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Safeguards Diagnostic Review for South Africa

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Safeguards Diagnostic Review for South Africa Public Disclosure Authorized Safeguards Diagnostic Review for South Africa Public Disclosure Authorized Eskom Investment Support Project Public Disclosure Authorized March 11, 2010 Public Disclosure Authorized ABBREVIATIONS AND ACRONYMS AEL Atmospheric Emission License IBRD International Bank for Reconstruction APPA Atmospheric Pollution Prevention Act and Development AQA Air Quality Act IFC International Finance Corporation BAR Basic Assessment Report IP&WM Integrated Pollution and Waste BC Biodiversity and Conservation, a branch Management Policy of DEA IR Involuntary Resettlement BID Background Information Document ISDS Integrated Safeguards Data Sheet BP Bank Procedures IWULA Integrated Water Use License CEO Chief Executive Officer JSE SRI Johannesburg Stock Exchange Socially CLN Customer load network Responsible Investment (Index) CO Carbon monoxide Km Kilometer CO2 Carbon dioxide KPI Key Performance Indicators CPA Criminal Procedures Act kV Kilovolt CSIR Council for Scientific and Industrial MCWAP` Mokolo and Crocodile Water Research Augmentation Project CTF Clean Technology Fund MEA Multilateral Environmental Agreements DEA Department of Environmental Affairs MEC Member of the provincial Executive (formerly Department of Environmental Council Affairs and Tourism, DEAT) mg Milligram DEIR Draft Environmental Impact Report MW Megawatt DSR Draft Scoping Report NEMA National Environmental Management DWA Department of Water Affairs (formerly Act Department of Water Affairs and NGO Nongovernmental organization Forestry, DWAF) NH Natural Habitats EA Environmental Assessment NHRA National Heritage Resources Act EAR Environmental Assessment Report Nm3 Normal cubic meters EC Executive Committee (Eskom Holdings NOx, Nitrogen oxides Ltd) OHS Occupational Health and Safety ECA Environmental Conservation Act OHSP Occupational Health and Safety EEMP Eskom Environmental Management Management Plans Programme OP Operational Policy EHSG Environment, Health and Safety PCB Polychlorinated biphenyls Guidelines (World Bank Group) PCR Physical Cultural Resources EIA Environmental Impact Assessment PM Particulate matter EIR Environmental Impact Report PMP Provincial Management Plans EISP Eskom Investment Support Project PPAH Pollution Prevention and Abatement EMC Environmental Monitoring Committee Handbook EMF Environmental Management ppb Parts per billion Framework ROD Record of Decision EMI Environmental Management SAAQIS South African Air Quality Information Inspectorate System EMP Environmental Management Plan SANS South African National Standards EMS Environmental Management System SDR Safeguards Diagnostic Review EQP Environmental Quality and Protection, a SEA Strategic Environmental Assessment Branch of DEA SIA Social Impact Assessment Eskom Eskom Holdings, Limited SO2 Sulfur dioxide ESTA Extension of Security of Tenure Act SR Scoping Report FGD Flue gas desulfurization UCS Use of Country Systems FPM Fine particulate matter VOC Volatile organic compound GEF Global Environmental Facility WBG World Bank Group GoSA Government of South Africa WBR Waterberg Biosphere Reserve GRI Global Reporting Initiative I&APs Interested and Affected Parties ii Table of Contents EXECUTIVE SUMMARY .................................................................................................................. v I. BACKGROUND ...................................................................................................................... 1 II. PROJECT DESCRIPTION ..................................................................................................... 2 III. BASIS FOR SELECTING THE PROJECT FOR PILOTING UNDER OP 4.00 ............... 4 IV. METHODOLOGY AND PROCESS FOLLOWED IN DETERMINING EQUIVALENCE AND ACCEPTABILITY .......................................................................... 5 V. SUMMARY OF EQUIVALENCE ANALYSIS ................................................................... 7 A. Environmental Assessment (EA) ................................................................................ 8 B. Natural Habitats (NH) ............................................................................................... 10 C. Physical Cultural Resources (PCR) .......................................................................... 10 D. Involuntary Resettlement .......................................................................................... 10 E. General Conclusion of the Equivalency Analysis ................................................... 11 VI. ACCEPTABILITY ASSESSMENT ..................................................................................... 11 A. Institutional Capacity................................................................................................. 12 1. Eskom Holdings Limited (Eskom)............................................................... 12 2. The Department of Environmental Affairs (DEA) ..................................... 22 3. Department of Water Affairs ........................................................................ 25 4. South African Heritage Resource Agency ................................................... 25 B. Processes and Procedures .......................................................................................... 26 1. Environmental Governance .......................................................................... 26 2. Environmental Impact Assessment .............................................................. 27 3. Cumulative Impact Assessment ................................................................... 31 4. Strategic Environmental Assessment (SEA) and Environmental Management Frameworks (EMF) ................................................................ 32 5. Permitting ...................................................................................................... 35 6. Compliance and Enforcement ...................................................................... 36 7. Site-Specific EIA Process ............................................................................. 39 a) Medupi: EIA Process ........................................................................ 41 b) Kusile: EIA Process .......................................................................... 42 c) Overview of the EIA Process ........................................................... 45 8. DEAT Approvals and Associated Conditions ............................................. 47 a) Conditions Applicable to both Medupi and Kusile ........................ 48 b) Site-Specific ROD Conditions ......................................................... 49 c) Medupi Phase 1 Transmission Lines RODs ................................... 55 d) Post-ROD Permitting........................................................................ 56 e) Compliance and Enforcement .......................................................... 56 9. Environmental Management Plans (EMPs) ................................................ 57 a) Medupi: Construction Phase ............................................................ 57 b) Medupi: Operational Phase .............................................................. 58 C. Projected Outcomes: Environmental impacts .......................................................... 59 1. Medupi ........................................................................................................... 61 2. Kusile ............................................................................................................. 65 D. Projected Outcomes: Social Impacts ........................................................................ 67 1. Medupi ........................................................................................................... 67 2. Kusile ............................................................................................................. 67 3. Sere Wind Power Project, CSP Plant Sites, and Majuba Rail Spur Sites .. 68 E. Associated Facilities .................................................................................................. 68 1. Associated Facilities: Medupi ...................................................................... 68 F. Other Safeguards-Related Findings .......................................................................... 71 VII. SUMMARY OF GAPS AND PROPOSED GAP-FILLING MEASURES ....................... 73 Annexes Annex 1. World Bank Operational Policy 4.00 Annex 2. South African Legal Framework Applicable to the Environmental and Social Impacts of the EISP Environmental Framework Annex 3. Equivalence Matrix Annex 4. Comparison of South African Environmental Requirements for Thermal Power Plants and the World Bank Group Environmental Guidelines For Thermal Power Plants Annex 5. Summary of Stakeholder Consultations, Pretoria, December 9-10, 2009 Comments from Participants and World Bank Response References Maps Map 1. Location of EISP Components (IBRD 37164R) Map 2. Detail of Majuba Rail Spur (IBRD 37482) Map 3. Coalfields in the Medupi Area - Botswana and South Africa (IBRD 37658) iv EXECUTIVE SUMMARY 1. Policy Framework. Under Operational Policy/Bank Procedure 4.00 (OP/BP 4.00), Piloting the Use of Borrower Systems to Address Environmental and Social Safeguard Issues in Bank-Supported Projects, the Bank has had the authority since March 2005 to support pilot projects in which lending operations are prepared using the borrowing country‘s systems for environmental and social safeguards, rather than the Bank‘s corresponding operational policies and procedures. The
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