Exploration Drilling within Block ER236, off the East Coast of South Africa Draft Environmental Impact Assessment Report Version 1 September 2018 www.erm.com The business of sustainability CONTENTS 1 INTRODUCTION 1 1.1 PROJECT BACKGROUND 1 1.2 PURPOSE OF THIS REPORT 2 1.3 SUMMARY OF EIA PROCESS 3 1.4 PROJECT PROPONENT 9 1.5 THE EIA TEAM 9 1.6 UNDERTAKING BY EAP 11 1.7 EIA REPORT REQUIREMENTS AS PER EIA REGULATIONS GNR 982/2014 11 1.8 STRUCTURE OF THE EIA REPORT 14 2 ADMINISTRATIVE AND LEGAL FRAMEWORK 16 2.1 INTRODUCTION 16 2.2 OVERVIEW OF ‘ONE ENVIRONMENTAL SYSTEM’ 16 2.3 KEY RELEVANT LEGISLATION 16 2.4 OTHER APPLICABLE LEGISLATION 23 3 PROJECT DESCRIPTION 25 3.1 INTRODUCTION 25 3.2 PROJECT NEED AND DESIRABILITY 25 3.3 PROJECT LOCATION 26 3.4 PROJECT SCHEDULE 28 3.5 MAIN PROJECT COMPONENTS 29 3.6 PROJECT ACTIVITIES 34 3.7 PLANNED EMISSIONS AND DISCHARGES, WASTE MANAGEMENT 46 3.8 UNPLANNED EMISSIONS AND DISCHARGES 54 3.9 PROJECT ALTERNATIVES 55 4 BASELINE CONDITIONS 65 4.1 OVERVIEW 65 4.2 PROJECT AREA 65 4.3 ENVIRONMENTAL BASELINE 67 4.4 SOCIO-ECONOMIC BASELINE 108 4.5 SUMMARY OF KEY SENSITIVITIES 149 5 PUBLIC PARTICIPATION 152 5.1 PUBLIC PARTICIPATION OBJECTIVES 152 5.2 LEGISLATIVE CONTEXT 152 5.3 PUBLIC PARTICIPATION ACTIVITIES 154 5.4 SUMMARY OF COMMENTS RAISED DURING SCOPING PHASE 157 6 IMPACT ASSESSMENT METHODOLOGY 158 6.1 INTRODUCTION 158 6.2 IMPACT IDENTIFICATION AND CHARACTERISATION 158 6.3 DETERMINING IMPACT MAGNITUDE 159 6.4 DETERMINING RECEPTOR SENSITIVITY 161 6.5 ASSESSING SIGNIFICANCE 162 6.6 MITIGATION POTENTIAL AND RESIDUAL IMPACTS 163 6.7 RESIDUAL IMPACT ASSESSMENT 164 6.8 CUMULATIVE IMPACTS 165 7 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT OF PLANNED ACTIVITIES 166 7.1 INTRODUCTION 166 7.2 IDENTIFICATION AND SCREENING OF KEY IMPACTS 166 7.3 PLANNED OPERATIONS: KEY ENVIRONMENTAL IMPACTS 171 7.4 PLANNED OPERATIONS: KEY SOCIAL IMPACTS 202 7.5 CUMULATIVE IMPACTS FROM PLANNED OPERATIONS 214 7.6 IDENTIFICATION AND SCREENING OF POTENTIAL CUMULATIVE IMPACTS 215 7.7 EVALUATION OF POTENTIAL CUMULATIVE IMPACTS 215 8 ACCIDENTAL EVENTS 217 8.1 INTRODUCTION 217 8.2 METHODOLOGY 218 8.3 ASSESSMENT OF ACCIDENTAL OIL SPILL AND BLOWOUT 220 9 ENVIRONMENTAL MANAGEMENT PROGRAMME (EMPR) 255 9.1 INTRODUCTION 255 9.2 OBJECTIVES 255 9.3 CONTENTS OF AN EMPR 255 9.4 DETAILS OF ENVIRONMENTAL ASSESSMENT PRACTITIONER 257 9.5 SITE AND PROJECT DESCRIPTION 258 9.6 POTENTIAL IMPACTS ASSESSED 263 9.7 IMPLEMENTATION OF EMPR 265 9.8 SPECIFIC MANAGEMENT PLANS 266 9.9 ENVIRONMENTAL MANAGEMENT PROGRAMME COMMITMENTS REGISTER 268 9.10 MONITORING 286 9.11 AUDITING 288 10 SUMMARY AND CONCLUSION 289 10.1 INTRODUCTION 289 10.2 SUMMARY OF IMPACTS IDENTIFIED AND ASSESSED 290 10.3 RECOMMENDATIONS 293 11 REFERENCES 294 LIST OF FIGURES Figure 1.1 Locality Map 2 Figure 1.2 Environmental Impact Assessment Process 3 Figure 3.1 Location of Block ER236, and the Northern and Southern Areas of Interest 27 Figure 3.2 Example of a Drillship 30 Figure 3.3 Subsea Well Schematic at the End of Drilling Phase 38 Figure 3.4 Preliminary Well Construction Phases vs Drilling Time Schedule 39 Figure 3.5 Schematic of Cement Plug at Bottom Hole 45 Figure 3.6 Typical Solids Control/Fluid Recovery System 48 Figure 3.7 Drilling Vessel Alternatives 57 Figure 4.1 A Map showing the Project Area, including ADI and AII 66 Figure 4.2 Total Greenhouse Gas Emissions for South Africa (Mt of CO2) 68 Figure 4.3 Bathymetry of the South African East Coast 69 Figure 4.4 Coastal and Benthic Habitat Types off the South African East Coast 71 Figure 4.5 The Ecological Threat Status of Coastal and Offshore Benthic Habitat Types off the South African East Coast 72 Figure 4.6 The Predominance of the Agulhas Current in Block ER 236 74 Figure 4.7 VOS Wind Speed vs Wind Direction for Richards Bay Breakwater (28.8°S and 32.1° E) 76 Figure 4.8 VOS Wind Speed vs Wind Direction for Port Shepstone (30.0° to 30.9° S and 31.0° to 31.9° E) 77 Figure 4.9 VOS Wave Height (Hmo) vs Wave Direction for a Deepwater Location Offshore of Richards Bay (29.0°S and 32.5° E) 78 Figure 4.10 VOS Wave Height (Hmo) vs Wave Direction for Port Shepstone (30.0° to 30.9° S and 31.0° to 31.9° E) 79 Figure 4.11 The South African Inshore and Offshore Bioregions in Relation to Block ER236 81 Figure 4.12 Phytoplankton and Zooplankton Associated with Upwelling Cells on the Tugela Bank. 82 Figure 4.13 Major Fish Spawning, Nursery and Recruitment Areas along the KZN Coast in Relation to Block ER236 84 Figure 4.14 Large Migratory Pelagic Fish that Occur in Offshore Waters 85 Figure 4.15 Location of the Jesser and Wright Canyons, in the Sodwana Canyon Complex, where Coelacanths were Discovered 88 Figure 4.16 The Reefs of KZN and the Annual Sardine Run 91 Figure 4.17 The Bottlenose Dolphin and the Indo-Pacific Humpback Dolphin 93 Figure 4.18 The Humpback Whale and the Southern Right Whale 94 Figure 4.19 The Home and Core Ranges of Loggerheads and Leatherbacks during Inter- Nesting 99 Figure 4.20 Typical Plunge-Diving Seabirds on the East Coast are the Swift Tern (Left) and the Cape Gannet (Right) 101 Figure 4.21 Protected/Potentially Sensitive Areas in Relation to Block ER236 102 Figure 4.22 Focus Areas for Offshore Protection 104 Figure 4.23 Estuaries along the Wild Coast. The Estuaries in Red are Estuary Protected Areas (EPAs) 106 Figure 4.24 KZN Municipalities 109 Figure 4.25 Eastern Cape Municipalities 110 Figure 4.26 Administrative Structure 112 Figure 4.27 Ethnic Composition in the City of uMhlathuze Local Municipality 113 Figure 4.28 Administrative Structure 116 Figure 4.29 Sectoral Composition of GDP in 2014: eThekwini Metropolitan Municipality 117 Figure 4.30 Education Profile within eThekwini Metropolitan Municipality 118 Figure 4.31 Spatial Distribution of National Pelagic Long-line Fishing Effort 126 Figure 4.32 Intra-Annual Variation of Catch and Effort Recorded by the Large Pelagic Long-Line Sector (Average Figures for the Period 2000 – 2014) 127 Figure 4.33 Inter-Annual Variation of Catch Landed and Effort Expended by the Large Pelagic Longline Sector (2000 - 2014). 127 Figure 4.34 Typical Configuration of Long-Line Gear Targeting Pelagic Species (Left) 128 Figure 4.35 Spatial Distribution of Fishing Effort Expended by Traditional Line-Fish Sector 130 Figure 4.36 Spatial Distribution of Effort Expended by the Crustacean Trawl Fishery 4-133 Figure 4.37 Proportion of fishers that contribute to overall participation in KwaZulu- Natal (left) and proportion of fisheries that contribute to total catch in KwaZulu-Natal (right) (ORI, 2014) 4-138 Figure 4.38 Possible extent of the South African Continental Shelf c. 137,000 Years Ago during the Saalian glaciation 4-144 Figure 4.39 Locations of Shipwrecks off the East Coast of South Africa 4-147 Figure 4.40 Submarine Cables 149 Figure 6.1 Impact Significance 162 Figure 6.2 Mitigation Hierarchy 164 Figure 8.1 The Weathering Processes Acting on Oil 233 Figure 8.2 The Fate of a Typical Medium Crude Oil under Moderate Sea Conditions 234 Figure 8.3 Current Roses (Distributions of Speed and Directions) across All Depths, 2013-2017 at N1 and S. Arrows depict direction of currents. 242 Figure 8.4 Extent of the Modelled DAH Plume 243 Figure 9.1 Project Location – Offshore South Africa 259 Figure 9.2 Waste hierarchy 268 LIST OF TABLES Table 1.1 The EIA Team 10 Table 1.2 Legislated Content of EIA Report (GNR 982/2014) and Corresponding Sections in this Report 11 Table 1.3 Proposed EIA Report Structure 14 Table 1.4 Listed Activities in Terms of the NEMA EIA Regulations, 2014 (as amended, 2017) 19 Table 3.1 Coordinates of the Block ER236 (WGS84 UTM Zone 36S) 28 Table 3.2 Coordinates of the Northern Area of Interest (WGS84 UTM Zone 36S) 28 Table 3.3 Coordinates of the Southern Area of Interest (WGS84 UTM Zone 36S) 28 Table 3.4 Example Drillship Specifications 30 Table 3.5 Estimated Daily Fuel Use by the Drillship and Supply Vessels 34 Table 3.6 Total Estimated Fuel Consumption by the Drillship and Supply Vessels 34 Table 3.7 Predicted Total Atmospheric Emissions from Vessels during Drilling Operations 47 Table 3.8 Main Components of Water-Based Muds 49 Table 3.9 Main Components of Non-Aqueous Drilling Fluids 50 Table 3.10 Typical Well Design and Estimated Discharges 51 Table 3.11 Advantages (+) and Disadvantages (-) of Offshore Discharge and Onshore Disposal of Drill Cuttings (adapted from OGP, 2003) 61 Table 4.1 Eddy Types Identified in the Agulhas Current 73 Table 4.2 Marine Mammals Likely to be Encountered in Block ER236 96 Table 4.3 Breeding Resident Seabirds Present along the South Coast 100 Table 4.4 Key Estuaries of the Wild Coast 106 Table 4.5 Local Municipalities within the AII 108 Table 4.6 Population Summary 113 Table 4.7 Small-scale Fishery “Basket” Areas 4-134 Table 4.8 Summary of Key Sensitivities 149 Table 4.9 Public Participation Tasks 154 Table 4.10 Summary of Key Comments Raised during the Draft Scoping Report Consultation 157 Table 6.1 Impact Characteristics 158 Table 6.2 Biological and Species Value / Sensitivity Criteria 162 Table 6.3 Socio-Economic Sensitivity Criteria 162 Table 7.1 Potential Impacts from Planned Activities 167 Table 7.2 Non-Significant Impacts 169 Table 7.3 Summary of Environmental Impacts Assessed 171 Table 7.4 Summary of Project Activities that will result in Greenhouse Gas Emissions 172 Table 7.5 Predicted Total Atmospheric Emissions from Vessels during Drilling Operations 173 Table 7.6 Significance of Impacts Related to Climate Change 175 Table 7.7 Summary of Vessel Activities that Discharge Operational Wastes to Sea 176 Table 7.8 Significance of the Impact