A cross-sector guide for implementing the. Mitigation Hierarchy. Prepared by The Biodiversity Consultancy

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1 A cross-sector guide for impementing the Mitigation Hierarchy Prepared by The Biodiversity Consutancy

2 Prepared by The Biodiversity Consutancy. CSBI woud ike to express its thanks to the Internationa Finance Corporation (IFC) for substantia technica input and financia contribution to this document. Date of pubication: 2015 CSBI 2015 A rights reserved. No part of this pubication may be reproduced, stored in a retrieva system, or transmitted in any form or by any means, eectronic, mechanica, photocopying, recording or otherwise, without the prior consent of CSBI. Discaimer Whie every effort has been made to ensure the accuracy of the information contained in this pubication, neither CSBI, IPIECA, ICMM or Equator Principes nor any of their members past, present or future warrants its accuracy or wi, regardess of its or their negigence, assume iabiity for any foreseeabe or unforeseeabe use made of this pubication. Consequenty, such use is at the recipient s own risk on the basis that any use by the recipient constitutes agreement to the terms of this discaimer. The information contained in this pubication does not purport to constitute professiona advice from the various content contributors and neither CSBI, IPIECA, ICMM or Equator Principes nor their members accept any responsibiity whatsoever for the consequences of the use or misuse of such documentation. This document may provide guidance suppementa to the requirements of oca egisation. However, nothing herein is intended to repace, amend, supersede or otherwise depart from such requirements. In the event of any confict or contradiction between the provisions of this document and oca egisation, appicabe aws sha prevai.

3 A cross-sector guide for impementing the Mitigation Hierarchy Prepared by The Biodiversity Consutancy Lead authors: Jon Ekstrom, Leon Bennun and Robin Mitche The Biodiversity Consutancy Ltd 3E King s Parade, Cambridge, CB2 1SJ, UK Teephone: Emai: enquiries@thebiodiversityconsutancy.com Website: Company Number: VAT Number: Photographs reproduced courtesy of the foowing: front cover and pages 26, 44, 45, 46, 47, 55, 57, 59, 64, 66, 68 and 84: Rio Tinto; page 8: AngoGod Ashanti/Kar Schoemaker; page 13 (eft): Betty Sheton/Shutterstock.com; page 13 (right): Sura Nuapradid/ Shutterstock.com; page 21: Vadimir Saman/Shutterstock.com; and page 37: Graeme Shannon/Shutterstock.com.

4 Contents Executive summary 6 Overview 8 About this document 8 What is the mitigation hierarchy? 8 What is this document for? 9 How this document is structured 9 Rationae for use of the mitigation hierarchy 10 Uses and components of the 11 mitigation hierarchy Preventive measures 11 Remediative measures 12 The first components of the mitigation hierarchy 14 are often the most usefu and effective The mitigation hierarchy and the 15 project ifespan Using the mitigation hierarchy before, 15 during and after the ESIA How to move to the next component of the 16 mitigation hierarchy and use feedback to optimize investments Appication of the mitigation hierarchy 18 incuding offsets to achieve BES targets BES target feasibiity assessments 18 Measuring the contribution of mitigation hierarchy 19 components towards a BES target Appying the mitigation hierarchy retroactivey 19 Communication and documentation 20 Section 1: Avoidance 21 Definitions 21 Rationae 21 Key principes 21 Key steps in avoidance 23 Key types of avoidance 23 Avoidance through site seection 23 Avoidance through project design 24 Avoidance through scheduing 26 Exampes of avoidance in practice 27 The practice of avoidance 32 Start eary, but don t stop: avoidance 32 through the project ifespan Think big: understanding the project site 32 within the wider andscape Synthesize, map, discuss: assessing BES 33 vaues and sensitivities Constraints and chaenges 34 Cost considerations: is expensive avoidance worth it? 34 An emerging chaenge: avoidance of indirect 35 and cumuative impacts Keeping track: monitoring and evauation 35 for avoidance actions Creative thinking: innovative ideas 36 for avoidance Section 2: Minimization 37 Definitions 37 Rationae 37 Key principes 38 Key steps in minimization 38 Types of minimization 39 Exampes of minimization in practice 42 The practice of minimization 44 Start eary, but don t stop: minimization 44 through the project ifespan Understand what s reay needed: investing 44 in research to minimize more effectivey Execute the pans: ensuring that minimization 44 is carried out effectivey Check to see whether it s working: estabishing 44 monitoring and an adaptive approach Constraints and chaenges 45 Cost considerations for minimization actions 45 Deaing with data-poor and uncertain situations 45 Whether and when to move to restoration and offsets 45 Creative thinking: innovative ideas 46 for minimization Page 2 A cross-sector guide for impementing the Mitigation Hierarchy

5 Contents Section 3: Restoration 47 Definitions 47 Rationae 48 Key principes and steps for 50 impementing restoration Start eary and buid a soid information base 51 Define reaistic restoration goas 51 Take practica steps to support restoration success 52 Monitor and manage adaptivey 52 Exampes of restoration in practice 52 The practice of restoration 54 Anayse constraints: reaistic goa setting 54 Manage using threshods: piars of restoration success 56 Assess trajectories: evauating performance criteria 57 and success Learn by doing: the adaptive management approach 57 Section 4: Offsets 59 Definitions 59 Rationae 60 Government reguation 60 Requirements for financing 60 The business case for BES offsets 60 Key principes 61 Types of offsets 61 Key steps in offsetting 62 Phase 1: BES offset contextuaization 63 Phase 2: BES offset strategy 63 Phase 3: BES offset design and 63 management panning Phase 4: BES offset impementation 64 Exampe of offsets in practice 65 The practice of offsetting 66 Buy off the shef? Reguatory offsets 66 Engage stakehoders and buid partnerships: 66 vountary and finance-requirement offsets Add up oss and gain: biodiversity accounting 66 Find the right site: some practica short cuts 67 Think ong term: ensuring offset permanence 68 Patience is needed: how ong do offsets take to set up? 69 Keep on track: monitoring offset performance 69 Constraints, chaenges and creative thinking 69 Joined-up thinking? The pros and cons of 69 aggregated offsets How it works on water: offsets at sea 70 Offset socia success: worth striving for 70 References 71 Webinks 75 Further reading 76 Definitions 79 Acronyms 83 Appendices 84 Appendix 1: Horizon scan of future 84 deveopments for avoidance and minimization Appendix 2: Knowedge gaps in 85 avoidance and minimization A cross-sector guide for impementing the Mitigation Hierarchy Page 3

6 Contents List of figures, tabes, boxes and exampes in practice Overview Figure 1: Schematic diagram showing the 11 impementation of the mitigation hierarchy Figure 2: Appication of the Mitigation 12 Hierarchy components Box 1: Differentiated appication of the Mitigation 13 Hierarchy for biodiversity and ecosystem services Figure 3: Avoid, minimize, restore, offset 14 Figure 4: Appying the mitigation hierarchy across 15 three broad stages of the project timeine Tabe 1: Financia institutions and industry use the 16 mitigation hierarchy for different purposes at different stages of the project ifespan Figure 5: The iterative stages in the assessment of 17 options and impacts, to optimize investment in the components of the mitigation hierarchy Figure 6: Increasing the use of avoidance and minimization 17 in project design through iterative appication of the mitigation hierarchy Box 2: Biodiversity and ecosystem services: 18 risk, impacts and dependencies Figure 7: Steps in assessing the technica and 19 poitica/business feasibiity of a biodiversity conservation target (e.g. no net oss) Section 1: Avoidance Tabe 2: Advantages of, and considerations 22 for, avoidance Tabe 3: Exampes of how to undertake avoidance 25 through project design Box 3: Exampes of how to undertake avoidance 26 through scheduing Avoidance Exampe 1: Avoiding high biodiversity vaues 27 in iquid natura gas (LNG) site seection, Tanzania Avoidance Exampe 2: Identifying and preserving 27 high-quaity habitat during oi and natura gas deveopment in Coorado Avoidance Exampe 3: Avoiding disruption to caribou 27 migration in Canada Avoidance Exampe 4: Gas pipeine design changed 28 to avoid mamma migration route in Centra Asia Avoidance Exampe 5: Micro-routing mine access 28 roads in Chie to avoid sensitive habitats Avoidance Exampe 6: Avoiding impacts at a 28 Word Heritage site in the Democratic Repubic of Congo Avoidance Exampe 7: Infrastructure design for 29 unconventiona oi and gas avoids biodiversity impacts in North American grassand Avoidance Exampe 8: Innovative jetty design and 30 construction avoids biodiversity impacts for LNG project Avoidance Exampe 9: Scheduing to avoid impacts at a 30 cosed mine in France Avoidance Exampe 10: Research investments inform 31 eary avoidance of impacts on fauna in Peru Avoidance Exampe 11: Risk screening informs 31 pipeine redesign in Azerbaijan Avoidance Exampe 12: Avoiding impacts on 31 provisioning services through adaptive mine-path panning in Madagascar Avoidance Exampe 13: Avoiding cora reef encroachment 32 during LNG deveopment, Yemen Avoidance Exampe 14: Pipeine rerouting to avoid impacts 32 on an endemic ichen in Namibia Box 4: Using no-net-oss (NNL) forecasting to optimize 33 investment in avoidance and cacuate offset iabiity Box 5: Managing indirect impacts by inking together 35 socia and environmenta management pans Box 6: Cumuative impacts and strategic 36 environmenta assessment Section 2: Minimization Tabe 4: Advantages of, and considerations for, 38 minimization Box 7 Adaptive management and continuous 39 improvement happens through repeat assessment of minimization options throughout the project ifespan Box 8: Minimizing habitat fragmentation and degradation 39 Tabe 5: Exampes of physica, operationa and abatement contros for minimization Minimization Exampe 1: Minimizing impacts on 42 Page 4 A cross-sector guide for impementing the Mitigation Hierarchy

7 Contents cora reefs during LNG deveopment, Yemen Minimization Exampe 2: Micro-routing the shore 43 approach for an LNG pipeine in Papua New Guinea Minimization Exampe 3: Eary panning informs 43 minimization measures for offshore Indonesia Minimization Exampe 4: Minimizing the impacts of 43 god mining at two specia areas of conservation in Sweden Section 3: Restoration Figure 8: Schematic showing the iterative appication of 48 avoidance and minimization together with a restoration constraints anaysis and offset scoping, to set reaistic goas for remediative measures in the mitigation hierarchy Tabe 6: Advantages of, and considerations for, restoration Figure 9: A summary of the restoration 51 panning and impementation process Restoration Exampe 1: Creating and managing 54 widfower meadows at a potash mine in the UK Restoration Exampe 2: Restoration of forest and upand 53 grassand Agri River Vaey, Itay Restoration Exampe 3: Seed storage faciitates 52 restoration of native and endemic fora and fauna in Greece Restoration Exampe 4: Geomorphic recamation 54 ays the foundation for restoration in New Mexico Figure 10: Setting feasibe restoration goas 55 through constraints anaysis Figure 11: Graphic representation of different 56 threshods and restoration intervention mechanisms aong the condition/degradation gradient Section 4: Offsets Box 9: Offset pre-feasibiity assessment 64 Figure 12: Steps and outputs in biodiversity 65 offset design Offsets an exampe: A marine offset for a 65 coa termina in Austraia Definitions Box 10: Three definitions of biodiversity offsets 81 A cross-sector guide for impementing the Mitigation Hierarchy Page 5

8 Executive summary The mitigation hierarchy is a too designed to hep users imit, as far as possibe, the negative impacts of deveopment projects on biodiversity and ecosystem services (BES). It invoves a sequence of four key actions avoid, minimize, restore and offset and provides a bestpractice approach to aid in the sustainabe management of iving, natura resources by estabishing a mechanism to baance conservation needs with deveopment priorities. This guidance document is designed to guide users through the practica impementation of the mitigation hierarchy, and offers guidance for understanding each step in the sequence described above, both at the initia design and panning stages of a project and throughout the project s ifespan. It is aimed primariy at environmenta professionas, working in, or with, the extractive industries, and who are responsibe for managing the potentia risks of project impacts on biodiversity and ecosystem services. The deveopment of this document was, in part, motivated by the Internationa Finance Corporation (IFC) Performance Standards on Environmenta and Socia Sustainabiity, in particuar Performance Standard 6 (PS6) on Biodiversity Conservation and Sustainabe Management of Living Natura Resources (IFC, 2012a). The CSBI recognizes that not every project is governed by IFC PS6, and that the extractive industry, biodiversity science, performance standards and other expectations may evove and change. This guidance is not, therefore, constrained by IFC PS6 but more broady refects the state of the art and good practice of operationaization of the mitigation hierarchy for biodiversity and ecosystem services impact management in the extractive industries. The structure of the document is described beow. The Overview The Overview introduces the mitigation hierarchy as a framework for managing the risks and potentia impacts of deveopment projects on biodiversity and ecosystem services. It provides a forma definition of the mitigation hierarchy according to the Cross-Sector Biodiversity Initiative (CSBI), and carifies the meanings of the terms avoid, minimize, restore and offset as used in the context of this guidance document (simiar terms may have different ega impications in some jurisdictions). The Overview presents the ecoogica, economic, reguatory and reputationa drivers for appying the mitigation hierarchy, and describes its uses in terms of performance measurement, scheduing, achieving costeffectiveness in project operations, and as a risk assessment and management too. Lasty, the Overview emphasizes the importance of engaging financers, and interna and externa stakehoders, in the decision making process, and the consequent need for maintaining effective communication and documentation. Exampes of key communication materias are provided. Section 1: Avoidance Section 1 introduces the concept of avoidance the first and most important step in the mitigation hierarchy. The benefits and potentia considerations of avoidance are summarized, and the different types of avoidance are expained, with detais provided on how each type of avoidance can be undertaken. A number of practica exampes are presented to iustrate how avoidance has been used by the extractives industry in a range of different circumstances. Guidance on the genera practice of avoidance is provided, together with a summary of the potentia constraints and chaenges that may be encountered. This section coses with a summary of how improved ecoogica information and new technoogy can combine to give rise to new ideas for avoidance, and exampes of recent innovative approaches are provided. Page 6 A cross-sector guide for impementing the Mitigation Hierarchy

9 Executive summary Section 2: Minimization Section 2 is dedicated to the second step in the mitigation hierarchy minimization. The principes and types of minimization are presented, together with a summary of the advantages and considerations that may need to be borne in mind. Practica exampes of minimization are provided to demonstrate how this step has been used effectivey by the extractives industry in a variety of different circumstances. This section coses with guidance on the genera practice of minimization, a summary of potentia constraints and chaenges, and a note on innovative ideas for its appication. References and further information A References section is provided at the back of the guidance, foowed by a ist of usefu webinks and a comprehensive seection of reevant tites for further reading. Terminoogy used within the scope of the guidance is carified in a Definitions section, and a summary of the acronyms used within the guidance is aso provided. Finay, the two Appendices provide (1) an anaysis of future deveopments and (2) detais of knowedge gaps, for both avoidance and minimization. Section 3: Restoration Restoration is presented in Section 3 of the guidance. The rationae for restoration is presented and, as with avoidance and minimization, the advantages of, and potentia considerations for, restoration are aso summarized. A summary of the key principes and steps for impementing restoration are presented, together with giudance on the practice of restoration, incuding reaistic goa-setting, effective management of the process, and performance evauation. A number of exampes describing how restoration has been successfuy empoyed in practice are aso presented. Section 4: Offsets Section 4 presents the fourth and fina step in the mitigation hierarchy offsets. An expanation of the rationae for offsets is provided, together with a brief anaysis of the business case for BES offsets. The key principes for using biodiversity offsets are summarized, as are the different types of offsets and the steps invoved in the practice of offsetting. A practica exampe is incuded to demonstrate how offsetting has been used to aid habitat recovery for threatened fauna and fora species in a marine environment. The section coses with a summary of significant issues emerging as industry continues to design and impement biodiversity offsets. A cross-sector guide for impementing the Mitigation Hierarchy Page 7

10 Overview About this document What is the mitigation hierarchy? The mitigation hierarchy is a framework for managing risks and potentia impacts reated to biodiversity and ecosystem services 1 (BES). The mitigation hierarchy is used when panning and impementing deveopment projects, to provide a ogica and effective approach to protecting and conserving biodiversity and maintaining important ecosystem services. It is a too to aid in the sustainabe management of iving, natura resources, which provides a mechanism for making expicit decisions that baance conservation needs with deveopment priorities. As defined by the CSBI (CSBI, 2013a), the mitigation hierarchy is: the sequence of actions to anticipate and avoid impacts on biodiversity and ecosystem services; and where avoidance is not possibe, minimize 2 ; and, when impacts occur, rehabiitate or restore 3 ; and where significant residua impacts remain, offset. The mitigation hierarchy is not a standard or a goa, but an approach to mitigation panning. It can be used in its own right or as an impementation framework for BES conservation goas such as no net oss (NNL) or net gain/net positive impact (NPI), reguatory requirements and/or interna company standards. It provides a mechanism for measurabe conservation outcomes for BES that can be impemented on an appropriate geographic scae (e.g. ecosystem, regiona, nationa, oca). 1 See the Definitions section on page 79 and, for further expanation, the A-Z of Biodiversity: 2 In the mitigation hierarchy, and in this guidance, minimization is used in a genera sense to mean reduce or imit as far as feasibe. It is not used in the ega sense current in some jurisdictions, where the term minimize means reduce to zero. In many instances, it is not possibe to reduce a biodiversity-reated risk or impact to zero, and if it is possibe, the net incrementa environmenta/socia benefit may not justify the significant additiona cost. 3 In the mitigation hierarchy, and in this guidance, restoration is used in a broad and genera sense. Restoration does not impy an intention to restore a degraded ecosystem to the same state and functioning as before it was degraded (which is the meaning in some specific jurisdictions, and may be an impossiby chaenging or costy task). Restoration may instead invove and recamation or ecosystem rehabiitation to repair project impacts and return some specific priority functions and biodiversity features to the ecosystems concerned. There are many terms inked to restoration, incuding rehabiitation, recamation and remediation: these activities ony amount to restoration when they ensure gains for the specific BES features of concern that are targets for mitigation. Page 8 A cross-sector guide for impementing the Mitigation Hierarchy

11 Overview What is this document for? This document provides high-eve guidance, with pointers to further information, for using the mitigation hierarchy effectivey to manage the potentia impacts 4 of extractive activities on BES, at a andscape scae, throughout project ifespans. It aims to refect state-of-the-art good practice of operationaizing the mitigation hierarchy for biodiversity impact management for extractive industries. The guidance is aimed at those working in, or with, industry and financia institutions, who are responsibe for overseeing the appication of the mitigation hierarchy, and who need a sound grasp of current good practice and its ongoing evoution, as we as a quick and simpe way to find additiona detaied information when necessary. It draws upon experts in reevant fieds and current scientific iterature, recognizes gaps and chaenges in the impementation of each step of the mitigation hierarchy and eaves room for adaptabiity to future advances in these areas. This guidance aims to: ceary define the mitigation hierarchy and its appication to extractive projects; offer practica guidance for understanding and impementing each step of the mitigation hierarchy throughout the ifespan of an extractive project; outine how to determine and demonstrate oss or gain of biodiversity and/or ecosystem services as a resut of mitigation action or inaction; offer practica measures for predicting and verifying conservation outcomes over time; aow fexibe appication, adaptabe to site-specific environmenta, operationa and reguatory circumstances; and be systematicay appicabe across a range of extractive industry projects and natura environments 5. The guidance is framed to be compatibe with other IPIECA and ICMM guidance on biodiversity, ecosystem services and offsets, and with the CSBI Timeine Too and Baseine Biodiversity Data Coection Guidance 6. It focuses mainy on mitigating impacts on biodiversity, but aso addresses ecosystem services (the benefits peope receive from ecosystems) when appropriate. The two are cosey reated, but not in a straightforward way. Conserving biodiversity is ikey to maintain existing ecosystem services, but the reverse may not aways be so. Appication of the mitigation hierarchy to ecosystem services is reativey new. As more experience is gained, this guidance may be updated accordingy. For both biodiversity and ecosystem services, this guidance assumes a focus on significant (or materia) impacts. This means that the impacts are on a BES feature that has substantia intrinsic or ecosystem service vaue, for exampe because it is highy threatened, unusua and ocaized, or of major cutura or economic importance, or in an intact and unmodified state. It aso means that the potentia impacts are not minor or trivia for exampe they woud severey reduce a species viabiity, or the abiity of a habitat to maintain viabe popuations of its native species. BES performance standards of the Mutiatera Financia Institutions, such as the IFC s Performance Standard 6 (IFC, 2012a), provide usefu frameworks and guidance for assessing the materiaity of impacts. Identifying the BES features of concern is an important first step in appying the mitigation hierarchy. Once these features have been identified, they form the target for appication of a the mitigation hierarchy components. This guidance covers the mitigation of impacts that coud be expected to arise from a project s routine activities reated to exporation, construction, operation and cosure. It does not address the risk of accidents and emergencies. Whie engineering and panning to prevent, contain and manage emergencies are a crucia part of project design and operation, they are beyond the scope of this document. How this document is structured This document is structured according to the components of the mitigation hierarchy, i.e. avoidance, minimization, restoration and offsetting: The Overview (this section) introduces the mitigation hierarchy and its operationaization as a whoe. It covers the primary drivers for impementing the mitigation hierarchy over the ifespan of an asset and touches on topics that are common to a the components of the mitigation hierarchy. 4 Direct, indirect and cumuative. See the Definitions section on page This guidance does not cover offshore ecosystems, where there is as yet very imited experience of how to appy the mitigation hierarchy. 6 Fu references and webinks (where avaiabe) are given in the References section. A cross-sector guide for impementing the Mitigation Hierarchy Page 9

12 Overview Section 1 focuses on the first, and often the most important, component of the mitigation hierarchy avoidance. This preventive step is intended to avoid impacts on the most sensitive BES, through site seection, project design and/or scheduing. Section 2 presents the second component of the mitigation hierarchy minimization 7. This is aso a preventive step, and aims to reduce impacts that cannot be avoided through physica, operationa or abatement contros. Section 3 discusses the first remediative component of the mitigation hierarchy restoration 8. Where damage or degradation to biodiversity vaues cannot be avoided or further minimized, there may be scope for remediation via rehabiitation or restoration efforts. Section 4 covers the ast component of the mitigation hierarchy offsets. This step is the ast resort to address those significant residua impacts that coud not be prevented through avoidance and minimization, or adequatey corrected through restoration/rehabiitation. Additiona conservation actions are aso covered in this section. Sections 3 and 4 are ess detaied than Sections 1 and 2. Extensive information and guidance aready exists for restoration and offsets. This document outines the key issues for these components and provides signposts to reevant materia esewhere. Rationae for use of the mitigation hierarchy There are ecoogica, economic, reguatory and reputationa drivers for appying the mitigation hierarchy: consequences on human we-being. It may aso affect the viabiity of projects that have significant dependencies on those ecosystem services. Reguatory drivers: the mitigation hierarchy is used by many financia institutions, industries, governments and NGOs. Severa financia standards and safeguards (Internationa Finance Corporation Performance Standard 6 (IFC PS6), European Bank for Reconstruction and Deveopment Performance Reguation 6 (EBRD PR6), Word Bank Environmenta and Socia Standard 6 (ESS6), and the Equator Principes) a require appication of the mitigation hierarchy for management of impacts on BES. The US Wetand Banking, the European Union Birds and Habitats Directives and Austraia s Environment Protection and Biodiversity Conservation Act are exampes of reguatory frameworks that aso require appication of the mitigation hierarchy. Economic drivers: effective appication of the mitigation hierarchy can reduce risks, costs and deays for industry and financia institutions during project deveopment. Companies that foow good practice in environmenta management, incuding appication of the mitigation hierarchy, may secure easier and ess costy access to finance, and and resources 9. Reputationa drivers: stakehoders increasingy expect that the mitigation hierarchy shoud be carefuy appied, as good practice towards achieving sustainabe deveopment. Ecoogica drivers: these incude protecting and conserving biodiversity, maintaining ecosystem services, and sustainaby managing iving natura resources, through imiting and/or repairing project impacts on BES. Impacts on biodiversity can adversey affect the deivery of ecosystem services, and this may in turn have negative 7 In the mitigation hierarchy, and in this guidance, minimization is used in a genera sense to mean reduce or imit as far as feasibe. It is not used in the ega sense current in some jurisdictions, where the term minimize means reduce to zero. In many instances, it is not possibe to reduce a biodiversity-reated risk or impact to zero, and if it is possibe, the net incrementa environmenta/socia benefit may not justify the significant additiona cost. 8 In the mitigation hierarchy, and in this guidance, restoration is used in a broad and genera sense. Restoration does not impy an intention to restore a degraded ecosystem to the same state and functioning as before it was degraded (which is the meaning in some specific jurisdictions, and may be an impossiby chaenging or costy task). Restoration may instead invove and recamation or ecosystem rehabiitation to repair project impacts and return some specific priority functions and biodiversity features to the ecosystems concerned. There are many terms inked to restoration, incuding rehabiitation, recamation and remediation: these activities ony amount to restoration when they ensure gains for the specific BES features of concern that are targets for mitigation. 9 e.g. Rainey et a. (2014). Page 10 A cross-sector guide for impementing the Mitigation Hierarchy

13 Overview Uses and components of the mitigation hierarchy The mitigation hierarchy is usefu as a framework because it can: Promote performance measurement: it is the too by which biodiversity conservation goas (e.g. NNL, net gain/npi, reguatory or company interna poicy goas) can be achieved. Inteigent appication of the mitigation hierarchy can reduce the costs of achieving such goas. Reduce scheduing deays and instigate costeffective approaches: the mitigation hierarchy is a feedback optimization process to make the most costeffective investment whie effectivey managing impacts on biodiversity and ecosystem services. Science, stakehoders, finance and industry schedues a factor into the judicious use of each component of the mitigation hierarchy. Function as a risk assessment and management too: the mitigation hierarchy is a risk management too and an Environmenta and Socia Impact Assessment (ESIA) panning too. Appropriate appication reduces business costs and scheduing/financing deays. The effective appication of the mitigation hierarchy provides the opportunity for eary identification of BES risks and mitigation options. This faciitates eary business forecasting of potentia mitigation requirements and options, schedue and cost estimates, and impications for project feasibiity. Figure 1 iustrates the iterative process of avoiding and minimizing unti remaining risks and impacts can be managed through the remediative measures of restoration and offsetting. The mitigation hierarchy can be viewed as a set of prioritized, sequentia components that are appied to reduce the potentia negative impacts of project activities on the natura environment. It is not a one-way inear process but usuay invoves iteration of its steps. It can be appied to both biodiversity and reated ecosystem services. There are two preventive components, avoid and minimize, and two remediative components, restore (or rehabiitate) and offset (see Figure 1.3). As a rue, preventive measures are aways preferabe to remediative measures from ecoogica, socia and financia perspectives. Preventive measures Avoidance, the first component of the mitigation hierarchy, is defined by the CSBI 10 as Measures taken to anticipate and prevent adverse impacts on biodiversity before actions or decisions are taken that coud ead to such impacts. Figure 1 Schematic diagram showing the impementation of the mitigation hierarchy 10 Definitions in this section are from CSBI (2013a), Framework for Guidance on Operationaizing the Biodiversity Mitigation Hierarchy, December See aso the Definitions section on page 79 of this report, for comparison with other definitions that are avaiabe. A cross-sector guide for impementing the Mitigation Hierarchy Page 11

14 Overview Avoidance is often the most effective way of reducing potentia negative impacts. Its proper impementation requires biodiversity and ecosystem services to be considered in the pre-panning stages of a project. When avoidance is considered too ate, after key project panning decisions have been taken, cost-effective options can easiy be missed. 11 Minimization, the second component of the mitigation hierarchy, is defined by the CSBI as Measures taken to reduce the duration, intensity, significance and/or extent of impacts (incuding direct, indirect and cumuative impacts, as appropriate) that cannot be competey avoided, as far as is practicay feasibe 12. We-panned minimization can be effective in reducing impacts to beow significance threshods. Remediative measures Restoration is used to repair BES features of concern that have been degraded by project activity. It invoves measures taken to repair degradation or damage to specific BES features of concern which might incude species, ecosystems/habitats or priority ecosystem services foowing project impacts that cannot be competey avoided and/or minimized. In the context of the mitigation hierarchy, restoration shoud focus on the BES features identified as targets for mitigation. 13 Restoration is usuay carried out on-site and to repair impacts caused (directy or indirecty) by the project. Impementation of offsets (see beow) may aso invove restoration activities carried out off-site to repair impacts not caused by the project. These different kinds of restoration activities shoud not be confused. minimized and/or rehabiitated/restored. Offsets shoud have a specific and preferaby quantitative goa that reates directy to residua project impacts. Often (but not necessariy) this is to achieve no net oss or a net gain of biodiversity. Offsetting is a measure of ast resort after a other components of the mitigation hierarchy have been appied. Offsets can be compex, expensive and uncertain in outcome. The need for offsets shoud therefore be reduced as far as possibe through considered attention to earier components in the mitigation hierarchy. In the exampe shown in Figure 2, a project s potentia impact (a) is reduced by taking measures to avoid, minimize and restore impacts (b) but a significant residua impact remains; this can be remediated via an offset (c), which in this case eads to a net gain in biodiversity. Figure 2 Appication of the mitigation hierarchy components Offsetting forms the fina component of the mitigation hierarchy. Offsets are defined by the CSBI as Measurabe conservation outcomes, resuting from actions appied to areas not impacted by the project, that compensate for significant, adverse project impacts that cannot be avoided, 11 The CSBI Timeine Too party aims to address this: 12 In the mitigation hierarchy, and in this guidance, minimization is used in a genera sense to mean reduce or imit as far as feasibe. It is not used in the ega sense current in some jurisdictions, where the term minimize means reduce to zero. In many instances, it is not possibe to reduce a biodiversity-reated risk or impact to zero, and if it is possibe, the net incrementa environmenta/socia benefit may not justify the significant additiona cost. 13 In the mitigation hierarchy, and in this guidance, restoration is used in a broad and genera sense. Restoration does not impy an intention to restore a degraded ecosystem to the same state and functioning as before it was degraded (which is the meaning in some specific jurisdictions, and may be an impossiby chaenging or costy task). Restoration may instead invove and recamation or ecosystem rehabiitation to repair project impacts and return some specific priority functions and biodiversity features to the ecosystems concerned. There are many terms inked to restoration, incuding rehabiitation, recamation and remediation: these activities ony amount to restoration when they ensure gains for the specific BES features of concern that are targets for mitigation. Page 12 A cross-sector guide for impementing the Mitigation Hierarchy

15 Overview Box 1 Differentiated appication of the mitigation hierarchy for biodiversity and ecosystem services The mitigation hierarchy can be appied to both biodiversity and ecosystem services. However, the approach may need to be differentiated to refect their distinct characteristics. Whie biodiversity represents the stock of nature (genes, species and ecosystems), ecosystem services are the benefits to peope that fow from this stock when it is combined into integrated and functioning systems. Where there are significant potentia impacts on ecosystem services, the foowing points shoud be borne in mind when appying the mitigation hierarchy: Identifying the beneficiaries, and the extent of their dependence on the service(s), requires both socioogica expertise, and appropriate stakehoder consutation. This information on demand and dependence needs to be brought together with information on how impacts wi affect ecosystems and the fow of services. In practica terms, this means bringing together the socia and environmenta components of impact assessment which often operate separatey. Dependencies may extend not ony to Affected Communities (defined as a group of stakehoders using an ecosystem service that is affected by the project and reiant on that ecosystem service for their we-being) but to the project itsef. Understanding the spatia aspect of impacts is crucia. Whie Affected Communities typicay are cose to the project site, this is not aways the case for exampe where there are impacts on water suppy or quaity which can affect distant communities downstream. Offsets for ecosystem services shoud be ocated so that they deiver to the Affected Communities. This coud necessitate a composite offset for the project, with separate ocations to offset residua impacts on biodiversity and on ecosystem services. Ecosystem services that were previousy out of reach can sometimes be made accessibe by changes in tenure, targeted training, or faciitation of trave. In some situations, compensation for ecosystem services can ony feasiby be provided through substitution (e.g. a borehoe repacing fowing surface water) and/or monetary compensation. Engineering or monetary compensation is usuay ess satisfactory than an ecosystem-based approach. It may aso not be possibe to compensate for some important ecosystem services (e.g. spiritua vaue) in this way. There may often be mitigation trade-offs between different ecosystem services, between services provided to different stakehoder groups, and between biodiversity and ecosystem services. For exampe, increasing access to, or use of, productive services (such as wood fue or fisheries) coud be incompatibe with improved biodiversity conservation, and with some reguating or cutura services. Situations often aso arise where the ecosystem services reied upon by Affected Communities invove unawfu activities (e.g. timber or bushmeat harvesting). Where compex trade-offs and dependencies are invoved, it is particuary important to obtain a sound understanding of the ecoogica, socia, poitica and economic contexts, materiaity of impacts, and the avaiabe options and their consequences. Extensive stakehoder consutations (and probaby negotiations), wi be necessary. Many toos are avaiabe to guide the identification and prioritization of ecosystem services, such as those from IPIECA/IOGP (2011) or WRI ( e.g. Landsberg et a., 2013). Modeing toos such as InVEST ( or ARIES ( may be usefu in determining current baseines and trends, and potentia project impacts. A cross-sector guide for impementing the Mitigation Hierarchy Page 13

16 Overview The first components of the mitigation hierarchy are often the most usefu and effective The mitigation hierarchy is a hierarchy in terms of priorities. As a genera rue, this means that the earier components need specia emphasis. Whie a components of the mitigation hierarchy are important, rigorous efforts to avoid and minimize as far as feasibe are ikey to achieve significant reductions in potentia impacts (Figure 2). Carefu impementation of the eary components of the mitigation hierarchy wi reduce the project s iabiity for restoration and offsets measures. This is important as these ater mitigation components may often but not aways encounter the foowing (see aso Figure 3): 1. Increasing technica, socia and poitica risks (e.g. technica faiure of restoration, or poitica faiure of a biodiversity offset). 2. Increasing uncertainty of costs, and risk of cost escaation. 3. Increasing costs per unit of BES. 4. Increasing requirements for externa stakehoder engagement and speciaist expertise. 5. Decreasing opportunity to correct mistakes. 6. Decreasing confidence and trust among key stakehoders. However, the opportunity costs of avoidance and minimization may often be arger for the project site (because it contains vauabe minera, oi or gas resources) than for other ecoogicay simiar areas. There may thus be a strong economic rationae for restoration and (especiay) offsets to be favoured over avoidance and minimization in addressing potentia impacts. In practice, therefore, tradeoffs between environmenta and economic effectiveness may need to be considered and resoved. There is no simpe formua for doing this, and different risks and considerations wi need to be weighed carefuy in the context of societa preferences and stakehoder concerns. There are often fewer options and higher risks further aong the mitigation hierarchy. Where it is feasibe, avoidance tends to have fixed, known costs and in many cases a higher probabiity of success than ater components. Beyond avoidance, mitigation options usuay diminish, and chaenges reated to cost, schedue and stakehoders often become more significant. Exceptions occur however (e.g. restoration may in some cases be riskier and more expensive than offsetting) and projects wi need to be considered on a case-by-case basis. Figure 3 Avoid, minimize, restore, offset Increasing risk of time ag between oss and compensation Decreasing trust and faith among stakehoders in the ikeihood of success Avoid Minimize Restore Offset Decreasing probabiity of mitigation success; increasing uncertainty about the costs of mitigation options Decreasing options for mitigation; decreasing opportunity to correct mistakes Page 14 A cross-sector guide for impementing the Mitigation Hierarchy

17 Overview The mitigation hierarchy and the project ifespan The CSBI Timeine Too 14 iustrates how options for the preventive components (avoidance and minimization) occur primariy, but not excusivey, eary in the project panning cyce, and options for the remediative components (restoration and offsets) occur ater and throughout operations. Figure 4 iustrates the appication of the mitigation hierarchy across the project ifespan and highights the components most ikey to be of importance during each broad stage. Seection of project sites through ecosystem-eve BES screening occurs at the pre-feasibiity assessment stage. Once a site has been chosen, further avoidance and minimization occurs within the project site. During construction and operation, impementation of the mitigation hierarchy invoves adaptive management. Work undertaken during each stage incudes defining study areas, assessing BES vaues and impacts, and choosing and impementing mitigation options. Iterative decision making (shown by the green arrows in Figure 4) is desirabe at each stage. Using the mitigation hierarchy before, during and after the ESIA The mitigation hierarchy has traditionay been used during the ESIA and, more recenty, the offset design process. However, it is proving vauabe in current good practice to aso use the approach before and after the ESIA. Before the ESIA, the mitigation hierarchy functions as a risk assessment framework to assess the magnitude of BES risks, for exampe to consider whether it is feasibe to mitigate impacts at the site, whether the site can be restored, and whether an NNL can be achieved. Questions to ask incude: Is there a risk of irreversibe or nonoffsettabe impacts? Are there ess-damaging aternatives that are feasibe? And, with respect to ecosystem services: Is the proposed deveopment ikey to be sustainabe in this ocation, given its natura resource dependencies? Figure 4 Appying the mitigation hierarchy across three broad stages of the project timeine 14 CSBI Timeine Too A cross-sector guide for impementing the Mitigation Hierarchy Page 15

18 Overview Tabe 1 Financia institutions and industry use the mitigation hierarchy for different purposes at different stages of the project ifespan Project stage Industry use of the mitigation hierarchy Financia institution use of the mitigation hierarchy Key mitigation hierarchy components impemented Pre-ESIA Risk assessment: first screening for potentia offset ocations Risk Assessment Avoidance by site ocation (Offsets) ESIA Mitigation design Feedback optimization approach to mitigation investment Residua impact assessment Offset design Conceptua framework Guidance for cients Avoidance by project design and scheduing Minimization (Restoration) (Offsets) Post-ESIA Performance tracking Adaptive management Performance tracking for oan and/or financing agreement actions 15 (ESAPs, EPAPs 16 ) Performance audits (Avoidance) Minimization Restoration Offsets During ESIA, the mitigation hierarchy can function as the principa ESIA organizing framework for BES. It guides panning and communication. Haf way through the ESIA process, it is good practice to use the mitigation hierarchy as a feedback optimization too (see beow). This invoves checking to determine whether impacts remaining after avoidance and minimization can be remediated (with restoration and offsets). If remediation woud incur unacceptaby high costs or risks, it may be necessary to go back and reassess the earier components of the mitigation hierarchy. After the ESIA, during the construction and operations phase, the mitigation hierarchy functions as an adaptive management framework for practitioners, as an audit too for reguators and financia institutions, and as an NNL too in offset design. Both industry and financia institutions appy the mitigation hierarchy across the different stages of the project cyce, but for sighty different purposes. For industry, the mitigation hierarchy is mainy a too for panning and adaptive management; for financia institutions it provides a framework to guide cients, and a means to audit performance (Tabe 1). How to move to the next component of the mitigation hierarchy and use feedback to optimize investments The mitigation hierarchy is not a one-way inear process, and entais both feedback and adaptive management to optimize investments (see Figure 5 on page 17). The principe The question, How much avoidance is enough? depends on the mitigation options remaining for the biodiversity features of concern, after this component has been appied. Iteration may therefore be necessary (Figure 5). The method 1. Appy avoidance and minimization measures to potentia BES impacts using a risk-based approach. 2. Characterize and estimate the magnitude of the potentia remaining impacts to be addressed by restoration and, if necessary, offsetting. 3. Assess the environmenta, socia, poitica and economic feasibiity of restoring or offsetting this type and magnitude of impact on BES vaues. 15 Equator Principes (2014). Guidance for EPFIs [Equator Principes Financia Institutions] on incorporating environmenta and socia consideration into oan documentation Environmenta and Socia Action Pans (mainy mutiatera finance institutions (MFIs)), and Equator Principe Action Pans (Equator Institutions). For an exampe see: Page 16 A cross-sector guide for impementing the Mitigation Hierarchy

19 Overview Figure 5 The iterative stages in the assessment of options and impacts, to optimize investment in components of the mitigation hierarchy 4. If risks and/or costs are too high, return to avoidance and minimization and repeat the evauation process 5. Throughout the process, communicate the options with panners, engineers and decision makers. The outcome Figure 6 (beow) shows an exampe of how changes in emphasis across the mitigation hierarchy may resut during the design phases as new information becomes avaiabe and further consutation takes pace. Severa rounds of appication (iterations) of the mitigation hierarchy are ikey through a project s panning and operationa phases. When using a no net oss/net gain framework, scenarios need to be informed by quantitative assessment of osses and gains. In the hypothetica exampe presented in Figure 6, the iterative appication of the mitigation hierarchy at the design stage eads to increased use of avoidance and minimization, utimatey reducing the scae of restoration and offsets needed for remediation. Figure 6 Increasing the use of avoidance and minimization in project design through iterative appication of the mitigation hierarchy In this hypothetica exampe, assessment eads to modification of Design 1, which woud have eft unacceptabe potentia impacts remaining after avoidance and minimization. In the next iteration, Design 2 achieves further avoidance, but it woud sti not be unfeasibe to restore or offset the potentia impacts. Design 3 further minimizes potentia impacts, reducing the scae of restoration and offsets needed for remediation A cross-sector guide for impementing the Mitigation Hierarchy Page 17

20 Overview Box 2 Biodiversity and ecosystem services risks, impacts and dependencies Risks associated with BES take two forms: the risk that deveopment projects pose to BES, and the risk that impacts on BES (if not adequatey addressed through the mitigation hierarchy) can pose to deveopment projects. Intrinsic risk This is the risk of significanty damaging important and sensitive biodiversity features or ecosystem services. This may aso pose a direct risk to a project that is dependent on specific ecosystem services. Compiance risk This is the risk of faiure to compy (or being perceived not to compy) with government reguation or finance safeguards. This coud resut in fines, deays and increased costs, as we as sower and more troubesome approvas for future projects and reduced access to finance, natura capita and and. Reputationa risk This is the risk that sharehoders, stakehoders and wider society may perceive that good practice has not been foowed in reation to BES. This coud resut in weakened reationships with stakehoders, and reduced trust (with an increased chance of protests or poitica obstaces causing deays and costs), a diminished socia icence to operate ocay, nationay and/or internationay, diminished investor confidence and oyaty, and ower staff morae. As with compiance risk, it coud aso resut in reduced access to finance, and and natura resources. Avoidance and minimization hep to prevent potentia impacts, and the intrinsic, compiance or reputationa risks that these woud pose. Restoration and offsets hep to remediate impacts that have aready happened. Faiure to remediate adequatey may aso pose intrinsic, compiance or reputationa risk. For a more detaied discussion of risks and impacts see IPIECA-IOGP (2011). Appication of the mitigation hierarchy incuding offsets to achieve BES targets No net oss (NNL) can be defined as the point at which project-reated impacts on biodiversity are baanced by measures taken through appication of the mitigation hierarchy, so that no oss remains. Where the gains are greater than the osses, net gain resuts. NNL and net gain are therefore targets which can be used to drive performance in the appication of the mitigation hierarchy. NNL or net gain may be required for specific biodiversity vaues by some reguatory frameworks or financing conditions. Where feasibe, IFC PS6 requires NNL for impacts on Natura Habitat and net gain for impacts on Critica Habitat 17, and this approach is increasingy regarded as best practice. Projects may take many years to achieve NNL, and many miestones wi be set aong this journey. However, the mitigation hierarchy may be appied without having NNL or net gain as a goa. Setting cear targets for the biodiversity features of concern and taking a quantitative approach are sti desirabe to ensure effective deivery. Currencies and metrics to demonstrate BES osses and gains exist but are sti being refined and tested. 18 BES target feasibiity assessments BES target feasibiity assessments evauate the ikeihood that a project wi achieve specific targets, such as NNL or net gain. Some financia institutions ook for such predictions quaitative feasibiity and quantitative forecasts in oan-supporting documents 19 to provide a greater degree of certainty of BES targets being met. 17 For projects financed by the IFC or financia institutions adopting PS6. Definitions of Natura Habitat and Critica Habitat can be found in IFC Performance Standard 6 ( and the accompanying Guidance Note 6 ( 18 An exampe framework for measurement is outined in ICMM-IUCN (2013) Independent report on biodiversity offsets. Avaiabe at 19 Project exampes incude Oyu Togoi (Mongoia, and severa others not yet at financia cose. Page 18 A cross-sector guide for impementing the Mitigation Hierarchy

21 Overview Figure 7 Steps in assessing the technica and poitica/business feasibiity of a biodiversity conservation target (e.g. no net oss) Define study area Define BES vaues of concern Assess residua impacts on vaues foowing avoidance, minimization and rehabiitation/restoration Assess the andscape significance of these impacts (e.g. within migratory routes). Assess the avaiabiity of potentia offset sites (or other options for intervention) within the andscape Assess the additionaity and equivaence of potentia offset sites (or other options for intervention) Are offsets ecoogicay feasibe? Review avaiabe conservation interventions and their ikey effectiveness Cacuate potentia net gains, considering time ags and uncertainties Estimate costs Are offsets technicay feasibe? Assess the socio-economic and poitica contexts Assess the potentia for ecoogica, economic and poitica sustainabiity Are offsets socio-economicay and poiticay feasibe? Offsets options narrow (and certainty increases) as the process moves from stage to stage. Feasibiity assessments consider technica, socia, poitica and economic issues. To answer the question, Is it possibe to achieve a target? (such as NNL), the burden of proof goes through the stages of theoretica feasibiity, technica feasibiity (incuding cost considerations) and socio-poitica feasibiity (incuding sustainabiity consid - erations) (Figure 7). As greater certainty is achieved, the project mitigation and offset options are narrowed down, as in any project design process. At a coarse scae, such assessments can initiay be competed as a desktop exercise, before a fied assessment is undertaken. Financia institutions wi aso be interested in the track record or capacity of cients to undertake such work. Measuring the contribution of mitigation hierarchy components towards a BES target A BES target forecast (such as for NNL) can be done by assessing osses versus gains predicted from the appication of each step of the mitigation hierarchy through the project ife span. 20 Once appropriate metrics for BES features (or surrogate measures, if appropriate) have been chosen, a precautionary approach, with speciaist input, can be used to predict the gains expected from avoidance, minimization, restoration and offsets. For averted oss offsets, the determination of net gain can be achieved through estimates of change predicted in the absence of the offset (the counterfactua scenario). Appying the mitigation hierarchy retroactivey The mitigation hierarchy is ideay appied from the eariest stages of a new project, or an existing project s expansion. It is more chaenging to appy the mitigation hierarchy retrospectivey to a project that is aready operationa. In this case, the potentia for avoidance and minimization is ikey to be imited, but opportunities coud become apparent when, for exampe, site ayout and timetabing of activities are reviewed. However, an ongoing project may sti provide significant oppor - tunities for restoration and, especiay, offsetting. One chaenge is that, frequenty, baseine (pre-project) data 20 For exampes, see the gains forecast for the QIT Madagascar Mineras project (Tempe et a., and the oss/gain tabe of habitats and species for Bardon Hi Quarry, UK (Tempe et a., A cross-sector guide for impementing the Mitigation Hierarchy Page 19

22 Overview for priority BES features are imited, making it hard to assess project impacts quantitativey (or even quaitativey). This may require back-casting, inferences based on current status in reation to and-use and other changes since the project started. Communication and documentation The reputationa benefits of, and indeed recognition for, seecting certain design options can be recognized if financiers 21, and interna and externa stakehoders, have been consuted and engaged in the process of decision making. Therefore, the communication of the design options, key choices to be made, the technica, economic and poitica constraints, and the refined business case can be beneficia to a project. Communication materias coud incude the foowing: maps and avaiabe quantitative data on oss, potentia gains, costs and socia issues, to better demonstrate options on constraints and opportunities; an estimate of residua impacts after the mitigation hierarchy has been appied; figures in terms of simpe metrics, such as quaity hectares 22 of habitat, which can hep stakehoders to understand and comment on the significance of impacts, predicted gains and the proposed/adopted avoidance and/or other mitigation measures (some design options may need to remain confidentia for commercia or other sensitive reasons); and a Biodiversity Action Pan (BAP) or environmenta management pan, which foows the mitigation hierarchy. 21 Lenders often require a biodiversity management pan, a biodiversity monitoring pan, and in some cases a biodiversity offset pan or demonstration of approach to no net oss. A these documents can be effectivey based on the appication of the mitigation hierarchy. 22 Quaity hectares : a biodiversity metric that weights habitat area by its quaity (often assessed on a scae of 0 1, or 0 100%) in terms of intactness or suitabiity for specific biodiversity features of interest. See Tempe et a. (2012) for an exampe at Page 20 A cross-sector guide for impementing the Mitigation Hierarchy

23 Section 1 Avoidance Definitions The CSBI defines avoidance as Measures taken to anticipate and prevent adverse impacts on biodiversity before actions or decisions are taken that coud ead to such impacts. Other simiar definitions exist 23. Avoidance invoves changes in eary project panning to design out impacts or risks. Measures taken to avoid impacts can therefore take pace at different scaes and in both time and space. Rationae Avoidance is the first and most important step of the mitigation hierarchy. It offers many benefits, some of which are outined in Tabe 2 (page 22) together with potentia downsides and aspects to consider. Key principes The key principe in avoidance is to start its consideration as eary as possibe in the project panning process, at a point where adjustments to project site and infra - structure ocation may sti be feasibe. Other important principes, which aso appy to minimization (see Section 2) and indeed to a eements in the mitigation hierarchy incude: access to, and use of, the most reevant datasets and expertise; use of maps and spatia information 24 ; monitoring basic performance of staff and contractors; and monitoring the impementation of environmenta management pans and the resuts of adaptive management. 23 Business and Biodiversity Offsets Programme ( and the UNEP-WCMC Biodiversity A-Z ( 24 Preferaby on a singe GIS patform at andscape scae and study area scae (such as habitat maps, nesting sites, watercourses, infrastructure pans, immigration predictions). A cross-sector guide for impementing the Mitigation Hierarchy Page 21

24 Section 1 Avoidance Tabe 2 Advantages of, and considerations for, avoidance Advantages Most effective ecoogicay: most ikey to deiver a no-netoss outcome. Lowest risk step. Can be the most costeffective step. Most effective with: Considerations eary review and reativey reiabe information about ecoogica risks and aternatives, incuding at andscape and ocation-specific scaes, i.e. benefits from front-oading certain BES-reated efforts; and eary panning and action before a financia factors are known. Large gains are possibe. Can entai significant up-front costs or changes to initia pans. Higher certainty of success. Tangibe and evident to stakehoders: manages reputationa risk. Avoidance of impacts on high-vaue BES can be highy significant for a company s oca icence to operate and aso for its nationa and goba image. Can be forgotten by stakehoders during the project ifetime (efforts not recognized). Some corporate organizations and industry associations have stated no go commitments requiring avoidance of Word Heritage Sites (incuding ICMM and She in 2003, and Soco and Tota in 2014). Avoidance decisions are sometimes commerciay/poiticay confidentia and therefore cannot be communicated effectivey to a stakehoders. Immediate: does not require the ong time frames to achieve outcomes that woud be necessary for minimization, restoration or offset options. Costs can be integrated into project design. Costs are one-off, not ongoing. Often more cost-effective (for achieving a particuar resut) than ater steps in the mitigation hierarchy. Can greaty reduce the risk of significant deays and costs in permitting and scheduing. Justifications for avoidance wi normay be mutipe, e.g. socia and poitica, faciitating the business case. Can be difficut to negotiate when actua project feasibiity and schedue are critica/in question. Cear scientific basis. A coarse one size fits a approach. Not a BES sensitivities wi be covered. May be easier to measure oss vs. gain in avoidance decisions. Spatiay- and temporay-specific BES sensitivities can be specificay avoided (e.g. a nesting site, a 10-day migration period). Avoidance may be the ony option for certain irrepaceabe BES vaues (e.g. some od growth forest, some ocay endemic species). continued Page 22 A cross-sector guide for impementing the Mitigation Hierarchy

25 Section 1 Avoidance Tabe 2 (continued) Advantages of, and considerations for, avoidance Advantages Considerations Avoidance through carefuy structured stakehoder consutation can deveop support for, or reduce opposition to, a project (e.g. siting of hydropower dams). Avoiding impacts in the first pace removes the need for scientific justification or expert consensus on the acceptabiity of ater stages of the mitigation hierarchy. Lega or financia requirements may ca for avoidance, e.g. for specific sites (such as Protected Areas), species, ecosystems and/or ecosystem processes. Specific definitions and guidance exist in some countries for avoidance and minimization 25. Many enders have specific requirements, such as the IFC PS6 stipuations 26 to avoid impacts on biodiversity and ecosystem services For exampe, see Gaveston District (2013): Gaveston District Stream Condition Assessment: Evauating Avoidance, Minimization, Stream Restoration Projects and Compensatory Mitigation Pans Stream Pans June 2013.pdf 26 For activities/projects financed by the IFC, an Equator Principes Financia Institution, or a ending institution that subscribes to the IFC Performance standards. 27 IFC (2012a): Performance Standard 6, Requirements paragraph 7: As a matter of priority, the cient shoud seek to avoid impacts on biodiversity and ecosystem services ; and paragraph 25: With respect to priority ecosystem services adverse impacts shoud be avoided. Key steps in avoidance These steps are not stricty sequentia but may take pace aongside each other: engage project panners and engineers with ecoogists/ environmenta professionas; ensure that there is effective communication between the environmenta and socia eements of the project; make mitigation requirements expicit in contractor agreements; pan and conduct appropriate stakehoder consutation, with resuts feeding back into panning; ensure an iterative process: before mitigation design is compete, assess whether restoration and offsets measures can compensate for remaining impacts (see Figure 1). Strengthen panned avoidance and minimization measures if necessary; and integrate avoidance into environmenta management pans. Key types of avoidance In genera, the different approaches to avoidance can be categorized into three major types, i.e. avoidance through: site seection; project design; and scheduing. Many approaches may encompass a three types of avoidance. Avoidance through site seection Avoidance through site seection invoves the reocation of the project site or components away from an area recognized for its high BES vaue. This type of avoidance invoves screening for BES vaues very eary in the panning process, foowed by an anaysis of aternative project ocations. Spatia information is needed at a andscape eve (i.e. at a scae that shows potentia project ocations in their wider geographica context) for reocation of an entire project site, or at a oca eve for reocation of project components. A cross-sector guide for impementing the Mitigation Hierarchy Page 23

26 Section 1 Avoidance What does it invove? Avoidance through site seection invoves spatiay pacing whoe projects so as to avoid areas of high vaue for biodiversity or ecosystem-services. Spatia avoidance can take many forms, for exampe: focusing exporation away from high biodiversity vaue areas; preferentia siting of infrastructure outside an important site, such as a Key Biodiversity Area; and re-routing of a road or pipeine to avoid a wetand or a migratory corridor. When is it done? Upon entering a new geographica area of operation: through identifying and avoiding regions or ocations with higher BES vaue. During exporation: through designing on-ground activities to avoid identified biodiversity and reated ecosystem services risks. Before the sites or corridors for the main project or anciary infrastructure have been chosen. How can it be undertaken? Spatia avoidance is best accompished initiay (eary in a project ifespan) through andscape (or seascape) screening of biodiversity risk (see Appendices 1 and 2). This is essentiay a mapping exercise, conducted by corporate or project panning teams. Financia institutions are not usuay invoved at this stage. The steps to be taken are mapped in Appendix 1 and 2, and briefy summarized here: Obtain data ayers through desktop and/or fiedwork means. Assess biodiversity risks at proposed project sites through a simpe mapping overay, e.g. in geographic information systems (GIS): what are the biodiversity vaues at the proposed project site? How many hectares of each priority ecosystem or species habitat coud be impacted? Communicate site risks to project panning teams, in terms of scheduing deays or the potentia magnitude of mitigation costs. For biodiversity, recognized goba and nationa datasets 28 can support such screening via GIS. Ecosystem service maps generay do not yet reiaby demonstrate risks at the appropriate spatia scae, though they may give an indication of where additiona data coection is needed. To avoid risks to ecosystem services, some further fied data coection/stakehoder engagement may be needed (both socia and technica). Avoidance through project design Avoidance through project design takes pace when seecting the type of infrastructure, and its and pacing and mode of operation on the project site. Impacts may be avoided through carefu pacement of infrastructure, and through the carefu choice of construction and operationa methods. This provides an opportunity to consider any potentia downstream effects of the project design, outside the project site. What does it invove? Avoidance through project design invoves changing the ayout and type of infrastructure used at the project site. The two major approaches are: seection of the types of infrastructure, construction and operationa processes (e.g. directiona driing, methods for mine pit construction, the choice of pipeines vs. raiways or roads); and seection of the ayout of project infrastructure, such as micrositing and rerouting of pipeines. When is it done? Avoidance through project design occurs after site seection. Engagement in the eary design process before decisions begin to be made is critica. Avoidance through project design is most effective when considered during conceptua design, feasibiity study and front-end engineering design. The seection of infrastructure ayout happens at the same time as, or just after, seection of the construction and operationa processes. If a financia institution is invoved at this stage, avoidance through project design considerations can be incuded as part of environmenta and socia due diigence. 28 For exampe: IBAT ( IUCN Red List ( GBIF ( GobCover ( Landsat ( Page 24 A cross-sector guide for impementing the Mitigation Hierarchy

27 Section 1 Avoidance Tabe 3 Exampes of how to undertake avoidance through project design Organization of project site and fixed infrastructure Custering project faciities on a singe site to reduce the overa footprint. Reducing the width of corridors during construction and operations. Maximizing the use of mutipe wedriing sites. Using existing infrastructure wherever possibe to avoid or reduce road construction and/or vegetation cearing. Reducing the size of camps and faciities, which might be sequentiay used. Identifying and protecting undisturbed set-asides within project areas, for exampe to conserve patches or corridors of vauabe habitat, or migration routes. Locating dri pads to avoid nesting sites; modifying footprint design or size to avoid a threatened or sensitive vegetation type or species. Modifying the ocation of fixed infrastructure and faciities such as driing sites, gas processing faciities, oi treatment centres, waste rock dumps, taiing dams, oi treatment centres. Routing of inear infrastructure* Micro-routing inear infrastructure around habitat features and/or areas of importance to BES. Burying transmission ines to prevent coisions with birds, or pipeines to avoid bocking anima movements. Locating support roads in aready disturbed habitats to avoid direct damage and risks from increased access. Aigning new inear infrastructure aongside existing structures (e.g. existing roads, or rai corridors) and on disturbed habitats. Choice of infrastructure type Using horizonta wes and extended-reach driing (ERD) in sensitive areas where feasibe. Using a pipeine rather than a road to avoid indirect impacts from increased access (e.g. impacts on trade in bushmeat). Using aeria conveyor bets to reduce habitat fragmentation. Using air cooers instead of water cooers in power generation faciities, to avoid therma discharge to aquatic systems. Using heicopters rather than roads. Modifying drainage systems, e.g. routing of sediment-aden stormwater run-off and other effuents away from high biodiversity aquatic habitats. Using new technoogies to minimize atera drawdown of groundwater through mine de-watering. Expanding underground mine with robotic operation. * Incuding onshore and offshore pipeines, transmission ines, raiway corridors, support roads How can it be undertaken? Eary communication is essentia between project panners, engineers and geoscientists, and project (or externa) ecoogists/environmenta professionas. Avoidance through project design is a major component of an ESIA. Fied data coection and stakehoder engagement on biodiversity and ecosystem services wi probaby be necessary, informed by the risk screening resuts. Before and during ESIA, continuous communication between ecoogists/environmenta professionas and panning, engineering and construction teams can faciitate decision making and impementation. Engineering and procurement contractors may aso need to be invoved in this decision making process, and this can be incuded as a requirement in their contracts. Avoidance through project design is appicabe during detaied project design such as micrositing of infrastructure and roads, using ground disturbance permits or other methods. Overaying project site BES maps with infrastructure and activities (e.g. road use), preferaby in GIS, wi hep to faciitate workshops to discuss impacts and options. See Exampe 7 on page 29. A cross-sector guide for impementing the Mitigation Hierarchy Page 25

28 Section 1 Avoidance Avoidance through scheduing Avoidance through scheduing is achieved through changes in the timing of project activities. Impacts may be avoided by understanding and taking into account seasona and diurna patterns of species behaviour (e.g. breeding, migration, roosting) and ecosystem functioning (e.g. river fow, tree fruiting patterns, vegetation growth cyce/pattern) as we as the use of natura resources by oca communities (e.g. fishing and hunting seasons and ocations). What does it invove? Avoidance through scheduing invoves changes in the timing of construction and operationa activities. When is it done? Tempora avoidance is impemented after avoidance through site seection, and concurrent with avoidance through project design. It continues into the operationa ife of the project, in decision making on a activities. How can it be undertaken? Avoidance through scheduing cas for a good ecoogica understanding of the seasona or diurna (day/night) patterns of species behaviour and ecosystem functioning in and around the project area. This feeds into a cose Box 3 Exampes of how to undertake avoidance through scheduing Restricting exporation, construction or operationa activities to outside bird or marine mamma breeding or migration seasons. Moratoria on road or rai transport at night, to faciitate freedom of movement for widife. Seasona timetabing of activities for minima impacts. Leaving short windows of disturbance-free time (on a seasona or daiy basis) to avoid the most sensitive periods for BES (e.g. when mass fruiting of a tree species attracts primates, or when a medicina pant fowers and is coected by oca peope). Sequencing of events: constructing a project or extracting resources across a andscape in a manner that permits species migrations in advance of the project activity moving to their habitat, preserving corridors at a times, and/or supporting restoration objectives by eaving undisturbed areas adjacent to those undergoing restoration. coaboration between project panners, engineers and ecoogists/environmenta professionas, and resuts in the management of activities around periods when potentia impacts on BES are owest. Page 26 A cross-sector guide for impementing the Mitigation Hierarchy

29 Section 1 Avoidance Exampes of avoidance in practice 29 AVOIDANCE EXAMPLE 1 Avoiding high biodiversity vaues in iquid natura gas (LNG) site seection, Tanzania BG Group and Statoi competed a rigorous site seection process marrying technica, environmenta and socia discipines to identify a preferred option for the instaation of an LNG faciity from a shortist of severa sites on the Tanzanian coastine. Information on the occurrence and distribution of biodiversity was used to inform the seection process, ensuring that avoidance of high biodiversity vaues was a key consideration in the fina choice of site. AVOIDANCE EXAMPLE 2 Identifying and preserving high-quaity habitat during oi and natura gas deveopment in Coorado In Coorado, BP worked with a team from the Nature Conservancy to evauate the potentia impacts of an oi and natura gas deveopment on the San Juan basin andscape. The area contains vauabe natura habitats for mue deer, ek, bad and goden eages and other species, some protected under federa aw and others important economicay as game species. The anaysis, incuding computer modeing, identified areas where BP shoud minimize or avoid future deveopment and where widife and habitat impact mitigation efforts were ikey to bring the most benefits. For exampe, the modeing effort determined that the maintenance of existing sage brush communities woud have a positive impact on deer and ek herds during the winter. The sage brush habitat provides critica forage during winter months when snow depths can imit foraging opportunities. With this information, BP and the state reguators deveoped the San Juan Widife Mitigation Pan. This Pan aims both to preserve existing high-quaity habitat and to offset any oss of habitat by taking steps to restore or enhance habitat conditions nearby. The San Juan Basin contains vauabe habitat for Mue Deer and Ek, among other species AVOIDANCE EXAMPLE 3 Avoiding disruption to caribou migration in Canada AREVA s Kiggavik uranium mine project in Nunavut, Canada, is being designed to avoid impacts on migratory caribou. The mine site was seected to avoid known caribou water crossings where traditiona knowedge indicated that caribou may be more sensitive to changes in direction whie migrating. Avoidance through scheduing wi aso be impemented. Ony a winter road, operating in seasons of ow sensitivity for caribou, wi be used to suppy the mine, whie road activity wi be hated or managed (e.g. by grouping of trucks to reduce frequency of potentia disturbance) during caribou movements or migration. Road design and construction (materia and embankment height) wi incorporate widife-friendy features to faciitate caribou movement across the andscape. Caribou migration in Nunavut, Canada 29 Pace names and other detais have been removed for some exampes A cross-sector guide for impementing the Mitigation Hierarchy Page 27

30 Section 1 Avoidance AVOIDANCE EXAMPLE 4 Gas pipeine design changed to avoid mamma migration route in Centra Asia A project in centra Asia required a gas pipeine to pass through a bioogica corridor used as a migratory route by an endangered mamma species. The inear infrastructure risked bocking the autumn migration. Two avoidance options existed: rerouting the pipeine to pass outside of the known migratory route (avoidance through site seection); and burying the pipeine to remove a barrier to movement during operation (avoidance through project design). The rerouting option was chosen because it ensured the east amount of disturbance and was of ower cost than a burying option. This option was ony possibe due to the eary panning stage at which BES issues were considered. After avoidance had been undertaken, options to minimize impacts (see Section 2) were to construct overpasses and/or underpasses at reguar intervas, which aow the mammas to cross, and hence minimize the barrier effect. AVOIDANCE EXAMPLE 5 Micro-routing mine access roads in Chie to avoid sensitive habitats On the Chiean side of Barrick God s Pascua-Lama project, the main access road was rerouted to avoid, as far as possibe, wetands (vegas) and the nesting sites of an endemic and regionay-protected sub-species of burrowing parrot (Cyanoiseus patagonus boxami). The transmission ine, as we as temporary buidings set up to support the construction of the road, were aso reocated based on the proximity to these sensitive habitats. AVOIDANCE EXAMPLE 6 Avoiding impacts at a Word Heritage site in the Democratic Repubic of Congo The Virunga Nationa Park in Democratic Repubic of Congo (DRC) is isted as a UNESCO natura Word Heritage (WH) site due to its universay recognized biodiversity vaue. The park is situated within Tota E&P s Bock III Abertine Graben Project and makes up around 30% of the Bock. Eary in the project inception phase Tota s interna biodiversity risk assessment identified the UNESCO WH site and aso recognized its ega status as a Protected Area under DRC environmenta aw. Tota wi avoid any impacts on the WH site by ensuring that no exporation or work is carried out in the Virunga Nationa Park area s 2012 boundaries. This commitment was reiterated during Tota s Sharehoders Meeting in May Tota has further undertaken to refrain from prospecting or expoiting oi and gas in any natura sites inscribed on the Word Heritage List as at 4 June Seismic acquisition in Tota E&P s Bock III Abertine Graben Project wi be restricted to the north-east sector of the bock, outside the Virunga Nationa Park (a UNESCO Word Heritage natura site) Page 28 A cross-sector guide for impementing the Mitigation Hierarchy

31 Section 1 Avoidance AVOIDANCE EXAMPLE 7 Infrastructure design for unconventiona oi and gas avoids biodiversity impacts in North American grassand In this case significant impacts on biodiversity were avoided through the project infrastructure design process. The aim of the design study was to maximize resource extraction whie minimizing impacts on environmenta and socia vaues. In this unconventiona gas fied, it was cear that the greatest and most cost-efficient biodiversity gains avaiabe in the mitigation hierarchy were in avoidance through project design. A study was undertaken to assess how much of the resource coud be extracted whie minimizing we pad pacement on high-biodiversity and and through the use of horizonta directiona driing (HDD). Private ranch Protected area Native prairie We pad pacement and HDD visuaization: maxima resource access with no constraints We pad pacement using four constraints: native prairie; protected areas; watercourses; and residences Biodiversity vaues and other constraints were mapped across the gas fied. These incuded private and, protected areas, native grassand (recognized as Critica Habitat) and watercourses. This process is a type of spatia biodiversity constraints mapping. We pad pacement was first designed to maximize resource extraction, using known HDD engineering options. These infrastructure pacements woud have resuted in significant and unacceptabe impacts on biodiversity, principay rare and threatened pants, birds and grassand ecosystems. Lega and stakehoder drivers infuenced decision making. Ecoogists and engineers discussed and mapped options for mitigation. Constraints were agreed upon so that the project aimed to maximize resource extraction whie minimizing impacts on Critica Habitat and other features such as residences. This resuted in a design with fewer we pads and onger directiona driing. GIS spatia overay design aowed every pad to be paced outside of native grassand Critica Habitat. As a resut the residua impact caused by we pads was reduced from many hectares down to zero. This design meant that (a) some parts of the concession coud not be accessed, eading to a oss of resource expoited and potentia revenue, and (b) avoidance of many biodiversity impacts and a reduction in mitigation costs was possibe. A cross-sector guide for impementing the Mitigation Hierarchy Page 29

32 Section 1 Avoidance AVOIDANCE EXAMPLE 8 Innovative jetty design and construction avoids biodiversity impacts for LNG project The Papua New Guinea Liquefied Natura Gas Project (PNG LNG) operated by Esso Highands (a subsidiary of ExxonMobi) recognized that their jetty design originay approved for the PNG LNG pant site and pipeine andfa woud have required significant dredging, trenching, backfiing and construction of a causeway. The project sought to avoid damage to biodiversity through the innovative design and construction of the jetty. A state-of-the-art cantiever bridge system was used to construct the jetty. The sef-propeed pie-driving unit buit jetty segments incrementay away from the shore and out to the berth. This type of construction method minimized the impact of bridge construction in the mangroves and marine environment. In addition, an aternative pre-existing marine offoading faciity was seected, which eiminated the need for any further dredging or causeway construction. Pan view of the PNG LNG Project These changes ed to a 75% reduction of the area to be disturbed, and reduced sedimentation and impacts on marine ecoogy. They eiminated the need for ong-term operationa maintenance dredging due to sedimentation accumuation in dredged channes, and the consequent minimization and monitoring required for such impacts. AVOIDANCE EXAMPLE 9 Scheduing to avoid impacts at a cosed mine in France At a cosed mine in Beezane, France, AREVA pans to buid a storage faciity for radioactivey contaminated sediments in the rehabiitated (partiay backfied and revegetated) open pit. Construction wi be hated from January to June to avoid the reproductive period of a sensitive species, the peregrine facon. Simiary, stripping of soi and cearing of vegetation wi be carried out ony in winter, so as not to interfere with the nesting season of species such as the woodark. The peregrine facon, a sensitive nesting species at the Beezane mine in France Soi stripping and vegetation cearance being undertaken in winter, outside the bird nesting season Page 30 A cross-sector guide for impementing the Mitigation Hierarchy

33 Section 1 Avoidance AVOIDANCE EXAMPLE 10 Research investments inform eary avoidance of impacts on fauna in Peru Avoidance and minimization are key components of Repso Peru s biodiversity management programme. During 3D seismic surveys, the project deveoped a method for studying impacts on bioogicay sensitive areas (BSAs). BSAs are areas where animas mate, nest, eat, drink, bathe, move or use specific cay icks. If a BSA was found, the panned seismic survey ocation had to avoid it. For measuring effectiveness, the oceot (Leopardus pardais) was chosen as a key species indicator. This approach aso ed to improved knowedge of the area for future projects, oca awareness of the project and better reationships with externa stakehoders and reguatory agencies. AVOIDANCE EXAMPLE 11 Risk screening informs pipeine redesign in Azerbaijan Foowing environmenta and socia screenings as part of the South Caucasus Pipeine Expansion project in Azerbaijan and Georgia, BP redesigned the pipeine configuration to avoid affecting a cutura heritage site. The panned route for the pipeine and a faciity site incuded part of the Gobustan Cutura Reserve, a UNESCO Word Heritage site. The screening process identified severa heritage sites incuding potentia buria mounds, traces of medieva road and a potentia medieva settement. BP estabished a buffer zone around the sites and avoided these areas. AVOIDANCE EXAMPLE 12 Avoiding impacts on provisioning services through adaptive mine-path panning in Madagascar QIT Madagascar Mineras (QMM) atered the timing of the dredging path for its imenite mine in response to information about the ocation of provisioning services for two oca communities obtained from mahampy (a reed) and ravenaa (a pam). The QMM Environment and Communities teams work cosey together, and because of this they recognized the importance of these resources for the oca communities. Changing the mine path was critica to the company s oca socia icence to operate. As a resut, any hectares of mahampy and ravenaa have been cear of the mine path for severa years, aowing time for aternative resources to be ocated and negotiations to take pace. The timing of the mine-path taken by the foating dredge was atered to reduce impacts on oca ecosystem services: forest products used by oca communities. A cross-sector guide for impementing the Mitigation Hierarchy Page 31

34 Section 1 Avoidance AVOIDANCE EXAMPLE 13 Avoiding cora reef encroachment during LNG deveopment, Yemen Tota s LNG project site in Yemen is ocated among the marine habitats of Bahaf, which incude sensitive areas of cora reef with high biodiversity. As a first step, Tota undertook intensive cora sensitivity mapping and monitoring. The marine construction work, as initiay panned, woud have encroached on severa areas of cora reef. A compete redesign of some parts of the pant was therefore undertaken during the initia site preparation phase. For exampe, the route for the outfa pipeine was reocated and finay aid on a sandy bottom sufficienty far away from the reefs to avoid impact, whie the footprint of the shoreine protection wa was reduced. The resut was that amost no coras were encroached upon. AVOIDANCE EXAMPLE 14 Pipeine rerouting to avoid impacts on an endemic ichen in Namibia The ichen Teoschistes capensis is ony found in Namibia and South Africa. It thrives near AREVA s Trekkopje uranium mine in Namibia because of the coasta fogs characteristic of the region. In this fragie ecosystem, ichens pay an important roe, as support to other vegetation and food for animas. Initia pans were to pipe seawater purified by reverse osmosis across a fied of ichen. Once the importance of the ichen fied was recognized, a 10 km detour in the pipeine was designed to avoid it. Steps were aso taken to protect the ichen fied from the impacts of peope and vehices. The practice of avoidance Extensive experience exists regarding the impementation of avoidance measures for extractive industry sector projects. Requirements and opportunities are changing with the appearance of new poicies and reguations, better bioogica data and innovative technoogies. Start eary, but don t stop: avoidance through the project ifespan Considering avoidance at the very start of project panning, before site seection and project design has started, increases the opportunities to maximize ecoogica and economic effectiveness. Eary avoidance options can be assessed a ong time before ESIA, during a country or andscape screening process. Once major project decisions have been made, avoidance options inevitaby become fewer. Nevertheess, as the CSBI Timeine Too 30 demonstrates, the mitigation hierarchy is reevant across the entire project ifespan (see Figure 4 on page 15). Avoidance is an important component of adaptive management throughout operations, and even during cosure. Think big: understanding the project site within the wider andscape Many institutions (financia institutions, NGOs and governments) support a andscape approach with regard to managing and use and BES-reated chaenges. An initia andscape-scae study is initiay essentia to inform a three types of avoidance. This shoud begin to answer the questions, How is biodiversity distributed in the andscape? and What impacts on biodiversity and ecosystem services might the chosen project site have? Avoidance through site seection is amost impossibe without andscape eve maps and information: the objective is to seect a project site to avoid the most sensitive areas in terms of biodiversity and the ecosystem services it provides. For avoidance through project design and avoidance through scheduing, a study area arger than the project site can be usefu. This is because: 30 Page 32 A cross-sector guide for impementing the Mitigation Hierarchy

35 Section 1 Avoidance impacts are better understood when considered in reation to the surrounding area (the project site wi be part of a arger suite of habitats, with ecoogica interconnections); the spatia scope of impacts (direct or indirect) may extend beyond the study area; and it is more cost-effective to make initia baseine surveys 31 over a wider area than to return to undertake a whoe new set of surveys outside the project site ater on as may be needed if a andscape-scae approach is not taken at the start. The reative significance of impacts at the site shoud be assessed in the context of the andscape: What vaues and sensitivities exist at the site and in its surrounds? How is the site ecoogicay inked to the andscape for exampe, upstream or downstream effects, habitat fragmentation and connectivity, inear features (rivers and riparian vegetation, reefs, his)? How do any migratory species use and move across the andscape? What is the wider range and distribution of specific BES vaues at the project site? Considering these questions can hep a project to better understand the significance of osses and gains at the project site. The ecoogica function of habitats impacted must be considered, not just their area. For exampe, 100 ha of forest or seagrass impacted at the site may have greater significance if it forms part of a narrow corridor for the migration of back bears, or constitutes periodic foraging grounds for manatees, from a much arger area. Likewise, if a project site is in a wetand area, downstream effects outside of the project boundary may be the most important to assess. The key issue is how impacts on the site may have wider impacts on BES outside it. Synthesize, map, discuss: assessing BES vaues and sensitivities The next step is to assess the types, amounts, distribution (in space and time), ecoogica and socia significance, and sensitivity to disturbance of the BES vaues within the study area (see Exampe 7 on page 29). Desktop screening In many cases, a great dea of usefu information can be acquired from existing datasets, via a desktop screening process. This is a task for speciaists with the skis to assess ecoogica and socia risks reated to BES. Appropriate use of datasets such as those found in the Integrated Biodiversity Assessment Too (IBAT), the IUCN Red List, and other nationa or regiona sources heps identify BESreated risks, reduce environmenta, socia and heath impact assessment (ESHIA) costs, and better define ESHIA Terms of Reference (ToRs). Desktop screening can aso hep to inform an NNL Feasibiity Assessment, i.e. a first assessment of whether significant residua impacts coud potentiay be offset. Such NNL Feasibiity Assessments have been used by some financia institutions as part of project finance documentation 32 (see Box 4). Box 4 Using no-net-oss (NNL) forecasting to optimize investment in avoidance and cacuate offset iabiity The Oyu Togoi Copper Mining Project 32, Mongoia, used NNL forecasting to inform the design of avoidance and minimization measures. Initiay, the size of the impacts remaining after these preventive measures were so great that restoration and offsets were not technicay and financiay feasibe. Therefore, using the feedback optimization iustrated in Figure 5 on page 17, new avoidance and minimization measures were designed to reduce the residua impacts. The NNL feasibiity assessment determines the approximate magnitude of the project footprint, and therefore provides an estimate of the ikey residua impacts. It is usuay possibe to undertake an NNL feasibiity assessment for a project to determine the options for reaching NNL. Both desktop and fied data are usuay necessary, but it can be competed in approximate terms using desktop data (e.g. prior to financing or eary concession decisions). Such assessments therefore set the scope for the whoe mitigation hierarchy, and in particuar the requirements for avoidance and minimization. 31 See CSBI (2015) for guidance on baseine surveys For an exampe see the Net Positive Impact Forecast for the Oyu Togoi Project A cross-sector guide for impementing the Mitigation Hierarchy Page 33

36 Section 1 Avoidance Eary engagement with stakehoders Eary engagement of appropriate externa stakehoders (e.g. at the pre-feasibiity panning stage) to understand their perspectives on BES vaues, sensitivities and risks (e.g. which vaues stakehoders are particuary concerned about) is crucia. Stakehoder views may be divergent. Seeking these views and taking them into account is important, and wi be beneficia. Eary acquisition of fied data Desktop screening wi usuay identify knowedge gaps. The importance of these gap can be assessed using information from stakehoder engagement and through consutation with avaiabe expertise (incuding oca knowedge-hoders). This wi hep to guide a costeffective and targeted programme of data acquisition, if needed. Focused studies to estabish primary data sets on BES vaues are best undertaken in coaboration with community members or researchers speciaizing in those components of BES. Consider remote sensing for andscape-scae screening to identify gaps in knowedge. Use fied surveys, based on good habitat maps, to revea data on priority species groups identified during risks screening. Reduce costs by eiminating surveys on groups very unikey to represent risks. Where ocation-specific data are poor, speciaists may sti be abe to reconstruct baseines and interpoate existing data for the study site. Conservation panning software can prioritize avoidance actions, given due consideration to uncertainties. Using remotey-sensed datasets 33 combined with existing knowedge, the distribution of BES vaues can be predicted based on bio-physica parameters. Athough there wi be errors of commission and omission unti fiedwork is carried out, desktop work is usefu and amost aways has a roe to pay. Using desktop studies to the fu is ikey to reduce ESHIA costs in the onger term. Making spatia BES maps avaiabe to decision makers It is usefu to synthesize data from desktop and fied studies and to convert them into formats that are understandabe and attractive to project panners and engineers. Spatia (preferaby GIS) maps of BES vaues and sensitivities sometimes caed constraints maps (see Exampe 7 on page 29) can be converted into simper spatia maps that can be understood by project decision makers and management, and utiized aongside other maps used for project panning, e.g. with respect to hydroogy, geoogy, socio-economics and infrastructure. Ideay, there shoud be a singe integrated GIS patform for the whoe project. Constraints and chaenges Cost considerations: is expensive avoidance worth it? Avoidance costs can be significant, but (where avoidance is feasibe) are often ower than the costs of ong-term minimization, restoration or offsets. Typicay, many avoidance options wi be fairy straightforward to identify, justify and incorporate within the decision-making process. Direct costs associated with avoidance are generay incurred up-front, and are normay a singe event. As such, they are typicay integrated into project deveopment costs rather than being shown as a dedicated BES budgetary ine item. However, avoidance costs may sometimes incude arge opportunity costs (e.g. foregoing minera extraction to avoid impacts), hidden costs (e.g. additiona infrastructure costs from choosing aternative project ayouts, etc.) and net present vaue costs (e.g. through necessitating changes in project scheduing). Where potentia avoidance options invove significant costs, it may be hard to judge trade-offs between avoiding BES impacts and incurring significant costs. Under such circumstances it is advisabe to carry out some form of cost-effectiveness anaysis (CEA 34 ) or costbenefit anaysis (CBA 35 ). These approaches can hep to determine whether the costs are justifiabe or not, or whether another step in the mitigation hierarchy may deiver a more cost-effective and acceptabe soution. 33 GobCover ( LandSat ( Quickbird ( etc. 34 For guidance on cost-effectiveness anaysis, see: and WHO (2003): 35 For an exampe of a cost-benefit anaysis tookit, see Manchester Metropoitan University (2015): and European Commission (2014): Page 34 A cross-sector guide for impementing the Mitigation Hierarchy

37 Section 1 Avoidance Where biodiversity features are particuary vunerabe and/or irrepaceabe, outright avoidance may be the ony feasibe option, if the risks invoved in reying on other mitigation components are too high. In practice, this means that a panned project woud not go ahead, or woud proceed ony where potentia impacts coud be avoided. An emerging chaenge: avoidance of indirect and cumuative impacts The creation of a new extractive industry site, perhaps in a remote area or in an area with ow popuation density, can resut in an infux of workers and other setters 36. An increased popuation and new or expanded settements may put increased pressure on oca natura resources and BES vaues. Severa deveopments may be panned in the same area, creating cumuative impacts. One possibe approach to managing such indirect and cumuative impacts woud be for industry, aong with others such as a government agency ead, to work together in seecting appropriate avoidance measures. A Strategic Environmenta Assessment 37 at the appropriate scae can provide a framework for this. Keeping track: monitoring and evauation for avoidance actions Like other mitigation activities, avoidance needs monitoring. An effective monitoring framework covers both actions and outputs/outcomes. Questions incude: Are actions being impemented by contractors or staff? What outcomes are resuting? For exampe, is a nightdriving ban being enforced, and if so, what impact is this having on the number of mammas kied on roads? Structuring by pressure, state and response indicators 38 may often be hepfu. Reguar monitoring is best but need not aways be frequent. The idea is to aim for the east burdensome system that is consistent with producing robust and meaningfu resuts, which can inform adaptive management if necessary. A probem with monitoring avoidance is that activities subsequent to the decision to avoid may be outside the company s contro. For exampe, another company may choose to site its project in a ocation that had initiay been avoided. Working cosey with stakehoders, incuding government, from an eary stage, and having a transparent process for generating and sharing information and decisions, can hep to avoid this. Box 5 Managing indirect impacts by inking together socia and environmenta management pans A mining company in East Africa has successfuy managed the potentia negative indirect impacts on biodiversity caused by the immigration of prospective workers and famiies. Risks incuded increased iega hunting of endangered mammas and reduced access (for oca residents) to ecosystem services such as forest pantations crops and timber. There was a risk that this woud ead to significant issues with the resident community concerning the company s socia icence to operate, as we as cause significant biodiversity impacts. Joint workshops and good working reations between the socia and environmenta teams from the beginning faciitated an understanding of the ikey scae of immigration, the potentia risks this posed and the possibe mitigation measures avaiabe. There was senior eve support for these mitigation measures because the risks were mutipe: heath, safety, socia icence to operate, biodiversity and natura resource management. Fortunatey, singe mitigation measures coud meet mutipe socia and environmenta risks. The project found soutions with the government and its financia partner. These incuded imiting immigration and managing the ocations for settement growth. This, in turn, reduced impacts on natura resources and biodiversity around the project site. 36 IFC (2009): the IFC has produced extensive guidance on this topic in their Handbook for addressing project-induced in-migration See Box 6 (page 36), the Definitions section (page 82) and 38 OECD Framework for Environmenta Indicators: A cross-sector guide for impementing the Mitigation Hierarchy Page 35

38 Section 1 Avoidance Box 6 Cumuative impacts and Strategic Environmenta Assessment When other deveopment projects aready exist, are panned or can be anticipated to take pace in a andscape or seascape (an eco-scape ), cumuative impacts shoud be considered. The impacts of individua projects on BES features of concern may be assessed as being of minor significance, but coud add up and/or interact so as to be highy materia. For exampe, the fragmentation effect of buiding one new road to a mine, or one new pipeine to an oi and gas fied, might not be considered significant; but the combined impact of ten new roads (or pipeines) crossing the andscape woud be. Cumuative impact assessment considers the incrementa changes caused by other past, present or reasonaby foreseeabe actions together with the project (European Commission, 1999). As with other impact assessments, it is appied for specific BES features of concern because of their sensitivity or importance for stakehoders. Essentiay, cumuative impact assessment reframes the materiaity of potentia project impacts. When project impacts make a significant contribution to cumuative impacts, and cumuative impacts are materia, project impacts shoud be regarded as materia too, and appropriate mitigation measures (starting with avoidance) shoud be appied. The IFC (2012c) provides detaied guidance on assessing and mitigating cumuative impacts. When an initia cumuative impact assessment shows significant potentia impacts, it wi often be in the deveoper s best interest to encourage (working with other project proponents where reevant) a government-ed process that can deveop a more strategic, arge-scae approach to cumuative impact management. This wi guard against a project s mitigation measures being undermined by other deveopments in future (e.g. new projects being sited in areas that had previousy been avoided). It therefore aso serves to reduce business risks owing to perceived impacts, or impacts on ecosystem services on which the project depends. Cumuative impacts woud ideay be addressed via a Strategic Environmenta Assessment (SEA see the Definitions section on page 79) that considers and baances economic, socia and environmenta priorities and forms the basis for an integrated and- or sea-use pan at a arge spatia scae (an eco-scape, a region or an entire country). SEAs can be chaenging to undertake, but are increasingy seen as important by governments, deveopment agencies and deveopment banks. Creative thinking: innovative ideas for avoidance Improved ecoogica information and new technoogy can combine to give rise to innovative ideas for avoidance. These are very specific to the sector, biome and BES vaue. Bringing together those who know the area and its biodiversity, and those who know the project and its infrastructure incuding the engineers and ecoogists working on-site may spark innovative ideas for deaing with specific issues. New and untested mitigation approaches coud have potentia unintended consequences; consideration shoud be given to assessing and monitoring such consequences. Some exampes of recent innovative approaches are given beow: Use of high-frequency noise, outside the range of human hearing, to keep animas away from infrastructure). Use of green ights on offshore oi/gas production patforms, to avoid impacts on nocturnay migrating birds 39 ; Zoning and contro of access to concessions, to reduce direct and indirect impacts pre-emptivey; if indirect impacts are predicted to be widespread, this can constitute an effective avoidance option (e.g. Pic de Fon Management Pan 40 ); and Use of security contros on roads and on permit area boundaries to reduce the harvest and disturbance of natura resources; the most effective avoidance of a variety of impacts on oi and gas and mining concessions has been achieved at sites such as those operated by She in Gabon and the ExxonMobi Chad Export Project, 41 where safety restrictions have reduced iega impacts on forests in and around concessions. 39 Poot, H. et a. (2008). Green ight for nocturnay migrating birds. In Ecoogy and Society, Vo. 13, Issue Rio Tinto, Simandou 41 Moynihan, K. J. et a. (2004). Chad Export Project: Environmenta Protection Measures. Society of Petroeum Engineers, Pubication No. SPE Page 36 A cross-sector guide for impementing the Mitigation Hierarchy

39 Section 2 Minimization Definitions 42 The CSBI has defined minimization as measures taken to reduce the duration, intensity, significance and/or extent of impacts (incuding direct, indirect and cumuative impacts, as appropriate) that cannot be competey avoided, as far as is practicay feasibe. Other simiar definitions exist 43. Risk and impact minimization is key to industria environmenta mitigation and management. If avoidance is not possibe, and once the preferred aternatives have been chosen, it is appropriate to consider minimization. Measures vary according to the project s BES vaues, proposed infrastructure and activities. Measures to minimize impacts can be appied throughout the project ifespan, from design through construction, operations and end-of-ife activities. Minimization and avoidance are cosey reated. Whether a measure is categorized as one or the other may depend on circumstances and scae. For exampe, rerouting a road to competey avoid an amphibian migration route counts as avoidance through project design. Controing the movement of vehices during migration season, so as to reduce amphibian mortaity, woud be termed minimization. Rationae The rationae for undertaking minimization is simiar to that for avoidance. Minimization, however, does not offer the same ecoogica certainty (that actions wi have the intended effect) that avoidance does. Some advantages of, and considerations for, minimization, are shown in Tabe 4 on page In some jurisdictions, the term minimization (and the reated word minimize ) is egay defined as reduce to zero. Therefore, some companies have chosen to avoid using the words minimize / minimization and instead use words ike imit / imitation and reduce / reduction. 43 For exampe: Business and Biodiversity Offsets Programme ( Biodiversity A-Z, UNEP-WCMC ( and Evauating Avoidance, Minimization, Stream Restoration Projects and Compensatory Mitigation Pans ( Stream Pans June 2013.pdf) A cross-sector guide for impementing the Mitigation Hierarchy Page 37

40 Section 2 Minimization Key principes Minimization is a core part of ESIA. Effective engagement with ESIA speciaists is fundamenta to the design of minimization methods. Engage reevant speciaists and stakehoders to predict impacts that cannot feasiby be avoided and to hep design minimization measures. Provide information in a form appropriate for others (e.g. construction engineers) to use. Hod workshops to faciitate communication between ecoogists/environmenta professionas, panners, engineers and finance and permitting managers. Encourage innovation; however, be prepared to revert to a conservative approach if costs for unproven minimization measures begin to escaate. Be reaistic about what minimization can and cannot achieve, and be cautious about the effectiveness of untested methods; minimization measures that ook good on paper do not aways work in practice. Key steps in minimization Minimization starts in project conception and can continue unti cosure, using adaptive management (Box 7). Predict risks and impacts remaining after avoidance. What significant impacts on priority BES features are unavoidabe, or are there potentia impacts for which avoidance woud not be technicay feasibe and/or cost-effective? Design minimization methods to reduce impacts. Write the ToRs for ESIA consutants or other speciaists, which are specific to the priority BES or infrastructure risk in question, e.g. Design widife corridors for the road for species x, y and z. Expore additiona minimization opportunities throughout the project ifespan. Use adaptive management to assess opportunities during construction and throughout operations (e.g. ay down areas and timing of each activity). Tabe 4 Advantages of, and considerations for, minimization Advantages Minimization efforts may seem more visibe and rea than avoidance measures to some stakehoders. Panning and impementation of minimization measures can occur adaptivey throughout the project ifespan in response to performance monitoring. An adaptive approach aows adoption of new technoogies or practices that become avaiabe over the project ifetime and aow BES risks to be handed more effectivey. Impacts can be minimized by addressing both the source magnitude and the exposure or BES sensitivity to the impact (such as habituation to noise). Considerations Minimization, by definition, usuay resuts in ony the partia mitigation of impacts i.e. some impacts wi be incurred, however they wi be ess severe than if no mitigation had been impemented. It can be chaenging to assess and monitor the success of minimization measures in some cases, especiay if the technique is unproven and/or baseines are unreiabe. Minimization is often ess certain in its effectiveness than avoidance. The active interventions invoved in minimization coud have unexpected or unintended consequences (e.g. road crossings coud become traps by concentrating animas where they are easiy hunted or depredated). Some minimization approaches coud generate openended costs. Practicaities (e.g. the time needed to deveop the information base, methods and/or oca capacity) coud cause deays in minimization measures and a time-ag in reducing impacts. Page 38 A cross-sector guide for impementing the Mitigation Hierarchy

41 Section 2 Minimization Box 7 Adaptive management and continuous improvement happens through the repeat assessment of minimization options throughout the project ifespan Continuous improvement is a we-accepted corporate concept, particuary in heath and safety management. It can aso be effectivey appied to BES-reated impact mitigation. A commitment to continuous improvement for managing BES-reated impacts/chaenges manages both risk and reputation. Some minimization options wi become obvious ony after construction is compete or operations are under way. The stakehoder and scientific consensus concerning the project may change over time, requiring continuous adaptation and improvement based on new conditions, data, priorities, reguatory requirements and perceptions. For exampe, the minimization targets and monitoring efforts of QIT Madagascar Mineras have changed over the years as new data have been acquired on the goba distribution of the rare or threatened species identified in baseine surveys. With the discovery of new sites for some species, and their decreasing goba threat status, fewer and fewer remain on the company register as priorities for minimization. Duty of care and corporate responsibiity to stewardship remain, nevertheess (Rabenantoandro in itt., 2012). Types of minimization Minimization actions can be convenienty divided into three major categories (see Tabe 5 on pages for exampes): Physica contros: adapting the physica design of project infrastructure to reduce potentia impacts, such as instaing cuverts on roads, or bird fight diverters on transmission ines. Operationa contros: managing and reguating the actions of peope associated with the project incuding staff, contractors or (where feasibe) project affected peope and migrants. Operationa contros can manage both direct impacts (e.g. soi spi minimization from dri pad construction) and indirect impacts (e.g. measures to reduce iega hunting). Abatement contros: taking steps to reduce eves of poutants (e.g. emissions of dust, ight, noise, gases or iquids) that coud have negative impacts on BES. Engineering for minimization may distinguish between designs that abate at source (e.g. reduce the amount of noise created) and abate at receptor (e.g. put barriers in pace to reduce noise transmission). These categories may at times overap. Many different exampes of minimization are avaiabe, and new practices emerge every year. Whie innovation can reap rewards, care must be taken in experimenting with untested methods with unknown costs. Box 8 Minimizing habitat fragmentation and degradation Habitat fragmentation is the process by which a singe contiguous habitat bock, such as a 100-ha forest, becomes dissected into severa sma bocks (e.g. 30 ha each). Gaps between habitat bocks can be barriers to species movement or other necessary ecoogica connectivity. Habitat degradation is the process by which the quaity or condition of the habitat becomes compromised, e.g. by reef damage from boats, or progressive ow-intensity burning and cutting within a forest. Poor condition habitat may not support high-vaue species nor provide ecosystem services. Negative impacts can be minimized through carefu spatia design of project infrastructure, and by taking steps to ensure that inear infrastructure (such as roads, raiways or pipeines) does not create barriers (e.g. by buiding widife bridges or corridors, or controing and imiting vehice movements). Linear infrastructure may aso provide an enhanced pathway for the movement of predators, poachers and/or invasive species. Measures, such as checkpoints and movement contros, can be put in pace to avoid this. Transocation of protected species coud be considered if the action is expected to yied a measurabe conservation benefit and a risks have been weighed 44. Transocation attempts may cause new impacts, and do more harm than good if not carefuy assessed and panned. Research may be needed to design effective minimization for some BES vaues and types of impacts. 44 The reason transocation often fais is because the new site/ecosystem usuay has its niches fu, meaning that there is no food, sheter or space for the transocated animas. The IUCN guideines on transocating threatened species are a usefu resource: A cross-sector guide for impementing the Mitigation Hierarchy Page 39

42 Section 2 Minimization Tabe 5 Exampes of physica, operationa and abatement contros for minimization Physica contros Operationa contros Abatement contros Design vegetation cearance for exporation activities such as seismic surveys to minimize direct osses, minimize fragmentation of habitat, and maximize potentia for regrowth aong ines. Manage access to project sites and sensitive sites, and contro immigration and induced access to natura resources. Design and insta drainage and water treatment systems for contro of poutant discharges (such as tota suspended soids or oi and grease). Protect watercourses from sources of contamination and sitation. Manage the pattern and timing of vegetation cearance (e.g. to reduce fragmentation, and promote regeneration). Impement appropriate poution abatement treatments (for exampe, abatement of nitrogen oxide emissions from power generation faciities to minimize impacts on ecosystem and vegetation growth) Shade ight sources and/or direct them onto site areas. Prohibit the burning of vegetative waste foowing forest cearance to avoid air emissions and reduce the risk of forest fires. Take measures to reduce the quantity/rate of introductions of invasive aien species onto project sites Use fencing to imit incidenta damage to existing biodiversity: for instance, to wetands adjacent to construction areas, trees adjacent to road aignments, or mobie widife. Fencing must be used carefuy so as not to introduce new impacts by restricting anima movements. Manage indirect impacts such as migration, induced access and increased purchasing power of oca inhabitants, which can ead to agricutura expansion and increased take of widife. Impement soid waste management practices, such as propery managed rubbish sites, to reduce the spread of fera predators such as foxes, cats and dogs. Substitute ow-impact technoogies or practices for higher-impact ones, e.g. imited vegetative/soi remova for cearing to promote recovery and inhibit the spread of non-native/invasive species. Estabish institutiona contros on, and provide aternatives to, unsustainabe natura resource use (e.g. fuewood, bushmeat, and fishing). Use designs or technoogies that reduce or imit poution, e.g. ow-intensity ighting, noise siencers, dust-contro devices. Minimize unnecessary noise sources and use, and maintain appropriate noise attenuation devices on engines and other pieces of equipment. Impement procedures to safeguard or retain pant species and materias (seeds, rootstock and medicines) used by oca communities, during impementation of vegetation cearance programmes. Basic smoke and dust abatement can be significant in reducing impacts on rare, threatened and endangered species such as izards (their eggs) and pants (smothering). Provide base materia compatibe with oca ground conditions; bitumen shoud be aid on a geotextie membrane. Avoid the widespread use of concrete at sites use ony at those areas that absoutey require it. Impement operationa contros on contractors to minimize disturbance around dri pads and at the edge of pits (in case of mining). continued Page 40 A cross-sector guide for impementing the Mitigation Hierarchy

43 Section 2 Minimization Tabe 5 (continued) Exampes of physica, operationa and abatement contros for minimization Physica contros Operationa contros Abatement contros Stabiize disturbed sopes, revegetating them preferentiay with native species to reduce/avoid erosion. During operations, impement procedures that minimize impacts at the reinstated ocations and therefore do not disrupt natura revegetation by indigenous fora and re-coonization by oca fauna. Design operations or faciities to reduce the number of access points or opportunities for off-road tracking. Keep the workforce within defined boundaries (e.g. camps at night) and to the agreed access routes. Empoy carefu methods of road construction (e.g. to reduce dust and noise) or river crossings (e.g. seection of the most appropriate open-cut method for a river crossing). Educate the workforce about environmenta performance expectations and requirements, incuding those reated to BES. Limiting the footprint of supporting infrastructure components of a project to minimize habitat oss (e.g. narrowing the width of an access road). Largescae versions of this may be regarded as avoidance through project design. Keep traffic to the minimum requirements for operations. Consider species-specific contros, such as widife crossings or bird fight diverters. Impose and enforce speed imits and instruct vehice operators regarding driving expectations and requirements. Aow access to site(s) transportation ony by authorized empoyees A cross-sector guide for impementing the Mitigation Hierarchy Page 41

44 Section 2 Minimization Exampes of minimization in practice MINIMIZATION EXAMPLE 1 Minimizing impacts on cora reefs during LNG deveopment, Yemen Marine habitats in Bahaf, Yemen, the site of the Yemen LNG Project, incude sensitive areas of cora reef with high biodiversity. As a first step, Tota undertook intensive cora sensitivity mapping and monitoring. This aowed avoidance of many impacts (see Avoidance exampe 2 on page 27). However, there was no aternative to the cooing water intake pipeines and the LNG jetty crossing some areas of cora reef. Minimization of these unavoidabe impacts incuded two main measures cora transocation and in-situ mitigation measures to reduce sedimentation impacts on coras. For these two areas, a arge cora transpantation programme was performed. Priority od growth cora stands (of sensitive, sow-growing species) were separated from their base and carefuy moved to seected refuge areas with simiar ecoogica conditions. This was the argest-ever such exercise attempted, with costs (excuding project design changes) around US$ 5.3 miion over 14 years. A high percentage of the heathy cora coonies were successfuy transported from severa threatened areas to protected sites. No critica damage due to cora handing was observed. Continued monitoring of the transpanted coras indicates very good success rates, demonstrating the feasibiity of cora community transpantation 45. As a compementary action, sit curtains were depoyed between coras and construction works to reduce sediment deposits onto the reef. They consisted of a semi-permeabe barrier extending from the surface to the sandy bottom. The geotextie fabric aowed sea water to cross the barrier but retained sediment partices. The efficiency of these devices was demonstrated through monitoring. Above eft: The Bahaf site showing areas impacted by the LNG jetty and intake cooing water pipeines. Above right: cora transocation in progress. Left: sit curtains depoyed during LNG jetty construction. 45 Chaîneau et a. (2010) Page 42 A cross-sector guide for impementing the Mitigation Hierarchy

45 Section 2 Minimization MINIMIZATION EXAMPLE 2 Micro-routing the shore approach for an LNG pipeine in Papua New Guinea The PNG LNG Esso Highands (ExxonMobi) Project recognized that the pipeine andfa design originay approved for construction for the PNG LNG pant site woud have resuted in significant habitat oss. The andfa of Caution Bay, which is adjacent to the LNG pant site, is ined by a corridor of mangroves. During detaied design, the pipeine was routed through the narrowest section of the mangrove corridor to reduce the need for mangrove cearance. The right of way width within the mangrove was reduced by more than 50%, i.e. from 142 m to m. This was possibe because of the seected open-cut trench construction method, considered the most technicay robust option for this environment, as we as tests of soi stabiity properties in soft mangrove mud. Prior to mangrove cearance and construction at andfa, tria excavations were conducted in test pits. Excavations showed cohesive soi characteristics, which enabed a reduction in the trench width, spoi heap width and trenching voumes. Mangrove habitat cearance was therefore reduced. MINIMIZATION EXAMPLE 3 Eary panning informs minimization measures for offshore Indonesia Risk screening Three months before BP decided to bid for two deep water oi and gas exporation icences in a remote part of the Arafura Sea off the coast of Indonesia, the upstream environmenta and socia teams were working with regiona coeagues to compie information about the area. BP s environmenta and socia practices require the company to identify any potentia impacts on the oca environment or community and buid mitigating actions into their pans as they deveop. Sensitive sites The environmenta team identified four protected areas within about 180 km of the bocks one marine environment off Aru Isand and three and-based reserves in the Tanimbar Isands group which were screened out as being too far away to be affected even by potentia indirect impacts. Sensitive species Twenty-seven species of marine mammas were known or beieved to use waters around the exporation bocks, incuding four cassed by the IUCN as Threatened or Near Threatened Species. Mitigation options The team identified the foowing actions to mitigate the most significant environmenta and socia impacts and risks: 1. a gradua buid-up of power in the airguns used during seismic surveys to reduce disturbance to marine mammas; 2. agreement on an oi spi response pan with the seismic contractor; and 3. seection of specific oi spi mitigation and response measures for operations near Puau Larat nature reserve, a sensitive site protected by Indonesian Law. MINIMIZATION EXAMPLE 4 Minimizing the impacts of god mining at two specia areas of conservation in Sweden In principe, every mining project wi incude actions taken to minimize the negative impact on biodiversity through physica and operationa contros and through discharge treatment. One exampe of a comprehensive strategy to avoid impacts on biodiversity can be found at a god mine in Västerbotten, Northern Sweden. Here the orebody, and therefore the mine itsef, is situated within the catchment area of a designated Natura area north of the mine site, a stream with a protected popuation of freshwater musses. To minimize any impact, a water from the mine site is coected, treated and pumped south over the watershed to another catchment area. Further south is another Natura 2000 area, and to avoid impacts at this site the concentration imits in the southern discharge point have been set at very ow eves. 46 Natura 2000 sites are an ecoogica network of specia areas of conservation, conserving Europe's most vauabe species and habitats. A cross-sector guide for impementing the Mitigation Hierarchy Page 43

46 Section 2 Minimization The practice of minimization Start eary, but don t stop: minimization through the project ifespan Minimization is best panned eary in the ifespan of a project (before or during the ESHIA process), ideay before on-the-ground activities commence. The construction phase tends to be the key phase for minimization. However, as we as avoidance, minimization can often continue during ater stages of the project ifespan, where adaptive management may be possibe and vauabe. Understand what s reay needed: investing in research to minimize more effectivey Carefuy designed and thought-through research may often be worth the investment to ensure that efforts are effective, and cost-effective. Research may revea opportunities for innovative approaches (see Creative thinking: innovative ideas for innovation, on page 46). Significant gains are possibe through innovation but care must be taken not to invest in too many untested methods. Execute the pans: ensuring that minimization is carried out effectivey As minimization measures are usuay undertaken as standard components of environmenta management pans, the carefuy managed execution and monitoring of these pans is the most important factor in ensuring success. Check to see whether it s working: estabishing monitoring and an adaptive approach We-designed monitoring is crucia in assessing the effectiveness of impemented minimization measures. Specific, defined methods and metrics are needed for evauating success (e.g. reguar, consistent mortaity inspections on roads and power ines). If resuts fa short of what is expected, the possibe reasons shoud be reviewed and consideration given to adapting interventions accordingy. Avaiabe minimization technoogies shoud be reviewed on a reguar basis to determine whether new or enhanced opportunities for minimization are avaiabe and viabe. Page 44 A cross-sector guide for impementing the Mitigation Hierarchy

47 Section 2 Minimization Constraints and chaenges Cost considerations for minimization actions The costs of minimization actions can occur throughout a project s ifespan, and may transate into operating costs. Uness minimization measures are we-conceived and impemented at the design stage, they may ater fai, resuting in unexpected costs for identifying and impementing additiona measures during construction and/or operations. Some minimization actions cost very itte, such as shading ight sources, whie others can invove arge sums of money, such as buiding fish adders or widife crossings. 47 Deaing with data-poor and uncertain situations In the absence of sufficient data to predict the efficacy of minimization measures, an adaptive management approach is good practice. Such an approach invoves impementing minimization measures based upon best avaiabe knowedge, and consequenty setting up a monitoring programme to improve knowedge about BES vaues and sensitivities. For exampe, a project might monitor the effectiveness of poution contro by monitoring spawning or heath measures of marine fish. If minimization measures prove ineffective or insufficient, this improved knowedge is used to adapt or impement more effective ones. Adaptive management is a good opportunity to engage and coaborate with quaified experts. This can buid stakehoder support for the approach and contribute to the science of minimization. Whether and when to move to restoration and offsets The end of the minimization panning stage is a critica moment in the appication of the mitigation hierarchy. This is true for at east three reasons: 1. From this point on, a measures impemented wi seek to repair damage done, rather than prevent damage occurring. 2. Once damage has occurred, the potentia for repair is not certain. Therefore, restoration and offsets often (though not aways!) present a higher risk than avoidance and minimization. 3. The costs and effectiveness of restoration and offsets are often (though not aways!) inherenty ess predictabe than the costs of avoidance and minimization. When shifting from preventive to remediative measures the foowing critica questions may be asked: What type (severity, magnitude, duration, scae) of potentia impacts might remain? Can these potentia impacts reaisticay and crediby be managed through restoration and/or offset measures? If the answer to the ast question is yes, it is feasibe to proceed to panning restoration and offsets. If the answer is no, further design and panning for avoidance and minimization measures may be needed. This process is iustrated in Figure 5 (page 17), which demonstrates the iterative feedback oop that ensures optima investment in avoidance and minimization. Determining the restorabiity of a habitat/ecosystem requires appropriate data and expert consutation. Assessing restoration options is covered in Section 3 (pages 47 58). 47 A number of terms have been used in industry to express the aim to minimize impacts as far as feasibe, given considerations of cost and the practica constraints of engineering. These incude: ALARA (as ow as reasonaby achievabe); ALARP (as ow as reasonaby practicabe); BAT (best achievabe technoogy); BATNEEC (best avaiabe techniques not entaiing excessive cost); BPEO (best practicabe environmenta option). A cross-sector guide for impementing the Mitigation Hierarchy Page 45

48 Section 2 Minimization Creative thinking: innovative ideas for minimization Community-based minimization actions and job creation: effective community participation regarding the provision of oca jobs can be achieved through abour-intensive minimization actions. Exampes incude pre-construction savaging of pants and animas from sites prior to cearance for mining (e.g. Ambatovy Nicke Project, Madagascar 48 ) and coecting seeds/seedings for use in active revegetation programmes. Reduction of impacts on natura resources and biodiversity caused by indirect and third-party impacts such as immigration and induced access. Use, enhancement and/or construction of natura ecosystem processes to manage impacts (e.g. water recycing, reed beds, vegetation for erosion contro) often known as green infrastructure. Conversion of physica waste streams so that they have beneficia properties for BES (e.g. conversion of a waste water ake into wetand habitat; conversion of spoi heaps into habitat for invertebrates) Page 46 A cross-sector guide for impementing the Mitigation Hierarchy

49 Section 3 Restoration Definitions In the context of the mitigation hierarchy, restoration refers to measures taken to repair degradation or damage to specific biodiversity features and ecosystem services of concern (which might be species, ecosystems/habitats or particuar ecosystem services) foowing project impacts that cannot be competey avoided and/or minimized. When repair of damage does not focus on the biodiversity features and functions identified as targets for appication of the mitigation hierarchy, it is better termed rehabiitation and counts as an additiona conservation action (see the Definitions section on page 79) that does not contribute to biodiversity oss/gain accounting. Restoration actions begin once impacts have aready occurred. However, research and panning eary in the project ifespan, and ongoing management throughout, are desirabe. Restoration to reduce residua impacts wi typicay invove on-site works, with specific intermediate and ong-term goas for the re-estabishment of priority aspects of ecosystem structure, function or species composition. Note that this is different to restoration activities carried out to impement offsets (see Section 4), which wi typicay take pace outside the project s area of operations. Restoration goas in the mitigation hierarchy may reate to the site baseine prior to impacts 49, or to a reference site esewhere in the impacted ecosystem. Aternativey, the goa may be for an ecosystem with different characteristics from those present before impacts. 50 Restored ecosystems wi amost aways be nove 51 to some extent, because precise reinstatement is impossibe. 49 In some jurisdictions, the ega interpretation of restore means to return a disturbed physica environmenta attribute to a condition that is exacty the same as that which existed prior to the disturbance. In many instances, this is technicay impossibe, and if it is possibe, the incrementa cost required to attain this benchmark does not necessariy transate into substantia net environmenta/ecoogica benefits. For these reasons, restoration in the mitigation hierarchy woud rarey have a goa of reinstatement to a precise pre-disturbance state. 50 This coud potentiay be a vaid approach for restoration of some biodiversity features or ecosystem services of concern, but in most cases is ikey to be cassed as rehabiitation. Government reguators may in some cases constrain opportunities for restoration, for exampe by requiring rehabiitation using non-native pant species. 51 Hobbs et a. (2006). Nove ecosystems: Theoretica and management aspects of the new ecoogica word order. In Goba Ecoogy and Biogeography, Vo. 15, Issue 1, pp A cross-sector guide for impementing the Mitigation Hierarchy Page 47

50 Section 3 Restoration Restoration outcomes might incude, for exampe, ocaized recamation of a stabe substrate, reestabishment of productive ands or fisheries, enhancing habitats for specific conservation vaues and maintaining natura habitat connectivity. Restoration projects are thus varied in spatia extent, management intensity and ecoogica specificity of goas. Rationae Restoration is the most important remediative component of the mitigation hierarchy because it aims to reverse impact damage directy, and arrive at a desired upgraded state. Restoration therefore has the potentia to reduce the iabiities associated with residua impacts. Restoration is generay more chaenging and uncertain than avoidance and minimization (where those are feasibe). It can aso be expensive. Therefore, objectives for restoration within the mitigation hierarchy shoud aim to cover ony project-attributabe impacts remaining after avoidance and minimization measures have been iterativey appied (Figure 5) through a restoration constraints anaysis (Figure 8). In practice, the extent to which restoration can contribute to a project s appication of the mitigation hierarchy wi vary 52 according to many factors, incuding the nature and ocation of a project s impacts, contingent andscape factors, the technica feasibiity of and costs associated with impementation measures, stakehoder perspectives and eve of input, and, the desired timescaes for BES vaues to be reinstated. The pace of ecoogica recovery can be sow. Tempora ags between impacts occurring and restoration gains accruing may make it chaenging to attain minimum performance targets within project timescaes. Tempora ags can contribute to cumuative impacts from ecoogica effects, for instance if an impacted area of habitat provided an important function in the wider andscape (such as a migratory stop-over site or drought refuge) or highy vaued ecosystem services. In these cases, strong emphasis shoud be put on avoidance and minimization. Simiary, where restoration is not feasibe for priority biodiversity features, further consideration shoud be given to avoidance and minimization measures rather than progressing straight to the design of offsets (Figure 2, page 12). Figure 8 Schematic showing the iterative appication of avoidance and minimization together with a restoration constraints anaysis (see The practice of restoration on page 54) and offset scoping, to set reaistic goas for remediative measures in the mitigation hierarchy Restoration constraints anaysis drives prevention optimization and defines residua impacts Avoidance and minimization (A&M) design prevention remediation If restoration too chaenging (socio-poitica, cost, ecoogy), revisit A&M Constraints anaysis sets maximum restoration objectives (see Figure 10) Quantified residua impacts on priority features = remaining remediation requirements/targets If offset too chaenging (socio-poitica, cost, ecoogy) revisit A&M Offset scoping and feasibiity 52 The Biodiversity Consutancy Industry Briefing Note, Opportunities for Ecoogica Restoration in Terrestria and Marine Environments (TBC, 2015) reviews the information avaiabe on costs, timescae and feasibiity for restoring different habitats. Page 48 A cross-sector guide for impementing the Mitigation Hierarchy

51 Section 3 Restoration Tabe 6 Advantages of, and considerations for, restoration Advantages In the best scenarios, restoration can be a mechanism to baance impacts and achieve targets (such as NNL/net gain) without seeking off-site offsets. Gains are ikey to accumuate over time, and with decreasing management input needed once ecoogica reestabishment threshods are overcome. Goas can be set to ensure targeted BES sensitivities wi be covered. It is easier to measure oss versus gain than the outcome of avoidance and minimization decisions (e.g. hectares). Often does not require significant up-front investment. Faciitates inkage of socia and environmenta management pans. Justifications for restoration wi normay be mutipe, e.g. socia, poitica, ecoogica faciitating the business case for investment. Visibe and evident to stakehoders, heping to manage reputationa risk: a damaged site can eave a damaged reputation. A restored site eaves a positive egacy beyond the project ifetime; can become a fagship site. Restored areas may have fewer probems than offsets reated to uncontroed access, as they are generay within icence areas. Restoration interventions are often abour-intensive and can be a means of oca job creation. Can be particuary effective at re-estabishing the suppy of provisioning (food and fibre), cutura and reguating (e.g. food attenuation) ecosystem services to oca beneficiaries, because restoration occurs at the impact site, and ecosystem functions can be easier to restore than community composition. Satisfies permitting requirements: many jurisdictions set a ega requirement to return sites to an ecoogica reference state, or to a stabe and usefu non-conservation and use. May provide a unique opportunity to maintain spatia ecoogica connectivity within the andscape or seascape (e.g. for migration corridors). Considerations Generay has a ower certainty of success than avoidance and minimization. Restoration for many BES features is poory understood, and can be chaenging, sow and expensive; it can be compicated by ogistica, socia and poitica constraints. Restoration may not be an advisabe option for irrepaceabe or vunerabe BES vaues (e.g. od growth forest, some ocay endemic species) due to the uncertainty of outcomes and time ag for success. Requires eary panning to ensure that adequate baseine information 53 for the impact site is coected to inform feasibe restoration goas and practice. May require changes to initia pans in order to avoid or minimize impacts on the east restorabe areas or features. May require ong-term management interventions and costs to ensure that the site remains on the correct trajectory for the required outcome (costs eventuay diminish once restored areas are sef-sustaining). Likey to be ess cost-effective (for achieving a particuar resut) than earier steps in the mitigation hierarchy. Costs may be hard to predict uness a neary identica project in same environment exists. Athough oss-gain quantification may be more straightforward than with offsets, restoration often requires ong time frames to achieve outcomes. The scientific basis for optima restoration practice is often compex. Requires expert consutation to derive feasibe goas and impementation pans. It is practicay impossibe to fuy return a site to its predisturbance state, especiay in terms of species composition. Genera rehabiitation that does not address specific BES vaues of concern may be important for stakehoders, reguatory compiance and reputation, but does not count as the appication of restoration in the mitigation hierarchy. continued 53 See CSBI (2015) for guidance on baseine surveys. A cross-sector guide for impementing the Mitigation Hierarchy Page 49

52 Section 3 Restoration Tabe 6 (continued) Advantages of, and considerations for, restoration Advantages Provides an opportunity to integrate BES mitigation into a andscape/seascape vision. Spatiay-specific BES sensitivities can be specificay designed into the restoration pan (e.g. an anima feeding corridor). Considerations Restoration needs coser monitoring than other mitigation activities due to unpredictabe recovery trajectories and uncertain effectiveness of techniques. Restoration may provide vauabe habitat for ocay endemic fora or fauna a common rationae in the mining industry. Restoration is ikey to be ess poiticay and egay compex than offsets. Designing restoration goas (e.g. maintaining environmenta services fows) through carefuy structured stakehoder consutation can deveop support for (or reduce opposition to) a project. Heps manage indirect impacts by repacing the natura resources ost to project impacts, rather than protecting or enhancing a potentiay decreasing stock of remaining resources as offsetting aims to do. This iterative approach shoud aim to reduce residua impacts as far as feasiby possibe, and wi reduce or eiminate the need for a biodiversity offset 54. Offsets have some inherent disadvantages as they are off-site 55, ony indirecty address impacts, and their design and impementation are frequenty sociay and poiticay compex. The end of the iterative restoration panning stage is therefore a critica moment for appying the mitigation hierarchy. From this point on, it is possibe to characterize residua impacts (i.e. describe feature sensitivity, impact magnitude, consequence, etc.) and quantitativey estimate the scae of offsets or other remediative actions required to baance residua impacts, according to the poicy and reguatory framework appicabe. Tabe 6 summarizes some of the advantages of restoration, and potentia drawbacks or points to be considered in its panning and impementation. Key principes and steps for impementing restoration Experience with restoration projects points to a number of key principes and processes that can hep to ensure success. Restoration is ikey to be most successfu if it invoves we-tested techniques, is panned eary in the project ifespan with the benefit of trias, and impemented as eary as possibe after a disturbance has occurred. During impementation, effectiveness is optimized if performance is cosey monitored, especiay in the estabishment phase of pantings or anima transocations. Other key eements of restoration success are detaied beow. Not a of these wi appy to every project. Figure 9 (page 51) summarizes the overa process as a simpe fow chart. It is important to keep restoration goas (and how to achieve them) in mind throughout the project ifespan. 54 Impementation of an offset is ikey to be warranted ony where significant residua potentia impacts remain for priority BES features, with assessment of significance and priority according to appicabe poicy and poicy frameworks. 55 Restoration in ocations geographicay separate from the project s impacts is a form of offset that produces biodiversity gains by reversing historic degradation unreated to project impacts. This form of offset is empoyed as an aternative or compement to averted oss offsets, which produce reative gains by preventing anticipated and ikey future degradation. Page 50 A cross-sector guide for impementing the Mitigation Hierarchy

53 Section 3 Restoration Start eary and buid a soid information base Obtain suitaby detaied and distributed baseine data 56 for pre-impact conditions in impacted and reference sites, for the specific BES vaues of concern. Access and use the most reevant datasets and appied ecoogy expertise. Choose reference sites carefuy and use them with caution as an input into goas constraints anaysis (see beow), as we as to provide natura regeneration anaogues and ocay adapted genetic materia. Before operations start, use sites as tests/piots for deveoping/refining/informing restoration methods 57. Trias can be progressivey expanded to hep refine an overa impementation strategy. Where the techniques or environment are nove, advance fied trias can hep an assessment of feasibiity and point towards approaches more ikey to be successfu. Start research, trias and stakehoder consutation as eary as possibe in the project ifespan. Eary research wi hep define costs before decisions about restoration goas are made. Use spatia information management systems to record research, panning and monitoring. Spatia data woud ideay be managed on a singe GIS patform at an appropriate andscape/seascape scae. Maps produced from such a system are hepfu in communicating restoration project pans and performance. Define reaistic restoration goas Undertake an up-front review of knowedge gaps and risks in achieving desired end points, incuding consideration of prior restoration successes for simiar habitats, species or other desired ecoogica attributes. Can the approaches be repicated? What adaptations are required? Use post-impact scenario and ess-disturbed reference systems to define appropriate restoration goas. The aim is to determine at what stage the system can become sef-sustaining and resiient to natura disturbances (wi it require significant ong-term human intervention?). Use constraints anaysis (see Figure 8 on page 48, and The practice of restoration on page 54) to ensure that restoration goas are ecoogicay, sociay and financiay Figure 9 A summary of the restoration panning and impementation process feasibe. Strengthen panned preventive measures if needed by revisiting avoidance and minimization, to reduce the residua impacts to manageabe eves. In some cases, restoration goas and BES offset objectives may have to be considered in parae to assist in the design of the best remediation package for priority biodiversity features. Where potentia avoidance options invove significant costs, and the opportunity for minimization is imited, eaving significant residua BES impacts, the trade-offs between restoration and offsets wi have to be considered carefuy. Forecast future resource requirements, in reation to the desired end-point and interventiona timescae (e.g. staff support needs, genetic materia, top-soi, CapEx/OpEx, etc.). Engage project panners, engineers and socia scientists with restoration ecoogists, practitioners and stakehoders to create the vision for an integrated cosure, considering any commitments or agreements, and with reference to the wider andscape and oca buy-in. 56 See CSBI (2015) for guidance on baseine surveys. 57 For exampe the Simandou project in Guinea is using disused dri pads as piot sites for the restoration of sub-montane grassand ecosystems. A cross-sector guide for impementing the Mitigation Hierarchy Page 51

54 Section 3 Restoration Take practica steps to support restoration success Engage appropriate speciaists with prior expertise in simiar ecosystems and environmenta conditions. Seeking the right advice eary on can save years of time and significant cost. As far as possibe, ensure continuity of technica staff. Ecoogica restoration requires speciaized skis and incrementay acquired oca knowedge. Make restoration impementation requirements expicit in contractor agreements where appropriate. Where appropriate, preserve substrate (e.g. topsoi, cora structures) and genetic materia (e.g. via seed banks and nurseries) from the project site. Preserve ocay adapted genetic materia, and search for simiar oca sites that have experienced disturbance and natura recovery. Integrate restoration into environmenta management pans. Monitor and manage adaptivey Set performance criteria and indicators for measuring success. Owing to the different timescaes of projects and ecosystem deveopment processes (even when assisted by restoration interventions), most perform - ance criteria wi focus on indicators of the system being on a sef-sustaining trajectory 58 of recovery, rather than on demonstrating attainment of eventua desired states. Monitor restoration progression using trajectory anaysis (see Learn by doing: the adaptive management approach on page 57), with fina and intermediate target ranges for a specific set of desired attributes/status indicators. Adaptivey manage restoration interventions accord - ing to trajectory anaysis resuts. Intermediate target ranges set performance threshods for adaptive management deci sions to keep recovery trajectories within desired imits. Use monitoring information on background environ - menta trends to inform evauation of the success of restoration outcomes and adaptive management. Any future versions of this document woud aim to provide guidance to hep determine when impacts may be considered permanent for the sake of mitigation. This may be site-specific depending on the systems being restored and/or the overa objective of restoration. Exampes of restoration in practice 59 RESTORATION EXAMPLE 1 Creating and managing widfower meadows at a potash mine in the UK Around the operationa works and office compex at the Ceveand Potash site at Bouby, North Yorkshire in the UK, the company has recreated areas of native grassand, providing a haven for poinating invertebrates such as bees, butterfies, moths and hoverfies. Carefu preparation and seeding with a widfower mix containing native pants appropriate for the site has resuted in meadows with aesthetic and other biodiversity vaues. The meadows contain fowers providing vauabe nectar sources such as Bird s-foot Trefoi, Ox-eye Daisy, Red Cover and White Cover. Ongoing management is used to maintain the desired attributes, and meadows are cut annuay to maintain the nutrient-poor conditions that aow this diverse native grassand pant community to thrive. Parts of the meadows are eft uncut through the winter to ensure that functionay important invertebrates overwintering in the dry aeria parts of pants can aso survive. 58 Notwithstanding unknown or unpredictabe recovery trajectories, most ecosystems tend towards a recognizabe type, within a range of conditions this has ed to the domain of attraction mode being a widey accepted description of observed restoration outcomes, except where threshods withhod or divert trajectory deveopment. 59 Pace names and other detais have been removed for some exampes. Page 52 A cross-sector guide for impementing the Mitigation Hierarchy

55 Section 3 Restoration RESTORATION EXAMPLE 2 Restoration of forest and upand grassand the Agri River Vaey, Itay One of the argest onshore oi fieds in Western Europe, eni s Va d Agri concession, is in the Agri River Vaey, a biodiversity-rich area in Southern Itay. The area incudes Specia Areas of Conservation (Natura 2000 sites designated under the European Habitats Directive 60 ), and a Nationa Park was created recenty in the upper vaey. Low-intensity mixed farming is the main and use on the vaey bottom and ower sopes, giving way to natura grassand, woodand and rocky habitats at higher eevations. Recognizing the sensitivity of the site, eni set up the AgriBiodiversity Project (ABD) as a coaboration with She Itaia E&P, Fauna & Fora Internationa (FFI), the Word Conservation Union (IUCN) and the oca University of Basiicata. Whie aso engaging other stakehoders, ABD carried out a systematic assessment of biodiversity-reated risks and opportunities, aowing the identification of opportunities to reduce potentia operationa impacts. The project was abe to differentiate specific, ocaized effects of oi activities from other drivers of change, such as cimate change and other human activities (e.g. agricuture, grazing practices, urbanization and infrastructura expansion). The outcome was a targeted biodiversity action pan (BAP) for impact mitigation, restoration and ong-term monitoring, which has been impemented in seected sites since The BAP identified priority habitats for mitigation and restoration efforts which can increase access for grazers. Upand grassand These ecoogicay important communities are used for seasona grazing. After triaing different techniques, severa key approaches were adopted in 2008 to restore pipeine and fowine disturbances: 1) directy re-seeding with ocay sourced seeds; 2) controing the thiste Carduus coinus; and 3) spreading seed-rich grass cuttings from the undisturbed area. By 2011, monitoring showed that the prairies had recovered their origina structure, composition and ecoogica functions, without any increase in non-native species. Beech forest The upand beech forest in the area is within two Natura 2000 sites and has high biodiversity vaue. Restoration of the forest edge community, through panting, grazing and iega ogging contro, aims to reduce edge effects evident on the forest around two we pad cearings. Natura/panted forest Restoration of pipeine and fowine disturbances in this habitat was faciitated by imiting access to peope and ivestock at the head of the fowine to reduce soi disturbance. Rapid rainfa run-off was aso imited to reduce erosion and speed up recoonization. Unwanted pants coonizing disturbed soi (rudera species) were removed before seeding to imit their spread and competitive advantage, and in some areas the topsoi was enriched with soi from the woodand to imit rudera growth. Monitoring suggests that these restoration measures have been effective so far. In 2011, the fowine corridors were characterized by a shrub community typica of the eary successiona stages of oak forest, incuding seedings of the oak Quercus cerris. Lessons earned The project demonstrated that restoration of project impacts in the Agri River vaey ecosystems is possibe. Suggestions for good practice have emerged as foows: Understand key characteristics of the habitats and species of concern. Preserve the topsoi of the disturbed area (or, if not possibe or if insufficient, obtain topsoi from a nearby reference area without compromising its ecoogica integrity). Re-seed with seeds from ecoogicay adapted popuations nearby. Prevent run-off where sites are sti dominated by bare soi. Manage aien invasive species and other species not characteristic of that habitat. Protect restoration activities from other disturbances during the eary recovery phase. Partnerships were important for success, both for setting ecoogica goas and for impementing the restoration work itsef. 60 EU Habitats Directive: A cross-sector guide for impementing the Mitigation Hierarchy Page 53

56 Section 3 Restoration RESTORATION EXAMPLE 3 Seed storage faciitates restoration of native and endemic fora and fauna in Greece S&B Industria Mineras S.A. has undertaken more than 35 years of systematic work and research on and rehabiitation in Greece. This has been appied at their major quarries at Mios and Fokis, highighting the vaue of knowedge about, and access to, ocay adapted species. At Mios, ony native pants are now used in recamation, owing to the distinct soi type and harsh cimate with high temperatures, ong drought periods and strong winds. As we as being adapted to the specific soi, native pants have a dormant period in summer and thus need no watering during the typica six-month period of hot, dry weather. Many are aso adapted to the saine water and frequent fires characteristic of the isand. Fokis by contrast is a mountainous area, party in the pseudoapine zone. Since 2010, ony endemic pant species have been used in rehabiitation work, incuding the rare Acer hedreichii and other species from the pseudo-apine zone. So far more than 1.5 miion pants have been produced for recamation at the two pant nurseries of S&B ocated at Fokis and Mios. Recreation of habitat for native fauna and fora has made substantia progress. Independent studies, sponsored by the Ministry of Environment and carried out by the Department of Bioogy of the University of Athens, showed that there was no significant difference in the fauna diversity observed between the quarry site on Mios (Chivadoimni) and an undisturbed reference area. RESTORATION EXAMPLE 4 Geomorphic recamation ays the foundation for restoration in New Mexico At BHP Biiton s coa asset in New Mexico, USA, geomorphic recamation is a key too in achieving biodiversity and sustainabiity goas. Geomorphic recamation overcomes abiotic threshods to regeneration by mimicking natura drainage patterns, and provides ong-term stabiity of rehabiitated andforms, serving as the foundation for the estabishment of a bioogicay diverse and sustainabe ecosystem. The practice of restoration Anayse constraints: reaistic goa setting Restoration is the process of ecoogica management of a project-affected site to bring it to a target state. The most important step in restoration panning is to set reaistic biophysica, ecoogica and financia goas that are sociay acceptabe to reevant stakehoders. In the context of the mitigation hierarchy, goas aso need to be consistent with the overa intended biodiversity outcomes through the appication of the Hierarchy as a whoe. Figure 10 (page 55) represents these constraints, or design factors, to panning feasibe goas for restoration as part of the mitigation hierarchy in three dimensions: socia, ecoogica and financia. As outined in the previous section, this process is ikey to be iterative in order to arrive at the appropriate cost-benefit baance between revisiting preventive measures (avoidance and minimization) versus investment in remediative actions. During mitigation hierarchy panning, eary iterations of restoration constraints anaysis shoud drive the avoidance or minimization of impacts, in particuar to ensure that impacts do not surpass any threshods beyond which restoration woud be unfeasibe (e.g. physico-chemica properties of the substrate). However, this wi not aways be possibe for the entire area of infuence, for exampe at mining pit sites. Fina iterations of restoration constraints anaysis woud occur once avoidance and minimization have been maximized, in order to derive a set of feasibe goas considering ecoogica, socio-poitica and financia factors. In some environments, passive restoration via natura regeneration with itte or no externa intervention may produce the desired outcome in an acceptabe time frame (e.g. patches within forests with suitabe soi profies and seed-rain). The potentia of passive restoration as a strategy depends on the ecosystem resiience to the impact type, which can be assessed from an evauation of the current habitat matrix in the context of ecosystem-use history. Page 54 A cross-sector guide for impementing the Mitigation Hierarchy

57 Section 3 Restoration Figure 10 Setting feasibe restoration goas through constraints anaysis Ecosystems are in constant fux, switching over time between states, within a broad range of types dictated by prevaiing environmenta drivers. When this ecoogica property is combined with the reaity of ongoing environmenta change, acceerated by cimate change, it becomes cear that it is often unreaistic to specify tightydefined restoration outcomes (e.g. in terms of species composition), especiay when they aso require ong timescaes for regeneration. Restoration is therefore unikey to be abe to achieve no net oss (where that is a vountary or reguatory goa for the project), at east for materia project-attributabe impacts on vunerabe biodiversity features or compex ecosystems; hence, residua impacts may remain. In these circumstances, broader restoration goas such as reinstating habitat structure or functiona properties that can suppy ecosystem services (e.g. soi formation, carbon sequestration, food or tsunami attenuation and cean water suppy) may be more appropriate and achievabe. This may invove reiance on offsets to achieve the necessary gains for specific biodiversity features. A cross-sector guide for impementing the Mitigation Hierarchy Page 55

58 Section 3 Restoration Manage using threshods: piars of restoration success Variations in ecosystem compexity, species diversity, environmenta sensitivity, specific chemica conditions, and different regeneration rates a affect restoration potentia and the ikeihood of success, and therefore ca for case-by-case soutions. The practica management response to this uncertainty is to identify abiotic and biotic threshods, and design intervention mechanisms to overcome these threshods (Figure 11). Ecoogica threshods can be thought of as barriers to natura regeneration, and resources shoud target these to faciitate a sef-sustaining recovery. For exampe, physicochemica modification coud invove mechanica preparation of substrate structure and chemica composition, or engineering of hydroogica patterns; bioogica modification is ikey to invove introduction or enrichment of species; environmenta management coud invove a grazing regime or predator contro. Figure 11 Graphic representation of different threshods and restoration intervention mechanisms aong the condition/ degradation gradient Intact Threshods define restoration mechanisms Environmenta management Biotic threshhod It is sti difficut to find targeted guidance for particuar restoration chaenges in many ecosystems. However, an increasing array of research artices and practice guideines is emerging to support the impementation of restoration. A good pace to start is with a search of the internet and schoary artices databases using terms describing the ecosystem and desired attributes. The resources avaiabe through the Society for Ecoogica Restoration Internationa, incuding the Goba Restoration Network 61 and the Foundation Documents 62 are other usefu starting points. Another growing source of restoration exampes is the Conservation Evidence website 63. Exampes of ecosystems for which a weath of knowedge on restoration techniques is avaiabe incude freshwater wetands, satmarshes, temperate forests and mangroves. See TBC (2015) for an anaysis of the avaiabiity of information on restoration techniques among different biomes and ecosystem types. The abiity to evauate a priori the potentia of generic restoration techniques in certain environments is imited by ow historic eves of success reporting gobay 64, compicated by a ack of robust scientific frameworks for measuring success against ecoogica criteria. Nonetheess, mutipe research reviews of restoration efforts over the past few decades show that the majority of these efforts have ed to an improvement of biodiversity and/or ecosystem services 65. Yet, a fexibe, adaptive management approach is usuay necessary (earning from the restoration attempt itsef), timescaes for success vary greaty, and sedom do restored sites reach their preimpact state for the BES features of concern. Degraded Bioogica modification Abiotic threshhod Physico-chemica modification Where avoidance and minimization are unabe to prevent severe 66 project-attributabe environmenta degradation, it is typicay not feasibe to return such degraded areas to their pre-disturbance state. In these cases, threshods may have been crossed that prevent recovery within reasonabe time frames, ecoogica communities may fai to reassembe predictaby, and cumuative environmenta change over ong timescaes often makes such a goa Ruiz-Jaen, M. C. and Aide, T. M. (2005). Restoration Success: How is it being Measured? In Restoration Ecoogy, Vo.13, Issue 3, pp Maron, M. et a. (2012). Faustian bargains? Restoration reaities in the context of biodiversity offset poicies. In Bioogica Conservation, Vo. 155, pp Meaning that impact intensity is sufficient to cause the system to cross an abiotic threshod which wi require physico-chemica modification of the substrate before bioogica regeneration can commence. Page 56 A cross-sector guide for impementing the Mitigation Hierarchy

59 Section 3 Restoration unattainabe. These are important considerations in determining whether the appication of restoration is an appropriate response in the mitigation hierarchy. Assess trajectories: evauating performance criteria and success As with goa setting, evauating restoration success can be approached from cutura, economic, abiotic and biotic perspectives. In many cases restoration programmes start with highy disturbed or degraded habitats, and the timescaes required for the affected habitat to approach a fuy functiona state and for goa attainment are typicay ong. In practice, therefore, most performance criteria wi focus on indicators of the system being on a sefsustaining trajectory of recovery, rather than focus on the eventua goa. At this stage of recovery, the habitat structure is ikey to be immature and the desired species composition may not yet be estabished. Ceary-described quantitative end points and intermediate targets are needed to manage restoration and address stakehoder input. From the biotic perspective, indicators of key ecosystem attributes (e.g. vegetation structure and cover) may be seected, either to measure goa attainment directy, or to estabish whether suitabe ecoogica processes are reoccurring. Reference sites may be used, with caution, to hep set end points and targets; science-based ecosystem modes may aso hep to quantify intermediate targets and end points. success 68. Any residua impacts predicted to remain after restoration is compete wi need to be sma enough to be acceptabe to stakehoders and reguators (e.g. ALARP as ow as reasonaby practicabe). If residua impacts are predicted to be arger, biodiversity offsets may need to be evauated. Learn by doing: the adaptive management approach Data from trajectory anaysis of performance criteria can be usefuy incorporated into a typica monitoring and evauation framework ( BACI see beow) in order to drive adaptive management of restoration interventions for the attainment of ong-term goas. The BACI framework reates to the foowing casses of information in the case of restoration: B - Before project impact ecoogica baseine A - After project impact ecoogica baseine C - Contro information from a reference site(s) I - Impact/resuts of the restoration impementation. Time-series data can be coated for these indicators to pot their trajectories. This aows evauation of progress towards end points and targets, and makes it possibe to judge whether system recovery can reasonaby be assumed to be heading towards defined goas 67. Trajectories can aso be used to adapt management, and communicate with externa stakehoders. Because project site cosure and divestment wi often come before restoration goas are fuy attained, trajectory anaysis is increasingy being used to predict 67 Koch, J. M. and Hobbs, R. J. (2007). Synthesis: Is Acoa Successfuy Restoring a Jarrah Forest Ecosystem after Bauxite Mining in Western Austraia? In Restoration Ecoogy, Vo. 15, Issue Suppement s4, pp. S137-S Dey, D. C., and Schweitzer, C. J. (2014). Restoration for the future: Endpoints, Targets and Indicators of Progress and Success. In Journa of Sustainabe Forestry, Vo. 33, Suppement 1, pp. S43-S65; and Ruiz-Jaen, M. C. and Aide, T. M. (2005). Restoration Success: How is it being Measured? In Restoration Ecoogy, Vo. 13, Issue 3, pp A cross-sector guide for impementing the Mitigation Hierarchy Page 57

60 Section 3 Restoration By deveoping baseine information with ongoing research, it can be usefu to buid a conceptua mode of how the ecosystem functions and responds to inputs of materias or environmenta stressors. These modes can hep buid an understanding of the structure and function of the ecosystem, in particuar what the controing factors might be for key deveopmenta processes (e.g. fire or fooding of a certain frequency and intensity may be essentia to stimuate regeneration). Such an understanding enabes more effective adaptive management decisions. Where restoration or offset activities are ongoing and of significant scae, they may benefit from periodic fied review by a sma team of externa experts. Expert review coud be sought first at the stage of detaied panning for restoration/offsets projects, to ensure that techniques to be used and the expected gains are appropriate and reaistic. Subsequent review at (say) five-year intervas woud provide a check that activities are on track, and scope for impementing adaptive management if needed. As we as improving outcomes, externa review may hep to reassure stakehoders that remediation work is being addressed seriousy and is continuing to a high standard. Page 58 A cross-sector guide for impementing the Mitigation Hierarchy

61 Section 4 Offsets Definitions The CSBI defines offsets as Measurabe conservation outcomes, resuting from actions appied to areas not impacted by the project, that compensate for significant, adverse impacts of a project that cannot be avoided, minimized and/or restored 69. There are numerous definitions of biodiversity offsets, spanning the reguatory, business and scientific sectors 70 (see the Definitions section on page 79 for more detai). Offset definitions often specify an end goa of NNL or net gain, to provide compete compensation 71 for significant residua impacts of the project. This may aso be required by reguators, financing conditions or company poicy. However, offsets may not aways aim to compensate fuy for residua impacts, nor be impemented in an NNL framework, providing an aternative outcome based on the socia, poitica and reguatory expectations. 72 Offsets amost aways invove conservation interventions reated to and or sea management 73 away from the site of direct project impact. Typicay, offsets are in an area where the BES features of concern (and subject to significant 69 Adapted from CSBI (2013a). Framework for Guidance on Operationaizing the Biodiversity Mitigation Hierarchy. 70 Key common eements within the offset definitions incude: i) offsets invove actions that provide measurabe gains for biodiversity; ii) offsets compensate for significant residua negative impacts after earier steps in the mitigation hierarchy have been appied; and iii) offsets aim for a specific and measurabe outcome, most commony to target no net oss or a net gain if required by reguation, a financing institution or interna company poicy, for biodiversity on the ground. 71 The term compensation used here and esewhere in this chapter is used in a genera sense to mean remediation of impacts; it does not impy financia measures or payments. 72 No net oss is a common aim for offsets, and required by some reguators and financia institutions. A recent IUCN study has examined the conditions for a biodiversity offset to achieve no net oss (which are narrow) and the conditions for offsets to achieve outcomes better than the status quo of (often financia) compensation. The IUCN study finds that there is enormous potentia for current compensation practices to be improved, even if these do not end up achieving no net oss. See Pigrim and Ekstrom (2014). The Taninthayi nature reserve in Myanmar (TBC, 2014a) provides an exampe of a compensation project set up outside a no net oss framework, which has had positive outcomes. 73 Mechanisms used to effect offsets coud incude (among others) conservation easements, covenants, community agreements, improved management of a site with cear tenure, and improved ega and/or on-the-ground protection for new, proposed or existing protected areas. A cross-sector guide for impementing the Mitigation Hierarchy Page 59

62 Section 4 Offsets residua impact) are present 74. However, this may not be the case where an offset invoves trading up, i.e. where it targets BES features that are judged to be of higher priority than those impacted by the project. Biodiversity offsets may be set up in terrestria, freshwater or marine systems. As we as offsets, projects may undertake additiona conservation actions (ACAs). The term refers to a wide range of interventions that are intended to be positive for BES, the impacts of which may be hard to quantify 75. ACAs may or may not target BES features that have been significanty impacted by a project, but unike offsets they are not designed to provide measurabe gains that can be set against those impacts 76. Rationae BES offsets are the fourth and ast component of the mitigation hierarchy 77 and are designed to compensate for significant adverse residua impacts that remain after efforts have been made to avoid, minimize and restore 78. Ideay, the appication of appropriatey comprehensive and targeted avoidance, minimization and restoration woud fuy address a project s biodiversity-reated risks and impacts i.e. no materia residua impacts/risks woud remain that might warrant an offset. Government reguation Reativey few governments as yet have poicies that require or enabe BES offsets, but the number is increasing 79. Such schemes have specific provisions on how offsets shoud be panned, designed and impemented. In some cases, government-required BES offsets are tied to a market mechanism for trading credits, such as a habitat bank 80. Requirements for financing Many internationa financing institutions have, or are deveoping, environmenta safeguard poicies that require offsets where projects resut in significant, unavoidabe residua impacts on BES 81. Notaby, the IFC s Performance Standard 6 (IFC, 2012a) is aso foowed by the 79 Equator Principe banks and by 32 OECD (Organisation for Economic Cooperation and Deveopment) export credit agencies. PS6 requires a net gain for Critica Habitat 82 and, where feasibe, no net oss for Natura Habitat 83. The business case for BES offsets An increasing number of companies have adopted vountary no net oss or net gain goas for biodiversity management 84. Meeting these goas is often achieved through the use of biodiversity offsets. Where significant adverse impacts do remain, these can potentiay be addressed via a BES offset. 74 This may not aways be the case. For exampe, it has been proposed to offset residua project impacts caused by increased sedimentation on Austraia s Great Barrier Reef by funding improved agricutura practices on and in coasta catchment areas. 75 See the definition of ACAs on the UNEP-WCMC Biodiversity A Z website: 76 An exampe of an ACA might be a genera environmenta awareness programme supported by the project and focused on oca communities or schoos. 77 An aternative representation of the mitigation hierarchy is avoid/reduce/remedy ; biodiversity offsets are a component of the remedy category. 78 The terms restore and restoration are used in a genera sense to describe this remediative component of the mitigation hierarchy. In some jurisdictions and technica descriptions, restoration impies returning a disturbed physica environmenta attribute to a condition exacty the same as that which existed prior to the disturbance. This sense does not necessariy appy here. Restoration in the mitigation hierarchy may incude or equate to recamation or rehabiitation, i.e. returning a disturbed physica environmenta attribute to a stabe and usefu state (but different to its condition prior to disturbance). 79 TBC (2014b); ten Kate and Crowe (2014). 80 We-estabished schemes incude: New South Waes (Austraia) Biobanking; State Government of Victoria (Austraia) vegetation credit register; Canadian fish habitat; US species conservation banking; US wetands banking; and German habitat banking. (See Webinks on page 75.) 81 Most internationa finance institutions have environmenta and socia safeguards/frameworks mandating offsets, incuding the Africa, Asia and Inter-American Deveopment Banks, the European Bank for Reconstruction and Deveopment (EBRD), and the Word Bank Group (Internationa Bank for Reconstruction and Deveopment, Internationa Finance Corporation and the Mutiatera Investment Guarantee Agency). 82 PS6 defines Critica Habitats as areas with high biodiversity vaue, incuding (i) habitat of significant importance to Criticay Endangered and/or Endangered species; (ii) habitat of significant importance to endemic and/or restricted-range species; (iii) habitat supporting gobay significant concentrations of migratory species and/or congregatory species; (iv) highy threatened and/or unique ecosystems; and/or (v) areas associated with key evoutionary processes. The Word Bank s draft Environmenta and Socia Safeguard 6 and equivaent standards of other MFIs adopt simiar, though not aways identica, definitions. 83 Natura habitats are areas composed of viabe assembages of pant and/or anima species of argey native origin, and/or where human activity has not essentiay modified an area s primary ecoogica functions and species composition. 84 For a recent review, see: Rainey, H. et a. (2014). An exampe is Rio Tinto s biodiversity strategy: Page 60 A cross-sector guide for impementing the Mitigation Hierarchy

63 Section 4 Offsets The business case for adopting such goas, and impementing offsets, may incude severa factors, for exampe: reduced risks and iabiities; strengthened reationships with stakehoders (oca communities, reguators, NGOs and others); trust buit on a credibe reputation growing the socia icence to operate with oca, nationa and internationa benefits; continued access to natura capita and and; increased investor confidence and oyaty; improved staff oyaty; increased reguatory goodwi, avoiding deays in permitting; infuence over emerging environmenta reguation and poicy; know-how buit for cost-effective compiance with increasingy stringent environmenta reguations; first-mover benefits in the market; and strategic opportunities in new markets and businesses, as adoption of simiar goas for biodiversity becomes more widespread. In practice, the appication of a vountary approach wi be driven by technica and economic considerations, socio-economic factors, reputationa concerns and the need to ensure stakehoders are satisfied that offsetting for significant residua impacts is adequate and appropriate to meet the stated goa. Key principes Severa governments and internationa processes have defined principes for biodiversity offsets 85. These are intended to hep ensure that offsets ead to genuiney positive conservation outcomes, that deveopers can distinguish between sound and unsound offset investments, and that the views of reevant stakehoders are taken into account. The principes for offsets have been expressed in various ways 86 but the core technica criteria incude: Appication of the mitigation hierarchy: the earier components of the mitigation hierarchy shoud aways be systematicay appied, as expained in earier chapters of this guidance. Recognition of imits: is redress for project-attributabe osses actuay possibe? Equivaence: is an offset a fair exchange for what is ost? 87 Outcomes: is the offset designed, impemented and monitored to achieve cear, stated and (where possibe) quantitativey assessed outcomes for biodiversity? Stakehoder engagement: have the appropriate stakehoders been engaged in panning and design of the offset, and wi they continue to be engaged in its impementation? Additionaity: wi an offset resut in a rea positive change on the ground, which woud not have resuted anyway? Longevity: wi an offset ast at east as ong as a project s impacts? These criteria need to be carefuy considered when panning, designing and impementing biodiversity offsets. Types of offsets Athough offsets can appear very diverse, there are two basic types: 1. Restoration offsets: designed to remediate past damage to biodiversity (due to factors unreated to the deveopment project in question) by making positive conservation management interventions, such as the rehabiitation or enhancement of biodiversity components (or even recreation of ecosystems and their associated biodiversity vaues) at suitabe offset sites. 2. Protection or averted oss offsets: designed to protect biodiversity in an area demonstrated to be under threat of imminent or projected oss (due to factors unreated to the deveopment project in question). 85 For exampe, see: NSW (2014), the New South Waes Government poicy on biodiversity offsets ( and the BBOP offset principes ( 86 Offsets principes are discussed further in a number of reports and pubications, incuding: IUCN (2014a); Pigrim and Ekstrom (2014); ICMM-IUCN (2013); and BBOP (2012a). 87 In practice, this usuay means whether the BES conserved is ecoogicay very simiar to the biodiversity impacted, or of a different kind and a higher conservation priority (when trading up is justified). Equivaence is discussed at greater ength in Gardner et a. (2013) and Quétier & Lavore (2011). A cross-sector guide for impementing the Mitigation Hierarchy Page 61

64 Section 4 Offsets The two kinds of offsets are not excusive. For exampe, an offset coud aim to remove invasive species ( restoration ) whie aso protecting a site against predicted future habitat degradation ( averted oss ). Key steps in offsetting Frequenty, offsets are compex projects with a number of different facets a of which need to be considered in design and impementation. These incude: Technica considerations: What are the intended outcomes? How wi these be measured and in what currencies? How wi the offset integrate andscape considerations and aign with regiona or nationa conservation pans? Management considerations: What conservation interventions wi be used and how wi these be impemented? How wi day-to-day management of the offset be handed? How wi progress be monitored and adaptive management impemented? Stakehoder considerations: How wi the offset address stakehoder expectations ensuring buy in to the offset process and pans, and participation and partnership where appropriate? How wi socia and biodiversity aspects be integrated? Impementing offsets on and where communities enjoy ega or customary tenure or use rights shoud invove effective consutation with the affected communities. Where impementing offsets coud potentiay have significant adverse impacts on affected communities, they can ony be impemented with Informed Consutation and Participation (ICP) 88 with those communities. Economic and sustainabiity considerations: What wi the offset cost to set up and manage? How wi resources be generated and made avaiabe to conserve the offset in perpetuity (or as ong as it is required to run)? Governance considerations: Who owns and who manages the and (or sea) invoved in the offset? What partnerships and ega arrangements are necessary? Shoud these remain static or evove over the course of the project? How wi decisions be taken on such changes? Outside a few reguatory frameworks that use offset banking approaches (see Government reguation on page 60) there is as yet imited experience in setting up and managing offsets on the ground. Lessons earned so far suggest that issues of sustainabiity, governance and stakehoder participation demand more attention than they have generay received, especiay as some of the issues here may be unfamiiar to companies in the course of their usua operations. There is considerabe scope for offset design and management to be informed (more than it has been to date) by growing experience in the successfu design and management of Protected Areas. 89 The key steps in offset design are summarized in Figure 12 on page 65. It is important to recognize the major roe of affected stakehoders throughout the offset design process, and in particuar prior to the seection of an offset site and the approva of draft offset impementation and management pans 90. Before entering Phase 1 (offset contextuaization) it is important to have gone through some preparatory steps, as outined esewhere in this guidance document: Identify and assess the key BES features in the project s ocation and area of impact (incuding through consutation with oca and indigenous communities to determine socia and cutura BES vaues, where appropriate). Appy the previous components of the mitigation hierarchy (with iterations if necessary). Quantify project-attributabe biodiversity-reated osses and gains. Assess significant adverse residua impacts that coud warrant a biodiversity offset. For a more detaied expanation of the key steps outined beow, see The practice of offsetting on page IFC PS6 indicates that where impementing offsets woud invove potentiay significant adverse impacts on affected communities, they can ony be impemented with Informed Consutation and Participation (ICP). ICP is defined in para 31 of IFC s PS1. The eve of consutation with respect to Indigenous Peopes is beyond the scope of this document. In some cases, as outined in IFC s PS7, this woud require Free Prior and Informed Consent (see UN-REDD, 2013 for guidance). 89 See for exampe recent papers on Protected Area effectiveness incuding: Edgar et a. (2014); Gedmann et a. (2013); and Watson et a. (2014). 90 More detaied information on offset design can be found in BBOP (2012b). ICMM-IUCN (2013) provides an overview, and vauabe background information can be found in recent IUCN pubications avaiabe at and Page 62 A cross-sector guide for impementing the Mitigation Hierarchy

65 Section 4 Offsets Phase 1: BES offset contextuaization Step 1: Review the project scope and activities. Step 2: Review residua adverse impacts and determine the need for an offset. Step 3: Review the ega framework and/or poicy context for a biodiversity offset. Step 4: Review broad-brush offset costs (both set-up and management) for different pausibe scenarios of conservation intervention and governance/ management arrangements. Step 5: Using this information, introduce discussion of offsets into ongoing stakehoder participation and engagement processes. Phase 2: BES offset strategy Step 6: Use project-specific goas, nationa or regiona conservation panning frameworks, and strategic stakehoder engagement to identify potentia sites or projects for offset possibiities. Step 7: Produce an annotated ist of offset options. Step 8: Screen the offset options (sites/projects) for theoretica, technica and socio-poitica feasibiity (see Box 9). Step 9: If no options are feasibe, and residua impacts are unacceptabe, return to iterative appication of the earier steps of the mitigation hierarchy (see pages 16 17) to reduce predicted residua impacts. Otherwise, from this screening, seect one or two prime options for detaied feasibiity studies 91. Step 10: Record the rationae for seecting these options, and outine the proposed genera approach for offset impementation, incuding institutiona arrangements and partnerships, in a short report the Biodiversity Offset Strategy. Phase 3: BES offset design and management panning Step 11: Conduct detaied feasibiity studies for proposed sites/projects, incuding oss/gain accounting for predicted biodiversity gains against residua impacts (see The practice of offsetting on page 66). and assessment of options for institutiona arrangements and partnerships. Make fina site/project seection. Step 12: For the chosen site(s) and/or projects, carry out a detaied design and management panning process based on sound science. Step 13: Carry out a set of design tasks in parae, ensuring that information fows between a the processes: (a) Technica design: Research and choose among possibe types of conservation intervention (e.g. protecting and, panting trees, invasive weed remova). Ensure that issues of equivaence, additionaity and permanence are ceary addressed, and that estimates of potentia gains vis-à-vis residua impacts are we founded, based on good fied data and reaistic assumptions, and incorporate uncertainties/risks of faiure and time ags. Further on-ground studies shoud be commissioned as necessary. (b) Socia design: Buiding on earier stakehoder engagement, carry out appropriate con - sutation and communications, and invove reevant stakehoders in participatory panning. Biodiversity offsets are more ikey to fai for stakehoder-reated reasons than for any other reason. It is important to ensure that an offset is acceptabe to affected stakehoders by undertaking appropriate engagement and communications. Issues of socia equity regarding the and management changes that are being proposed need to be addressed appropriatey. Where offsets affect ands where communities enjoy ega or customary tenure or use rights, they can ony be impemented with Informed Consutation and Participation (ICP) with affected communities For a recent exampe, see the 2012 report on Rio Tinto s biodiversity offsets strategy for the Oyu Togoi project (TBC and FFI, 2012). 92 ICP is defined in para 31 of IFC s PS1. The eve of consutation with respect to Indigenous Peopes is beyond the scope of this document. In some cases, as outined in IFC s PS7, this woud require Free Prior and Informed Consent (see UN-REDD, 2013 for guidance). A cross-sector guide for impementing the Mitigation Hierarchy Page 63

66 Section 4 Offsets (c) Governance design: Assess options for offset governance and management. This may incude considerations of and/sea tenure (and purchase, conservation easements, new community or government-managed Protected Areas, community management agreements). Options shoud be considered in the context of nationa poicy and ega mechanisms and of stakehoder input, recaing that the interests of different stakehoder groups may need to be baanced. Key roes and responsibiities in impementing the offset need to be described. (d) Financia design: Ensure that the offset is economicay feasibe for the period of a project s responsibiity. As a minimum, resources must be in pace for the first years after estabishment, with a viabe pan for provision after that. Appropriate ong-term financia mechanisms might invove, for exampe, one-off payments to a trust fund, use of bonds or insurance. Techniques from standard business panning can be used to assess an offset s financia appropriateness and viabiity. Step 14: Deveop an integrated BES Offset Management Pan, which detais the ega, institutiona and financia arrangements to be put in pace for impementation 93. Phase 4: BES offset impementation Step 15: Impement the BES Offset Management Pan, incuding appropriate monitoring and evaua - tion, and ensure adaptive management in response to monitoring information. 93 For an outine of the contents of a BES Offset Management Pan, see BBOP (2009a). Box 9 Offset pre-feasibiity assessment A stepwise assessment of the theoretica, technica and socio-poitica/economic feasibiity of offsetting wi narrow down the options for offset sites and mechanisms to a sma set of choices (see Figure 7 on page 19) and aso increase the certainty that those options are workabe as potentia offsets. Theoretica feasibiity Is there sufficient avaiabe and ecoogicay suitabe and or sea in the country or region for an offset to be possibe? Is there scope, in theory, for restoration or better protection to provide the additiona gains in biodiversity needed? Technica feasibiity Are there known conservation methods that coud achieve the restoration or better protection needed to provide adequate offset gains, within the required timescae and for a reaistic cost? Is it feasibe to sustain the offset over the entire time that it needs to function? Socio-poitica and economic feasibiity Can such changes in and use actuay be put in pace at the candidate offset sites? Are the stakehoder engagement and poitica processes necessary for such changes ikey to be feasibe? Are there reevant and workabe governance modes avaiabe? Is the investment needed to set up and maintain the offset through its ifespan avaiabe, or is there a viabe pan to generate it? Page 64 A cross-sector guide for impementing the Mitigation Hierarchy

67 Section 4 Offsets Figure 12 Summary of the steps and outputs in biodiversity and ecosystem services offset design Exampe of offsets in practice OFFSETS AN EXAMPLE A marine offset for a coa termina in Austraia A project to restore a nationay recognized and isted endangered regiona ecosystem is the first marine offset project for BHP Biiton s coa business. The boundary of the Great Barrier Reef Word Heritage Area in Queensand, Austraia overies BHP s Hay Point Coa Termina port operations. The Marine Pant Restoration Project was deveoped and impemented as a marine fish habitat offset measure to compensate for impacts on mangrove and intertida habitat areas. The project aso ensures no net oss to the ecoogica, aesthetic and water quaity vaues of the area from construction activities that were associated with the port. The project has aided habitat recovery for threatened fauna and fora species, incuding the mangrove mouse, and provided critica nursery grounds for crustaceans and fish species within Sandringham Bay Conservation Park. This has ensured that oca mangrove protection and restoration wi match mangrove oss due to the project, as we as providing enduring benefits across a range of socia and ecoogica parameters. Surveys show no impacts from construction activities to the mangrove mouse popuation or its habitat. The restoration of hydroogy was successfu and significant natura recruitment of satmarsh vegetation is occurring. A cross-sector guide for impementing the Mitigation Hierarchy Page 65

68 Section 4 Offsets The practice of offsetting Buy off the shef? Reguatory offsets Where there are reguatory frameworks pertaining to biodiversity offset design and deivery, offsets can usuay be panned and impemented in a more or ess straightforward manner: On a case-by-case basis, use the guideines and principes provided by the reguator, in cose consutation with reguatory personne. Where such a market exists 94, seriousy consider the option of buying an appropriate quantity of biodiversity credits off the shef in a market-based mechanism (e.g. a habitat or conservation bank). Often, this can be consideraby simper and ess risky than designing and impementing a sef-service offset, where that is an aternative option. who takes on specific responsibiities, and describe the ega, institutiona and financia arrangements in pace so this happens. Add up oss and gain: biodiversity accounting The concepts of no net oss and net gain of biodiversity (see the Overview on pages 8 20) are reativey new. Not surprisingy, there are no universay accepted approaches for determining the type, nature and size of an offset, the appropriateness of proposed intervention measures, and the assessment of the utimate success of the impemented measures. Biodiversity is intrinsicay difficut to measure and compare quantitativey; no singe metric can describe biodiversity as a whoe. Nevertheess, methods have been deveoped (and continue to be refined) for cacuating oss and gain of particuar biodiversity vaues. These may Engage stakehoders and buid partnerships: vountary and finance-requirement offsets This is the more common, and ess straightforward, case. Often, such offsets are in countries with compex and ownership and management arrangements. Simpy easing or purchasing a portion of and may not be a viabe sustainabe option in many cases. Success in designing and impementing such offsets usuay depends on engaging a range of stakehoders, which is ikey to be a combination of: nationa or provincia government agencies; nationa or oca conservation trust funds; community-based organizations, where appropriate; individua and owners in cases where customary and ownership prevais; a partner NGO with nationa presence, institutiona capacity and a track record of success in impementing site-based conservation; and a speciaist consutancy group. Offset impementation over a ong period of time is chaenging. Working with one or more management partners can greaty increase the ikeihood of success. The Biodiversity Offset Management Pan shoud identify 94 TBC (2014b); ten Kate and Crowe (2014). Page 66 A cross-sector guide for impementing the Mitigation Hierarchy

69 Section 4 Offsets focus on habitat as a usefu proxy for biodiversity as a whoe (e.g. quaity hectares, a measure of habitat area x condition), or on a sma set of key species (e.g. units of distribution, a measure of the proportion of the popuation of a particuar species in a defined ocae). Any offset approach that aims to demonstrate how far residua impacts have been addressed (incuding a no net oss or net gain approach) cas for cacuation of projectattributabe osses and gains for the specific biodiversity features of concern. In the context of IFC PS6, for instance, these wi be those species that have given rise to Critica Habitat designation and are aso materiay impacted by the project, as we as any Natura Habitat significanty impacted. Often, it wi aso be appropriate to incude other species or habitats that are of particuar concern to stakehoders. For cacuating osses, residua impacts on biodiversity features need to be considered at a andscape scae reevant to the ecoogy of the biodiversity features of concern (incuding indirect impacts such as induced/faciitated access to an area with noteworthy biodiversity). In identifying the biodiversity features of concern, and seecting potentia offset options (if warranted), cumuative impacts of mutipe projects across the andscape may aso need to be taken into account. The baseine for oss cacuation is normay the situation prevaiing before project impementation begins one reason why it is important to undertake baseine biodiversity surveys for impact assessment 95. Cacuating gains invoves a number of predictions of how biodiversity vaues wi change foowing the impementation of an offset compared to what woud have happened without the offset (the counterfactua scenario). This is a compex technica task as biodiversity features show natura variation over time, and can be affected either positivey (e.g. through other expected conservation investments) or negativey (e.g. through ongoing habitat oss, or widife poaching). Gain cacuations thus ca for a knowedge of baseine conditions pre-offset (gained, ideay, by targeted baseine surveys) and an estimate of trends in pressures and conservation responses (based on expert knowedge and assessment) to accuratey estabish the counterfactua. There is aso a need to ensure that investing in an offset does not simpy dispace pressures on biodiversity to other paces (so-caed eakage ), thus diminishing or eiminating gains. Expert invovement is essentia in net gain type deiberations. Find the right site: some practica shortcuts The offset site seection process can be time-consuming, costy and compex. Focusing on sites that are aready designated as conservation priorities, but may be inadequatey protected, can reduce the negotiation period and transaction costs, ease stakehoder discussions, (sometimes) de-risk and rights issues and utimatey improve outcomes. Such sites coud be identified in a number of ways incuding via: aggregated offsets that have aready been identified (see Joined up thinking? The pros and cons of aggregated offsets on page 69); nationa conservation pans, incuding the Nationa Biodiversity Strategy and Action Pans (NBSAPs) produced under the Convention on Bioogica Diversity; priorities for conservation identified by internationay credibe mechanisms, such as the Key Biodiversity Areas standard deveoped by IUCN (incuding BirdLife Internationa s Important Bird and Biodiversity Areas); and existing protected areas that are under-resourced and woud benefit from additiona onger-term investment. There are some caveats: Equivaence (whether or not the option represents fair and appropriate redress) may be an issue where potentia offset sites are substantiay different from the impact site(s). Where offset and impact sites are far apart, oss of ecosystem services for particuar stakehoder groups may aso be a consideration this can be a significant socia risk for certain projects 96. Demonstrating additionaity may be probematic where governments have (or arguaby shoud have) aocated funding for conservation impementation, such as for existing protected areas. These concerns need to be investigated and addressed on a case-bycase basis. 95 See CSBI (2015) for guidance on baseine surveys A soution in this case coud be a composite offset, with one (or more) offset sites that dea with ike-for-ike-or-better BES exchanges in the context of andscape-eve panning, and another set of offset activities cose(r) to the project s impacts to offer redress to oca communities whose ecosystem services have been affected by the project. A cross-sector guide for impementing the Mitigation Hierarchy Page 67

70 Section 4 Offsets Think ong term: ensuring offset permanence In principe, the changes in and management or use needed to impement a biodiversity offset are no different from those impemented routiney by government and non-government conservation organizations, for exampe in protected areas. However, outcomes for offsets need to be quantified and verified if their contribution to the appication of the mitigation hierarchy is to be demonstrated. Simiary, if offsets are to compensate for significant residua impacts, they need to ast for at east as ong as the impacts they are offsetting. In many cases, this means that offset outcomes shoud aim to be permanent, or at east to be sustained for a protracted period of time, often beyond the ife of a project. Permanence may ca for ega designation or agreement, for exampe through the estabishment of conservation easements or the designation of protected areas under nationa aw. Usuay, this must be combined with ongterm financing mechanisms that cover not just set-up costs but aso ongoing management and monitoring costs. These might be, for exampe, trust funds or secured government budget commitments. If trust funds or simiar mechanisms are to be used, the costs shoud be factored into project budgets at the eariest possibe stage. Not a costs need necessariy be borne by the project. In some circumstances (for instance, where the offset is addressing a cear goba conservation priority, and providing gains for biodiversity features beyond the ones impacted by the project) it may be possibe to attract trust fund contributions from other sources, such as foundations. Managed and may aso be abe to generate some revenue, in time, towards recurrent costs. However, the probabe size of such contributions can easiy be overestimated. The medium- to ong-term future cannot be reiaby predicted. There is thus usuay intrinsic uncertainty about how far the predicted biodiversity gains of an offset can, or wi be, reaized. Uncertainty can be deat with by discounting predicted gains proportionatey (e.g. resuting in an increase in the physica size of an offset). Often the extent of uncertainty is itsef uncertain, so again a precautionary approach (informed by expert opinion) is advisabe. Uncertainty coud aso be addressed via some type of insurance mechanism. Whie offset insurance approaches are being deveoped for greenhouse gas emissions, this is unexpored territory for biodiversity offsets as yet. Off the shef offset credits, purchased through habitat banks or simiar reguated regimes, are a way of effectivey addressing uncertainty. However, it may take years after offset reguations are introduced for credits to become avaiabe, and in many regions and tenure arrangements may make such schemes unworkabe. For marine offsets, habitat banks are unikey to be feasibe except where terrestria offsets can reduce threats that emanate from and (e.g. sediment oad for cora reefs). Biodiversity offsets cannot be set in a static context. Environmenta changes, incuding those associated with cimate change, are a reaity in the medium to ong term. Managing offsets adaptivey is therefore vita if anticipated gains are to be reaized and not undermined. An adequate offset monitoring and evauation system is therefore needed for this purpose. Financia support for this needs to be buit into whatever ong-term financia arrangements are made for supporting the offset. Page 68 A cross-sector guide for impementing the Mitigation Hierarchy

71 Section 4 Offsets Patience is needed: how ong do offsets take to set up? The types of biodiversity offset that industry is now expected or required to undertake, by host-country government reguation and/or externa financiers, may take two years or more to set up. Severa projects are currenty four to eight years into the set-up process for their stipuated biodiversity offsets and have not yet started active impementation on the ground. This is not surprising, given the time required for permitting of industria concessions and the and-use panning/ stakehoder consutation required. Where a government or government private sector system has been set up to provide offset credits, conveyancing can take 3 24 months, and typicay invoves much ess effort on the part of a project proponent. Exampe systems incude the New South Waes biobanking scheme, the Victoria State Native vegetation credit register and the US species conservation or wetand mitigation banks 97. Keep on track: monitoring offset performance Tracking biodiversity offset performance is important for managing the impementation schedue and budget, evauating progress towards estabished goas/outcomes, and for adapting interventions when needed. With mutipe stakehoders and ong-term aims and often rapidy changing socia and economic contexts biodiversity offsets can readiy experience scope-shift 98. Therefore, the carefu tracking of targets, actions and outcomes is criticay important. Setting up, training and resourcing a dedicated monitoring unit (part of the project team or via a contractor or partner, or with eements of a three) wi hep to ensure consistency of approach and that monitoring is not negected or overooked. As for major restoration efforts, externa expert review at intervas may hep to keep offset performance on track (see page 58). Constraints, chaenges and creative thinking A number of issues are emerging as industry continues to design and impement biodiversity offsets. Some of the most significant of these are outined beow. Joined-up thinking? The pros and cons of aggregated offsets Aggregated offsets are where a singe offset site is used to compensate for the impacts of mutipe projects. Where credits from such a site are sod to project proponents, it becomes a type of conservation bank. For a project proponent, this approach has many advantages: it reduces transaction costs, can imit or prevent schedue deays, and outsources many difficut technica and poitica questions (incuding the significant sociopoitica issues of and-use change) to other institutions with a cear mandate for tacking these issues. Nationa biodiversity offset schemes may invove a network of aggregated offsets, seected to fi gaps or enhance connectivity in existing Protected Areas networks. 99 For government and conservation NGOs, aggregated offsets have the great advantage of aowing integration of biodiversity offsets with arge-scae conservation panning, ensuring that regiona or nationa conservation priorities are addressed, and that offsets are sufficienty arge and we-connected to function effectivey within wider andscapes. Despite these positives, few aggregated biodiversity offsets yet exist. One reason is that they require significant seed funding to set up, with no guarantee of success. Using aggregated offsets may aso make it difficut to demonstrate equivaence the particuar habitat or species being impacted may not be conserved in the aggregated offset. Industry may aso fee that aggregated 97 New South Waes (Austraia) Biobanking; State Government of Victoria (Austraia) vegetation credit register; Canadian fish habitat; US species conservation banking; US wetands banking; and German habitat banking, pp (See Webinks on page 75.) 98 Fundamentas are provided in ICMM-IUCN (2013). 99 In Liberia, a proposed nationa biodiversity offsets scheme is tied to the expansion of the protected areas network. Sites chosen as aggregated offsets sites are among those with the highest vaue for biodiversity conservation: see A cross-sector guide for impementing the Mitigation Hierarchy Page 69

72 Section 4 Offsets offsets are not cosey inked enough, in pubic perception, to their project, and thus that they do not effectivey address issues of reputationa risk and stakehoder (especiay oca community) acceptance. Aggregated offsets are being activey expored at present as part of proposed government reguatory schemes. For instance, the Word Bank is promoting the use of nationa biodiversity offsets schemes, and has piot projects in Liberia and Mozambique. How it works on water: offsets at sea Most experience with offsets so far has been in terrestria systems. However, the requirements of host-countries (usuay), internationa financing institutions and other financiers as we as vountary company-specific commitments appy just as much to the marine ream. Marine offsets are not fundamentay different to terrestria ones. However, they do pose some specific chaenges and compexities, for severa reasons: 100 Geography: Marine systems are highy interconnected, and so a project s potentia biodiversity-reated impacts may be diffuse and widespread. In the water coumn and on the surface, ecoogicay important features are often highy mobie, and in unpredictabe ways. Many species routiney move verticay, far more than in the terrestria environment. In coasta environments, there are aso strong interactions between and and water, so the sea is infuenced by what is happening on the and but not usuay the other way around. Ecoogy: Marine organisms can have particuary compex ife histories. They may inhabit different ecosystems at different ife stages, and may aso move from being highy mobie and widespread, as arva forms, to being sedentary and ocaized as aduts. Many species show intense concentrations over short periods, meaning that some species may be very widespread but aso highy dependent on a few ocations, e.g. for breeding. Concentrations are inked to the non-continuous and variabe resources of the marine environment. Poitics: Tenure and ownership systems are usuay very different with regard to the sea versus on and. Outside nationa jurisdictions, the high seas have no effective biodiversity-focused governance. Data: Whie there is an increasing number of good marine biodiversity datasets, data are often patchy and scanty as compared to terrestria systems. Some ecosystems (such as the benthos and the open ocean) are intrinsicay difficut to survey and monitor. Experience in marine offsets is sti very imited. However, as ong as the particuar characteristics of the marine ream are borne in mind, it shoud be possibe to design and impement offsets in the ocean environment just as on and. Offset socia success: worth striving for Projects invoving and-use change are often probematic with regard to their biodiversity risks and reated impacts. An offset may take many years to demonstrate technica success for its target biodiversity features. With appropriate design, however, it coud achieve socia success among key stakehoders much earier. Eary socia success of an offset can address some project-reated risks for at east the first 5 10 years of an offset s impementation period. Such success coud encourage further financing and support of the project, and hep achieve anciary objectives such as maintaining the oca socia icence to operate and host-country government support. A focus on achievabe impementation targets for a biodiversity offset, such as community acceptance and participation and government engagement, in addition to technica/scientific outcomes, wi hep to ensure ong-term success. 101 The success of some and-use compensation programmes not designed as biodiversity offsets is evidence of the importance of socia success See TBC (2013) 101 BBOP (2009b) discusses engagement of stakehoders in a cost-benefit context. 102 TBC (2014a) a review of the Taninthayi Nature Reserve in Myanmar. Page 70 A cross-sector guide for impementing the Mitigation Hierarchy

73 References BBOP (2009a). Biodiversity Offset Impementation Handbook. Business and Biodiversity Offsets Programme, Washington, D.C. BBOP (2009b). Biodiversity Offset Cost-Benefit Handbook. Business and Biodiversity Offsets Programme, Washington, D.C. BBOP (2012a). Standard on Biodiversity Offsets. Business and Biodiversity Offsets Programme, Washington, D.C. BBOP (2012b). Biodiversity Offset Design Handbook and Biodiversity Offset Design Handbook Appendices. Business and Biodiversity Offsets Programme, Washington, D.C. and Chaîneau, C., Hirst, R., A-Thary, I., Dutrieux, E., Thorin, S., Caragnano, A., Benzoni, F. and Pichon, M. (2010). Resuts And Lessons Learned From A 3-Year Intensive Cora Communities Monitoring During Construction Of A LNG Pant In Yemen. Society of Petroeum Engineers, Document ID: SPE MS. DOI: CSBI (2013a). Framework for Guidance on Operationaizing the Biodiversity Mitigation Hierarchy. December CSBI (2013b) CSBI Timeine Too A too for aigning timeines for project execution, biodiversity management and financing. Cross-Sector Biodiversity Initiative. CSBI (2015). Good Practices for the Coection of Biodiversity Baseine Data. Dey, D. C. and Schweitzer, C. J. (2014). Restoration for the Future: Endpoints, Targets and Indicators of Progress and Success. In Journa of Sustainabe Forestry, Vo. 33, Suppement 1, pp. S43-S65. EBRD (2014). Performance Requirement 6: Biodiversity Conservation and Sustainabe Management of Living Natura Resources. European Bank for Reconstruction and Deveopment. May Edgar, G. J., Stuart-Smith, R. D., Wiis, T. J., Kininmonth, S., Baker, S. C., Banks, S., Barrett, N. S., Becerro, M. A., Bernard, A. T. F., Berkhout, J. et a. (2014). Goba conservation outcomes depend on marine protected areas with five key features. In Nature, Vo. 506, pp Equator Principes (2014). Guidance for EPFIS on incorporating environmenta and socia considerations into oan documentation. March documentation_march_2014.pdf European Commission (1999) Guideines for the Assessment of Indirect and Cumuative Impacts as we as Impact Interactions. Office for Officia Pubications of the European Communities, Luxembourg, 169 pp. A cross-sector guide for impementing the Mitigation Hierarchy Page 71

74 References European Commission (2014). Guide to Cost-Benefit Anaysis of Investment Projects. Economic appraisa too for Cohesion Poicy pp. Avaiabe at: European Commission (2015). Cost-effectiveness anaysis (website). EuropeAid Cooperation Office, Brusses. Accessed March Gaveston District (2013). Gaveston District Stream Condition Assessment: Evauating Avoidance, Minimization, Stream Restoration Projects and Compensatory Mitigation Pans. June % pdf. Accessed March Gardner, T. A., Hase, A., Brownie, S., Ekstrom, J. M., Pigrim, J. D., Savy, C. E., Stephens, R. J. T., Treweek, J., Ussher, G. T., Ward, G. and ten Kate, K. (2013). Biodiversity offsets and the chaenge of achieving no net oss. In Conservation Bioogy, Vo. 27, Issue 6, pp Gedmann, J., Barnes, M., Coad, L., Craigie, I. D., Hockings, M. and Burgess, N. D. (2013). Effectiveness of terrestria protected areas in reducing habitat oss and popuation decines. In Bioogica Conservation, Vo. 161, pp Hobbs, R. J., Arico, S., Aronson, J., Baron, J. S., Bridgewater, P., Cramer, V. A., Epstein, P. R., Ewe, J. J., Kink, C. A., Lugo, A. E., Norton, D., Ojima, D., Richardson, D. M., Sanderson, E. W., Vaadares, F., Vià, M., Zamora, R. and Zobe, M. (2006), Nove ecosystems: theoretica and management aspects of the new ecoogica word order. In: Goba Ecoogy and Biogeography, Vo. 15, Issue 1, pp doi: /j X x ICMM-IUCN (2013). Independent report on biodiversity offsets. IFC (2009). Projects and Peope: A handbook for addressing project-induced in-migration. Internationa Finance Corporation, Washington, D.C., December pp ning+and+adapting/knowedge+products/pubications/pubications_handbook_inmigration wci IFC (2012a). Performance Standard 6: Biodiversity Conservation and Sustainabe Management of Living Natura Resources. Internationa Finance Corporation, Washington, D.C., 1 January AJPERES IFC (2012b). Guidance Note 6: Biodiversity Conservation and Sustainabe Management of Living Natura Resources. Internationa Finance Corporation, Washington, D.C., 1 January IFC (2012c). Good Practice Handbook: Cumuative Impact Assessment and Management Guidance for the Private Sector in Emerging Markets. Internationa Finance Corporation, Washington, D.C., 82 pp. IPIECA/IOGP (2011) Ecosystem services guidance. Biodiversity and ecosystem services guide and checkists. IOGP Report Number 461. London, IPIECA and IOGP. Page 72 A cross-sector guide for impementing the Mitigation Hierarchy

75 References IUCN (2014a). Biodiversity Offsets Technica Study Paper. A report by the IUCN Biodiversity Offsets Technica Study Group. Gand, Switzerand. 65 pp. IUCN (2014b). The IUCN Red List of Threatened Species (website). Version Koch, J. M. and Hobbs, R. J. (2007) Synthesis: Is Acoa Successfuy Restoring a Jarrah Forest Ecosystem after Bauxite Mining in Western Austraia? In Restoration Ecoogy, Vo. 15, Issue Suppement s4, pp. S137-S144. Landsberg, F., Sticker, M., Henninger, N., Treweek, J. and Venn, O. (2013). Weaving Ecosystem Services into Impact Assessment: A Step-by-Step Method. Word Resources Institute. Washington, D.C. Manchester Metropoitan University (2015). Project Management Tempates and Tookits (website). www2.mmu.ac.uk/bit/project-management-tookits. Accessed March Maron, M., Hobbs, R. J., Moianen, A., Matthews, J. W., Christie, K., Gardner, T. A., Keith, D. A., Lindenmayer, D. B. and McApine, C. A. (2012). Faustian Bargains? Restoration reaities in the context of biodiversity offset poicies. In Bioogica Conservation, Vo. 155, pp Moynihan, K. J., Cadwe, E. R., Seier, U. L., Kau, C. F., Daetwyer, N. A., Hayward, G. L. and Batterham, G. (2004). Chad Export Project: Environmenta Protection Measures. Society of Petroeum Engineers, Pubication No. SPE Paper presented at the Seventh SPE Internationa Conference on Heath, Safety, and Environment in Oi and Gas Exporation and Production, Cagary, Aberta, Canada; March NSW (2014). NSW Biodiversity Offsets Poicy for Major Projects. Office of Environment and Heritage for the NSW Government, State of New South Waes. 33pp. OECD (2006). Appying Strategic Environmenta Assessment: Good Practice Guidance for Deveopment Co-operation. OECD Environment Directorate, State of the Environment Division. Using the pressure-state-response mode to deveop indicators of sustainabiity. OECD Framework for Environmenta Indicators. Accessed March Pigrim, J. D. and Ekstrom, J. M. M. (2014). Technica conditions for positive outcomes from biodiversity offsets. An input paper for the IUCN Technica Study Group on Biodiversity Offsets. Gand, Switzerand: IUCN. 46 pp. Poot, H., Ens, B. J., de Vries, H., Donners, M. A. H., Wernand, M. R. and Marquenie, J. M. (2008). Green ight for nocturnay migrating birds. In Ecoogy and Society, Vo. 13, Issue 47. Quétier, F. and Lavore, S. (2011). Assessing ecoogica equivaence in biodiversity offset schemes: key issues and soutions. In Bioogica Conservation, Vo. 144, Issue 12, Rainey, H., Poard, E., Dutson, G., Ekstrom, J., Livingstone, S., Tempe, H. and Pigrim, J. (2014). A review of corporate goas of No Net Loss and Net Positive Impact on biodiversity. In Oryx, Vo. 49, Issue 02, Apri 2015, pp Ruiz-Jaen, M. C. and Aide, T. M. (2005). Restoration Success: How is it being Measured? In Restoration Ecoogy, Vo. 13, Issue 3, pp A cross-sector guide for impementing the Mitigation Hierarchy Page 73

76 References SER (2004). SER Internationa Primer on Ecoogica Restoration. Version 2, October Society for Ecoogica Restoration, Science and Poicy Working Group. Accessed January TBC (2013) Marine and coasta biodiversity offsets. The Biodiversity Consutancy. Industry Briefing Note, Juy TBC (2014a). Review of the Taninthayi Nature Reserve Project as a conservation mode in Myanmar. The Biodiversity Consutancy. November TBC (2014b). Government poicies on biodiversity offsets. The Biodiversity Consutancy. Industry Briefing Note, June TBC (2015) Opportunities for Ecoogica Restoration in Terrestria and Marine Environments. The Biodiversity Consutancy. Industry Briefing Note. TBC and FFI (2012). Biodiversity Offsets Strategy for the Oyu Togoi Project. Unpubished draft report of The Biodiversity Consutancy Ltd. and Fauna & Fora Internationa, Apri Tempe, H., Edmonds, B., Butcher, B. and Treweek, J. (2010). Biodiversity Offsets: Testing a Possibe Method for Measuring Biodiversity Losses and Gains at Bardon Hi Quarry, UK. In In Practice, Edition 70, December Chartered Institute of Ecoogy and Environmenta Management. Bardon.pdf Tempe, H. J., Anstee, S., Ekstrom, J., Pigrim, J. D., Rabenantoandro, J., Ramanamanjato, J. B., Randriatafika, F. and Vinceette, M. (2012). Forecasting the path towards a Net Positive Impact on biodiversity for Rio Tinto QMM. IUCN, Gand, Switzerand. ten Kate, K. and Crowe, M. L. A. (2014). Biodiversity Offsets: Poicy options for governments. An input paper for the IUCN Technica Study Group on Biodiversity Offsets. IUCN, Gand, Switzerand. UN-REDD (2013). Guideines on Free, Prior and Informed Consent. United Nations coaborative initiative on Reducing Emissions from Deforestation and forest Degradation (REDD) in deveoping countries. Watson, J. E. M., Dudey, N., Segan, D. B. and Hockings, M. (2014) The performance and potentia of protected areas. In Nature, Vo. 515, pp WHO (2003). Making choices in heath: WHO guide to cost-effectiveness anaysis. Avaiabe at: Page 74 A cross-sector guide for impementing the Mitigation Hierarchy

77 Webinks Ambatovy Nicke Project: Business and Biodiversity Offsets Programme: Canadian fish habitat: Conservation Evidence: Equator Principes Action Pan for the Pungwe B hydroeectric power scheme: Forest Peopes Programme: German habitat banking: Goba Biodiversity Information Faciity: GobCover Land Cover v database. European Space Agency GobCover Project, ed by MEDIAS- France: Goba Land Cover Faciity Quickbird Imagery: Goba Restoration Network: Integrated Biodiversity Assessment Too: New South Waes (Austraia) BioBanking: Rio Tinto Biodiversity Strategy: Rio Tinto Simandou Project: State Government of Victoria (Austraia) vegetation credit register Information sheet: data/assets/pdf_fie/0003/205356/nvcr_1.pdf Strategic Environment Assessment Information Service: US species conservation banking: US wetands banking: UNEP WCMC Biodiversity A-Z: USGS Landsat Missions, data access: Word Bank Factsheet: Environment and Socia Standard 6: A cross-sector guide for impementing the Mitigation Hierarchy Page 75

78 Further reading AEWA (2008). Guideines on how to avoid, minimize or mitigate the impact of infrastructura deveopments and reated disturbance affecting waterbirds. Agreement on the Conservation of African-Eurasian Migratory Waterbirds (AEWA) Conservation Guideines No. 11. AEWA Technica Series No. 26, September AEWA (2012). Guideines on How to Avoid or Mitigate Impact of Eectricity Power Grids on Migratory Birds in the African-Eurasian Region. Agreement on the Conservation of African-Eurasian Migratory Waterbirds (AEWA) Conservation Guideines No. 14. AEWA Technica Series No. 50, May Bissonette, J. (2007). Evauation of the Use and Effectiveness of Widife Crossings. NCHRP Report 615, Project Prepared for the Nationa Cooperative Highway Research Program (NCHRP), Transportation Research Board of the Nationa Academies. 275 pp. Brown, J. J., Limburg, K. E., Wadman, J. R., Stephenson, K., Genn, E. P., Juanes, F. and Jordaan, A. (2013). Fish and hydropower on the U.S. Atantic coast: faied fisheries poicies from haf-way technoogies. In Conservation Letters, Vo. 6, pp Byron, H. (2000). Biodiversity and Environmenta Impact Assessment: A Good Practice Guide for Road Schemes. The RSPB, WWF-UK, Engish Nature and the Widife Trusts. 120 pp. CBD (2001). Assessment and management of aien species that threaten ecosystems, habitats and species. Abstracts of keynote addresses and posters presented at the sixth meeting of the Subsidiary Body on Scientific, Technica and Technoogica Advice, hed in Montrea, Canada, from 12 to 16 March Secretariat of the Convention on Bioogica Diversity (CBD), Technica Series No. 1. Montrea, Canada CBD (2006). Biodiversity in Impact Assessment. Background Document to Decision VIII/28 of the Convention on Bioogica Diversity: Vountary Guideines on Biodiversity-Incusive Impact Assessment. Secretariat of the Convention on Bioogica Diversity (CBD), Technica Series No. 26. Montrea, Canada. CBD (2012). Best poicy guidance for the integration of biodiversity and ecosystem services in standards. Convention on Bioogica Diversity (CBD), Technica Series No. 73. Montrea, Canada. Energy and Biodiversity Initiative (2003). Biodiversity indicators for Monitoring Impacts and Conservation Actions. Energy and Biodiversity Initiative (2003). Framework for Integrating Biodiversity into the Site Seection Process. Energy and Biodiversity Initiative (2003). Good Practice in the Prevention and Mitigation of Primary and Secondary Biodiversity Impacts. Energy and Biodiversity Initiative (2003). Integrating Biodiversity into Environmenta Management Systems. Page 76 A cross-sector guide for impementing the Mitigation Hierarchy

79 Further reading Energy and Biodiversity Initiative (2003). Integrating Biodiversity Conservation into Environmenta Management Systems. Goba Reporting Initiative (2012). Oi and Gas Sector Suppement. GRI, Amsterdam Guison, R. E., Hardner, J., Anstee, S. and Meyer, M. (2015). Good Practices for the Coection of Biodiversity Baseine Data. Prepared for the Mutiatera Financing Institutions Biodiversity Working Group & Cross- Sector Biodiversity Initiative. Internationa Counci on Mining and Metas (2006). Good practice guidance for mining and biodiversity. ICMM, London. Internationa Counci on Mining and Metas (2010). Mining and Biodiversity: A coection of case studies 2010 edition. Internationa Hydropower Association (2012). Hydropower Sustainabiity Assessment Protoco. London, 220 pp. IOGP (2013). Environmenta management in Arctic oi and gas operations: Good practice guide. Report 449, May IPIECA (2013). Marine Geospatia Bibiography. IPIECA-IOGP (2000). Biodiversity and the petroeum industry: a guide to the biodiversity negotiations. IPIECA-IOGP (2003). The oi and gas industry: operating in sensitive environments. Avaiabe at: IPIECA-IOGP (2006). A guide to deveoping biodiversity action pans for the oi and gas industry. IPIECA-IOGP (2006). Key biodiversity questions in the oi and gas ifecyce. IPIECA-IOGP (2007). An ecosystem approach to oi and gas industry biodiversity conservation. IPIECA-IOGP (2007). A guide to the Convention on Bioogica Diversity for the oi and gas industry. IPIECA-IOGP (2010). Aien invasive species and the oi and gas industry: Guidance for prevention and management. IPIECA-IOGP (2010). Managing biodiversity impacts: 10 tips for success in the oi and gas industry. A cross-sector guide for impementing the Mitigation Hierarchy Page 77

80 Further reading IPIECA-IOGP (2010). Oi and gas industry guidance on vountary sustainabiity reporting. IPIECA-IOGP (2011). Ecosystem services guidance. Biodiversity and ecosystem services guide and checkists ( and Ecosystem services checkists ( IPIECA-IOGP (2012). Managing oi and gas activities in coasta areas. IUCN (2014). Technica conditions for positive outcomes from biodiversity offsets. IUCN, Gand, Switzerand. IUCN/SSC (2013). Guideines for reintroductions and other conservation transocations. Version 1.0. Gand. Switzerand: IUCN Species Surviva Commission, viiii + 57 pp. Mutiatera Financing Institutions Biodiversity Working Group (2015). Good Practices for Biodiversity Incusive Impact Assessment and Management Panning. Prepared by Hardner & Guison Associates for the Mutiatera Financing Institutions Biodiversity Working Group. Protected Panet (2015). Website: SER (2015). SER Foundation Documents (various). Avaiabe at the Society for Ecoogica Restoration website: Accessed March Speerberg, I. (2002). Ecoogica Effects of Roads. Science Pubishers, Enfied, New Hampshire, USA. 251pp. Strand, H., Höft, R., Stritthot, J., Mies, L., Horning, N., Fosnight, E. and Turner, W. (eds.) (2007). Sourcebook on Remote Sensing and Biodiversity Indicators. Secretariat of the Convention on Bioogica Diversity, Montrea, Canada. CBD Technica Series No. 32. cce.nasa.gov/pdfs/cbd-ts-32_sourcebook.pdf Word Business Counci for Sustainabe Deveopment (2011). Guide to Corporate Ecosystem Vauation: a framework for improving corporate decision-making. Word Commission on Dams (2000). Dams and Deveopment: a new framework for decision-making. Earthscan, London, UK. 404 pp. Zimmermann, R. C. (1992). Environmenta impact of forestry. Guideines for its assessment in deveoping countries. Food and Agricuture Organization (FAO) Conservation Guide 7. FAO, Rome, Itay. For a detaied exampe of appying the mitigation hierarchy at a major mine deveopment, incuding quantitative biodiversity oss/gain accounting and offset design, see technica impact assessment documents for the Oyu Togoi project at especiay: Biodiversity Impacts and Mitigation Actions for the Oyu Togoi Project (ESIA Appendix 3) Biodiversity offsets strategy for the Oyu Togiu project (ESIA Appendix 4) Net Positive Impact forecast for the Oyu Togoi project (ESIA Appendix 5) The above ESI Appendices are avaiabe at: Page 78 A cross-sector guide for impementing the Mitigation Hierarchy

81 Definitions The definitions beow are intended to carify terminoogy used within the scope of this guidance. Uness otherwise indicated, they foow CSBI (2013a), which drew primariy but not excusivey from the IFC Performance Standards and documents produced by the CSBI member associations. These definitions are intended to capture the broadyunderstood meanings of terms (where those exist) whie refecting the specific needs of this CSBI guidance, which is focused on the practica impementation of biodiversity conservation via the mitigation hierarchy. Where substantivey different definitions are aso in common use, these are aso noted. Usefu additiona directories and gossaries of terms are provided by UNEP-WCMC s Biodiversity a-z ( and BBOP (bbop.foresttrends.org/pages/gossary). Additiona conservation action (ACA) Area of infuence Avoidance Biodiversity and ecosystem services An intervention intended to be positive for BES, but not providing measureabe gains that can be set against residua impacts. ACAs may or may not target the BES features significanty impacted by a project. An area ikey to be affected (impacted) by: activities that are directy part of, or controed by, a project (direct impacts); unpanned but predictabe actions or conditions caused by the project, incuding those occurring ater or at a different ocation (indirect or secondary impacts); externa activities or faciities necessary to conduct the project and that exist primariy to support the project; and other existing, panned or reasonaby predictabe activities or resource uses that combine with the project; or activities or resource uses that create more than incrementa effects (cumuative impacts). Measures taken to anticipate and prevent adverse impacts on biodiversity before actions or decisions are taken that coud ead to such impacts. Biodiversity is the variabiity among iving organisms from a sources incuding, among others, terrestria, marine and other aquatic ecosystems and the ecoogica compexes of which they are part. This incudes diversity within species (genetic diversity), between species and of ecosystems 103. Diversity is thus manifested across a range of scaes, from the microscopic to the goba. Biodiversity has a range of vaues based both on its existence and on its current and future, direct and indirect uses by peope. 104 Biodiversity underpins the provision of ecosystem services, which are benefits peope obtain from ecosystems. These incude provisioning services such as: food and water; reguating services such as reguation of foods, drought, and degradation and disease; supporting services such as soi formation and nutrient 103 Convention on Bioogica Diversity: For further detais, see the A-Z of Biodiversity at A cross-sector guide for impementing the Mitigation Hierarchy Page 79

82 Definitions Biodiversity and ecosystem services (continued) Counterfactua scenario Critica habitat Cumuative impacts Like-for-ike or better principe Minimization Mitigation hierarchy cycing; and cutura services such as recreationa, spiritua, reigious and other nonmateria benefits. For further detais, see the Miennium Ecosystem Assessment ( The project scenario under which there has been no appication of the mitigation hierarchy. Areas with high biodiversity vaue, incuding: habitat of significant importance to Criticay Endangered and/or Endangered Species; habitat of significant importance to endemic and/or restricted-range species; habitat supporting gobay significant concentrations of migratory species and/or congregatory species; highy threatened and/or unique ecosystems; and/or areas associated with key evoutionary processes. Critica habitat may be natura or modified. For the purposes of this guidance, and where appicabe, the existence of ecosystem services of significant importance to the above species or to dependent community ives or iveihoods may aso indicate high biodiversity vaue consistent with critica habitat. Impacts resuting from the successive, incrementa, and/or combined effects of a deveopment when added to other existing, panned and/or reasonaby anticipated future ones (IFC, 2012c). Exampes incude: reduction of water fows in a watershed due to mutipe withdrawas; and forest habitat damage due to the combination of ogging, road-buiding, resuting traffic and induced access. For offsets, conservation either of the same biodiversity vaues impacted by the project (an in-kind offset) or those considered to be of a higher priority (an out-ofkind offset that invoves trading up, i.e. where the offset targets biodiversity of higher priority than that affected by the project). Measures taken to reduce the duration, intensity, significance and/or extent of impacts (incuding direct, indirect and cumuative impacts, as appropriate) that cannot be competey avoided, as far as is practicay feasibe. (Minimize as used here does not impy an intention to reduce to zero, which is its ega meaning in some jurisdictions. Some companies have chosen to avoid using the words minimize / minimization and instead use words ike imit / imitation and reduce / reduction.) The sequence of actions to anticipate and avoid, and where avoidance is not possibe, minimize, and, when impacts occur, restore, and where significant residua impacts remain, offset for biodiversity-reated risks and impacts on affected communities and the environment. Page 80 A cross-sector guide for impementing the Mitigation Hierarchy

83 Definitions Modified habitats Natura capita accounting Natura habitats No net oss Net gain Offset (BES offset) Areas that, prior to the onset of any activity reated to the project, may contain a arge proportion of pant and/or anima species of non-native origin, and/or where human activity has substantiay modified an area s primary ecoogica functions and species composition. The assessment of osses and gains of biodiversity and ecosystem services using a standardized approach to measure and account for BES in both physica and monetary terms. Areas composed of viabe assembages of pant and/or anima species of argey native origin, and/or where human activity has not essentiay modified an area s primary ecoogica functions and species composition. The point at which project-reated impacts are baanced by measures taken through appication of the mitigation hierarchy, so that no oss remains. The point at which project-reated impacts on BES are outweighed by measures taken according to the mitigation hierarchy, so that a net gain resuts. May aso be referred to as net positive impact. Measurabe conservation outcomes, resuting from actions appied to areas not impacted by the project, that compensate for significant, adverse project impacts that cannot be avoided, minimized and/or restored. (See aso Box 10, beow) continued Box 10 Three definitions of biodiversity offsets IFC Performance Standard 6 Biodiversity offsets are measurabe conservation outcomes resuting from actions designed to compensate for significant residua adverse biodiversity impacts arising from project deveopment and persisting after appropriate avoidance, minimization and restoration measures have been taken A biodiversity offset shoud be designed and impemented to achieve measurabe conservation outcomes that can reasonaby be expected to resut in no net oss and preferaby a net gain of biodiversity; however, a net gain is required in critica habitats. BBOP (BBOP Standard on Biodiversity Offsets, page 13) Biodiversity offsets are measurabe conservation outcomes resuting from actions designed to compensate for significant residua adverse biodiversity impacts arising from project deveopment after appropriate prevention and mitigation measures have been taken. The goa of biodiversity offsets is to achieve no net oss and preferaby a net gain of biodiversity on the ground with respect to species composition, habitat structure, ecosystem function and peope s use and cutura vaues associated with biodiversity. Whie biodiversity offsets are defined here in terms of specific deveopment projects (such as a road or a mine), they coud aso be used to compensate for the broader effects of programmes and pans. Austraia Government (Environment Protection and Biodiversity Conservation Act 1999: Environmenta Offsets Poicy 2012) An offsets package is a suite of actions that a proponent undertakes in order to compensate for the residua significant impact of a project Offsets shoud aign with conservation priorities for the impacted protected matter, and be taiored specificay to the attribute of the protected matter that is impacted in order to deiver a conservation gain. A cross-sector guide for impementing the Mitigation Hierarchy Page 81

84 Definitions Quaity hectares Residua impacts Restoration Set-asides Significant conversion or degradation Strategic environmenta assessment (SEA) A biodiversity metric that weights habitat area by its quaity (often assessed on a scae of 0 1, or 0 100%) in terms of intactness or suitabiity for specific biodiversity features of interest. Project-reated impacts that might remain after on-site mitigation measures (avoidance, set-asides, management contros, abatement, rehabiitation/restoration, etc.) have been impemented. Any reiabe determination of residua impacts on biodiversity needs to take into account the uncertainty of outcomes due to mitigation measures. An estabished broad definition of Restoration is the process of assisting the recovery of an ecosystem that has been degraded, damaged or destroyed. 105 In the context of the mitigation hierarchy, it is the measures taken to repair degradation or damage to specific biodiversity features of concern (which might be species, ecosystems/habitats or ecosystem services) foowing project impacts that cannot be competey avoided and/or minimized. Restoration does not impy an intention to restore a degraded ecosystem to the same state and functioning as before it was degraded (which is the meaning in some specific jurisdictions, and may be an impossiby chaenging or costy task). Restoration may instead invove and recamation or ecosystem repair to return specific biodiversity features and functions, among those identified as targets for appication of the mitigation hierarchy, to the ecosystems concerned. When repair of damage does not focus on the biodiversity features and functions identified as targets for appication of the mitigation hierarchy, it is better termed rehabiitation and counts as an additiona conservation action (see definition, above) that does not contribute to biodiversity oss/gain accounting. Land areas within the project site, or areas over which the cient has management contro, which are excuded from deveopment and which are targeted for the impementation of conservation enhancement measures. Set-asides wi ikey contain significant biodiversity vaues and/or provide ecosystem services of significance at the oca, nationa and/or regiona eve. These are ikey to be most acceptabe if defined using internationay recognized approaches or methodoogies (e.g. high conservation vaue, systematic conservation panning). The eimination or severe diminution of the integrity of a habitat caused by a major and/or ong-term change in and or water use; or a modification that substantiay minimizes the habitat s abiity to maintain viabe popuations of its native species. Refers to anaytica and participatory approaches that aim to integrate environmenta considerations into poicies, pans and programmes and evauate the inter-inkages with economic and socia considerations (OECD, 2006). SEA provides the context and framework for individua project environmenta impact assessments. 105 SER (2004): SER Internationa Primer on Ecoogica Restoration, Version 2. Society for Ecoogica Restoration Internationa, Science and Poicy Working Group. Page 82 A cross-sector guide for impementing the Mitigation Hierarchy

85 Acronyms ACA Additiona Conservation Action ESAP Environmenta and Socia Action Pan ALARP BACI BAP BBOP BES CBA CEA CSBI As Low As Reasonaby Possibe/Practica Before-After-Contro-Impact experimenta/survey design Biodiversity Action Pan: a pan to manage potentia risks to changes in biodiversity or ecosystem services arising from environmenta aspects of assets and activities; it ists the actions to take to conserve or enhance biodiversity. Business and Biodiversity Offsets Programme Biodiversity and Ecosystem Services Cost-Benefit Anaysis: a systematic and comparative approach to economicay sound financia decision making Cost-Effectiveness Anaysis: a decisionmaking assistance too for identifying the most economicay-efficient way to fufi an objective Cross Sector Biodiversity Initiative: a partnership between ICMM, IPIECA and the Equator Principes Association ESHIA ESIA GIS IBAT ICMM IFC PS6 IPIECA MFI NBSAP NNL NPI Environmenta, Socia and Heath Impact Assessment Environmenta and Socia Impact Assessment Geographic Information System Integrated Biodiversity Assessment Too Internationa Counci on Mining and Metas Internationa Finance Corporation Performance Standard 6: Biodiversity Conservation and Sustainabe Management of Living Natura Resources The goba oi and gas industry association for environmenta and socia issues. Mutiatera Financia Institution Nationa Biodiversity Strategy and Action Pan No Net Loss Net Positive Impact (net gain) EBRD PR6 European Bank for Reconstruction and Deveopment Performance Reguation 6: Biodiversity Conservation and Sustainabe Management of Living Natura Resources ToRs UNEP Terms of Reference (contractua/scope of work specification) United Nations Environment Programme EPAP EPCM Equator Principes Action Pan Engineering, Procurement, Construction and Management contracts Word Bank ESS6 Word Bank Environmenta and Socia Standard 6: Biodiversity Conservation and Sustainabe Management of Living Natura Resources EPFI Equator Principes Financia Institution WCMC Word Conservation Monitoring Centre ERD Extended-reach driing A cross-sector guide for impementing the Mitigation Hierarchy Page 83

86 Appendices Appendix 1: Horizon scan of future deveopments for avoidance and minimization The avaiabiity, quantity and quaity of biodiversity data are a improving, as are engineering techniques that make a wider range of mitigation options possibe. Access to economic data is aso improving, making it possibe to more readiy compare costs and benefits of aternative mitigation options. Oi and gas industry innovations are arguaby deveoping more rapidy than within the mining sector; foating LNG production patforms and extended reach directiona driing are exampes. The resoution of biodiversity data is increasing An increasing granuarity of biodiversity data sets is ikey (e.g. access to higher-resoution sateite data sets, enabing a better understanding of spatia habitat distribution and even individua fauna species ocations). This means that researchers and commercia deveopers wi be abe to have an improved and finessed understanding of the status and sensitivity of BES vaues in many ocations. Information on the threat status of biodiversity is increasing Ongoing work on a Red List of Ecosystems to go aongside the Red List of Species wi greaty aid biodiversity risk management. A Red List of Ecosystems wi inform a greater understanding of BES vaues, and wi provide more accessibe information on the ocation and status of habitat types that warrant consideration for avoidance or the impementation of appropriate minimization measures. Athough a fu goba ist is not expected to be pubished unti 2025, many assessments wi be carried out sooner and companies are aready abe to appy the Red List of Ecosystems criteria to the specific ecosystems in question. New Zeaand has aready benefited from such a piot Page 84 A cross-sector guide for impementing the Mitigation Hierarchy