Edition 1

Issued by: Provincial Government of the Western Cape Department of Environmental Affairs and Development Planning Utilitas Building, 1 Dorp Street Private Bag X9086 Cape Town 8000 South Africa

Departmental Project Manager: Gerhard Gerber ([email protected])

Prepared by: Martin de Wit De Wit Sustainable Options (Pty) Ltd PO Box 546 Brackenfell 7561 South Africa

Frauke Münster ERM Southern Africa (Pty) Ltd

Terence Jayiya Jaymat Enviro Solutions CC

Co-ordinated by: De Wit Sustainable Options (Pty) Ltd

Contact person: Gerhard Gerber ([email protected])

COPYRIGHT © Republic of South Africa, Provincial Government of the Western Cape, Department of Environmental Affairs and Development Planning 2006. ALL RIGHTS RESERVED.

This document is copyright under the Berne Convention. Apart from the purpose of private study, research or teaching, in terms of the Copyright Act (Act No. 98 of 1978) no part of this document may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without permission in writing from the Department of Environmental Affairs and Development Planning. Likewise, it may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published.

This guideline should be cited as: Department of Environmental Affairs and Development Planning. 2006. Provincial Guideline on Biodiversity Offsets. Republic of South Africa, Provincial Government of the Western Cape, Department of Environmental Affairs & Development Planning, Cape Town.

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Acknowledgements

Steering committee:

Name Organisation Chris Martens CapeNature Doug Jeffrey Doug Jeffrey Consultants Gerhard Gerber Department Environmental Affairs and Development Planning Mare-Liez Oosthuizen Department Environmental Affairs and Development Planning Mark Botha Botanical Society Paul Hardcastle Department Environmental Affairs and Development Planning Susie Brownlie de Villiers Brownlie Associates Tania de Waal Department Environmental Affairs and Development Planning Verna Bowie CapeNature

Stakeholders engaged in the guideline development process:

These guidelines were developed through a consultative process and have benefited from the inputs and comments provided by a wide range of individuals and organizations. Twenty-eight people attended the public workshop (sorted by name):

Name Organisation Alan Cluett Holcim South Africa Christo Marais Working for Water Don Kirkwood CapeNature Doug Jeffery Doug Jeffery Environmental Consultants Erwin Obermeyer National Treasury Frauke Münster (facilitator) ERM Southern Africa Gerhard Gerber Department Environmental Affairs and Development Planning Graham Main De Beers Hendrik van der Hoven Hendrik van der Hoven Janse Rabie Nicholas Smith & Associates Jeff Manuel Botanical Society of South Africa Kate Snaddon Freshwater Consulting Group Lisa van Aarde Planning Partners Liz Day Freshwater Consulting Group Mare-Liez Oosthuizen Department Environmental Affairs and Development Planning Mark Botha Botanical Society of South Africa Martin de Wit (facilitator) De Wit Sustainable Options Nick Helme Nick Helme Botanical Surveys Paul Hardcastle Department Environmental Affairs and Development Planning Ronelle Clarke City of Cape Town Rowena Smuts Conservation International Sam Ralston Wildlife & Environment Society SA Sharlin Hemraj National Treasury Susie Brownlie De Villiers Brownlie Associates Tania de Waal Department Environmental Affairs and Development Planning Terence Jayiya (facilitator) JAYMAT Enviro Solutions Verna Bowie CapeNature Wendy Engel CapeNature

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In addition, thirty-two people completed expert opinion surveys (sorted by name):

Name Organisation Alan Cluett Environmental Consultant Andrew Blackmore Ezemvelo KZN Wildlife Anneke de Kok Anneke de Kock Environmental Consultants Anton Wolfaardt CapeNature Brent Corcoran Maloti-Drakensberg Transfrontier Project D. Kirkwood CapeNature Danie Swanepoel Department Environmental Affairs and Development Planning Dian Grant Grant Johnston Associates J H Briers Dept Minerals and Energy John Dini Working for Wetlands (SANBI) Julie Carlisle Nature’s Valley Trust Kate Snaddon The Freshwater Consulting Group Louis de Villiers Louis de Villiers atterney, WESA Lozelle du Plessis Dept. of Agriculture Lynette Munro Environmental Evaluation Unit UCT M Sasman Ecosense CC Mark Aken Anglo Coal Mark Botha Botanical Society of SA Mark Rynhoud Geological & Environmental Services Mellisa Naiker Department Environmental Affairs and Development Planning Michael Mangnall Ninham Shand Nick Helm Nick Helm Botanical Surveys Nitasha Bijanth-Pillay Department Environmental Affairs and Development Planning Patricia M Holmes City of Cape Town Peter Croal CIDA Philip Desmont Conservation consultant Russel Wise CSIR Samantha Ralston WESSA Stephen Davey Amathemba Environmental consulting Susie Brownlie deVilliers Brownlie Associates Verna Bowie CapeNature Willem de Lange Western Cape Department of Agriculture Yvette van Wijk Garden Route Botanical Garden Trust

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Executive Summary

TO BE INSERTED IN FINAL DOCUMENT

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Contents

Acknowledgements ______i Contents______iv Executive Summary ______iii Figures ______v

1. BACKGROUND 1

2. INTRODUCTION 3 2.1 Biodiversity offsets in the Western Cape 3 2.2 What are biodiversity offsets? 4 2.3 When are biodiversity offsets considered? 5 2.4 Structure of the guideline 7

3. OFFSETS IN THE EIA PROCESS 8 3.1 General procedures 8 3.2 Pre-application planning and screening 8 3.3 Basic Assessment 9 3.4 Scoping 9 3.5 Impact assessment 9 3.5.1 Biodiversity impact specialist study 9 3.5.2 Draft EIR/EMP 10 3.5.3 Offset-design process 10 3.5.4 Final EIR/EMP 12 3.6 Decision by Authority 12 3.7 Monitor and Audit 12

4. OFFSET DESIGN PROCESS 13 4.1 Adequacy of the offset 14 4.2 Types of compensation 15 4.3 Offset design 16 4.4 Offset agreements 19 4.5 Offset management plan 19

5. LAWS, POLICIES, PLANS AND GUIDELINES TO BE CONSIDERED 20 5.1 Policies, plans and guidelines directing biodiversity offsets 20 5.2 Laws, policies, plans and guidelines influencing biodiversity offsets 22

6. ROLES AND RESPONSIBILITIES 25 6.1 General roles in a biodiversity offset system 25 6.2 Specific responsibilities in planning, project development and impact assessment 26

7. CONCLUSIONS 30

8. BIBLIOGRAPHY 30

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Cover photographs: Karin Burns, Leon van der Merwe

Figures

Figure 1: When to consider biodiversity offsets in the hierarchy of impact mitigation measures...... 5 Figure 2: Biodiversity Impact Assessment and the Offset Design Process...... 11 Figure 3: Biodiversity Offset Design Process...... 13 Figure 4: Roles in a Biodiversity Offset System ...... 25

Tables

Table I: Ratios for biodiversity offsets...... 14 Table II: Selected examples of biodiversity offsets in South Africa...... 17 Table III: Policies, plans and guidelines directing biodiversity offsets...... 21 Table IV: Selected laws, policies, plans and guidelines influencing biodiversity offsets ...... 22 Table V: Responsibilities in planning, project development and impact assessment...... 27

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1. BACKGROUND

One of the general objectives of Integrated Environmental Management (IEM) and the Environmental Impact Assessment (EIA) process is to identify, predict and evaluate the actual and potential impacts of proposed developments on the biophysical environment, on socio-economic conditions and on cultural heritage.

Additionally, options for preventing and mitigating negative impacts and alternatives are evaluated with a view to prevent and minimise negative impacts and to maximise benefits. In order to ensure that development delivers socio-economic benefits without threatening the viability of the systems upon which these services depends, the disturbance of ecosystems and loss of biological diversity must be avoided, or where they cannot be avoided, be minimised and remedied. In certain instances the need however exists to explore mechanisms to offset or compensate for unavoidable, residual impacts on biodiversity.

The concept of “biodiversity offsets” is relatively new and, even internationally, an acceptable definition and consistent approach has yet to be found. Without a consistent approach and clarity on how to make use of biodiversity offsets, either no use or inappropriate use is being made of biodiversity offsets. There is currently little understanding, clarity or agreement amongst role-players involved in development, planning and EIA processes on: ° what biodiversity offsets are ° when to consider biodiversity offsets ° the process and procedures to be followed when considering biodiversity offsets; ° the required public participation and stakeholder engagement process when considering offsets; ° how to incorporate biodiversity offsets into the EIA decision-making process; ° how to secure the offsets being proposed/considered; ° how to monitor and manage offsets made;

The purpose of this guideline is to provide authorities, project proponents, conservation planners, town and regional planners, EIA practitioners, specialists, NGOs and other stakeholders with guidance on the above questions. This may facilitate the discussion between these different role-players in the design and implementation of biodiversity offsets. As a biodiversity offset is a relatively new concept, with few examples of good practice to draw on, there remain many unanswered questions which can only be addressed over time through ongoing learning from pilot offset projects. It is expected that the learning from these projects would inform future editions of this guideline.

Once the concept of biodiversity offsets is established and accepted, pressure will grow to produce a system that achieves the targets of economic development and efficiency, ecological sustainability and integrity, and social justice without becoming an obstacle in that process. Based on examples world wide of other environmental compensation schemes, ranging from transferable development rights to carbon offsets, this means at least that the following factors be addressed: ° the areas (corridors, zones) where offsets will achieve the maximum benefit for biodiversity need to be sufficiently pre-planned, i.e. identified and secured ° the security and transferability of offsets are guaranteed ° development authorisations for residual biodiversity impacts of ‘medium’, ‘medium- high’ or ’high’ significance become increasingly dependent on offsets being secured ° incentives for conservation and restoration are integrated into a system of offsets

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° a stable policy and planning framework is in place ° environmental protection and conservation is steadily integrated into the market-place

This guideline is written as a stepping stone towards the development of such a robust, workable biodiversity offset system supported by an appropriate policy framework. It is work in progress, but intends to clearly state the direction of this progress.

During early 2006, the Department of Environmental Affairs and Development Planning (DEA&DP) therefore appointed a consortium consisting of De Wit Sustainable Options (Pty) Ltd, Jaymat Enviro Solutions CC and Environmental Resources Management Southern Africa (Pty) Ltd to assist the Department with the development of this provincial guideline on biodiversity offsets in the context of Integrated Environmental Management and Environmental Impact Assessment in South Africa in general, and in the Western Cape in particular. The guideline is informed by a literature review, an expert opinion survey, a key stakeholder workshop and several interactions with the Department and members of the project steering committee.

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2. INTRODUCTION

This section focuses on: • the rationale for biodiversity offsets in the Western Cape • a definition of biodiversity offsets • when would biodiversity offsets be considered, and when would they not be considered

2.1 Biodiversity offsets in the Western Cape

The Western Cape is well known for its exceptional biodiversity1. The Province’s biodiversity, including the ecological patterns, processes and associated goods and services, are one of the key enabling factors for socio-economic development in the Western Cape2. However land-intensive socio- economic development realities pose a significant threat to the Province’s remaining biodiversity and will impact on human health and well-being and on the sustainability of economic development strategies3. Urban sprawl, ribbon-like coastal developments, extensive agriculture, and clustered developments outside the urban edge are placing more and more pressure on the limited supply of often endangered and even critically endangered ecosystems in the Western Cape4. Conservation and sustainability targets are increasingly difficult to attain as a result of competing land uses. The challenge for developers, authorities and impacted parties is to respond in such a way that development benefits are achieved and maximised without threatening the viability of the biophysical systems which enable socio-economic development. On the social front, the Province has been experiencing high levels of migration across the socio-economic spectrum and particularly from people with low levels of skills and literacy, desperate for opportunities to integrate with the main stream economy. These pressures are increased by the need for social justice with respect to access to land and housing, both areas where considerable shortfalls are apparent. The situation is compounded by a booming economy which has provided considerable benefits for those well-positioned to take the opportunities that have presented themselves, but which has exacerbated income, asset and spatial inequalities5.

As highlighted in the Western Cape Provincial Spatial Development Framework6, the Province thus finds itself at a crossroad. Should it continue to follow its historic development path, which, while tried and tested, particularly regarding its ability to create short term financial profits, may be driving the Province further down the road of environmental unsustainability, social injustice and economic inequality, or

1 For a recent overview on the ecosystems of the Western Cape see De Villiers et al. (2005).

2 See Towards a Sustainable Development Implementation Plan for The Western Cape (WCPDC/DEA&DP, 2005).

3 See Towards a Sustainable Development Implementation Plan for The Western Cape (WCPDC/DEA&DP, 2005).

4 Provincial Urban Edge Guideline (DEADP 2005d), Western Cape Provincial Spatial Development Framework (DEADP 2005a)

5 Western Cape Provincial Spatial Development Framework (DEADP 2005a)

6 Western Cape Provincial Spatial Development Framework (DEADP 2005a)

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should it take the less travelled sustainable development route? It has become apparent that innovative approaches to integrated environmental management and environmental impact assessment are needed if the sustainability of the developmental growth path already paved by the iKapa Elilhumayo Strategy and other lead strategies is to be ensured. The exploitation of our biodiversity has made it apparent that drastic measures need to be introduced in order to save this beautiful Province for future generations. A biodiversity offset system for the Western Cape is one solution towards ensuring more sustainable development in the Province, and can contribute to achieving the Provinces’ vision of transforming into an “environment economy”.7

According to the Biodiversity Act No 10 2004, biological diversity or biodiversity means: “ the variability among living organisms from all sources including, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part and also includes diversity within species, between species, and of ecosystems”.

For background on biodiversity considerations in EIA, readers are referred to the following two guidelines that should be read in conjunction with this guideline: • Guideline for the involvement of biodiversity specialists in EIA processes (Brownlie, S. 2005) • Fynbos Forum Ecosystem Guidelines for Environmental Assessment in the Western Cape (De Villiers et al. 2005).

2.2 What are biodiversity offsets?

Several definitions for biodiversity offsets have been attempted, most notably one by the IUCN8:

Biodiversity offsets are conservation actions intended to compensate for the residual, unavoidable harm to biodiversity caused by development projects, so as to ensure no net loss of biodiversity. Before developers contemplate offsets, they should have first sought to avoid and minimise harm to biodiversity.

The key issue is that the need to consider a biodiversity offset are only triggered when residual biodiversity impacts of medium or higher significance, are evident. In other words biodiversity offsets are a last resort measure to consider once all the options and alternatives to prevent, minimise and mitigate impacts have been explored. Residual impacts of very high significance however represent a fatal flaw for the development in that the biological impacts will be irreversible, compromise ecological integrity and therefore be undesirable. Residual impacts of low significance also will not require the developer to offset impacts. Biodiversity offsets can therefore contribute to sustainable economic development by ensuring responsible development that goes hand in hand with conservation (or restoration) action to ensure that ecological integrity is maintained. It is a mechanism whereby development and conservation objectives can be achieved more effectively by not only focussing on the site of the development. A biodiversity offset system therefore provides clear opportunities for the achievement of ecological integrity, economic efficiency and social justice, while providing clear

7 This is an economy where ecosystem system goods and services are mainstreamed, building on the recognition that healthy ecosystems underpin healthy economies, especially an economy as dependent on the natural environment as the Western Cape. Biodiversity it is an important contributing factor to ecosystem functioning, and ultimately the provision of economically valuable goods and services to society.

8 Ten Kate et al. (2004). This definition is also accepted in the Provincial Spatial Development Framework (DEADP 2005a).

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guidance to developers on mechanisms to possibly address residual biodiversity impacts and ensure more sustainable development.

2.3 When are biodiversity offsets considered?

Biodiversity offsets are only considered as a mechanism for compensating for residual biodiversity impacts after a developer has proven that reasonable and responsible actions have been taken to avoid, minimise and mitigate biodiversity impacts resulting from a proposed development (see Figure 1) and need to be interpreted as a last resort biodiversity impact mitigation option.

Figure 1: W hen to consider biodiversity offsets in the hierarchy of im pact m itigation m easures

While the significance of impact on an environment is influenced by the sensitivity of the specific environment (and biodiversity offsets are therefore more likely to be considered in more sensitive environments), environmental sensitivity in itself is not the trigger for an offset. The trigger is whether the residual negative impact on biodiversity is of ‘medium’, ‘medium – high’ or ‘high’ significance (see Box I). Regarding the sensitivity of the different ecosystems it is important to note that the process of listing threatened ecosystems in terms of Section 52 of the National Environmental Management: Biodiversity Act of 2004 (Act No. 10 of 2004) is currently underway. Until such time as the listing process has been completed the National Spatial Biodiversity Assessment9 together with the Western Cape Provincial Spatial Development Framework should be referred to for guidance in terms of when offsets might have to be considered.

9 DEAT/SANBI (2004).

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Box I: Significance thresholds for negative im pacts on biodiversity

Threshold Significance rating Offset decision ‘Exclusionary’ threshold. e.g. irreversible loss of critically Very high Potential fatal flaw endangered ecosystem ; im pact on international scale or for the project. high im pact on national biodiversity or ecosystem services Im pacts cannot be com pensated for. Threshold of m ajor potential concern. e.g. irreversible High Offset required. im pact, leading to change in ecosystem status from endangered to critically endangered; m edium im pact on national, or high im pact on provincial biodiversity or ecosystem services Threshold of potential concern. e.g. irreversible im pact Medium - High Offset required. leading to change in ecosystem status from vulnerable to endangered; m edium im pact on provincial or high im pact on local biodiversity or ecosystem services Threshold of potential concern. e.g. irreversible im pact Medium Offset required. leading to change in ecosystem status from not threatened to vulnerable; im pacts with low im pact on provincial but m edium im pact on local biodiversity or ecosystem services Negligible or no concern. e.g. low im pact on local Low No offset required. biodiversity or ecosystem services May offset voluntarily. Source: Adopted from Brownlie (2005)

Biodiversity offsets will not be considered by the authorities when:

° All the options and alternatives to avoid, minimise and mitigate the biodiversity impacts have not first been considered ° inappropriate use is made of offsets as a negotiation tool in an attempt to leverage environmental authorisation ° residual impacts are of very high significance (in other words ecological integrity will be compromised through for example when critically endangered ecosystems or ecosystems containing irreplaceable biodiversity or irreplaceable ecosystem services are proposed to be developed) ° residual impacts are of low significance (and therefore there are no impacts to compensate for) ° on-site biodiversity losses will not be adequately compensated by offsets ° offsets come at too high costs to society

In order to adequately identify and evaluate the possibility of compensating for residual unavoidable harm to be caused by a proposed development, the proposed offsets must be evaluated during the Environmental Impact Assessment and decision-making process for the development (Section 3).

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2.4 Structure of the guideline

The guidelines address the following key aspects of biodiversity offsets:

First, the incorporation of biodiversity offsets in the EIA decision-making process is explained in Section 3. Offsets would require a specific process within the existing EIA procedure would require integration with existing issues-driven public participation processes. This is discussed in Section 3. Key components of a successful offset system are mentioned, but as this section is focussed on process, these are discussed in more detail in the following sections.

Second, guidance on successful offset design is provided in Section 4 as the security of the offset is vital for the longer-term viability of an offset programme.

Third, guidance is provided on the policy and planning framework wherein offsets operate and suggestions are made on how to monitor and manage offsets made over time. This is the focus of Section 5.

Fourth, the roles and responsibilities of parties involved in the biodiversity offset system are explained in Section 6. This includes roles and responsibilities for the developer, the authorities and those representing biodiversity, as well as all their delegated functions.

Section 7 concludes and Section 8 provides a bibliography of useful texts which provide further information and detail on biodiversity offsets.

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3. OFFSETS IN THE EIA PROCESS

This section focuses on: • general procedures to be followed when considering offsets • how to incorporate biodiversity offsets into the Environmental Impact Assessment decision-making process • the required public participation and stakeholder engagement process when considering offsets • suggestions on how to monitor and manage offsets made over time

3.1 General procedures

In order to adequately identify and evaluate the possibility of compensating for residual unavoidable harm to be caused by a proposed development, the proposed offsets must be evaluated during the Environmental Impact Assessment and decision-making process for the development. Although the possible need for an offset to be considered might be identified when significant impacts are anticipated during the pre-application planning stages of a development, the actual need to offset the impacts of the development will only be known once all the options and alternatives to prevent, minimise and mitigate the impacts have been evaluated during the environmental impact assessment process and the residual biodiversity impacts have been found to be of medium or higher significance.

The nature of the offset required and the actual offset implementation and management measures required will then be evaluated and determined during the final stages of the basic assessment or environmental impact assessment, with the information to be submitted as an additional specialist study to be submitted as part of the final basic assessment report or final environmental impact report. The environmental management plan, to be submitted with the final basic assessment report or final environmental impact report, will include a section specifying the implementation, management and monitoring requirement in terms of the offset. If the proposed offset is found to be acceptable, the offset will be included as a key deciding factor in the approval given for the development and will be specified as a condition of approval.

The inclusion of offsets in a generic EIA process is further discussed in Sections 3.2 – 3.9. It is also prudent that project specific offsets considered in the EIA process need to be guided and informed by the institutional and societal context. To this effect a discussion on applicable policies and plans are discussed in Section 10.

3.2 Pre-application planning and screening

In the pre-application planning and screening phases of a development it is recommended that the project proponent follows a positive planning approach to promote amongst others the use of mitigation and offsets to try and ensure no net loss of biodiversity10.

The pre-application planning phase should include the collection of adequate, reasonable and reliable baseline biodiversity information in order to identify sensitive areas and processes which should be

10 For a discussion on the positive planning approach see Brownlie (2005).

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avoided by the project. Where the project is located in an area where biodiversity issues are considered to pose a potential risk to the project, this may signal the possible need to consider offsets in more detail during the EIA process if significant residual impacts are anticipated, clearly stating the hierarchy of interventions as was illustrated in Figure 111 . This means that biodiversity issues of concern are identified, opportunities to avoid, minimise and mitigate biodiversity impacts through consideration of alternatives are identified and evaluated, and if residual impacts are unavoidable and significant, and the proponent is intent on proceeding with submission of an application for environmental authorisation, consideration of biodiversity offset options need to be initiated during the final stages of the environmental impact assessment.

3.3 Basic Assessment

For development applications that require a Basic Assessment, the need for the offsets to be considered will be indicated by the environmental assessment practitioner in the basic assessment report if residual biodiversity impacts are found to be of medium or higher significance. If the Department agrees with the recommendation of the practitioner, the Department will request that additional information, in the form of a specialist study to be submitted together with a final basic assessment report, be submitted assessing the offset proposed by the applicant. If however it is clear that all the issues will not be property addressed during the basic assessment process, the Department will instruct the applicant to also submit the application to a scoping process.

3.4 Scoping

The scoping process should identify biodiversity issues and concerns and develop the Term of Reference (ToR) for biodiversity specialists to address key issues. The ToRs should include the requirement that specialists determine whether or not offsets are required (based on the assessment of impact significance)12, and if so, to recommend appropriate offset options for further consideration and development during the environmental impact assessment.

The EIA practitioner may involve a biodiversity specialist during the scoping process if the expected residual biodiversity impacts are anticipated to be of medium or higher significance. Although stakeholders may raise the need for impacts to be offsets, and even make recommendations on the nature of such offsets during the public participation processes, the environmental assessment practitioner conducting the public participation process will have to make it clear that the outcome of the environmental impact assessment and the actual significance of the residual impacts will inform the need for the biodiversity impacts to be offset.

3.5 Impact assessment 3.5.1 Biodiversity impact specialist study

The need to offset the impacts of a development will only be known once all the options and alternatives to prevent, minimise and mitigate the impacts have been identified and evaluated during

11 For a discussion on the positive planning approach see Brownlie (2005).

12 See section 2.3.

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the environmental impact assessment process and the residual biodiversity impacts have been found to be of medium or higher significance.

The significance of the residual biodiversity impacts therefore determine when biodiversity offsets are required (see Figure 2): ° when residual impacts on biodiversity are of ‘very high’ significance according to the criteria used for the assessment of impacts, the biodiversity specialist will recommend that the project should not go ahead/contains a fatal flaw (where development is not appropriate a biodiversity offset will not be able to compensate for the biodiversity loss and impact on environmental integrity, and therefore approval for the development will be refused after the initial environmental impact assessment without the need to further evaluate offsets). ° when residual impacts on biodiversity is of ‘medium’, ‘medium – high’ or ’high’ significance, reasonable offsets for biodiversity loss will be recommended. ° when residual impacts on biodiversity is of ‘low’ significance, there is no need for biodiversity offsets and the recommendation will be for the project to continue without further management intervention. Voluntary offsets might however be proposed as long as these does not imply any additional cost to the authorities (the low significance of the impacts will not justify the costs).

It is important to note that while the significance of residual biodiversity impacts will also be informed by the social and institutional context of the resources that are affected. First the biodiversity specialist study will asses the nature, intensity (severity or magnitude), extent (spatial influence) and duration of the impacts (see Section 2.3 for a classification of significance thresholds), then the impacts are contextualised within the planning context and the societal values in a specific region (for a discussion see Section 5).

3.5.2 Draft EIR/EM P

The draft Environmental Impact Report (EIR) and Environmental Management Plan (EMP) should include the findings and recommendations of the biodiversity specialist, including details of the nature of the proposed offset and the implementation and management requirements. The purpose of this stage of the EIA process is to obtain stakeholder comments on the findings of the impact assessment (and the proposed offset where required) and to test the need for an offset with the authorities (see Section 2.3). The authorities will refer to the planning context (see Section 5) within the province and need to act in the interests of broader society when making this decision. The authorities might ask for an independent specialist review to be done of the EIR and EMP (at the cost of the proponent), and if needed request additional consultation with stakeholders (over and above the standard EIA public participation process) regarding the proposed offset.

3.5.3 Offset-design process

Once the need for an offset to be considered is identified by the authority, the nature of the offset required will then be evaluated and determined during the final stages of the environmental impact assessment, with the information to be supplied as an additional specialist study to be submitted as part of the final environmental impact report. The issues that need to be taken into consideration for the development of a robust offset system are further described in Section 4.

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Figure 2: Biodiversity Im pact Assessm ent and the Offset Design Process

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3.5.4 Final EIR/EM P

The evaluation of the proposed offset will then be submitted as an additional specialist study submitted as part of the final environmental impact report (EIR). The environmental management plan, to be submitted with the final environmental impact report, will include a section specifying the implementation, management and monitoring requirement in terms of the proposed offset. The details of what should be included in such a plan are also further discussed in Section 4.5.

3.6 Decision by Authority

On the basis of the final basic assessment report or the final EIR and EMP the Department will make a final decision on the project. Given the significance of the residual impacts, the proposed offset might however be found to not be acceptable, with approval for the proposed development refused by the authority. If the proposed offset is however found to be acceptable, the offset will be included as a key deciding factor in the approval given for the development and will be specified as a condition of approval. The required contractual agreements (e.g. land ownership, security of conservation areas) are negotiated and will then have to be signed and the offset secured prior to the commencement of the development.

3.7 Monitor and Audit

Where a decision is made authorising the development on condition that the proposed offset is secured, the implementation of the offset management plan needs to be monitored and audited. The biodiversity offset needs to achieve a gain at least equal to the residual loss at the site at which development takes place. Such specific targets need to be established in the EMP of the proponent. Suitable management and implementation action and specific monitoring indicators need to be defined in the EMP with a view to minimise monitoring and evaluation costs to the authority and to the developer13. With time changes to the offset plan might have to be made in order to ensure the continued achievement of the offset objectives.

13 A monitoring programme will focus on management indicators on the area that has been set aside for the offset. Alternatively, and depending on the choice of metric (see section 4.1), a monitoring programme will focus on management indicators as well as on indicators of economic value of biodiversity and indicators on ecosystem structure, function and process.

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4. OFFSET DESIGN PROCESS

This section focuses on the question how to guarantee the long term security of the offsets being considered.

The security of the offset is vital to achieve the intended benefits to biodiversity and support the longer term sustainability of the development project. This necessitates a careful offset design process, categorized in five distinct steps (see Figure 3): ° determine the adequacy of the offset ° define the types of compensation ° design offset ° reach offset agreements ° develop offset management plan

Figure 3: Biodiversity Offset Design Process

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4.1 Adequacy of the offset

In order to determine whether or not a proposed offset will adequately compensate for the residual biodiversity impacts of a specific proposed development, the actual biodiversity loss to be caused and the significance of this loss must be determined. The following three approaches to assessing biodiversity loss and valuing the biodiversity to be lost are identified: ° Setting of policy targets ° Use of ecological proxies for ecosystem structure, function and process ° Economic valuation of biodiversity

Theoretically sound approaches to the valuation of biodiversity loss, whether for ecological proxies or for economic valuation, are still in development14. As a preferred approach to the valuation of biodiversity loss, and for the purpose of biodiversity offsets in the Western Cape, area-based policy targets are therefore proposed. Although in theory a like-for-like offset compensates for the biodiversity lost in a ratio of 1:1, the significance of two ecosystems may not be similar as to the economic services they provide. This together with the fact that offset benefit will only occur with time and may fail at least in part, calls for a precautionary approach with offset having to be like-for-better and ratio therefore exceeding 1:115. The ratio would also be higher the higher the significance of the impacts to be offset is.

As a preferred option, developers are to be guided by the ratios in Table I in the design of an offset16. Alternatively, developers may present the authorities with their own proposal based on ecological proxies, or the economic valuation of biodiversity, but these will be evaluated on its own merits and on a case by case basis (see Box II). The costs of such proposals will be at the expense of the proponent.

Table I: Ratios for biodiversity offsets

Significance of residual biodiversity impacts Offset ratio ‘high’ To be defined following a workshop with biodiversity specialists ‘medium – high’ To be defined following a workshop with biodiversity specialists ‘medium’ To be defined following a workshop with biodiversity specialists

14 There are several sources on this topic. See, for example Eftec (2005), Mendes (2004).

15 For a discussion see Bishop (2003) and Suvantola (2005).

16 For a discussion on the thresholds for residual impacts see section 2.3.

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Box II: Valuing biodiversity - ecological proxies and econom ic valuation17

There are two approaches at the centre of the debate on offset m easurem ent m ethods, nam ely the use of ecological proxies (such as hectares or habitat functions) and the use of econom ic values of biodiversity. In both cases, no uniform standard and sim ple solutions are available.

Ecological proxies refer to a habitat that is ecologically sim ilar and to conservation of an area of the sam e size, structure, function or a m ultiple of the area dam aged by habitat conversion or disturbance. Ecological proxies consider structure, function and com position, issues of scale, conservation status and ecological com m unities, and the long term viability and functionality of biodiversity. There is, however, little consistency in the approaches used by different agencies world-wide to assess the functional equivalence of habitat.

Biodiversity and its goods and services often have no m arket price and consequently a considerable am ount of uncertainty can surround their real value and significance. In the last few decades econom ic valuation techniques have developed up to a point where these values can be im puted with reasonable confidence. The current econom ic techniques used to value biodiversity are based on the fact that people dem and goods and services of natural system s not only as a source of raw m aterials but also as an am enity. Although these approaches are gaining in practical im portance world-wide, their broad- based acceptance will take tim e.

4.2 Types of compensation

Although the current proposed biodiversity offset system is focussed on physical area-based compensation, it does not in principle exclude other forms of ecological compensation or monetary compensation schemes. Such schemes may include contributions to an accredited biodiversity trust18, provision of finance for public protected areas19, funding of public biodiversity research20 or support for

17 See for example ELI (2002), Tucker (2003).

18 Developers can compensate for damage by making payments into a Biodiversity Conservation Trust Fund. Conservation bodies and developers could reach an agreement on the size and nature of the trust fund. The money should be earmarked to finance conservation projects. The money should be administered by a non-profit organisation. Such a fund does in no way release developers from their environmental liabilities.

19 In many cases, the protected area systems are significantly under-funded to such a degree that the long-term viability of the area is genuinely threatened. A common example is where degradation is making incursions into protected area, but the authorities have insufficient financial resources to counter this. It may be argued that financial contributions to park budgets in such a context could create additional conservation outcomes in an area that the country has already deemed a conservation priority.

20 In some cases it may not be feasible to provide an offset by designating new and additional protected area or demarcating land for conservation purposes. In such cases, other types of investments may be the best or only option for offsetting residual biodiversity impacts. One option is to support biodiversity research and education, training and awareness-raising. An example is a World Heritage Site that is at risk due to a lack of management planning. Research could be conducted in order to better understand the threats and thus manage the park properly. While financial support for taxonomic and other research and training can make an important

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biodiversity capacity building in government agencies, but in all cases proponents need to demonstrate clearly the benefits to biodiversity. Monetary compensation mechanisms should also be earmarked for actions benefiting biodiversity specifically.

4.3 Offset design

A proposal containing a biodiversity offset should follow the best current practice in offset design. This could be informed by earlier case studies in South Africa (see Table I), but needs to be interpreted within the rules as specified in this guideline. The key factors that need to be considered in selecting the Best Practicable Offset (BPO) include the following aspects21 :

° Clear and valid purpose for offset in broader conservation planning. Clear reference should be made to provincial spatial conservation plans, and how offset will contribute to this.

° Consistency with development and conservation planning in the area (i.e. desired future state). The proposed offset need to align closely with existing development and conservation plans (at various scales) for the area.

° Clear designation of offset areas. It needs to be clear which physical area is included in the proposal. When offsets are proposed on the same property, additional benefits to standard on- site mitigation options need to be demonstrated clearly.

° Duration of the offset. The proposed time period for the proposed offset should be motivated and clear.

° Long-term security of development and offset rights. The proposal should contain reference to the contracts and agreements governing the offset area.

° Ecological effectiveness of the offset. The proposal needs to include estimates of the benefits to biodiversity.

° Distribution of the costs and benefits of the offset. The proposal needs to include possible positive and negative impacts of the offset on other parties and needs to highlight who benefits and who loses from the offset.

° Economic efficiency of the offset. The proposal needs to include estimates on the broader economic gains or losses of the offset.

° Administrative costs of the offset. The proposal needs to include reference to the administrative costs of the offset.

° Management responsibilities. The proposal needs to clarify responsibilities for managing the offset for its full duration.

contribution to biodiversity, the direct conservation outcomes of activities such as training are, however, often hard to demonstrate.

21 This section is informed by lessons on compensation mechanisms world-wide. See for example Bredin (2000), Townsend et al (2004) and Young (1992).

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Table II: Selected exam ples of biodiversity offsets in South Africa22

Proponent Name of Offset Status Size of offset Offset context Anglo Coal Isibonelo Off-Site Wetlands Project Together the two wetlands Coal originates from wetlands. One of its precursors, peat, forms only in Rehabilitation to be rehabilitated (Dunns permanently saturated wetlands, where the decomposition of dead plant matter farm and Thubalihle is retarded by low oxygen levels. The consequence of this relationship, still wetlands) cover an area of observed today, is the occurrence of shallow coal deposits in parts of the 46 hectares landscape that frequently still contains wetlands. Where this is the case, it is usually not possible to mine the coal using open cast methods, without destroying many hectares of wetland.

The authorisation for mining near Kriel in Mpumalanga has introduced a new factor into the equation that might help balance out the destruction. In Mpumalanga, Anglo Coal is funding the rehabilitation of equivalent wetlands in the same catchments as wetlands that will be lost through a new open cast coal mine. It is the first time that such wetland offsite mitigation has been made a condition of mine authorisation. Mount Royal Renosterveld conservation Record of The fund is to the total of R The proposed development entails the upgrade of the existing 9-hole golf Golf and area in the northern section of Decision 5.5 million course into an 18-hole course, with residential (726 units) and Country Estate the development site and a commercial/tourism components. The proposed Mount Royal Estate Renosterveld Management (developed in four phases) totals 162.1 ha of which 30% is earmarked for Trust Fund. development; the rest will be left for open space and the golf course.

Authorisation has been granted in terms of Section 22 of the Environment Conservation Act, 1989 (Act No. 73 of 1989) solely for the purposes of undertaking the activity referred to above. Renosterveld is given a 100% irreplaceability value (i.e. most remaining remnants is crucial for conserving a representative portion of this vegetation type), requiring that a conservation area be established in the northern section of the development site in accordance with the area identified by the specialist botanist, and must be

22 Although these case studies do provide an indication of the possibilities of an offset system these should be interpreted as having taken place before the development of this guideline.

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Proponent Name of Offset Status Size of offset Offset context rezoned to Open Space III and incorporated as a Contractual Nature Reserve into Cape Nature’s Stewardship Programme, before construction of any of the dwellings commences. A Renosterveld Management Trust Fund must be established and used for the management of conservation areas within the development, as well as for three other Renosterveld sites within the Swartland Municipal Area.

Ncandu, Ncadu dam properties Project 1000 ha of land The Newcastle Town is building a dam for drinking water since it has already Newcastle, been estimated that in 2015 the town is likely to run out of water. It has already KZN been established that the dam construction will result in the loss of biodiversity since 18 ha of land will be damaged by the construction.

In exchange for flooding 18 ha of a provincial reserve, the proponent purchased over 1000 ha of the dam’s catchment area, and set aside funds to manage this and the remaining area to control invasive plants. The 1000 ha of land will be handed over to Ezemvelo KZN Wildlife for conservation.

Source: Expert opinion surveys, this study

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4.4 Offset agreements

Before the development of a final offset management plan, the developer needs to reach agreement with a suitable land-owner. Such a contract would include issues on ownership, management and the monitoring and evaluation of the proposed offset. Guidance on where such an offset can take place is provided through the province’s conservation plans, but these areas may still fall under an ownership not primarily concerned with biodiversity conservation, or that has not yet been re-zoned for biodiversity conservation purposes. There are opportunities to create contract nature reserves on private land through Stewardship Agreements entered into between a conservation agency and landowners under the Protected Areas Act (57 of 2003). An example is CapeNature’s Stewardship Programme that sets out to achieve conservation targets in the province that may, in principle, include biodiversity offset projects. Offset agreements would therefore involve issues on ownership and possible title deed restrictions, agreements on the management of the offset as well as agreements on the monitoring and evaluation of the success of the offset project over time.

4.5 Offset management plan

Based on the information in Sections 4.1 – 4.4, the proponent develops an offset proposal that submitted as an additional specialist study with the final environmental impact report with implementation and management requirements addressed in the accompanying environmental management plan for the proposed development. The proposal should be clear on the size of the proposed offset (Section 4.2), the design of the offset (Section 4.3), and the agreements in place to support the offset (Section 4.4).

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5. LAWS, POLICIES, PLANS AND GUIDELINES TO BE CONSIDERED

This section provides information on the legal, policy and planning framework guiding biodiversity offsets

This guideline cannot be read in a vacuum. Several policies, plans and guidelines provides direction for using biodiversity offsets as an instrument for environmental management (the focus of Section 5.1), while several other, although not directly mentioning biodiversity offsets, does provide important context for the use of biodiversity offsets (the focus of Section 5.2).

5.1 Policies, plans and guidelines directing biodiversity offsets

In Section 2.3 it was stated that the need for a biodiversity offset is triggered on the significance of residual impacts that are ‘medium’, ‘medium – high’ or ’high’, and that the significance of residual impacts is identified through the biodiversity assessment, as well as the social and institutional context of the resources that are affected.

The significance of residual biodiversity impacts, in terms of the nature, intensity (severity or magnitude), extent (spatial influence) and duration of the impacts, will be an outcome of the biodiversity assessment on a case-by-case basis. The social and institutional context is contained in several planning documents that further guide the need for biodiversity offsets in specific areas.

The National Biodiversity Strategy Action Plan (NBSAP) explicitly recognises the need for biodiversity offsets. In activity 1.3.10 it is stated that a national policy framework to guide the implementation of biodiversity offsets (off-site mitigation) in threatened ecosystems, ecological corridors and other special habitats23, need to be developed. Given existing provincial planning documents, an offset would be required for development impacting on the following areas24: ° endangered areas of biodiversity in which land may be converted to intensive agriculture or urban development (Buffer 1 area in the Provincial Spatial Development Framework (PSDF)) ° extensive agricultural areas with endangered areas of biodiversity (C.a category in Bioregional Planning Category) or agricultural areas, excluding intensive agriculture and farmsteads (Agricultural Zone1 area in the Zoning Scheme category)

The possibility for biodiversity offsets are explicitly recognised for certain developments in specific provincial guidelines: ° developments outside the urban edge (Provincial Urban Edge Guideline) ° golf course or polo field developments on the border between buffer and urban areas (Guidelines for Golf Courses, Golf Estates, Polo Fields and Polo Estates) ° resort development, where relevant, need to include proposals on biodiversity offsets (Guidelines for Resort Development)

23 DEAT (2004)

24 DEA&DP (2005a)

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Although the above mentioned guidelines make mention of specific development activities potentially requiring offsets, the need for possible offsets extends to any activity which is assessed to have residual, unavoidable biodiversity impacts of ‘medium’, ‘medium – high’ or ‘high’ significance as discussed in Section 2.3.

A summary of policies, plans and guidelines providing direction on the use of biodiversity offsets is included in Table III.

Table III: Policies, plans and guidelines directing biodiversity offsets

Policies, Plans and Guidelines Role in directing biodiversity offset options National Biodiversity Strategy ° Identifies the need to develop a national policy framework to guide the Action Plan (NBSAP) (DEAT implementation of biodiversity offsets (off-site mitigation) in threatened 2005) ecosystems, ecological corridors and other special habitats

Provincial Spatial Development The PSDF defines two types of buffer areas: Framework (PSDF) (DEA&DP ° Buffer 1 in which land may be converted to other uses if satisfactory 2005a) offsets are provided. Buffer 1 areas contain endangered areas of biodiversity in which land may be converted to intensive agriculture or urban development, if satisfactory offsets are provided. ° Buffer 2 where no such offsets will be necessary. Buffer 2 areas contain vulnerable and least threatened areas of biodiversity which can be converted to intensive agriculture and urban development without the need for offsets in these areas.

Guideline for involving ° Compensation or offsets should only be considered after other biodiversity specialist in EIA biodiversity management actions (avoidance, mitigation, enhancement, processes (Brownlie 2005) rehabilitation and restoration) have been considered ° Offsets could include formal commitment to managing substitute areas of comparable or greater biodiversity value for conservation, entering into a secure and permanent conservation agreement with the conservation authority, setting aside protected natural areas, establishing a trust fund for biodiversity conservation, thereby enabling land acquisition or management, etc. ° Offsets should focus on areas of recognised value to biodiversity conservation, and on ensuring the persistence of landscape-scale processes.

Guideline for Resort ° Where relevant, it will be expected of a proposed resort development to Development in the Western provide satisfactory Biodiversity Offsets Cape (DEA&DP 2005c) Guidelines for Golf Courses, Golf ° Development that includes a golf course or polo field component may be Estates, Polo Fields and Polo located on the border between buffer areas and urban areas if resulting Estates in the Western Cape in achieving long term Biodiversity Offsets, i.e. the development takes (DEA&DP 2005b) place on degraded or disturbed land, which is not deemed as being of conservation significance and will result in the rehabilitation and ongoing maintenance of a significant land parcel/habitat/natural resource; and/or the applicant must indicate how the proposed development takes Biodiversity Offsets priorities, determined by the approved biodiversity plans, into account and how it will conform to and benefit such management systems.

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5.2 Laws, policies, plans and guidelines influencing biodiversity offsets

The compensation for project specific biodiversity impacts through an offset is also influenced by several policies, plans and guidelines at different levels of government (for a summary see Table IV). Some examples are: • Government plans for rapid economic development to halve poverty and unemployment by 2014 through the Accelerated and Shared Growth Initiative of South Africa (ASGISA). • Environmental conservation is safeguarded through the Constitution, the NEMA, and the Biodiversity Act. • The goal of sustainable development has developed planning documents on both national and provincial levels focussed on achieving long term development benefits without compromising the natural environment. • Spatial planning at national, provincial, local and urban levels is progressively more informed by the desired conservation status of land, thereby providing more clarity on the spatial framework wherein economic development can be accelerated. • Finer scale conservation plans are needed to inform the trade-off between development and conservation at lower levels, easing the task of case-by-case evaluation of the desirability of biodiversity offsets. The design of a biodiversity offset cannot be done in isolation and needs to take cognisance of the broader goals of economic development, such as halving of poverty and unemployment, and the promotion of conservation.

Table IV: Selected law s, policies, plans and guidelines influencing biodiversity offsets

Policies, Plans, Guidelines Role in affecting biodiversity offset options Constitution of the Republic of “everyone has the right to have the environment protected, for the benefit of South Africa (Act 108, 1996), present and future generations, through reasonable legislative and other article 24 (b) – (c) measures that prevent pollution and ecological degradation; promote conservation; and secure ecologically sustainable development and use of natural resources while promoting justifiable economic and social development”

Accelerated Shared Growth Core objective is to halve poverty and unemployment by 2014. Economic Initiative South Africa (ASGISA) growth of at least 6% by 2010.

The EIA system is being reformed so that it will reduce unnecessary delays, without sacrificing environmental standards. A complimentary activity is improvements in the planning and zoning systems of provincial and local governments.

Millennium Ecosystem The Millennium Ecosystem Assessment (MA) is an international work Assessment (MA) program designed to meet the needs of decision makers and the public for scientific information concerning the consequences of ecosystem change for human well-being and options for responding to those changes.

The MA focuses on ecosystem services (the benefits people obtain from ecosystems), how changes in ecosystem services have affected human wellbeing, how ecosystem changes may affect people in future decades, and response options that might be adopted at local, national, or global scales to improve ecosystem management and thereby contribute to human well-being

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Policies, Plans, Guidelines Role in affecting biodiversity offset options and poverty alleviation.

International Convention on The International Convention on Biological Diversity (CBD) includes voluntary Biological Diversity (CBD) guidelines on biodiversity-inclusive impact assessment. In Section 23 it is stated that remedial action can take several forms, i.e. avoidance (or prevention), mitigation (by considering changes to the scale, design, location, siting, process, sequencing, phasing, management and/or monitoring of the proposed activity, as well as restoration or rehabilitation of sites), and compensation (often associated with residual impacts after prevention and mitigation). National Sustainable The NSDS stems from Section 24 (b) of the Constitution and particular the Development Strategy (NSDS) phrase “secure ecologically sustainable development and use of natural resources while promoting justifiable economic and social development”. The objectives of a national strategy for sustainable development are: ° contribute to the establishment of an encompassing framework that provides a basis for policy integration and coordination towards poverty eradication and economic growth through sustainable development; ° strengthen existing planning frameworks by lengthening the time horizon, and specifically by identifying long term trends that may influence (positively or negatively) the intended development outcomes. ° identify synergies, tensions and contradictions at the interface between efforts aimed at achieving economic growth, social equity and integrity of the natural resource base.

Although still in development, the final product is set to be used by government and stakeholders to enhance South Africa’s long term planning capacity. It would specifically influence national and provincial development strategies, such as the National Spatial Development Perspective, the Provincial Growth and Development Strategies and other cross-sectoral development programmes.

National Environmental The National Environmental Management Act (Act 107, 1998) states in Management Act (NEMA) (Act Section 2(4)(a) that sustainable development requires the consideration of all 107 of 1998) relevant factors including the following: ° that the disturbance of ecosystems and loss of biological diversity are avoided, or, where they cannot be altogether avoided, are minimised and remedied; ° that a risk-averse and cautious approach is applied, which takes into account the limits of current knowledge about the consequences of decisions and actions ° that negative impacts on the environment and on people’s environmental rights be anticipated and prevented, and where they cannot be altogether prevented, are minimised and remedied.

Section 2(4)(p) states that the costs of remedying pollution, environmental degradation and consequent adverse health effects and of preventing, controlling or minimising further pollution, environmental damage or adverse health effects must be paid for by those responsible for harming the environment.

National Environmental The objectives of this Act are within the framework of the National Management: Biodiversity Act Environmental Management Act, to provide for (Act No 10 of 2004) ° the management and conservation of biological diversity within the Republic of South Africa and the components of such biological diversity ° the use of indigenous biological resources in a sustainable manner; and ° the fair and equitable sharing among stakeholders of benefits arising from bio prospecting involving indigenous biological resources; ° to give effect to‘ ratified international agreements relating to biodiversity which are binding on the Republic ° to provide for co-operative governance in biodiversity management and conservation, and;

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Policies, Plans, Guidelines Role in affecting biodiversity offset options ° to provide for a South African National Biodiversity Institute to assist in achieving the objectives of this Act.

The Act further, amongst others, provides the framework for biodiversity management and planning, as well as for its threatened or protected ecosystems and species.

National Spatial Biodiversity Establishes status for terrestrial, inland water, estuarine and marine Assessment (NSBA) (DEAT ecosystems, protection levels and conservation priorities at a 1: 250000 scale 2004) nationally and suggested implementation options for priority areas.

Provides the national context for development of biodiversity plans at the sub- national and local scale.

Conservation priority areas indicate where there is a need for finer scale planning, expansion of the protected area system and integration of biodiversity-compatible development and resource management across the landscape and seascape, including on private and communal land.

Sustainable Development Provide a framework that assists in developing a common understanding of Implementation Plan Western the concept of “sustainable development” and enables decision makers to Cape (SDIP) (WCPDC/DEA&DP assess the extent to which their proposed policies, strategies and projects 2005e) contribute to sustainability.

Provincial Urban Edge Guideline Set outer limits of development around the urban area. This counters urban (DEA&DP 2005d) sprawl, encourages densification, and contributes to the protection of natural resources.

Fine-scale biodiversity (see Von Identification of conservation corridors and conservation priority areas at Haze et al. 2005) or bioregional 1:10000 scale. plans (e.g. C.A.P.E., SKEP, STEP) Identification of environmentally sensitive areas in which developments may be fatally flawed or may trigger the need for a biodiversity offset.

Integrated Development Plan Need for the integration of fine-scale biodiversity or bioregional plans into (IDP) lower level (e.g. municipal) plans to guide location of development to less environmentally sensitive areas. Local Economic Development Plan (LED)

Municipal Spatial Development Framework (MSDF)

Environmental Management Framework (EMF) LandCare Area Wide Planning The tension between maintaining healthy and productive land for agricultural (DoA 2003) purposes and the protection and restoration of critical natural capital is addressed by the land area wide planning process by the Department of Agriculture. It is defined as (Department of Agriculture 2003): “a comprehensive problem solving process that integrates social, economic and ecological concerns over defined geographical areas. This process strives to sustain and improve environmental health through a natural resource management approach that integrates locally driven initiatives”.

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6. ROLES AND RESPONSIBILITIES

In this section the focus is on defining the responsibilities of different role-players involved in biodiversity offsets at different stages in the planning, project development and EIA processes.

6.1 General roles in a biodiversity offset system

The purpose of this section is to provide a general model to broadly define and simplify the different roles in a biodiversity offset system. Figure 4 provides a general model of the three main parties in a biodiversity offset project namely the: ° developer (acting on behalf of private shareholders) ° authority (acting on behalf of the public) ° biodiversity representative (acting on behalf of biodiversity conservation)

These parties may delegate their roles to other experts, but do remain ultimately responsible for the success or failure of a biodiversity offset system.

Figure 4: Roles in a Biodiversity Offset System

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The authority is responsible for defining the processes and rules for the biodiversity offset system, and may finally grant the right for development when all rules and regulations governing the offset system have been adhered to. The authority acts on behalf of third parties and ecosystems impacted by development and would seek a solution that maximises social welfare.

The biodiversity representative includes all institutions, landowners or specialists acting in the interest of biodiversity. The existence of biodiversity impacts positively on a sustained flow of ecosystems services to the benefit of the public or as an intrinsic ecological value. Some biodiversity representatives may benefit from the demand for offsets (such as owners of land earmarked for conservation), but only if these are managed well and for the intended benefits to biodiversity. A biodiversity representative may also be asked to assist the authority in evaluating the impacts of a development on biodiversity and the feasibility of a proposed offset (such as the biodiversity specialist or an independent statutory body concerned with biodiversity conservation and restoration).

The developer may receive authorisation for the development from the authority on certain conditions, such as the need for a sustainable biodiversity offset. The developer is required to follow the processes and rules laid down by the authorities to protect the interests of third parties and the diversity of life in the natural environment. The developer may need to appoint an independent environmental assessment practitioner (EAP) to exercise this responsibility.

6.2 Specific responsibilities in planning, project development and impact assessment

More specific and often delegated roles do exist in provincial planning, project development and EIA processes. Proposed roles and responsibilities are listed in Table V.

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Table V: Responsibilities in planning, project developm ent and im pact assessm ent

Process Offset task Responsibilities (incl. coordination) Authority (or Developer Biodiversity representative delegated) STRATEGIC PLANNING Policies and procedures Specify offset rules and procedures DEADP responsible Take note when planning a Conservation planners provide input (DEAT on national level) project that has biodiversity impacts Fine-scale conservation Clearly define threatened ecosystems, ecological DEADP responsible Take note when planning a Conservation planners provide input planning corridors and special habitats project that has biodiversity impacts Spatial planning Incorporate outcomes of conservation planning into DEADP, district and local Take note when planning a Bioregional programmes, urban and spatial development plans and frameworks municipalities responsible project that has biodiversity regional planners integrate conservation impacts and spatial plans Pre-application planning: Undertake baseline biodiversity assessment to identify Developer may choose to Biodiversity specialist may identify Biodiversity issues key biodiversity issues and risks (including potential source opinion from biodiversity risks that may signal the need to fatal flaws) and inform project planning to avoid and biodiversity specialist consider offsets at a later stage of the EIA minimize negative impacts on biodiversity. process. Basic Assessment Report Assess project impacts on biodiversity, including DEADP evaluates Developer responsible that Environmental Assessment Practitioner and final Basic Assessment consideration of alternatives. Where residual impacts of whether offset is required draft and final basic (EAP) submits draft and final basic Report medium significance remain after incorporation of and sets out further assessment report are assessment report to authority measures to avoid and minimize negative impacts, conditions if needed submitted investigate and recommend offset options to compensate for residual impacts.

Where residual impacts are of high significance, project location presents a fatal flaw. No offset will adequately compensate for biodiversity loss and loss is considered unacceptable.

Where residual impacts are of low significance, no offsets are required, provided that best practice is applied in avoiding and minimizing impacts.

Scoping Obtain specialist and public input on potential DEADP or financial Developer appoints EAP, EAP responsible for process biodiversity issues and risks, project alternatives and institution provide opinion who in turn, appoints biodiversity specialist terms of reference (if required) biodiversity specialist Public may raise biodiversity issues,

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Process Offset task Responsibilities (incl. coordination) Authority (or Developer Biodiversity representative delegated) concerns and management tools, such as offsets.

ENVIRONMENTAL IMPACT ASSESSMENT Biodiversity specialist study Assess project impacts on biodiversity, including EAP responsible for process consideration of alternatives. Where residual impacts of ‘medium’, ‘medium-high’ and ‘high’ significance remain Biodiversity impact assessment specialist after incorporation of measures to avoid and minimize provide recommendation on need for offset negative impacts, investigate and recommend offset project options to compensate for residual impacts.

Where residual impacts are of very high significance, project location presents a fatal flaw. No offset will adequately compensate for biodiversity loss and loss is considered unacceptable.

Where residual impacts are of low significance, no offsets are required (unless if voluntary), provided that best practice is applied in avoiding and minimizing impacts.

Draft Environmental Impact Draft EIR/EMP submitted for stakeholder comment and DEADP evaluates Developer responsible that Environmental Assessment Practitioner Report (EIR) and proposed to receive response from authority on proposed offset (if whether offset is required draft EIR/EMP is submitted (EAP) integrated biodiversity specialist Environmental Management required) and sets out further study findings into EIR and EMP (including Plan (EMP) conditions if needed proposed offset if required) and submits to authorities and other stakeholders for comments. Offset design process (where Develop feasible offset project and develop offset DEADP responsible to Developer designs offset Biodiversity specialist provides input on the residual impacts are management plan which defines the objectives of the identify and make project which may include value of biodiversity loss and suitable types assessed to be of ‘medium’, offset, value and type of offset proposed, responsibilities available preferred offset biodiversity, conservation of compensation. ‘medium – high’ or ‘high’ and monitoring programme. areas based on planning, legal and CapeNature can provide comment and significance) conservation plans economics specialist inputs guidance. Negotiate and sign draft offset project contract DEADP may provide Developer and owner of support in identifying offset area agree on draft areas and owners contract Final Environmental Impact Biodiversity impact assessment and offset management DEADP evaluates report Developer responsible that Environmental Assessment Practitioner Report (EIR) and proposed plan integrated into EIR and EMP final EIR and EMP are (EAP) submits final EIR and EMP to Environmental Management submitted authorities Plan (EMP)

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Process Offset task Responsibilities (incl. coordination) Authority (or Developer Biodiversity representative delegated) Decision by authority EIR and EMP are considered by decision-making DEADP responsible for DEADP may call in CapeNature or other authority, including consideration of the proposed offset. decision biodiversity experts if required to review Authorisation is granted or rejected. Conditions attached EIR, biodiversity assessment and proposed to ROD may include requirements for offsets. offset. Project go-ahead and Negotiate and sign final offset project contract. Developer and owner of Developer engage with CapeNature if offset implementation of EMP Finalise transfer of title deeds; rezoning of land or offset area formalize falls under Stewardship Programme inclusion in stewardship programmes contract Monitoring and audit Independent monitoring and audit of offset project to DEADP provides Developer responsible to Independent specialist may be needed for ensure it complies with agreed offset management plan guidance on good submit review of progress monitoring and audit review and ROD. practice monitoring and as measured against EMP auditing to authorities

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7. CONCLUSIONS

This guideline provides the first steps towards using biodiversity offsets as an instrument for environmental management in the Western Cape. It is argued that biodiversity offsets does not replace the responsibilities for on-site mitigation. Biodiversity offsets in the Western Cape will form part of the clearly defined statutory EIA approval process and a specific offset design process is suggested in this guideline.

The guideline further provides a framework wherein offsets can be recommended by biodiversity impact assessment specialists and environmental assessment practitioners, be proposed by the developers, and evaluated by the authorities. As this is a relatively new concept in environmental management, even internationally, it is realized that a phase of learning from pilot biodiversity offsets is needed that will inform future editions of this guideline.

Biodiversity offsets are interpreted as the first step in producing a system where the principle of compensation for biodiversity losses is orderly integrated into a market for biodiversity conservation and restoration. It provides an additional environmental management tool to contribute to the achievement of sustainable development in the Western Cape Province.

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