Public Disclosure Authorized Public Disclosure Authorized Armenia Sector Issues Paper Second Thematic Paper: Enhancing Environmental and Social Sustainability of Public Disclosure Authorized Mining in Armenia Part I: Improved Environmental and Social Performance in Mining Sector Part II: Environmentally and Socially Sound Management of Mine Tailings Public Disclosure Authorized Armenia: Enhancing Environmental and Social Sustainability of Mining—Sector Issues Paper © 2014 The International Bank for Reconstruction and Development/The World Bank 1818 H Street, NW Washington DC 20433 Telephone 202-473-1000 Internet: www.worldbank.org Email: [email protected] All rights reserved. June 2014 This volume is a product of the staff of the International Bank for Reconstruction and Development/The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax: 202-522- 2422, e-mail: [email protected]. ARMENIA – Enhancing Environmental and Social Sustainability of Mining 2 Acknowledgements This Sector Note was prepared by a team of World Bank staff and consultants working on environmental management, social development and sustainability issues within the Europe and Central Asia (ECA) region under the leadership of Kulsum Ahmed, Sector Manager, and Henry Kerali, Country Director for ECCU3. This analytical work is a result of collaboration with the Government of Armenia, namely, the Ministry of Nature Protection (MNP), Ministry of Energy and Natural Resources (MENR) and Ministry of Finance (MOF). The analysis is a synthesis of the inputs and advice of a wide range of interested parties. The team would like to acknowledge the many contributors and individuals that supported the preparation of this report. The team comprised of Adriana Damianova, Lead Environmental Specialist and Esma Kreso, Environmental Specialist (co-task team leaders); Michelle Rebosio, Social Development Specialist; Arusyak Alaverdyan, Operations Officer; Tigran Kostanyan, Economist, Gohar Gyulumyan, Senior Economist; Satik Nairian, Linh Van Nguyen and Josephine Kida, Program Assistants. Beyond the World Bank staff, the team also comprise of Edita Vardgesyan, Aleksandr Grigoryan, Ana Bachurova and Maja Colovic-Daul, consultants. The team would also like to express our gratitude to the Food and Agriculture Organization (FAO) for their financial support for the preparation of the report. The final papers have been further developed based on a set of peer reviewer comments provided by Gary McMahon, Senior Mining Specialist; Hocine Chalal, Lead Environmental Specialist; Kirsten Lori Hund, Senior Mining Specialist; and Dr. Saleem Ali, Director of the Center for Socially Responsible Mining at the University of Queensland, Australia. Many of the important details in the analysis were obtained through discussions and interviews in Armenia with representatives of the public sector, NGOs, academia but also the mining sector and industry. In addition, a number of comments have been received from the public consultations event held on October 3, 2013 in Yerevan. We would also like to thank our editors Lauri Scherer and Ashish Kumar Sen for working under a very tight schedule to deliver this report in a rather presentable form. Many other specialists in the public and private sectors also provided valuable inputs. We thank them all. ARMENIA – Enhancing Environmental and Social Sustainability of Mining 3 Abbreviations ADA Armenian Development Agency ARD acid rock drainage AMD acid mine drainage BAT best available techniques BREF Best Available Technologies Reference CIA Cumulative Impact Assessment CHMP cultural heritage management plant CSR corporate social responsibility DSTP deep-sea tailings placement EHS Environment Health and Safety EIA Environmental Impact Assessment EIP –RM European Innovation Partnership on Raw Materials EITI Extractive Industries Transparency Initiative EIT-KIC European Institute of Innovation and Technology, Knowledge and Innovation Communities EMP Environmental Management Plan EMS Environmental Management System ESIA Environmental and Social Impact Assessment ETP-SMR European Technology Platform on Sustainable Minerals ERA-MIN Network on the Industrial Handling of Raw Materials for European Industries GIIP Good international industry practice IBP Integrated Benefits Package IFC International Finance Corporation MT metric tons NEAP National Environmental Action Plan NGO nongovernmental organization PAG Potentially Acid Generating PS Performance Standards (IFC) R&D research and development RA Republic of Armenia RCRA Resource Conservation and Recovery Act SESA Strategic Environmental and Social Assessment TMF tailings management facility TSF tailings storage facility UNEP United Nations Environment Programme US EPA United States Environmental Protection Agency ARMENIA – Enhancing Environmental and Social Sustainability of Mining 4 Table of Contents ACKNOWLEDGEMENTS ....................................................................................................................... 3 ABBREVIATIONS ..................................................................................................................................... 4 TABLE OF CONTENTS ........................................................................................................................... 5 INTRODUCTION ....................................................................................................................................... 8 ORGANIZATION OF THE PAPER AND METHODOLOGY ................................................................................ 9 1. BACKGROUND ............................................................................................................................... 11 2. REVIEW OF LEGISLATIVE PROVISIONS FOR ENVIRONMENTAL AND SOCIAL SUSTAINABILITY .................................................................................................................................. 13 LEGAL REQUIREMENTS ON SUSTAINABLE MINING IN ARMENIA ............................................................. 13 LEGAL REQUIREMENTS ON SUSTAINABLE MINING IN OTHER COUNTRIES ............................................... 14 COMPARISON OF ENVIRONMENTAL LEGISLATION AND REQUIREMENTS IN DIFFERENT COUNTRIES ....... 16 3. TRANSPARENCY AND INFORMATION SHARING ................................................................ 25 4. BEST PRACTICES FROM INTERNATIONAL MINING CORPORATIONS ........................ 28 ENVIRONMENTAL MANAGEMENT SYSTEMS (EMSS) ............................................................................. 28 ENVIRONMENTAL AUDITING ................................................................................................................... 29 SELF-MONITORING .................................................................................................................................. 29 GRIEVANCE REDRESS MECHANISMS (GRMS) ......................................................................................... 30 CORPORATE SOCIAL RESPONSIBILITY ..................................................................................................... 31 PROPER PLANNING AND PRACTICES BEYOND MINE CLOSURE ................................................................. 32 MANAGING SOCIAL IMPACTS .................................................................................................................. 32 5. TECHNOLOGICAL ADVANCES—COSTS AND BENEFITS .................................................. 35 NEW TECHNOLOGIES AT THE COMPANY LEVEL ...................................................................................... 37 NEW TECHNOLOGIES AT THE REGULATOR OR GOVERNMENT LEVEL ...................................................... 38 6. MAIN RISKS, BOTTLENECKS, AND OBSTACLES ................................................................. 41 7. RECOMMENDATIONS AND CONCLUSIONS .......................................................................... 42 RECOMMENDATION 1: ENHANCE COOPERATION AND BETTER STAFFING PRACTICES IN THE RESPONSIBLE MINISTRIES ........................................................................................................................ 42 RECOMMENDATION 2: IMPROVE MONITORING PRACTICES, ENFORCEMENT AND DATA COLLECTION,