CHAPTER 8 ENVIRONMENTAL IMPACT ASSESSMENT FOR NATURAL RESOURCE PROJECTS IN LATIN AMERICA

• Jurisdiction: United States

Mineral Development in Latin America
(Nov 1997)
CHAPTER 8
ENVIRONMENTAL IMPACT ASSESSMENT FOR NATURAL RESOURCE PROJECTS IN LATIN AMERICA


Luke J. Danielson ¹
University of Chile Faculty of Law
Santiago, Chile
Pendleton, Friedberg, Wilson & Hennessey, P.C.
Denver, Colorado

INTRODUCTION

After more than a decade of conflict between those who have seen protection of the world's environment as the most important problem on the global agenda, and those who believe that economic development is the principal key to human progress, there is a broad consensus in favor of the formula "sustainable development." The debate has shifted to the question of precisely what this phrase means.

Reflecting this pairing of environmental protection and economic development, governments worldwide are struggling to create systems of environmental management which are at once effective in protecting the environment and economically efficient.

These national systems of environmental management are generally conceived as consisting of a group of "instruments" of environmental protection or control. In Chile, for example, Law 19,300, the Environmental Framework Law, recognizes education,² research,³ the system of environmental impact assessment,⁴ environmental quality norms,⁵ the protection of natural areas,⁶ classification of wildlife species,⁷ emission norms,⁸ natural resource management plans,⁹ prevention plans in areas where norms are close to being exceeded and compliance plans where they are exceeded¹⁰ tradable emission permits,¹¹ and others. There are obviously many other instruments in application in one or another country, from compulsory environmental audits, to emission taxes, closure plans, and others.

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Each of these instruments has advantages and disadvantages. Each is effective and works efficiently, in dealing with some problems, and is less useful in some other circumstances. None of them seems to be adequate to achieve all of the objectives of national environmental policy when used alone.

The modern era of environmental management began in some of the most developed countries about 30 years ago.¹² These concepts have been spreading worldwide since that time, as more countries have developed their own national environmental management programs.

From the point of view of the developing world, the richest countries have a luxúry in organizing their environmental programs as in so much else. Their economic margins are so much greater that their economies are sometimes thought (rightly or wrongly) to capable of absorbing some inefficiency in environmental management while still producing enormous wealth. And, this thinking goes, if one instrument of environmental management is applied in a haphazard or ineffective manner, the developed countries have a whole host of other instruments available to take up the slack.

While there are reasons to question this perspective even in the developed countries, it may be true that issues of effectiveness and efficiency are much more critical in developing countries, where growing populations, growing expectations, and the desire for a better life are paramount issues, and there is a pressing need to find ways to achieve environmental objectives without deterring investment, or braking economic growth.

At the same time, it is in these same countries where citizens may be most directly affected by high levels of air and water pollution, noise, and disruption of traditional patterns of subsistence by environmental change. The need is therefore also pressing to find ways to get the maximum return out of whatever resources the society is able to devote to environmental protection.

In most countries, one of the first instruments adopted has been environmental impact assessment. It is perhaps the environmental management tool which has the broadest application worldwide. Because it is often the first tool to be adopted, it may have very significant implications for the structure of other environmental instruments which come in its wake.

The purpose of this article is to describe and analyze the development of environmental impact assessment in some of the countries of Latin America, with particular attention to its application in the mining and other resource industries.

The article does not purport to be a complete summary of all relevant legislation, but attempts instead to focus on specific issues of interest, using a comparative approach to illustrate the challenges that face environmental impact assessment, and specific current issues of interest.

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I. THE REQUIREMENT FOR IMPACT ASSESSMENT

The 1992 Rio Declaration on Environment and Development¹³ recognizes, in Principle 17, that:

"Environmental impact assessment, as a national instrument, shall be undertaken for proposed activities that are likely to have a significant adverse impact on the environment and are subject to a decision of a competent national authority."

This is by no means the only international agreement which commits signatory states to create and maintain environmental impact assessment systems. For example, Paragraph 1 (A) of Article 14 of the Convention on Biological Diversity¹⁴ requires each Contracting Party, "as far as possible and as appropriate" to

"Introduce appropriate procedures requiring environmental impact assessment of its proposed projects that are likely to have significant adverse effects on biodiversity with a view to avoiding or minimizing such effects, and, where appropriate, allow for public participation in such procedures."

The World Bank, which has had a major influence on the development of environmental impact assessment worldwide, describes its policies in Operational Directive 4.00 (October 1989) which are amplified and described in detail in the Bank's Environmental Assessment Sourcebook,¹⁵ which has been the subject of a long series of Updates dealing with various subjects. Annex A-3, part of O.D. 4.00, lists projects which "normally" require environmental assessment. Item (viii) on the list is "Mineral Development (including oil and gas)."¹⁶

The reasons for early and widespread adoption of environmental impact assessment as a fundamental part of national environmental management programs will become clearer later in this article. But the recognition of the instrument by international bodies stems at least in part from the fact that it is an instrument which is (I) flexible, and easily adapted to a wide variety of circumstances, (ii) broad, and capable of considering holistically the environmental consequences of a project, (iii) a very effective vehicle for public education and participation, and (iv) easily coordinated with other instruments of environmental management as those are developed.

All this said, one of the most interesting aspects of the development of environmental impact assessment is its variety. In general outline, there is such broad consensus on what the process is that almost none of the agreements or legislation which use the term "environmental assessment" attempt to define it. On this level, there is even something like an international "common law" understanding of what the basic elements of the process are (e.g., base line studies, identification of potential impacts, identification of ways to avoid, minimize, mitigate, or compensate for negative impacts, production of a written document, some form of public participation).

But detailed analysis of the process as it has developed disclose an enormous variation in how it works, its legal implications, and its effectiveness. Study of these differences, and how

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they have worked in practice, is a very fertile field for understanding how to use this tool effectively, to solve environmental problems, and efficiently, to achieve that environmental improvement at the lowest cost to both the private and public sectors.

And there is an enormous amount of material available for study. Some countries have decentralized the review process to sectoral ministries, each with its own set of procedures. Many countries have federal systems in which the states and provinces have impact assessment systems of their own. In some countries both these phenomena exist. There are thus dozens or even hundreds of different systems in Latin America alone: many more sets of rules for environmental impact assessment than there are countries.

While this means that a project developer has to learn the rules anew to some extent in every jurisdiction, it also means that there is a robust development of local legal systems in this area. The rules for environmental impact assessment are being taken seriously and developed locally in most places, and not simply being copied or imported.

II. GENERAL TYPES OF SYSTEMS

A. Legal Responsibility for Preparation of the Statement.

Much has been written contrasting what has been called the "North American" style of environmental impact assessment, typified by the U.S. National Environmental Policy Act, and the "European" system,¹⁷ which bears some similarities to the World Bank process.¹⁸ The most obvious and notable distinction between the systems is who has the legal responsibility for preparing the impact study.

This is perhaps an appropriate point to observe that while the focus of attention has often been the environmental impact study, which is the most tangible result of the process, the modern conception is that the instrument of environmental impact analysis is a process, which consists of many elements. The study is simply one step in the process. While approval of the study is important as a milepost for the project proponent, and has legal consequences, it is generally true that the newer systems focus more on the process of analysis than the document, and may thus not have a clear endpoint.

This is consistent with the best modern concepts of environmental management, such as the fundamental ISO 14,000 idea of...