Environmental aspects of dam andreservoir projects - the World Bank'snew policy

by Robert Goodland

The Bank seeks to promotesustainability in all relevant projectsand sectors. This article outlines theBank's most recent environmentalpolicy for dam and reservoir projects.

Integrating power generation and irrigation with rural development increasesthe benefits of a dam or reservoir project.

IN MARCH 1989, the World Bankannounced a new official policy to befollowed by all staff and borrowersinvolved in any project related to darnsand reservoirs. This comprehensiveand detailed new policy lays downprocedures designed to ensure that allenvironmental aspects of such projectsbecome routinely and systematicallyintegrated into project design andoperation. The overall aim of thispolicy parallels economic least cost:that is to ensure that borrowerspromote their environmentally andsocially low·cost project investmentoptions and exclude environmentallyand socially high-cost projects, whilemaintaining optimal environmentaland social standards. The strength ofthe policy is that the Bank will notnormally finance projects which donot comply with the policy. Theremainder of this article is the officialpolicy, practically verbatim, togetherwith Figure 1.

BackgroundThe policy recognizes that dam andreservoir projects improve watersupply for irrigation and households,provide power, control floods, andreduce fossil-fuel depletion and theenvironmental effects of fossil·fuelburning. With careful planning,adverse effects (Figure 1) can beprevented, mitigated, or compensated,and the beneficial effects enhanced.Other existing Bank policies are also tobe followed in dam and reservoirprojects, such as those on involuntary

Dr. Robert Goodland is Chief, Environment,Latin American Section, World Bank,Washington. DC 20433 USA.

WATERLINES VOL.8 NO.4

resettlement, tribal peoples, wildlands(biodiversity), cultural property,international riparian rights, damsafety and the general guidelines onenvironmental policy.

Governments need to haveenvironmentally and economicallysound macroeconomic and sectorpolicies on matters which affect darnand reservoir projects. In the contextof individual invesbnent projects, theBank should review these policies andseek to improve them where necessary.

Adverse environmental impactsshould be avoided, minimized orcompensated for wherever possibleduring project design (e.g. bymodification of dam location orheight), and by measures implementedas part of the project, bearing in mindthe need to balance environmental,

economic, social and other concerns.Opportunities to increase benefitsshould be sought in the design of theproject, such as by using reservoirs forwaterfowl, tourism and fisheries. Cost-benefit analyses should explicitlyinclude estimates for all necessarymitigatory measures, as well as forquantifiable environmental losses andenhancements due to the project.

Design of invesbnent programmesfor supplying water or energy shouldconsider demand management as wellas supply options such as conservationof water and energy, efficiencyimprovements, system integration,cogeneration and fuel substitution.Environmental analysis is essential indecisions about the need for a project,its type (eg. thermal vs. hydro), size,location and area of influence. Whereviable alternatives exist, careful damsiting is critical to minimize theinundation of forest or other wildlandareas, and the dislocation of people.The creation and/or protection ofcompensatory forest or other wildlandareas should be promoted. Thefeasibility of preparing the reservoirarea prior to inundation should be

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Figure 1 Typical environmental effects of dams and reservoirs

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LAND LOSSES Large tracts of agricultural lands,forests or other wildlands may be inundated.Careful siting can minimize such losses (e.g. byselecting reservoirs with high Kwh-generated/haland area inundated). The value of lost timber andother resources, and foregone use of inundatedland should be estimated in the economic analysis.

HEALTH Some water-related diseases (e.g.schistosomiasis, malaria, onchocerciasis andJapanese B encephalitis) may increase unlessprecautions or mitigatory measures areimplemented. Vector control, environmentalmodifications, and education of residents may needto be incorporated into the project.

PLANT AND ANIMAL LIFE Biotic surveys arenormally essential; plant and animal extinction canbe prevented or minimized by careful project siting.Loss of wildlife may be mitigated by includingelsewhere in the country a wildlands managementarea equivalent to the inundated tract, as providedfor by the Bank's Wildlands policy. Animal rescue,replenishment and relocation can be useful. Canaland other crossing facilities are often essential.

FISH AND OTHER AQUATIC LIFE Fish migrations(if any) will be impaired even with passagefacilities. Fish propagation may mitigate losses andproduce more fish protein than before the project.Spawning areas, aquaculture, improved fishingmethods and marketing may need specialattention. A reduced supply of nutrientsdownstream and to estuaries can impair fisheryproductivity. Interbasin transfers may threatenaquatic species by introducing new predators orcompetitors. A socio-economic survey candetermine the importance of fish to the society.

WATER WEEDS Proliferation of floating weeds(e.g. water hyacinth [Eichornia] and water lettuce[PistiaJ, can impair water quality and increasedisease vectors and water loss (through evapo-transpiration). Clogging impairs navigation,recreation, fisheries and irrigation. The potential touse weeds for compost, biogas or fodder should beinvestigated.

WATER QUALITY Suitability of water quality fordrinking, irrigation, fisheries or other uses, bothwithin reservoirs and downstream, should beaddressed. Issues include saline intrusions, waterretention time (i.e. flow/volume), loss of flushing,increased nutrients in reservoir, pollution (e.g.agricultural leachates, pathogens, industrialeffluents), raising or contamination of water table,and salinization.

ANAEROBIC DECOMPOSITION Inundatedvegetation on the bottom of reservoirsdecomposes, consuming large amounts of oxygen.If thermal stratification occurs, mixing of surfaceand bottom water is impeded, and the bottom watermay become anaerobic. Anaerobic decompositionof organic material produces noxious gases toxic toaquatic life and harmful to machinery. If dischargedby the dam, downstream fish could be killed.Multiple-level outlets in the dam can avoid thedischarge of anaerobic water. Inexpensive modelsare available to predict thermal stratification.Conversion of forest to timber before reservoirfilling reduces project contribution to greenhousegases.

EROSION Erosion upstream in the catchment arealeads to sedimentation or land slides which canimpair storage; catchment area managementshould be encouraged where appropriate.Increased erosivity of the water (the so-called'hungry waters' effect), on the river-bed andstructures below the dam, including deltaic andcoastal changes, should be considered duringpreparation. Trap efficiency, the capacity of thereservoir to store sediments should be estimated.Many dams have low trap efficiency and do notstore much sediment, hence do not increaseerosivity downstream.

DOWNSTREAM HYDROLOGY Changes indownstream hydrology can impair ecosystemsdependent on seasonal flooding, including areasthat may be important for fisheries (e.g. floodplains,lagoons, marshes, mangroves) or for traditionalflood-recession agriculture. Sometimesmanagement of downstream water-releases canminimize such damage by partially replicatingnatural flooding regimes.

INTACT RIVERS Hydroelectric and otherdevelopments should preferably be concentratedon the same rivers if hydrological risks and othercircumstances permit, in order to preserveelsewhere a representative sample of rivers in thenatural state. This should be considered part of thetrade-off.

MULTIPLE USE Multiple use should be addressedthrough tourism, irrigation, fisheries, bird and otherbiotic sanctuaries, and recreation. Water-flowregulation can convert seasonal rivers intoperennial waterways, reduce flooding, and improvedrinking-water and irrigation. Communal accessshould be perpetuated.

[Note that involuntary resettlement, tribal people, culturalproperty and dam safety are not discussed here as theyare covered by other Bank policies.)

WA1ERLINES VOL.8 NO.4

Institutional aspectsMajor dam and reservoir projectsshould be used to help buildenvironmental capacity (analytical,regulatory and enforcement) ininstitutions at the national and sectorallevels, through training, consultancy

resolution, as well as the institutionalarrangements.

Sector investment operations (asdistinguished from specific investmentprojects) in sectors that include majordam and reservoir projects shouldproceed only when the environmentalcapabilities of the sector are adequate,or provisions to establish adequateenvironmental protection measureshave been agreed upon duringappraisal.

Bidding documents and contractsshould incorporate appropriatemeasures to protect the environmentThe environmental monitoring system,dam construction contractors'performance, adequacy of theenvironmental measures, institutionalarrangements, training andperformance of the in-houseenvironment unit, and reports of theenvironmental panel should bereviewed with the borrower duringsupervision, and any necessarycorrective actions identified andagreed upon.

Completion reports should reviewenvironmental problems and progress.In addition, as some environmentaleffects become apparent only after adecade or more of operation, the Bankshould encourage the borrower tocontract an independent environmentalpost-audit a decade or so afterimpoundment.

Information collected is to bedocumented and provided to the Bankand government agencies concerned,to ensure that environmental factorsare fully considered in project design,including determination of the finaldam site and height, and shouldcomprise part of the baseline dataagainst which subsequent changes canbe measured.

The Bank's 1989 policy onEnvironmental Assessment should befollowed. During preparation, theBank should review the draft Terms ofReference (TOR) for theenvironmental assessment part of thefeasibility study, the short list ofconsultants, and their technicalproposals. The environmentalassessment should be consistent withcountry legislation on procedures andrequirements. Broad intersectoral co-operation should be ensured betweenagricultural, fisheries, forestry, health,wildlife, tourism, municipal andindustrial agencies, both at policy andfield levels. Biotic, cadastral, socialand cultural property surveys shouldbe started early.

The appraisal mission shouldinclude environmental specialists toassess the environmental analysis, thedesign of measures to minimize ormitigate adverse environmentalimpacts, and the capacity of theborrower's staff to implement them.The environmental panel should beconvened during project appraisal. TheAppraisal Report should describe theenvironmental issues and their

~ ..-This small dam in the Rangpur district is used/or irrigation. bathing andwashing clothes.o assess the ability of the borrower to

undertake them; ando advise on the need for an

environmental panel.

determined. Removal of vegetationwill improve the water quality of thereservoir and reduce growingconditions for aquatic weeds, whileselective removal of timber and otherobstacles will improve the possibilityfor net fishing and enhance watercirculation, important for oxygendistribution.

Benefits from dam and reservoirprojects increase when they becomeregional development projects whichintegrate, for instance, powergeneration, irrigation and municipalwater-supply, with catchment areamanagement and rural development.Designing water projects in thecontext of overall river-basin andregional development plans normallyreduces the potential for unanticipatedcumulative adverse environmentaleffects and intersectoral problems. Theneed for catchment area managementand improved land use, for examplediscouraging settlement in flood-proneareas, should also be systematicallyconsidered.

The lands inundated by a darn aretypically more productive thanneighbouring uplands, and aretherefore more densely populated bypeople and livestock. Displacement ofthe lowland population to the uplandsoften endangers the environment, asmore people and livestock have tosurvive on a reduced resource base.Demand for arable land, fuel, fodder,potable water, building materials andother resources may increasedramatically, and the carrying capacityof the uplands may be quicklyexceeded unless developmentassistance increases the productivity ofthe remaining resource base. TheBank's resettlement policy emphasizesmaintenance, the prompt restoration ofand then the improvement of the socialand economic production systems andincome levels of both the displacedpopulation and the host populationamong whom they are relocated. Thekey is the policy of replacement ofassets in kind (rarely in cash), ratherthan compensation of assets at marketor other value.

Project cycleDuring project identification, anenvironmental reconnaissance byindependent, recognized experts orfirms, selected by the borrower andapproved by the Bank, is essential to:o ensure that potential environmental

effects are identified;o ascertain the scope of further

environmental studies and actionsneeded;

WATERLINESVOL.8 NO.4 9

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and policy dialogue, and to foster cov-erage of dams and reservoirs byenvironmental legislation.

Environmental benefits can bemaximized and costs reduced byimproved intersectoral planning.Potential environmental implicationsare often better anticipated byinvolving the agencies responsible forenvironment, health, tourism, socialaffairs, municipal and industrial water-supply, agriculture, livestock,fisheries, and navigation, plus stateand provincial authorities.Environmental agencies should beconsulted in project planning andpreparation, to ensure that relevant lineministries and other decision-makersare made aware of potentialenvironmental impacts andrecommended mitigatory measures.

An environmental unitEach project involving large dams(height above 10m or reservoir volumeabove 2.5 million cubic metres, orwith significant environmentalimplications) requires an in-houseenvironmental unit with adequatebudget and professional staffmg strongin expertise relevant to the project,usually physical and biological scienceand sociology. It should normally beestablished within the implementingministry or agency (such as that forirrigation or energy) or in a river-basinauthority. The project's environmentalunit should be located or well-represented at the project site, andwork in conjunction with existingcentral agencies. Strengthening anexisting agency-wide unit may bebetter than creating a new one. Theunit should be established as early aspossible to help ensure that pre-projectbaseline data are collected andenvironmental problems anticipated atan early stage. It should exist duringproject implementation plus anadditional period to be agreed with theBank. The unit should ensure thatmonitoring and evaluation anticipateenvironmental problems, and thatmitigatory measures are implemented.Early and extensive training of unitstaff is a priority.

For projects involving large dams,or having major environmentalimplications, the borrower shouldnormally engage an advisory panel ofindependent, internationallyrecognized environmental specialists,the composition of which should bedetermined by the environmentalreconnaissance. In certain cases,however, the reconnaissance studymay advise, based on the significanceof the environmental issues and the

borrower's (including consultants')capacity to deal with them, that thepanel is not needed. The costs of thepanel could be financed from the loanor credit Its TOR, and the ~hort listsof individual experts from which thepanel is to be selected, should beacceptable to the Bank. The panelshould advise the borrowerperiodically on environmental aspectsof the project, including:o analysis of the findings of the

environmental reconnaissance;o the TOR and findings of the

environmental assessment;o environmental plans, procedures,

budgets and progress throughoutthe life of the project; and

o the in-house environmental unit'sstaff, training, functions andrelations with the Ministry ofEnvironment.Depending on circumstances, panel

reviews would normally be held onceor twice a year during preparation andimplementation, or when the in-houseenvironmental unit requests one. Theadvisory panel should continue tofunction after completion of theproject for a few years (as agreed withthe Bank), and could be convened on

an ad-hoc basis thereafter.Community organizations, research

centres, environmental advocates andother NGOs can often providevaluable perspectives on improvingboth project design andimplementation, as specified by otherBank policies. To tap theseperspectives, the Bank encouragesconsultations by project authorities(including consultants preparing theproject) with appropriate NGOs,particularly local NGOs. Variousmechanisms for consultation may beappropriate, including sponsoredpublic hearings or national workshops.Bank staff, too, should consult withNGOS as appropriate, bearing in mindthe capacity of NGOs to offerimportant perspectives on projectdesign, and the need to protect theconfidentiality of information sharedbetween the Bank and borrower. Inaddition, the Bank encouragesconsultation between project executingagencies and the population affectedby the project, as part of the projectdesign process. This includes tribalpeople, the focus of a separate Bankpolicy. The Appraisal Report shoulddescribe and assess the consultationswhich took place. •

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