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Report of Short Term Assignment DFID Contract Number: ESD/14 Comparative Analysis of OECD/DAC Guidance and Other Internationally

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Report of Short Term Assignment DFID Contract Number: ESD/14 Comparative Analysis of OECD/DAC Guidance and Other Internationally Report of Short Term Assignment DFID Contract Number: ESD/14 Comparative analysis of OECD/DAC Guidance and other internationally important SEA regimes August 30 2006 Purpose The purpose of this briefing note is to provide a short, factual comparison of the differences and similarities among SEA approaches promoted and adopted internationally with particular reference to the implications for the donor community. Introduction In June 2006, the OECD/ DAC published the Good Practice Guidance on Applying SEA in Development Cooperation for use by its members and partner countries. This guidance now serves as a commonly agreed framework for strengthening and harmonising the use of SEA in support of international development policies, plans and programmes, as called for in the Paris Declaration on Aid Effectiveness 2005. Currently, the guidance is being pilot tested by a number of multilateral and bilateral aid agencies as part of their ongoing activities. This process is designed to assist donor agencies to come to a better understanding of the ways that the Guidance can improve SEA application across a broad scope of development assistance activities. It also is expected to identify opportunities for coordination of their SEA procedures within partner countries, helping to implement a more coherent approach consistent with the harmonisation agenda agreed by the donor community. At the same time, the Guidance calls for donor agencies to take a flexible approach to SEA, adapting processes and tools to the particular context and issues encountered. This is a difficult challenge within the harmonisation agenda but not a contradictory one, since adaptation to purpose provides a convergence point for different processes. Lessons gained on this aspect from ‘road tests’ of the Guidance should be particularly valuable for donors and their partners. On a broader level, , there are overlaps and differences between the SEA approach promoted in the Guidance and that established under other legal and policy regimes that apply to or bear upon development cooperation.. Given the Guidance is recent, this situation could be potentially confusing, especially for partners, and, at worst, it might undermine efforts to increase the effective take up of SEA. Accordingly, this briefing note reviews the main differences and similarities in the approaches to SEA and the reasons for them. It provides a comparative analysis of internationally important SEA regimes against the reference standard established by OECD/ DAC Guidance. Specific attention is given to the European SEA Directive, the UNECE SEA Protocol and the World Bank, where the use of SEA and similar diagnostic tools is relatively diversified. For ease of comparison, the salient requirements and procedures of these approaches are cross-related in a summary matrix. This information is in Annex 1. Background: Synopsis of DAC Guidance The DAC Guidance benchmarks SEA good practice as applied to development cooperation. It is intended to promote and support the SEA use and up take by donor agencies and partner countries, consistent with the fundamental shift that has taken place towards more strategic programmes of aid delivery and the use of new instruments such as direct budgetary support and policy reform. More broadly, the Guidance responds to the harmonisation and alignment agenda set out in the Paris Declaration on Aid Effectiveness (March 2005), which, inter alia, calls for the donor community ‘to develop and apply common approaches’ to SEA [emphasis added]. In this context, SEA is defined flexibly1 and understood to encompass a family of approaches. These are ranged in the Guidance along a continuum of increasing integration from the traditional emphasis on environmental mainstreaming to the emerging area of sustainability appraisal, which addresses the economic, environmental and social effects of proposed actions. Across this spectrum, many permutations of focus, procedure and application are evident, particularly in the field of development cooperation. SEA is variously institutionalised in donor agencies alongside an increasing number of other strategic processes and diagnostic tools, such as poverty and social impact analysis (PSIA) and country environmental analysis (CEA). Given this diversity, the Guidance underlines the importance of a flexible, creative approach to SEA, one that is adapted to the purposes and processes of development cooperation and adds value to decision-making. It focuses on general principles, core elements and the large kit of tools that can be used for mainstreaming the environment consistent with MDG 7 and other key priorities for aid and lending. The Guidance outlines a menu of entry points for SEA application in relation to aid and lending instruments, illustrated with case examples of good practice. Above all, it emphasises that recommended approaches should be considered on a case-by-case basis, tailored to the nature of the strategic action and reflecting the context and circumstances of the partner country. SEA Instruments used for Comparison The DAC guidance represents an important addition to the legal and policy benchmarks now used or influential in the area of development cooperation. It offers a very different approach to the prescriptive arrangements enshrined in the European Directive and UNECE Protocol, which are widely referenced internationally as minimum procedural standards and also impinge on development cooperation activity (as described below). Similarly, the Guidance differs from the SEA requirements set out in World Bank environmental and social safeguards (ESS) policy and procedure 1 As specifically defined: This Guidance…uses the term SEA to describe an analytical and participatory approach that integrates environmental considerations into policies, plans and programmes and evaluates the inter linkages with economic and social considerations. (OP/BP 4.01). The latter describes the elements and steps that are to be taken to meet Bank requirements, including a specification of the content of an environmental report. However, in encouraging their flexible application, Bank procedure converges with the approach recommended in the Guidance. Beyond the ESS framework, the approach of the Guidance has many points of correspondence with the wider scope of SEA application at the Bank, which covers development policy lending and non- lending economic and sector work, amongst other areas. The above three regimes represent the main reference points for placing the role and potential contribution of DAC guidance on SEA good practice in development cooperation in a broad, comparative perspective. A brief profile of the key features of the three regimes is given below, preparatory to focusing on their differences and similarities to the Guidance (for further analysis, see Therivel 2004, Dalal-Clayton and Sadler 2005): The European SEA Directive (2001/42/EC) came into operational force in mid-2004 and now in its implementation stage. It has the character of a framework law, comprising 15 articles and two annexes that are critical to the nature and scope of application of the Directive (which covers only plans and programmes).2 Stated objectives are to provide for a high level of protection of the environment and to contribute to the integration of environmental considerations into the preparation of plans and programmes with a view to promoting sustainable development (Art 1). The main body of the Directive is made up of the EIA-based procedural requirements that must be incorporated into the SEA processes of EU member states (through transposition into national legislation).3 Detailed guidance on implementation of the SEA Directive issued by the EC (2003) is now paralleled by comparable materials in many member states, notably in the UK where the requirements of the Directive have been folded into a new statutory process of sustainability appraisal in the case of land use plans (but not sector plans or programmes). On one level, the Directive has been at the leading edge of a trend toward greater standardisation of SEA procedure at the level of plans and programmes. Yet as UK experience suggests, it is also possible to use the Directive as a platform on which to base a more integrative approach, lying at the other end of the SEA spectrum to strictly environmental mainstreaming (described in the Guidance). As a supra-national model of SEA, the Directive is also considered to have wider international influence on process development in transitional and developing countries. This may occur as a direct response of countries with close EU associations, for example as part of economic cooperation activities or it may be transmitted less directly through EC-funded training and capacity building activities, including those undertaken by individual member states. 2 The Directive covers certain plans and programmes, essentially those which prepared for listed sectors and which set a framework for future development consent of projects subject to the EIA Directive (85/3337/EEC) and any that would require an assessment pursuant to the Habitats Directive (92/43/EEC). However, there remain a number of grey areas regarding the actions that subject to SEA. 3 EU member states were required to have brought the necessary laws or regulations before 21 July 2004. It is clear that not all did so and some still may not be in legal or operational compliance. Anecdotal information also suggests there are wide variations in SEA implementation across the EU. The SEA Directive
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