Biodiversity Management in the Cement and Aggregates Sector

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Biodiversity management in the cement and aggregates sector Regulatory tools About IUCN IUCN, International Union for Conservation of Na- The work of the Centre focuses on ture, helps the world find pragmatic solutions to our most pressing environment and development 1. conceptual development of the law; challenges. 2. technical “on-the-ground” legal assistance in drafting and implementing legislation and IUCN’s work focuses on valuing and conserving treaties; nature, ensuring effective and equitable governance of its use, and deploying nature-based 3. training and capacity building; and solutions to global challenges in climate, food 4. information dissemination through publica- and development. IUCN supports scientific re- tions and policy papers. search, manages field projects all over the world, and brings governments, NGOs, the UN and companies together to develop policy, laws and best www.iucn.org/law practice.

IUCN is the world’s oldest and largest global envi- About the Global Business and ronmental organisation, with more than 1,200 government and NGO Members and almost 11,000 Biodiversity Programme (BBP) volunteer experts in some 160 countries. IUCN’s BBP seeks to encourage transformational and de- work is supported by over 1,000 staff in 45 offices monstrable change at the company and sectoral and hundreds of partners in public, NGO and pri- level in how biodiversity is valued and managed vate sectors around the world. by businesses, in order to conserve and restore biodiversity and to ensure that biodiversity bene- www.iucn.org fits are shared equitably. The Programme’s objective is that business practices at landscape and seascape levels are transformed to generate ben- About the Environmental Law efits for biodiversity and natural resource-depen- Centre (ELC) dent livelihoods. The ELC has the goal of promoting the develop- To achieve this aim and objective, three intercon- ment and implementation of environmental law nected entry points have been identified in the in the context of sustainable development, and IUCN Business Engagement Strategy: advocates environmental law as a major tool to achieve good governance in this field. Unlike most 1. Businesses adopt policies to manage biodi- environmental law organisations, the ELC bene- versity risks, so as to avoid and minimise bio- fits from being part of a broader multi-disciplinary diversity impacts and seek opportunities for knowledge-based institution which allows it to link biodiversity conservation and benefits for nat- legal issues with conservation practice in the real ural resource-dependent people. world. 2. Supply chains apply sustainability standards and safeguards that positively impact biodi- The work of the ELC has always been closely versity and local livelihoods. associated with the development of international environmental law and policy, but as the Envi- 3. Public and financial sector policies promote ronmental Law Programme (comprising the ELC the integration of biodiversity and livelihood plus the World Commission on Environmental Law values in business decision-making. (WCEL), a volunteer network of over 500 environmental legal specialists) grew, the ELC’s focus www.iucn.org/business broadened to implementation, training and capacity building, which are now core areas of its work. Biodiversity management in the cement and aggregates sector Regulatory tools Credits

The designation of geographical entities in this Available from: IUCN (International Union book, and the presentation of the material, do not for Conservation of Nature) imply the expression of any opinion whatsoever Global Business and on the part of IUCN concerning the legal status Biodiversity Programme of any country, territory, or area, or of its authori- Rue Mauverney 28 ties, or concerning the delimitation of its frontiers 1196 Gland or boundaries. Switzerland Tel +41 22 999 0000 The views expressed in this publication do not Fax +41 22 999 0020 necessarily reflect those of IUCN. [email protected] www.iucn.org/cementandag This publication has been made possible in part gregates by generous funding from the Holcim Group. Photo credits: Published by: IUCN, Gland, Switzerland Page Photographer Caption /organisation Copyright: © 2014 International Union for Con- 9 ©Laurent Villeret/ Julia Marton-Lefèvre servation of Nature and Natural Resources Dolce Vita 11 Rashila Kerai Bardon Hill aggregate plant, UK Reproduction of this publication for educational 17 Holcim Obourg cement plant, Belgium 23 Joel Bolduc Portland cement plant, USA or other non-commercial purposes is authorised 27 Maria Ana Borges Bischoffsheim aggregate plant, without prior written permission from the copyright /IUCN France holder provided the source is fully acknowledged. 32 Holcim Cartago cement plant, Costa Rica 39 Rashila Kerai Picoaza aggregate plant, Ecuador Reproduction of this publication for resale or other 43 Rashila Kerai Beenleigh aggregate plant, Australia 47 Christoph Sennecy Le Grand aggregate plant, commercial purposes is prohibited without prior Imboden France written permission of the copyright holder. 51 Rashila Kerai Apaxco cement plant, Mexico 55 Rashila Kerai Sennecy Le Grand aggregate plant, Citation: IUCN (2014). Biodiversity management France 59 Maria Ana Borges Alesd cement plant, Romania in the cement and aggregates sector: Regulatory /IUCN tools. Gland, Switzerland: IUCN. 64pp. 63 Rashila Kerai Madukkarai cement plant, India

ISBN: 978-2-8317-1648-0

Cover design by: Zoï Environment Network

Layout by: Zoï Environment Network

Produced by: IUCN Environmental Law Centre and Global Business and Biodiversity Programme Acknowledgements

IUCN would like to thank all those that have been involved in the development of this guide, from planting the seed of this idea in 2010 through to publishing in 2014.

We are particularly grateful to Holcim for their generous financial support, as well as their enthu- siasm and knowledgeable input, without which this guide would not have been possible.

A special thanks to:

The authors: Sarah Lucas Maria Ana Borges Vanja Westerberg Lothar Guendling

The editor: Amy Sweeting

The project coordinators: Maria Ana Borges, Global Business and Biodiversity Programme, IUCN Sarah Lucas, Environmental Law Centre, IUCN Giulia Carbone, Global Business and Biodiversity Programme, IUCN Alejandro Iza, Environmental Law Centre, IUCN

The reviewers: Ana Elizabeth Bastida, Centre for Energy, Petroleum and Mineral Law and Policy, University of Dundee, Scotland Gerard Bos, Global Business and Biodiversity Programme, IUCN Dominique Buechi, Holcim Technology Ltd. Isabel Calle, Peruvian Society for Environmental Law (SPDA) Giulia Carbone, Global Business and Biodiversity Programme, IUCN Mark Christensen, Anderson Lloyd Lawyers, New Zealand Nathalie Olsen, Global Economics Programme, IUCN Luke Danielson, Sustainable Development Strategies Group, US Christoph Imboden, Chair of the IUCN-Holcim Biodiversity Advisory Panel Alejandro Iza, Environmental Law Centre, IUCN Rashila Kerai, Holcim Technology Ltd. Lorena Martinez Hernandez, Environmental Law Centre, IUCN Ruksana Mirza, Holcim Technology Ltd Dyah Paramitah, Indonesian Centre for Environmental Law Mark Smith, Water Programme, IUCN Contents

Foreword 8

About this guide 10

Executive summary 12

1 Biodiversity and ecosystems in quarrying operations 14

Quarrying and the Integrated Biodiversity Management System 14 The role of policy makers and regulators in creating an enabling environment 17

2 Policy goal and principles for improved biodiversity management 18

3 Command-and-control instruments 22

Land-use and strategic planning 22 Strategic Environmental Assessment 22 Land-use planning 22 Conservation and sustainable use legislation 25 Permitting procedures for quarrying operations 25 Environmental impact assessment with specific attention to biodiversity impact assessment 25 Management plans incorporating biodiversity 30 Biodiversity monitoring system and reporting requirements 32 Procedural mechanisms 32 Access to information 33 Public participation in decision-making processes 34 Compliance and enforcement-related mechanisms 36

4 Market-based instruments 40 Overview of market-based instruments 40 Price-based instruments 43 Environmental performance bonds 44

6 Quantity-based instruments 46 Cap and trade 46 Biodiversity offset implementation 48

5 Supporting Instruments 52 Capacity building 52 Biodiversity in sustainability reporting 52 Sustainable public procurement 53

Glossary of terms 56

Bibliography and further reading 60

Boxes

Box 1 – The Integrated Biodiversity Management System (IBMS) 16 Box 2 – Examples of planning systems for mineral extraction in the EU 24 Box 3 – The International Finance Corporation (IFC) Sustainability Framework (2012) 26 Box 4 – Policy and legal provisions on biodiversity offsets in EIA requirements 28 Box 5 – Levels of biodiversity input for the rehabilitation plan 31 Box 6 – Public access to environmental information 33 Box 7 – Making biodiversity management information publicly accessible 34 Box 8 – Law on Prior Consultation with indigenous and native peoples in Peru 37 Box 9 – The Extractive Industries Transparency Initiative (EITI) 38 Box 10 – Danish raw materials and waste taxes 44 Box 11 – The Swedish gravel tax 45 Box 12 – The United Kingdom aggregates tax 46 Box 13 – The Hunter River Salinity Trading Scheme in New South Wales, Australia 47 Box 14 – The Australian Bushbroker® banking scheme 48 Box 15 – Wetlands banking in the United States 49 Box 16 – CDC Biodiversité, France 50 Box 17 – Sustainability reporting: The Global Reporting Initiative 53 Box 18 – The International Sustainable Public Procurement Initiative (SPPI) 54 Box 19 – Green public procurement for Brazil’s Olympics 54

7 Foreword

Governments have an important role to play in This practical guide explores the crucial rela- laying the foundations for a sustainable future. As tionship between policies and business actions, the primary stewards of natural resources, they and how regulatory tools can best be used to im- are responsible for the protection and wise use prove the biodiversity performance of the cement of these resources. Public policies and regulato- and aggregates sector and help reduce the sec- ry tools can help ensure these “public goods” are tor’s environmental footprint. managed carefully and safeguarded for future generations. This publication is part of a broader series addressing the risks and opportunities for biodiversity Creating an enabling environment for businesses and ecosystems that result from quarrying for to integrate biodiversity considerations into cor- cement and aggregates. While this particular porate policies and operations is an important guide is aimed at policy makers, other guides in driver of responsible resource stewardship. By the series are designed for businesses, to sup- holding all businesses to the same standards, po- port them in developing internal policies and sys- licy makers can create a level playing field, and tems to manage and monitor biodiversity on their by rewarding businesses that operate above mi- landholdings. The series emphasises the distinct nimum standards, they can encourage continuous but complementary roles that governments and improvement. businesses have to play in the conservation and sustainable use of nature and natural resources. At IUCN, we work with a wide range of economic sectors, from those with significant impacts The challenge ahead is in gaining momentum for on biodiversity, such as extraction, to biodiver- implementation. IUCN stands ready to support the sity-dependent sectors, such as agriculture and implementation of the recommendations, ideas biodiversity-based enterprises like ecotourism. and suggestions in this guide, and the rest of the In most cases, we have seen that business out- series. However, success can only be achieved comes can be enhanced by good public sector through collaboration. Through this guide, IUCN interventions. hopes to create a collaborative space in which governments, businesses and civil society work In the case of the cement and aggregates sec- together to create better outcomes for biodiver- tor, we have worked with key industry players for sity and ecosystems as well as communities who nearly 10 years, gaining experience with individual directly depend on natural resources. companies and also with industry associations. The scope of our work has ranged from site-level Finally, this guide is a living document, and we interventions to development of broader manage- hope that readers’ experiences and perspectives ment and reporting systems. However, the policy will give it longevity and relevance. We would like context was the missing link throughout this work. to illustrate these recommendations with a variety

8 of real-life examples and warmly welcome your feedback and suggestions. We invite all inte- rested parties to join us in a conversation to promote this collaborative interface between enabling policies and business actions for the benefit of nature and people.

Julia Marton-Lefèvre IUCN Director General

9 About this guide

Like any other extractive activity, quarrying for dards for the extraction of construction materials. cement and aggregates has the potential to af- Given that the guidance provided is global and fect biodiversity throughout the life cycle of an that legal systems vary extensively from country to extraction operation, both directly and indirectly. country, this guide focuses on providing general di- These impacts result from land clearance, noise rection for regulatory tools, rather than specifically and vibrations, pollution and waste, as well as the prescribing how this content should feature in the alteration of hydro-geological systems. legal framework of a certain country or system.

This guide provides guidance on the principles Chapter one explains the potential impact of and content of regulatory tools that can be used quarrying operations on biodiversity and ecosys- to identify and address impacts, risks and oppor- tems, the need to address and manage biodiver- tunities to biodiversity and ecosystems from quar- sity issues throughout the life cycle of extraction rying for cement and aggregates. It also draws on activities, and the role that policy makers and key international laws, existing strategies and a regulators can play in creating an enabling envi- range of relevant initiatives to develop a series of ronment to do so. Chapter two provides a policy principles to support these tools and help ensure goal and five principles to guide regulatory tools that biodiversity considerations are integrated in related to biodiversity management, thus laying planning and throughout the life cycle of quarry- the foundation for developing a legal framework ing operations. In the context of this guide, other that is in line with global biodiversity conservation environmental or social issues are addressed only objectives. Chapters three, four and five then when they link to biodiversity. explore the range of regulatory tools that can be used to promote better biodiversity management The guide is aimed at policy makers and regula- in the cement and aggregates industry; these tors at the national level, who are in the process chapters also provide examples of how these of adopting, reviewing and implementing relevant tools have been used in different countries. regulatory tools to strengthen biodiversity stan-

Executive summary

To function effectively, environmental policies Principle 2 Sound science forms the basis need to involve a mix of regulatory tools. Where- for biodiversity assessment as command-and-control regulatory instruments are mandatory and limit choice, market-based Principle 3 Incremental biodiversity values instruments introduce an element of choice and trigger differentiated but use price signals, either positive (financial re- proportionate responses wards/incentives) or negative (charges and taxes) to change behaviours. The key is to achieve the Principle 4 Impacts on biodiversity are right mix of tools based on a country’s institution- addressed in the context of al arrangements. This mix will vary depending on the mitigation hierarchy the maturity of the country’s environmental legal frameworks, the technical capacity of public au- Principle 5 Open, participatory and transparent thorities and the level of integration of sustain- processes support biodiversity ability practices across private and state-owned management enterprises operating in-country.

The following set of five principles and list of actions for policy makers aim to support the estab- Actions for policy makers lishment of a policy environment in line with the Command-and-control instruments global biodiversity conservation agenda. Togeth- er, the principles and actions provide an overview In drafting laws and regulations for biodiversity of the key messages within this guide and have management, take into consideration the key been elaborated based on the Integrated Biodi- terms, definitions and obligations associated versity Management System as well as the litera- with international conventions that have been ture and experts consulted for this guide. ratified by your country. Ensure that all terms and definitions related to biodiversity and ecosystems are consistently Policy Principles used in all laws and regulations. Principle 1 The ecosystem approach informs Undertake a comprehensive assessment of the land-use and strategic planning, institutional and legal framework in your country, as well as biodiversity manage- including environmental regulations and mining ment, from project inception to and planning laws, in order to assess the extent beyond closure to which this framework enables or hinders biodiversity conservation.

12 In countries with a federal or decentralised Formulate trading rules and establish the regu- structure, promote cooperation between differ- latory or contractual underpinnings necessary to ent levels of government through collaborative create effective property rights or implement an institutional arrangements. environmental tax. Based on an institutional and legal assessment, Establish monitoring systems and allow for adap- identify the need for adopting and/or strength- tive management to ensure the effectiveness of ening laws and regulations for biodiversity man- market-based instruments. agement in quarrying operations. Use planning tools to reconcile environmental Supporting instruments and development objectives at a strategic level, Create opportunities for capacity-building activ- and to ensure that biodiversity considerations ities related to integrated biodiversity manage- are fully integrated within land-use and strategic ment measures, in order to enhance or strength- planning. Such tools also need to be informed en compliance with environmental laws and by an ecosystem approach and established in regulations. an open, participative manner. Encourage sustainability reporting practices Include a biodiversity impact assessment as a through the use of international standards or the requirement in the overall Environmental Impact establishment of regulatory incentives or techni- Assessment or Environmental and Social Impact cal support. Assessment procedures. Such an assessment provides the basis for the baseline assessment Commit to sustainable public procurement pro- and subsequent tools, such as the biodiversity cedures and promote sustainable sourcing prac- management plan or action plan, and rehabilita- tices in the cement and aggregates industry, to tion and closure plans. improve the management of biodiversity and ecosystems in supply chains. Ensure that permitting procedures are transparent and provide opportunities for all stake holders, both governmental and nongovernmen- tal, to submit proposals and participate in the decision-making process. Establish an effective compliance and enforcement system, involving self-monitoring and reporting as well as administrative control/ inspections.

Market-based instruments Ensure that sufficient and accurate information about the environmental costs and cost differences of different activities is available and that necessary analytical studies are undertaken to define the most cost-effective instruments for targeting environmental damages. Help improve overall knowledge of the economic values or benefits of biodiversity, in order to know which components of biodiversity need to be protected, and to what extent, to safeguard or enhance their contributions to human welfare. Ensure that market-based instruments are in conformity with other policies. In general, successful market-based instruments incorporate other policy instruments to function effectively.

13 1 Biodiversity and ecosystems in quarrying operations

Biodiversity and ecosystems provide essential biodiversity impacts, emphasis needs to be placed products and services for human life, including on safeguarding biodiversity at the national level, oxygen, food, fresh water, fertile soil, medicine, through strategic assessment and planning. shelter, protection from storms and floods, stable climate and recreation. However, biodiversity is being lost at unprecedented rates, largely due to human activities. If this rate of loss continues, it Quarrying and will hugely impact human well-being and the abili- the Integrated Biodiversity ty for future societies to sustain themselves. Management System Like any other extractive activity, the extraction of materials for concrete production has the potential Concrete is the most widely used material in the to affect biodiversity and ecosystems both directly world after water. Every nation and every commu- and indirectly, throughout the life cycle of a project. nity requires concrete for construction and infra- These impacts result from land clearance, noise structure. Consequently, its main ingredients—ce- and vibrations, pollution and waste related to ex- ment and aggregates—are in high demand. They traction and production activities, and the alteration are also relatively widespread, extremely bulky of hydro-geological systems. As demand for these and fairly cheap, meaning that, as it is expensive resources grows and their supply becomes scarce, to transport them over long distances, their ex- it is expected that there will be greater conflicts and traction and production generally occurs locally increasing tradeoffs between business interests (see Figure 1). and biodiversity values. Given that quarrying operations are often located close to urban areas and In order to address the potential impacts of quarry- on land with relatively low biodiversity values, there ing for cement and aggregates on biodiversity, as are also important opportunities for this sector to well as to maximise the opportunities for biodiver- enhance biodiversity on quarrying sites through ef- sity on quarry operations, an integrated approach fective management and rehabilitation. to biodiversity management is needed. Such an approach should take into consideration the en- If the value of nature and the services it provides tire life cycle of an extraction operation, from the are integrated into decision making, the degra- planning phase to closure. It should also allow for dation of ecosystems can be halted. Laws and differentiated responses based on the biodiversity regulations have a key role to play in protecting that exists in and around a site. IUCN’s Integrated the environment, biodiversity and ecosystems, Biodiversity Management System (IBMS) for the and in promoting sustainable resource use. While cement and aggregates sector describes such an site-level measures are essential in addressing approach.

14 Figure 1 – Characteristics and impacts of quarrying

Pollution to land (e.g. deposits of cement kiln dust), air (NOx, SO2 and dust emissions) and water from sedimentation and altered hydro- logy (particularly for karst systems), including changes in water quality and reduction of overall water availability

Limestone quarries may contain Limestone and aggregate quarries are cave and karst systems which can often located close to their markets harbour unique (often endemic) (population and industrial centres), cave fauna and flora and generally and are hence less likely to be located are of high conservation priority in undisturbed natural areas

Disturbance of wildlife by noise and vibrations from blasting, quarry traffic and increased human access

Quarries for aggregate and cement production are generally smaller in size than extraction sites operated by the mining industry

Habitat change, through land clearance for Extraction of sand and gravel is often production sites, quarries and associated located in alluvial areas of freshwa- infrastructure, as well as from management ter ecosystems which, in areas of and rehabilitation activities high population density, are generally classified as areas of high biodiversity conservation concern Characteristics of Direct impacts resulting quarrying activities from quarrying

The IBMS forms the basis for the guidance and policy and throughout the life cycle of quarrying recommendations provided in this guide (See Box operations. These two documents have been de- 1). While this guide targets policy makers and reg- signed to complement each other, with one aimed ulators, the IBMS was developed as best prac- at changing business practices and the other at tice guidance for companies in the sector to in- creating the enabling policy environment for im- tegrate biodiversity considerations into corporate proved biodiversity management by the sector.

15 Box 1 – The Integrated Biodiversity Management System (IBMS) The IBMS provides guidance to companies in the risk-and-opportunity-based approach. The IBMS cement and aggregates sector that want to take a guidance is anchored on the business processes systematic approach to managing biodiversity at used by companies, as well as their interactions their operations. It delineates the key elements of with policy processes at several different stages a system for integrated and prioritised manage- (see table below). Thus, the implementation of an ment of biodiversity throughout the life cycle of an IBMS relies on regulatory tools that are consistent extraction operation and in all activities, using a with good biodiversity management practices.

Source: IUCN. 2014. Biodiversity management in the cement and aggregates sector: Integrated Biodiversity Management System (IBMS). Gland, Switzerland. Available at: www.iucn.org/cementandaggregates

16 In order for voluntary action on biodiversity by The role of policy leading companies to become standard practice throughout an industry or sector, policy makers makers and regulators and regulators need to support the establishment in creating an enabling of an enabling policy environment, by first putting in place minimum requirements for all operators environment and second creating incentives for companies to go beyond the minimum standards. Governments Policies, laws and regulations are an important can further enable scaling up of best practices by part of a framework for public and private actions business by rewarding voluntary measures that to advance the protection of the environment, re- support biodiversity goals. sources and ecosystems. On the one hand, laws and regulations provide the basis for mainstream- It is very important to ensure that the minimum ing biodiversity into strategic planning process- standards are applied equally to all operators of es, including land-use planning, Strategic Envi- every size, including state and private companies ronmental Assessments that include cumulative and national and international operators. Pro- and multi-source impacts, and landscape-level visions should also be made for rewarding first management processes that integrate biodiversity movers and best practices. Generally speaking, values based on the ecosystem approach. On the command-and-control measures are used to set other hand, they establish the framework for an minimum requirements, while market-based in- enabling environment that allows operators to instruments may be more appropriate for incentivis- tegrate biodiversity protection into their business ing better practices. activities.

17 2 Policy goal and principles for improved biodiversity management

The policy goal of this guide is to promote the in- work, taking into account the services provided by tegration of biodiversity management into cement ecosystems and involving people who benefit from and aggregates extraction, in order to achieve op- ecosystem services and could be affected by de- timal outcomes for biodiversity, ecosystems and velopment projects. natural-resource-dependent communities. By adopting the ecosystem approach in land-use The following five principles for biodiversity man- and strategic planning, local authorities can help agement lay the foundations for regulatory tools set priorities and identify possible conflicts be- designed to advance this goal. tween quarrying and biodiversity. This approach can also help prioritise areas for development that maintain ecosystem connectivity at a level which will not compromise biodiversity and ecosystems. Principle 1 Thus, an ecosystem approach to land-use and strategic planning requires taking into consider- The ecosystem approach informs land-use and ation legislation on protected areas, habitats and strategic planning, as well as biodiversity man- species and introducing appropriate measures, agement, from project inception to beyond clo- such as the creation of buffer zones. sure Integrated planning for natural resource extraction The ecosystem approach is defined by the Con- and biodiversity conservation at the regional level vention on Biological Diversity as “a strategy for can result in interesting and novel scenarios. Par- the integrated management of land, water and ticularly in sand and gravel extraction, where life living resources that promotes conservation and cycles of quarries are relatively short, there are sustainable use in an equitable way … It is based good opportunities for re-establishing habitats on the application of appropriate scientific meth- that have been lost; these activities can be direct- odologies focused on levels of biological organi- ed towards species and ecosystems that are re- zation which encompass the essential processes, gionally rare or under-represented. functions and interactions among organisms and their environment. It recognises that humans, with In promoting the ecosystem approach, it is im- their cultural diversity, are an integral component portant that all players look beyond their fenceline of ecosystems.” and work together to address cumulative impacts on a larger scale. Policy makers can support such An ecosystem approach proposes that decisions actions by setting requirements that any impacts about development activities be made based on in areas with relevant ecological connections knowledge of natural systems and how ecosystems to extraction sites be addressed in biodiversity

18 management activities. In addition, the sector can within the site. Thus, the higher the risk, the more be encouraged to make biodiversity management stringent the response. decisions in light of the surrounding landscape, in order to enhance biodiversity values in the area Biodiversity assessments and baseline studies and support conservation priorities. should be an integral part of planning and permitting requirements and inform the development of biodiversity management measures for the inception, operation and closure of quarries for cement and Principle 2 aggregate operations. Regulatory tools also need to Sound science forms the basis for biodiversity ensure that quarrying activities are managed in such assessments a way that biodiversity concerns are systematically and effectively integrated into planning and decision Planning and regulatory tools should require that making at an early stage, so that better outcomes the best available and most up-to-date scientific are achieved for the conservation and sustainable data informs biodiversity assessments and leads use of biodiversity resources. to the identification of measurable improvements in biodiversity management for planning, operation Differentiated requirements should be put in place and closure at extractive sites, including through depending on the level of biodiversity importance the permitting and EIA processes. Decisions should onsite. In areas where high biodiversity values have reflect the state of the art of biodiversity manage- the potential to be affected, clear and measurable ment. If such information is unavailable or incom- biodiversity targets should form an integral part of plete, regulators should use appropriate incentives rehabilitation plans and be required through the to encourage operators to contribute to the gen- permitting procedure. eration of scientific information through site-based research and assessments. Quarrying in protected areas should only be carried out if permitted under applicable legislation, Data on biodiversity is available from multiple based on the non-regression principle, which pre- sources. At the national level, the repositories of vents governments from loosening their existing such information will vary, but may include gov- standards or regulations regarding the protection ernment agencies, universities and non-govern- of biodiversity, and in accordance with established mental organisations. At the global level, there are legal requirements and the management objectives a number of web-based tools and datasets where of the respective areas. such information can be found, including the IUCN Red List of Threatened Species (www.iucnredlist. org), Protected Planet (www.protectedplanet. net), Key Biodiversity Areas and the IUCN Red Principle 4 List of Threatened Ecosystems (www.iucnredlist ofecosystems.org). In addition, the Integrated Bio- Impacts on biodiversity are addressed in the diversity Assessment Tool (www.ibat-alliance.org/ context of the mitigation hierarchy ibat-conservation) is an online tool designed to facilitate access to critical biodiversity information Regulators should ensure that plans for and deci- at the site level, in order to inform decision-mak- sions on activities that may have significant impacts ing processes. on biodiversity reflect due consideration of biodiversity risks and opportunities associated with the activities planned. All opportunities to protect, restore and enhance biodiversity should be identified, con- Principle 3 servation outcomes created and adverse biodiversity impacts adequately addressed. Incremental biodiversity values trigger differentiated but proportionate responses Policy and legal instruments should further aim at ensuring no net loss of biodiversity and biodiversi- Regulatory tools should require operators to as- ty management measures through use of the mit- sess the importance of biodiversity at proposed igation hierarchy, which states that (1) significant development sites, as well as their potential risks impacts are avoided; (2) impacts that cannot be and impacts, and mandate management respons- avoided are minimised; (3) restoration measures es proportionate to the importance of biodiversity are taken to address any unavoidable impacts; and

19 (4) any significant residual impacts on biodiversity Sub-national governments should participate that may remain are offset (see details on the mit- actively in the participatory and transparent pro- igation hierarchy on the next page). Where avoid- cesses, in order to contribute technical opinions ance of significant effects or application of the and knowledge of the area. While the operator mitigation hierarchy are not reasonably practica- ultimately bears the responsibility for biodiversity ble, the projects may be permitted only if justified management, where appropriate, local communi- by overriding public interest and after consultation ty members can play an important role in moni- of all stakeholders; in such cases impacts should toring and measuring activities. Such community be mitigated by reasonable and appropriate mea- engagement can have social, environmental and sures. economic benefits for all stakeholders, and may help build community support for the project. The limits of public information, including business confidentiality, pending procedures, etc., should Principle 5 be respected in this process. Such approaches may also help contribute to better enforcement of Open, participatory and transparent processes the laws and permit conditions. support biodiversity management Besides designing regulatory tools to ensure that Policy and legal instruments should encourage participatory processes are in place, policy mak- open, participatory and transparent processes for ers and regulators also have a broader role to play biodiversity management at all phases of a ce- in protecting the rights and building the capacity ment and aggregates operations, from planning to of local stakeholders. In this sense, they need to closure. Legal instruments should be used to en- ensure that the needs and opinions of natural-re- sure that stakeholders are well-informed and that source-dependent and indigenous communities there are appropriate and effective opportunities are balanced with biodiversity conservation needs, for consultation and participation in decision mak- to ensure sustainable outcomes. Furthermore, the ing. Information about the biodiversity aspects of rights of indigenous people need to be safeguard- quarrying activities can be made available based ed through principles such as that of free, prior on proactive disclosure to stakeholders and the and informed consent. This principle states that public, in accordance with applicable legislation. a community has the right to give or withhold its consent to proposed projects that may affect the Regulators should require that the management lands they customarily own, occupy or otherwise of biodiversity in quarrying operations gives ap- use. propriate weight to biodiversity-related social aspects at the local level, in order to integrate the The next chapters provide more detail on the reg- different perspectives and interests of stakehold- ulatory tools that policy makers can use and how ers as they relate to biodiversity. It is especially these tools can help encourage better manage- important to consider the opinions of communi- ment of biodiversity within the cement and aggre- ties who see themselves as potentially or actual- gates sector. ly affected by the activities through, for example, loss of vegetation, noise, vibration, dust and other forms of pollution.

20 The Mitigation Hierarchy

The mitigation hierarchy is defined in the BBOP Standard (2012) as follows:

Avoidance: measures taken to avoid creating impacts from the outset, such as careful spatial or temporal placement of elements of infrastructure, in order to completely avoid impacts on certain components of biodiversity.

Minimisation: measures taken to reduce the du- ration, intensity and/or extent of impacts (including direct, indirect and cumulative impacts, as appropriate) that cannot be completely avoided, as far as is practically feasible.

Rehabilitation/restoration: measures taken to rehabilitate degraded ecosystems or restore cleared ecosystems following exposure to impacts that cannot be completely avoided and/or minimised.

Offset: measures taken to compensate for any residual significant, adverse impacts that cannot be avoided, minimised and/or rehabilitated or restored, in order to achieve no net loss or a net gain of biodiversity. Offsets can take the form of positive management interventions, such as restoration of degraded habitat, arrested degradation or averted risk, or protecting areas where there is imminent or projected loss of biodiversity.

Sources: Rio Tinto. 2008. Rio Tinto and Biodiversity - Achieving results on the ground. Available at: SAME LINK. And, BBOP. 2012. Mitigation Hierarchy. Available at: http://bbop. forest-trends.org/pages/mitigation_hierarchy

21 3 Command-and-control instruments

This chapter reviews the legal tools, mechanisms An SEA is a formal, systematic process of analys- and approaches that can be used to support bio- ing and addressing the environmental effects of diversity management in quarrying operations, from policies, plans and programmes and other stra- integration into wider land-use and strategic plans tegic initiatives. This process applies primarily to to specific legislative instruments that regulate bio- development-related initiatives that are known to diversity management at the site level. It also dis- have or likely to have significant environmental ef- cusses procedural mechanisms that can be used to fects, notably those initiated individually in sec- complement laws and regulations, including access tors such as transport and energy, or collectively to information and public participation. through spatial or land-use change.

While an Environmental Impact Assessment (EIA) focuses on integrating environmental consider- Land-use and ations into development goals and objectives at the project level, an SEA extends the aims and strategic planning principles of an EIA to higher levels of decision making. It allows problems of environmental de- One way to integrate biodiversity management terioration to be addressed at their source in poli- into quarrying operations is to plan natural recy and planning processes, rather than waiting to source extraction as an element of broader land- mitigate their project-level impacts.i use and strategic plans. This requires looking beyond a particular site and making decisions based on a landscape, group of sites or specific initiative. Land-use planning

The impacts of the cement and aggregates indus- Strategic Environmental try at a landscape level and on biodiversity can be minimised through the development and appli- Assessment cation of national, regional and local policies for the supply of minerals. The overall aim of mineral Proposed and existing land-use plans may be planning is to meet the justified need for minerals subject to a Strategic Environmental Assessment at the lowest social, economic and environmental (SEA), which allows for the integration of conser- cost. Wherever practicable, areas of designated vation considerations into land-use planning pro- landscape, nature conservation or heritage value cesses. should be protected from mineral development.

22 There are competing land-use interests in every when other types of development are prioritised society and state. These interests range from com- above ground that prevent access to the minerals munity-related issues to industrial and commercial for the long term. It should take place at a high lev- issues to ecological issues. As far as the extractive el, since the distribution of minerals can vary sig- industries are concerned, the key challenge is to nificantly between regions.ii In the EU, the demand find a balance among the sustainable supply of for minerals is being set in the context of environ- minerals for society, economic development and mental and land-use policies and the impacts of the social and natural environment. The objective extraction at a landscape level and on biodiversity. of land-use planning within the context of mineral planning is to find sustainable solutions that take Land-use planning, as defined by the Food and into consideration medium-to-long-term views Agriculture Organisation of the United Nations, and local, regional and national interests. Miner- is “the systematic assessment of land and water al extraction requires access to mineral deposits, potential, alternatives for land use and economic which unlike many other resources are geograph- and social conditions in order to select and adopt ically fixed. Because of this inflexibility, land-use the best land-use options. Its purpose is to select planning requires a long-term view to protect min- and put into practice those land uses that will best eral deposits from sterilisation, which happens meet the needs of the people while safeguarding

23 resources for the future.”iii It can be considered any land-use planning process. Land-use planning a proactive rather than a reactive measure, in the does not necessarily prohibit resource extraction sense that does not react to specific proposals to but rather regulates where quarrying should not carry out development on specific sites. It can also take place and where it may be allowed, subject to help prioritise economic activities within a specif- certain conditions. Use of the ecosystem approach ic landscape, while at the same time ensuring the can help establish rules to attract extractive oper- sustainable use of natural resources. ations in areas where negative environmental impacts are less likely to occur. Land-use planning regularly takes into account nature protection; the consideration of require- Box 2 provides examples of planning systems for ments for species and habitat protection, protect- mineral extraction in the EU that, depending on ed areas and sustainable use of natural resources the jurisdiction, combine elements of land-use and are binding obligations and an essential part of mineral planning.

Box 2 – Examples of planning systems for mineral extraction in the EU

Mineral plans elaborated by some EU member and, where necessary, an appropriate assess- states (e.g. Austria, France, some German states) ment under the Habitats Directive. identify mineral reserves (mainly sand and gravel) In Slovakia, in the framework of the national raw and evaluate their quality and quantity (produc- materials policy, the overlapping of protected tivity), regional importance (demand, etc.) and areas (including Natura 2000 sites) and mineral suitability for exploitation. The plans also analyse reserves has been analysed in order to better possible conflicts with other land uses, which in- understand which are the actual overlaps, how clude Natura 2000, natural protection areas, for- far Natura 2000 sites are “limiting” extraction of ests, groundwater protection zones, settlement known reserves, and what are the possible solu- areas and traffic routes, and also identify areas tions in sites that are subjects of interest for both that may be suitable or unsuitable for extraction. mining and nature protection. In England, Planning Policy Statements and Some mineral planning systems also consider guidelines for Minerals and Biodiversity and the need to safeguard mineral resources for fu- Geological Conservation provide clear rules and ture exploration and/or extraction. For instance, conditions for the extraction of aggregates, brick Sweden has developed a land bank system by clay, natural building and roofing stone, oil and declaring various types of mineral reserves to be gas. The roles and responsibilities of the plan- of national interest in accordance with the En- ning authority and the project developer are de- vironmental Code, and protecting the resources fined, and the competent authority for nature from being sterilised by other land-use develop- conservation (Natural England) must be consult- ment. ed as regards the assessment of impacts when extractive activities are likely to have adverse ef- Source: European Comission (EC). 2011. Guid- fects on protected areas (including Natura 2000). ance Document “Non-energy mineral extraction Regional and local strategic plans set out the and Natura 2000”. Pp. 40. Luxembourg. Available spatial framework within which proposals for the at: http://ec.europa.eu/environment/nature/natura extraction sites will be considered. Such plans 2000/management/docs/neei_n2000_guidance. are subject to a strategic environmental impact pdf

24 The permitting process represents a crucial op- Conservation and portunity for determining and approving the biodiversity management measures necessary for the sustainable use legislation responsible operation of a given activity. There- fore, all measures that will be undertaken during Risks to the environment and biodiversity from the operational phase should be introduced as re- natural resource extraction can also be regulated quirements during the permitting procedure and at the site level through specific legislative instru- included in permit conditions, with statutory obli- ments including: gations specified.

permits; These activities might include mitigation measures at different phases of the project; requirements for environmental impact assessments (EIAs); the compilation of information on biodiversity to management plans; and be used for biodiversity inventories, biodiversity monitoring and inspection systems. monitoring and continuous biodiversity improvements; mine closure measures and plans; and any plans for rehabilitation, restoration, offsets or These requirements may be included in specific compensation. biodiversity conservation legislation, as well as in more general laws and regulations on mining or Although permitting is generally required for new industrial activities. The placement will depend activities or for significant changes in existing ac- on the existing legal framework and constitutional tivities, it may also be required for existing activ- structure of the country, the national legal systems ities or installations. When permitting is required and practices, and regulations at a local level. for existing activities, it is important to recognise that, in most cases, the operators already have permits, and, even if authorities are entitled to Permitting procedures require changes, additional resources and time are often needed for such changes. As a conse- for quarrying operations quence, transition periods may be granted, with the condition that compliance plans for achieving The permitting process, overseen by compe- the new requirements over time need to be elabo- tent administrative authorities in a formal admin- rated. This may also apply to requirements for the istrative act, is the core legal instrument for the integration of biodiversity conservation into exist- integration of biodiversity into mineral resource ing extractive industry activities. extraction. In permitting procedures, authorities either assess environmental impacts or verify the results of formal EIAs carried out by experts hired Environmental impact by the proposed operator of a project. These results are then fed into the overall decision-making assessment with specific process. attention to biodiversity Different jurisdictions take varying approaches to impact assessment addressing the interface between environmental considerations and permitting for access to Nearly every country has a requirement for an en- mineral rights. In some jurisdictions, environmen- vironmental impact assessment (EIA) as part of tal considerations are integrated directly into the the permitting process for mineral extraction ac- permitting process, while in others they are con- tivities. An EIA identifies the potential impacts of sidered separate from the permitting process and a planned activity on the environment and biodi- subject to a different set of laws and regulations. versity and specifies mitigation measures to ad- In many countries, quarries are subject to the laws dress those impacts. Collection and assessment of landownership, i.e. they are owned by the rel- of information on potential impacts on the envi- evant landowner, unlike most minerals, which are ronment, including biodiversity, is the core of the often owned by the state. However, even when procedure. quarries are the property of the landowner, they are still subject to the environmental permitting EIA requirements are often included in specific EIA process before they are approved for operation. laws and regulations that need to be considered

25 when deciding on permit applications. To facilitate be part of the overall EIA, provided that it is iden- the preparation of EIAs by operators, the compe- tified as a specific section. tent authority with responsibility for approving the EIA and granting the relevant permit can provide The following sections offer some points on the information on the overall legal framework in a process, scope, content and standards of the guide or on the relevant government website. biodiversity impact assessment that may prove helpful for law and policy makers looking to main- At the European level, Article 6 of the EU Fauna stream biodiversity considerations into environ- and Flora Habitat Directive provides that poten- mental regulations. tial impacts on biodiversity be given particular attention. Impacts on biodiversity need to be given equal weight when balanced with other aspects. The biodiversity impact Assessment procedures and their outputs should assessment process be such that the assessment of biodiversity impacts is clearly identifiable. This does not mean A comprehensive biodiversity impact assessment, that two separate assessment procedures are which looks at potential impacts on biodiversity necessary; biodiversity impact assessment can and ecosystem services, will lead to the creation

Box 3 – The International Finance Corporation (IFC) Sustainability Framework (2012)

The IFC’s Sustainability Framework promotes Performance Standard 6: Biodiversity Conser- sound environmental and social practices in busi- vation and Sustainable Management of Living ness activities, encourages transparency and ac- Natural Resources – recognises that protecting countability, and contributes to positive devel- and conserving biodiversity, maintaining ecosys- opment impacts. IFC’s Performance Standards, tem services and sustainably managing living which are part of the Sustainability Framework, natural resources are fundamental to sustainable have become globally recognised as a benchmark development. The requirements set out in this for environmental and social risk management in Performance Standard have been guided by the the private sector. CBD. The applicability of this Performance Stan- dard is established during the environmental and With regards to EIAs and biodiversity impact as- social risks and impacts identification process. sessment in quarry operations, two Performance Based on this process, the requirements of this Standards (1 and 6) need to be given special con- Performance Standard are applied to projects (i) sideration, as they provide specific guidance for located in modified, natural and critical habitats; better integration of biodiversity management into (ii) that potentially impact on or are dependent on business operations: ecosystem services over which the client has direct management control or significant influence; Performance Standard 1: Assessment and or (iii) that include the production of living natu- Management of Environmental and Social ral resources (e.g., agriculture, animal husbandry, Risks and Impacts – establishes the importance fisheries, forestry). of (i) integrated assessment to identify the environmental and social impacts, risks and opportunities Source: International Finance Corporation (IFC). of projects; (ii) effective community engagement 2012. Performance Standards and Guidance through disclosure of project-related information Notes available at http://www.ifc.org/wps/wcm/ and consultation with local communities on mat- connect/topics_ext_content/ifc_external_corpo ters that directly affect them; and (iii) the client’s rate_site/ifc+sustainability/sustainability+frame management of environmental and social perfor- work/sustainability+framework+-+2012/perfor mance throughout the life of the project. mance+standards+and+guidance+notes+2012/ performance+standards+-+2012

26 of a baseline assessment representing the status a site identified, described and assessed, includ- quo before operations start. A biodiversity impact ing residual impacts that cannot be avoided and assessment is conducted as part of the broader any necessary mitigation measures (see Figure 2). environmental impact assessment process, either The assessment should also include all aspects as part of the overall EIA or an environmental and and phases of the proposed activity, including site social impact assessment (ESIA) required by ex- preparation, development of the site, operation, isting legislation. It may also be a separate pro- rehabilitation and closure, as well as all elements cedure, as suggested for Natura 2000 areas in EU of biodiversity possibly affected and all possible legislation. impacts of the proposed activity on biodiversity.

The process should include an adequate inven- International standards specific to biodiversity im- tory of the biodiversity present at the site and, pact assessment, such as the “Voluntary guide- based upon this inventory, a proper identification lines for biodiversity-inclusive impact assess- of the biodiversity importance of the site. It is im- ment” developed by the CBD, the EU Natura 2000 portant that the biodiversity impact assessment network or the International Finance Corporation be as comprehensive as possible, with all possi- (see Box 3), are useful frames of reference. ble impacts of a planned activity on and around

27 Box 4 – Policy and legal provisions on biodiversity offsets in EIA requirements

Governments can introduce biodiversity offset- requires the avoidance and minimisation steps ting policy and regulation in two basic ways. The for all impacts on valued biodiversity; first is through specific provisions on biodiversity requires that significant residual impacts are offsets (and perhaps other aspects of biodiversi- offset; ty conservation) and the second is to incorporate offsetting provisions into other laws and policies addresses all components of biodiversity af- that deal with EIA, land use planning, SEA, sec- fected, including ecological and evolutionary toral policies or broader environmental policies. process and functional aspects; The decision on which approach to take depends addresses the use of cultural values of biodiver- to some extent upon the legal customs of the ju- sity to affected parties; risdiction concerned, and also upon the scope of the other laws relative to the intended scope for considers impacts beyond the site boundaries, biodiversity offset requirements. at the landscape scale; addresses indirect and cumulative impacts; and In many countries, EIAs provide the necessary framework for governments to negotiate biodi- evaluates the effectiveness and risks of pro- versity offsets with developers, particularly for posed measures to minimise and restore/repair larger-scale projects. In order for the EIA to act impacts; that is, it must provide a reliable mea- as a trigger for biodiversity offsets, the require- sure of residual negative impacts on biodiversity. ments of the EIA system itself need to be robust and transparent, to ensure that the full mitigation Details about implementation of the proposed off- hierarchy is followed, that there is a reliable mea- set should then be incorporated in an environmen- sure of residual impacts on biodiversity and their tal management plan (offset management plan) or significance, that biodiversity offset negotiations Biodiversity Action Plan. take place with stakeholders, and that realistic and practicable offset proposals are prepared. The Business and Biodiversity Offsets Programme (BBOP) has developed tools and resources related When integrating biodiversity offset provisions to biodiversity offsets, including principles on bio- within EIA requirements, it is important to ensure diversity offsets and guidance for designing off- that the EIA or its supporting policy framework: sets, as well as resource papers and case studies.

includes targets to achieve “no net loss” of Source: Crowe, M. and ten Kate, K. 2010. Biodi- biodiversity, translated into country- and con- versity offsets: Policy options for governments. text-specific indicators; Available from: http://www.forest-trends.org/pub lication_details.php?publicationID=3079

28 Figure 2 – Geographical scope of the biodiversity impact assessment

A buffer zone around the site, which may be from several hundred metres to several kilometres around the site, depending upon land uses

The site itself

Access roads, conveyor belts and transportation routes that may cut across paths of movement or mi- Areas connected ecologically to the site, for gration of some fauna, or disturb example, rivers and streams downstream of critical areas the site that may be affected by hydrological changes or pollution resulting from quarrying

Wider areas linked to the site by particular species, for example, migratory species that use the site or surrounding area for resting or breeding

29 Contents of the biodiversity impact Key Biodiversity Areas (KBA); critical habitats and, in particular, limestone A biodiversity impact assessment should include resource areas should be investigated for the information on the proposed activity, the environ- presence of karst ecosystems and features es- ment that may be affected, and the impacts of pecially caves; the proposed activity on the environment, for various stages of the operation. EIA and biodiversity ecosystems (terrestrial and aquatic) and the assessment legislation generally prescribes the services they provide; output, i.e. the information required for a sound species on the IUCN Red List of Threatened decision. An essential part of this information is Species; categorisation of the impacts, in order to determine the risk to biodiversity and ecosystem integ- national priority species and national priority rity. To determine the risk to biodiversity and eco- habitats (defined in legislation and/or National systems, it is necessary to classify the biodiversity Biodiversity Strategy and Action Plan). importance of the site as well as understand the impacts that the operation will have on biodiversi- In addition to describing and assessing the pos- ty. Within the assessment, biodiversity and poten- sible impacts, the biodiversity assessment should tial impacts can be categorised as follows: also identify mitigation measures for all operational phases of the proposed activities and beyond protected areas: potential impacts on rec- closure (see Box 4). Mitigation measures include ognised areas of high conservation value that biodiversity management activities as part of the are either in or nearby the site; environmental management measures required by law. The development of management plan(s) habitats: the presence of characteristic and will be informed by the descriptions of possible high-value habitats found in the area upon impacts and identification of mitigation measures which the species depend; within impact assessments. These plans should species: rare or endangered species that are be prepared and agreed on in the overall permit- present in or near the site, characteristic spe- ting process and will be part of the permitting con- cies that are found in the area, and invasive ditions. alien species that might be a threat to biodiversity in the area; hydrological services: including ground and sur- Management plans face water balances and flows; and incorporating biodiversity community use: the key uses of biodiversity by local stakeholders, including livelihood and rec- The assessment of environmental risks and oppor- reational uses of biodiversity, as well as spiri- tunities will trigger the development of manage- tual values associated with biodiversity in and ment plans that address the risks identified and around the site. realise the opportunities associated with improved practices. These plans can include an environmen- International instruments and standards, as well tal management plan (EMP), a biodiversity action as national law as applies, can be useful referenc- plan (BAP) and a mining closure and site rehabilita- es for identifying biodiversity that may be affected tion plan. Such plans are often a legal requirement by the operation. Among the useful sources of in- and focus on avoiding, minimising and mitigating formation are: impacts of operations on the environment. Given the nature of quarrying activities, biodiversity con- protected area status, including World Heritage siderations should be an integral component of sites, Ramsar sites, biosphere reserves, IUCN these plans. Furthermore, regulatory tools should protected area management categories I-IV and provide for differentiated requirements based on other significant national protected areas; the level of biodiversity importance and impacts of an extraction site.

30 Box 5 – Levels of biodiversity input for the rehabilitation plan

Standard rehabilitation plan • re-vegetation using only native species • active control of invasive alien species • re-vegetation using non-invasive alien species or native species • no biodiversity monitoring (except presence/ absence of invasive alien species) • active control of invasive alien species • ultimate land use based on a natural resource • no biodiversity monitoring base/biodiversity (forestry, grazing, etc.) with • ultimate land use not primarily geared at bio- due cognisance of the land-use patterns in the diversity or depending on biodiversity (e.g. re- broader landscape sidential/industrial) Source: IUCN. 2014. Biodiversity management Rehabilitation plan with biodiversity targets in the cement and aggregates sector: Integrated Biodiversity Management System (IBMS). Gland, • may include biodiversity targets (together with Switzerland. Available at: www.iucn.org/cement targets for other forms of land use) andaggregates

Environmental Management Plan (EMP) focuses exclusively on biodiversity and ecosystem risks and opportunities. The decision on the need The EMP provides a description of the methods for and preparation of a BAP should also be part and procedures for mitigating and monitoring im- of the permitting process, and the BAP, if needed, pacts and promotes the awareness and use of should be part of the permit conditions. best environmental management practices by sites during their construction and operations phases. Basic elements of a BAP may be prescribed in secondary legislation (decrees, regulations) or in Findings of the biodiversity impact assessment, administrative instructions or guidelines issued by especially the recommended mitigation measures the government. BAPs should include targets for could be incorporated into the EMP. The manage- important biodiversity and monitoring procedures. ment plan should include provisions for emergency response if unforeseen biodiversity- related events occur, such as discovery of rare species, discovery Mine closure and site rehabilitation plan of important undetected caves, accidental spillage of oil or other substances reaching water resourc- As part of the permitting process, a developer es, or quarrying activities accidentally disturbing should be required to submit a mine closure, land underground water balance. The EMP should refer reclamation and site rehabilitation plan to identi- to the biodiversity value of the site, the opportuni- fy measures to restore the impacted parts of the ties to enhance biodiversity, the landscape context site. The closure and rehabilitation plan, if agreed and community expectations and desires. to by the authorities, should also be made part of the permitting conditions.

Biodiversity Action Plan (BAP) The management plan for the site should be fully integrated into the mine closure and rehabilitation A BAP should be required for sites where the risk plan, and vice versa. Specific biodiversity require- assessment determines that biodiversity values ments for the rehabilitation plan, which are best are high and impacts would be difficult to mitigate. included in secondary legislation (decree, reg- BAPs are intimately linked to EMPs and comple- ulation) or in administrative instructions, should mentary to rehabilitation plans. While both EMPs include biodiversity rehabilitation targets, a min- and rehabilitation plans consider other aspects of imum level of biodiversity input and opportunities the risk assessment, such as environmental im- for biodiversity gains (see Box 5). pacts and safety-related considerations, the BAP

31 It is important to stress that closure and rehabilitation measures should be implemented as ear- Procedural mechanisms ly as possible and financial assurances should be provided early in the project, to ensure there As a complement to regulations and laws governing are enough funds available at the time of closure. the permitting and impact assessment processes, Specific characteristics of rehabilitation plans that governments should implement specific procedur- could be helpful in drawing up specific require- al mechanisms to ensure transparency, participa- ments can be found in the IBMS document dis- tion, consultation and compliance, with a view to cussed in Box 1. enhancing the legitimacy of the entire process. It is essential that access to information is ensured and that all stakeholders, both governmental and non- governmental, have the opportunity to participate Biodiversity monitoring system in public consultation processes (see Box 6). and reporting requirements Principle 10 of the 1992 Rio Declaration on Envi- During the permitting process, the monitoring and ronment and Development states that environmen- reporting requirements for the biodiversity of the tal issues are best handled with the participation site will be determined and prescribed, with con- of all concerned citizens in the decision-making ditions on how to fulfil the general monitoring obli- process. States should require public authorities – gations included in legislation or in secondary rules including government bodies from all sectors and and regulations on biodiversity monitoring. The at all levels, as well as bodies performing public subjects of biodiversity monitoring at the site, the administrative functions – to create mechanisms procedures and the reporting requirements should and adopt measures for ensuring access to infor- be decided on in the permitting procedure and in- mation, public participation and access to justice. cluded in permit conditions. Basic elements of a monitoring system for a site to be considered in the permitting process may be described in secondary legislation (decree, regulation) or in administrative instructions or guidelines, and should include reporting requirements.

32 Box 6 – Public access to environmental information In the EU, the Aarhus Convention and EU Direc- of conservation measures and their relationship tive 2003/4/EC on public access to environmental to sustainable development objectives, and shall, information mandate that member countries pro- as far as possible, organise public participation in vide access rights to guarantee that the disclo- the planning and implementation of conservation sure of information is the general rule. Public au- measures. thorities are permitted to refuse a request only in specific and clearly defined cases. There is also a At present, member countries of the Economic mechanism for reviewing compliance. Commission for Latin America and the Caribbe- an are also developing a regional instrument on In Southeast Asia, the rights of access to infor- access to environmental information, participation mation and participation are expressed in article and justice to ensure those rights in the region. 16 of the ASEAN Agreement on the Conservation of Nature and Natural Resources, which stipu- Source: European Commission (EC). 2013. The lates that the contracting parties shall circulate as Aarhus convention: http://ec.europa.eu/environ widely as possible information on the significance ment/aarhus/

Access to information The second system should allow the public to request and receive information, outside review or National legislation relating to access to informa- comments. This right to access information should tion on environmental matters provides a practical be extended, by law, to any person, without hav- tool for achieving transparency and accountability ing to prove any interest or reason for requesting by allowing individuals and communities who are, information. Legislation to implement this system or may be, affected to obtain government-held in- should outline the timeframes for delivering the formation about activities that can affect them or information requested (minimum of one month pose a risk to their lives or to the environment. as stated by the Aarhus Convention with possi- In addition, access to information legislation can ble extension if needed for a justified reason) and also provide recourse to justice when the public standards or guidelines for situations when in- authority fails to provide such information through formation requests may be refused, for example procedures for review or appeal of an agency’s where disclosure would adversely affect various decision to withhold information. interests.

Two complementary systems are necessary to ef- In general, situations that could lead to refusal of fectively implement this topic. The first is a sys- information might include national defence, in- tem to keep records of all decisions and process- ternational relations, public security, the course es held by public authorities, and to disseminate of justice, commercial confidentiality, intellectual them and inform the public without the need for property rights, personal data or the confidenti- them to request the information. Relevant legisla- ality of the proceedings of public authorities; or tion for this system should identify specific docu- where the information requested has been sup- ments to be publicly available for review, comment plied voluntarily or consists of internal communi- and information, both in draft and in final form. cations or material in the course of completion. The legislation should also state the authorities The grounds for refusal should be interpreted responsible for providing access and distribution narrowly, taking into account the public interest of information, the means of distribution, format, served by disclosure. The legislation should also timeframe and the means by which comments will guarantee stakeholders access to review proce- be received. Box 7 details the type of biodiversity dures before a court of law or other independent management information that should be available, and impartial body to challenge a decision; this widely publicised and easily accessible. would be relevant when a stakeholder considers

33 Box 7 – Making biodiversity management information publicly accessible

that his request of information has been unrea- Public participation in sonably refused, partly or fully, inadequately an- swered or ignored, or in any other way not han- decision-making processes dled in accordance with applicable law. The public’s right to participate in decision making Access to information held by the authorities can on administrative and legislative measures relating be included in specific legislation. Reference to to the development and exploitation of natural re- such legislation should be made in biodiversity, sources is crucial, particularly in mineral extraction. land-use and mining legislation, where the legal The Aarhus Convention (Annex I) lists quarries and instruments such as planning, EIA/ESIA and per- opencast mining where the surface of the site ex- mitting are regulated. When a single piece of leg- ceeds 25 hectares as one of the activities that re- islation concerning access to information does quire public participation in decision-making pro- not exist or is insufficient, provisions on access cesses. Legislation should specifically establish that to information and the relevant procedures should extractive activity-related decisions should be sub- be incorporated into legislation on biodiversity ject to appropriate participation by affected persons conservation or into laws and regulations on min- and the general public. Decisions and processes ing or land-use planning. where public participation is particularly important

34 for integrating biodiversity conservation into quar- mental education and awareness raising, should rying activities include land-use planning, designa- also be provided to stimulate public participation tion of protected areas and quarry sites, EIA, per- in decision-making. mitting processes and establishment of mitigation measures and management plans for biodiversity. Government authorities should take due account of the public comments within the decision-mak- Some basic provisions for early and effective pub- ing process, and any decisions should be prompt- lic participation should be incorporated into rele- ly relayed to the public. Decisions should refer to vant legislation. The concerned people should be the comments and, if the comments have not been informed in a timely manner, and the information followed, proper justification should be provided. provided should be accurate, relevant and un- Public citizens should have access to review pro- derstandable. Once they have received all rele- cedures before a court of law or other independent vant information, the public and/or affected per- and impartial body to challenge the substance and sons should be given adequate or reasonable procedural legality of any decision, act or omission opportunity to prepare and express their views relating to public participation in decision making in and opinions, for both drafts and final decisions. environmental matters. Such procedures should be Capacity-building resources, including environ- timely, fair, open, transparent and equitable.

35 Finally, the community and other affected or inter- ested parties should have the right to monitor and Compliance and oversee the project and its impact, and, whenev- enforcement-related er there is significant impact to biodiversity and/ or their livelihoods, there should be a complaint mechanisms mechanism procedure available to them. Ensuring compliance is an important comple- Indigenous and local communities that depend ment to legislation that oversees impacts on the on biodiversity for their livelihoods or tradition- environment and biodiversity; laws and regula- al lifestyles should be given special attention to tions will be useless if the government is unable guarantee their participation in decision-making to ensure compliance and effective implementa- processes. If needed, mechanisms should be es- tion. Strengthening the integration of biodiversi- tablished for this purpose. As such, adopting the ty conservation into extractive industry activities obligations on free, prior and informed consent of also means making recommendations for better the International Labour Organization (ILO) Con- practices in compliance mechanisms. vention 169 on Indigenous and Tribal Peoples in Independent Countries and the UN Declaration on The objective of compliance mechanisms is to en- the Rights of Indigenous Peoples into national leg- sure that the statutory obligations, as well as the islation is recommended (see Box 8), particularly obligations and conditions established in permits, the following aspects: are followed. Inspection and supervision also ensure that the mitigation measures have been im- consult the people concerned whenever con- plemented and thus that the environmental and sideration is being given to legislative or admin- biodiversity management systems are working. istrative measures that may affect them directly Inspection/supervision must cover all activities (ILO Convention 169, Article 6a); throughout all phases, including site operations, site-closure and post-closure measures. When consult and cooperate in good faith with Indige- statutory obligations imposed on an operation nous Peoples, seeking to obtain their free, prior via a license, EIA or other regulatory process are and informed consent (UNDRIP, Article 19, 32 not met, enforcement mechanisms must be put in (2)); place. recognise the rights to participate in decision making in matters which affect Indigenous Peo- An effective compliance and enforcement pro- ples’ rights (UNDRIP, Article 18); gramme requires governments to take a number of establish means by which these people can actions. Compliance should be considered when freely participate, to at least the same extent environmental laws and regulations are framed. as other sectors of the population, at all levels Good communication with industries likely to be of decision making in elective institutions and affected can also help improve eventual compli- administrative and other bodies responsible for ance. Economic instruments should be chosen policies and programmes that concern them carefully, in order to maximise compliance. Envi- (ILO Convention 169, Article 6b); and ronmental performance can be improved by a mix of such instruments, including incentives as well safeguard the people concerned against the as restrictions. In addition to command-and-con- abuse of their rights; means should be provided trol regulations, other approaches, such as volun- to allow them to take legal proceedings, either tary or negotiated agreements and market-based individually or through their representative bod- instruments should be given consideration. ies, for the effective protection of these rights (ILO Convention 169, Article 12). A number of issues are crucial to ensuring effective compliance:

Competence and expertise: Governmental and administrative authorities responsible for compliance control must have the necessary competence and expertise in biodiversity conservation. Authorities must have sufficient personnel and appropriate equipment. Otherwise, they should have access to expert advice.

36 Box 8 – Law on Prior Consultation with indigenous and native peoples in Peru

The Law on Prior Consultation was adopted in Peru organisations, which are appointed by members in 2011. It builds on commitments set out in the ILO of indigenous communities. In addition, the peo- Convention 169 concerning Indigenous and Tribal ples’ representative organisation can request the Peoples in Independent Countries. initiation of the consultation, and if such petition would be rejected, legal remedies are provided. The Peruvian law recognises the right of indigenous and native nations to be consulted before The final decision is adopted by the competent the adoption of any legal or administrative mea- authority. It has to be justified and refer to all sures (e.g. mining operation permits), as well as points of view, suggestions and recommenda- any plans or programmes for development at nations of the people implied, and must include an tional and regional levels (e.g. land-use planning) analysis of the implications of the decision for the that could directly affect their rights, cultural iden- people. The consensus achieved is legally binding tity, quality of life and development. Prior consul- for both parties. Even if there is no consensus, the tation must be conducted before adopting any authorities are obliged to ensure the protection of decision for exploitation of natural resources lo- people’s collective rights. cated in their territories. The law aims at reaching consensus between the government and native It is important to note that this procedure does not peoples. The competent authorities (i.e. the ones preclude the obligation of the authorities to con- responsible for the measure) are obliged to identi- duct public participation procedures as part of EIA fy decisions that can potentially affect Indigenous and permitting processes, which include a wider Peoples, identify the concerned indigenous or range of stakeholders. native populations, fully inform them of the measures, evaluate the measure taking into consider- Source: Full text of the Peruvian law on Prior ation their collective rights and initiate a dialogue Consultation with indigenous and native peo- with the people. The consultation is developed ples (in Spanish): http://faolex.fao.org/docs/pdf/ through the Indigenous Peoples’ representative per128120.pdf

Legal means: Authorities must have the neces- Transparency and accountability: Compliance sary means to undertake appropriate and ef- control needs transparency, not only for the op- fective inspection/supervision, including setting erator but also for other affected stakeholders, aside appropriate financial resources. Legisla- including the public. Reports on inspection/su- tion must provide for these. pervision should, to the extent possible, respect rules about business confidentiality. There are Cooperation of authorities: Inspection/supervi- a number of inspection standards available, sion authorities must have the opportunity to for example the EU’s Integrated Pollution Pre- participate in permitting procedures, both to vention Control system (IPPC), which applies ensure that aspects of enforcement are consid- to extractive industry activities. For instance, ered and permits are “enforceable” and to en- in the IPCC system, industries with a high pol- sure that they are informed about the permits lution potential are required to have a permit that they are expected to control afterwards. which can only be issued if certain environmen- Conversely, inspection/supervision authorities tal conditions are met. Member States are re- should inform permitting authorities about the sponsible for inspecting industrial installations results of compliance controls, enabling permit- and ensuring they comply with the directive. At ting authorities to verify that permits are work- the global level, the Extractive Industries Trans- ing or whether modifications and adaptations parency Initiative (EITI) is a recent example of are required.

37 a transparency and accountability standard for reporting, results can be taken into account better governance of natural resources that rec- when deciding about inspection/supervision. onciles and makes public company payments Especially where environmental auditing sys- and government revenues from oil, gas and tems are in place and are applied by operators, mining at the country level (see Box 9). inspection/supervision can be reduced, though not completely replaced, as any self-regulation Monitoring: Compliance can also be ensured requires some governmental guarantee. by self-monitoring and reporting by industry. A combined system is appropriate, involving both self-monitoring and reporting and admin- Where obligations are not complied with and could istrative control. To the extent operators volun- cause serious damage to the environment, en- tarily establish environmental and biodiversity forcement measures, including appropriate sanc- management systems involving monitoring and tions, are needed.

Box 9 – The Extractive Industries Transparency Initiative (EITI)

The EITI is a global standard to ensure better nat- The Initiative encourages greater transparency ural resource governance through transparency and accountability to help mitigate the potential and accountability in the extractive sector. It is negative impacts of mismanaged revenues. a voluntary initiative, supported by a coalition of companies, governments, investors and civil-so- The EITI has 12 principles that are the corner- ciety organisations. stone of the standard. It includes several criteria detailing minimum requirements that countries The EITI has a robust but flexible methodology for must follow. At present, 23 countries worldwide monitoring and reconciling company payments have met the requirements established in the EITI and government revenues from oil, gas and min- Standard. ing at the country level. According to this methodology, each implementing country must develop Source: EITI Standard: http://eiti.org/files/English_ its own EITI process adapted to its specific needs. EITI%20STANDARD_11July_0.pdf

4 Market-based instruments

This chapter provides an introduction to mar- than through explicit directives.”iv These tools can ket-based instruments, explaining what they are, harness market forces by redefining the agenda what their function is, why they can be useful pol- of companies and individuals so that they see im- icy tools for biodiversity conservation, and the proved environmental outcomes as in their own practical advantages they offer in relation to the interest. more traditional command-and-control instruments. MBIs can result in the same benefits to biodiversity conservation as command-and-control mechanisms, but at a lower financial cost to government, industry and society as a whole, by: Overview of market-based allowing flexibility in response to the instru- instruments ments, so that each individual can choose the lowest-cost means of achieving the desired A challenge for biodiversity management is that, outcome; in the absence of well-defined property rights for encouraging greater change or abatement mea- habitats and biodiversity components, the costs sures amongst those who can achieve change and benefits to biodiversity resulting from the most cheaply, as opposed to imposing equiva- land-use activities of any one individual operator lent change requirements on all; and tend to fall on society as a whole, rather than on the individual. As such, an operator may not ful- providing positive incentives for better biodiver- ly consider these costs and benefits in its deci- sity outcomes, compared to the negative or pu- sion-making. nitive incentives evident in regulatory approaches.v Market-based instruments (MBIs) aim to internal- ise these external costs and benefits and encour- Command-and-control regulations are more pre- age private producers and consumers to consider scriptive in nature than MBIs. For example, com- biodiversity or ecosystem values in their econom- mand-and-control mining regulations tend to have ic decisions, either through pricing tools such as minimum requirements for site rehabilitation, re- taxes or subsidies or by allocating tradable prop- quire the use of a certain type of management erty rights to “pollute” at a level below that which process to prevent environmental damage, or occurs in a non-regulated marketplace. specify a maximum allowable level of pollution at the firm level. MBIs are broadly defined as “regulations that encourage behaviour through market signals rather

40 However, a challenge of command-and-control recognise that measures such as subsidies or instruments is that they require all companies to payments for environmental services are only ef- reduce their pollution by the same amount, even fective as long as budgets remain available. For if the companies are only able to achieve this at this reason, the environmental outcome of price- different costs (due to differences in processes based instruments is sometimes considered less employed, input mixes, location-specific factors, certain than quantity-based approaches, such as etc.). In contrast, an MBI with the same allowable cap-and-trade schemes. In general, successful level of pollution target will encourage those com- MBIs usually incorporate other policy instruments panies or plants that can reduce their environmen- to function effectively, for example quantity-based tal impact at a lower cost per unit of discharge to instruments tend to require complementary regu- reduce more, relative to those operators who face lations to create effective property rights or enti- higher abatement costs. tlements.

MBIs, therefore, allow firms to make adjustments While there are many benefits to using - mar based on their unique business structures and op- ket-based instruments, some caution also needs portunities. Furthermore, as MBIs give companies to be exercised. Before using an MBI, it is import- the incentive to discover cheaper ways to achieve ant to define and understand the relevant market desired targets, they may lead to innovation in failure and policy objective that is being addressed. production processes and enhanced competitive- If environmental goals are not well-defined, it may ness. Other advantages include improved access be difficult to set appropriate tax, subsidy or pollu- to investment capital and, in some cases, reduced tion levels to effectively address the specific chal- enforcement costs due to better alignment be- lenges at hand. Economic valuation of the benefits tween private and public interests. and costs of pollution control or habitat preservation can help governments make the case for MBIs leverage behavioural change through a MBIs by ensuring that there is enough information range of different mechanisms, including: available to determine what levels of taxes, subsidies or pollution caps will contribute to increasing price-based instruments, which alter the prices social well-being. Such valuation studies can also of goods and services to reflect their relative im- be used to support policy and decision-making pact, for example through environmental taxes about alternative land uses for a given site or al- and tax rebates, subsidies, fees and fines (see ternative locations for a given quarry. Table 1); In considering which instrument is most appro- quantity-control instruments, which alter the priate for addressing biodiversity concerns, it is rights associated with the use of natural re- worth recalling two basic principles of the mar- sources and make these rights tradable, for ex- ket-based approach: ample through tradable permits and biodiversity offsets schemes (see Table 1); and the beneficiary pays principle states that an in- Market-based facilitation approaches, which strument should be designed to reward good make existing markets work better by enhancing environmental performance by compensating information, lowering the costs of transactions those who deliver biodiversity benefits; and and increasing market confidence, for example the polluter pays principle, states that an instru- through information disclosure (see Chapter 5). ment should be designed to ensure that those who damage biological resources pay the costs The choice of the most appropriate MBI will de- either to those directly affected or to the state, pend on a range of factors, including environmen- acting on their behalf. tal effectiveness, costs of contracting, monitoring and enforcement, distributional effects, conformity with other policies and political preferences. Since the extraction of aggregates and limestone For example, if there is concern about the compli- tends to be associated with pollution and damag- ance costs of achieving pollution reduction, then es to biodiversity, most instruments used in these a price-based mechanism should be favoured, as sectors adhere to the polluter pays principle. How- the cost of reducing one unit of pollution is known ever, when a single landholder is able to provide beforehand (although such instruments may need substantial environmental benefits, e.g. through to be adjusted several times until the required the restoration of a wetland or by undertaking en- change is achieved). However, it is important to vironmentally friendly, multi-functional agriculture

41 Table 1

Examples of particular instruments

or forestry, other instruments, such as public sub- The following section offers examples of instances sidies, conservation tenders or auctions, conser- where MBIs have been used to lessen the environ- vation easements, or payments for environmental mental impacts associated with the extraction of services may be appropriate. These instruments limestone, sand, gravel, rock or coal. The exam- follow the beneficiary pays principle. ples focus on instruments most commonly used in the cement and aggregate sector, namely tradable permits, biodiversity offsets and taxes.

42 associated with environmental taxes, they have Price-based instrumentsvii been relatively scarcely applied.

Price-based approaches include conservation ten- Boxes 10–12 provide some country-based exam- ders, environmental taxes, user fees, bonds, tax ples of environmental taxes used in Europe to curb rebates and subsidies, all of which aim to influence pollution and minimise impacts from extraction for the behaviour of producers and/or consumers by cement and aggregates. These examples show altering prices, and therefore costs or profits. The that most of the environmental taxes used in the most commonly used price-based instrument in aggregates industry are applied to natural resource the natural resources extraction sector is environ- extraction, as output taxes. However, output taxes mental taxes. Tax rebates, or subsidies in combina- have been criticised as being inefficient, because tion with taxes or tax rebates, are also used. Some they do not provide incentives to reduce the en- schemes, for example, allow for relief from taxes on vironmental impact of the production process, natural resource extraction in exchange for a for- for example through the installation of abatement mal and monitored commitment to implement and equipment or the targeting of less ecologically maintain environmental improvements. In some sensitive mining sites. Output taxes only provide cases, policy makers may also combine taxes and incentivesix to lower production, thus lowering the subsidies to minimise the overall extraction of vir- relative volume of environmental impacts. gin material. Policy makers may use an output tax to encourage Environmental taxes are commonly levied to cor- the substitution of secondary or recycled material rect market prices that do not reflect the negative for virgin materials. However, there is consensus externalities imposed on society as a result of an that no single tax can generate the optimum re- environmentally harmful activity. In the EU, an en- sults in terms of upstream and downstream waste vironmental tax is defined as one whose tax base generation and disposal and that multiple policy is a physical unit (or a proxy of it) of something instruments may be necessary. A combination of that has a proven, specific negative impact on the a tax on intermediate materials (to give producers environment. European statistics distinguish four the incentive to produce lighter-weight products) different types of environmental taxes, relating to with a recycling subsidy (which lowers the cost of energy, transport, pollution and resources.viii The recycled materials relative to virgin materials) may revenue from environmental taxes usually goes be able to more effectively deliver appropriate in- into the central budget of ministries of finance, al- centives. This system is very similar to a deposit- though a percentage may be earmarked for spe- refund system, in which the deposit acts like a tax cific environmental objectives. However, despite on the virgin material, while consumers who recycle the potential environmental and fiscal benefits get their tax refunded.

43 Box 10 – Danish raw materials and waste taxes

A tax on raw material extraction was introduced in This has increased the ease with which waste Denmark in 1990. The tax was set at DKK 5 (EUR supplies could be re-utilised, for example in con- 0.8) per m³ for selected extracted raw materials. struction works. The tax is levied on raw materials that are extracted and consumed in or imported to Denmark, in- In this case, taxes on raw material extraction, in cluding sand, gravel, stones, peat, clay and lime- combination with the supply-oriented regulatory stone. The raw materials tax was introduced in policy measure, led to a marked increase in recy- close conjunction with a 1987 waste tax of DKK cling, which was the main intention of the taxes. 40 (EUR 5.3) per tonne of waste, whether land- This illustrates the fact that a specific policy mix of filled or incinerated. The waste tax was then dif- instruments may be the key to achieving desired ferentiated in 1993 and again in 1998, so that the outcomes. landfill tax rate increased to EUR 50 (DKK 375). Sources: These measures were highly effective: In 1985, 82 • European Environment Agency. 2008. Effective- percent of the construction and demolition waste ness of Environmental Taxes and Charges for in Denmark was landfilled and only 12 percent Managing Sand, Gravel and Rock Extraction in recycled, but by 2004 the recycling rate had in- Selected EU Countries, EEA Report No. 2/2008, creased to 94 percent. However, an important pre- Copenhagen. condition for this marked increase in the share of • Söderholm, P. 2011. Taxing Virgin Natural Re- waste recycled was a complementary supply-ori- sources: Lessons from Aggregates Taxation in ented regulatory policy measure introduced in Europe. Luleå University of Technology. Avail- 1997 on the separation of construction and dem- able at: http://www.hallbaravfallshantering.se/ olition waste. The policy requires that waste from download/18.7df4c4e812d2da6a41680004968/ demolition works involving more than one tonne should be separated at source into pure fractions.

Environmental taxes should be set at a level that specific sources of pollution, often requires spe- reflects the cost of environmental damage that an cific monitoring technologies that can measure activity is causing. However, differential taxation pollution levels. Fortunately, the ongoing and that reflects differences in environmental damage rapid advances in information technology and is rarely seen in practice. In Sweden for example, computer processing are improving the ability to rather than employing a virgin gravel extraction tax monitor changes in the environment and thus the that reflects differences between the environmen- feasibility of developing environmental markets. tal cost of gravel extraction in the north versus the south of the country, Swedish authorities introduced a complementary regulatory instrument to Environmental limit gravel extraction where gravel beds are essential for drinking water or where gravel extraction performance bonds conflicts with other natural and cultural values (see Box 11). The informational requirements necessary In a relatively small number of countries, indus- to design appropriate regulatory instruments and tries are required to post environmental perfor- rules are further increased by regional differences mance bonds to fund insurance pools against in ecosystem service provisions. potential environmental risks associated with extraction, production or use of certain products. Policy makers may be tempted to employ broad The payment is only returned if the environmental upstream environmental tax bases to minimise damage of the activity does not exceed certain monitoring and administration costs and to in- thresholds (or stays within the legal thresholds). crease central government funding. Taxing close Performance bonds are sometimes called “insur- to damages, or using cap-and-trade to target ance premium taxes.”

44 Sweden, for instance, has had a compulsory in- However, while performance bonds or insurance surance system since 1989. The system, which premiums are meant to encourage firms to inter- is managed by private insurance companies for nalise environmental risks in their decision making, operators of “dangerous facilities,” compensates they are rarely set in proportion to the risk or poten- for damages when polluters cannot be identified. tial damage created by the activities. In the United France requires operators of quarries and waste States, for example, all petroleum products are storage facilities to post financial guarantees pro- taxed to support the Oil Spill Liability Trust Fund, tecting the public from potential non-payment of regardless of how they are transported; this may mitigation expenses, and Spain requires pollution create small incentives to use less petroleum, but liability insurance from companies handling haz- not to use safer ships or other means of transport. ardous waste in the chemical industry. In Western Australia, mining companies are re- As the prices for future performance bonds will quired to have bank-guaranteed unconditional increase with any environmental damage caused, environmental performance bonds that are in- the system provides an incentive for a company tended to ensure that the Western Australian Gov- to minimise the negative impacts of its activities. ernment has sufficient funds to rehabilitate mine In extreme cases, companies may not be able to sites if operators fail to do so. However, a major purchase performance bonds if insurance com- concern for the mining industry is that the un- panies deem them likely to violate environmental conditional performance bond system applies to regulations in the future. all companies and does not reflect the overall industry risk of failure to comply with environmental

Box 11 – The Swedish gravel tax After the introduction of the Swedish gravel tax there are few conflicts over natural and cultural in 1996, the tax rate was raised on several sub- values. This measure, used in combination with sequent occasions. By 2006, the rate was EUR the uniform tax, ensures that gravel extraction 1.38 (or SEK 13) per tonne natural gravel extract- only takes place for purposes where alternative ed, twice the original level. The tax must be paid materials cannot be used. by any company exploiting a site that requires a permit under the Swedish Environmental Code. The extraction of gravel in Sweden, which totalled The rationale for introducing the gravel tax was 44.6 million tons per year in 1995, had fallen to primarily environmental, based on concerns about 18.8 million tons by 2008. Although it is unclear resource scarcity, preserving the landscape and to what extent this reduction is attributable to the water quality, as gravel beds serve as important tax, it is very likely that the tax has helped to sus- groundwater reservoirs and are used as a filter for tain the shift as a part of a package of policy mea- purification of drinking or sewage water in certain sures that include, among others, a tightening of parts of Sweden. However, a uniform tax failed to the permit regime. Moreover, the levying of the tax address north-south differences in the availability led to improvements in the quality of information of natural gravel to purify water. A cost-effective arising from monitoring of the extraction activity solution would have required a higher tax on grav- at the quarry level. This case indicates that ex- el extraction in southern Sweden relative to north- tractive taxes may help improve the quality and ern Sweden, where gravel beds are more abun- the reliability of the extraction data, which can dant and population pressures are lower. then be used as a basis for encouraging changes in quarry management activities. To account for these differences in environmental externalities, changes were recently made in Source: Swedish Environmental Protection Agen- licensing procedures for quarrying operations, cy (SEPA). 2000. Naturgrusskatten: utvärdering av specifying that natural gravel extraction should skatteeffekterna (The Tax on Natural Gravel: Evalu- take place only in locations where gravel beds are ation of the Tax Impacts), Report 5077, Stockholm. not essential for drinking water supply and where

45 Box 12 – The United Kingdom aggregates tax

The UK aggregates tax was introduced in April ronmental tax revenues has helped reinforce its 2002 for quarry operators. The impetus for the intended purpose. A proportion of the tax reve- tax was a contingent valuation study that estimat- nue, for instance, was used to develop a quali- ed the total external costs (in terms of noise and ty standard for recycled aggregates, which gave vibration, dust and other emissions to air, visual companies confidence in purchasing these ma- intrusion, loss of amenity and damage to wildlife terials. This was reinforced through the use of habitats) of aggregates extraction in the region to awareness-raising campaigns to encourage local be EUR 558 million (or GBP 380 million) per year. authorities to purchase recycled materials when carrying out local infrastructure projects. The tax was introduced at a rate of EUR 2.35 (or GBP 1.60) per tonne, equivalent to approximate- Sources: ly 20 percent of the average price per tonne of • Söderholm, P. 2011. Taxing Virgin Natural Re- material. The goal of the tax is to reduce the en- sources: Lessons from Aggregates Taxation vironmental costs associated with quarrying op- in Europe. Luleå University of Technology. erations, as well as to reduce the demand for http://www.hallbaravfallshantering.se/down aggregates and encourage the use of alternative load/18.7df4c4e812d2da6a41680004968/ materials, such as secondary aggregate materials • London Economics. 2006. Study to Inform the (exempt from the tax), waste slate or shale, or re- Policy Review of the Aggregates Levy Sustain- cycled aggregate materials. ability Fund. http://londoneconomics.co.uk/ wp-content/uploads/2011/09/78-Study-to-In- Although there is no quantitative data available form-the-Policy-Review-of-the-Aggregates- to show the extent to which the tax has been ef- Levy-Sustainability-Fund.pdf fective, it is likely that the earmarking of the envi-

obligations. In an attempt to more closely reflect ant from all discharges in a specific area. Partici- the overall industry risk of failure, a Mining Secu- pants in these programmes are permitted to trade rities Fidelity Fund has been proposed as an al- discharge levels amongst themselves, provided ternative (see http://www.dmp.wa.gov.au/docu the collective discharge from all sources remains ments/100957_Policy_Options.pdf). below the cap. These schemes are often used to manage greenhouse gas emissions and over-exploitation in fisheries and watersheds. They are Quantity-based also used to regulate levels of effluents (nutrients, salts, pesticides) and salinity in waterways. Aus- instruments tralia has been a frontrunner in developing cap- and-trade schemes to regulate discharges of sa- Quantity-based market instruments involve cre- line water (see Box 13). ation of a market for a commodity (either biodiversity offsets or transferable quotas/credits) based As quarrying for cement and aggregates is of- on a decision to limit emissions levels or total al- ten associated with discharges of high pH water, lowable environmental impact. which has adverse effects on water quality, a cap- and-trade scheme system may be used to limit such discharges. With regards to land, “tradable Cap-and-trade development rights” have been trialled to some extent in the United States and in Europe but are Cap-and-trade arrangements generally involve a still considered a theoretical approach and highly cap being placed on emissions of a given pollut- dependent on well-defined property rights.x

46 Box 13 – The Hunter River Salinity Trading Scheme in New South Wales, Australia The Hunter River Salinity Trading Scheme manag- mines’ requirements. Credits are valid for 10 years es saline water discharges from coal mines and and can be owned by a third party. In order to power stations to minimise impacts on water us- maximise the potential benefits from trade and fa- ers and the aquatic ecosystem. The scheme man- cilitate new entrants, 20 percent of credits expire ages salinity by restricting discharges to a share every two years and are reallocated via auction. of that which can be safely diluted within a high- A comprehensive system of real-time monitoring flow event. is used to ensure that participants do not exceed their pollution entitlement. The total salt that can be discharged during the high-flow event is calculated according to the Source: Department of Environment and Con- ambient salinity in the Hunter River. A salinity servation New South Wales. 2006. Hunt- water-trading scheme works by allocating par- er River Trading Scheme: Working together to ticipants discharge credits, which represent a protect river quality and sustain economic devel- percentage of the allowable discharge of saline opment. Available at: http://www.epa.nsw.gov.au/ water into the basin. These credits can be traded resources/licensing/hrsts/hrsts.pdf amongst the participants according to individual

47 Box 14 – The Australian Bushbroker® banking scheme

In Australia, offsetting frameworks are encouraged they need to find an offset. BushBroker® registers at the federal level under the Environmental Protec- all transactions and creates the initial credits by tion and Biodiversity Conservation Act of 1999 and recruiting landowners and conservation bank in- reinforced by planning and conservation laws in a vestors on payment agreement or land surrender number of states and territories. Over the years, schemes. The Victorian government has recently however, experience showed that it was often dif- increased its role in the Bushbroker® programme ficult to provide on-site offsets, whether for eco- by providing online tools, hands-on outreach and logical reasons or simply because the developer facilitation with landowners. had no interest in native vegetation management. In 2002, the Victorian government introduced Sources: BushBroker®, a system to establish, register and • Bushbroker Information sheet: http://www.depi. trade native vegetation credits, making it easier for vic.gov.au/__data/assets/pdf_file/0020/205049/ developers to obtain offset credits while helping BB-info-16-OTC.pdf willing landholders to provide those offsets. Un- • Biodiversity Offseting (UK Parliament Postnote der this framework, landowners first register their 369): http://www.parliament.uk/documents/ interest in being credit providers, and then devel- post/postpn_369-biodiversity-offsetting.pdf opers subsequently approach BushBroker® when

Biodiversity offset are currently developing this type of legislation.xii Some countries have independent laws or poli- implementation cies requiring compensation (e.g. U.S. wetland mitigation), while others address biodiversity off- Biodiversity offsets can be used to offset resid- sets through strategic environmental assessment ual impacts on biodiversity that have not been (SEA), environmental impact assessment (EIA) addressed through avoidance, minimisation or or planning laws (e.g. Germany).xiii In addition to on-site rehabilitation measures. Offsets are often mandatory programmes, a number of business considered a market-based instrument, as they entities, have commitments to no net loss or net enable a baseline and credit market for trading bio- positive impact. diversity values.xi While cap-and-trade schemes aim to limit overall environmental impacts, under While Box 4 (page 28) introduced biodiversity off- offset arrangements, an operator may be allowed set policy with a specific focus on incorporating to undertake an action that reduces ecosystem offset provisions into EIA requirements, this sec- services if it also undertakes (or purchases from tion focuses on biodiversity offset implementation. another party) a separate action that increases Biodiversity offset implementation generally takes ecosystem services by at least the same amount one of the three following forms: at a different site from where the development has taken place. Thus, an offset arrangement en- The one-off approach: Once adverse impacts ables one action to be matched with another, so have been evaluated, the biodiversity offset is that there is at least no net reduction of ecosys- carried out by the developer or by a subcon- tem services or biodiversity. In some cases, the tractor (e.g. a conservation NGO). The devel- requirement may be to produce a net increase in oper assumes financial and legal liability. Verifi- biodiversity. cation is normally undertaken by an accredited third party or a government agency. Offsets were first formalised in the US in the In-lieu arrangement: A government agency 1970s for wetland mitigation (See Box 15). Today, specifies a fee that a developer has to pay to a 45 countries and states have laws or policies that third party to compensate for residual biodiver- specifically require biodiversity offsets or some sity impacts. The third party (i.e., the offset pro- form of compensatory conservation for partic- vider) takes on the financial and legal responsi- ular sets of impacts, and another 27 countries bility for the offset. In-lieu arrangements have

48 been employed in the U.S. Wetland and Spe- commitments. Biobanking also helps reduce the cies Mitigation program (see Box 15) and forest time required to identify a feasible offset site and compensation schemes in India and Mexico. process a development permit, as credits are typically registered in advance of a development pro- Biobanking: Biobanking (also called mitigation posal. Generally speaking, whereas one-off or in- banking) involves a repository of existing offset lieu approaches to biodiversity offsets can lead to credits, where each credit represents a quanti- many dispersed or fragmented restoration efforts, fied gain in biodiversity resulting from the resto- biobanks can help ensure that offsets are designed ration, establishment, enhancement or preserva- and implemented in a landscape context to ensure tion of biodiversity. As in the in-lieu arrangement, greater ecological and social value (see Boxes 14, financial and legal liability is transferred from the 15 and 16). developer to the provider. When appropriate prevention and mitigation mea- Credit prices generally reflect the costs of produc- sures have been taken, governments should help ing a credit (purchase of land, opportunity costs, ensure that the necessary institutional framework implementation and administrative costs). Biobanks is in place to help quarry operators offset residual tend to be designed to offset multiple development adverse biodiversity impacts arising from project projects, which enables pooling of resources and development. There are certain pre-requisites for efforts; thus, biobanking reduces offset and trans- the effective implementation of biodiversity off- action costs through economies of scale. Trans- sets: action costs associated with establishing biodiversity offsets include costs to identify and secure Adequate capacity is needed not only to design an offset, apply for development permission, and and implement offsets, but also to monitor and monitor, report on and enforce biodiversity offset enforce them.

Box 15 – Wetlands banking in the United States

Wetland mitigation banking in the United States tion bank (the banker) can satisfy CWA require- has its origins in federal-level regulations. Dating ments by selling wetlands credits to developers. back to 1972, the Clean Water Act (CWA) mandat- The system allows buyers and sellers of credits ed compensatory mitigation of wetlands and wet- to find each other and agree on prices that reflect land-related services, implying that developers of the cost of land and offset activities. It stimulates projects that impact wetlands must: demonstrate third-party investment in offset creation as well as that the least environmentally damaging alterna- standardised units of trading. tive will be used, minimise any unavoidable impacts and compensate for or offset the harm. According to the Ecosystem Marketplace (2010), annual known U.S. wetland and stream payments Compensation can be achieved through resto- amounted to $2.2 billion in 2008. In 2005, near- ration, creation, enhancement or preservation of ly three quarters (71 percent) of credit sales were wetlands, collectively termed mitigation. While de- undertaken by private commercial banks, and an- velopers often prefer on-site mitigation as a way other quarter were sold by single clients. In 2010, to compensate for unavoidable damage to wet- an estimated 700,000 cumulative acres (283,280 lands, on-site mitigation has been criticised for hectares) had been protected or restored through resulting in fragmented and poorly monitored wet- mitigation programmes in North America. The lands with limited ecological value. Consequent- market has arisen through strong policy drivers, ly, in 1993, the Clinton administration released a enforcement and detailed regulation. comprehensive package of improvements to federal wetlands programmes that included support Source: Identifying and Mobilising Resourc- for the use of mitigation banks. Upon establishing es for Biodiversity Conservation: https://cms a mitigation bank by enhancing, restoring or cre- data.iucn.org/downloads/information_paper_res_ ating wetlands habitats, the creator of a mitiga- mob_021012.pdf

49 Offsets should result in additional investment in Furthermore, good governance is vital for creat- conservation, rather than just replacing public ing and supporting effective market-based instru- financing with private financing for conserva- ments. By allowing project developers to decide tion. how necessary damage avoidance, mitigation or compensatory activities are undertaken, MBIs Biodiversity offsets should be permanent, i.e. it have the potential to deliver flexibility and effec- is important to ensure that gains last at least as tive conservation outcomes through positive in- long as the impacts. centives, in contrast to command-and-control It is also important to put in place safeguards, instruments, penalties or fines. such as limits on what can be offset and how.

Box 16 – CDC Biodiversité, France

The first biodiversity bank in France was created developers, thereby allowing larger areas to be on 11 May 2009, in Saint Martin de Crau, by CDC managed and better conservation outcomes to be (Caisse de Dépôts et Consignation) Biodiversi- achieved. At this stage, a developer only receives té. CDC Biodiversité is an operator dedicated to validation by the state in case there is an environ- providing the necessary intelligence for biodiver- mental equivalence between the residual impacts sity-related project design and monitoring, includ- and the ecological goals of any given offset opera- ing the implementation of offset measures. The tion. French legislation has recently made ecologi- first project it managed involved the restoration cal compensation mandatory, such that any public and reintegration of a 357-hectare abandoned or private project developer is obliged to compen- orchard into the adjacent Crau Nature Reserve. sate for the residual impacts of their development This reserve is the last remaining semi-arid steppe projects. in Western Europe, containing several rare and threatened species of birds, insects and plants. CDC Biodiversité is supported by several national and local agencies, including the Ministry of Ecol- CDC Biodiversité has created a biodiversity bank ogy, the Regional Environment Agency and the from which compensation credits can be deduct- management of the Grau Nature Reserve and the ed as needed. The project is helping developers local chamber of agriculture. whose activities have a residual impact on an ecosystem similar to the Crau. In addition, the biodi- Source: CDC Biodiversité: http://www.cdc-biodi versity bank helps aggregate offsets from several versite.fr/

5 Supporting Instruments

To complement and leverage regulations that re- rewarding or publicising conservation achieve- quire the operator to comply with biodiversity ments, such as the development of sustainable management measures, public authorities may biodiversity management standards and prac- employ other legal tools to promote voluntary tices by the operator to achieve “no net loss” of conservation. For example, authorities can sup- biodiversity; and port the efforts of operators wishing to implement supporting research and data collection for the biodiversity conservation measures at their ex- creation of centralised biodiversity databases. tractive sites through non-financial means, such as providing technical assistance and capacity building. Authorities may also encourage and establish a sustainability reporting process, with a Biodiversity in view to helping operators set goals, measure performance and manage change. sustainability reporting

Sustainability reporting is the practice of measur ing and disclosing organisational performance to- Capacity building wards the goal of sustainable development, and being accountable to internal and external stake- Capacity building and technical assistance can holders for that performance. Reporting involves help strengthen biodiversity management and providing environmental, social and governance enhance compliance with environmental laws information within documents, such as annual re- and regulations, though these measures should ports and sustainability reports. always be viewed as complementary to efforts aimed at environmental enforcement and not as Sustainability reporting is an important tool for a substitute for them. Public support for capacity reducing conflicts between companies and local building may include: communities and other stakeholders, and assessing the performance of companies in accordance providing grants for education activities, raising with their sustainability strategy or their biodiver- awareness and training programmes for sus- sity management strategy. It promotes transpar- tainable use of biodiversity (e.g. how to develop ency in corporations’ operations and stakeholder an EIA or a biodiversity action plan); involvement. establishing public-private agreements for re- The role of governments in sustainability report- search on on-site biodiversity conservation and ing is to establish public policies that contribute to management; a stronger uptake of sustainability reporting and

52 reporting on biodiversity performance, whether As major consumers, public authorities can use only through awareness raising or through legisla- their purchasing power to choose goods and tion. Governments can make use of the following services with lower impacts on the environment, tools to further enhance biodiversity in sustain- thereby making an important contribution to ability reporting:xiv sustainable consumption and production. Sus- tainable public procurement (SPP), which is also introducing mandatory reporting standards that called green public procurement (GPP), allows include provision of summary information about governments to leverage public spending in order biodiversity values and management perfor- to promote the country’s social, environmental mance; and economic policies. Sustainable purchasing can help influence the market by providing in- creating instruments to benchmark and recog- dustry with real incentives for developing green nise good biodiversity performance, where re- technologies and products, boosting the compet- porting is voluntary; itiveness of biodiversity-friendly businesses, sav- setting an example by introducing biodiversity ing money and fostering job creation. Economic information when producing a sustainability re- factors related to public procurement include the port in public agencies; and costs of products and services over their entire introducing mandatory reporting on biodiversi- life cycle, such as acquisition, maintenance, op- ty for all state-owned companies, including the erations and end-of-life management costs (in- adoption of the Global Reporting Initiative’s vol- cluding waste disposal) in line with good financial untary guidelines (see Box 17). management. Social factors include social justice and equity, safety and security, human rights and employment conditions. Environmental factors include emissions to air, land and water; climate Sustainable public change; biodiversity; natural resource use and procurement water scarcity over the whole product life cycle. UNEP’s Sustainable Public Procurement Initiative Public procurement is the process used by gov- (see Box 18) is a global instrument for SPP. This ernments, regional and local public authorities or initiative aims to promote a transition to a green bodies governed by public law (more than 50 per- economy. cent financed, supervised or managed by public authorities) to obtain goods, services and works.

Box 17 – Sustainability reporting: The Global Reporting Initiative

The Global Reporting Initiative (GRI) provides a developed sector-specific supplements and an comprehensive sustainability reporting frame- “Approach for reporting on ecosystem services.” work that is widely used around the world. GRI has developed general guidelines for sustainabil- In some countries, reporting is mandatory, where- ity reporting, which include performance indica- as in others it is voluntary, although the trend in re- tors covering the three pillars of sustainability: cent years has been towards governments making economic, environmental, and social. The envi- sustainability reporting mandatory. Some coun- ronmental indicators cover impacts on living and tries combine voluntary and mandatory approach- non-living natural systems, including land, air, wa- es, with the voluntary approaches complementary ter and ecosystems. With regards to biodiversity, to the mandatory ones. the focus is on reporting related to operations and impacts in areas of high biodiversity value, such Sources: The Global Reporting Initiative: http:// as protected areas, as well as reporting on pro- www.globalreporting.org tection and restoration of habitats. GRI has also

53 Sustainable public procurement is a fundamental policy instrument to reduce the environmental impacts of products throughout their life cycles, increasing innovation and efficiency in the use of energy and materials, reducing public expenditure costs and fostering compliance with the law. Major infrastructure projects, such as those associated with sporting events, can provide a good opportunity for implementing sustainable procurement practices (see Box 19).

Box 18 – The International Sustainable Public Procurement Initiative (SPPI)

The SPPI, which was established in 2012, “aims to and North-South cooperation, and enhancing scale-up the level of public spending flowing into public-private collaboration. goods and services that maximise environmental and social benefits.” The SPPI seeks to back the The SPPI seeks to provide countries with a com- worldwide implementation of sustainable procure- mon vision, language and framework for SPP and ment by promoting a better understanding of its to guide stakeholders on how to effectively pave potential benefits and impacts and facilitating in- the way towards SPP implementation. creased cooperation between key stakeholders. Sources: The objectives of the initiative are to build the case • Sustainable Public Procurement Initiative: http:// for sustainable public procurement by improving www.unep.org/Documents.Multilingual/Default. awareness of SPP tools, developing progress re- asp?DocumentID=2688&ArticleID=9188&l=en ports on implementation, analysing barriers and • UNEP Guidelines for procurement: http://www. proposing innovative solutions, and to support unep.fr/SCP/procurement/docsres/ProjectInfo/ implementation through increased South-South UNEPImplementationGuidelines.pdf

Box 19 – Green public procurement for Brazil’s Olympics

Infrastructure development for the 2016 Summer on their construction sites, optimise energy use Olympics in Brazil will be based on sustainable and minimise waste production. measures and principles. A bill passed for the purpose of the Olympics mandates the adoption of The development of research and monitoring to environmentally sustainable measures, including achieve the goals of reducing pollution and sav- greenhouse gas reductions and energy and water ing resources, as well as advertising of sustainable savings. actions to promote environmental awareness, are all requirements within the procurement policies. This bill is in line with Brazil’s public procurement These requirements apply to work carried out di- regulations, which aim to ensure the promotion rectly by the government and enterprises that ben- of sustainable national development. Through a efit from the state funds or those controlled by it. public tendering process, private providers are required to use environmentally certified materials Source: Rio 2016 Sustainability: http://www. rio2016.com/en

Glossary of terms

Biobanking: A system that creates a reposito- ground with respect to species composition, ry of existing offset credits, where each credit habitat structure, ecosystem function and peo- represents a quantified gain in biodiversity re- ple’s use and cultural values associated with bio- sulting from the restoration, establishment, en- diversity. hancement or preservation of biodiversity. Also called mitigation banking. Biodiversity outcome indicators: Indicators used to measure progress towards a targeted goal. Biodiversity action plan: A mechanism by which the objectives and targets for biodiversity con- Biodiversity risk matrix: A tool for assessing the servation can be achieved. BAPs can either be risk to biodiversity of a new development or of an stand-alone or be incorporated into the EMS. ongoing quarrying operation. The matrix has the Numerous specific elements may be covered in biodiversity importance category of a site on the a BAP. y-axis and the level of likely impact on biodiversity by the anticipated activities on the x-axis. Biodiversity conservation: The management of human interactions with genes, species and Cap-and-trade: An environmental policy that sets ecosystems so as to provide the maximum ben- limits (caps) on emissions of certain pollutants efit to the present generation while maintaining and then allows businesses to buy or sell permits their potential to meet the needs and aspirations to emit pollutants, as long as the overall amount of future generations; encompasses elements stays within the prescribed limits. of saving, studying and using biodiversity (Con- vention on Biological Diversity). Command-and-control instruments: Legislative tools that prescribe specifically how a company Biodiversity enhancement: Measures undertak- should comply with specific standards. en to enhance or improve biodiversity, going beyond mitigation or rehabilitation to explore Compensation: Generally, a recompense for some opportunities to enhance the conservation of loss or service and something which constitutes biodiversity. an equivalent to make good the lack or variation of something else. Compensation can involve Biodiversity offsets: Measurable conservation something (such as money) given or received as outcomes resulting from actions designed to payment or reparation (as for a service or loss or compensate for significant residual adverse injury). Specifically, in terms of biodiversity, com- biodiversity impacts arising from project devel- pensation involves measures to restore, create, opment, after appropriate prevention and miti- enhance or avoid loss or degradation of a com- gation measures have been taken. The goal of munity type, in order to compensate for residual biodiversity offsets is to achieve no net loss, impacts on it and/or its associated species. and preferably a net gain, of biodiversity on the

56 Critical habitats: Areas with high biodiversity ronmental performance. This typically involves value, including (i) habitats of significant im- organisational structure, planning activities, re- portance to critically endangered and/or en- sponsibilities, practices, procedures, processes dangered species; (ii) habitats of significant and resources for developing, implementing, importance to endemic and/or restricted-range achieving, reviewing and maintaining the envi- species; (iii) habitats supporting globally signif- ronmental policy. icant concentrations of migratory species and/ or congregatory species; (iv) highly threatened Environmental taxes: Any compulsory, unrequited and/or unique ecosystems; and/or (v) areas as- payment to the government levied on tax bases sociated with key evolutionary processes. deemed to be of particular environmental reference, where the tax bases include energy prod- Ecosystem: A dynamic complex of plant, ani- ucts, motor vehicles, waste, measured or esti- mal and micro-organism communities and their mated emissions, natural resources, etc. non-living environment interacting as a functional unit. Free, prior and informed consent (FPIC): The principle that a community has the right to give Ecosystem approach: A strategy for the inte- or withhold its consent to proposed projects grated management of land, water and living that may affect the lands they customarily own, resources that promotes conservation and sus- occupy or otherwise use. tainable use in an equitable way. Habitat: The physical and biological environment Ecosystem services: Beneficial functions that on which a given species depends for its surviv- are performed by natural ecosystems, such al; the place or type of site where an organism as maintenance of hydrological systems, pro- or population naturally occurs. tection of the soil, breakdown of pollutants, recycling of wastes, support for economically Integrated Biodiversity Management System: A important living resources and regulation of cli- system that includes steps and recommenda- mate. tions for biodiversity management activities at each phase in the life cycle of a development, Environmental and social impact assessment from planning through operations and eventual (ESIA): The process of identifying, estimating closure. and evaluating the environmental and social consequences of current or proposed actions. Invasive species: Species that are introduced — intentionally or unintentionally — to an ecosys- Environmental impact assessment (EIA): A pro- tem in which they do not naturally appear and cess of evaluating the likely environmental im- which threaten habitats, ecosystems or native pacts of a proposed project or development, species. These species become invasive due to taking into account inter-related socio-econom- their high reproduction rates and by competing ic, cultural and human-health impacts, both with and displacing native species that natural- beneficial and adverse. ly appear in that ecosystem. Unintentional introduction can be the result of accidents (e.g. Environmental management plan (EMP): A doc- when species escape from a zoo) or transport ument that defines responsibilities, budgets and (e.g. in the ballast water of a ship), while inten- any necessary training for environmental moni- tional introduction can be the result of importing toring and impact management, and describes animals or plants or the genetic modification of how results will be reported and to whom. The organisms (Convention on Biological Diversity). EMP can be a separate document, but is considered part of the environmental impact state- Key biodiversity areas: Nationally identified sites ment. An EMP usually is required in order to of global significance. The identification of KBAs obtain permission to implement a project. In a is an important approach to address biodiversi- number of countries, an EMP is not a legal re- ty conservation at the site scale, i.e. at the level quirement. of individual protected areas, concessions and land-management units. There is no maximum Environmental management system (EMS): A or minimum size of sites, because appropriate system that provides a framework for moni- size varies according to socio-economic criteria, toring and reporting on an organization’s envi- such as land use and tenure.

57 Landscape approach: A mosaic of different types Rehabilitation: The recovery of specific ecosys- of land use, such as agriculture, forests, pasture tem services in a degraded ecosystem or habi- and conservation areas. Managed as a whole, a tat (Convention on Biological Diversity). landscape serves a variety of needs for various stakeholders. The Livelihood and Landscape Restoration: The return of an ecosystem or hab- Strategy vision of a landscape is of multiple and itat to its original community structure, natural complementary land uses based on negotiation complement of species and natural functions rather than centralised planning. Landscapes Convention on Biological Diversity). do not exist in a vacuum, but are influenced by a wide range of external factors, including Species: A group of inter-breeding organisms that policies and economic conditions generated seldom or never interbreed with individuals in far outside it, land use in adjacent landscapes other such groups, under natural conditions; and perhaps remote physical features such as most species are made up of subspecies or dams. Addressing landscape management is- populations. sues always requires interventions outside as well as inside the landscape. Stakeholders: Individual persons or groups who are directly or indirectly affected by a project, as Market-based instruments: Instruments or regu- well as those who may have interests in a proj- lations that encourage behavior through market ect and/or the ability to influence its outcome, signals rather than through explicit directive. either positively or negatively (International Fi- nance Corporation). Mitigation: Anthropogenic intervention to reduce negative or unsustainable uses of ecosystems Strategic environmental assessment (SEA): or to enhance sustainable practices. The formalised, systematic and comprehensive process of identifying and evaluating the envi- Mitigation hierarchy: A hierarchy of management ronmental consequences of proposed policies, actions that states that (1) significant impacts plans or programmes to ensure that they are ful- should be avoided, (2) impacts that cannot be ly included and appropriately addressed at the avoided should be minimised, (3) restoration earliest possible stage of decision-making, on measures should be taken to address any un- a par with economic and social considerations. avoidable impacts, and (4) any significant residual impacts should be offset. Sustainable public procurement (SPP): A tool that allows governments to leverage public Monitoring: Activities undertaken after the de- spending in order to promote the country’s so- cision is made to adopt the plan, programme cial, environmental and economic policies. Also or project that are designed to examine its im- called green public procurement (GPP). plementation. For example, a monitoring programme can examine whether the significant Threatened species: Species that face a high environmental effects occur as predicted or es- (vulnerable species), very high (endangered tablish whether mitigation measures are imple- species), or extremely high (critically endan- mented. gered species) risk of extinction in the wild.

Performance bond: A payment made by oper- World heritage site: Includes both cultural her- ators to the respective authority before a po- itage sites and natural heritage sites. Cultural tentially environmentally damaging activity is heritage sites are works of man or the combined undertaken. The payment is returned only if the works of nature and man, and areas including environmental damage of the activity does not archaeological sites that are of outstanding uni- exceed a specified threshold. versal value from the historical, aesthetic, eth- nological or anthropological point of view. Nat- Protected area: A clearly defined geographical ural heritage sites are natural sites or precisely space that is recognised, dedicated and man- delineated natural areas of outstanding uni- aged, through legal or other effective means, to versal value from the point of view of science, achieve the long-term conservation of nature conservation or natural beauty (UNESCO World with associated ecosystem services and cultur- Heritage Convention). al values.

Bibliography and further reading

Bibliography i United Nations Environment Programme vi Stavins, R. N. 2002. Experience with Market- (UNEP). 2004. Environmental Impact Assess- Based Environmental Policy Instruments. FEEM ment and Strategic Environmental Assessment: Working Paper No. 52.2002; KSG Working Paper Towards an Integrated Approach. Available at No. 00-004 http://www.unep.ch/etu/publications/textONU br.pdf vii This chapter is based on ideas from EEA (2008), Palmer and Watts (1999) and Soderhölm (2011) ii Department of Mining and Tunnelling Universi- ty of Leoben, Austria. 2004. Minerals planning viiiEurostat 2013. Environmental tax statistics. policies and supply practices in Europe. Com- Available at: http://epp.eurostat.ec.europa.eu/ missioned by the European Commission (EC) statistics_explained/index.php/Environmental_ Enterprise Directorate General under Contract tax_statistics n° ETD/FIF 2003 0781. Available at http://ec.eu ropa.eu/enterprise/policies/raw-materials/files/ ix Palmer, K., and Walls, M. 1999. Extended Prod- best-practices/leoben_extsum_en.pdf uct Responsibility: An Economic Assessment of Alternative Policies, Discussion Paper 99-12, iii Food and Agriculture Organization of the Unit- Resources for the Future, Washington, DC. ed Nations (FAO). 1993. Guidelines for land- use planning. FAO Development Series No. 1. x Renard, V. 2007. Property rights and the ‘transfer Rome. Available at http://www.fao.org/docrep/ of development rights’: Questions of efficiency T0715E/t0715e00.htm#Contents and equity. Town Planning Review78(1): 41-60. iv Stavins, R. 2001. Experience with market-based xi Bull, J.W., Suttle, K.B., Gordon, A., Singh, N.J., environmental policy instruments. Discussion Milner-Gulland, E.J. 2013. Biodiversity Offsets in Paper 01-58, Pp 1. Resources for the Future. Theory and Practice. Oryx 0(0): 1–12. Available at: http://www.rff.org/documents/rff- dp-01-58.pdf xii Madsen, Becca, Nathaniel Carroll, Daniel Kan- dy, and Genevieve Bennett, 2011 Update: State v Whitten, S.M., Coggan., A., Reeson, A. Gord- of Biodiversity Markets. Washington, DC: For- dard, R. 2007. Putting Theory into Practice: est Trends, 2011. Available at: http://www.eco Market Failure and Market Based Instruments. systemmarketplace.com/reports/2011_update_ CSIRO Working Paper Series 2007-02. Available sbdm at http://www.csiro.au/Outcomes/Environment/ Population-Sustainability/SEEDPaper2.aspx

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