International and Regional Environmental Impact Assessments

1 Overview

Environmental impact assessments (EIAs) have become a critical component for developing projects over the last decade in the Gulf Cooperation Council (GCC) region. It is mandatory for all developing projects in the region to obtain an environmental permit for construction and/or operation and this is a process that is typically managed and led by an approved environmental consultant. Environmental permits are obtained by developing an EIA or a Strategic Environmental Assessment (SEA) study to assess, minimize and mitigate the potential impacts of the project on the surrounding areas.

Over the last decade, there has been more evident emphasis on the importance of implementing a comprehensive EIA process by the regulating authorities for all developing projects in the region and specifically, in the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA). Guidelines have been developed by the Environment Agency of Abu Dhabi (EAD), Dubai Municipality (DM) Environment Sustainability Department (ESD) in UAE and the National Centre for Environmental Compliance (NCEC) in KSA.

In general, the impact assessment process assesses the impact of the proposed development on the surrounding sensitive receptors, and a value/sensitivity rating is assigned based on the existing environmental conditions. Impacts are determined, and magnitude/severity ascribed to the impacts of the full lifecycle of the project. The significance of the impacts is then determined by cross-referencing with the existing environment findings using a quantitative or qualitative system of values and matrices. The significance of the negative impacts identified will determine the degree of mitigation required during the project lifecycle.

This paper focuses on the impact assessment process in both the UAE and KSA, in comparison to the international requirements in particular the International Finance Corporation (IFC) requirements and performance standards. The subsequent sections provide the differences between those legislations as well as a comparison against the IFC requirements.

2 National, Regional and International Requirements

This section provides the different approaches to the EIAs carried out under the jurisdictions of EAD, DM-ESD, and NCEC in comparison with the IFC requirements.

2.1 Environmental Impact Assessment Objectives

The EIA process and objectives are consistent across regional and international guidelines with differences in the approach and implementation. The EIA definition and objectives for the above-mentioned regulators are provided below, and the differences between those regulators are provided in subsequent sections.

As per OP 4.01 (IFC Operational Policies, 1998), IFC requires environmental assessment of projects proposed for IFC financing to help ensure that they are environmentally sound and sustainable, and ultimately improve decision making.

The environmental assessment is a process whose breadth, depth, and type of analysis depend on the nature, scale, and potential environmental impact of the proposed project. The environmental assessment process evaluates a project’s potential environmental risks and impacts in its area of influence; examines project alternatives; identifies ways of improving project selection, siting, planning, design, and implementation by preventing, minimizing, mitigating, or compensating for adverse environmental impacts and enhancing positive impacts. It also includes the process of mitigating and managing adverse environmental impacts throughout project implementation. IFC favors preventive measures over mitigatory or compensatory measures, whenever feasible.

EAD defines the EIA process as a planning tool to guide the evaluation of environmental impacts and potential mitigation and monitoring efforts associated with a proposed project within Abu Dhabi Emirate. The objective of an EIA is to provide a comprehensive description of the environmental baseline conditions, the probable impacts of the proposed project, and the potential mitigation and monitoring efforts. The EIA supports the goals of environmental protection and sustainable development, integrates environmental protection and economic decisions, predicts environmental, social, and economic consequences of a proposed activity and assesses plans to mitigate any adverse impacts resulting from the proposed activity; and provides for the involvement of government and other agencies in the review of proposed activities (EAD, 2014).

DM-ESD requires EIAs for projects in which unmitigated impacts are expected to be ‘significant, sensitive and diverse’. The objective of the EIA is to present the regulatory with detailed information on the need for the proposed project, its nature, size, and location; environmental conditions (through baseline surveys) of the proposed project site; potentially significant environmental impacts including predictions through numerical model simulations; proposed measures to avoid, mitigate or compensate for the predicted impacts; and monitoring plans (DM, 2022).

NCEC defines the EIA as a study for determining, estimating and assessing the environmental impacts that may result from any activity classified by the Centre within Category (2) or Category (3) after reviewing the environmental classification form to include the environmental considerations and incorporate same in the final design of the activity in parallel with the economic, social and security considerations, and determining the necessary alternatives and measures for protecting the environment (MEWA, 2020).

2.2 National, Regional and International Comparison

The international and regional requirements for undertaking an EIA in terms of scope, methodology, implementation, and reporting mechanism differ; and these are presented in the subsequent sections and the tables below.
It is important to note that IFC is not a regulatory authority, however, IFC provides international best practice and guidance to banks for funding approvals and is being compared against in this paper.

2.2.1 Strategic Environmental Assessment (SEA) and EIA Governance

With the developing countries’ commitment to Net Zero to achieve a balance between the carbon emitted into the atmosphere and the carbon removed from it, the requirement for SEAs has increased for large scale projects, where policies and planning are required to be developed at the inception/conceptualization stage of the project to guide project design and operation.

As presented in the table below, for most of the regional authorities and their legislations, EIAs take precedence over SEAs due to the available developed guidelines and implementation; however, SEAs are not required for the majority of the regional authorities, but regulators have started considering them.

Criteria	IFC	EAD	DM-ESD	NCEC
SEA	The World Bank follows the Organization for Economic Co-operation and Development (OECD) in describing SEA as ‘analytical and participatory approaches to strategic decision-making that aim to integrate environmental considerations into policies, plans and programs, and evaluate the inter linkages with economic and social considerations’. Over time SEA has become more strategic by bringing different groups of stakeholders into an environmental and social dialogue in an iterative and adaptive way. Impact-centered approaches to SEA best fit to integrate environmental considerations in plans and programs where environmental impacts and risks can be identified and predicted. The SEAs are applied at the policy level at the very early stages of a project. The projects that require an SEA follow the Organization for Economic Cooperation and Development (OECD) guidelines.	EAD has developed the guidelines for the SEAs (ref: EAD-EQ-PCE-TG-03). As per EAD, the SEA serves as a planning tool to guide the investigation of alternatives, evaluation of environmental impacts, and potential mitigation and monitoring efforts associated with a proposed policy, plan, or program (PPP) within Abu Dhabi Emirate.In the past couple of years, large scale projects required undertaking an SEA in order to obtain the No Objection Certificate (NOC) from EAD.Projects being developed in Abu Dhabi usually require an EIA study, however, for projects that are assumed to have localized impacts, a preliminary environmental review (PER) study is required, where specific environmental baseline surveys are only carried out.	In the absence of technical guidelines for SEAs in Dubai, it is deemed that SEAs are not required or governed in the Emirate of Dubai.	There are no technical guidelines developed for SEAs in KSA by NCEC. However, NCEC’s guideline for environmental permits to establish and operate activities defines the SEA as ‘as study for determining and assessing the environmental impacts that may result from the policies, strategies, plans and programmes at the levels of the sectors and the areas that the government authorities propose to allot to a development or human sector; to include all environmental considerations and incorporate them in parallel wit the economic and social considerations.’In line of the above, SEAs are considered not required yet in KSA under NCEC’s jurisdiction. However, SEA guidelines are in the process of being developed but cannot be confirmed yet until officially launched.Despite NCEC not having SEA guidelines developed, some developers such as NEOM and the Red Sea Global (RSG) have their own guidelines for SEA which are being implemented in their projects.

2.2.2 Categorization

Different authorities classify projects based on specific criteria, in order to determine the level of requirements for the impact assessment study. The criteria depends on the level of significance of impacts, the sensitivity of the surrounding receptors, likelihood of impacts, the extent and magnitude of impacts anticipated from the project activities during the construction and operation phases.

The table below presents the different classification requirements by each authority in comparison with the IFC requirements in terms of the complexity of the project and the significance of impacts.

Criteria	IFC	EAD	DM-ESD	NCEC
EIA Categorization	The IFC categorizes the environmental impact assessment to reflect the magnitude of risks and impacts into the following categories: Category A: business activities with potentially significant adverse environmental or social risks and/or impacts that are diverse, irreversible or unprecedented. Category B: business activities with potentially limited adverse environmental or social risks and/or impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures. Category C: Business activities with minimal or no adverse environmental or social risks and/or impacts. Category FI: business activities involving investments in financial institutions (FIs) or through delivery mechanisms involving financial intermediation.	In Abu Dhabi, there is no categorization of projects requiring an environmental impact assessment study. However, based on the location, size, sensitivity, nature and magnitude of the potential environmental impacts, if the project is considered to have minimal and contained impacts, then a preliminary environmental review report (PER) is developed, otherwise an environmental impact assessment study is required.	In Dubai, DM-ESD requires an environmental impact assessment study to be carried out for all types of projects. However, based on the location, size, sensitivity, nature and magnitude of the potential environmental impacts, projects either require a full-on environmental impact assessment report or an environmental impact assessment summary. The different types of projects and the required EIA study for each of these projects is provided in Volume 2, Section 1.1 of the DM Guidance on the Environmental Clearance (EC) Requirements for Development, Infrastructure and Industrial Projects in the Emirate of Dubai.	NCEC classifies projects into three categories according to their ensuing environmental impacts. The classification is done on the basis of multiple factors including type and size of the activity, energy used, depletion of natural resources by the activity, land uses, sensitive receptors around the project area, and characteristics of potential environmental impacts. NCEC categorizes projects as follows: Category I Environmental Management and Rehabilitation Plan: the activities expected to have minimal environmental impacts that do not extend beyond the project site. Category II EIA: the activities expected to have medium environmental impacts throughout the different stages of the project. Such impacts can be limited and controlled, and they do not extend significantly beyond the project site. CAT II EIA only requires an EIA report to be developed. Category III EIA: the activities expected to have severe environmental, social, and economic impacts that may extend beyond the project site and may adversely affect the sustainability of the environmentally sensitive areas and receptors. CAT III EIA requires both a scoping report and an EIA report to be developed.

2.2.3 EIA Components

The EIA study requirements across all guidelines in the region are mainly the same with slight differences in components such as the social aspect, the compliance requirements, duration of environmental baseline surveys, monitoring duration during the construction and operation phases, etc. The table below highlights the differences in the regional requirements as well as provides a comparison against the IFC requirements and standards.

Criteria	IFC	EAD	DM-ESD	NCEC
Social Aspect	Social impact assessments including stakeholder analysis and planning, disclosure and dissemination of information, consultation and participation, grievance mechanism and ongoing reporting to affected communities form an integral part of the EIA studies under IFC. IFC mandates a comprehensive social impact assessment and defines stakeholder engagement as the basis for building strong, constructive, and responsive relationships that are essential for the successful management of a project’s environmental and social impacts.	The social aspect is a part of the EIA study undertaken for EAD, DM-ESD and NCEC. Due to the cultural and potential political restrictions, stakeholder engagements are not undertaken in the region, but grievance mechanisms are supported and addressed by local authorities despite the absence of the governing guidelines and regulations in the region. However, it is important to note that stakeholder engagements with relevant authorities is a requirement by all the regulators (i.e. EAD, DM-ESD and NCEC).
Duration of Surveys	Projects following the IFC standards and requirements, involve long term environmental baseline monitoring in order to provide an appropriate and representative baseline conditions of the project area. In addition, IFC mandates project owners to undertake environmental monitoring during the construction and operation phases of the project, in order to ensure continued compliance with the guidelines.	For projects under EAD’s jurisdiction, the environmental baseline monitoring depends on the project type, location, size, nature and surrounding sensitive receptors. These factors also determine the frequency of monitoring during construction and operation (if required). Duration of the surveys is determined by EAD for each project based on their specified criteria. In comparison, the IFC PS specifically provide guidelines for how to depict baseline surveys which may be considered to be more onerous than authority requirements in the region.	For projects under DM-ESD’s jurisdiction, the environmental baseline monitoring requirements including duration are specified in the DM guidance document for each type of project which could be considered general as the criteria is limited and does not take into account all the influencing factors. Monitoring during the construction and operation phases will depend on the requirements of the CEMP and OEMP which are linked to the conditions set by the authority.	For projects under NCEC’s jurisdiction, given the pace of development, some requirements are more onerous than others and the environmental baseline monitoring requirements are determined on a project basis. Monitoring during the construction and operation phases will depend on the EIA requirements and the CEMP and OEMP (if and as requested by NCEC).
Environmental Management Framework (EMF)	As per IFC PS1, the client, in coordination with other responsible government agencies and third parties as appropriate, will conduct a process of environmental and social assessment, and establish and maintain an environmental and social management system (ESMS) appropriate to the nature and scale of the project and commensurate with the level of its environmental and social risks and impacts. The ESMS will incorporate the following elements: (i) policy; (ii) identification of risks and impacts; (iii) management programs; (iv) organizational capacity and competency; (v) emergency preparedness and response; (vi) stakeholder engagement; and (vii) monitoring and review. The management programs will establish environmental and social action plans, which will define desired outcomes and actions to address the issues raised in the risks and impacts identification process, as measurable events to the extent possible, with elements such as performance indicators, targets, or acceptance criteria that can be tracked over defined time periods, and with estimates of the resources and responsibilities for implementation.	As part of the EIA, EAD requires that a full environmental management framework is provided, including contractor details, roles and responsibilities, training and competence, communication protocol, monitoring and auditing requirements.	As part of the EIA, DM-ESD requires that a full environmental management framework is provided, including contractor details, roles and responsibilities, training and competence, communication protocol, monitoring and auditing requirements.	As per NCEC requirements, only a high-level environmental management framework is required to be included in the EIA; a more detailed framework is to be provided as part of the Construction Environmental Management Plan (CEMP) (when required).
Compliance and Supervision	Environmental monitoring during the construction and operation phases are mandatory by IFC, in order to ensure continued compliance with the guidelines. Procedures are required to be established to monitor and measure the effectiveness of the management program, as well as compliance with any related legal and/or contractual obligations and regulatory requirements. The monitoring program is overseen by the appropriate level in the organization. For projects with significant impacts, external experts are retained to verify its monitoring information. The extent of monitoring should be commensurate with the project’s environmental and social risks and impacts and with compliance requirements.	As per EAD guidelines, an audit and inspection program should be developed for projects involving multiple stakeholders, proponents, and/or contracts because this will ensure compliance with all the EMF requirements and commitments (including applicable legal requirements, standards, and codes of practice) across all participants in the project activity. Environmental audits are mostly undertaken on a quarterly basis by an approved third-party environmental consultant. An audit report is then prepared including all observations, non-conformances, previous findings, corrective action plans and the record of training provided since the last audit.	As per DM guidelines, an environmental consultant shall be appointed to perform periodic comprehensive environmental audits of the project during the construction phase to ascertain that compliance has been achieved as per the recommendations of the EIA and the conditions of the EC. The environmental audits are either undertaken on a quarterly or biannually based on the ongoing project activities and the project milestone. An environmental performance report shall be developed in line with the onsite audit, which is comprehensive and includes all observations, non-conformances, previous findings, corrective action plans and the record of training provided since the last audit.	As per NCEC guidelines, environmental audits are required for Cat II and III projects on a quarterly or biannual basis for permits for construction, operation and closure of activities, and upon renewal of the environmental permits. In order to renew environmental permits for operation, a licensed third-party environmental consultant undertakes the environmental audit and then prepares an environmental audit report in accordance with NCEC guidelines. The audit report is then submitted to NCEC along with the request to renew the environmental permit for operation.
Monitoring Requirements	As per IFC PS1, the client will establish procedures to monitor and measure the effectiveness of the management program, as well as compliance with any related legal and/or contractual obligations and regulatory requirements. Where the government or other third party has responsibility for managing specific risks and impacts and associated mitigation measures, the client will collaborate in establishing and monitoring such mitigation measures. Where appropriate, clients will consider involving representatives from affected communities to participate in monitoring activities. The client’s monitoring program should be overseen by the appropriate level in the organization. For projects with significant impacts, the client will retain external experts to verify its monitoring information. The extent of monitoring should be commensurate with the project’s environmental and social risks and impacts and with compliance requirements.	The monitoring requirements during the construction or the operation phase are determined based on the type of project and the extent of impacts identified by the EIA study. Should monitoring be required to be undertaken, the main works contractor (during construction) or the operator/project proponent (during operation) shall submit a quarterly monitoring report to the authority.	The monitoring requirements during the construction or the operation phase are determined based on the type of project and the extent of impacts identified by the EIA study. Should monitoring be required, the main works contractor (during construction) or the operator/project proponent (during operation) shall submit a quarterly environmental performance report to the authority.	The monitoring requirements during the construction or the operation phase are determined based on the type of project and the extent of impacts identified by the EIA study. Should monitoring be required, the main works contractor (during construction) or the operator/project proponent (during operation) shall submit a quarterly monitoring report to the authority. In addition, once the environmental permit to construct (EPC) is expired, NCEC requires an updated EIA to be submitted with the full suite of environmental surveys/monitoring (i.e., air quality, noise, soil quality, groundwater, etc.) included.

It is important to note that all of the above-mentioned regulatory authorities carry out periodic inspections to project sites during the construction phase. For industrial or highly sensitive projects, inspections are also undertaken during the operation phase.

3 Conclusion and Recommendations

This paper has provided the differences between the regional guidelines as well as a comparison against the IFC standards and requirements. The GCC region, specifically, the UAE and KSA, have witnessed an exponential growth and development in the last couple of decades. With the increased number of development projects, the guidelines developed by the different authorities have been undergoing constant update and change in order to accommodate that growth and implement best industry practices.

Despite the short period of operational time of these authorities in comparison to international regulators and agencies, however, their progression has been notable. Through my experience on projects in the region, specifically the UAE and KSA, the efforts and growth of the authorities over the last couple of decades has been remarkable to witness. Liaising with authorities is part of every developing project and is an experience on its own. Regulators in the region encourage face to face meetings and discussions in order to clarify and agree on the way forward on a project with regards to environmental aspects.

With the growth and development of the authorities in the region, it has been noted that at times, similar projects require different levels of efforts depending on the project jurisdiction. Where projects are developed on a masterplan level, it is recommended that rather than EIAs being developed for plot levels (in some cases), overall EIAs shall be developed for the masterplan which would then guide future dedicated environmental studies for the individual plots.

In conclusion, there are a number of environmental authorities in the region whose environmental governance and guidelines have had significant influence and improved the design, construction, operation and overall performance of projects.

In addition to the authorities mentioned in this article, there are a number of private developers, authorities and freezones who have published their own guidelines, many of which refer and align with some of IFC’s PS.  In addition to permitting requirements, developers have set ambitious environmental and sustainability targets in line with national targets and sustainability agendas and therefore aim to include environmental considerations from early project inception stages.

There are several areas where improvement can be made to further enhance the overall environmental governance in the region such as through regulatory reforms and updates to environmental guidelines to better align with international best practice. Areas of improvement around social impact, stakeholder engagement and operational environmental controls are some examples of where such improvement can take place.

With the project proponents and regulators working hand in hand towards more sustainable developments, the visions and aims of the UAE and KSA towards a greener future can certainly be achieved.

4 Reference List

Dubai Municipality, 2021. Guidance on the Environmental Clearance (EC) Requirements for Development, Infrastructure and Industrial Projects in the Emirate of Dubai. Dated March 2021

Environment Agency Abu Dhabi (EAD), 2014. Technical Guidance Document for Environmental Impact Assessment (EIA) (EQ-PCE-TG-02). Dated 14 April 2014

Ministry of Environment, Water and Agriculture, 2020, Approving the Implementing Regulation for Environmental Permits to Establish and Operate Activities. Saudi Arabia Ministerial Decision No. 436153/1/1442.

Ministry of Environment, Water and Agriculture, 2021, Approving the Implementing Regulation for Environmental Inspection and Auditing. Saudi Arabia Ministerial Decision No. 393691/1/1442.

Performance standards on environmental and social sustainability – ifc.org. IFC. (2012, January 1). https://www.ifc.org/content/dam/ifc/doc/2010/2012-ifc-performance-standards-en.pdf

Strategic Environmental Assessment Policy Sector Reform – World Bank. World Bank. (n.d.). https://documents1.worldbank.org/curated/en/197551468340871432/pdf/Strategic-environmental-assessment-in-policy-and-sector-reform-conceptual-model-and-operational-guidance.pdf

World Bank. 2013. OP 401 environmental assessment – ifc.org. IFC Operational Policies. (1998, October). https://www.ifc.org/content/dam/ifc/doc/1990/op401-environmentalassessment.pdf