Environmental management: challenges and opportunities for the resource sector in PNG

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1 Environmental management: challenges and opportunities for the resource sector in PNG With an appropriate level of attention, support and effort, now is the time for industry, regulators and other stakeholders to shape the environmental performance of the future. Environmental management in the resource sector has a chequered past in PNG - the past environmental legacies, particularly at some high profile mines, and industry, regulators and communities alike are reminded about this on a near-daily basis. Much of this goes back two or more decades and much but not all is uncontested by opponents, supporters and observers of these projects. Nevertheless, detractors and opponents of the resource sector in PNG are only too keen to highlight past problems. Environmental management in the PNG resource sector has moved on. People do not want to repeat environmentally-damaging practices of the past and there is genuine intent to achieve a high level of environmental performance. Changes are taking shape. PNG is a difficult place to build and operate resource projects - with complex environmental and social settings and mineral and hydrocarbon resources located in some of the most remote and difficult to access sites imaginable. This presents challenges for environmental management, but we won t be delivering a checklist of dos and don ts or attempt to present a magic solution to addressing all of PNG s past environmental legacies here - instead, we take a bigger picture view. The past few years have seen the transition from The Department of Environment and Conservation (DEC) to the Conservation and Environment Protection Authority (CEPA), the operation of PNGs largest resources project, PNG LNG. Papua LNG is in the wings and the prospect of several new large and long-life mining projects such as Frieda River and Wafi-Golpu is looking closer than in years past. It is therefore timely to take a macro view of environmental management for the resource sector in PNG in the 21st century and the challenges and opportunities associated with this. There are three key themes that will play an important role to shape the future of environmental management in PNG. It s up to industry, regulators and other stakeholders to determine the degree to which this is done and how successful it will be. Regulatory framework for environmental management in the resource sector and technical standards The transition from DEC to CEPA in mid-2014 presents a window of opportunity to address an area of frustration for some. We commonly hear surprise from both old and new players in the PNG resources sector that there is a relative lack of formal guidance regarding the requirements for environmental performance for existing and proposed projects. The Environment Act is a strong foundation on which to build this guidance, and a series of guidance notes were prepared in the early 2000s dealing with issues like what should be in an environmental impact statement and what needs to inform a social impact assessment. However, in the ten or so years since the Environment Act came into force and these early guidance notes were

2 released, there has been little substantive progress towards better clarity regarding the requirements for environmental performance. Existing guidelines where they exist are generally outdated and compliance with the requirements of these guidelines does not always ensure the adequate protection of the environment. Perhaps the most obvious example of this are PNG s ambient and drinking water quality standards, which are based on information now more than 30 years old and which contain thresholds well above what is now understood to cause environmental harm. In other aspects such as air and noise, or hazardous materials, guidelines are absent. It s worth considering the implications of this from a range of perspectives. For proponents of new projects, this can create uncertainty. What guidelines should be adopted when they are designing their project? What should they commit to in their closely scrutinised environmental impact statement or feasibility study for their project? PNG guidelines, which may not adequately protect the receiving environment and therefore leave them exposed in future? Australian guidelines? IFC performance standards? Or a melting pot of some or all of them, plus others? By way of example, on a recent EIS Coffey prepared for a greenfield project in PNG, in the order of thirty separate environment-related guidelines were adopted in the absence of PNG guidelines. Air quality alone considered eight separate standards from five different jurisdictions. While this can provide flexibility, it does not provide clarity or consistency. For existing operators, this can add risk. What happens if new standards are enforced? How will existing environment permit conditions and performance requirements be gradually amended? What might be the impact of this on the business and how can it be best planned for? For regulators such as CEPA, this can add confusion. What standards should be used in the absence of adequate PNG guidelines? Who should CEPA believe about what are the most appropriate standards? Often, the guidelines that are chosen come down to robust debate between the proponent s consultants and CEPA's internal and external technical experts about what to apply, where personal preference can be influential. Lastly, for landowners and other stakeholders, just like for proponents, this can create uncertainty. People want confidence that if a project is to proceed then appropriate standards will be applied during the assessment of it, and that these appropriate standards will form conditions in the project s environment permit. Also that the proponent will be held to account against them. Main body text. So, what is a path forward? The good news is that CEPA has been working on plans to gradually develop a series of technical standards for a range of aspects. This is in recognition of the need to provide greater certainty regarding the requirements for environmental performance and to address some of the issues just raised. We understand that for now these are likely to address matters such as an overhaul

3 of the water quality guidelines; hazardous materials management; and, vegetation clearance standards and offsets. The result should be greater clarity for all and improved environmental performance for resource sector developments, consistent with the objectives of the Environment Act. A lack of funding and resource constraints within the fledgling CEPA has hampered efforts to progress many of these technical standards. However, as CEPA s levies and fees structure is refined and the authority grows in structure and technical strength, it s not productive wait for the process to run its course it will take forever. Nor will it be productive to rush the process, but continuation of status quo will not help improve environmental management in PNG s resource sector. There is also the need to develop technical standards that are responsive to change and development that are established in a way that allows them to evolve as information and feedback becomes available. Industry has a role to play, as do other stakeholders, in making clear what it sees as the highest priorities and then working with CEPA to define a program to achieve this while maintaining CEPA s independence. The program should be ambitious but achievable, with clear milestones set so that progress can be tracked. Once the priorities are established, then the program needs to come with capacity building within CEPA to ensure that its officers can effectively develop, implement and enforce the technical standards and to help develop the next generation of environmental regulators in PNG. Technical standards prepared by external consultants will help to get things going, but there needs to be the capacity building alongside this. This cannot be done without effective collaboration between all parties, perhaps with industry taking the lead, where collaboration is not a dirty word it may be the best opportunity we have for strengthening PNG s regulatory framework for the resource sector. Regulation by EMP and approval conditions The second key theme relates to the habit elsewhere of regulation by environmental management plan. This trend sees regulators grant consent to projects with promises by proponents to prepare a large number of EMPs that are tied to a large number of approval conditions. This may foster a perhaps misplaced belief that if the EIS says that a large environmental management plan will be prepared and lots of monitoring will be done, and approval conditions reflect this, then everything will be ok. Regulation by environmental management plan can work well in practice when management plans are targeted to key measures for key aspects or areas of significant environmental risk, and they provide binding requirements for mitigation and monitoring by proponents that will make a material difference in environmental management.

4 However, once focus shifts to an increasing number of management plans with associated monitoring for an increasing number of aspects some of which may have questionable worth if they are to be expected to actually improve environmental performance then the value of the EMP and the monitoring needs to be carefully considered. Are more EMP s better? And when it comes to monitoring, is there value in monitoring everything, all the time? Further to this, a commitment in a plan to prepare another plan is not a management measure and is not likely to improve environmental performance. In parallel with this, we are seeing a growing trend across jurisdictions for a never-ending list of commitments from proponents which end up tied to approval conditions in permits. This should not be a competition, yet the mentality that more commitments and more conditions and more monitoring automatically equals better environmental performance needs to be treated with caution. As for the number of EMPs, the concern is that this results in a loss of focus on those things that really matter. The apparent shift elsewhere in focus from those few aspects that really matter to a wide range of aspects inevitably results in confusion and uncertainty about exactly what a project will and will not do for environmental management. While it may sound dramatic, wayward commitments, misplaced EMPs and illdefined monitoring programs can undermine stakeholders confidence in the proponent s overall ability to deliver on its environmental management promises. They detract from the things that really matter. Keep it simple but high value An alternative approach would be to reduce the number of plans, reduce the number of commitments and reduce the repetition between them, and to present a tightly-scoped monitoring program. This may help ensure more focussed environment management and to simplify auditing and compliance requirements during the project. Importantly, this should be able to be done without compromising the environmental performance of the project and without compromising the ability of the government to regulate those aspects of the project with the greatest potential to cause environmental harm. PNG regulators have historically focussed on those matters of greatest importance to local people, particularly where subsistence livelihoods may be affected by resource projects. This has traditionally formed the basis of environment permit conditions and the requirements of EMPs and their associated monitoring. CEPA needs to keep its focus on the real environmental risks/issues and not get distracted by the second order issues it has done well to handle appropriately in the past. Industry and consultants have not helped CEPA in this regard. Just because jurisdictions elsewhere are following a trend of regulation by EMP and exhaustive approval conditions it does not automatically follow that PNG should head down this path. All including industry, consultants and regulators should be encouraged to resist the race to see who can prepare the most EMPs or make the most commitments or monitor the most parameters, and to try and focus on what really matters for the environment and for the people of PNG.

5 Opportunities for the resource sector in PNG The third and last key theme relates to the opportunity for greater collaboration between all industry players to benefit the resource sector as a whole, with tangible results for environmental management. Projects in PNG tend to operate in isolation and collaboration between industry players is the exception rather than the rule. There is a vast body of accumulated knowledge regarding environmental management in PNG, which now has the benefit of more than three decades of studying, monitoring and assessing the environmental impacts of resource development projects. Constructively, much of this accumulated body of research addresses criticism of past environmental management practices and environmental impacts for resource sector projects in PNG. Much of it also relates to information that opponents of projects claim does not exist. It does, much has been independently peer reviewed and industry and CEPA should make more of it. Some of this knowledge and data is freely available, but plenty is not. It s often held by proponents, operators and/or consultants. As operators and consultants regularly change on projects, there is a loss of this knowledge and data and much time, effort and money is spent trying to recreate it. This map shows the resource development projects that just Coffey s environmental and social impact assessment team has worked on in PNG over the past 40 or so years. The important point is that there has been extraordinarily broad coverage over a long time period and across a wide range of environmental and social aspects, and yet collaboration across these projects is, in our experience, rare.

6 There is a huge opportunity here for the resource sector in PNG. The long history in PNG of developing resource sector projects with comprehensive investigation provides instructive examples of the types of environmental impacts that are likely to eventuate. Equally for those that are not and how these have been successfully investigated and managed by others in the past and what lessons can be learned. The more this is understood and shared, the more environmental management time, money and effort can be best directed to things that actually work, or working collaboratively to understand and solve the challenges common across sites. Jurisdictions elsewhere have active environment management networks to share data, successes and challenges for environmental management in their industry. One example of this is the Goldfields Environmental Management Group, which is a technical and professional body of people predominantly working within the mining industry of the eastern goldfields region of Western Australia. It includes employees of mining and exploration companies, environmental consultancy and service organisations and government agencies. Formed thirty years ago, it provides a source of information on environmental management practices with a focus on the mining industry. It holds workshops, annual general meetings and provides funding for projects to assist with research studies and to help promote environmental awareness in the industry. What does the future hold? It does not take much imagination to envisage something similar providing huge benefits for environmental management for the resource sector in PNG. A future where the sector works collaboratively, where appropriate, is a future likely to strongly lead towards improved environmental management of its projects. Environmental management in PNG has moved on from the old days. Nobody wants a repeat of past poor performance. Changes are taking shape and with an appropriate level of attention, support and effort - now is the time for industry, regulators and other stakeholders to shape its future.