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Infrastructure workshop launches environment policy update

A workshop on large-scale infrastructure and extractive industries projects was held recently at the IDB to update the Bank’s environment policy. According to senior economist Ricardo Quiroga, the idea was to brainstorm on some of the challenges and trends in such projects, with participants drawing on their experience with past projects to identify lessons learned that could be incorporated into the new policy.

The IDB uses strategies and policies to provide a framework for its various areas of activity. Strategies identify priorities for Bank action—what types of projects the Bank should fund—while policies set out binding rules about which ones can be approved and what procedures need to be followed. In its review of IDB strategies and policies, the Bank’s board recently approved a new environment strategy, clearing the way for the environment policy update.

Large-scale infrastructure projects are complex operations involving economic, financial, technical, political environmental and social risks. The new environment strategy calls for the Bank to conduct environmental assessments not just to mitigate negative impacts under the  “do-no-harm” concept,  but to broadly enhance environmental sustainability and social development in an strategic and integrated manner.    Updating its environment policy is particularly important as the Bank is increasingly being asked  to address underinvestment in infrastructure in Latin America and the Caribbean and meet the demand for private and public financing,  often under complex or undeveloped  institutional and governance settings .

At the workshop, environment consultant Lee Doran gave a detailed presentation on large-scale infrastructure and extractive industries projects from the perspective of an environmental impact assessment (EIA) practitioner. He emphasized the large scale and complexity of such projects, the multiplicity and diversity of the stakeholders involved and the high profile of the projects.

As an example of previous project experience, Doran cited the Berger case in Canada. In the late 1970s, some large oil companies were planning to build a gas pipeline in the MacKenzie Valley in the Northern Territories. The Canadian federal government appointed Supreme Court Justice Thomas Berger as commissioner to advise it on the environmental impact of the controversial project.

Berger took the then-unusual approach of holding extensive community meetings, sometimes in tents and log cabins, even outdoors, with area residents. Berger released his report announcing  that while the biophysical impact of the proposed pipeline was controllable, the local communities were not ready: many land claims were outstanding and there was no regulatory framework in place for environmental and social protection. He recommended that the project be delayed  because the social conditions were not appropriate and the local community was not ready to accept the project.

 May years later, when the MacKenzie pipeline project was back on the table,  the situation had changed dramatically. Land claims were properly settled, land use regulation authorities were  in place and environmental assessment processes were  established. Moreover, area residents were  well organized and had  shrewdly negotiated an equity participation in the project.

The case prompted a lively discussion among the workshop participants, including representatives of a nongovernmental organization and a U.S. government agency. They agreed that development takes time and governance is crucial. For such large, complex projects to be successful, the regulatory system must be in place and, most importantly, the community needs to give its prior informed consent.

The learning workshop on large-scale infrastructure projects to update the environment policy was the second in a series of four. The first one took place in September 16  2003, addressing the topic of environmental safeguards.  The two other workshops on the environment policy update are scheduled for November of 2003.


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