WILDLIFE COMPENSATION: A POLICY ANALYSIS
Robert Keith MacDonald
B.A, University of Victoria, 1989
ESEARCH PROJECT SUBMITTED IN PARTIAL IWLFILLMENT OF
THE REQUlREMENTS FOR THE DEGREE OF
MASTER OF NATURAL RESOURCES MANAGEMENT
in the
School of Rescurce and Environmental Management
Report No. 223
0 Robert Keith ~MacDonald1998
SIMON FRASER UNIVERSITY
April 1998
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There are no regdatory requirements in Canada which explicitly state the need, or level, of compensation required for the loss of nonfïshenes wildlife habitat. The purpose of this study is to synthesize an improved environmental impact assessment mechanism to estimate appropnate compensation levels for the loss of nonfisheries wildlife habitat. This is achieved by initiaify developing a research inventory of compensation mechanisms and decisions involving the loss of wildlife habitat. A modified goals achievement matrix (GAMJ is used to measure the effectiveness and appropriateness of existing compensation mechanisrns, against specsed measurement criteria developed £Yom the literature, to establish an irnproved mechanism. A simple simulation exercise is conducted to evaluate the practicaiity of the recomrnended improved mechanism.
It is a finding of this study that the usefulness of existing compensation mechanisms for wildlife habitat are signiticantly restricted by poiïcy and scientSc deficiencies. It is recommended that an inclusive and mandatory compensation requirement be adopted by all levels of govenunent to address nonfisheries wildlife habitat losses. At a minimum, this requirement should: i) discourage the general use of compensation, ü) strictly prohibit monetary compensation, iii) use area as a surrogate measurement of habitat value until a more ecological approach is developed, and iv) apply 1: 1 creation to lost and 2: 1 securement to lost habitat ratios to encourage creation over simple preservation. Due to its extensive use in impact assessment, substantial additional research is required to further the development of compensation theory and methodology with respect to wildlife habitat. To Mom and Dad We don 't Iearn what we don 't want to know or regmd ar unimportanf. -Lynton K. Caldwell (1 988) This report would not have been cornpleted without the support of many individuals. To these people 1will always be indebted and gratehl.
1would like to th& my mother Adele, father Hugh (deceased), and brother Douglas who have aiways stood by me and supported my educational pursuits.
1 thank the staff, faculty, and al1 my fellow ciassrnates fiom over my many years of enrollment in the School of Resource and Environmental Management. Their assistance and camaraderie will always be remembered, Particular thanks to my supervisory cornmittee of Dr. Chad Day and Dr. Don Alexander for their efforts in seeing me through. Without Dr. Day's patience, encouragement, and flexibility, 1 could not have completed this program.
Thank you to the many individuals and organizations who answered my multitude of questions and provided valuable unpublished information for this report, especially Mr. B. Clark of the BC Ministry of Environment, Lands and Parks-
1would iike to recognïze the financial assistance provided by my employer, Transport Canada, and the many managers and supervisors who supported my studies over the years. I am officially back at work!
To al1 my fnends, thank-you for your assistance and continuai encouragement. 1am most gratefül for the support of my dear fnend, Mr. Leslie Szarnosi.
Most of all, 1would lke to thank Brenda and KyIe for their love, encouragement, and patience. CONTENTS ... ABSTRACT ...... ,...... m
ACKNO WLEDGMENTS ...... vi
LIST OF TABLES ...... ix
Chapter 1. INTRODUCTION ...... 1
1.1 Research Purpose ...... ,...... 1 1.2 Research Objectives ...... 2 1.3 Study Methods ...... 2 1.4 Research Inventory Selection ...... 3 1.5 Report Structure ...... ,...... 4
Chapter 2 . BACKGROUND ...... 5
2.1 Problem Statement ...... 5 2.2 Compensation in Environmentai Assessrnent ...... 7 2.2.1 Definition ...... 7 2.2.2 Role and Application of Compensation in Environmental Assessrnent ...... 8 3.2.3 General Types of Compensation ...... 11 2.2.4 Frameworks for. Determining. Compensation ...... 12 2.2.5 Evaluative Cntena ...... 15 2.3 Wildlife and Wildlife Habitat ...... 16 2.3.1 Wildlife & Wildlife Habitat - Canada's National Asset ...... 16 2.3.2 Endangered Species and Spaces ...... 16 2.3 -3 Chronic Loss of Widlife Habitat ...... 18 2.3 -4 Urgency for Govemment Policy and Action ...... 21 2.3 -5 Compensation in Wildiife Management ...... -22 2.4 Limitations of Compensation ...... 23 ...... ,...... ,. 2 .4.1 Uncertainty ...... ,...... ,. 23 2.4.2 Lack of Success ...... 24 2.4.3 Foliow-up Monitoring and Research ...... 25 2.4.4 Administrative Mïsuse ...... 27 2.4.5 Scientific Limitations ...... 30 2.4.6 Practical Reality ...... 36
Chapter 3 . METHODOLOGY ...... 39
3.1 Research Inventory ...... 40 3.1.1 Current Poiicy Mechanisms ...... 41
vii
TABLES
Table 1. Annual Totals of Wildlife Species at Risk ...... 17
Table 2 . Wetland Losses Attributed to Specific Land Use in Canada ...... 19
Table 3 . Comparkon of Habitat Types in Lower Mainland Between 1880 and 1985..... 20
Table 4 . Compensation Policy Mechanisrn .Federal Policy on Wetland Conservation .. 50
Table 5 . Compensation Policy Mechanism .BC MELP and CWS Regional Wddlife Guidelines ..-50
Table 6 . Compensation Policy Mechanisrn .Policy E-13 Surrey Official Comrnunity Plan ...... 51
Table 7 . Compensation Policy Mechanism .BC Water Act ...... 51
Table 8 . Compensation Policy Mechanism .BC WiZdZife Act ...... 52
Table 9 . Compensation Policy Mechanisrn .Federal Policy on Fish Habitat ...... 52
Table 10 . Inventory of Compensation Decisions ...... 65
Table Il. GAM Criteria ...... 77
Table 12 . GAM of Policy Mechanisms ...... 79
Table 13 . Summary of Results ...... 80
Table 14. Simulation Exercise .CN Intermodal Yard ...... 85
Table 15 . Simulation Exercise .Parallel Runway Project ...... 85
Table f 6. Simulation Exercise . Cohmbia Basin Fish and Wiidlife Compensation Project ...... 85 Chapter 1
INTRODUCTION
Habitat losses which are not fully mitigated must be adequately compensated ifsociety is to protect wildlife resources for future generations. Presently, adverse impacts from development activities on fish and wildlife habitat are either mitigated or compensated. Mitigation mechanisms elirninate or rninimize impacts, whereas compensation actions offset residual losses that cannot be mitigated or avoided.
This study examines compensation requirements for nonfisheries wildlife habitat. Theones and techniques regarding fish and wildlife mitigation, as weil as fisheries compensation, are more prevalent and established. However, to date, no standardized systern has been developed to reliably estimate appropriate compensation for nonfisheries habitat losses. In this study, wildlife is defined as animal species other than fish. This corresponds to the traditional separation of fish and nonfish wildlife management undertaken by governmental agencies.
Society needs to establish appropriate rnechanisms to calculate compensation levels for the loss of habitat in environmental impact assessments involving wildiife. A forma1 compensation systern must be established in order to address the chronic habitat losses associated with economic development related to resource extraction and ecosystem development. Until the requirements for wildlife habitat compensation are defined and implemented, wildlife and wildlife habitat will continue to be destroyed or irnpaired as a consequence of development initiatives.
1.1 Research Purpose The purpose of this study is to synthesize an improved environmental impact assessrnent mechanism to estirnate appropriate compensation levels for the loss of nod3sheries wiIdlife habitat. This is accomplished by developing an initial framework based on current iiterature and interviews with professionais in this are& in order to evaluate existing and theoretical rnechanisms being utilized to calculate compensation levels. An evaluative framework is then applied to select a preferred system for detemiining compensation levels for the Ioss of wildlze habitat,
1.2 Research Objectives Research for this study addresses £ive objectives. These include: documenting theoretical and scientifïc iiterature, as well as policy mechanisms previously used to determine wildlife habitat compensation; identi%ng cntena used to evaluate previous habitat compensation proposais; deterrnining which elements of previous rnechanisms were most successfùI and provided the most accurate levels of compensation; synthesizing a recommended system for establishing wildlife compensation; and delineating questions which require fùrther research.
Conclusions and recomrnendations are based on the resuits of addressing these five research objectives.
1.3 Study Methods A research inventory of compensation mechanisms and decisions regarding the loss of wildlife habitat has been developed fiom: scientSc, popular media, and govemmental published literature; inte~ewswith federal, provinciai, and municipal public servants; and unpublished documents and files available from the provincial govenunent. Interviews and unpublished documents and files have been used to augment the lirnited arnount of published literature. The inventory also includes a discussion of elements used to juste the need for compensation and the methodological criteria used to prescribe the level of compensation provided. The effectiveness and appropriateness of various compensation mechanisms are evaluated against specified cnteria with the use of a modified goals achievement matrix (GAM). The matrix provides a format with which to evaluate and compare the elements of each mechanism in order to identify an improved approach based on the best aspects of the various alternatives. Evahative criteria for the GAM are assembled fiom a literature review of scientific and theoretical discussions and the findïngs of a research inventory of previous compensation decisions.
A simple simulation exercise is conducted to compare compensation levels derived fkom the irnproved alternative to those prescribed in previous decisions, for selected case studies. The intent of this component is to examine the differences between each approach and determine if there is a mechanism that is viable, practical, and appropnate for developing a compensation policy to prevent the future loss of wildlife habitat.
1.4 Research Inventory Selection
The intent of this inventory is to reflect the diversity of mechanisms used to establish compensation requirements and the range of recent compensation levels prescribed. The research inventory for this study is not exhaustive nor does it contain all of the previous compensation decisions for iosses related to wildlife habitat.
Compensation ievels documented in the research hventory have been primarily drawn from decisions regarding developments in the Lower Maidand of British Columbia during the pied 1980 to 1997. However, additional compensation decisions related to hydroelectric-dam developments, mining operations, fishenes losses, and wetland uses have been included to provide a broader range of results in order to conduct a more thorough examination of the issues associated with wildiife habitat compensation. 1.5 Report Structure The report consists of six chapters. Chapter hvo reviews the background and role of compensation in the environmental impact assessrnent process. This chapter aIso examines the justfication for appropriate compensation for the loss of wildlife habitat. The three-part rnethodology appiied to achieve the purpose of this study is outlined in chapter 3. Chapter folir categorizes and discusses the research inventory assembled. Chapter five describes the application of the GAM to the various mechanisms tested, how the simulation was conducted, and discusses the results of both. The final chapter presents the conclusions and recommendations of this study. Chapter 2
BACKGROUND
An understanding of the policy and the science associated with compensation is the basis of this research report. It is used to evaluate existing rnechanisms and to establish an improved and consistent mechanism for determining wildlife compensation requirements in the event that current evduative systems are producing inconsistent recomrnendations. This chapter includes a problem statement, a definition of compensation, an indication of the dzerences between mitigation and compensation, an explanation of the role of compensation in environmental impact assessrnent, a discussion of the general types of compensation, and a review of existing frameworks for determùiuig compensation. The justification for compensation when there is a loss of wildlife habitat is also discussed. The limitations of compensation are examined to outline the problems associated with compensation implernentation.
2.1 Problem Statement There are no regulatory requirements in Canada which explicitly state the need, or level, of compensation that is required for the loss of wildlife habitat. Canada, as in jurisdictions in the US, is also harnpered by a lack of guidelines, standards, or criteria for compensatory mitigation (CEARC 1988, 1; Lea and Frederick 1992, 3 8). Al1 levels of govement in Canada have failed to implement legal or fonnal requirements for wildlife compensation or develop precise mechanisms for calculating appropriate compensation levels. In BC, the lack of forma1 requirements during the last two decades has resulted in projects where: no compensation for habitat loss has been provided @FO 1988, 2), developers and political leaders have questioned the basis of providing compensation (Robinson et al. 1991, 90; Petersen 1992, n-p.), and insufficient or inappropnate compensation has been docated (Clark 1996, interview). Compensation for the loss of wildlife habitat is largely guided by: policy statements, ad- hoc guidelines and criteria, public pressure, and the initiative of public servants. Existing approaches do not precisely define an adequate level of compensation or ensure that compensation is consistently applied to al1 projects in the same manner. For example, existing laws only provide minimal protection to some bird species and their nesting areas (Cox 1995,20; Clark 1996, interview).
The need to hprove requirements for wildlife habitat compensation is a consistent recommendation in the literature, govemment policy reports, and management reviews related to this subject. The Fraser River Estuary Management Prograrn (FREMP) in its 199 1 Report of the Habitat Activity Workng Grozp concluded that: "The establishment of a formal [compensation] policy would improve the agencies' abilities to protect wildlife habitat" (FREMP 1991, ii). FREMP also identified the need to analyze: ". . . the present status of habitat compensation . . . and rnake recommendations on the fiiture improvements to compensation techniques and guidelines" (ibid., 33). A comparable literature review of compensation, conducted by Lawrence and Davies (1993, 2-5), indicated that the "extensive range of problems" in compensation could be associated with the lack of an initial "appropnate fi-amework" (Lawrence and Davies 1993, 2-5).
Although the problems associated with compensation for wildlife habitat are often identified in the literature, Little forma1 or informa1 research has been undertaken. In 1988, the now defunct Canadian Environmental Assessment Research Council (CEARC), published a detailed research prospectus on mitigation and compensation and noted that "Although an integral component of the EA (Environmental Assessment) process, Little attention has been given specifically to these areas of study" (CEARC 1988, 1). The lack of extensive articles, essays, and policies is also evidence of the lack of interest in this subject with scientSc, popular, and government literature.
Habitat losses, which are not fûily rnitigated, must be adequately compensated if society is to maintain sufficient levels of wildlife habitat. Mechanisms are needed to determine when compensation is required and calculate an appropriate level of compensation. These mechanisms need to be applied in a consistent manner to al1 projects and activities which result in the loss of wildlife habitat. This research will attempt to address this deficiency.
2.2 Compensation in Environmental Assessment Compensation is one of several environmental assessment techniques used to address negative impacts on the naturai or social environments, as a result of a project or activity. Theory and legislation describing environmental assessment state that a project proponent is responsible to compensate for negative impacts which cannot be fully mitigated. An explanation of the definition, the role, and the types of compensation is outlined below to provide background information on the use of compensation in environrnental assessment.
2.2.1 Definition The Canndian Environmental Assessment Act (CEAA) defhes "compensation, replacement, and restoration" as "restitution for damage caused by" adverse environmental effects (Canada 1992, 5). Compensation is one of several concepts included within the broader definition of mitigation which: means, in respect of a project, the elimination, reduction or control of the adverse environmental effects of the project, and includes restitution for any damage to the environment caused by such effects through replacement, restoration, compensation or any other means. (ibid., 5)
The former Environmentd Assessmenf Review Process Gridelines Order (EARP), which was replaced by CE& did not include a formal definition of compensation. However, EARP specifically noted that compensation and mitigation measures were intended to "prevent any of the potentially adverse environmental effects of a proposa1 from becoming significant" (Canada 1978-79, 4).
The comrnon definition of compensation used by practitioners and acadernics suggests that it is a measure, often retroactive, taken to offset or replace an environrnental loss caused by a negative impact. Compensation measures are primarily intended to address the residual effects of an impact which has not been adequately or fuily mitigated (Lawrence and Davies 1993, v; CEARC 1988, 1). Compensation is a further rneans to ensure that the cost of a dismption (Ellis 1989, 303) is addressed in a fair and equitable rnanner where the benefits are distnbuted to those at risk (CEARC 1988, 1). Measures used to provide compensation involve: replacement, substitution, restoration, enhancement, acquisition, or securement of similar characteristics or properties.
Despite both acadernic and legal definitions, compensation remains a "relatively informal concept" (ibid., 1). Theory detailiig the defhition of compensation remains largely undeveloped and unpublished. Due to its informal nature, compensation is often more appropriately defined by its practical application in environmental assessment.
2.2.2 iRoIe and Application of Compensation in Environmental Assessrnent Environmental assessment (EA) attempts to ensure that social and ecological impacts, considered externalities in economic calculations of costs and benefits, are included in an "institutionalized decision-making process" Wtney and Maclaren 1985, 1). EA applies a prescribed, sequential format to address environmental impacts, as foIlows: identification, measurement, prediction/evaIuation, implementation of mitigation or compensation, and follow-up monitoring. The mitigation and compensation component of this sequential format is the prirnary rnechanism which attempts to ensure that environmental costs are addressed and incorporated into the decision-making process.
Traditional theory on impact assessment considers compensation as one end of the mitigation - compensation continuum. Whereas compensation replaces a loss, a mitigation measure is taken to prevent, minimize, or avoid a negative impact (Weems and Canter 1995, 199). Mitigation measures include changes and substitutions to processes, project designs, and locations, as weii as remedial measures to aBected components (Whitney and Maclaren 1985, 20). Both compensation and mitigation attempt to implement the principle of "sustainable development, no net loss, and polluter paysy' where those who cause negative impacts are responsible for paying the associated costs (Environment Canada 199 1b, 3; CICS lWO,S, 12). As a result of this procedural linkage, compensation is ofien referred to as compensatory rnitigation or considered a subconcept of mitigation rather than a mutually exclusive option (Lynch-Stewart and Lee 1994, 5; Beck 1994, 800).
It is conventional practice in impact assessment to initially implement all mitigation measures possible, thus avoiding the requirement to compensate. If an impact or loss cannot be fully mitigated, ody then should residual or unavoidable impacts be addressed through replacement or compensation measures (Robinson et al. 199 1,4). Within the United States National Environmenial Policy Act (NEP A) the sequentiai preference of the continuum is formally regulated, as follows: (1) avoidance of direct or indirect impacts or losses; (2) minimization of the extent or magnitude of the action; (3) rectification or repair, rehabilitation or restoration of integrity and function; (4) reduction or elirnination of impact by preservation and maintenance; and (5) compensation by replacement or by providing a substitute resource or environment (Cintron-Molero 1992, 243).
It is generally accepted that, although compensation is necessary, it is the method of last resort in impact assessment and habitat loss (Mattingly 2994, 207; Robinson et al. 1991, 4). Ofien, compensation is compared to "a pound of cure", as oppose to an "ounce of preventiony'that is provided by effective mitigation (Robinson et al. 1991, 89; Lawrence and Davies 1993, vi). Opinions critical of compensation suggest that it should not be applied "in-lieu" of adequate protection or mitigation due to uncertainties associated with its impiementation (Koski 1992, 344). Strict adherence to the preferential sequence of the mitigation--compensation continuum is often cited as the most effective means of addressing concerns that there is over-reliance on compensation. Additional mles or preferences regarding the implementation of compensation are also discussed in some sections of the literature. These uiformal rules or preferences suggest that compensation should: be implemented prior to losses occurring; be located on or close to the site of the losses; consist of habitat replacement rather than the enhancement of existing habitat; consist of the same type of habitat destroyed; and be evaluated periodicdy to ensure objectives have been satisfied (Mattingly 1994,207; DFO 1985, 14).
Attempts to provide more formal applications of compensation sometirnes rely on mathematical or accounting methods for conceptualizing or calculating compensation. Theoretical approaches to compensation are often viewed as a formula which suggests a rational, reasonable, and practical application. The following formula was suggested to address compensation concems related to the Torrey Canyon oil spilI (Hawkins and Southward 1992, 6 13): C = (A+L) x Y
Where: C = compensation A = acute darnages L = chronic long-term darnages Y = number of years for recovery
In this example, variable 'A' would be a large and immediate irnpact which would be resolved immediately based on current evidence, while 'L' wouId be a srnder impact occurring over a longer period of time and resolved with separate payrnents based on evidence obtained over several interval periods.
Although this methodology provides an excellent conceptual view of applying compensation, the obvious dSculty lies in calculating and interpreting the individual parameters of the formula. The structure provided by a conceptual mathematicai method, however, cm be used as a Earnework for subsequent discussions and research for determining appropriate levels of compensation.
2.2.3 General Types of Compensation In its simplest form, habitat compensation consists of "the costs of purchasing, irnproving and managing compensatory habitaty'(Robinson et al 1991, 40). Compensation has been categorized into three general types, including: in-kind, out-of-kind, and monetary. Very different goals, objectives, and outcornes are incorporated into each of the three general types of compensation and reflect mutually exclusive options.
In-kind and out-of-kind compensation provide an actual replacement or substitute of species or habitat for that which has been impacted. In-kind compensation involves replacing the same types of habitats or species affected whereas out-of-kind involves replacing different types of habitats or species than those which were impacted (Lea and Frederick 1992, n-p.). Out-of kind compensation is preferred when the habitats or species impacted are plentihl and not threatened. In these circumstances losses to cornmon habitats are replaced with more endangered or rare habitats to provide an overd greater environmental benefit.
Monetary or cash compensation involves the exchange of money to offset net environmental losses caused by a development. It is generdy agreed that "monetary compensation" does not have the ". . . lasting beneficial effect on the viability of. . ." the environment as does mitigation or other types of compensation, although these costs may be ". . . several orders of ma30nitude greater . . ." (Lawrence and Davies 1993, 2-10). Such an approach is considered anthropocentric rather than ecocentnc, where the value of the loss is determined by its value to hurnan society rather than to the ecosystem (CEARC 1988, 3). Of the three types of compensation, the monetary alternative is believed to have the least beneficial effect on the environment (Lawrence and Davies 1993, 2-10). Monetary compensation is also ciiticized when compensation funds are directed towards governments' general revenues. General revenue fùnds can be distributed to provide an indirect, overall, and possibly greater benefit to society. However, this occurs at the expense of the specifk environment impacted. To address this criticism, the BC provincial governrnent has established 'special' accounts, such as the BC Habitat Conservation Fund, to accept rnonetary compensation and ensure that these funds are directed towards acquiring or enhancing other habitats near the site where a development occurred (HCF 1988, 2). Alternative cash compensation can be prohibited, as in the case of federal fisheries compensation policy, to ensure that compensation actions have a direct beneficial effect on fish habitat and stocks @FO 1985, 14, 23).
2.2.4 Frameworks for Determining Compensation Compensation is generally determined through the use of one, or a combination, of the following three fiarneworks: i) formal policy or statutory requirements, ü) accepted practice, and iii) negotiated measures (CEARC 1988, 1). These three fiarneworks do not calculate the Ievel of compensation; rather, they reff ect the broad approaches which are used to determine when and how compensation is applied. Each of these fiarneworks is discussed below.
2.2.4.1 Forma1 Policy/Statutory Requirements
Compensation, established by formai policy or statutory requirement, requires a specific Ievel of compensation to be provided in order to receive an approval fiom govemment or to satisG the Iaw. It reflects the most rigid approach of the three fiarneworks (FEMP 199 1, 7; CEARC 1988, 1). Those responsible for applying fonnal policies may have some discretionary authonty or flexibility to incorporate project specific considerations; however, a statutory requirement generally has an inherent inability to be modified or altered. Any changes or special consideration could only be accomplished by modifications to the statute or regulation.
Statutov requirements are viewed as a proactive rneans to facilitate the development and review of compensation proposals. Both developers and regulators would have a common understanding of requirements, which helps ensure fairness and accountability. Altematively, more formal requirements would restrict a regulator's ability to be creative or apply specific measures to unique sites (ibid., 1).
The statutory compensation eamework is not widely applied in Canada. The timited use of this framework is aaributed to the difficulty in developing the necessary dynamic legislation needed to make it finctional and reduce bs inflexibitity in response to unique or complex impacts (ibid., 1). In the absence of forma1 policy or regdatory requirements, the other approaches are applied by default.
2.2.4.2 Accep ted Practice Accepted practice establishes compensation requirements according to current govemment or industry guidelines or practices. Guidelines, by their nature, are usually evolving and often based on the precedents of previous compensation decisions f?om sirnilar developments (ibid., 1). Nthough not a legal requirement, application of and cornpliance with such requirements is obtained by agencies as a provision to receive indirect or secondary approvais. This framework is criticized for fang to make compensation requirements explicit (ibid., 1) and ensuring consistent application to al1 projects.
The accepted practice and the forma1 policy and statutory frameworks provide the only basis to arbitrarily apply explicit compensation requirements. These two general approaches elirninate some of the confiicts over mrthodology, reduce time bamers for approvais, enable attention to be directed towards actuai compensation techniques, and facilitate the resolution of outstanding issues (ibid., 1).
2.2.4.3 Nego tiated Measures Negotiated rneasures are the most commonly utilized frarnework and are exercised in the absence of guidelines or legal requirements. (ibid., 1; Abs 1992, n-p.). Measures common to this Earnework include: bilateral negotiations, mediation, judicial and quasijudicial courts, and nonbinding entities such as the CEAA. Negotiated processes are by nature adversarial. They require compromise to achieve solutions and can be ovenvhelming or exclusive to al1 aEected parties. However, precedents of negotiated measures often becorne the bases for fbture decisions and can "act as a force for change in accepted practices and . . . formal policy" (CEARC 1988, 1, 2).
Negotiated rneasures require the development of case-by-case and site-specific means to calculate compensation levels. This frarnework is not efficient since these means camot be unifody applied to similar projects and result in an inconsistent approach towards reaching overail habitat objectives. However, this characteristic provides the flexibility to respond to the unique nature of impacts and site-specific requirements of habitat being lost (ibid*, 1).
EA decisions based on compromise, are not usually based on ecological principles, and as a result they often fail to satisQ minimal needs of the environment (Beanlands 1985, 37; Caldwell 1988, 80). Negotiations rely on the necessity to compromise to reach a decision acceptable to al1 parties. When cornrnenting on the need to compromise in reaching habitat and land use decisions near Boundary Bay, Rob Butler of the Canadian Wildlife is quoted in Canadiari Geographic as stating: "A compromise is no answer, for it falsely assumes there is no right or wrong. . . . " However, Butler added that such a compromise "may be the only hope" to protect habitat in this area (Pym 1990, 112). Negotiated compensation levels cm often be a reflection of a stakeholder's ability to infiuence decisions, rather than the scientific merits of an environmental position.
Technical information in environmental impact statements becornes the analysis on which negotiations are based (Elliot 1981, 12) rather than a sound prescription for establishg compensation levels. Negotiations are &O criticized because decision makers dlow trade-offs that may not incorporate al1 of the long-term environmental costs and implications (Caldwell 1988, 80; Elliot 198 1, 12). As a result, agencies accept less than full compensation (Abs 199 1, n.p.)
The literature suggests that negotiated measures for detemllning wildtife compensation have failed, are inadequate, and that alternative means are necessary. Steinhart concluded that the use of negotiations is the primary reason why compensation has failed and recommended that compensation should be part of the "biological challenge of development" and not "part of the bargaining process" (Steinhart, 1987, 11). Lawrence and Davies (1993, 2-6) suggested that the reliance on negotiation to reach the majority of senlements they reviewed indicates the "importance of providing a workable, yet comprehensive model". Guidelines are needed to provide some degree of minimal environmental protection.
2.2.5 Evaluative Criteria CEARC suggested that an increased focus on formai and statutory and accepted practices may resolve the issues currently relying on negotiations and allow a greater focus on other aspects of compensation (CEARC 1988, 2). As such, determinhg appropriate compensation will require the need for explicit criteria (ibid., 2). This research will attempt to contribute to this requirement. 2.3 Wildlife and Wiidlife Habitat The su~valof many wildlife species is threatened by the loss of habitat (Cox 1995,20; Robinson et al. 1991, 84; UN 1988, 1). Recomrnendations in the Literature to address this issue consistently identify the need to address habitat losses in order to protect wildlife species (Lord 199 1, 7; Hummel 1995, 34; Murray 1987, 162). If the continual loss of habitat is not adequately addressed, Canada's wildlife capital will be further degraded and the nation's environmental debt will increase (Lord L 99 1, 10).
Discussions related to this topic note the ovenvheiming si~canceof Canada's wildlife and wildlife habitat assets, outline the increases in the nurnber of species at risk and the amounts of habitat lost, ident* the chronic nature of habitat losses, and document the demands on governments to reverse these trends.
2.3.1 Wildlife & Wildlife Habitat - Canada's National Asset Canada, by fortune of its geography, has inherited a diversity of wildlife species and habitats. As the second largest country in the world, Canada contains large portions of the most unique and critical habitat types necessary for many species' survival. For example, one quarter, or approximately 127 million hectares, of al1 the world's wetlands are located in Canada. Wetlands are considered the most diverse and valuable type of habitat available to wildlife (Environment Canada 1991a, 3). Lord, in The Status of Wildlife Habitat in Cmmda: ReaZities & Visions, (199 1, 7) reported that Canada contains the foUowing number of species: 198 rnamrnals, 550 birds, 86 amphibians and reptiles, 177 fieshwater fish, and 100,000 insects and other invertebrates.
2.3.2 Endangered Species and Spaces The increasing number of wildlife species extinct, rare and endangered is linked to the corresponding stresses and threats to wildlife habitats (UN 1988, 1). This international trend recognizes the linkage between habitat and species survivd (1). In 1997/98, the Committee on the Status of Endangered Wildlife in Canada (COSEWIC) reported that a total of 186 wildlife species, not including plants, were extinct, or at risk of becoming extinct, in Canada (WWF 1997, n.p.; COSEWIC 1997, n.p.). This is an increase of 689% since 1984 when COSEWIC reported that a total of 27 species, not including plants, were extinct or at risk. The increasing trend in the number of wildlife species extinct, extirpated, endangered, threatened, or vulnerable is iilustrated below in table 1 which displays the annual totals developed fiom World Wildlife Fund publications and COSEWIC7ssurnmary of "Species Designated in the Five Risk Categones with Current Geographical Occurrence7'(COSEWIC 1997, n-p).
Table 1 Annual ~otals'of Wildlife Species at Risk
Year ~xtineratened'~ulnerable' Total
* Source: COSEWIC 1997, n.p, Note 1 - COSEWC Annual Totals: Annual totals for wildlife species at risk are estabkhed annually by The Committee on the Status of Endangered Wildlife in Canada (COSEWIC). The cornmittee consists of representatives fiom federal, pro~lncialand territorial governrnents and conservation organizations (WWF 1997, n-p.). Note 2 - Definitions: Extinct: a species formerly indigenous to Canada that not longer esists anywhere. Extirpated: a species no longer existing in the wild in Canada but occurring elsewhere. Endangered: a species threatened Mth imminent extinction or extirpation in dl, or a sigrtifkant portion, of its range. Threatened: a species likely to become endangered in Canada if the factors affecthg its vulnerabiliw are not reversed- VuInerabIe: a species particdariy at risk because of low or cieciini~gnumbers, srna range, or for some other reason, but not a threatened species, The importance of habitat to the su~valof wildlife species has been well documented in wildlife literature for many years (MacArthur and Wilson 1967, n-p.; Preston 1962, n.p.)- As early as 192 1 in Canada, C. Gordon Hewitt in neConservation of WiZdIlife in Canada (192 1, n.p.) concluded that developrnent and reclamation of wildemess areas had led to the "destruction of the haunts of our wildlife." The increasing numbers of species at nsk would appea. to suggest that many wildlife species and their habitats in Canada are threatened. Considering the habitat-species linkages (UN 1988, 1) suggested in the literature, it would be reasonable to consider the continual reduction in the arnount of habitat available in Canada as a main contributkg factor to the increasing number of species at risk,
Reductions in the amount of habitat avdable to wildlife is weU documented in the literature. For example, since 1800 one seventh, or 20-million hectares, of wetlands in Canada has been destroyed (Environment Canada 1991a, 4). In the United States, more than one halfof the original wetlands in the contiguous forty-eight states have been destroyed or flled (Steinhart 1990, 18; Mattingly 1994, 206). In some American states the loss of wetlands has been even more drarnatic. In Connecticut and California, ninety percent of wetlands have been lost, and in Iowa approximately ninety-five percent have been lost (Steinhart 1990 18). Further losses of wetlands in the United States are estimated to be occurring at approxirnately 300,000 to 500,000 acres a year (Steinhart 1990, 20; Mattingiy 1994, 206). These discussions illustrate the degree to which losses to wildlife species and habitat are occurring, in the absence of a more formal and cornprehensive compensation mechanism.
2.3.3 Chronic Loss of WiIdlife Habitat The chronic and histoncal Iosses of habitat in various parts of Canada may be largely attributed to the continual pressures of development (Canada, Transport Canada, 1990% 8-1 1). With respect to wetland habitats, historic losses in Canada have been attributed to the several specific land uses as outlined in table 2. Table 2 Wetfand Losses Attributed to Specific Land Use in Canada
Reason for Loss Percentage Loss ------vP.------Farming Drainage 85 % Urban & Ludustrial Growth 9% Other: (including: recreational developrnent, hydro, lake-level, forestry 6% and peat harvesting) Source: (Canada, Environment Canada, 1991,4).
Hydroelectric expansion in British Columbia has resulted in widespread losses of critical habitats including: spawning areas for fisheries, forage producing areas for ungulates, and lower valley areas which are the predomuiant snow &ee areas for wildlife during winter months (Murray 1987, 168). The impact on wildlife habitat is evident in Murray's comparison of the arnount of water impounded due to dam expansion over a thirty-year period. In 195 1 there were 6 1 dams with a corresponding 6,58 1 million cubic meters of water impounded in British Columbia. By 198 1 this amount had increased to 103 dams, with 177 billion cubic meters of water impounded and over 426,000 hectares of flooded valley floors and nparian areas (ibid., 168).
The chronic, yet incremental, nature of habitat losses is iiiustrated by the historic transition of wildlife habitat to other land uses in the Lower Fraser River Estuary of the Lower Mainland of BC The Boundary Bay portion of the estuary exceeds the 1971 Ramsar Convention's seIection criteria in terrns of numbers of waterfowl and shorebirds, for intemationally important wetlands, by more than 30-fold and 60-fold respectively (Transport Canada 1990% 8- 12). Government studies conciuded that during winter rnonths this area supports the largest diversity and number of birds in Canada (l3utler and Campbell 1987, 6).
The most serious threat to wildlife appears to be the permanent loss of habitat to urban development which currently occupies 28.3% of the estuary. Tabie 3 sumarizes the changes in type and quantity of wildlife habitat in the Lower Mainland since the beginning of European settlernent (ibid., 16). Habitat loss due to rapid industrialization and urban development is a common conclusion of the various wildlife impact analyses, covenng projects in the estuary and the Lower Mainland (Transport Canada 1990a, 8-12). In the case of the Boundary Bay area of the estuary, development pressures wili likely fiirther erode the amount of wildlife habitat available.
A 1990 survey of land title ownership indicated that of the 1,713 hectares of privately owned land around Boundary Bay, 74 percent is controlled by investors, developers, and hobby farmers, while only 23 percent is owned by commercial fmers and the final 3 percent is occupied by urban uses (Pym 1990, 109). In this same Canadian Geographic article, Pym suggests that these investors and developers would "hedge their bets, lobby Delta's municipal council and forever test the wind of a favorable zoning changeyy(ibid., 115).
Table 3 Cornparison of Habitat Types in Lower Mainlaod Between 1880 and 1985 (Total Area 682.5 km ')
Habitat Type Oh 1880 Oh 1985 % of 1985 Area Protected
River 9.7 9.7 0.0 Sand & Mud FIats 37.9 37.9 Source: Butler and Campbell, 1987, 16 Preservation and compensation of the remaining habitat is necessary for the maintenance of existing populations of wildlife (Murray 87, 162)' such as bird populations in the Fraser River Estuary (Robinson et al. 199 1, 84). Furthemore, of the rernaining habitat, only one percent of the Lower Mainland's 682 square kilometers is preserved for wildlife by legislation (Pym 1990, 108). A cornparison of the percentages for the various types of habitat between 1885 and 1985 suggests that habitat losses have not been adequately addressed or compensated. 2.3.4 Urgency for Government Policy and Action Literature on wildlife fiom the late 1980s and early 1990s, most notably that of Monte Hummel, President of the Canadian World Wildlife Fund (1989 and 1995), questioned how important wildiife and wildlife habitat is to Canada. Hummel asked whether the future of wildlife would be deterrnined by "design or default" and warned that on a daily basis Canadians were "Liting options through inaction" (Hummel 1989, introduction). Consideration of wildlife habitat must extend beyond the goal of protecting twelve percent (attnbuted to the Bruntland Commission's report Our Cornmon Futzrre) of the land base, as public parks and conservation areas, and incorporate how society accommodates wildlife habitat in the remaining 88% of the land base (Lord 199 1, 7). Methods, such as compensation, must be introduced into institutions which govem land use and development in order to ensure the preservation of the nation's wildlife heritage (Murray 1987, 162). The application of preservation and compensation considerations would be consistent with other public controls on private lands such as planning requirements, taxation and policies which dictate specifïc land uses (Hummel 1995, 34). It is necessary that the econornic sectors or entities which benefit fiom, or have an impact on, wildlife habitat be required to provide adequate arnounts of compensation (Environmental Canada 1990a, 7). As in the case of the Columbia River system in the United States, hydroelectnc-dam development has been responsible for the elirnination of rnany of this areas salmon runs (Economist 1995,20). Due to the inexpensive source of hydroelectnc power, agencies such as the Bonneville Power Administration have been able to provide power to customers at prices up to seventy-five percent lower than elsewhere in the United States. However, the economic losses to salmon and steehead fisheries done due to dam developrnent, have been estimated at $US 375 million annually, with a cumulative loss of %US6.5 billion since 1960 and a projected future loss of $US 3 -7 billion per decade (ECoski 1992, 3 89). As a resuIt of these habitat impacts, the Bonneville Power Administration has recently been required to provide tens of millions of dollars per year in compensation and mitigation actions throughout the Columbia River system (Econornisr 1995, 20). It is apparent, as in the exarnple above, that habitat losses are ody acknowledged if there is an immediate observable economic cost, prknarily in the form of remedial actions or monetary compensation (UN 1988, 1). 2.3.5 Compensation in Wildlife Management Compensation requirements have been used for a number of years in jurisdictions throughout North America and Europe. For example, in the US, the Fish and WiZdlife Coordination Act of 1934 required that the secretary of the interior recomrnend mitigation or compensation measures for damages caused by federal agencies building water projects (Steinhart 1987, 8). Article 18 of The Federal Law on Protection of Nature and Landrccpe in Swifzerland, adopted in 1966, specïfied: If injury cannot be avoided, substitute areas should be created so that biotypes (endernic animal and plant living spaces) area cease to decrease. (UN 1988, 12). The Federal Republic of Germany required that unavoidable darnage to wildlife habitat be offset or eliminated (ibid., 24). Even in Byelorussia, a former Soviet Socialist Republic, industries were required to restore and retum al1 damaged lands to their previous state. This republic reported that, over a twenty-five year period, 158,000 hectares of damaged lands were restored (ibid., 24). As early as 1990, the WildIife Ministers Council of Canada recornrnended that a forma1 requirement be established that would necessitate future development projects to "compensate for habitat that is unavoidably destroyer (CICS 1990a, 8). This formally identsed the need for those who cause habitat degradation to be responsible for rehabilitation and mitigative measures (ibid., 12). The requirernent that users should be responsible for such associated costs had been previously presented in the Guidelinesfor WildIlife Policy NI Canada (MinÏster of Environment 1983, 7). 2.1 Limitations of Compensation The process of selecting an improved mechanism for compensation, or preferable characteî-ïstics from various rnechanisms, must reflect an appreciation of the limitations of compensation. An examination of the limitations associated with the science of compensation and its current use assists in providing accurate measurement denafor such a selection process. This section examines those aspects of compensation most frequently cnticized, including: the uncertainty associated with its use, the lack of its overall success, the failure to conduct follow-up monitoring or supporting research, the extent of administrative rnisuse, and the inherent weaknesses of its scientific foundation. 2.4.1 Uncertainty The uncertainty associated with compensation policy and practice is a consistent criticism in the literature. Staternents by practitioners, regdators, and researchers suggest that compensation is: unclear, "evolving and fiaught with uncertainty" (Robinson et al. 199 1, S9), "largely experimental and will not worKY(Abs 199 1, n-p.), "confùsed and uncertain'', and represents an "inadequate and unsettled state of law" (McDade 1993, 2); and a questionable "viable optiony' (Beck 1994, 80 1) in wildlife management. Uncertainty associated with compensation in natural resource management has led some to deem compensation, "not [to bel in the interest of [any of the] parties" (McDade 1993, 2). Developers, and those required to provide compensation, also idente uncertainty as a major obstacle to the acceptance of the use of compensation. Private sector interests require predictabiiity, consistency, and certainty in compensation requirements, as with ail regulations, before they can be widely accepted or implemented (Lynch-Stewart 1992, 4; Sokolove and Huang 1993,69). Requirements must be clearly established and udormly irnplemented to ensure fair application to all projects which result in the loss of habitat; otherwise, some proponents may be left at an economic disadvantage. Any reduction in uncertainsr will benefit development interests by strearnlinhg reviews and reducing the tirne required to obtain approvais (Lynch-Stewart 1992, 4). 2.4.2 Lack of Success According to the literature, the application of habitat cornpensation has been 1argely unsuccessfûl (Mattingly 1994, 207; Lawrence and Davies 1993, 1- 12; Environment Canada 2990a, 12; Beck 7994, 80 1). Lawrence and Davies (1993, 1-12) fbrther concluded that even with "multi-year resources and long-term efforts [compensation] efforts have met [with] variable success" suggesting that satisfactory results may be unobtainable. Indeed, none of the studies, articles, or government reports reviewed as part of this paper conclude that success rates for compensatory habitat have ever been extremely, or even moderately, successfirl. Unfortunately, the Literature contains few articles on the success rates of various techniques for actually establishing wildlife compensation. Research indicating the success rates for establishing habitat compensation is Iargely limited to wetlands and fisheries projects, where compensation is more ofien permitted or regulated. Published research on success rates predominately originates £Yom the United States. Furthemore, no published research was found which measured the effectiveness of the various mechanisms or processes applied to determine an appropnate amount of compensation. Research evaluating the implementation of compensation measures indicates that success rates are low, marginal, and variable (Race and Fonseca 1996, 94; Sokolove and Huang 1992, 3 6; Lawrence and Davies 1993, 1-12). Such fkdings are consistent across various junsdictions in the United States including New England, California (Steinhart, 1987 IO), and Flonda (Sokolove and Huang 1992, 36). The poor success rates are best iilustrated by Sokolove and Huang's (1992, 36) study of wetlands creation in Florida, which reported a 27 percent success rate for both tidal and nontidal areas and only a 12 percent success rate for fieshwater areas Based on the poor success rates for irnplementation, some authors have suggested that compensation should not be applied (Beck 1994, 801; Race and Fonseca 1996, 94). The Cornmittee on Restoration of Aquatic Ecosystems in the United States recommended to regulators that wetlands restoration should not be used to compensate for the destruction of existing wetlands, due to the "trial and error" nature of compensation and the lack of success (Race and Fonseca 1996, 92)- To address some of these concems, Race and Fonseca (1 996, 99) recommended that there be a greater ernphasis placed on cornpliance and enforcement. They suggest that success rates for permit requirements would be improved by penalties and incentives for permit holders. 2.4.3 Follow-up Monitoring and Research Research and monitoring is considered integral in the evaluation of the effectiveness of compensation (Lawrence and Davies 1993, 1-29). The cvaluation of compensation is lirnited due to the lack of follow-up monitoring and supporting research. Claims that compensation has duplicated or replicated lost habitat values is not supported by the literature due to the lack of research and monitoring information (Race and Fonseca 1996, 95). Research on compensation is further impaired by the absence of well documented monitoring results which are subject to peer-review by the scientific cornmunity. Such deficiencies are characterized as a "serious flaw in the evolution of [compensatory] mitigation technology and philosophy" (ibid., 95). Recommendations for further monitoring and research are not unanimous in the literature. Lawrence and Davies (1 993, 1-1) questions whether hrther research would improve techniques or capabilities considenng the other inherent Limitations of compensation discussed above. Race and Fonseca (1996, 99) States that they are not "overly optimistic" that more research, tirne, consultants, or money would improve compensation unless alternative approaches to compensation, such as "adaptive management," are adopted. This research will attempt to develop such approaches. Government agencies are criticized for not judging or documenthg the success of previous efforts, current techniques, or proposed methods for compensation Gea and Frederick 1992, 3 8; CEARC 1988, 1). As discussed earlier, the successfulness of compensation has not been adequately measured or reported by government agencies in Canada and the United States (Mattingly 1994, 207; Lea and Fredenck 1992, 38; CEARC 1988, 1; Lawrence and Davies 1993, 1-29, Steinhart 1987, 11; FREMP 1991, 33). In some instances, govemment involvement ended as soon as a development was completed, with no follow-up monitoring of proposed compensation measures (Steinhart 1987, 11). In the Lower Mainland of BC, government environmentai agencies have not begun the process of establishing a comprehensive ïnventory of compensation projects @REME' 199 1, 33), necessary to initiate any type of evaluation or comparison. The ability to irnplement improvements to compensation techniques and guidelines is hampered by the lack of a clear understanding of the effectiveness of existing activities (ibid., 33). Weaknesses in current techniques and guidelines for mitigation and compensation are attributed to the limited number of studies conducted to date and their inaccessibility to practitioners. As a result, valuable expenence Eorn current applications is not being transferred to subsequent efforts or incorporated into new technical guidelines (Hamson 1988, 8). This information is important since governments continue to require, and promote, the application of compensation in developments which result in the loss of wildlife habitat (Lea and Frederick 1992, 3 8). The lack of foiiow-up monitoring is also reflected in the level of noncornpliance with compensation requirements. A review of 174 compensations project concluded that only eight projects satisfied al1 permit requirements, representing a 4.6% success rate (Race and Fonseca 1996, 99). In other instances, the iiterature reports that compensation requirements are never conducted (Steinhart, 1987,lO). Race and Fonseca (1996, 99) suggested that a greater emphasis on the use of foilow-up monito~gwill help: i) detemiine cornpliance, ü) establish whether scientific objectives have been satisfied, and iii) increase the overall success rate of compensation efforts. 2.4.4 Administrative Misuse Problems associated with compensation can also be attributed to weaknesses in the management and the administrative infrastructure responsible for governing implementation. Examples in the literature indicate that govenunent agencies and their staff often sacrifice compensation requirements for the sake of expediency, because they confiia with other bureaucratic objectives, and because of a lack of effective systerns to ensure proper implementation. As a result of these administrative and management deficiencies, ". . . a lot of the [compensatory] mitigation gets unmitigated" (Steinhart 1987, 8). A summary Iist, including descriptions of the administrative and management problems identified in the literature, is provided below. 4 Clear Objectives and Mandate - Steinhart (1987, 8) suggested that government agencies responsible for compensation do not have a clear sense of what they wish to achieve through compensation. As a result, objectives such as economic development take precedence over compensation requirements. Agencies, feanng charges that they are preventing development on pnvate lands, ofien agree to compensation in order to achieve at least "some environmental benefit" irrespective of its merits (ibid., 8). As a result, agencies seldom obtain adequate compensation leveis for the amount of habitat destroyed (ibid., 10) b) Administrative Fucus - Based on her research of compensation efforts for wetlands, Lynch- Stewart (1994, 6) indicates that agencies focus more on administrative processes than on technical considerations. Lynch-Stewart suggests that a greater ernphasis on technical considerations is necessary to help ensure compensation is successfÛ1. This statement is consistent with other criticisms that governrnent agencies, overall, neglect the technical aspects of environmental assessment in favor of process and administrative aspects. c) Training and Management Tools - A lack of adequate training (Lea and Fredenck 1992,39) and available measunng tools and techniques (Race and Fonseca 1996, 99) are identined as sign5cant limitations for govemment agencies involved in compensation. The lack of training and tools further exacerbates various agencies' abilities to overcome other problems discussed in this section. d) Long Term Cornmitment - Lower success rates and the inconsistent application of requirements reflects the lack of a long-term cornmitment to compensation. An example of this problem is illustrated in the management of a compensation site from the McNary Dam project by the state of Washington. When the state government recently experienced funding constraints, it simply returned the McNary WiIdlife Management Area to the US Corp. of Engineers. The area had been previously leased to the state as compensation for damages from the McNary Dam (Steinhart 1987, 11). This decision by the State of Washington may Lirnit its credibility when developers and utilities are required to provide future compensation for the loss of habitat fkom new projects. e) Location of Conipensntion - Compensatory habitat is sometirnes provided in areas distant frorn an irnpacted area (Race and Fonseca 1996, 94). This may result in the concentration of habitat in some areas at the expense of other areas (Robinson et al. 1991, 90). As well, alternative sites for compensation habitat may be inherently Limited in their value for wiidlife. For example, in the Boundary Bay area, researcher Mary Taitt questions how developers can compensate for the loss of raptor habitat elsewhere, when "The poundary Bay] is the hot spot in Canada for birds of prey . . ." (Pym 1990, 12). f) Securement as Compensation - The literature suggests that the securement, preservation, or protection of habitat elsewhere does not satisQ compensation 28 requirernents (Environment Canada 1996, 16; Beck 1994, 800; and Robinson et al. 199 1, 90). Whereas habitat replacement involves the actudy creation of new habitat sites, securement only includes the acquisition and preservation of similar habitat at a difEerent location. The simple securement of habitat as compensation assumes that a hectare of new habitat is found for every hectare lost to development, which is rnisleading since many habitats are finite (ibid., 89). In the instance of a 1: 1 ratio of searement to losses; this wiU result in an overall50% net loss to habitat (Abs 1991, n.p.). As opposed to a 1:1 ratio of creation to losses; where there would be no net loss of that particular type of habitat- At a minimum, compensation involves the purchase and securement of habitat as well as the addition or improvement of habitat values and functions (Environment Canada 1996, 16). This limitation is incorporated as a constra.int in the Memorandum of Agreement on Wetlands Compensation, between the US Army Corps of Engineers and the US Environmental Protection Agency, wtiich States that the simple purchase or preservation of habitat may ody be used in "exceptional circumstances" (Beck 1994, 800). This provision helps ensure that the Corps of Engineers will attempt to provide full compensation, which includes adding to or enhancing the values of an acquired habitat site, rather than simply purchasing and securing a property. g) Consistency - The application of compensation is characterized as being inconsistent and arbitrary due to the case-by-case basis in which requirements are applied (Elliot 1981, 234; Race and Fonseca 1996, 95). This problem is largely attributed to the over reliance on negotiations in the process of determinhg compensation (ibid., 94), as discussed earlier in this chapter. This rnay result in the unanticipated complication that more stringent controls on future habitat losses will be necessary to offset the cumulative impacts of inconsistent decisions on previous compensation requirements (ibid., 98). Developers and property owners have also been accused of the inappropriate use of compensation. Compensation is the preferred technique for those involved in land use since it interferes Iess with on site-development (Steinhart 1987, 8) and it enables development on desirable sites with habitat (Mattingly 1994, 207). Steinhart, in his article "Mitigation Isn't: Compensation for habitat Ioss fiom development is a buy-og and the benefits are often illusory" (1987, 8) claims that developers only offer mitigation to avoid having their proposals contested by government agencies. Once compensation is initiated, developers are primarily focused on satiseng the minimum permit requirements rather than creating successfbl compensation habitat @ea and Fredenck, 1992, n-p.). These examples suggest that considerable further work is required in the administration and management of compensation. Researchers may be unable to measure the technical effectiveness or practical usefülness of compensation if efforts are unnecessarily hampered by administrative or management hadequacies. Unless govenunent agencies are able to address these problems and strearnline processes, they will be unable to commit the necessary efforts and resources to ensure that: 1. replacement is a priority over securement; 7. adequate and proper compensation is subscribed to by replators; 3. permits are monitored for compliance; 4. established compensation sites are rnaintained and continue to satisfy original habitat goals; and 5. developers are treated equitably, to avoid confrontation, and allow efforts to be focused on creating valuable compensatory habitat. 2.4.5 Scientifiç Limitations The environmental assessment literature does not extensively review or explore the scientific focus of compensation for the loss of wildlife habitat. The sparse Iiterature available suggests that there is a far reaching need to develop a more solid scientific foundation to determine appropriate compensation. The use of experknentation in the development of actual compensation sites is recommended as a means to achieving this goal (FEEMP 1991, 67). However, few authors speci£ïcaiIy discuss or evaluate how scientific aspects should be incorporated into mechanisms for determining appropriate compensation levels. Beyond the simple recognition that compensation is required, it appears that considerably more effort is required to incorporate scientific considerations into policy development. An irnproved mechanism for determining compensation for wildlife must address the scientific bit ations inherent in environmental assessment and wildlife management. The limitations of science in environmental assessrnent and wildlife management are also pertinent to the application of compensation requirements for the loss of wiidlife habitat. A review of these limitations provides an initial basis upon which to examine the broader scientific considerations which may be applicable to wildlife compensation. Environmental assessrnent has often been criticized for its lack of attention to scientfic requirements and realities (Beanlands and Duinker 1983, 1; Thompson nad., 12; EUiot 1981, 215). Beadands and Duinker (1983; 1985) also recornrnended that EA should incorporate application of relevant ecological principles. Murray (1987, 86), in Our WiZdIlife Heritage: 100 Years of WiZdIfe Mmlagement, characterized wildliie management in a similar manner. He noted that scientific applications have ofien been limited since the nature of wildlife conservation problems preclude the possibility of developing testable hypotheses as a basis for experimentation. Science based on ecological principles and perspectives has been also neglected in favor of administrative, legal, and political considerations (Beanlands 1985, 3). Cornpensatory rnitigation has been compared to First Nation treaties, where pledges are made without real commitments, simply to avoid an argument, and with the intention of being ignored once the focus rnoves on to other business (Steinhart 1987, 8). As a result, environmental assessment has evolved with a lack of attention to fundamental ecological principles as well as basic scientific fiameworks (Beanlands 1985, 11). Several scientSc limitations related to environmental assessment, and to a lesser extent wildlife management, which are relevant to compensaiion for wildlife habitat, are outlined briefly below. This listing and explanation is not exhaustive and is pnrnarily intended to iflustrate the depth and scope of scientific considerations associated with environmental assessment. Where possible, each constraint should be incorporated into the design of a mechanism for determining appropriate compensation levels. The listing is largely drawn fiom Beanland's (1985) discussion of environmental assessment, and is supptemented with references to scientinc requirements included from literature on compensation for wildlife habitat. a) Nntural Variability: Natural systerns, such as habitats, are highly dynamic and it is normal for such systerns to be subject to extreme variations over space and time (Beanlands 1985, 7). Variability affects the establishment ofbaseline conditions, the cornparisons among and between systems, and any subsequent detemination of compensation levels. It is necessary to understand these natural processes to differentiate between project-related impacts and activities induced by natural causes (Lawrence and Davies 1993, 2-6). Hanison (1988, 8) identified some of these factors in his review of marine compensation; he concluded that compensation guidelines developed for a specific geographical area may not be applicable to another area due to spatial varïability and dzerences in species composition. This factor should also be considered when evaluating the sources of data that wildlife managers apply in decision making. Often, data from sirnilar, but better documented ecosystems, are applied in management decisions involving sites which lack local data without considenng the unique dynamics or variability of each system (ibid., 7). b) Complexity of lnternctions: Cause-and-effect relationships are difticult to detemine due to the complexity of interactions and the variability within, and among, systerns (Beanlands 1985, 7). These interactions also inclüde cumulative, synergistic, extemai, and adverse impacts. A focus at the population level provides weak information and does not provide an understanding of the mechanisms which control variables or cause interactions (Beanlands 1985, 9). Literature on compensation regarding wetlands recommends a greater focus on the fiinctions of ecosystems rather than focushg on the presence, absence, or number of species (Lynch-Stewart 1992, 5; Simenstad and Thom 1992,423). The EARP Panel for the ParaHel Runway at the Vancouver International Xirport explicitly stated to the proponent that "The value of habitat cannot be stated in simple acreage terms" (Robinson et al. 1991, 83). Simenstad and Thom (2992,467) further suggest that if compensation is to be successful it will need to go beyond the consideration of specific species or functions, and move towards an overd landscape perspective. Lordys The Statzrs of Wildlqe Habitat in Canada: Realities & Visions (1991, 43) observed that focusing on a single species habitat may occur at the expense of other species and ultimately have a negative affect on the "ecological integrity of the area." As a result, Lord (199 1, 8) concludes that wildlife management must move towards system-oriented concepts. In practice, an approach based on hnctions which considers various interactions may provide a more effective and efficient means of obtaining compensation requirements. Bradley (1993, teIephone conversation), a habitat biologist with BC Hydro and Power Authority, indicated that BC Hydro has been more successfùl in providing compensation for wildlife losses by altering extemal interactions, than through the creation of any specific upland habitats. BC Hydro has successfùlly enhanced habitat values for specific species by prescribing controlled bums to create grazing habitat and through the control of predators. Application of Scientific Procedures: The fùrther application of scientific procedures and processes has been a consistent recommendation and theme in the environmental assessrnent literature (Beaniands and Duinker 1983, 2; Beanlands 1985, 7; Thompson nad., 8). Standard scientific methods include formulating hypotheses, gathering data, testing by experiment, and verifjing results by replication. A review of wetland restoration work in urbanized estuaries concludes that poor scientinc evaluations restrict compensatory rnitigation projects (Simenstad and Thom 1992, 424). Practitioners suggest that habitat compensation sites would be more successful ifthey were set up as formal experirnents with corresponding control sites and long-term monitoring (FREMP 1991, 67). d) Value Laden: Problems with environmental assessment cm often be attributed to conflicts associated with differences in society's values and beliefs which are independent of scientifc inputs to the process Q3 acow 1980, n.p.). Environmental assessment data are often portrayed as scientifically inconclusive and value laden. This leads to dficulties in establishing consensus on desirable environmental outcornes (Eliiot 198 1, 195). Such subjective preferences and values also influence the establishment of standards of quality (ibid., 10) which include methods for establishing compensation. Efforts have been made to develop evaluative processes, based on scientinc considerations, that quant@ wildlife habitat values and fùnctions. However, these procedures and techniques are characterized as subjective (Sokolove and Huang 1992, 37) and appear to be subject to the problems of being value-laden discussed above. The US Environmental Protection Agency created habitat evaluation procedures (HEP) and wetland habitat techniques (WET) to categorize habitat based on relative importance and values to wildlife. These two techniques assume that numencd calculations of gains and losses can be established. In turn, these calculations are used to determine compensation ratios for the amount of replacement habitat required (Bradley 1993, telephone conversation; Sokolove and Huang 1992, 3 7). Regardless of how the scientific limitations for the process are addressed, "[rnlany scientists remain skeptical of the ability of environmental science and technology to simulate any but the simplest of wetland types . . ." (h4attingly 1994,21 1). Research regarding compensation of habitat for fisheries concluded that based on the current state of scientinc knowledge, "habitats created by humans are unlikely to match those destroyed in terms of bioiogical productivity or diversity" (Harrison 1988, 81). Researchers also question if wildlife restoration can be accomplished with the use of current techniques or with additional research (Lawrence and Davies 1993, 1-1). The scientific viability of compensation is questioned when considering: the inherent differences between impacts and compensation areas, the limited ability to idente values in each, the daculty of reproducing values, and the uncertainty of restoration success @eck 1994, 801). Traditional wildlife management and environmental assessment theory, which includes compensation, is deeply rooted in John '4- Livingston's dennition of shallow or tarne ecology, which assumes that normal science cmpredict, control, and reproduce natural features and functions (Hummel 1989, 233). As such, Mattingly (1994, 21 1) suggests that "[olur ability to adequately mitigate environmental impacts . . . remains admittedly naive." This is mon apparent in the case of compensation for marine losses, where theory appears to be "relatively easy, at least on paper"; however, when applied the "real world intervenes and problems arise" (Harrison 1988, 4). This suggests that the underlying basis of compensation in normative science is flawed. Alternatively, this may lend support to Hammond7s(1978, n.p.) practical suggestion that "we should be striving towards an acceptable rnedian between intuitive judgment and true experimental mode of inquiry" in environmental assessment. The processes for deterrnining compensarion, as well as application techniques, may benefit fkom adopting such a practical approach. Several case studies discussed in the iiterature suggest that the acceptance of compensation as a comprehensive and scientific rnechanism may not be justified. Race and Fonseca (1996, 96) subrnit that compensation has been prematurely institutionalized, based on the extrapolation of experimental results, without sufficient indication that expectations wiil be satisfied. Mattingly (1994, 207) implies that the basis for assurning that compensation is appropnate is based on society's naive beliefs and perceptions that we can cornpensate for adverse effects of human activities. Inconsistencies within corresponding scientSc and policy development suggest that compensation may be more of a practical and convenient policy instrument than a sound scientific technique for managing losses to habitat. ~attin&(1994, 209) illustrates this inconsistency when commenthg on the conflict between: the belief that specific wetland types and values cm be restored, and the overall policy focused on ecosystem diversity to ensure the protection and the preservation of wetlands. The unjustified acceptance and application of compensation may aiso have a signincant impact on the long-term management of compensation policies and wildlife. Race and Fonseca (1996, 98) identified compensation as one of the factors contributing to overall cumulative habitat losses. If le& unchecked, this may eventually result in the need for even higher compensation ratios fiom future projects to offset current losses which are being inadequately compensated (Race and Fonseca 1996, 98). Beanlands and Dilinker's An Ecological Framework For Environmental Assesment (1983) recornrnends the adoption of assessrnent approaches which have an ecological focus. Their approach focuses on the further exploration of linkages between baseline and project information, with consideration of valued ecological components in order to more effectively predict outcornes and effects. Mitigation and compensation are identified in their discussion of specific approaches (Beanlands and Duinker 1983,30, 115) and they could be applied as a framework to assist in determining habitat losses and requirements for compensation. However, an ecological approach to compensation is not discussed in detail in their bookiet or in the literature, nor are there specific exarnples on how this could be accomplished. 2.4.6 Practical Reality Regardless of the limitations or inadequacies of compensation, it is recognized that there is an obligation to make compensation work, since it is better than the alternative, which is no compensation (Steinhart 1987, 11; Race and Fonseca 1996, 98). Compensation is one of only a few methods, such as mitigation, where environmental costs of development can be currently addressed (Steinhart 1987, i 1). The inability to immediately achieve adequate compensation is not a legitimate reason to dismiss it as a goal so long as the concept of compensation is valid (Lynch-Stewart 1992, 9). Inconsistencies in EA rnethodologies, including compensation, can be attributed to a variety of extemal pressures such as the political, the, and financial limitations imposed on professionals by decision-makers (Thompson n.d., 10; Caldwell 1988, 80). Despite its deficiencies compensation remains a viable objective; however, it dlrequire deliberate and selective changes, as well as a new focus which considers the underlying problerns and limitations that have hindered its usefùlness thus far @ace and Fonseca 1996, 100). Unfortunately, the lack of an extensive body of published literature on these topics wouid appear to support Steinhart's (1987, 11) daim that "We nod at these ideas" to improve compensatory rnitigation; however, "We haven't mastered them." It is also possible that, as researchers, we have been focusing too much on the issues and Limitations surrounding compensation as opposed to bringing forth and developing practical, scientific solutions for scrutiny. To date, compensation policy and efforts have provided sorne tangible benefits which have contributed to the restoration of Losses to wildlife habitat. For instance, the application of no-net-loss m)compensation for wetlands has already contributed significantly to furthering wetland conservation over previous conditions (Lynch-Stewart 1992, 3). Compensation policy, concephially, provides a beneficial focus that performs several important tasks which inchdes: finctioning as a structured approach, acting as an underlying pnnciple for negotiations between agencies and proponents, providing a focus for further research, acting as a catalyst to reduce the loss of wetlands, irnproving requirements beyond the sirnply intent to protect, and hnctioning as rules to ensure consistency among projects (ibid., 3). Practitioners in the Lower Maidand of BC have found that compensation for fishenes purposes have had a secondary benefit in that they ofien provide substantiai compensation for losses to wildlife habitat (FREMP 199 1, 26). The greater certainty of existing policies and efforts has saved substantial tirne and money by reducing the conflict among government agencies, stakeholders, and development interests (Lynch-Stewart 1992, 16). Compensation is a reasonable response to the practical realization that all types of habitat losses cannot be avoided. Losses or aiterations to habitat will continue, regardless of its acceptability, due to a variety of causes including: natural succession, continued residual impacts of past activities, and current activities which are beneficial to society (ibid., 2; Environment Canada, 1996, 6). Once this realization is accepted, efforts can focus on achieving other goals associated with compensation. For example, in the case of wetlands in the US, compensation has been accepted and regulated, and the current focus is on achieving an equilibrium between losses and gains, with the eventual goal of increasing the overall amount of wetlands (Lynch-Stewart 1992, 2). The establishment of predetermined values for fisheries habitat in the lower Fraser River discourages developers from disputing the value of habitat and has focused their efforts on mitigation and compensation actions (FREMP 1992, 26). Land developers view the application of compensation as a simple and practical recognition of the time constraints involved in addressing the concerns of governrnent agencies and not as an atternpt :O avoid environmentai responsibilities (Wilson 1991, 2). Oppominities to mitigate, and thus avoid compensation, are ofken limited by the nature of a dsveiopment and the time constraints associated with replicating natural conditions. In such cases compensation may be the only practical alternative. Developments which may preclude the oppominity to mitigate habitat losses include high density residential areas without green spaces, industrial and commercial complexes, and incompatible land uses such as airports. Chapter 3 LMIETHODOLOGY This research paper is primarily intended to be an ove~ewof the topic of wildlife habitat compensation and not an exhaustive study of each of the components used in the methodology. It reflects an initial attempt to investigate compensation policy specifically, separate from other forms of mitigation, in the absence of established methodologies. To date, compensation researchers have failed to compile inventories of compensation mechanisms or decisions regarding the amount of compensation necessary to conduct such an investigation. Further, researchers have failed to evaluate or compare the attributes of the various mechanisms or decisions to idente weaknesses or to select preferred alternatives. This paper seeks to advance research in these areas. In order to achieve the objectives of this study, and address each of the research questions identified in chapter one, a three component methodology is applied. It includes: the compilation of a research inventory of previously used mechanisms for compensation, ii) the utilization of a modified goals achievement matrix (GAM) to evaluate the effectiveness of the rnechanisms identified f?om the inventory, and iii) the application of the recomrnended mechanism, to selected case studies, to enable the cornparison of recommended results with actual past compensation decisions. Each component has been selected to facilitate the process of identwg an improved mechanism for estimating appropnate compensation levels. The literature review outlining the background of compensation, discussed in chapter 2, predicates and supplements this methodology and provides the basis for selecting the measurement critena used in the GAM. The methods of examination applied in this paper subscribe to the investigative approach of environmentai research and attempt to incorporate the principles of adaptive management. hvestigative environmental research and adaptive management are applied to problem solving in: i) situations which cannot be examined in a laboratory setting where conditions can be controlled or replicated, ii) cases where too many variables exists, or iii) circumstances that are too difFcult to predict and subsequent alterations or corrections are required after implernentation. Adaptive management involves directly testing hypotheses in the field, when faced with scientifïc uncertainty, and developing conclusions from the results of actual events (NPPC 1984, 108). The investigative approach to research involves a detailed scientSc review of previous resexch and project activities to develop more refined conclusions fkom previously prescribed project objectives or testcd hypothesis. Due to the lack of extensive published research on this topic, and the inability to conduct laboratory experimentation, the methodology selected for this research utilizes the best available approach to evaluate existing information and establishes a more appropriate mechanism for determining compensation levels. This research will provide a foundation for future hypothesis testing and research analysis. Further, this approach provides the most flexibility in being able to interpret the results obtained fiom the inventory, rnatrix, and simulation. The examination of previous research and project activities provides the opportunity to obtain relevant observations and formulate significant conclusions which may be othenvise unavailable or untenable. Such information is then subsequently used to establish more effective requirernents for future projects involving compensation for the loss of wildlife habitats. 3.1 Research Inventory The first elernent of this methodol ogy involves the development of a research inventory of information regarding compensation for loss of wildlife habitat. The inventory is intended to satisfy the first research objective of this study-namely, the documentation of the mechanisms currently used for determinhg compensation. The research inventory for this research paper includes two subcomponents consisting of: 1) a description of the current policy mechanisms used to determine compensation arnounts; and 2) a listing of previous compensation decisions stemming fiom losses to various types of habitat. The research inventory was compiled Eom: i) the published literature including scientSc joumals, popular media, and govemrnental documents; ii) interviews with federal, provincial, and municipal govenurient public servants; and iii) unpublished documents and files made available by the BC Ministry of Environment, Lands and Parks. The intent of the inventory is to reflect the diversity of rnechanisms used to establish compensation requirements and the range of recent compensation levels prescribed. The research inventory for this study is not exhaustive nor does it contain ail of the previous compensation decisions for losses related to wildlife habitat in BC. The limited availability- of published data on compensation decisions in BC requires that the scope of the inventory be expanded to other jurisdictions. InteMews have been conducted with selected staff from govenurient agencies to supplement limited documentation in the literature. 3.1.1 Current Policy Mechanisms The first subcomponent of the research inventory includes a List and discussion of the various policy mechanisms currentiy used to determine compensation requirements for wildlife, including fisheries and wetlands. Information regarding each of the mechanisms discussed is presented in a cornmon format to facilitate cornparison of the various characteristics fiom each alternative- Specific information not available for an individual mechanism is noted within the cornrnon format. Elements and details nom policy mechanisms used outside Canadian jurisdictions are referenced in this portion of the research inventory to provide a broader perspective on this topic and increase the generdizability of the results. 3.1.2 Previous Compensation Decisions A catalogue of previous compensation decisions regarding the loss of wildlife habitat represents the second component of the research inventory- A tabular format is utilized to simpliQ the display of information and facilitate the review of material coilected regarding each decision. The location of compensation projects catalogued in this inventory are also identified. Details and characteristics regarding each of the compensation decisions are included in the catalogue to permit a cornparison arnong projects. If available in the literature, the information pertaining to the decision parameters and the rnethodological critena related to each of the compensation decisions are included. Specifically: i> Decision parameters include information regarding the details of the decision in addition to the: a) type of wiidlife irnpacted, b) arnount and type of habitat lost, c) location of the impacted area, and the compensation area, and d) level of compensation proposed by the project proponent, required by the approving agencies, and actuaiiy implemented. ii) Methodological critena inchde information related to the decision-making process in addition to the: a) mechanism applied, b) characteristics of the method, c) criteria used to establish the level of compensation, and d) elements applied in the calculations. The catalogue also identifies ifa particular category of information is not available or has been ornitted f?om a specific compensation decision. To illustrate the difficulty in obtaining published information on this topic, sources of information pertaining to each project are identifïed in the catalogue. Compensation Ievels cataiogued in this research inventory are prirnarily drawn frorn decisions regarding developments in the Lower Mainland of British Columbia dunng the period of 1980 to 1997. However, additional compensation decisions related to hydroelectric dams, mining operations, fisheries losses, and wetland uses are included to provide a broader range of results in an effort to increase the level of generahation of the research findings- 3.2 Application of a Modified Goals Achievement Matrix A modified goals achievement matrix (GAM) has been selected as the second element in the methodology for this study. This component of the rnethodology is designed to respond to the tkd and fourth research objectives, identified in section 1.2 of this report-- namely, determinhg the most successful elements of previous compensation mechanisms and selecting a recornrnended system for establishing compensation. The GAM provides a format to evaluate and compare the vanous compensation mechanisms in a consistent marner in order to identi@ which efements are the most successful. The evaluative fkamework is also used to select a preferred mechanism for determinhg appropriate compeilsation levels or identi@ng the most desirable characteristics associated with each of the mechanisrns. The GAM utilizes a matrix structure to measure the ability of various alternatives to achieve specified goals. In this application of the Gmthe effectiveness and appropnateness of each of the compensation measures, cornpiled in the research inventory, are evaluated against specified criteria. GAM evaluative criteria are assembled £tom the literature review and findings of the research inventory. For the purpose of this study, the GAM has been modifïed to reflect the lirnited information and quantifiable data located in the literature and its specific application to this topic. 3.2.1 Selection of the GAM Morris Hill originaily designed the GAM, in the late 1960s, in an effort to devise an improved evaluation method over traditional cost-benefit anaiysis (McAilister n. d., 148). Hill descnbed the GAM as a "rational planning process" (ibid., 160). The GAM was considered unique because it could incorporate nonmonetary values, which couid be quantified by scientific methods, and adjusted by a set of value weights within an overail evaluative fiamework (ibid., 159). This format irnproved traditional cost-benefit analysis by enabling the: i) incorporation of intangibles, ü) measurement of eEects on social welfare, üi) inclusion of equity effects, and iv) consideration of alternatives beyond strictly monetary evaluations (ibid., 160). The GAM is one of the first methodologies that has atternpted to evaluate problems with multiple objectives (Whitney and Macfaren 1985, 27). The GAM has been used extensively to rneasure the impact of various town planning processes which involved cornmunities (McAllister n-d., 164). The GAM evaluative process is based on the adequacy of alternatives to achieve specified goals and objectives. Goals, located in the columns of the matrix, are designed as attainable objectives which ailow the progression or regression, of achievement to be rneasured and recorded. A rneasurable unit is selected for each of the goals. Each is then recorded in the ceils of the rnatrix adjacent to each alternative, If possible, goals should be measured utilizing common units of analysis in order to dowfor the objective comparison arnong alternatives. This process also assists in enabling the collection of intangible rneasurements for specifïc goals which may not be quantifiable. In such instances the data for the nonquantifiable goals cannot be added to other quantifiable totals. Value weights can also be set for each goal based on its relative importance or other means of determination, such as community values. Weights are then multipiied by the values for each alternative so as to denve an overall achievement score. Significant information is required for each alternative in order to fully complete the GAM approach (ibid., 160, 161, 163; Whitney and Maclaren 1985, 27). Researchers have concluded that modified versions of the GAM are widely used in spite of various limitations (Whitney and Maclaren 1985, 28). 3.2.2 Modification of the GAM In order to achieve the objectives of this study, the GA.is rnodified to focus on those attributes of the methodology designed to compare and evaluate alternatives. According to the literature, this is a weli recognized attribute, and widely accepted application, of GAMs (McAllister n.d., 166). These modifications are intended to emphasize the strengths of the GAM methodology and focus on those characteristics best suited to this application. Modifications made to the GANincluding some justifications, are outlined below. i> Value weights are not relied on in this application due to the lack of valid methods fcr detennïning these values (ibid., 167). Value weights for goals related to compensation would be difficult to establish in the absence of extensive research literature on this subject. ii) Goal statements are replaced with simple criteria for some of the rneasurement categories. This modification reflects the notion that some of the categones of compensation information do not have attainable objectives which allow the measurement of progression or regression. In such instances, the results can only be labeled or descnbed; however, this will still allow for some qualitative comparisons arnong the alternatives proposed. iii) Quantification is not used in this application due to the lack of aggregate data. As with other intangibles, many measurement categories related to compensation mechanisms are not quantifiable and thus cannot be aggregated into an overall matnx score for each alternative- The use of quantification can eliminate important information when a complex matter or a large amount of data is summarized into a simple measurement unit (ibid., 167). These modifications emphasize the strength of the GAM to organize and present a large arnount of detailed information on various alternatives. This strength facilitates a consistent evaluation and comparison of each alternative (ibid., 168). This modifïed GAM is utiIized, where data are available, to: list quantitative or qualitative vahes for ali dternatives, compare the values for each measurement category, and measure the relative effectiveness of each alternative against the cntena or goal established. To allow the cornparison of nonquantsable units or dzerent data types, measurements for each criteria are often summarized using a common three-classincation, ordinal-scale format. Based on prescribed goals, the analysis wili determine the ability of each alternative to: satisk fail, or remain neutral on the requirernents of a criterion. Since quantifiec! data is not available, or not applicable, the matrix is modified to incorporate qualitative measurements. 3.2.3 Selection of the GAM Criteria Background information is recognized as an important source for the developrnent of goal statements (ibid., 166). Evaluative critena and goals for the modified GAM have been assembled fiom the Literature review of scientific and theoretical discussions and research findings from previous compensation decisions. The proper selection of goals and cnteria is critical to the successful evaluation within the matrix. Unfortunately, the Literature on the methodology does not recornmend procedures for the development of appropriate goals (ibid., 166). For the purpose of this report, criteria and goals have been largely based on recornmendations, or favorable comrnents, identified in the literature. A tabular format is used to list: i> each criterion or goal, ii) the unit of measurement, mainly qualitative, üi) desired or attainable objectives to enable the measurement of achievement if possible, and iv) appropriate references in the literature, or this report, supporting its seiection. This process should provide sufficient information to enable cornparisons among the various alternatives and the selection of a recomrnended compensation mechanism. 3.3 Simulation of Recommended Approach The final element in this methodology includes the application of the recommended alternative to a simple simulation exercise involving previous compensation decisions. The simulation consists of replacing actual compensation approaches with the recommended alternative for selected case çtudies. Compensation levels derived fkom the improved alternative cm then be compared to those prescribed in previous decisions. The intent of the simulation is to examine difEerences between each approach and determine if the recomrnended mechanism is viable, appropriate, and practical. This process is used for achieving the fourth research objective, outlined in section 1.2; in an effort to evaluate the appropriateness of alternatives when subjected to a practical application with actual compensation decisions. The results of this simulation wiU further determine if the recomrnended approach continues to satisQ the GAM criteria, and whether the alternative couId be irnplemented in a practical situation.. Chapter 4 RESEARCH INVENTORY RESULTS AND DISCUSSIONS This chapter evaiuates information compiled for the research inventory. Research information is presented in two subcomponents that surnmarize: 1. policy mechanisms used to determine requirements for compensation, and --3 compensation decisions fiorn projects that involved the loss of habitat. A general discussion provides an overail summary of findings and comments regarding both inventories. Information in the inventory is used in an application of a modified GAM and a simple simulation exercise in an effort to establish a more appropriate mechanism for determining wildlife compensation levels. 4.1 Inventory of Current Policy Mechanisms Six mechanisms used by government agencies to establish compensation requirements are presented in Tables 4 to 10. The inventory includes exarnples of rnechanisms for both fish and nonfkh wiidlife habitat. Sections 4.1.1 to 4.1.4 discuss four of the more cornmon nonfish wildlife habitat mechanisms. Thesa more detailed discussions identiQ unique attributes and provide additionai background infornation related to developrnent, application, and rnethodological approach. This inventory format was developed to address issues confkonted in this research related to the absence of any conceptual fiameworks in the wildlife compensation literature in oràer to evaiuate alternative mechanisms. Using the Iiterature as a reference point, information components selected were chosen to provide a comprehensive description of each mechanism and facilitate a consistent cornparison and evaluation arnong mechanisms. A common format developed to inventory each policy mechanism includes the following information: a) Nme - name or title of the poiicy mechanism. b) Habitat - type of habitat protected. c) Regdatory author@ - iegal authority for irnplementation. d) Olher azrthoriq - nonregdatory or implied justification for irnplementation. e) Agency - agencies responsible for implementation. f) Reqzrirement - method used to calculate compensation. g) Description - characteristics of rnethodology. h) Enforcement - penalties if compensation fails or is no t irnpiemented. Table 4 lnisml Pm-1- Name ~ederarF9on Wctland Conseivatiy, (Eiivironment Canada 199 1)- Habitat Wetlands Regulatory Authority Noiie Other Authority Federal policy in response to obligations under the Ramsar Convention for the "wise uscmof wetlands and coinniitinent to cstablisli wetlmd conservation policies. Applicable to arcas of fedcral jurisdiction including: ciiviromneiit, migratory birds, inland and ocean fislieries, ititeniational or trans-boundary resources and fedcral lands. Agency A national policy wliich applies to al1 fcderal departnients and agencies. Requircmcnt Goal of no net loss of wctland functioiis. Description Tlie objective of the policy is to proinote the conservation of wetlands. It consists of sevcn goals, nine guiding principles and seven strategies. Enforcement No enforcnlient..- -..... or moiiit~ringd~n~enc~, -ri .-"-..-"."m. - Iy...m..-- Table 5 g Name Rcgiorial Wildlife Guidelines (Environment Canada 1992; 1995; MELP 1995; Clark 1996) - Habitat WildIife (other tlian fisheries). Regulatory Authority None Other Autho~ity Limited. 1t is a regional working guideline, but not an officia1 govemmcnt policy (Cox 1995, 20) Agency BC Environnient, Lands and Parks (MELP) and Canadian Wildlife Servicc (CWS). Requirement No net loss of productive capacity. 1 : 1 ratio of developed area to protected area (50% net protection either onsitc or offsite). Cash compensation has becn previously utilized as a surrogate. Description Guidelines apply to large projects, predominantly golf courscs, in the Lowcr Mainland. The guidelines have not ban siiccessfully applied to residential developments. En forcement Voluntary cornpliance. Enforcement of restrictive covenants is possible. A 1995 study reportcd a 75% ratc of noncomplimcc for restrictive covenaiits witliin the City of Surrey associated witli riparian arcas (DFO and Surrey 1995, Table 6 Corn ensntioii Folieym- PoliilCornmuil ..P".-,.-- mnnninrm -- ".mm-~~mm Name Policy E-1.3 Protect Fisli- and Wildlife Habitat, Onicial CornniunityOCP), City of Surrey -97, 2-65) - Habitat Wildlife, bird and fish habitats Regdatory Autliority OCP (a general statcinent ofobjcctives and polices) adopted by City Council pursuant to the BC Municipal Act. 0thAu thori ty NIA Agency City of Surrey Requiremen t 'The City will strive to balance habitat losses widi habitat replacement and / or compensation" as part of dcvelopment process (ibid., 2-65). Description The process is largcly based on negotiations. A rezoning approval may require habitat replacement or compensation. Compensation may not be required for developinents utiliziiig current zoning. The City may utilize: i) "habitat balancc sheets" to reconcile losscs and gains, ii) special high dcnsity or cluster development zoniiig to obtain protection for up to 80 percent of a property, and iii) negotiate or recon~mendrequirements as part of the zoning review process. Oîher proactive measures implernented by the city to address habitat losses includc: a parks acquisition program involving wildlife habitat and the designation of habitat areas in initial local planning processes. These steps identify t? habitat rcquirements prior to the rczoning and development process so that their protection cari bc addressed, (Bennett and NichoIs 1998, interview) Enforceinent City bylaws include yrovisions- to ensure cornpliance- with zoning requirements. *Table 7 Name: BC Water Act (Hamilton 1998; DeHam 1998; Bradley 1993) Habitat Fish and wildlife Regulatoiy Authority S. 9 and S 12 of BC Water Act (discretion of the coniptrollcr to place subjects on a water liccnsc approval) Other Autliority NIA Agency Office of the Coniptroller of Water Rights, BC Ministry of Environment, Lands and Parks (MELP) Requirernent As a condition of a water license approval, the comptroller of water rights niay require habitat cornpcnsation for areas flooded by the development of a dam. Tiiis process is negotiatcd. Licensing requircninits are currcntly being updated with the developinent of 'water use plans' to address eiivironmental issues at each dam facility in BC. Description Habitat compensation requirements were included as a clause in seven major dam water licenses. ~*Enforccment 4.1.1 Federal Policy on Wetland Conservation The Federat PoZicy 012 We'etlondConservation, table 4, is the federal govenunent's response to the decline of Canada's wetlands (Environment Canada 1991,2). Since the release of this policy, several supporting documents have been published to assist in the interpretation and implementation of the original document. me Federul Policy on Wetlmd Conservation Implementalion Gidefor Federal Land Managers (1 996, 10) was published by Enwonment Canada to encourage federal departments to develop a proactive approach to the implementation of the 1991 wetland policy. Specific guidelines for the implementation of mitigation and compensation measures have not been developed. One strategy in the 1991 policy indicated that the federal goverment would undertake "exemplary practices" in the area of wetlands management, including the develo pment of guidelines on mitigation and compensatory measures (Environment Canada 199 1, 9). The 1996 guide fürther suggested that guidelines would be developed to achieve no net loss (NNL), including specific directives related to the application of compensation (Environment Canada 1996, 10). Neither the policy nor the guide provided technical details, recommended procedures, or methodologies to assist in the implementation of the no net loss goal. Although wetland functions are defined in these documents, no indication was provided on how to measure or value individual functions, or calculate compensation levels for lost functions. The 1996 guide did, however, provide some information and general guidance on how to assist subsequent development of the 1991 policy. It recommended that future directives be based on three elements: i) compensation be considered a method of last resort in the sequence -- avoidance, rninlmization, and then compensation -- of mitigation alternatives; ii) requirements for compensation be related to wetland fûnction and type, size of area, geographic context, and tirne kame; and iii) more successful alternatives such as habitat banking or nonwetland creation be favored over less proven wetland habitat creation (ibid., 10). Some guidance is provided with regards to approving the implementation of a compensation proposal. It is recommended that compensation only be practiced when "the proponent provides evidence that fùnctions can be effectively replaced when, where, and to what or to whom they are important . . ." (ibid., 16). With respect to preservation as compensation, the guide suggested that the simple protection of another wetland habitat does not constitute full compensation; further irnprovements or the addition of functions elsewhere are also required (ibid., 16). 4.1.2 PoIicy for Managing Fish Habitat and the No Net Loss Approach Fisheries and Oceans Canada applies its legislative authoriq, to protect fish and their habitat under the federai Fisheries Act, by imposing restrictions that require compensation for unavoidable habitat losses (Hanison 1988, 1). As no net loss of productive capacity is the central element of this compensation mechanism, an acceptable compensztion plan must be submitted to the department before it will grant approval to a developrnent that includes the loss of productive fisheries habitat. For exarnple, in the Fraser River Estuary Management Prograrn (FREMP) area, approximately 10 out of 150 projects reviewed annually require fisheries compensation (FREMP 1994, 3 5). This policy, outliied in table 9, is the most defined compensation mechanism available for either fish or nonfish wildlife compensation. Due to its advanced development, fishenes compensation is charactenzed by a more specialized infrastructure to support its implementation. For exarnple, Fisheries and Oceans Canada has developed a habitat project database of fisheries compensation, restoration, and creation sites. Sirnilar databases have not been established for other types of wildlife (Adair and Colnett 1995, 4). The database includes an individual balance sheet for each project wtiich identifies losses and gains for each habitat type (FREMP 1994, 30). No net loss of habitat is the most widely applied habitat compensation requirement. No net loss is ofien applied to establish, at least conceptudy, the amount of compensation required. The literature identified a number ofjurisdictions which have adopted NNL as the target for habitat loss. In addition to the fisheries habitat policy, examples in other jurisdictions include the: Federal Policy on Wedand Conservation for Canada, Puget Sound Water Quality Management Plan for wetlands on public and private lands in Washington State (Adair and Colnett 1995, 5), and US national irnplementation plan for wetlands (Lynch-Stewart 1992, 1). Despite wide acceptance of the NNL goal, enforcement and implementation has been difficult. Although a NNZ. policy for wetlands was adopted in the US in 1987, a further 300,000 acres of wetlands was Iost to farmers between 1985 and 1990. Dunng this same period, ody 26 farm producers received any punitive measures, in the form of withholding governrnent farm benefits, as a direct result of their impacts on wetlands (Steinhart 1990, 18). In BC, a ten-year review of the federd fish habitat policy concluded that the ". . . simple application of NNL through the compensation option has alone not assured a no net loss of habitat" (Langer et al. 1995, 18). NNL has also been characterized as only "significantly" slowing the rate of habitat loss for fishenes (Adair and Colnett 1995, 2), suggesting that it has failed to completely address losses. Due to its inability to address ali Iosses, NNL is descnbed as an elusive goal due to problems associated with its implementation (Mattingly 1994, 207). Race and Fonseca (1996, 100) recommended that the main focus of compensation be on increasing the amount of habitat area rather than on fùnctions or values, until the irnplementation problems are addressed. Altematively, Simenstad and Thom (1992, 464) concluded that it was "unreasonable to assume" simple acquisition of habitat alone would accomplish this goal. The titerature identifies several problems related to the application of NNL including: il solving information and knowledge deficits, such as detemuning relative value or equivalency of losses and replacements (Mattingly 1994, 207; ü) ensuring technical guidelines are based on ecologicaiiy sound principles (Harrison 1988, 1 & 6); iii) establishing a basis for compensating losses by functions or area (Lynch- Stewart 1992, 7); iv) developing specific goals for establishing functions that recognize growing plants do not necessariiy constitute a hnctioning system (Steinhart 1987, 10); v) confirming the hierarchy of requirements such as in-kind wetland creation over nonwetland replacements (Lynch-Stewart 1992, 7); vi) determinhg the scope of area where losses and gains should be balanced by project, region, watershed, or country (ibid., 7); and vii) developing supporting policies regarding compliance, monitoring, rep orting and acceptable trade-offs (Harrison 1988, 8). Lynch-Stewart (1 992, 6), in her wetlands research, reported that jurisdictions applying NNL have benefited fiom its knplementation regardless of associated limitations. As a concept, NNL has contributed to furthering wetland conservation and in practice it has protected some values and functions (ibid., 3). At a minimum, NNL establishes a goal for conservation, provides flexibility between total protection and uncontrolled development, and indicates that losses are too important to sanction without some form of restitution (ibid., 8). NNL provides considerable flexibility to practitioners since it does not require the same conditions, size, and location which existed before a project (ibid., 16). The principle of no net loss has also been attributed with significantly improving the conservation of fish habitat in BC (FREMP 199 1,I). The ten-year policy review, mentioned above, also reported and concluded that: il a total of 168,200 m2 of lost mud and sandflats were compensated with the replacement of the sarne type of habitat; ii) a total of 21,000 m2 of lost rnarsh habitat was compensated with 41,200 m2 of replacement marsh habitat, at a 2:1 ratio; Z) other habitat types, such as riparian, were lost and replaced with marsh habitat; and iv) a larger amount of replacement habitat is required, than was destroyed, in order to achieve NNL, since compensation habitat is likely only half as productive (Langer et al. 1995, 17). It is apparent that the practical implernentation of NNL requires rehement (Lynch- Stewart 1992, 26). The literature identified several methods currently being used to assist in the practical application of the NNL concept including: i> applying areas as a sunogate measurernent for fiinctions and values; ii) establishing a preferable hierarchy of requirements related to location and type of compensation; iii) using a ratio of replacement area to lost area, with a minimum of 1: 1, which varies depending on the functional value of both irnpacted and compensated sites; iv) developing long-term monitoring and compensation bonds to ensure requirements are impIemented; v) educating land owners and providing incentives to encourage protection (ibid., 5); and vi) establishing compensation banks to ensure that habitat is already available to offset losses before they occur (Weems and Canter 1995, 197). Research conducted on the restoration of mangrove systems in the US southwest suggested several goals to assist in the implernentation of NNL which included a vanety of relevant findings. These included: i> destroyed systems should be replaced with systems of equal types, structure, and fùnctions; ii) replacement surface areas should be equal to, or greater than, areas lost, üi) landforms and configurations of replacement habitat should be simiiar to Iost habitat; iv) impacted and restoration areas should be in the same landscape area; and iv) compensation areas must be protected in perpetuity (Cintron-Molero, 1992,243). Ln a related discussion Lynch-Stewart (1992 20) recornrnended that a series of incentives and disincentives be Wedto the achievement of compensation requirements to irnprove the success of NNL. 4.1.3 BC MELP and CWS's Regional Wildlife Guidelines and the Ratio Approach BC MELP and CWS's regional "working" wildlife guidelines, table 5, have only provided limited protection to wildlife habitat in the Lower Mainland of BC since they have not been adopted as official government policy by either the CWS or BC MELP (Cox 1995, 20). This limitation was illustrated in a 199 1 staffreport to Surrey city council regarding a golf course application. In its evaluation, city staff suggested that legal and jurisdictional questions associated with the regional guidelines were unclear and that the golfcourse developer should oniy be requested to voluntarily comply with its requirements (Surrey 1991, 100). Thus the ability of a11 levels of government to better protect habitat would be irnproved with a more formal policy; however, neither CWS nor BC bELP have adopted FREMPYs1991 Habitat Activity Grotcp Report recomrnendation to entrench the regional guidelines as an official policy (FREMP 199 1, 3 3). The guidelines require a 1: 1 râtio of secured habitat to lost habitat, in addition to enhancements, for developrnents which irretrievably alter nonfisheries habitat. The net result is the securement of an ârea, onsite or offsite, which is equal to the arnount of area developed which results in the protection of 50% of the original habitat area available for wildlife (Environment Canada 1992, 2). Application of the 1: 1 ratio in these guidelines (simple seacrement to lost) is diEerent from the 1: 1 ratio applied in fisheries policy (acttral replacement to lm)where new habitat is actually created. It has been suggested that the NNL approach should also be fomaily incorporated into the wildlife guidelines in order to better protect wildlife habitat(Cox 1995, 20). Regional wildlife guidelines are not currently avaiiable in any single published govenunent document. Information regarding the requirements of this policy mechanism can ordy be obtained £?om scattered sources including fiitigitive references in the literature, discussions with agency representatives, and details in unpublished correspondence obtained £?om the rninistry. A sirnilar compensation requirement is included in G-uidelines to Protect, Mnintain and Enhmce Fish md WiIdZzye Hàbifat on and AGacenf to Proposed Golf Cozirse Developments and fiisting Course Re-developments on Lowlmd Area, (1992) published by the BC MELP. However, in this instance the need to provide equivalent habitat applies only to migratory waterfowl and shorebirds. It appears that the existing guidelines have evolved over a period of tirne based on several compensation decisions. Origins of the guidelines can be traced initially to the Pan Asia project in Surrey Bend and Vancouver International Airport paraiiel runway project in early 1990. Subsequently its structure was more clearly defined in response to a series of golf course proposais reviewed during the early to mid 1990s. Several improvements made to the guidelines are outlined below: i> Retfalvi of the CWS ftrther refined the emphasis on "area" by incorporating minimum size requirernents for habitat areas and shapes in ordcr to maintain their ecological viability (Environment Canada 1992, 2), ii) Requirement for onsite and offsite compensation areas are to be secured with restrictive covenants (Environment Canada 1995, l), and iii) Completion of a balance sheet is required to compare the amounts of each habitat type lost with the corresponding arnounts of replacement habitat by type (MELP 1995, 1). Regardless of these refinements, this specific application of the ratio approach only focuses on preservation or securement of habitat. Reliance on presewation as the basis of compensation has been sharply criticized in the literature since it results in a net loss of habitat acreage and function (Weems and Canter 1995, 205). On the other hand, a ratio approach to secure compensation area does satise the desire of many agencies and conservation groups to acquire ownership or control over valuable habitat areas WMP 1991, 20). Junsdictions in the United States also use a sirnilar ratio of replacement area to lost area in the caiculation of compensation requirements. The Division of State Lands in Oregon has established a formula to caiculate how much compensatory mitigation is required per acre for stream bed alterations or wetland filling. In the US southwest, state permits for wetland Iosses require compensation ranging f?om 2: 1 to 3:1 (Steinhart 1987, 8). The 198 9 Illinois Interagency Wetland Policy Act ap plies a schedule of increasing ratios of up to 5: 1 depending on the level of impact and the location of the compensation land (Beck 1994, 802; Lynch-Stewart 1992, 5). In fact al1 rnitigation and compensation banks use some form of area-to-area substitution ratio to establish how much bank area is required to offset the loss of wetlands to development (Weems and Canter 1995, 205). The use of area as a goal for compensation has also been cnticized in the literature. For example, Race and Fonseca (1996, 99) suggested that a greater emphasis be placed on the position of compensation within the overail landscape rather than on the quantity of land obtained. As previously stated, Sirnenstad (1992, 464) concluded that simple acquisition, in the absence of considerhg fùnctional values, would not result in successful habitat compensations. Research in British Columbia has also suggested that, if a net gain in the amount of habitat is to be achieved, rnitigation should take priority over compensation based on area. This approach to compensation also requires additional planning to ensure habitat is not unequally distnbuted within an area (FREMP 1991, 72). Establishing a fixec! mIe for compensation also questions the vdidity of the EA process which is intended to evaluate the scale and degree of impacts and assign appropriate mitigation ahd compensation on a case-by-case basis (Russell and DuMoulin 1990, 1). 4.1.4 Office of ComptrolIer of Water Rights and the Monetary Approach Since 1960 there have been two clauses under provincial water legislation, table 6, which allow the BC Comptroller of Water Rights to require wildlife compensation as part of a water license application Compensation requirements are included in the clauses of seven such developments in B C. However, it has taken over thirty years for wildlife compensation to be formaliy recognized as a condition of a water License approval (Halladay 1993, telephone conversation). Compensation requirements have been largely determined by senior government oEcials and Crown corporation executives as part of the negotiated approval process (Bradley 1993, telephone conversation). Under these arrangements, compensation funds are not tied to targets that offset specific hydroelectnc project impacts; rat her, they are directed toward efforts which will improve the overall environmental condition of an area (DeHaan 1998, telepho ne conversation). The Columbia Basin Fish and Wildlife Compensation Program (CBFWCP) is undertaking research ro assess the public's opinion to deterrnining if sufficient levels of habitat compensation have been provided (ibid., telephone conversation). Monetary compensation is considered to have less of a lasting, beneficial effect than rnitigation and remedial compensation actions Kawrence and Davies 1993, 2-10). Agencies must ensure that controls are in place so that monetary compensation does not becorne the "preferred choice" in instances where the cost of in-kind compensation is several orders of magnitude greater than an acceptable cash settlement (ibid., 2-10). For example, under the PoZicy for Manugement of Fish Habitat, Fishei-ies and Oceans Canada has deemed monetary compensation to be unacceptable since it fails to meet fisheries management objectives (Canada, 1985, 23). Regardless of the criticism, monetary compensations have been extensively applied in British Columbia for wildlife compensation. In addition to the provisions under the Water Act discussed above, several compensation programs have been forrnalized in trust arrangements with ongoing contributions. Exarnples of sirnilar rnonetary arrangements are outlined below in discussions on the BC Wildlife Program and the Habitat Conservation Fund, Compensation fùnds, received for darnages to wildlife and habitat caused by major projects, are also a source of revenue for the BC governrnent's Wildlife Program. Over $1 million out of the total budget of $12.5 million dollars is received annually corn BC Hydro and Power Authority, BC Cnistry of Transportation and Highways, and other govenunent agencies(Environment 199 1, 19). In 1968 this approach was also used when a trust fünd was specificaiiy established as part of the Creston Valley WiZdIife bfmagement Area Act. The fûnd was intended to secure compensation from entities causing impacts to wildlife such as BC Hydro. By establishg a trust fund, these supemumerary funds could remain separate f?om regular govemment appropriations to ensure they would be used in the Creston Valley (Murray 1987, 52). The Habitat Conservation Fund was established in 198 1 by the Province of British Columbia to secure and enhance fish and wildlife habitats. In addition to fùnding frorn surcharges on hunting and fishing licenses, revenues are also received from compensation payments (FREMP 199 1, 20). Money is accepted from corporations or individuals for habitat loss due to impacts &orn development (HCF 1988, 2). As of 1992 the compensation account totaled $474,9 18, up fiom the 1988 balance of $41 5,159. The Projecr Review Report 1988-89 tu 1991-92 @CF n-d., 3) identified annual compensation revenues of approximately $50,000 (ibid., 34) although these revenues were denved from interest and miscellaneous eamings. No new compensation contributions were made during this penod. Over this four-year period, enhancement disbursements £kom the compensation account totaled $35,649 (ibid., 24). Enhancernents included: improved spawning habitats ($25,000), irnproved angler access with acquisitions of 5-24hectares of land ($5 1,000), restored trout spawning habitats, irnproved and protected waterfowl habitats, and irnproved fisheries near a mine (HCF 1988, 1; HCF n.d., 33). The minimal ongoing level of contributions to this account may suggest that either the trust is not viewed as appropnate avenue for managing compensation funds, or that cash settlernents are being discouraged as a form of compensation in British Columbia. 4.2 Inventory of Compensation Decisions An inventory of meen projects involving compensation for the loss of wildlife habitat, fiom British Columbia and the US PacSc Northwest, are sumrnarized in table 10. Decisions regarding the amount of compensation required for these projects occurred during the 1960 to 1997 period. Several of the entries include compensation for fish habitat. Sections 4.2.1 to 4.2.6 include more detailed discussions regarding six distinctive projects involving wildlife compensation. These examples provide greater insight into the approaches and mechanisms adopted to satisfy compensation requirements. A common format is used to inventory compensation decisions which includes the following information: Project - project name. Date - date project reviewed or compensation determined. Habitat / wildlife - type of habitat or wildlife impacted or lost. Due to the absence of a cornmon method for class*g habitat types, no attempt has been made to Iist types based on an uniform system. Amozint losr - habitat area lost- AU projects described Iosses in terms of area but none explained losses in terms of functions or values. Location losf - location of project or area where habitat was destroyed. Location cornp. - location of compensation habitat. Proposed comp. - level of compensation originally proposed by proponent. Actzral comp. - level of compensation provided, or agreed to, by proponent and agencies ifproject did not proceed. Mechanism - policy mechanism used to establish compensation requirements and levels. 3 Delail or descrzption - details or description of project elements and methodologicai criteria used in decision. k) Reference - references for information included in the inventory. As with the inventory of policy mechanisms, this inventory was developed specifïcally for this research. Although this framework attempts to provide cornmon critena to permit consistent comparisons, information on vanous compensation projects is not reported in a cornrnnn format in the literature. As a result some projects have incomplete information. 4.2.1 Thornton Intermodal Yard, Surrey Bend - CN Rail Compensation provided by Canadian National Railway (CN) in 1988, for its development in Surrey represented one of the first successful efforts by govemment agencies to obtain compensation for habitat loss in the Lower Mainland. This fact was identifïed during negotiations by CN who suggested that such measures were without precedence and noted that no compensation had been provided for the Aiex Fraser Bridge. The 1986 bridge project extended fYom Annacis Island through Burns Bog, which was considered to have a higher habitat value than Surrey Bend (DFO 1988, attachrnent II, 2). The final compensation agreement was recognized by agency staff as "a new way of obtaining adequate habitat compensation and something of a precedent" (Environrnent Canada 1988, 1). In fact, according to minutes from the proceedings, the precedent setting nature of this decision, and its long-term importance was recognized early by agency staff @FO 1988, minutes of 87/11/20 meeting, 2). The nature of this process illustrates how decisions established fiom negotiations evolve into precedents and subsequently become more formal accepted practices, as outlined previously in section 2.2.4.3. Indeed, several later compensation decisions, such as the parailel runway project (Transport Canada 1990b, 2 1-5) and the Pan Asia development in Surrey Bend (Russell and DuMoulin 199 1, 3,referenced precedents established in the CN compensation decision. The 5 October 1988 Memorandum of Understanding between CN, BC Ministry of Environrnent, and CWS of Environment Canada required CN Rail to provide $600,000 in compensation to the Nature Trust of BC. The Nature Trust was to use this money to purchase strategic parcels of habitat when such areas became available (Transport Canada 1990b, 21-6). This amount was established by estirnating the replacement value of 87 acres of habitat based on pnces paid by the Nature Trust for similar marsh habitat elsewhere. The final agreement addressed three primary issues including: total arnount of habitat alienated, price per hectare of off-site replacement marsh habitat, and the inability of CN to provide onsite or surplus lands to off-set the loss of 32.2 hectares (Environment Canada 1988, MOU, 2). The CN decision is an exarnple of the 'negotiated measures' fi-amework used to determine compensation as discussed in section 2.2.4.3. Negotiation played a significant role in detemiinhg the arnounts, types, and quality of habitat lost, as weli as the requirements and the level of compensation provided. As with the parallel runway project, the proponent initially offered linle in the way of compensation. CN's original position suggested that onsite dedication of 5.5 ha for wildlife would address all habitat impacts associated with the total Loss of 32.2 hectares. Environmental agencies initially requested a 2: 1 ratio of replacement area to lost area, which was similar to fishenes habitat compensation requirements at that time (DFO 1988, attachent I, 2). It is apparent that considerable negotiation occurred between govemment agencies in establishing these requirements. At one juncture during the process it was suggested by a senior public servant that the 2: 1 ratio be abandoned and that a monetary contribution of $150,000 would be more defensible (MELP 1988, 1). 4.2.2 ParaIlel Runway Proj ect - Transport Canada The parailei runway project at Vancouver International Airport illustrates the policy vacuum created in the absence of an established compensation meclianism for the loss of wildlife habitat. Transport Canada's parallel runway proposal resulted in the loss of approximateiy 350 ha of bird habitat on Sea Island in Richmond, BC (Transport Canada 1996, 5). Transport Canada initially refused to comment on what would be an appropriate level of compensation due to the absence of formal governmental policy on compensation (Robinson et al. 199 1, 90). It was further suggested that any compensation package would require Treasury Board approval (ibid., 88). However, despite this announced limitation, Transport Canada did include sorne suggested compensation measures in its environmental impact study and submission to the EARP panel. The panel also noted in its report that compensation requirements related to bird habitat destmction were unclear (ibid-, 4). The sequence of negotiations and events which led to the &al compensation package for the parallel runway project were complex and developed over a 6-year penod. Milestone developments included: Transport Canada's original compensation proposal which involved: estabiishing a 25 ha hear park on the north side of the project, purchasing a 3 i ha fmadjacent to the Alaksen Widlife Area in Delta, and managing a 132 ha commercial reserve adjacent to the new runway, as wildlife habitat, until it was required for development (ibid., 86). CWS, in written submissions to the EARP panel, requested one-for-one replacement habitat in secured tenure with value added management measures to enhance productivity and obtain overall no net loss (ibid., 90). Irnrnediately prior to the EARP panel public hearings, Transport Canada agreed to develop a mitigation and compensation plan to address any reductions in capacity due to the project. The plan was to be based on the following principles: i) replacement compensation would be based on a 1: 1 ratio; ü) opportunities to secure land for bird habitat would be explored; üi) a package would be developed for impacts not replaced and iv) al1 provisions would be subject to federal Treasury Board approval (ibid., 90). The EARP panel made several recommendation to the Minister of Transport and the Minister of Environment regarding the loss of wildlife habitat. It recornrnended that: i) al1 habitat and habitat quality losses resulting fYom the project and associated policies and programs should be cornpensated; ii) compensation shouid be on a 1: 1 ratio basis of similar fùnction and quality on Sea Island, a 2:l basis in the Roberts Banks area, and 3: 1 in the Boundary Bay area; üi) compensation should involve the purchase of habitat lands, or securement of tenure, with enhancement; iv) credit shouid be granted for enhancements which result in added habitat value or increased canying capacity, thus reducing acreage needed; and v) lands north of the area required for the runway inf?astructure not be approved for commercial purposes and be dedicated to wildlife conservation (ibid., 4 , 5). In the 24 June 1992 announcernent to approve the paraliel runway project the federal covenunent indicated that habitat lost due to the project would be compensated by Y providing land securement, enhancements, and management activities. The goal of the compensation efforts would be to ensure no net Loss of habitat capability (Transport Canada 1996, 5). In Decernber 1994 the federal Treasury Board approved the following compensation measures: i) transfer of the 3 1 ha farm adjacent to the Alaksen National Wildlife Area, ii) transfer of a 140 ha area north of the new paralfei runway to CWS to be managed as wildlife habitat while ensunng no increases in bird strike hazards; and iü) transfer of $9 million from Transport Canada to Environment Canada, over a four-year penod for associated compensation activities (ibid., 6). The $9 million was intended to compensate for the baIance of the 350 ha loss not included in the transfer of the approximately 171 ha to CWS (ibid., 10). CWS, with the assistance of a public advisory group, subsequently used these fùnds in the following manner: i) $2.25 million was docated to private land stewardship through the Delta Familand and Wildlife Trust, ü) $6 million was used for the acquisition of wildlife habitat at three properties including the Spetifore lands in Delta, a portion of Iona Island, and Don and Lion Islands in Richmond, and iii) $750,000 was transferred to the Greater Vancouver Regionai District to enhance the carrying capacity of protected habitat in the Lower Mainland for aEected birds (ibid., 6). This project illustrates the absence of clarity in existing federal and British Columbia policies related to wildlife compensation. Clearly there was an overemphasis on negotiation associated with determinhg the requirements for compensation. Rather than focusing on the technical and ecological requirements to implement appropriate levels of compensation, al1 parties expended considerable efforts focused on whether compensation was required, and at what level. For example, Transport Canada's Kmcouver International Airport Parallez Rzcnwq Environmental Mitigation Project. bzterageq Steering Cornmittee Final Report (1996) suggested that the transfer of 170 ha and $9 million to CWS fully compensated the loss of 350 ha of habitat removed by the runway project. However, the agency did not indicate how such a conclusion would satise any of the existing policy mechanisms or would be supported on a scientific or ecological basis. Ironicaily, this agency did not support the EARP panel's recornrnendation of 2: 1 and 3 :1 compensation Ievels, arguing that these were not based on an ecologically sound rationale (ibid., 9), even though there was better ecological rational in the Literature supporthg the provision of compensation in the imrnediate vicinity of the area impacted. 4.2.3 Columbia Basin Fish and Wildlife Compensation Program - BC Hydro Compensation for negative impacts fiom hydroelectric projects have been formdy instituted into two programs in BC, under the direction of BC Hydro and BC Environment, Lands and Parks. The Columbia Basin Fish and Wildlife Program Compensation Program (CBFWCP) replaced previous mitigation and compensation efforts for fish and wildlife associated with construction of the Hugh Keenlyside, Mica, ReveIstoke, Duncan, Kootenay Canal, and Seven mehydroelectric projects (BC Hydro 1996, 1) A similar program, the Peace-Williston Fish and Wildlife Compensation Program, has been established in northeastern BC ta address impacts fiom hydroelectric projects in that region. BC Hydro provides $3.2 million annuaIly to CBFWCP and $800,000 to the Peace- Williston program out of an interna1 fùnd of $70 million (BC Hydro 1996, 1, 2; DeHaan 1998, telephone conversation). To date, over 3 10 parcels of land, totaling 126 1 ha, have been acquired or transferred for habitat protection from CBFWCP and predecessor prograrns. A fùrther 742 ha have been acquired as part of the Peace-Williston program. Annually, these programs also fund over 85 projects which support and enhance wiidlife and their habitats. Projects hnded by these programs do not need to address specific impacts fiom hydroelectric projects, nor are they associated with targets to achieve a particular level of restoratiun, habitat creation, or securement. In the case of CBFWCP, criteria are applied to approve projects that will improve fish and wildlife conditions throughout the region. This is intended to maximize the benefits to the environment through avaiiable funding. Fish or wildlife projects involve a variety of management initiatives: inventory and assessment, enhancement and restoration; monitoring and evaluation; and public involvement. An eight-member steering cornmittee, which includes public and First Nation representation, annually reviews and approves projects submitted by govemental agencies, public organizations, and individuals (ibid., telephone conversation). 4.2.4 Columbia River Basin - Northwest Power Planning Council Significant amounts of wildlife habitat have been impacted by hydroelectric developments in the US Columbia River basin. Impacts have resulted in: losses of floodplain, riparian, and wetlands areas, channelization of strearns, riprapping of shorelines, destruction of valley floors from the installation of transmission lines, water irnpoundment and passage restrictions thus alienating wildlife access, and water level fluctuations resulting in vegetation removal (NPPC 1984, 43, 8 1). Power-authorities such as Bonneville are required to undertake compensation activities including the acquisition and development of replacement wildlife habitat as well as off-site enhancement measures (ibid., 8 1). The approach adopted in the Columbia River basin accepts the prernise that restoration efforts cannot duplicate environrnental conditions that existed prior to hydroelectric development (id12 Calculated losses represent what the river was capable of producing pnor to developrnent, while rnitigation and compensation goals ident* what can reasonably, and practically, be provided. Losses and goals estabiished by the council are not intended to be identical (ibid., 12). The Northwest Power Planning Councii has irnplemented plans which include habitat loss statements as the primary mechanism to review and fund mitigation and compensation activities. Each plan and statement is evaluated based on: availability of baseline inventory data, extent to which wildlife have been aEected or enhanced by hydroelectric projects, extent to which previous efforts have been success£ùl, and previous Iosses and continuing changes caused by each dam. The plans are subject to public consultation and review by government environmental agencies pnor to their approval by the council and funding by power-authorities, such as the Bonneville Power Adrninistrator (ibid., 83). Future developments require full compensation for unavoidable losses in the forrn of restoration, replacement, propagation, improved carrying capacity in undisturbed areas, and acquisition of land or management rights (Northwest, 1984, 94). As early as 1965, habitat acquisition was adopted as a method of compensation in the Columbia Basin when the US Arrny Corps of Engineers obtained land to offset habitat losses associated with John Day Dam. The procurement of habitat was also undertaken for the Hel1 Canyon cornplex, with the acquisition of three islands in the Snake River and range habitat, Grand Coulee Dam, Wdlarnette River projects by obtaining winter range habitat, and Libby Dam with the acquisition of 9500 acres of range land (ibid., 85, 87). 4.2.5 Environmental Assessrnent of the Isserk Drilling Program A proactive approach to wildlife restoration and compensation requirements was attempted in the environmental review conducted for the Isserk drilling program. The assessment attempted to evaluate the level of compensation that would be required in the event of an oil spi11 (Lawrence and Davies 1993, 1). This document represented the closest attempt identified in the literature to review previous compensatory activities. However, dthough it included conclusions fiom the review, the research does not provide references for any of the actual methods or activities investigated. Conclusions and recomrnendations in the report only identify consiraints and requirements for hrther study without suggesting a specific methodology for calculating the restoration or compensation requirements if a spill actually occurred. However, the report did provide severai relevant conclusions and recommendations including suggestions that: i) fiameworks for restoration and compensation should be established pnor to development, ii) the absence of a general compensation mode1 reflects that the majority of settlements are based on negotiations, and iii) the scientific comrnunity was unable to predict al1 major impacts (ibid., 2-3, 2-6). 4.2.6 Lincoln Avenue Wetland Project - Wetlands Restoration in US Pacific Northwest Research on efforts to restore wetlands in the US Pacific Northwest is one of the best examples of compensation based on functions rather than on acreage. A functional approach focuses on the attnbutes of wetlands that support comrnunities of fish and wildlife rather than on mere use by fish and wildlife (Simenstad, 1992, 423). Quantification of the specific attributes allows subsequent measurement and adaptive management to increase the probability of overall success (ibid., 423). Simenstad (1992, 435,460) and Race and Fonseca (1996, 98) recommended the adoption of such an adaptive approach to restoration of habitat functions. The requirements and approach include: i) an adequate knowledge of ecosystem functions as an absolute prerequisite, ii) explicit goals and objectives, iii) quantitative, systematic baseline and post-construction data based on an index of habitat function, and iv) an ability to expenment and mode ongoing projects in order to achieve goals (Simenstad, 1992, 425). Unfortunately, this approach is the exception. Rather than focusing on mechanisms, which are the products of a functioning ecosystem, the majority of restoration work focuses on monitoring the simple presence or absence of fish and wildlife which represent the outcome[s] of efforts (ibid., 460). These shortcomings reflect the lirnited scientific development associated with an approach based on functions (ibid., 460). Simenstad (1992, 424) also attributed problems with this approach to a restrictive permit process that prohibits flexibility, iirnited hancial resources, and historicaily poor science. 4.3 Cornments on Policy Mechanism and Compensation Decision Inventories Below are several comrnents with respect to the development and application of the two inventories used in this study. GeneraI A lack of published data and analysis on compensation decisions in the literature made the compilation of information for both inventories dficult. As a result, important information components for several of the entries are not available. Due to the absence of any standardized or suggested methodologies for inventorying or cataloging compensation information, new formats have been developed for this study. This cntical information necessary for a more complete cornparison and analysis is not avdable ~omthis work. The establishment of a standardized reporting practice or procedure would assist in this research Policy Mechanism Inventory Many of the policy mechanisms inventoried consist of blended rnethodologies, approaches, and theoretical foundations, and as such, the categorization applied in this study rnay be somewhat artificial. As a consequence, the complexity associated with sorne of the mechanisms may not have been hlIy illustrated. Compensation Decision Compensation decisions catalogued in the inventory were compiled fiom published literature and files made available by the BC Environment, Lands and Parks. As a result, the inventory is largely comprised of projects fiom the Lower Mainland of BC and larger projects &om other locations. However, the review of a smaller subset of compensation decisions from the Lower Mainland has enabled the observation of trends in the processes and the procedures applied over the last 12 to 15 years. The inventory does not include entries frorn large projects where no compensation was provided. Exarnples documenting the justification for not applying compensation would have provided a more complete analysis. Chapter 5 GAM APPLICAIFION AND SIMULATION This chapter applies the two methodologies selected and developed to analyze the various compensation mechanisms compiled from the inventory identified earlier. Specifically, it presents the foIIowing components: 1. selection of criteria and goals for use in the GAM; 2. application of a modified GAM to rneasure various mechanisms; 3. use of the recommended mechanisms in a simulation exercise; and summarization of findings and concluding comrnents. Results f?om this chapter are used to ident3 deficiencies with existing compensation alternatives and to recommend a more appropriate compensation mechanism. 5. f GAM Criteria Each of the parameters for the modified GAM presented here have been chosen frorn recommendations, favorable cornments, and in light of obstacles identZied in the literature- For each parameter, an evaluative goal or criterion, as weII as a corresponding rneasurable unit such as a nominal or ordinai scale, have been selected. This procedure permits the rneasurement of progression, or regression, of each rnechanism against the selected parameters. It also allows for a consistent comparison between alternatives. Table 11 identifies each parameter, its associated goal or criterion, the corresponding measurement unit, and specifïc references fkorn the literature or this report that support its selection. Measurable units or scales for each parameter are presented in table 12 in descending order of preference. Table 11 GAM Criteria 1 OR SCALE 1. Requirement to A more formal a) legd FREMP 1991, ii; hplement requirement. 2. Consistency Applies compensation a) satisfies Race and Fonseca 1996, and requirements in a b) neutral consistent manner. c) fâils 3. Framework to A more formai a) formal CEARC 1988,1,2; determine level of requirement. b) accepted practice c) negotiated a) in-kind CEARC 1988,3; compensation desirable. b) out-of-kùid Lawrence and Davies 1993,2-10 c) monetary 5. Measurement of The basis used to a) functions/values Steinhart 1987, 10; Compensation measure or value b) area LynchStewart 1992,7 com~ensation. C) other 6. Compensation A4ethod or approach is a) section 4.1 Methodology used to calculate b) ratio c) ad-hodotber a) satisfies Seinhart 1987, 10 Goals b) neutral 1 compensation. C) fa& 1 8. Scientific 1 Use of scientific 1 a) satisfies Beaniands and Dulliker 1 Frarnework 1 procedures and b) neutral 1983,2; Thompson, n.d., I 8; Simenstad and Thom processes. c) fails 1992,424 9. Ecological Applies an ecologicai a) satisfies Beanlands 1985,7; Princip les approach considering b) neutrd Murray 1987, 162; Harrison 1988, 8; Lord variabilis and c) fails 1991, 8 comple-W. t 10. Guidelines & Includes instructions a) satisfies 1 Environment Canada Directives and directions on bj neutrai I991a, 9; Environment Canada 1996, 10 implementatioo. c) &ils 11. hplementation Requirements for: a) satisfies ibid., 10 1 Requirements 1 function, area, type, 1 b) neutral the, and geography, C) fails I 12. Mitigation / Compensation is a) satisfies Robinson et al. 1991,4; Compensation dehed as a method of b) neutral Lawrence and Davies 1993, vi; Mattingly 1994, Iast resort- c) fâiIs 207; Weens and Canter I HienrchyP reference 1995.199 13. Location of Compensation located a). adiacent- 1 Pynn 1990, 12; Compensation close to impact area. b) in re~odares Robinson et al. 199 1,90; andFonseca 1996, c) no requirement 1 14. Preservation as Compensation is not a) not permitteci Robinson et ai. 199 1,90; Compensaiion satisfkd by simple b) neutrd Beck 1994,800; Environment Canada protection of habitat. c) allowed 1996, 16 15. Recognition of 'at Capability to identw a) satisfies sections 2.3.2 & 2.2.3 risk7 habitat or and increase b) neutrai wïiciiite com~ensation, cl iailr I I I I , - 1 16. Foliow-up Fomd requuement for a) satisfies Lea and Frederîck 1992, MO~~IOM~ f0U0w-up monkoîing. b) neud 38; Lawrence and Davies 1993, 1-29; Race and c) fâiIs Fonseca 1996, 95 1 17. ERforcement 1 Mechanisrn should 1 a) satisfies 1 section4.I 1 1 include enforcernent 1 b) neutral 1 provisions. c) fâils 18. Practicai Reality Ability for practical a) satisfies Steinhart 1987, 11; and adaptable b) neutrd Lynch3tewart 1 992, 11 ; Environment Canada applications- c) fàils 1996- 6 19. Amount of Identifies level of Compensation compensation compensation to (obtained from examples in the inventory) I provided. losses (Le. $ : ha or 5.2 GAM Application The results of the modified GAM for this sti~dy are presented in table 12 In this application, each mechanism fiom the inventory is measured against selected parameters according to the prescribed goals or criteria. A specific scale or unit is employed to measure the ability of a mechanism to satisthe goal or cnterion for each parameter. Table 13 provides a sumrnary of the number of goals or criteria satisfied by each Table 12 GAM of Policy Mechanisms Parameters: Policy on Regio na1 Policy E-1.3 BC BC Wetland WiIdIife Surrey OCP FVater Act WiIdLife Act Conservation Guidelines Requirement policy policy / policy legal option' legal nonformal Consistency faiis faiIs fails fails satisfis Framework negotiated accepted negotiated negotiated accepted pracîice practice ' Type in-kind & in-kind & in-kind monetaq & in-kind & out-of kind mone tary out-of-kind neutrai Measurernent function / area area area other other Me thod NNL ratio ad hoc ad hoc oiher Objectives satisfies - fails3 fails fails fails satisfies4 ScientSc fails fails - satisfiesS fails - fds neutral satisfiesS Ecologicai satisfies - fails3 fails fails faïis faiIs Guidelines faïis fails - satisfies6 fails fails fails Imptement fails faiis - satisfies6 fails fails fails : Hierarchy satisfies satisfies neutral fails satisiïes - fails2 Preference Locations neutral regional ara7 neutra18 regional area7 regional ara7 Preservation not permitted allowed allowed allowed allowed Recognition neutral fails fails fails satidies4 of 'at nsk' Monitoring fails fails fails fails fails Enforcernent fails fails - satisfiesg satisfïes satisfies satisfies P racticai satisfies satisfies satisfies satisfies satisfies hountLo minimum 1: 1 50% net 20% to 80% N/A N/A net ~sarn~tes'~no e.uampIes golf course = North Slope $259 : ha no examples reported in the $10,186 / ha; project = total reported in the Li terature CN = $17,241/ 50% to 80% or literature ha); of area $14 /year/ ha runway = secured as $50,279 / ha) habitat Notes : CornptrolIer has discretionq authonty to impose compensation requirements; requirements are not automatic. Precedents for compensating such lasses exist; however, rqionai wïldlife managers have significant discretionary authority to approve any proposal. NNL is the clear objective of this mechanism; however, it fails to identiQ how it can be imptemented practiçally. Protection of nest and eggs only as specificdly Iisted in WiIdI~yeAct. Not applicabIe to other elements of habitat. Minimally satisfies this goal by the use of habitat type balance sheets to measure loss and compensation areas or the use of area measurements to defrne minimum habitat areas. However, this does not uiclude the use defensible scientific procedures or stnictured eqerimentation, Requirements relate only to area and type. No inclusion of îünction, geography and tirne. Not specified; however, in practice, compensation is located within regional area. Although not specified in OCP, it is likely compensation would be within city boudaries. Only provisions to enforce restrictive covenants for protected area satisfies this goal- IO. Provided for cornparison purposes only, insufficient information to conduct any type of measurement. 79 Table 13 Summary of Results Number of PoIicy on Regional Policy E-1.3 BC BC Parameters: Wetland Wildlife Surrey Water Act Wzldlife Act 18 Conservation Guidelines OCP Number of Parameters 3 2 3 3 5 CompleteIy Satisfied No. of Parameters 4 6 1 I 4 Part ially Satisfied: 5.3 Summary of Findings and AnaIysis The sumrnary of findings and analysis presented below has been developed fiom exarnining the resuits of the GAM and the individuai characteristics of the six mechanisms reviewed in this study. Results from the operation of the GAM provide the basis for selecting a recommended mechanism to be applied in the simulation. Findings and Results of the GAM Only two of the five wildlife mechanisms use some form of legaI basis that requires wildlife compensation similar to the fisherïes habitat policy discussed earlier (parameter $1). One of these mechanisms, the BC Wafer Act, stiU requires a sia&cant amount of negotiations and interpretation to determine when compensation is applied, thus diminishing the sigdicance of this factor. The absence of more formal requirements is reflected in the inability of four of the rnechanisms to ensure consistent application (parameter #2). None of the five mechanisms utilizes a formai or statctory framework for determining compensation levels. Al1 five rely on accepted practices or negotiations to determine the level of compensation required. Although this provides flexibility and enables the establishment of new precedents, it fails to ensure the consistent application of requirements to di projects and focuses efforts away f?om the technical and scientinc requirements of compensation (parameter #3). Ali five mechanisms reviewed require some level of negotiations to either determine the requirement (parameter #1) or the level of compensation (pararneter #3). This confirms the notion that the foundation of most compensation policies is some form of negotiation (section 2.2.4.3). Although it is the least preferred type of compensation, at least two of the five wildlife mechanisms allow, or have allowed, compensation in the form of rnonetary payrnents for the loss of wildlife habitat. Only the fisheries policy mechanism established by DFO expiicitly States monetary compensation is not acceptable (pararneter #4). Habitat is predominately vaiued and measured as a ratio of area in two of the mechanisms reviewed. The wetlands mechanism attempts to partialiy measure, and value, habitat based on fùnctions and NNL. However, a minimum 1: 1 replacement ratio has been recommended as an interim surrogate in the absence of a developed functional and NNL approach in the wetland mechanism (parameters # 5 and 6). Even the fishenes policy utilizes an area-based surrogate to achieve its goal of NNL. 9 The structure of dl £ive mechanisms was measured by the presence of: i) clear objectives and goals (parameter #7), ii) scient& procedures and processes (parmeter #8), and iii) ecologically sound principles (parameter #9). None of the mechanisms reviewed satisfied al1 three pararneters related to structure or applied a stringent or comprehensive scientific or ecological approach to compensation. The wetlands mechanism partially satisfied the 'objective' and 'ecologicai' parameters with an attempt to uiclude NNL and fùnctional values for habitat. The regional wildlife mechanism and OCP mechanism both applied habitat-type balance sheets to reconcile losses and gains which partiaiiy satisfies the 'scientific' parameters. Although its scope is limited, in this instance the succinct requirement to protect nests and eggs in the Wildlife Act satisfied the 'objectives' pararneter. Only the regional wildliie mechanism partiaily satisfied the parameter for 'guidelines' by containing a few established instructions on how to irnplement the compensation requirements (parameter #IO). None of the mechanisms satisfied aii of the parameters related to instructions, including 'implementation' (# 11), 'hierarchy preference' (# 12), 'location' (#13), 'preservation' (#14), and 'at risk recognition' (#15). Recognition that compensation was the least desirable mechanism within the mitigation-- compensation hierarchy of preferences was included in three of the mechanisms and was the most cornmon beneficial instruction. Forrnal follow-up monitoring is not a requirement in any of the five mechanisms (parameter #16). Enforcement is possible in four of the mechanisms (parameter $17). Both the Wildlife Act and Water Act have direct authonty to enforce their requirements. The OCP and regional guideline mechanisms rely exclusively on enforcement capabilities included in associated approval processes, such as bylaws, that enfUrce zoning requirements that may contain compensation provisions. Al1 five of the rnechanisms could be considered 'practical' and have the abïiity to be adapted (parameter #18). This can be attributed to lack of a strict Iegal Eamework for wetlands, regional guidelines, and Surrey's OCP rnechanisms, and the considerable discretionary authonty included into legal Iiameworks of the comptroller and WiIdIlife Act mechanisms. Summary Comments: Current wildlife compensation mechanisms rely extensively on negotiations and informat processes to achieve compensation requirements. The structure and foundation of these existing mechanisms has not been extensively developed or forrnaiized. Mechanisms with strong legal requirements, have extensive weaknesses in application whereas those with some ecologicai and scientific foundation have no substantiai implementation requirements to ensure consistent application. It would appear that legal requirements do not have the provisions to incorporate ecological and scientSc pnnciples. Based on the mechanisms reviewed, it is apparent that the use of 'area' is the only practical and available rnethod to value and calculate compensation. None of the more ecological approaches to valuing habitat have been practically implemented and reported in the literature. Al1 of the compensation mechanisms reviewed would benefit greatly fkorn the incorporation of more forma1 elements into their structure and operations. Recommended Mechanism The recommended wildlife compensation mechmism is a hybrid, consisting of the regional wildlife guidelines with several modifications. This mechanism was selected primarily for two reasons. 1. Mechanisms with stronger legal and formal requirements failed to provide adequate guidance and direction with respect to implernentation, or failed to adequately incorporate valid scientific and ecological principles. 2. Of the two mechanisms which contain some semblance of scientSc and ecological principles, the regional wildlife mechanism is identzed as the ody alternative which cm be practically implemented. Regardless of its ecological relevance, there is insufficient guidance and direction to date on how to irnplement NM, based on hnctional values. Recommended modifications to the operation and structure of the regional wildlife guidelines are outlined below. Only modifications which are established, and cmbe practically implemented, have been recommended in order to facilitate the development of a usefül compensation mechanism. The recommended guidelines should include the following key points: Formalize the guidelines as legal regdations under the BC WiIdZlife Act to ensure consistent application to aU anticipated wildIife habitat losses. This provision is sirnilar to requirements for fish habitat under the federal Fisheries Act which have been successful irnplemented in practice. Incorporate more formal requirements for implementing compensation including : i) more extensive use of scientific rnethods in the measurement and calculation of habitat types; ii) prohibition on the use of monetary compensation to offset habitat losses; iii) a minimum of 1: T replacement or creation for lost habitat; iv) alternatively, a 21 securement ratio, to reflect thzt preservation is a less desirable objective, for the loss of each hectare of wiidlife habitat may also be considered; v) a sliding compensation ratio which uicreases in proportion to the physical distance where replacement habitat is protided, ir. order to ensure compensation is located as close to irnpacted areas as possible; and vi) mandat0 ry follow-up monitoring tied to enhrcement provisions. Remove most of the discretionary authority included in such legislation. Discretionary authority must oniy be grasted to modG the implementation of ecologically sound principles, if necessary, and ody on a strict case-by-case basis. 5.4 Simulation Exercise A simulation exercise is presented in tables 14 to 16. This exercise consists of a simple "what if' scenario involving the recommended compensation mechanism, deveioped in section 5.3, and several previous projects involving compensation, cornpiled as part of the inventory in chapter 4. Revised compensation levels are projected by applying the recornmended compensation mechanism described above to the circumstances of the previous projects. Specific attributes and characteristics of the compensation decisions exarnined and projected include the method for establishing requirements, type, amount, and location. This enables a cornparison between actual compensation levels produced by the current mechanisms and what might have been expected had the recornmended mechanism been applied. Table 14 Simulation Exercise - CN Intermodal Yard -.-.------.- Method ~YP~~~~-Amount Location Net Effect------. Previous negotiation monetary $600,000 Lower offsite habitat Mec hanism Mainland purchased at Widgeon Cr. near Pitt Meadows New in-kind or 69.8hamin. Surrey 69.8 ha' of habitat Mechanism securement of secured secured habitat Table 15 Simulation Exercise - Parallel Runway Project .-.-.-._.-..--~----...Method Tme .. Amount Location-_ Net Effect---- Previous regional securernent 140 ha onsite & Cash, and both Mechanism guidehe - and onsite, Lower onsite and offsite negotiation monetary 3 1 ha offsite, Mainland habitat provided $ 9 million New in-kind or 700 ha min. onsite & A further 529 ha' Mec hanism securement of secured Lower of secured habitat habitat Mainiand would have been Table 16 Simulation Exercise - Columbia Basin Fish and Wildlife Compensation Project Method Type Amount Location Net Effect Previous Iegal - rnonetary & $3.2 million in regional Cash for habitat Mechanism negotiation out-of-kind area enhancements and acquisition. New in-kind or 2263 lan' in regionai 2263 km' of Mechanism securement min. of area secured habitat secured would have been habita? No tes: 1 - Equivalent to an area approximately 18% of the total six of Surrey Bend. 2 - Equivalent ro an area approximately 10% the size of Burns Bog in Delta, BC. 3 - Approxhate area flooded by chrns inchded in the CBFWCP tous 113 1.9 km2 (BC Hydro 1998). 4 - Equivalent to an araapproximateiy seven and haX times the size of Surrey, B.C. The following observations can be made fiorn the results of these simple simulations: A more formal, regulatory approach, to establishg compensation requirements, contained in the recommended rnechanism, would replace the existing reliance on negotiations in these three scenarios. Provisions in the new recommended mechanism would exclude the previous use of monetary compensation and ensure that compensation is provided in the area directly impacted. Requirements in the new mechanism to provide a 2: 1 ratio of lost habitat to secured habitat would result in the acquisition and the securement of considerably more habitat than has been previously obtained. The application of the 2: 1 ratio on large projects, the size of the CBFWCP, and involving dl of BC Hydro's projects in the Columbia basin does not appear to be practical. Implementation of this requirement in similar instances may be difficult due to the enormous amount of area required to be cornpensated. However, this challenge may provide the necessary irnpetus to initiate fùrther stiidies on other surrogates to measure, calculate, and cornpensate habitat losses* Chapter 6 CONCLUSIONS AND RECOMlMENDATIONS This study has synthesized comrnonly used compensation mechanisms in an effort to develop an irnproved mechanism to estirnate appropriate compensation levels for the loss of wildlife habitat. Conclusions and recommendations f?om this study are based on: available literature on this subject, a review of previous compensation decisions involving the loss of wildlife habitat, an analysis of current mechanisms used by govemment, and an assessrnent of an irnproved hybrid alternative. This final chapter summarizes the deficiencies of current compensation mechanisms identified by the fiterature, identifies further problems with regard to the application of existing rnechanisms, and provides recornrnendations to further investigate additional questions in this cntical area of environmental impact assessrnent. 6.1 Mandatory Wildlife Habitat Compensation None of the current compensation mechanisms for wildlife explicitly state when, or to what extent, compensation is required. The need for a more formal requirement is consistently recornmended in the literature but Iittle progress has been made to achieve this goal (e.g., FREMP 199 1, ii; Lawrence and Davies 1993, 2-5). The ability of govemment agencies to obtain adequate wildlife compensation is heavily restricted by the absence of an inclusive and mandatory requirement. Existing provincial mechanisms with forma1 compensation requirements have limited application to dEerent types of habitai, as with the BC WiZdZlife Act which protects only eggs and nests, or are based on extensive negotiations and/or discretionary authorïty, as illustrated by the mechanism in the BC Water Act. Moreover, policies and unoEcial requirements, such as the Regional Wildlife Guidelines, can be difficult to enforce. This enforcement dficulty was illustrated in the Northview GoECourse project where the proponent secured only 60% of the minimum habitat stipulated in the guidelines. Indeed, none of the wildlife compensation methods reviewed exhibit the level of certainîy provided by the fisheries mechanism supported by the federal Fisheries Act. Recommendation 1 A cornprehensive and mandatory compensation requirement, for al1 types of nonfisherïes habitat, should be adopted as a formal regdation by federd, provincial, and local govemments. Regulations for wildlife compensation should be incorporated under the BC Wildlife Act, the BC Mzmicipal Act for applicztion in municipal planning, the federal Migratov Birds Convention Act, and the federal Canadian Environmental Protection Act for application on all federal lands to ensure consistency in al1 jurkdictions. Penalties for noncornpliance must be stnctly enforced in order for the mechanism to have the necessary influence to protect habitats for future generations. 6.2 Requirements for Wildlife Compensation The development of explicit criteria for irnplementing compensation would resolve many of the existing problems facing environmental assessment initiatives and enable a greater focus on technical and applied issues. Requirements within existing compensation mechanisms are often nonexistent and those that do exist Vary considerably. This is illustrated in table 14 by the overali low number of parameters completely satisfied--les than four of eighteen--by four of the five mechanisms examined in the GAM. It was also suggested in the literature that the use of more formal or statutory requirements would benefit compensation (Canadian, 1988, 1). Only one of the mechanisms reviewed, the regionai wildlife guidelines, included any type of forma1 guidance on the implementation of such requirements. The remaining rnechanisms relied exclusively on ad hoc approaches and "case-by-casey' analysis to develop requirements. It was sugsested in the literature that requirements based on negotiation and accepted practices have resulted in scientific and ecological compromises as well as inconsistent application arnong projects. None of the wildlife mechanisrns has completely addressed the various Limitations of compensation in practice. Problems identifïed in the literature related to uncertainty, successfu1 implementation, follow-up monitoring, the need for further research, administration, as weiI as the lack of attention to scientific and ecological principles are largely not addressed in the five mechanisms reviewed. Of the eleven parameters associated with these specific topics, only four of the parameters were satisfied, or partiaUy satisfied, by two of these mechanisms. Overail, a total of twelve out of fdty five (22%) were satisfied, or partially satisfied. Current compensation mechanisrns appear to function as more of a convenient policy instrument than a scientific and ecoiogical tool used to address wildlife losses. In essence, compensation policy enables development, which cannot be rnitigated, to proceed. Conclusions in the literature, and cornrnents Eom practitioners, suggest that current mechanisms are inadequate and require sigdicant irnprovement. The high number of wildiife species at risk, the increasingly chronic loss of wildlife habitat going unreplaced, and urgent demands for govemment action suggest that previous and existing mechanisrns have failed to provide sufficient ievels of compensation. Recommendation 2 Clear and formal requirements for implementing compensation are necessary to ensure that adequate habitat is provided. In the absence of new research in this area, requirements should be selected based on the best available information and procedures currently being successfully irnplemented. Scientific and ecological p~ciplesshould be incorporated incrementdly to the greatest extent possible. These requirements are largely recommended to reduce the extensive use of negotiations currently applied in compensation policy and to provide support for the practical and effective irnplementation of compensation. Several practical requirements fiom the iiterature, which are supported by this research, are presented below. These should be incorporated into the recornmended mandatory compensation regulations. Develop Forma1 Requirements for Irnplementation 1. Implementation requirements for compensation should be developed into a formal or statutory fi-amework to ensure consistent application to all projects. This will reduce the arnount of negotiation required in the application of compensation. Method of Last Resort 2. In any framework, compensation should be considcred the least desirable option in the sequential mitigation--compensation continuum (Robinson et al. 199 1, 4; Lawrence and Davies 1993, vi; Mattingly 1994, 207). This premise is endorsed by the Gndings of this study which identified a Iack of developed theory and methods to support the effective implementation of compensation. Compensation should not be adopted as a preferred option until it is further developed into a more effective scientific methodology. Prohibit Monetary Compensation 3. Monetary compensation should be considered unacceptable, as in fisheries policies, in meeting wildlife habitat objectives (CEARC 1988, 3; Lawrence and Davies 1993, 2- 10). Within the compensation preference hierarchy, in-kind is preferred over out-of- kind. Compensate for Area 4. Area should be accepted as an interim surrogate to measure and calculate compensation for habitat. This appears to be the only approach used, or recomrnended for use, in existing wildlife mechanisms and is consistent with the more successfbl fisheries mechanism- Ratios for RepIacement and Securement 5. A minimum of a 1: 1 ratio of habitat replacement to habitat lost should be incorporated as a fomal or statutory requirement. This level of compensation is sirnilar to the fisheries mechanism, wetland requirements in various jurisdictions, and the regional wildlife guidelines. Due to its practical application, a ratio of habitat securement to habitat lost should also be included. However, this level should be set at a 2:1 ratio to reflect that simple preservation is a less desirable objective and that the current 1: 1 securement, which results in a 50% net loss of habitat. A higher ratio would also begin to redress rnitigation for the loss of habitat which has aiready occurred without compensation. 6.3 Further Research in WiIdlife Compensation There is limited research information and anaiysis available with respect to wildlife compensation and its associated mechanisms. None of the published material identified has undertaken the kind of comprehensive review or evaluation of compensation mechanisms attempted in this study. The selection of appropriate criteria to measure and evaluate both the mechanisms and decisions was diEcuit in the absence of any suggested methodologies in the literature. Considering the extensive application of compensation in environmental assessment involving habitat loss, the lack of developrnent of this methodology should be a concem for al1 governing agencies. Comrnents in a 1988 CEARC publicatior! suggesting that Little attention had been given specifically to compensation remains relevant today, ten years later (Canadian, 1988, i). A lack of extensive published information, alternative theoretical mechanisms, and fùlly developed applied mechanisms would appear to suggest that compensation theory and accompanying methodology is still in its infâncy. Recornmendation 3 Substantial additional research is required to further the developrnent of compensation theory and methodology as it applies to the loss of wildliie habitat. This research is critical if compensation is to be relied upon to continually address unmitigated Iosses of habitat fiom developrnent. Otherwise, an alternative must be developed to replace compensation as a means of ensuring that the loss of habitat is adequately addressed in wildlife management. Such research should incorporate an adaptive and investigative approach which hrther examines previous decisions in order to improve existing requirements. In many cases, there is much to be leamed fkom past expenences in this area. The inventory of mechanisrns and decisions initiated in this study should be expanded upon and incorporate additional jurisdictions. If possible, files and unpublished documents Iocated in other regionai offices of BC Environment, Lands and Parks, as well as other departrnents, should be reviewed to increase the generalizability of this research. This would expand the scope of the review and enable the identification of additional usehl precedents or effective 'unofficial' procedures, in addition to other deficiencies and limitations of existing mechanisms. This research represents a sprïngboard for the developrnent of future compensation mechanisms. Abs, Susan. 1991. c'Technical Submission on Environmental Issues." Prepared for the Cornmunity Forum on Airport Development. Duplicated. Quoted in R.M. Robinson, M. G. HaggIund, J. C. Day, and L W. Wilson, Vmcouver Intzrnationai Airport ParaIIel Rumvay Project, Rep ori of the Environrnental Assessment Panel (Vancouver: Federal EnWonmentai Assessment Review Ofiice, August 199 1), 89. Adair, Marian, and Dianna Colnett. 1995. 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