NON-TECHNICAL SUMMARY INTRODUCTION This is the Non Technical Summary of a Social Impact Assessment (SIA) for an offshore multiple well exploration drilling programme (the Project) . The programme will be conducted within the Sigguk exclusive licence 2008/10 (Sigguk Licence) off the north west coast of Greenland between June and October 2010, with a two month contingency window over November and December, in case relief well drilling is required. It is important to note that Project drilling activities may require all or only part of this period. This SIA considers issues as they relate to the exploration drilling programme in the Sigguk License area. Further revisions of the SIA, with additional data collection and stakeholder consultation, will therefore be produced for any further exploratory drilling outside of the Sigguk 2010 campaign, or for any future stages of the exploration and potential development phases of work. This SIA has been produced by Environmental Resources Management (ERM) on behalf of Capricorn Greenland Exploration-1 Ltd ( Capricorn ), a subsidiary of Cairn Energy PLC ( Cairn ). It has been undertaken in accordance with applicable Greenland legislation and standards, international guidance and the corporate policies and expectations of Cairn . SIA STANDARDS AND PERMITTING The regulatory framework for offshore oil and gas activities in Greenland is currently being revised. The Bureau of Minerals and Petroleum (BMP) is the main implementing agency for laws relating to hydrocarbon exploration, and has been consulted throughout this SIA process. SCOPE As well as the SIA, a separate Environmental Impact Assessment (EIA) has been produced for the Project by ERM on behalf of Capricorn. Physical and biological environmental factors are therefore excluded from the SIA and covered by the EIA. The geographical scope of the SIA includes the municipality of Qaasuitsup, with particular attention paid to the towns of Ilulissat and Aasiaat, where some on-shore Project facilities may be located. Where information is available, it is also included for the towns of Qeqertarsuaq, Kangaatsiaq, Uummannaq, Upernavik, and Qasigiannguit. The municipality of Qeqqata is also considered in this report, in terms of impacts to Sisimiut, from where significant quantities of Greenland-based services and materials will be sourced, and Kangerlussuaq, which will be the transit gateway for rotational workers entering and leaving Greenland. ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 i Figure 1 (below) illustrates the Project area considered as part of this SIA. Figure 1 Project-Affected Area Source: nunagis.gl (2010) PROJECT PROPONENT AND SIA PRACTITIONER Project Proponent Capricorn Greenland Exploration-1 is a subsidiary of Cairn Energy PLC based in Edinburgh, UK. Cairn is an independent, public oil and gas exploration and production company quoted on the London Stock Exchange. SIA Practitioner ERM is a leading global provider of environmental, health and safety, risk, and social consulting services, with 137 offices in 39 countries employing approximately 3,300 staff. ERM has worldwide expertise in environmental and social impact assessment for offshore oil and gas projects, including operations in Arctic waters. ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 ii ASSESSMENT METHODOLOGY Overview of the Impact Assessment Process This SIA has been undertaken following a systematic process that predicts and evaluates the probable impacts of the Project on aspects of the socio-economic environment; it identifies measures to mitigate adverse impacts, and to maximise benefits, as far as is reasonably practicable. The overall approach is shown in Figure 2. Screening and Scoping for the SIA (and EIA) has been underway throughout Project planning and has involved consultation with the Greenland Government and key stakeholders, review of legislation and international standards and examination of previous studies. Engagement with the authorities and key stakeholders, affected populations in the Project area and Non-Governmental Organisations (NGOs) has continued throughout this process, as has interaction with the Capricorn Project Team. Figure 2 Overview of IA Approach Screening Scoping Assessment Stakeholder engagement Stakeholder Predict magnitude of impacts Evaluate their significance collection and new and surveys) new collection Investigate options for mitigation Baseline studies (existing data (existing studies Baseline Reassess residual impact (as required) Management Plans/ Mitigation Register Interaction with project planning and design and planning project with Interaction Reporting and Disclosure Baseline Data Collection To provide a social baseline against which potential impacts can be assessed, the SIA provides a description of the conditions that exist in the absence of the Project. The baseline identifies and assesses all stakeholders (also called “receptors”), as well as resources identified as having the potential to be significantly affected by the proposed Project. In preparing this SIA, a range of existing information sources and existing studies have been used. A comprehensive literature review has been conducted using reports prepared by government agencies; Greenlandic and ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 iii Danish research organizations, results from previously conducted studies in Greenland, and other published sources. In order to supplement published information and data, a social baseline data gathering mission was undertaken in February 2010. Consultations undertaken as part of this mission are summarised in Table 1 below. Table 1 Summary of Stakeholder Engagement Location Stakeholders Engaged • GA, NuSuKa, SIK • Greenland Travel Companies • Greenland Training Institutions • Air Greenland • Royal Arctic Line • Local Non-Government Organizations Nuuk • Beredskabskomiteen • KANUKOKA • Fishing Associations • Ministries of Internal Affairs; Environment and Nature; Financial Issues; Infrastructure; Housing and Traffic; Fishing, Hunting and Agriculture; Health and Social Affairs; Industry and Labour; Education, Culture, Church and Science; BMP • Town administration • Port Authority • Sisimiut Airport Authority (GLV) • Chamber of Commerce • Fire and Police • Training Institutions • Municipal Administration and Offshore Group • Police station • Ilulissat GA and Chamber of Commerce • INI • Small business owners • Local tourism operators • Chamber of Commerce Aasiaat • Local unemployed residents • Local fishermen and hunters • Town administration Uummannaq • Small business owners • Citizens • Qasigiannguit Town administration • Head of Culture • Qeqertarsuaq Town administration • Small business owners ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 iv Figure 3 Public Consultation in Uummannaq (February 2010) Source: ERM 2010 Following publication this non-technical summary (NTS), as well as the summary for the EIA, the findings of the Social and Environmental Impact Assessments will be communicated and verified through a public hearing process, during which time stakeholders will have the opportunity to query and comment on the report. This is expected to take place in mid-March 2010. Assessment of Impacts The assessment describes what will happen by predicting and quantifying as far as possible the magnitude of impacts. The term ‘magnitude’ is used as shorthand to encompass all the dimensions of the predicted impact including: • the nature of the change (what is affected and how); • its size, scale or intensity; • its geographical extent and distribution; • its duration, frequency, reversibility, etc; and • where relevant, the probability of the impact occurring. Magnitude also includes any uncertainty about the occurrence or scale of the impact. An overall grading is provided to determine whether an impact is of negligible, small, medium or large magnitude. The next step in the assessment process is to explain what the magnitude of an impact means in terms of its importance to people and the environment. This is referred to as Evaluation of Significance. ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION -1 v Magnitude and sensitivity are considered in combination to evaluate whether an impact is significant and if so its degree of significance (see Figure 4). Figure 4 Evaluation of Significance Magnitude of Impact Small Medium Large Not Significant Minor Moderate Major Value/Sensitivity of Resource/Receptor Value/Sensitivity High Medium Low Mitigation and Residual Impacts Impacts from both routine and non-routine Project activities are considered, taking into consideration existing mitigation measures within Project design. Where the assessment results in significant impacts, methods for practical and affordable mitigation are identified. SOCIAL SETTING Employment and Training Employment and training of the population is considered to be a key priority by the Government of Greenland, and this was reflected in consultations with all stakeholder groups. A range of training facilities exist in the Project area, including local Piareersarfiit, targeted training programmes provided through employee and business associations, as well as highly developed facilities such as the Sisimiut Building and Construction School ( Figure 5) . At the national level, other training facilities for training opportunities include the Metalwork and Industry school (in Nuuk), the Food Service and Preparation School (in