7/28/2019 Environmental and Social Challenges Eng
1/15
TITLEUNDP Discussion Paper No. 6
Fuelling Poverty Reduction
143
Environmental and social challenges in
oil sector management
Thomas W. Stephens, Ph.D.Managing Director
The Prescient 360 Group
Introduction
Historically, many new oil-exporting countries failed to give adequate attention to
the environmental and social aspects of the petroleum sector in its early development
stages. At a later point, it was precisely the overlooked environmental and social
impacts of petroleum production that had the greatest negative political and economic
ramifications for the government, the oil industry, and society as a whole.
Many developing country governments have enacted laws and policies for environmental
and social standards. However, the government institutions and agencies for their
regulatory oversight and compliance have often been under-funded and ineffectual.
Laws and policies alone are insufficient to manage environmental and social standards.
Environmental and social issues touched by the oil sector are best addressed through
joint collaboration by the oil industry and government, based on respect, mutually agreed
objectives and a clear delineation of roles and responsibilities. It is in the best business
interests of reputable international oil companies to achieve this level of collaboration.
Environmental and social issues should not be compartmentalised into separate
functions, but should be recognised as overlapping and interlinked domains that are
best addressed holistically.
The evolving context for environmental and social standards
Over the past 10-15 years, governments and international oil companies (IOCs) have
given increasing attention to the environmental and social aspects of oil operations.
They have recognised that the reputation and credibility of both governments and
private companies are jeopardised if these issues are not handled well. At the risk of
over-simplification, this growing awareness of environmental and social issues grew
out of initial attention to health, safety and environment (HSE) by oil companies for
internal operational practices and technical processes. Over time, greater and greater
attention was given to external factors affecting company performance, including
explicit concern about social issues and the importance attached to corporate social
responsibility (CSR). International media attention to oil spills and pollution, adverse
social impacts on local communities and displaced peoples, and inequitable economic
growth associated with oil revenues prompted private companies and governments
alike to reconsider where their responsibilities to environmental and social concerns
begin and end as well as the wider context in which they must act.
7/28/2019 Environmental and Social Challenges Eng
2/15
Fuelling Poverty Reduction
UNDP Discussion Paper No. 6144
This broader context for assessing environmental and social issues is shown in the
following graphic. The graphic makes a distinction between the internal operational
ecosystem of a company and the external ecosystem which combines both the
physical environment and social and economic considerations of affected or contiguous
populations. The graphic further notes the oversight and regulatory ecosystem ofgovernment in both the internal and external activities of petroleum operations.
Social and environmental ecosystems o petroleum operations
This oversight role for government is common in developed and middle-income
countries where standards are set for the protection of workers and employees
regardless of the industrial sector. It is also common for this oversight function to
ensure environmental safeguards at the site of major industrial or manufacturing
operations. It is less common to see this oversight function being effectively carried out
in developing countries, due to a lack of financial resources and institutional capacity.
A second key point about the evolving nature of environmental and social
considerations in the oil sector is that the number of stakeholders and interestedparties has grown considerably25. No longer are environmental and social issues of
bilateral concern only to the government and the oil companies or consortium involved.
Instead, the number of stakeholders and constituent groups has grown considerably,
now requiring much higher levels of proactive participatory decision-making and
transparency. This situation has arisen as a result of increasing media and local non-
governmental organisation (NGO) scrutiny of oil operations in developing countries,
in addition to more vocal demands by local communities that expect to be involved in
the decisions that affect their lives and livelihoods.
Internal corporate ecosystemCompany Operations
Health, safety and environment
Company external social andenvironmental policies, including
corporate social responsibility
External operational ecosystem
Physical environment Society
Flora Local communitiesFauna Cultural norms
Government oversight ecosystem
PoliciesLaws
25For a discussion of the convergence of environmental and social considerations and the growing number of involvedstakeholders, see Michael Hopkins, The Planetary Bargain: Corporate Social Responsibility Matters, Second Edition, London,
Earthscan Publications, 2003.
7/28/2019 Environmental and Social Challenges Eng
3/15
TITLEUNDP Discussion Paper No. 6
Fuelling Poverty Reduction
145
The table below highlights some of the new stakeholder groups apart from national
government agencies and oil companies that have emerged and the different kinds
of perceptions and interests they may have about the environmental and social
implications of oil sector operations.
New environmental and social stakeholders
Stakeholder group Function, role or interest
Local communities, civil
society organisations
Employment opportunities and local developmenttProtection of local customs, traditionstAvoiding environmental damage to family ortcommunal lands
Media and advocacy groups
(domestic and international)
Protect/defend local rights and valuest
Promote transparent decision-makingt
Report unethical behaviour or business practicest
Local development NGOs Potential partner with oil companies in carryingtout their community engagement programmes
Some NGOs may also be critics of oil companytoperations
Donor agencies Provide technical assistance, training and policytadvice
Promote public-private partnershipst
Domestic companies Seek to provide goods and services to internationaltoil companies (local content)
Learn new business practices and skills fromtworking with international companies and
contactors
Regional or local government Expect to participate in decision-making thattaffects local issues and community programmes
Expect to be recipients of some portion of oiltrevenues
May have regulatory and oversight role, alongsidetnational government
7/28/2019 Environmental and Social Challenges Eng
4/15
Fuelling Poverty Reduction
UNDP Discussion Paper No. 6146
Environmental and social issues in the project life cycle of petroleum operations
As the Royal Government of Cambodia (RGC) seeks to achieve the highest levels of
environmental and social safeguards and services in the oil sector, it is important to
keep in mind how the governments roles and responsibilities change over time,depending upon where the specific oil operation is in its project life cycle. The levels
of investment by an oil company and its environmental footprint are quite different,
for example, in the early stages of exploration and negotiation, compared to the later
stage if and when the site or block reaches full commercial exploitation and the
operations physical presence is significantly larger. In effect, the requirements and
expectations of both government and the oil companies vary throughout this life
cycle, including financial and institutional commitments, policy and regulatory
obligations, and other concerns.26
Most oil companies use some variation of the project life cycle below as part of theirbusiness and financial planning to develop a potential site.
Oil sector project lie cycle
The screen/negotiate phase is normally associated with the preliminary discussions
between government and oil companies to explore potentially promising sites orblocks for their possible commercial viability. Usually, financial transfers and physical
intrusion at the prospective site is relatively quite small.
During the drill/appraise phase, the oil company or the consortium steps up tests to
determine which of the previously screened blocks or sites have the potential for full
commercial development. At this stage, the company requires greater financial
commitments and the physical footprint of the operations may increase proportionally.
Based on an appraisal that a site has full commercial value and an acceptable expected
return on investment, the develop/produce phase generally associated with oilproduction begins. This phase signifies the beginning of major revenue flows to the
government and the oil companies, places communities and the environment at the
greatest potential risk when the operation reaches full-scale production, and exposes
both the oil companies and the government to increased public expectations and
perceptions of acceptable performance. The develop/produce phase may last anywhere
from 5-40 years depending on the size of the reserves at the wellhead.
26For a useful overview of environmental and social considerations, see International Finance Corporation (World Bank),Procedure or Environmental and Social Review o Projects, Washington, D.C., December 1998.
Screen/Negotiate Drill/Appraise Develop/Produce Dispose
7/28/2019 Environmental and Social Challenges Eng
5/15
TITLEUNDP Discussion Paper No. 6
Fuelling Poverty Reduction
147
The final dispose phase represents the point in time at which the block has lost or is
losing its commercial viability for the oil company or the consortium. The site may be
either closed down completely or sold to another investor who is willing to extract
any remaining oil or gas resources. The dispose phase is generally considered to have
potentially major environmental risks. Likewise, there may be social ramificationswhen local communities lose oil-related jobs and social benefits.
In short, each of these four phases entails distinct environmental/social challenges
and requirements for both governments and the private oil companies concerned.
Contractual issues in environmental and social oversight
Emerging oil economies initially address the environmental and social aspects of oil
management with the contractual commitments between the government and the
oil company or the consortium responsible for developing the hydrocarbon resource.While a countrys national laws and policies form the backdrop, contractual agreements
are an important factor. Most government attention in the contractual process, however,
is usually focused on negotiating the revenue sharing formulas, taxes, royalties or
production sharing agreements that determine the level and flow of funds paid to the
government for the exploitation of the hydrocarbon resource.
The negotiating and contracting process should also be an occasion in which explicit
attention is given by the government to the environmental and social ramifications of
the site or block to be developed. The contracting process allows for specific
environmental and social standards, procedures and requirements to be articulated.
Issues to be negotiated could include, for example:
Environmental and social planning tools and methodologies to be used during thetexploration and development phase (such as environmental impact assessments,
social impact assessments, resettlement action plans, public consultations, etc.)
Workplace/workforce standards expected in congruence with international andtnational labour standards
ISO guidelines to which the company should adhere during development and op-t
eration of the block, such as construction standards
Guidelines for corporate social responsibility programmes during the differenttphases
Fines and remedies as well as appellate or arbitration procedures to be followed intthe event of environmental damage or spills
By including these kinds of issues during the negotiation, the RGC can avoid later
unforeseen problems. In most negotiations, reputable IOCs are more than willing to
share with host governments the environmental and social policies and regulations thatthey follow, and thus allow for win-win negotiations on environmental and social issues.
7/28/2019 Environmental and Social Challenges Eng
6/15
Fuelling Poverty Reduction
UNDP Discussion Paper No. 6148
Environmental aspects of oil management
Four aspects of specific environmental issues are found in the upstream oil sector:
environmental management systems, environmental impact assessments, regulation and
compliance, and CO2 emissions and climate change.
Environmental management systems
It is in the best interests of the RGC to ensure that its own agencies, as well as the
international and domestic oil companies with which it partners, develop and use
relevant and practical environmental management systems to oversee oil operations.
Environmental management systems (EMS), as commonly deployed in companies and
government agencies, are an outgrowth of ISO 14001 one of many environmental
standards prepared by the International Standards Organisation in Geneva, Switzerland
aimed at promoting continual improvement in organisations environmental performance.
ISO/DIS 14001 defines an overall environmental management system, closely modelled
on the ISO 9000 quality systems standard, and covers the following key elements:
Establishment o an appropriate environmental policyt that is documented
and communicated to employees and made available to the public, and which
includes a commitment to continual improvement and pollution prevention,
regulatory compliance and a framework for setting objectives.
A planning phaset that covers the identification of the environmental aspects of
the organisations activities, identification and access to legal requirements,establishment and documentation of objectives and targets consistent with
the policy, and establishment of a programme for achieving said targets and
objectives (including the designation of responsible individuals, necessary means
and timeframes).
Implementation and operation o the EMSt including the definition,
documentation and communication of roles and responsibilities, provision of
appropriate training, assurance of adequate internal and external communication,
written management system documentation, as well as appropriate document
control procedures.
Checking and corrective action procedures, including procedurest for regular
monitoring and measurement of key characteristics of the operations and
activities, procedures for dealing with situations of non-conformity, specific
record maintenance procedures and procedures for auditing the performance of
the EMS.
Periodic management reviews o the overall EMSt to ensure its suitability,
adequacy and effectiveness in light of changing circumstances.
7/28/2019 Environmental and Social Challenges Eng
7/15
TITLEUNDP Discussion Paper No. 6
Fuelling Poverty Reduction
149
The EMS as outlined in ISO 14001 provides a structured process for the achievement of
continuous improvement, the rate and extent of which is determined by the organisation
in light of economic and other circumstances.27
Environmental impact assessment
An environmental impact assessment (EIA) is both a specific planning tool and a
process used to identify the environmental impacts of a project prior to decision-
making. It aims to predict environmental impacts at an early stage in project planning
and design, find ways and means to reduce adverse impacts, shape projects to suit
the local environment and present the predictions and options to decision makers.
By using EIA, both environmental and economic benefits can be achieved, such as
reduced cost and time of project implementation and design, avoid treatment/clean-up
costs and impacts of laws and regulations. A recent study by the United Nations
Environment Programme (UNEP) recommended that an EIA process should be usedduring the entire project cycle, from planning through operation to eventual closure.
EIA should also be closely integrated with the environmental management systems as
described above.
UNEP defines the keys elements of EIA as:
Scoping:t identify key issues and concerns of interested parties
Screening:t decide whether an EIA is required based on information collected
Identiying and evaluating project alternatives:t list alternative sites and
techniques and the impacts of each
Mitigating measures dealing with uncertainty:t review the proposed actionsto prevent or minimise the potential adverse effects of the project
Issuing environmental statements:t report the findings of the EIA28
From a regulatory perspective, EIA requirements should indicate as clearly as possible
which kinds of projects are subject to EIA procedures and which are not, so as to avoid
bureaucratic constraints on minor activities. Rules governing an EIA should always be
documented. Generally speaking, any large-scale upstream oil operations would be
expected to undergo an EIA. The EIA legislation should also establish effective review
and dispute settlement procedures to avoid unnecessary delays in decision-making and
progress in developing the project.
27For a useful overview of EMS, see ISO 14001: Environmental Management System Sel-Assessment Checklist, GlobalEnvironmental Management Initiative (GEMI), Washington, D.C., 2000. Another potentially useful GEMI reference source for
Cambodian decision makers is Measuring Environmental Perormance: A Primer and Survey o Metrics in Use. See www.gemi.org.
Some companies also follow industry standards from the American Petroleum Institute and the International Petroleum Industry
Environmental Conservation Association, both of which focus on sound engineering to reduce regulatory compliance costs.28See UNEP, Environmental Impact Assessment Training Resource Manual, Second Edition, Nairobi, 2002.
7/28/2019 Environmental and Social Challenges Eng
8/15
Fuelling Poverty Reduction
UNDP Discussion Paper No. 6150
Environmental compliance and enorcement
The basic starting point for environmental compliance is writing environmental laws
that are enforceable.29 To a certain extent, the contractual obligations signed between
the RGC and its international oil partners are key building blocks in upholding a complianceand enforcement regime. Behind this seeming straightforward principle, however, are
several critical tasks involving planning and institutional development.30 It is useful
to mention six elements for designing compliance strategies and enforcement
programmes:
1. Identifying the regulated community in the oil sector and establishing programme
priorities. This includes coordinating with other environmental programmes and
requirements for other sectors.
2. Promoting compliance to include building public support, publicizing successstories, designing economic incentives, and securing relevant educational and
technical assistance to meet overall compliance goals.
3. Monitoring compliance to include determination of inspection types, self-
monitoring and self-reporting by the regulated community, as well as the use of
area and/or ambient monitoring.
4. Enforcement responses to violations which entail the range of relevant response
mechanisms and authorities, articulation of the enforcement process, the role
of informal and formal mechanisms, the use of creative settlements to leverage
enforcement for broader results, and the selection of appropriate enforcementresponses (civil or criminal, sanction, assuring impartiality).
5. Clarifying roles and responsibilities including division of responsibilities among
government agencies and levels of government, the role of other government
institutions such as the legislature, and the role of non-governmental groups
(trade unions, universities, public interest groups) and third-party consulting
organisations.
6. Evaluating programme success and ensuring accountability refers to the metrics
used to determine if the compliance and enforcement process is working. Thesemetrics might include environmental results, compliance rates, progress in
returning violators to compliance, number of enforcement responses, timeliness
of enforcement responses, and monetary penalties assessed.
These six elements constitute the basic building blocks upon which a more detailed and
extensive compliance and enforcement regime should be constructed.
29An excellent reference on environmental law is UNEP, Judicial Handbook on Environmental Law, Nairobi, 2005.30
A valuable information source is the Network for Environmental Compliance and Enforcement (INECE), a partnership of
government and non-government enforcement and compliance practitioners from more than 150 countries. INECEs goals are:
raising awareness to compliance and enforcement; developing networks for enforcement cooperation; and strengthening
capacity to implement and enforce environmental requirements. Web site: www.inece.org.
7/28/2019 Environmental and Social Challenges Eng
9/15
TITLEUNDP Discussion Paper No. 6
Fuelling Poverty Reduction
151
CO2
emissions and climate change
A final environmental concern is the growing attention being given by both
governments and oil companies to the global challenge of CO2
emissions and climate
change. The scientific proof is now irrefutable that global warming is adversely affectingour planet; thus governments and companies are individually and collectively exploring
ways that they can address this problem. Oil-producing economies and both national and
international oil companies have a particularly important role, given the relatively high
carbon emissions that petroleum operations can potentially entail.
A key objective for the RGC should be to work closely with its oil company partners to
agree on an achievable level of reduction of CO2
and other greenhouse gas emissions.
For example, one of Cambodias main oil partners, Chevron, valuates carbon emissions
and the possibilities for offsetting or reducing them for all capital projects over US$5
million. Analyses of projects over US$50 million go to the executive committee and theboard, which sometimes reworks them based on future risks and liabilities. This sort of
carbon emissions valuation should be encouraged with all of Cambodias oil partners.
Another area of focus should be on reducing gas flaring. For example, methane flaring
has 21 times more of an impact on atmospheric temperatures than carbon dioxide.
In this regard, Cambodia should consider, if it has not already done so, joining the
Global Gas Flaring Reduction (GGFR) initiative, a public-private partnership of
governments, national and international oil companies, and donor agencies. Launched
at the World Summit on Sustainable Development in August 2002, the GGFR
partnership brings together governments of oil-producing countries, state-owned
companies and major international oil companies so that together they can overcomethe barriers to reducing gas flaring by sharing global best practices and implementing
country specific programmes. Poverty reduction is also an integral part of the GGFR
programme, which is developing concepts for how local communities close to the
flaring sites can use natural gas and liquefied petroleum gas (LPG) that may otherwise
be flared and wasted. The programme has already evaluated opportunities for small-
scale gas utilisation in several countries.31
Social aspects of oil management
Some of the common tools and methodologies for the social aspects of oil managementwere mentioned previously, notably social impact assessments (SIA), resettlement
action plans (RAP), and public consultations.
The CSR relationship between governments and oil companies is changing and
growing in complexity. Historically, CSR was commonly called corporate philanthropy,
corporate donations, or charitable giving. Companies of all sizes, across virtually
all industries and sectors, practised CSR. As these names imply, companies viewed
donations as philanthropy based on giving away a certain percentage of company
31A useful report from the GGFR is A Voluntary Standard or Global Gas Flaring and Venting Reduction, World Bank,Washington, D.C., 2004.
The CSR
relationship
between
governments
and oil
companies is
changing and
growing in
complexity.
7/28/2019 Environmental and Social Challenges Eng
10/15
Fuelling Poverty Reduction
UNDP Discussion Paper No. 6152
profits. In many instances, there may not have been any link between the kinds of
donations that a company made and the kind of business activities or sector in which
it was engaged. Corporate philanthropy units were often managed by separate,
autonomous foundations or within public and government affairs departments that
had limited interaction with operational business units.
Today, however, this situation has changed dramatically. CSR has grown considerably
in both scope and importance, as more and more companies recognise the business
value of using CSR as a strategic component in how the company is perceived by
investors, employees, local communities, governments and the media. Senior executives
and boards of directors are now keenly interested in their companies policies on CSR.
Compare the old philanthropy model with what are now thought of as legitimate
components or categories of CSR listed below:32
EconomicMonetary flows to the public sectortEmployment and human resource developmenttProcurement and supply chain managementtTechnology transfer and intellectual property rightst
Environmental
Environmentally safe production, products and servicestEnvironmental impact assessment and managementtEnvironmental reporting and management systemst
SocialHealth and safety of employeestLabour standardstCorruption and briberytHuman rightstViolence and conflicttSocial impact assessments and managementtCommunity and stakeholder engagement (non-commercial)tCharitable givingtSocial investmentt
Social reporting and management systemst
Corporate governanceRights and treatment of shareholderstGovernance policies and business principlestInformation disclosure and reportingtResponsibilities of the BoardtCustomer/end-user caret
32This list is derived from the World Bank, but similar lists can found based on an Internet search under the topic of corporatesocial responsibility. See World Bank, Public Sector Roles In Strengthening Corporate Social Responsibility (CSR): A Diagnostic
Framework and Options Appraisal Tool, Compiled and written by the Overseas Development Institute for the Private Sector
Advisory Services Department, December 2003.
7/28/2019 Environmental and Social Challenges Eng
11/15
TITLEUNDP Discussion Paper No. 6
Fuelling Poverty Reduction
153
This list demonstrates what has now come under the umbrella of CSR, which includes
the intermingling of environmental and social issues along with business ethics and
governance, as well as business operations and supply chain considerations.33
In designing a government policy toward CSR, it is perhaps helpful for the RGC tounderstand the emerging business case logic used by oil companies and some of the
elements associated with CSR best practice.
With regard to the CSR business case (or why it is in the self-interest of oil companies
to invest significant time and resources in good CSR programmes), there are essentially
four overlapping components:
Enlightened corporate sel interest and beneftst
o Not simply an operational cost, not simply philanthropyo Capturing business and reputation value calls for a more comprehensive and longer-
term approach to community outreach
o A capital investment with an expected return on investment (ROI)
Operationalt
o Increased competitiveness
o Maximise production and therefore revenue
o Improved workforce performance
Strategict
o Reduce risk
o Increase value of company social investments
External relationst
o Create political capital with host governments
o Enhance investor relations
o Tangibly demonstrate companys corporate citizenship philosophy
And finally, the emerging best practice in CSR, as seen by oil companies and leading
companies in other sectors, encourages: CSR supported by business unit senior
management, and backed by corporate endorsement at the headquarters level; a
long-term perspective; collaboration among multiple parties or stakeholders, leadingto public-private partnerships and local ownership; transparency and accountability;
joint decision-making; monitoring and evaluation of programmes; third-party auditing;
treating communities as active decision makers; and linking expectation management,
physical security for operations, environment, and community engagement.
33To demonstrate how CSR has come circle, see IBM,Attaining Sustainable Growth through CSR, IBM Institute for Business Value,IBM Global Business Services, Somers, New York, 2008.
7/28/2019 Environmental and Social Challenges Eng
12/15
Fuelling Poverty Reduction
UNDP Discussion Paper No. 6154
The growing complexity and scope of what constitutes good CSR places additional
responsibility on both the RGC and its oil company partners to ensure that CSR
policies and resources are well used and with the long-term interests of the Cambodian
people in mind. CSR is not a substitute for effective environmental and social
programmes undertaken by the RGC itself, but well conceived CSR programmes caneffectively complement government programmes and services and help to ensure
that the benefits of the oil sector are enjoyed by all of Cambodian society.
Selected case studies
The following case studies highlight some successful examples of how environmental
and social considerations are being addressed by oil-exporting governments in
collaboration with their international and national partners. The examples come from
Indonesia, Equatorial Guinea, Qatar and the trans-boundary pipeline project across
Azerbaijan, Georgia, and Turkey.
Indonesia Environmental and social saeguards or West Papua
West Papua constitutes 22 percent o Indonesias total land area and is one o the poorestprovinces in the country. It is also one o the most sparsely populated provinces, with only 5.6persons per square kilometre, and a population o only 2.4 million. At the same time, West Papuahas one o Indonesias largest natural gas sites, with reserves estimated at 38.1 trillion cubic eet.
The Indonesian government has embarked on a major initiative to develop one o the major gasfelds in partnership with British Petroleum (BP). The BP Tanugguh project, with an investment
o US$5 billion, will extract the gas and convert it into liquefed natural gas (LNG) or export toglobal markets.
The Indonesian government and BP have worked together closely to ensure both environmentaland social protection or the aected area. The project site is located in the vicinity o one othe worlds largest mangrove ecosystems, covering over 300,000 hectares on land and another60,000 hectares immediately oshore. This area directly supports approximately 3,000 households.
Based on the Special Autonomy Law o 2001, 70 percent o the post-tax revenues rom theproject will be returned to the province. By 2016, revenues o around US$100 million per yearwill be available to the province, with this sum rising to as much as US$200 million annuallyater 2019. These revenues will be used to improve inrastructure and government services aimedat providing lasting socio-economic benefts.
The Indonesian government and BP, in collaboration with UNDP, have also ormulated aDiversifed Growth Strategy (DGS) or the province and aected project area. Some o the keycomponents o the strategy call or dampening in-migration and unchecked growth in areasclose to the project; strengthening local business capacity; and promoting development onew enterprises to provide goods and services to the project. The DGS also places special emphasison linking Millennium Development Goal (MDG) 1, poverty reduction, and MDG 7, protectiono the environment.
CSR is not a
substitute or
efective
environmental
and social
programmes.
7/28/2019 Environmental and Social Challenges Eng
13/15
TITLEUNDP Discussion Paper No. 6
Fuelling Poverty Reduction
155
Marathon Oil: Malaria eradication in Equatorial Guinea
Marathon Oil has had operations on Bioko Island, Equatorial Guinea since January 2002.Malaria was identifed as a key issue or Marathons employees and the local community. It
became clear that by addressing malaria to provide a sae and healthy working environmentor company employees, Marathon could also make a signifcant dierence in the lives o allcitizens living on the island. Marathon and its partners looked or a long-term health solutionthat could eliminate or signifcantly reduce the transmission o the malaria parasite, thushaving both environmental and social benefts. The outcome was a public/private partnershipthat involves the Ministry o Health and Social Well-being, Medical Care DevelopmentInternational, One World Development Group, the Medical Research Council o South Arica,Yale University Medical School and the Harvard School o Public Health. A fve-year, US$8 millionmalaria transmission reduction programme was rolled out in August 2003.
To date, the initial results have been very encouraging:
Data rom monitoring sites showed a signiicant reduction in the number o disease-ttransmitting mosquitoes captured by window traps installed in local houses.The estimated number o malaria-inected mosquitoes ell by 80 percent as a result o thetfrst round o spraying.The relative risk o receiving an inective bite is estimated to be only 20 percent o the leveltbeore spraying began.2005 data on the number o children aged 2-15 with malaria parasites in their blood,tsuggests an improvement o more than 25 percent compared to a 2004 baseline.
7/28/2019 Environmental and Social Challenges Eng
14/15
Fuelling Poverty Reduction
UNDP Discussion Paper No. 6156
Qatar Petroleum and global warming
Qatar Petroleum (QP) is one o the major national oil companies in the Middle East, with crudeoil production o 850,000 barrels per day expanding to over 1 million barrels per day by late 2009,
as well as current gas production o 6.2 billion cubic eet per day approaching 25 billion cubiceet per day by 2012.
In alignment with the Qatar governments commitment to sustainable development and aspart o the companys business strategy, QP has obligated itsel to address global warming aspart o its current and uture business practices. This management decision was based on therecognition that climate change has become an important element o the global businessenvironment with political, economic, technological, social and environmental dimensions.
Toward this end, QP is tackling climate change on several ronts:
Developing a national emissions inventory in conjunction with the Qatar governmentt
Setting a zero gas laring target or all o QPs oil and gas ieldstDeveloping co-generation and waste heat recovery projectstUndertaking energy eiciency studies o QP operationstInvestigating alternative energy options or uture businesst
In designing its climate change policy and programme, QP researched and analysed severalkey questions related to its current business operations:
What kind o direct and indirect greenhouse gas emissions are being produced rom QPst
operations? What are the key sources o these emissions?What is the projected growth rate o QPs emissions? Is this growth rate locked in or can itt
be changed?
How does the emissions intensity o QPs operation compare to others in the industry?t
As a country, how does Qatars emissions compare with other countries? How do per capitatemissions compare? What about emissions per US$ o gross domestic product (GDP)? Whatabout Qatars cumulative emissions?
With respect to policies and programmes or uture operational targets, QP asked itseladditional questions:
What opportunities exist to reduce emissions? What do they cost?t
Would any o these opportunities be eligible or the Carbon Development Mechanism (CDM)t
under the Kyoto Protocol? Are there agreed CDM methodologies that could be utilised?What technologies/approaches are available to increase energy eciency? What is the cost ot
these technologies/approaches?
Is QPs investment strategy dierent under alternative post-Kyoto rameworks (scenariotplanning)?
These questions were used as part o the process or ormulating QPs eventual policy and programmatic
choices mentioned above.
7/28/2019 Environmental and Social Challenges Eng
15/15
UNDP Discussion Paper No. 6
Fuelling Poverty Reduction
157
The Baku-Tbilisi-Ceyhan (BTC) pipeline
The BTC pipeline runs or 1,760 kilometres rom Baku, Azerbaijan through the Republic oGeorgia and ends in Ceyhan, Turkey on the Mediterranean Sea. A consortium o oil companies
and investors, headed by British Petroleum, constructed the pipeline. It was fnished in 2006 atan investment cost o US$3.7 billion to bring high quality oil and gas ound in the Caspian Sea(in Azerbaijan territorial waters) or refnement and sale in European and global markets. At ulloperational capacity, the pipeline is able to trans-ship one million barrels o oil per day.
The BTC pipeline was built and is operated in accordance with stringent international environmental
and social standards. The pipeline is buried along its entire length. At its highest point, where itcrosses the Caucasus Mountains, the pipeline climbs to an altitude o 2,800 metres. Three separateenvironmental and social impact assessments (ESIAs) were completed to cover the length o the
pipeline and associated acilities through Azerbaijan, Georgia and Turkey. The three ESIAs wereled by international teams o independent consultants, with signifcant input rom nationalconsultants and scientists in all three countries.
Underpinning the ESIAs was a set o goals to minimise the project ootprint (including the righto way, temporary acilities and access roads), to achieve no net damage to protected ecologicalareas or archaeological sites, to require no resettlement o people, and to result in no permanentdisruption to the livelihoods o local populations. As a result o the meticulous route selection
process or the pipeline, not a single person was required to move rom their home because othe BTC project.
The ESIAs were made available or public comment and consultation beginning in mid-2002.Consultation and dialogue with all stakeholders including government and NGOs, as well as
potentially aected communities and interest groups at the local, regional and internationallevels played a vital role in the assessment. The communication and consultation process
continued throughout pipeline construction, with locally recruited community relations stameeting and sharing inormation with community members on a regular basis.
Summary
Proactively addressing environmental and social issues at the very early stages in the
development of the oil sector can help avoid later unforeseen problems. Recognizing
the different social and environmental requirements that must be addressed at each
stage in the lifecycle of an oil project from screen/negotiate through the dispose
phase is essential. There is also growing convergence and inter-linkage between
environmental and social issues, requiring their holistic treatment.
Collaboration and clear delineation of roles and responsibilities between the RGC and
its oil company partners is required to achieve optimal environmental and social
programmes with cost-effective use of available resources. This trend is evident in
the growing complexity and scope of CSR and the accompanying demands placed on
oil companies and the CSR oversight function of government.