banks interest in trialing EA at the strategic level in anticipation of the revised EA Policy. The readiness of the Ministry staff to engage in the reforms and undertake the SEA constituted a professional driver for the SEA. Although public pressure did not trigger the SEA, there was strong support for it from the provincial governments and districts and villages. In addition, the public consultation was seen to be so successful that the task force and sector agencies decided that most key reforms would be subject to public consultation and the principle of public consultation is now a provision of the new water resources law. Process Competence Accountable. The Inter-Agency Task Force was the lead agency for the WATSAL loan preparation and the SEA. The study was designed to be balanced and fair by obtaining opinions from four levels of management using non-government facilitators to avoid an appearance of bias. The study was not independently assessed. The SEA was conducted as 129

an open process and the information gathered was made public through documents in both English and Indonesian. The responses of the Inter-Agency Taskforce to the suggestions and proposals were included in the documentation. Participative. The SEA was designed around participation by sectoral interests in different jurisdictions as well as by individuals at village level. Their issues were clearly addressed in the SEA report and a second round of consultation was held to report back to the stakeholders on the responses to these issues. These second round consultations had little benefit for the Team, but they were considered to be extremely important in demonstrating that the participants were partners in the planning process, and that their input had been taken seriously and had been influential. Iterative. The SEA was designed to feed into the preparations for the WATSAL loan and so did not delay it. In fact, the participatory work helped build support for WATSAL. The opinions collected during the SEA provided a rich source of information on peoples objectives and hopes as well as their concerns and allowed the reforms to be made more robust. The SEA was not iterative in the sense of leading to successive environmental assessments at project level, although the review of EIA procedures conducted as part of the SEA would assist with subsequent implementation. Substantive Competence Integrated. This SEA was participative and not analytical. The breadth of consultations and the impartiality provided by the NGO facilitators allowed the stakeholders to identify a diversity of issues and possible solutions. The inter-relationship between environmental protection and social and economic benefit was central to the discussions and to the design of WATSAL. Thus, it was clear to the stakeholders that flooding, health problems, and stream turbidity stemmed, at least in part, from poor environmental management. The focus of the WATSAL loan and the SEA was on water resources management and irrigation rehabilitation. The SEA was tiered upwards to policy and legislative reforms in these sectors as well as downward to project activities in catchments and irrigation districts. Sustainability-led. The modifications to the WATSAL design that resulted from the SEA contributed to the environmental sustainability and social acceptability of the investment. Focused. The SEA investigations were managed as part of the WATSAL loan preparation and so were well integrated into the decision process. The investigations were not tightly focused; instead they were intended to allow stakeholders to raise issues and concerns that needed to be considered in the preparations. The SEA was both cost and time effective. It cost $70,000 and took less than 4 months to complete and influenced an investment of $300million. Influential. The study was successful not only in refining the WATSAL preparation but in introducing consultative approaches in subsequent water sector World Bank projects in Indonesia. As a result of its success, the Task Force and sector agencies also decided that most key reforms would be subject to public consultation. However, in 2003 there was a shift back towards a more centralized, less consultative approach within the Indonesian 130

government. With the elections of 2004, the then-government was replaced and the new government largely continued the more decentralized approaches that had been initiated under the reform and WATSAL. Even though their policies were not nearly as participatory and open as before 2003, there is a clear continuity. Lessons Learned This SEA arose from a fortunate coincidence of interests in both the government and the World Bank. Managers need to be able take up these opportunities when they arise. There were a number of reasons why the SEA was successfully implemented. First, giving the WATSAL Task Force the responsibility for conducting the SEA maximized the opportunity for the SEA outputs to influence the policy reforms. Secondly, the political backing from the National Development Planning Agency and the Public Works Ministry and the representation of sectoral Ministries and agencies on the Task Force was critical to the success of the SEA process. Thirdly, it proved to be important to have the NGOs as facilitators for the consultations. There was significant distrust of national Ministries amongst some stakeholders and these independent organizations provided credibility for the discussions. Fourth, the meetings with stakeholders were focused because proposed reform material being distributed well in advance. Finally, the return visits to the stakeholder groups to explain the responses of the Task force to their issues and suggestions added to the credibility of the consultations. Reforms and sectoral changes do impact on the political economy of the sector and there are constituents who oppose the reforms. This typically leads to oscillating degrees of commitment to the reform agenda. Thus, a long-term perspective is essential to allow the nation to work through these actions and reactions. An SEA can be very helpful to understand and guide these processes.

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Case Study 6. Environmental Flow Assessment, Pioneer Catchment, Queensland Background In response to concern about the state of many of Australia's river systems, the State and federal governments of Australia (Council of Australian Governments COAG) agreed on wide-ranging reforms to Australia's rural and urban water industries in 1994. The reforms included the development of water allocation plans for all Australian catchments and major groundwater systems. These plans were to include provisions for environmental water. Each State established a different approach to meetings its obligations under the 1994 agreement for water allocation planning. Under the Water Act 2000, the State of Queensland has drawn up a State-wide water allocation plan and has adopted a 2-level approach within each of its 35 catchments - a Water Resources Plan (WRP) specifying the objectives for meeting the social, environmental and economic needs of the catchment, and a resource operations plan (ROP) providing the details how water resources will be managed from day to day to meet these objectives. These catchment plans are subsidiary legislation under the Water Act and so their provisions carry the force of law. To date Queensland has completed 17 WRPs, has released three for pubic comment and has 2 more in preparation. The Pioneer WRP was approved in December 2002 and the ROP was approved in June 2005. The Environmental Flow Assessment The Pioneer planning area (encompassing the Pioneer River, Sandy Creek and Bakers Creek) is a small area, about 2,200 km2, on the north-east coast of Queensland. Sugarcane is the predominant form of agriculture although there is also cattle grazing and urban settlement in the catchment. Mackay is the major town. Apart from an estuarine wetland, there are no significant wetlands in the area. Four endangered and three of concern ecosystems, 18 rare or threatened plant taxa, some macroinvertebrate species and two mammals (the water mouse and the Irrawaddy dolphin) occur within the study area. Eungella National Park occupies a small part of the northwest of the catchment and Mt Kinchant Conservation park covers about half of the Sandy Creek catchment in the southeast of the study area. There are two dams, Teemburra and Kinchant Dams, in the planning area and Mirani, Marian Dumbleton Rocks weirs control flows and levels within the Pioneer River. The Teemburra dam and downstream flow regulators were completed for irirgation useage about 3 years before the study was carried out and the water licences were still being taken up as the dam filled. The Pioneer River is not overallocated and the study area is not regarded as being under stress. The SEA-type study assessed the potential environmental impacts of increased water abstractions in the Pioneer catchment. Environmental water requirements were assessed by a panel of experts through an environmental conditions study82 and an environmental flows
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Technical Advisory Panel (2001). Environmental Conditions Report. Pioneer Valley Water Resource Plan. Department of Natural Resources and Mines, Brisbane, Queensland, Australia.

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report83. The former assessed the current environmental conditions, the likely conditions if all present water entitlements were utilized and the key knowledge gaps. Specialist reports were produced on geomorphology, hydrology, habitat, water quality, aquatic vegetation, riparian vegetation, macroinvertebrates, fish, other vertebrates, estuarine and marine environments. The flow regime under current and full water abstraction entitlements were modelled with the IQQM model84. The environmental flows report quantifies the associations between changes in the flow regime of the waterways and their geomorphological and ecological impacts. This environmental assessment informed the decisions about water allocation between environmental and various consumptive uses. This study was carried out under the Water Act 2000 and not the Queensland Environmental Protection Act 1994 which has very limited provision for EIAs of plans and policies. This case study illustrates an impact-centered SEA at regional level where the environmental assessment was undertaken independently of the plan, although the results of the assessment were integral to the water allocation decisions within the final WRP and ROP. Instrumental Controls A number of drivers operated. The 1994 COAG agreement and the 2000 Water Act acted as the primary procedural drivers for the water allocation plan. The production of water allocation plans throughout Australia was overseen initially by the National Competition Council and subsequently by the National Water Commission. Both independent statutory agencies had authority to recommend that the federal government withhold funds earmarked for the State governments under the COAG agreement if there was insufficient progess with the reforms. This power had been exercised in a number of cases and so this oversight acted as a realistic evaluative driver for the production of the plans. Professional drivers were also important. While professional associations were not specifically involved, water managers and aquatic scientists throughout Australia were concerned about the state of the countrys water resources and there was a widespread acceptance of the need to ensure that environmental services were maintained through adequate and timely water flows. Although not as prominent as other drivers, public opinion was probably the most powerful force behind the inclusion of environmental concerns into these catchmnet plans. In the early 1990s, there had been widespread public dismay over the degradation of the waterways in the south-east of Australia leading to the COAG agreement. Ten years earlier a federal government had been defeated largely on environmental issues and politicians were sensitive to public opinions on these issues. This public interest in environmental

83

Technical Advisory Panel (2001). Environmental Flow Report. Pioneer Valley Water Resource Plan. Department of Natural Resources and Mines, Brisbane, Queensland, Australia. 84 Technical Advisory Panel (2001). Hydrology Assumptions Report. Pioneer Valley Water Resource Plan. Department of Natural Resources and Mines, Brisbane, Queensland, Australia.

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water issues was maintained throughout the 1990s as shown by the public engagement in water allocation plans, including the Pioneer Valley WRP. Process Competence Accountability. The catchment planning exercise was led by the Queensland Department of Natural Resources and Mines (now Department of Natural Resources and Mines), involving other relevant Departments, stakeholders and interest groups. The environmental water assessment was carried out by a Technical Advisory Panel comprising eight professionals with scientific backgrounds in hydrology, geomorphology and various speciality fields within aquatic ecology. The formal environmental assessment method the Benchmark method had been published in the academic literature and was regarded within the academic community as comprising best practice. The Panels reports were publicly available on the internet and were available for comment during the public consultation phase of the planning. They were not independently peer reviewed. The Panels reports provide extensive detail on how environmental sustainability was assessed from both fieldwork, existing data and information, and from comparision with comparable rivers in other catchments. Participative. The Water Act requires that the Minister for Water forms a community reference panel, including representatives of cultural, economic and environmental interests in the proposed plan area, once the intention is announced to draw up a water resources plan. He is required to take notice of the Panels recommendations when he is considering the plan. Submissions are also sought from the general public when the intention to prepare the plan was first announced and again on release of the draft WRP and ROP. A number of information sessions and meetings were also held with various interest groups in the plan area to allow face-to-face feedback. In the case of the ROP, a total of 226 submissions were received by an independent referral panel formed by the Chief Executive of the Department. The panel considered the submissions and made recommendations to the Chief Executive on each submission. This process was transparent with a public report being produced85 detailing each submission, the recommendation of the referral panel, and the Chief Executives decision with reasons. Iterative. The environmental flows study was timed to feed into the decisions about water allocation within the Pioneer Valley. However, the way in which this information was used within the decision arena is not publicly available and it is not possible to assess whether the environmental studies provided sufficient information and to what extent the recommendations from the Environmental condition and Flows reports were utiilised. Substantive Competence Integrated. Only two scenarios were assessed in the environmental study the current water abstraction and the level of abstraction if all licences were utilized following the completion of the Teemburra Dam. While this is quite a limited selection of scenarios, it
85

Department of Natural Resources and Mines (2005). Pioneer Valley Resource Operations Plan: Community Consultation Report. Brisbane, Queensland, Australia.

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does represent the outer limits of the range of likely levels of water abstraction and so was approriate in this catchment. The assessment was restricted to assessing the environmental aspects of the flow allocation rules and did not include the social and economic aspects. However, the environmental, social and economic aspects were all considered together when the water allocation decisions were made. Sustainability-led. While this study did not attempt to identify alternative development options that were more sustainable, the Benchmarking framework is quite robust and can readily be applied to other scenarios. While the ROP specifies quite clearly the environmental water requirements such as minimum flows at different seasons of the year at strategic locations the way in which these operating rules were derived from the environemntal water study and the extent to which the environmental assets would be protected using these rules is not clear. The ROP requires ecological monitoring requirements and assessments that will be used to establish whether the ecological assets in the catchment are protected with the environmental flow regime in the WRP and ROP. This monitoring program was developed separately using a risk assessment approach86; Focussed. The Environmental Conditions Report and the Environmental Flows Report, together with the hydrological modelling reports, provide an extensive base of scientifically credible information on which to make decisions. The key sustainability question within the catchment was the need to maintain the environmental quality of the river system in the face of the gradual utilization of licences for the new Teemburra scheme. The study, in its choice of two scenarios for assessment, was focussed on this question. The study, being required under the Water Act, was customized to the overall decision-making process required under the Act. The environmental reports were a significant input to the decisionmaking process and the WRP and ROP were designed to accommodate these environmental water requirements. This was achieveable because the Pioneer River is not over-allocated and there was little contention about the need to protect the aquatic environment. Influential. The Minister is required to take notice of the study when making his final water allocation decision. In that formal respect, it was influential. However, the extent to which the environemntal objectives were maintained in the face of the development objectives is difficult to discern from the WRP and ROP. Nevertheless, there has been no protest by environmental groups about the plans, implying that the environmental objectives have been met. Lessons Learned Although the proposed set of drivers are a useful structuring device, the real world is more subtle and interacting than is implied by such a simple set of possibilities. This case study illustrates how multiple drivers operate at different time scales and different levels of visibility. Thus, the formal procedural drivers of inter-government agreements and Acts were actually driven, in turn, by public pressure and, to a lesser extent, by professional recognition that action needed to be taken on environmental water management.
86

Cottingham, P., Quinn, G., Norris, R., King, A., Chessman, B., and Marshall, C., (2004) Environmental flows monitoring and assessment framework, CRC Freshwater Ecology, Canberra, Australia

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The process by which the evironmental considerations were incorporated into the catchment-wide plan generally conformed well to the process criteria proposed by IAIA. While the substantive components of the environmental assessment were effective in their own right in influencing the water allocation, they did not clearly meet all the IAIA substantive criteria. The minimal number of development scenarios and the lack of more sustainable development options emerging from the assessment are apparent deficiencies when assessed against the IAIA criteria. Nevertheless, they were appropriate in this context and indicate that the IAIA criteria may be too restrictive. In fact, the study was well tailored to the requirements of the water allocation process and was influential in ensuring that the environmental water needs were met. This discrepency is indicative of the difficulty of applying formal criteria, still partially derived from EIA-centered approaches, to an instrument which has widened in definition in recent years.

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Case Study 7. SEA of Mhlathuze Catchment, South Africa Background With the enactment of the 1998 National Water Act (NWA 36 of 1998), South Africa abolished the concept of private water. All water was transferred to the state with the Department of Water Affairs and Forestry (DWAF) being the trustee. The provisions of the NWA divided the country into 19 Water Management Areas (WMAs), each managed by a Catchment Management Agency (CMA). Key responsibilities of the CMAs were to formulate Catchment Management Strategies (CMS) and issue water licenses. The NWA assigns basic human needs with first priority for water, followed by water to maintain environmental services. Water for these purposes is held in a water reserve; water is available for other users only after these two needs have been met. The NWA also requires that the whole water cycle is managed and so land based activities that use significant quantities of water, such as forestry and interception for farm dams, will require water licenses. These activities are called stream flow reduction activities (SFRAs). These were new concepts in South Africa (and elsewhere) and, at the time of passing the Act, it was not clear how they should be operationalized. DWAF adopted SEA as a tool for catchment management when it became clear that a wider frame of information was needed by decision-makers operating under the NWA. CMAs would need to integrate environmental, social and economic data when making decisions about all forms of water use, and SEA offered a participatory approach as required by the NWA. The Mhlathuze Catchment (4,209 km2) in the province of KwaZulu-Natal (KZN) approximately 160km north of Durban was chosen as a pilot area to gain experience with SEA for catchment planning. The catchment lies within the Usutu-Mhlathuze WMA. The Mhlathuze River rises in the west at an altitude of 1,519m and flows east 170km to the sea. The area is, by South African standards, a high rainfall catchment, with rainfall generally ranging between 800 mm to 1400 mm along the coastal belt. The catchment can be divided into three zones. Firstly, an upland region above the Goedertrouw Dam is largely undeveloped communal land with extensive tracts of forestry. Secondly, the central belt below the Goedertrouw Dam also includes extensive communal areas combined with intensive irrigated agriculture producing sugar and citrus products. Finally, a coastal belt with high rainfall comprises forestry, dry land sugar cane farming and heavy industry. All industrial development occurs in the Richards Bay/Empangeni complex linked to the deepsea port facilities at the mouth of the Mhlathuze River. The catchment is water stressed87. The total system yield for the catchment is estimated to be 270 million m3/annum, yet water allocation exceeds the system yield by 32.4 million m3/annum. Not all allocated water is utilized but there is clearly insufficient water for
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Retief, F. (undated). Quality and Effectiveness of Strategic Environmental Assessment (SEA) as a Tool for Water Management within the South African Context. School of Environmental Sciences and Development, North West University, Potchefstroom, South Africa.

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further development, particularly with the requirements of the water reserve. The system yield will need to be enlarged through importation of water, or the existing yield will need to be allocated more effectively. The Mhalthuze Catchment SEA The study88 had been initially focused on acquiring information and developing a coherent picture of available water within the catchment for licensing water use for new forestation. Its coverage was subsequently expanded to include all water uses in the catchment, including the implementation of the concepts of the human and ecological water reserves. This meant that the SEA had to consider not only all activities (not just forestry) within the catchment but also all levels of decision making, from project to policy level. The objectives of the SEA89 were (abbreviated): To piece together various legislation, policies, regulations and planning initiatives and to make sense of the large amounts of information. To play a co-ordinating role within the catchment, bringing various initiatives under one umbrella. To sketch out the water resources picture, providing everyone with a common baseline and understanding of the technical issues and creating a framework for talking about sustainable development. To offer an all-embracing approach, incorporating social, economic, and biophysical aspects within an integrated system. To add value to the information gathered by expressing a better understanding of context and importance. To remain strategic in nature. The SEA should provide the catchment with broad level answers as to how and where development trends can be allowed to take place (within ecological, social and economically sustainable boundaries. To provide the residents of the Mhlathuze Catchment with a Decision Support System (DSS). The study is an example of an impact-centered SEA, undertaken to obtain information for a subsequent plan. The output of the SEA was intended to influence the CMS for the Mhlathuze catchment prepared by the CMA as well as decisions with regard to water licensing. However, at the time of a review four years later, the CMA had not been established, and so no CMS had been formulated and the process for granting water licenses also had not started. The pilot SEA was undertaken by a team from the DWAF sub-directorate responsible for Stream Flow Reduction Allocations with funding from DFID. The study included specialist studies on water quantity, conservation and biodiversity, social characteristics, and economics.
88

DWAF (2000c) Strategic Environmental Assessment for Water Use - Mhlathuze catchment - KZN. Department of Water Affairs and Forestry. Pretoria. 89 I. Steyl, DB. Versfeld, and P.J. Nelson (2000). Strategic Environmental Assessment For Water Use. Mhlathuze Catchment KZN. Department of Water Affairs and Forestry, Pretoria, South Africa.

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Subsequently, the exercise was repeated for the Usutu-Mhlathuze WMA to see if a larger area (about 6 times the size of the Mhlathuze catchment) could also be assessed using the same procedure. This scaled-up study was not successful. Unlike the SEA of the Mhlathuze catchment, it was not possible to conceptualize issues across the disparate catchments that made up the WMA. There were also difficulties with engaging such a large and diverse community. Whereas individual communities and farmers could be contacted in the Mhlathuze catchment, this was much more difficult across the WMA. Without the focus provided by the single catchment, this larger SEA lost direction and was never completed. Institutional Controls The SEA was not required under either the NWA or the environmental legislation. Although the study was funded by a development partner, there was no instrumental driver. Instead, there was a growing recognition within the Department of Environmental Affairs and Tourism (DEAT) and DWAF that tools like SEA were required for taking the integrative approach to water management required under the NWA and the White Paper on Water Policy90. Procedural/Process Competence Accountability. There was no single clear client for the study. DWAF was responsible for carrying out the Mhlathuze catchment SEA because they wanted to explore the use of SEA for comprehensive catchment planning. Because of its exploratory nature, the objectives were vague. The change in focus of the study from just forestry to all water using activities and from just project to policy level over-elaborated its potential and eroded its clarity of purpose91. The study was also intended to provide information for the CMS which was the responsibility of the Mhlathuze CMA. The CMAs were not operational at the time and so there was little direction over this later objective. The subsequent SEA for the WMA did not receive purposeful direction from the Department and eventually ceased. The team undertaking the catchment SEA was technically proficient and the study was carried out impartially and professionally. The study team was advised by an international consultant experienced in SEA92 and the study was extensively reviewed nationally93 and internationally94 both during and on completion of the study.
90 91

Republic of South Africa (1997). White Paper on Water Policy. Pretoria, South Africa. Retief, F. (undated). Quality and Effectiveness of Strategic Environmental Assessment (SEA) as a Tool for Water Management within the South African Context. School of Environmental Sciences and Development, North West University, Potchefstroom, South Africa. 92 Peter Nelson, Bristol, UK. 93 DWAF (2000b) SEA for water use in South Africa - Formal review of process. Department of Water Affairs and Forestry. Pretoria. Weaver A. (2001) Review comments on the report: Strategic Environmental Assessment for water use in the Mhlathuze Catchment - KZN. Council for Scientific and Industrial Research. Stellenbosch 94 Lee N. (2000) Final review report: SEA for water use - Mhlathuze catchment - KZN Province. University of Manchester. Manchester.

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The catchment-scale SEA was extensively documented consisting of a main SEA report and specialist studies on the social, biophysical and economic aspects of the catchment. It gives a clear picture of the state of the environment and sustainability issues in the catchment. One of the achievements of the study was to bring the over-allocation of water to the fore. Participative. A social analysis, carried out as part of the SEA, focused on the social and political structures and dynamics within the catchment in order to understand the needs of the communities. A formal public participation process was conducted as part of the social analysis component and was considered a corner stone of the SEA. It was decided to focus the participation process on the communal rural areas because they were the largest group and presented the biggest need. A combined stakeholder workshop was also held, attended by representatives of agriculture and industry. The good attendance suggested that the participation process was relatively well received, although the non-alignment of catchment boundaries with institutional boundaries left pockets of the catchment unrepresented. Overall the catchment-scale SEA was successful in getting disparate groups of people together and interacting. Iterative. The timing of the SEA process was such that it was not able to directly influence the decision making by the CMA because CMA were not established at that stage. Even four years later, at the time of the retrospective review, the CMAs were still not functioning and so the SEA had lost currency and immediacy. The SEA was also initiated before the finalisation of the new municipalities in 2000. On the other hand, the exploratory objective of the catchment SEA was not driven by a specific deadline or instrument, and the study was able to provide important insights into the value of SEAs for regional decision making while this was a current topic within DWAF. Substantive Competence Integrated. The SEA explicitly considered the biophysical, social and economic impacts of the use and allocation of water in the Mhlathuze Catchment. These assessments were integrated for the rural communities in that the social and economic consequences of water allocations to other land uses became very clear during the analysis. One of the economic studies assessed into the volumes of water used and the value output per m3 of water used for different activities so that a consistent picture could be established for making water allocation decisions. The study was intended to inform all levels of decision making from project to policy level. The absence of institutional structures meant that it was unable to be tiered to project or plan levels, but it was able to be influential upwards to the program/institutional level of the DWAF.

Wilson E. (2001) Review report: Mhlathuze catchment SEA - unpublished report. Oxford Brookes University. Oxford.

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Sustainability-led. Based on detailed analysis of biophysical, social and economic issues, the catchment SEA suggested establishing sustainability criteria and indicators covering the effects of development on the biophysical environment, on social and cultural conditions, and on the economy. While the study did not suggest methods for weighting these criteria, did provide a consistent structure for making decisions about development. This was a significant step forward from the more ad hoc methods adopted previously. Focused. The reviews indicated that the SEA lacked focus in important respects. The data collection for the GIS was unfocussed and not strategic this was a consequence of the CMA not being formed and the absence of catchment managers who could enunciate exactly how they would use the GIS. It was also a result of the scoping component of the catchment SEA not being conducted properly and the vague objectives failed to provide focus for this part of the study. As discussed above, the Mhlathuze catchment SEA could not be customized for the decision process at catchment or municipal levels because these structures were still being established. However, it did provide a rich source of information for considerations at DWAF level this was a result of the process of the SEA and the many reviews rather than the specific output of the SEA. The SEA of the Usutu-Mhlathuze WMA also lacked direction and was never completed. The Mhlathuze catchment SEA took about 2yrs and cost about R2m. The subsequent Usutu-Mhlathuze WMA SEA took about 3 years and cost R5m. Influential. The catchment-level SEA had very little direct influence on the catchment or its process. The CMA has not been established so no catchment management strategy had been formulated and the process for granting water licenses has not started. However, the SEA did raise awareness amongst rural communities and advanced their participation in water related decision-making95. The catchment CMA was more influential within DWAF. It provided a clear picture of the state of over-allocation of water within the catchment and the relative economic and social values of changing the allocations as licenses are issued. In the absence of a CMA and its catchment management strategies, DWAF has developed Internal Strategic Perspective (ISP) for the Usutu-Mhlathuze to guide decisions. The SEA informed this ISP by providing data and was influential for the development of ISPs for other WMAs. At a wider level, there was an expectation that SEAs would be undertaken for all catchments, but this has not materialized. The proposed Directorate for SEAs was not formed and further SEAs are unlikely to be undertaken for multi-sectoral water planning at catchment or WMA level. The reasons for this are not clear, although it seems to be linked to the restructuring of the Department and loss of staff. Instead SEAs have been used for
95

DWAF (2000). SEA for Water Use in South Africa - Formal Review of Process. Department of Water Affairs and Forestry. Pretoria.

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specific issues. An SEA has been conducted into forestry development in the Eastern Cape, and DWAF is considering an SEA in the Sandveld (Western Cape West Coast) dealing with the problem of over-abstraction of groundwater with concomitant destruction of wetlands, and DEAT and DWAF are about to undertake an SEA for the de Hoop Dam on the Steelpoort/Olifants system - a dam with important implications for the Kruger National Park, Although the influence of the SEA appears to be quite limited from these specific outcomes, it has had a more subtle but powerful influence. Under the WMA, DWAF had to shift from being a water and forestry service delivery organization to one focused on coordinating and planning in a participatory manner. However, the Department did not understand IWRM and there was some resistance to the changes. The SEA did contribute to this shift towards a more holistic approach including the social and environmental aspects of water resources management and the need to promote public involvement96. All development activity is now assessed from a social, environmental and economic perspective and the SEA influenced this shift in attitude. Lessons Learned There are both positive and negative lessons from the SEA. Its biggest success was in helping bring about a change of attitude within DWAF towards multi-sectoral, stakeholder responsive, environmentally aware water management IWRM. The extent to which the SEA contributed is difficult to judge and, without understanding the internal dynamics of the Department at that time, it is difficult to discern what the underlying lessons are. Nevertheless, it illustrates the leverage that an SEA can achieve when it occurs at a time of transition in institutional structures and there is a need to move in new directions. Ironically, this shift occurred when the Department shifted away from catchment-wide SEAs to single issue SEAs. Retief, in his review, concluded that the lack of clarity on the identity of SEA, its very wide remit, uncertainty as to which decision making processes it aimed to inform and general failure to convince decision makers of the added value of SEA, saw the SEA initiative within DWAF wither. Both the catchment and the WMA SEAs illustrate the importance of having clear objectives, a focused client, and well designed plan of work. The studies were weak in these aspects and did not lead to direct outcomes. The catchment and WMA SEAs also illustrate the importance of scale. The heterogeneity of the WMA mitigated against a single SEA study, especially because communities with diverse objectives needed to be involved. The Usutu-Mhlathuze SEA also shows the importance of commitment by senior managers to ensure that these potentially difficult studies are carried through.
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Retief, F. (undated). Quality and Effectiveness of Strategic Environmental Assessment (SEA) as a Tool for Water Management within the South African Context. School of Environmental Sciences and Development, North West University, Potchefstroom, South Africa.

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Case Study 8. SEA for Water Resources Planning, Palar Basin, India Background The Palar River Basin in Tamil Nadu State in the south of India has been the site for one of the first basin-wide strategic assessments of environmental and social issues in South Asia. The basin has a population of 5.4 million people and covers 18,000 km2. Because the Palar River runs for only a few days during the North-East monsoon season, the population is highly dependent on adequate, good quality water from tanks and groundwater. The Basin faces some serious water-related environmental/social issues. Sand mining in the river bed has lowered river levels to the point where some tanks no longer collect water efficiently. The Basin is the center of Tamil Nadus leather industry with about 600 tanneries located in the mid to upper basin. The industry uses numerous chemicals including large amounts of salt, chromium sulphate, sulphuric acid and ammonia. Although the tanneries now use either Common Effluent Treatment Plants or individual effluent treatment plants, there is now a legacy of high levels of chromium and salt in the surface and groundwater. Salt levels of over 6,000 mg/l have been recorded in the groundwater in the vicinity of tanneries. This has severely impacted agricultural yields (resulting in a landmark Loss of Ecology Commission mandated compensation from the tannery industry to about 30,000 affected farmers). The area near Ranipet is also heavily polluted by tannery chrome sludge impacting nearby drinking water supplies (so much so that it has earned the dubious distinction of being ranked among the top ten most polluted sites in the world97). Nearly 300 million litres of untreated sewage is discharged daily in the basin and there are high nitrate concentrations in localized areas because of excessive fertilizer use98. In addition, there is intense competition between industry, agriculture and domestic use for access to the Basins scarce water resources. Until recently, there was no River Basin Management Authority in the Palar Basin to coordinate access to water and take a cross-sectoral approach to polluting activities. In 2000, the Government of Tamil Nadu formed the Palar Basin Development and Management Board99 with 23 members representing key departments, local districts and administrators. The Institute of Water Studies (IWS) at the Water Resources Organization (WRO) provided the technical secretariat for the Board100. The initial task of the IWS/WRO was to develop a database, undertake research and apply a water management model to the basin. However, the Board had not taken an active role in managing the Basins water resources primarily because there was no operational framework vision, objectives, processes, guidelines, communications, etc - for management. In addition, the IWS focussed on data collection rather than interpretation and analysis.
97 98

http://news.bbc.co.uk/2/hi/science/nature/6063344.stm#map Modak, P. (2003). Development of a SEA based Framework for Sustainable Management of Palar River Basin. Discussion Note for workshop. World Bank, Washington DC. 99 The Palar and Thambiraparani Basin Development and Management Boards in Tamil Nadu State were the first two broad stakeholder basin management authorities formed in South Asia with support from the World Bank funded Tamil Nadu Water Resources Consolidation Project (TN WRCP). 100 The WRO had been established and the IWS strengthened under a reorganization of water planning and management through the NaduTN WRCP.

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In 2002 the World Bank funded a short technical assistance project within the Tamil Nadu Water Resources Consolidation Project to undertake an SEA of the Palar Basin to help the IWS/WRO develop an operational framework for the Board. The SEA The first phase of the SEA consisted of: Scoping review of reports, IWS database, initial discussions about issues, field visits for familiarization; Capacity Building introduction of SEA concepts and data analysis for IWS staff; Identification of Issues brainstorming workshop with IWS and environmental staff from WRO, use of external experts in workshop to analyse issues and previous responses; Forming Vision and Guiding Principles drafted vision, principles and objectives through brainstorming workshop, consultations with institutions and stakeholders in the Basin, finalization of Vision, principles and objectives. This first phase ended with agreement among the major sectors and interest groups on the priority issues facing the Basin, a Vision for the future, and objectives and guiding principles for achieving that Vision. The Vision Statement was adopted at a multistakeholder SEA workshop at Kancheepuram in December, 2003. The process had initially focussed on building the capacity within the IWS staff and reorientating them to a more active analytical and advisory role. Once their confidence and skills had been increased, there was engagement with a wider set of stakeholders to formulate the Vision, objectives and principles. Most importantly there was a common understanding of the priority issues facing the Basin amongst the key stakeholder groups. The process was also notable for its use of the technical skills that the IWS had developed over the previous few years. Maps, data reports, remote sensing imagery and models were used to develop a common sense of understanding on which issues could be debated and objectives and principles could be developed. Finally, the inter-relationship between environmental, social and economic issues was emphasized throughout the process. The three key issues that emerged from this discussion included: 1. Water Availability (including degraded traditional tank systems, good groundwater access, and competing demands), 2. Water Quality (especially tannery-related and also increasingly from municipal and other industrial sources), and 3. Sand Mining (that accounted for around 5000 truckloads a day and reduced groundwater availability and threatened water infrastructure) An Action Plan was developed in a second phase to achieve the objectives and address these key issues. A draft Action Plan was developed through a case-study based workshop in late 2003 in Kanchipuram attended by diverse stakeholders from water dependent sectors, academia, NGOs, and government agencies. The Plan covered policies and regulations, institutions, data collection and information, equipment, and resources. This draft Action Plan was then further refined through multi-stakeholder workshops

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customized to the interests of each group, before being presented to the Palar Basin Management Board for discussion. Due to follow-up and parallel efforts, there has been progress on all the three key areas. Projects to improve surface and ground water availability have been formulated and proposed for financing under the recently approved World Bank funded $485 million Tamil Nadu Irrigated Agriculture Modernization and Water-Bodies Restoration and Management (IAMWARM) Project. Water quality concerns are being somewhat addressed both through industry upgrades and improved regulation. New sandmining regulations have been implemented throughout the state to improve the sustainability and governance implications of this activity. Many points on the Action Plan are expected to be implemented by the Palar Basin Management Board with assistance from the IAMWARM project. Based on the experience of the Palar Basin pilot, the Project will fund 63 other sub-basins within 16 Basins101 in Tamil Nadu State to form Basin or subBasin Boards and conduct SEA studies to identify issues, develop a common vision and objectives, and build capacity for cooperative management. Institutional Drivers There was no legislative or instrumental driver for this SEA since it was neither required under State law nor as a condition of the (then) Water Resources Consolidation Project. Instead it arose from discussions between Bank staff and a small group of senior managers about the need for a common framework within which the critical water resource issues within the Basin could be handled. Many state departments, central agencies and local institutions welcomed this rare opportunity to interact on in a spatial context and coordinate their programs. The Basin Board and the State WRO continued to support the study as it progressed and resulted in the Vision statement, objectives, principles and action plan. There was no pressure for the study from either the public or professional organizations although the SEA gained increasing support from all stakeholders as it progressed. The continuing and widespread support for the SEA pilot is shown by its replication to all but one of the Basins within Tamil Nadu in the follow-on Project. Procedural Competence Accountability. The IWS was the primary agency to undertake this SEA activity to support the fledgling Palar Basin Development and Management Board. The study was guided by an external consultant experienced in SEA and Integrated River Basin Management. It was carefully designed to build capacity in the IWS, build support with stakeholders, and provide a pilot for other river basins while achieving valuable outputs for the Palar basin. The structured stakeholder workshops and other interactions were carried out professionally and fairly with all attendees being able to participate and have a frank exchange of views. The outputs vision statement, objectives, principles, action plan were not suited to independent review but were widely assessed by stakeholders before being acted upon.
101

Chennai, Palar, Varahanadhi, Ponnaiyar, Paravanar, Vellar, Agniyar, Parambikulam Aliyar, Pambar Kottakarayar, Vaigai, Gundar, Vaippar, Kallar, Tamiraparani, Nambiyar, and Kodayar Basins.

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Participative. Participation was one of the pillars of this SEA. However, the participation was carefully developed with the core technical group at IWS first being skilled and informed about the process before a wider group of stakeholders was involved. The stakeholders represented the main water-related organizations from State and regional institutions, industry groups, NGOs, and academics. Their views were included in the SEA outputs the draft Action Plan was developed directly by the stakeholder groups in a major workshop in late 2003. Developing a common information base amongst the participants was a significant issue since many were only familiar with either their industry or their locality. Technical aids including GISs, maps and remote sensing were used to help develop a common understanding of the whole basin. Nevertheless, the basin proved too big an area for many stakeholders to relate to; sub-basins would have been more management regions to plan. Iterative. There was no issue in this case of ensuring that SEA outputs met the timetable of an external policy, plan or program. The SEA was conducted to develop its own Basin Action Plan. The procedure was iterative in that it successively built up the management framework for the Basin and will now be rolled out in other river basins throughout Tamil Nadu. Substantive Competence Integrated. The workshop approach to the SEA allowed all key issues to be raised and discussed before prioritizing. Similarly the responses contained in the Action Plan were synthezied out of the outputs from three theme groups which considered a wide variety of potential actions. While these options were informally assessed by the stakeholders, they were not subject to formal analysis or assessment. The inter-relationship between environmental, social and economic issues was a central component of the analysis of issues and actions. Sustainability-led. This SEA was not undertaken as an impact-centered assessment of a proposed policy, plan or program where more sustainable alternatives could be advanced. Instead environmental sustainability was intimately linked to economic and social wellbeing, and was a central concern in drafting the Vision, objectives and Action Plan. Focused. The SEA exercise provided the knowledge base for planning and decision making by the Board, which they had lacked prior to the SEA. It selected and focused on a few key environmental issues that needed to be tackled to make life more sustainable for Basin residents. The exercise was tailored to the needs of the Board and its multistakeholder composition. Given the focus and impetus it provided to the Board, the study was highly cost effective. The study was undertaken through a $20,000 Norwegian Trust Fund grant with support from Bank supervision mission budgets and Client efforts through the Tamil Nadu WRCP, and took about a year to complete.
Influential. The SEA was highly influential within and outside the Basin. Within the Basin,

the study provided the Board with a management framework and a credible Action Plan for 146

subsequent funding and implementation. The SEA study also provided a blueprint, plus some lessons from experience, for strengthening integrated river basin management and stakeholder participation in other basins/sub-basins within the State (e.g. the sub-basin of the Cooum River that flows through the state capital of Chennai). Lessons Learned The need for various institutions to develop a shared appreciation of the inter-relationship of issues and options in a basin was found to be critical (e.g. for water quality monitoring, groundwater recharge, sand mining, etc.). For an SEA, it is critical to get the ownership/demand/buy-in of key stakeholders (esp. in the counterpart government institutions) for them to play a catalytic/arbitrator role. In this way, stakeholders can all grow together as part of the process, the recommendations have a good chance of being eventually implemented, and spill-over impacts to other areas are improved. SEA is best done when not viewed as a safeguards exercise for projects but as part of ongoing institutional development and to evolve a more holistic longer-term coordinated framework for investments. Environmental, social, and economic issues are very intertwined in basins such as the Palar Basin; hence, an SEA quickly evolves into an integrated basin planning approach and one should not focus overly on the environment in an SEA. In a situation where the principles of IWRM are not understood and mainstreamed, an SEA provides a vehicle for introducing some of the concepts through another mechanism. There needs to be a merging of analytical and stakeholder participation processes to enable a useful SEA approach. Analysis requires good knowledge base and modeling. Stakeholder participation needs a structured plan for engagement with customized consultation approaches for different stakeholder groups and appropriate platforms for interaction. Approaches need to be evolved at different spatial scales. For example, in this SEA, collating views of stakeholders scattered hundreds of kilometers apart over the entire basin was unwieldy; learning from this, the next IAMWARM project will use such approaches at a sub-basin level (usually with one central town/city) to enable stakeholders to interact on a more limited set of issues and make decisions at a more appropriate level. Change management is essential for moving an institution faced with multiple severe issues from a reactive, crisis-management mode to a one characterized by shared vision and a structured approach to management. An SEA-type approach could be a useful part of such a change management process. There need to be some tangible outcomes early in the process (low hanging fruit) to retain stakeholder interest and participation. That is, there should be a focus on products and outcomes that matter to people (e.g. basin/sub-basin atlases, joint learning process to understand the viewpoints of different stakeholders, implementation of quick-wins on knowledge, coordination, and investments).

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Finally, SEA is not an event or a series of events; it is a process where as much learning occurs through the process as through the outcomes. If successful, such an approach evolves into a process in perpetuity for monitoring, coordinating, and addressing evolving issues in the basin/sub-basin.

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Case Study 9. Nam Theun II Hydropower Development, Lao Peoples Democratic Republic Background The Lao Peoples Democratic Republic has a population of 5.7 million and a per capita income in 2003 of $340 making it one of the poorest countries in South East Asia. The country needs a GDP growth rate of 7% to meet its poverty reduction targets; in recent years it has nearly achieved that target with an average growth rate of 6%. The government of the Lao PDR has a target of 90% of households to be connected to electricity by 2020. Domestic demand was forecast to be 378MW in 2005, rising to 548 MW in 2010 and 956 MW by 2020102. The country has the largest hydropower potential in the region with only a small percentage of this potential developed at present. In addition the country has significant undeveloped coal resources. Hydropower and minerals have been two of the countrys major growth drivers, with sales of power to neighboring countries accounting for 30% of foreign earnings in 2003. Export demand is difficult to forecast, but export-oriented hydropower plants are expected to provide 1250MW by 2010 and 2796MW by 2020. Lao PDR now has bilateral power trade MOUs with Thailand (3,200 MW) and Vietnam (1500 MW). The country has an extensive portfolio of hydropower projects under study or under preparation, of which Nam Theun II (NT2) is the largest. This project, due for completion in 2010, will result in an increase in generating capacity of 1070 MW, of which 995MW will be exported to Thailand and 75MW will be used for domestic consumption. The project will consist of a dam creating a 450km2 reservoir on the Nam Theun River on the Nakai Plateau, a tunnel to carry water to the generating station below the plateau, a channel to discharge the water into the Xe Bang Fai River, and associated transmission works103. The government of Lao PDR has gradually improved its environmental and social protection legislation and regulations with assistance from the World Bank and the Asian Development Bank104. However, the implementation of these regulations is limited by the capacities of staff in the Ministry of Industry and Handicrafts and the Department of Environment under the Science, Technology and Environment Agency. Earlier dams, including the Nam Hinborn dam further downstream on the Nam Theun River, have had harmful social and environmental outcomes and it was recognized by the government of Lao PDR that the NT2 project needed to pay greater attention to minimizing environmental and social costs and compensating affected people. The project has been subjected to widespread international scrutiny and criticism and so the decision to
102

Norplan (2004). Lao PDR Hydropower Strategic Impact Assessment. Final Report. Prepared for Lao PDR Ministry of Industry and Handicrafts and the World Bank. Norplan, Oslo, Norway. 103 World Bank 2005. Nam Theun II Project Appraisal Document. World Bank Washington DC. 104 Norplan (2004). Lao PDR Hydropower Strategic Impact Assessment. Final Report. Prepared for Lao PDR Ministry of Industry and Handicrafts and the World Bank. Norplan, Oslo, Norway.

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proceed with the project has considerable symbolic importance for the Lao PDR government, demonstrating the governments openness to private sector investment, ability to handle complex environmental and social issues and make difficult tradeoffs, and willingness to engage in participatory decision making. The environmental and social issues arising from NT2 include resettlement of residents, restoration of their livelihoods, wildlife management programs on the Nakai Plateau, protection of the Nam Theun watershed, and mitigation of downstream impacts on Xe Bang Fai and Nam Theun rivers from the interbasin water transfer105. There have been numerous studies and extensive consultation with affected stakeholders, starting in the mid1990s and intensifying in 2004 and 2005. These have led to modifications to the project design to minimize the impacts of the development, including establishing operating rules for downstream river flows that help maintain the environmental health and social use of the rivers. The Cumulative and Strategic Impact Assessments The EIA studies included a cumulative impact assessment (CIA) for proposed dams in the NT2 region - the Mekong Basin, Nam Kading, Xe Bangfai and Hinboun basins so that potential environmental and social issues could be uncovered and assessed in advance106. This was primarily a desk study by a team of international experts with diverse social and environmental specialist skills, although an initial workshop was held with government Ministry staff and NGOs. The team assessed regional impacts from the NT2 development, including changes in water quality and flow along the Nam Theun/Nam Kading, the Xe Bangfai basins and parts of the Greater Mekong River; regional health issues and health service; improved infrastructure including roads, electrification and water supply; threats to the Nakai-Nam Theun National Biodiversity Conservation Area caused by improved access and population increase in the surrounding are; and the institutional capacity to handle these issues. They also reviewed the potential impacts of planned developments in non-power sectors (transport, irrigation, water supply/sanitation, forestry, fisheries, mining, health, education, conservation, poverty alleviation and protection of minority groups) in both Laos PDR and regional countries. The study summarized these potential cumulative impacts at 5 year and 20 year horizons over five regions in the vicinity of the NT2 project. For example, the study assessed the cumulative downstream changes in the Mekong River Basin from NT2 as well as other potential developments in the Basin. It recommended a number of institutional and management improvements and capacity building activities to improve Lao PDRs ability to deal with these cumulative issues.

105

Not all environmental issues were treated to the same extent. Thus, flows for environmental benefits below the dam were based on a predetermined flow amount rather than an a priori environmental flow assessment. 106 Norplan (2004). Cumulative Impact Analysis and Nam Theun 2 Contributions. Final Report. October 2004.

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In addition to the CIA, a Strategic Impact Assessment (SIA) was carried out as part of the environmental assessment for the NT2 project. This assessed the sector-wide implications, including environmental and social impacts, from 22 planned hydropower developments within Lao PDR over a 20 year period to 2022. The study resulted in recommendations for strategic improvement of environmental and social management in order to reduce impacts and manage the sector in an environmentally and socially sustainable manner. The study relied on an earlier study107 of the potential impacts of these planned developments to provide some generalized qualitative assessments of environmental and social impacts from the suite of developments. It also provided a brief qualitative consideration of alternative sources of energy and alternative programs for developing the countrys hydropower potential. Finally the study provides a generic discussion of waterrelated and land-related environmental impacts and provides some general suggestions on improvements to the regulatory and administrative environment and for improved capacity through training. None of the recommendations are specifically tied to the cumulative effect of the program of hydropower projects. These SEA studies are examples of impact-centered and institution-centred SEAs carried out independently of the project and are unusual in that they are part of the environmental assessment for a specific project development. Instrumental Controls Both SEA studies were undertaken as part of the extensive environmental and social assessment for the NT2 project development required by the World Bank and other development partners an instrumental driver. The level of international scrutiny that the project was subject to acted, in turn, as a powerful driver for the government of Lao PDR, the World Bank and other lenders to undertake world leading environmental assessment, including these strategic assessments. These public drivers differ from those in other projects because they came from international NGOs rather than from the stakeholders directly affected by the project. While the Lao PDR environmental requirements have been progressively strengthened over the last decade, they do not specifically require these strategic assessments to be carried out for individual project developments. Nevertheless, the government of Lao PDR was keen to demonstrate its environmental and social credentials and agreed to these additional assessments a form of professional driver. The trust that had developed between the government and the multi-lateral financing agencies over the years of preparation was central to the governments persistence in undertaking these extensive environmental and social assessments. Process Competence Accountability. The clients for these SEA studies are clear. The Social and Environmental Management Division of the Department of Electricity in the Ministry of Industry and Handicrafts has immediate responsibility for assessing the environmental and social
107

Worley International and Lahmeyer International (2000). Hydropower Development Strategy for Lao PDR. See Project Catalogue annex to the study.

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impacts of power development projects, although the Department of Environment has overall responsibility for environmental safeguards. Both studies were conducted fairly and professionally although the CIA study is notably more rigorous, balanced and detailed than the SIA study. The information on sustainability issues is obtained from a diversity of sources in the CIA study although the SIA study relied on fewer sources - both are adequately documented. Neither study was subject to independent peer group assessment, although both had to satisfy the standards of external funders, the ADB and the World Bank. Participative. Both reports were essentially desk studies with neither engaging in extensive stakeholder discussions. The CIA study sought information from Lao PDR Ministries and NGOs through an inception workshop; there is no information provided on the extent to which the SIA study involved interest groups. There was already an extensive stakeholder engagement program underway as part of the EIA and it was appropriate to confine these studies to desk assessments (or at least confine the interactions to government agencies) because of their detachment from current issues. However, the CIA, which considered the development paths of regional countries, did not appear to have held discussions with representatives of these governments. Iterative. Being published in 2004, both studies were available in time to be included in the decisions on the design of NT2 project and the decision by the development partners to proceed with funding. While the CIA study does provide sufficient detail to be able to guide future power development strategies, the SIA study is too generalized to provide assistance. Substantive Competence Integrated. While both studies are strategic in that they considered the social and environmental implications of hydropower development beyond just the NT2 project, only the CIA study included other sectoral developments within and outside Lao PDR. Both incorporated sectoral development policies and strategies, particularly the CIA study, into their recommendations. The SIA study was clearly tiered to project level decisions about hydropower options and both recommended improvements in legislative and institutional structures including capacity for environmental management. Focussed. The CIA study provides sufficient information to give a strategic context for integrating potential social and environmental issues into decisions on hydropower development over the next 20 years. On the other hand, the information base for the SIA study is relatively weak and its recommendations are generic and do not emerge from the information collected. Both studies were commissioned as part of the larger environmental and social assessment that accompanied NT2 and so are necessarily customized to the decision making process. Influential. Neither study was likely to have been influential for the purpose it was commissioned assisting in environmental and social assessment of the NT2 power development project, although the CIA study provided both government and development partners with the context for their subsequent decision to approve the project. However,

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both studies do provide valuable information for future program decisions by setting the scene for cumulative and transboundary environmental and social impacts as Lao PDRs hydropower development program proceeds. Lessons Learned These examples of SEAs are unusual in that they were triggered by, and were part of, a project level EIA study rather than the other way around. The NT2 project was so far advanced and so dependent on resolution of immediate project-related environmental and social issues, that these more strategic studies were unlikely to be influential. Nevertheless, the CIA study provided reassurance that cumulative impacts were manageable and gave direction to future capacity building and institutional initiatives for handling them. The lack of detailed analysis and limited reliance on data in the SIA study limited its recommendations to generalities and consequently diminished its influence. The studies also illustrate that, although stakeholder engagement is important, the relevant stakeholders for longer-term strategic studies such as these can be confined to governments and some strategic partners such as international funding organizations and some NGOs. Local groups potentially affected by decisions yet to be taken some years hence are unlikely to engage in these strategic studies. Finally, the studies illustrate the importance of trust and good working relationships between the government and the development partners. This factor is seldom discussed or analysed but, without it, the complex and long-running environmental and social analyses, both tactical and strategic, would not have been initiated or completed to provide the strong basis on which the decision to proceed with the project was undertaken.

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Case Study 10. Transboundary Diagnostic Analysis and Strategic Action Program, Lake Victoria, East Africa Background At 68,000 km2, Lake Victoria is the second largest freshwater lake in the world, by area. However, it has a relatively small basin (compared to the lake area) of 193,000 km2. Uganda, Kenya and Tanzania are riparian to the lake while parts of Rwanda and Burundi lie within its basin. The lake originally contained one of the worlds most biodiverse stock of fish in the last 50 years over 200 species of fish have disappeared from the lake, although some species persist in surrounding wetlands and small lakes. About 30 million people live within the watershed. Nearly 3 million people and the regional economy are highly dependent on the Basins natural resources. The population within the Basin is one of the poorest in Africa. They experience numerous social and environmental stresses including widespread watershed degradation, increasing water pollution, rising prevalence of water borne diseases, increasing conflicts over access and use of natural resources, declining fisheries, loss of aquatic and terrestrial biodiversity and, more frequent and more severe droughts and floods. More recently, the rapidly declining lake levels largely due to over abstraction of water for hydropower generation at Jinga have created serious social, ecological, and economic problems and political tensions. Environmental issues in the lake include eutrophication and cyanobacterial blooms, periodic outbreaks of water hyacinth, poor water quality and health issues from effluent and industrial discharges, high turbidity from inflowing rivers, decline in fisheries, loss of aquatic biodiversity, degradation of fringing wetlands, and a decline in water levels from excessive abstractions for hydropower. Issues in the lake basin include deforestation and erosion, reductions in river flows, increases in riverine turbidity and loss of terrestrial biodiversity. Because of the magnitude of the issues and the dependence of the basin population on the natural resources, a number of donors (World Bank, EU, FAO, Sida, DANIDA, UNDP, GEF) have provided assistance to help the basin governments address these issues. The largest of these projects was the World Bank managed Lake Victoria Environmental Management Project (LVEMP) towards which the GEF contributed $29.4 million under its International Waters Focal Area. The LVEMP project had the objectives of: maximizing sustainable benefits to riparian communities by using resources within the Basin; conserving biodiversity and genetic resources for the benefit of the riparian communities; and harmonising national management programmes in order to reverse environmental degradation trends in the region. The GEF/IDA funded project ran from 1996 to 2002 (Tanzania) and 2005 (Uganda and Kenya). LVEMP was a complex project with multiple components and a complex administrative structure. It succeeded in improving the scientific knowledge base for the

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lake and its basin108, building capacity within national institutions, helping establish the Lake Victoria Fisheries Organization (LVFO), and combating an outbreak of water hyacinth during the project period. However, there was no attempt to reach an agreed position between the riparian countries on the prioritization of the issues facing the lake and basin across all sectors, or on a program of action to tackle these issues. However, there were institutional improvements in the fisheries sector. The LVFO was established, there were attempts to harmonize the fisheries legislation of the riparian countries, and data sharing was established between the countries. Apart from this, LVEMP did not improve the management structures for the lake or influence national policies towards the lake and its basin. The Lake Victoria Basin Commission (LVBC) was established under the East African Community (EAC) in July 2004. It has the objective of providing leadership in managing the lake basin and coordinating management activities by the member countries of the EAC (currently the original countries of Kenya, Uganda, Tanzania and Rwanda and the new members Rwanda and Burundi). With assistance from Sida, the EAC developed an agreed Vision and Strategy for the lake basin. Five cross-cutting policy areas were agreed within the Vision statement: Ecosystems, natural resources and Environment Production and Income Generation Living Conditions and Quality of Life Population and Demography Governance, Institutions and Policies The Transboundary Diagnostic Analysis/Strategic Action Program While this mutually agreed Vision statement helped lay the basis for cooperative management of the lake basin, it fell short of providing a prioritized list of issues to be tackled through a coordinated program of action by the basin countries. Consequently, the GEF funded the Lake Victoria Development Program (a precursor of the LVBC) to produce a regional Transboundary Diagnostic Analysis and Strategic Action Program (TDA/SAP) between 2004 and 2007 (see Box 4). The TDA and SAP were intended to provide a foundation for the formulation of the second Phase of the Lake Victoria Environmental Management Project (LVEMP II). A two stage process was used to develop the TDA/SAP. In the first stage, national TDAs were produced identifying the priority transboundary issues within Uganda, Kenya, Tanzania, Rwanda and Burundi. All relied on stakeholder interactions, field visits, literature review and data collection although the methods and depth and breadth of these information sources differed between countries. Transboundary Major Perceived Problems and Issues (MPPIs) that affected each of the countries were identified from these information sources and prioritized using different approaches in each country. A total of 21 transboundary MPPIs were identified in the national TDAs with each assigned a ranking of high, medium or low priority, based on each countrys perception.
108

Hecky R. (2003). Lake Victoria Environmental Management Project: Phase 1. Scientific Stocktaking Report - Progress during LVEMP1 and Challenges for the Future. World Bank, Washington DC.

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In the second stage, these national MPPI priorities were reviewed regionally. The spatial extent of impacts (both environmental and socioeconomic) of these MPPIs and their root and immediate causes were investigated through a causal-chain analysis. This included the identification of institutional, legal and policy issues (such as weak capacity and conflicting legislative requirements) that impeded the management of the MPPIs. Finally, the regional TDA proposes interventions investments, scientific investigations, institutional strengthening, legislative changes that will address these priority MPPIs. The regional SAP drew upon further stakeholder consultations, the national and regional TDAs and other material to identify 18 Key transboundary Issues (KTIs). These were then prioritized, with the top five priority KTIs being (in order): 1. land, wetland and forest degradation; 2. governance, policy and institutional weaknesses; 3. fisheries, habitats and biodiversity from domestic, industrial and agricultural activities; 4. pollution, eutrophication and atmospheric deposition; and 5. water balance, water use management and climate change. The regional SAP states that there was good correspondence between the five KTIs and the MPPIs ranked by the regional TDA. The national TDAs were carried out between February and June 2006 and both the regional TDA and regional SAP were completed in March 2007. The LVEMP II project had been under preparation for some years and is due to be presented to the Board of the World Bank in February 2008. The regional TDA and SAP provide an example of an SEA that is both impact and institution-centered and that was carried out independently of the transboundary investment Program that it provided environmental and social information for. Institutional Controls The regional TDA and SAP were driven almost exclusively by the requirement of the GEF International Waters Focal Area. They were required as a condition for contributing funds to LVEMP-II (an instrumental driver). There was no legislative requirement for this analysis in the Basin countries109, apart from Tanzania where the Environmental Management Act (2004) required SEA to be undertaken of programs such as LVEMP II. However, the regulations to support the EMA have yet to be written and the SEA provisions were not yet implemented. While the GEF provided an external assessment of the quality of the TDAs and SAP there was no formal evaluative control over the studies. There was little public or professional pressure for these analyses, although there was widespread concern amongst international and national NGOs, natural resources managers, and governments about the environmental state of Lake Victoria. Once the TDA/SAP process commenced, there was considerable enthusiasm from the stakeholders for the analysis of the issues and the reports were discussed in depth.
109

Transboundary EIA guidelines under preparations by the EAC have yet to be finalized.

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Procedural competence Accountable. The LVBC, being the executing agency for the GEF grant, was the lead agency for the regional TDA and SAP. However, LVBC has a coordinating role and the lead agencies for implementing the actions in the SAP are the Ministries of the governments within the EAC. It is too early to gauge whether they have the resources or the political backing to implement this Action Program. Also, the objective of the regional TDA/SAP appeared to change as the work progressed. The GEF Project Document for the study and the TDA clearly states that the work will provide priority issues for the LVEMPII program. The SAP does not mention LVEMP-II in its justification or objectives, leading to uncertainty about the role of the SAP. The national and regional TDAs were developed professionally using extensive stakeholder input and formal analytical procedures. However, the results are uneven with some countries not identifying prominent issues Kenya does not discuss atmospheric deposition of nutrients (which is thought to be contributing a substantial proportion of the nutrient load) and Tanzania makes little mention of the drop in level of Lake Victoria (even though this has created major social, economic, ecological and political problems) and there is a lack of comparability between the national TDA issues. Nevertheless, these difficulties are reconciled in the regional TDA. However, the procedures whereby equal importance was attached to each of the five national TDAs to produce the regional TDA led to biased results. Thus, issues of considerable importance to the three riparian nations and that affected the majority of the basin population, such as the decline in the level of the lake, did not receive high priority because other issues were identified by all five basin nations. There is also confusion between the roles of the regional TDA and SAP with both producing prioritized lists of issues and actions to address the issues, although the prioritized lists are structured differently. The studies provide extensive documentation of the environmental issues in the lake basin and their implications for the long-term economic, social and environmental sustainability of the lake basin. Participative. The national and regional TDAs were developed with extensive stakeholder input using site visits, questionnaires, focus groups, and workshops although the depth and methods of consultation varied between the countries. The SAP also used an initial workshop of stakeholders to identify issues. These consultations covered a wide range of stakeholders and were very influential in establishing and prioritizing the issues. Iterative. The regional TDA and SAP were delivered late and, as a consequence, this has delayed the LVEMP II preparation program. LVEMP II preparation commenced with initial discussions on components to be funded in 2003 and was progressively refined through extended stakeholder consultations and assessments of lessons from LVEMP-I during subsequent years. LVEMP-II, with proposed components (i) Building the information base for governance and growth; (ii) Strengthening governance of transboundary natural resources; (iii) Enhancing sustainable economic growth; and (iv) Raising public awareness through education and communication, is broadly consistent with the recommendations of the SAP. However, this is the result of a convergence of numerous discussions, studies and reports on the issues facing the Lake Victoria Basin, including those that occurred during the TDA/SAP. 157

Substantive Criteria Integrated. The strategic recommendations that emerged from both the regional TDA and SAP were based primarily on stakeholder assessment, although knowledge from previous scientific investigations was drawn on by the assessment teams. Thus, the recommendations had the strength of cross-sectoral support but the weakness of being built on perceived issues rather than deep analysis. One of the strengths of this approach is that the issues and their root causes were seen as a mix of biophysical, socio-economic and institutional problems. However, the KPIs from the SAP are organized in a disjunctive manner with the second priority KPI including governance, policy and institutional weaknesses and the other KPIs dealing with biophysical issues. That is, the interrelationship between policy, institutional, social, economic and biophysical issues is not properly recognised. The regional TDA and SAP are tiered into relevant government policies insofar as they recognize the need for these policies and supporting legislation to be harmonized across the basin for some issues. However, the MPPIs under the regional TDA, and even more so the KPIs under the SAP, are generalized and do not go to sufficient detail to outline EIA requirements for infrastructure investments. Sustainability-led. Both the regional TDA and SAP develop priority actions that are intended to place the basin on a more sustainable footing. However, they were produced in parallel with the design of the LVEMP-II Program which itself had access to extensive information on actions required for sustainable development in the region. Consequently LVEMP-II is designed to promote sustainability (see above components) and its design is consistent with the TDA/SAP outcomes. Focused. Both the regional TDA and SAP assessed a wide range of potential issues before focusing on priority topics. Nevertheless, the priority issues in both documents remain pitched at a high level and would take further refinement before they could be turned into action. Their scope is broader than the components in LVEMP-II, which is more specific on the planned interventions. Perhaps because of the processes followed, there are a number of important transboundary issues that were not adequately covered in the TDAs including atmospheric nutrients (Kenya TDA), aquatic biodiversity (Rwanda TDA), reduced lake levels (Tanzania TDA) and groundwater issues generally. These issues were subsequently added in the regional TDA and SAP. The regional TDA/SAP are neither well integrated themselves nor well integrated into the decision-making process for the LVEMP-II program. Nevertheless, they do serve as prioritizing and coordinating instruments for the LVBO beyond LVEMP-II, including coordinating national sectoral programs. Although the cost ($1million) and time (project approved October 2004, completed March 2007) are high, this was a complex project with five nations, at different stages of development and skill, being required to coordinate their national priorities.

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Influential. The EAC recognize that there are shortcomings in the regional TDA and SAP and these will be followed up during the implementation of LVEMP-II. In spite of these, the regional TDA and SAP are seen as valuable by the EAC and they are likely to have an influence over the final design of the LVEMP-II program (its initial target), and they may act as an important structuring instruments for the LVBC. Lessons learned With a transboundary project such as this where there is complex procedural structure, it is important to have comparable methods and targets and indicators used in each country to identify and rank issues110. In addition, given the great disparity in sizes of the countries and the importance of the lake and basin to each countrys economy and social life, there may be a need to place greater emphasis on some countrys perceptions than others. In this case, the collation of the national TDAs into a regional TDA provided an opportunity to correct some inconsistencies and omissions between the national TDAs but that opportunity may not always be available. The study was reliant on an instrumental driver for its initiation. Being an externally required condition, this is not a strong foundation for the study recommendations to be implemented. On the other hand, there is widespread government, professional and public support for sustainable development within the Basin as manifest through mechanisms such as LVEMP-II, Nile Basin initiative projects, and other multi-lateral and bilateral development projects and the TDA and SAP provided an opportunity to structure commonly recognized issues and responses. The regional TDA and SAP were undertaken so late that they have delayed the preparation of LVEMP-II program. Nonetheless, if these recommendations are used properly, they are likely to have an impact on the design of LVEMP-II, especially since the project already has a strong sustainability focus. The two outputs from this study regional TDA and SAP are overlapping and confusing. They use different terminology, structure priorities in different ways and appear to be in competition in their attempts to identify priority issues. The SAP recognizes social, institutional and environmental issues but does not integrate them successfully. The purpose of the work also appeared to alter when the SAP was produced. SEA studies need to have clearer outputs and audiences if they are to have impact. The level of stakeholder participation across the national TDAs, and regional TDA and SAP was impressive. This level of participation is commendable but can skew the choice of issues and override the results of more analytical work. Both scientifically based analytical information and stakeholder understanding and objectives need to be balanced in order to achieve a well-founded instrument. Also equal weight was given to each of the national TDAs and SAPs even though some countries were not impacted by some of the issues. This was most noticeable in the case of the lake issues e.g. decline in lake level which have great economic and social importance to large populations but were downweighted in the regional TDA and SAP. The procedures used in such transboundary para110

Recommended indicators for GEF International Waters projects are described in Duda A. (2002). Monitoring and Evaluation Indicators for GEF International Waters Projects. Monitoring and Evaluation Working Paper 10 GEF Washington DC.

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SEAs need to be carefully considered and agreed to ensure that the recommendations represent the importance of the issues.

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Appendix E. Integration of Environment into Water Policies

No SEAs of national water policies were identified in preparing this ESW. However, the extent to which environmental concerns have been incorporated into national water policy was assessed by examining the water policies and legislation of three countries South Africa, Tanzania, and India and one State Victoria (Australia). The four policies have been written from different histories. South Africa is concerned about equity of access to water following apartheid, better use of existing resources, and consistency in water mgmt across sectors; Tanzania is concerned about development and protection of the resource; India is focused on protecting water sources for drinking and irrigation purposes; and Victoria is primarily concerned about balancing water flows for ecosystem health and consumption. Nevertheless, protecting and enhancing environmental functions that depend on water, are included in different ways and with different priorities in the four policies and their legislation. Table 4.4 provides details of the policies and legislations examined in this analysis. Table 4.4. The policies and legislation used in the analysis of environmental considerations in water management. South Africa Policy White Paper on a National Water Policy for South Africa, 1997 National Water Policy 2002 National Water Policy, 2002 White Paper: Securing Our Water Future Together, 2004. Legislation National Water Act 36 of 1998 Water Resources bill Comment

Tanzania

India Victoria (Australia)

Water Act 1989 Act No. 80/1989 Version with amendments July 2004.

The water resources legislation is expected to be passed in late 2007. Water legislation is enacted at State level The Victorian policy is developed to be consistent with Australian national water agreements of 1994 and 2004.

Recognition of Environmental Flow and Allocation Priority All four policies recognize the legitimacy of water for environmental benefit, although the justifications vary. In its National Water Policy, India recognizes that water is part of a larger ecological system that is essential for sustaining life. Victoria also recognizes this interdependence in the first principle of its White Paper The management of water will be based on an understanding that a healthy economy and society is dependent on a healthy environment. The Tanzanian NAWAPO also recognizes the relationship between 161

maintaining aquatic environments and certain economically important activities such as tourism, water supply, and hydropower. While South Africa recognizes the need to provide water for environmental benefit, it is less clear about the inter-relationship between environmental functioning and social and economic production. The policy states that environmental areas need to be protected so that they are not degraded to a point from which they cannot recover. The four countries assign different priorities to water for environmental benefit. South Africa and Tanzania assign water for the environment as the second priority after provision of basic human needs. In India, water for the environment is fourth priority after provision of water for drinking, irrigation and hydropower purposes, although these priorities can be amended regionally if necessary. Victoria does not assign an explicit priority to any water uses. Its White Paper on water management is written around the need to ensure that the health of aquatic environments is protected through provision of water and protection of catchments but the allocations of water to different sectors, including the environment, are left to the formulation of catchment plans. Comprehensiveness In its policy, Tanzania, recognizes the need to provide water to maintain ecological functioning of rivers, wetlands, estuaries and riparian zones. While the policy includes protection of groundwater quantity and quality, it does not recognize the role that groundwater plays in maintaining some ecosystems. While the Indian Water Policy does not specify the water resource components to be maintained, it does explicitly recognize the role that groundwater plays in maintaining some ecosystems. The South African White Paper places considerable emphasis on managing the whole water cycle, including rivers, lakes, wetlands, estuaries and groundwaters. Both the quality and quantity aspects of environmental flows are recognized as important for all these components of the water cycle. The Victorian White Paper includes both surface and groundwater environmental requirements. The Tanzanian and Indian policies and the South African White Paper deal with catchment protection, water quality and water flow issues that may interfere with environmental functioning. However, the levels of discussion and direction differ significantly. The South African White Paper provides extensive detail of these issues; the Tanzanian policy, while not providing as much detail, is very clear and comprehensive on the directions to be taken; the Indian policy mentions these issues but provides little direction on either catchment protection or water quality management other than the need for monitoring of point source discharges. The Victorian White Paper is strongly focused on flow management and river health, including riparian and catchment management. Although included, water quality is not dealt with extensively in the policy; it is covered in separate State Environment Protection Policies for surface water and groundwater111. The Victorian
111

EPA Victoria (2003). State Environment Protection Policy (Waters of Victoria) Our Water, Our Future! Publication 905. EPA, Melbourne, Australia. EPA Victoria (2002). State Environment Protection Policy (Groundwaters of Victoria). No. S160. EPA, Melbourne, Australia.

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White Paper is the only one of the four policies to include consideration of climate change effects on water resources. The policy states that both the environmental and consumptive water allocations will be re-established if long-term reduction in water availability occur and commits to a research program to quantify the effects of climate change on the States water resource. The Tanzanian and South African policies place considerable emphasis on cooperatively managing transboundary water resources. The latter says that, until there is an international legal system to guide the management of shared river systems, water to meet international agreements will be given a special status as a water allocation priority. In spite of sharing water resources with both upstream and downstream neighbors, the Indian water policy does not mention transboundary water management. However, it does recognize the need to manage the sharing of water between the states although it does not specify any roles or mechanisms. Victoria shares water resources with three other Australia States. The Victorian White Paper affirms the state governments commitment to work within the national water reform framework to manage these shared resources cooperatively, especially within the Murray-Darling Basin. Environmental Assessment All four policies endorse the need for environmental assessments of large scale development projects. The Tanzanian NAWAPO states that large water schemes must undertake an EIA. The South African White Paper reinforces the need for consideration of environmental impacts of any water scheme according to the principles of Integrated Environmental Management that require an assessment of the possible impacts of a proposed project and the design of measures to reduce negative and enhance positive impacts. The Victorian White Paper does not favor further project development but requires that environmental impacts should be considered if any developments are undertaken. The Indian Water Policy states that the preservation of the quality of environment and the ecological balance should be a primary consideration during the planning, development and operation of any project. The adverse impact on the environment should be minimized and should be offset by adequate compensatory measures. None of these water policies mention strategic environmental assessments. However, the Tanzanian Environmental Management Act (2004) does specify that major water projects should subjected to an SEA before specific project details are decided, and it is . It is anticipated that the new Tanzanian Water Resources bill in Tanzania will also require SEAs for integrated river and lake basin planning. Mechanisms for environmental water provision The Victorian White Paper describes a comprehensive system for providing environmental water through an Environmental Water Reserve (EWR) for both surface and groundwaters that will be held by the Crown (although administered by Catchment Management Authorities) and will have a legal status equal to consumptive water rights. The government will use various mechanisms to acquire water from current licence holders for environmental purposes where rivers and aquifers are over-allocated, including purchasing

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licences and allocations on the water market. Catchment Management Authorities be able to trade their environmental water entitlements on the water market. The South African and Tanzanian policies propose a Water Reserve that will be used to meet basic human needs and environmental needs. The environmental need will be calculated for each catchment; where the catchments are already over-allocated, then provision will be made for active intervention to protect the water resources. The Tanzanian policy is less specific about the mechanisms (methods, procedures orand bench marks) to be employed to provide environmental water although it states that water for the environment, in terms of quantity and quality, will be determined on the best scientific information available considering both the temporal and spatial water requirements to maintain the health and viability of riverine and estuary ecosystems, and associated flora and fauna. The Indian Water Policy does not provide information on the mechanisms to be employed to ensure water is allocated to the environment, although it does require that environmental considerations should be included in basin and catchment planning. South Africa has passed a new national water law to incorporate the provisions of its policy; Tanzania is finalizing its new Water Resources bill to support its policy; Victoria amended its 1998 Water Act in 2004. However, some central provisions, such as the EWR are not included in this amended Act. The Indian Water Policy is not provided with national legislative backing since water management is primarily a State responsibility. Economic Instruments and Water Conservation Financial instruments can be used to protect the environment by reducing water abstractions and wastewater discharges if there are linkages between volumes used/discharged and prices charged. Amongst the financial reforms proposed in the Victorian White paper is an environmental levy imposed on water authorities (estimated to be between 2-5% of water prices) to account for environmental impacts of water use. These funds will be used to promote sustainable management of water. A block tariff structure (i.e. progressive pricing) will be used to reward those who undertake water conservation activities. The Tanzanian policy states that water pricing and water trading will be gradually developed to promote water conservation but does not give a time frame or provide details. There is no mention of an environmental charge for water use. The South African White Paper says that consideration will be given to a resource conservation charge but that this is a complex issue where issues have yet to be understood. Similarly water trading may be introduced but there are benefits and costs that have to be better understood before a decision is made. The Indian policy does not mention environmental charges. The policies contain less information on charging for wastewater discharges. Neither the Indian nor the Tanzanian policies mention wastewater or pollution charges at all. However, the Tanzanian draft water bill does require wastewater discharge permits for urban, industrial and agricultural wastewater disposal. However, the bill leaves it up to the

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Basin Water Board issuing the permit as to whether the cost is related to the volume or quality of the discharge; i.e. whether the permit will act as an incentive to reduce pollution. The South African White Paper says that a system of economic incentives will be put in place to encourage a reduction in pollution and that these funds will be used for resource quality management and protection activities. The Victorian White Paper does mentions that sewage charges will be structured to promote water conservation but does not discuss details beyond the inclusion of sewage income as part o the calculation of the environmental levy. Environmental Representation Victorian legislation provides for environmental representatives to play a role in water management decisions. The Water Act (amended 2004) provides for a Water Trust Advisory Council which advises Minister on water resources. Its 3-5 members can be chosen from a range of backgrounds including environment, sustainability, finance, water infrastructure and community service. The State Catchment Management Council which oversees the Catchment Management Authorities (the operational authorities) consists of 10 members; currently two have an environmental background - an environmental consultant and an environmental academic and others have environmental protection experience. The draft Tanzanian Water Resources legislation states that the membership of the Water Resources Management Advisory Committee, a technical advisory committee, shall include up to nine sectoral representatives of which environment is one. Similarly, the Water Resources Management Council, can have up to nine sectoral representatives of which one can be from the environment sector. The Basin Water Boards can include up to 3 sectoral members the environment is one of the specified sectors. The Indian Water Policy does not specify the institutional structure, largely because water management is a State responsibility. Consequently, there is no indication whether there will be environmental representation on national, State or basin water management institutions. Water law is very fragmented in India112. It is largely State based where, in general, there is no provision for environmental representation on decision making institutions.

112

P. Cullet (2007). Water Law in India: Overview of Existing Framework and Proposed Reforms. Working Paper 2007-01. International Environmental Law Research Centre Geneva, Switzerland.

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