Widening the environmental due diligence net: safety, labour and governance

Sharon Jones, Associate Partner and Principal Environmental Consultant

 

Chris Dalgliesh, Director, Partner, and Principal Environmental Consultant

 

Not that long ago, environmental consulting focused exclusively on the biophysical environment: air quality, water and biodiversity. But during the last decade, this has expanded to cover socio-economic issues, heritage, community health, climate change and gender.

 

International lenders often appoint SRK to undertake environmental and social due diligence (ESDD) studies and loan monitoring on projects and operations in mining, hydropower and thermal power generation. Increasingly, they require SRK to gauge performance, not just against standard metrics, but also on governance, safety, security, labour and working conditions. 

 

When reviewing performance against these aspects, SRK has faced unusual circumstances as illustrated by some examples below.

 

On large hydropower projects in Angola, SRK identified the landmine risks to a resettlement programme and recommended comprehensive demining before resettlement. SRK also recommended Emergency Response Plans for dam failure scenarios to gauge and improve first responders’ and downstream communities’ capacity to manage failure. SRK also recommended vigilant enforcement of road safety and traffic management measures where convoys of large trucks travel through rural settlements.

 

In our experience, governance and reporting procedures prepared by contractors for large projects, are fairly sophisticated, but project owners/operators have fewer resources and less governance expertise. To address these shortcomings, SRK recommends early organisational reviews, thorough capacity building and job shadowing programmes over several years to transfer skills from contractors to operators. SRK helps operators with reports and suggests report templates to expedite compliance. 

 

Labour and working conditions can be challenging on projects staffed by expatriate workers and local workers. Often working conditions can differ markedly, favouring expatriate workers, or occasionally locals. SRK reviews performance against International Labour Organisation (ILO) standards intended to protect workers’ rights, carefully advising engineering, procurement, and construction contractors, whose approach to labour can diverge from ILO standards. 

 

As the scope of environmental and social reporting broadens, SRK’s deep experience in Environmental and Social Impact Assessment, ESDD and lender requirements helps us manage risks on large projects in developing countries, related to traditional concerns but also working conditions, community safety and governance.

 

Sharon Jones: sjones@srk.co.za

Chris Dalgliesh: cdalgliesh@srk.co.za