Provincial Investment Monitoring in Lao PDR

Poverty Environment Initiative (PEI ), April 2011

Monitoring as a key investment management activity

Scope of PEI monitoring framework

Investment data collection Approved Investments Compliance monitoring Monitoring Basic Impact/risk monitoring

Scope of PEI monitoring framework

Interdepartmental monitoring activity:

• • • • • •

Planning and Investment (DPI) Industry & Commerce Agriculture and Forestry (PAFO) Water Resource s and Environment (WREO) Land Management (NLMO) Labor and Wellfare Approved Investments social impacts environmental impacts economic impacts Monitoring

Types of monitoring and data: investment data Investment data collection (e.g. name of company, type of business, local jobs created, tax revenues generated)

Types of monitoring and data: compliance Compliance monitoring (does the company follow the concession, IEE/ESIA or other contractual agreements)  Agreements contain measures to protect communities and  the environment Agreements often build on lessons learnt and intend to avoid bad impact that has happened before.

Types of monitoring and data: impacts and risks Impact/risk monitoring (are impacts/risks on the environment and the local people notable)  Poor people strongly rely on the environment since natural resources remain an important source of livelihood.

 Health of the environment links to the well being of local people.

Dependence on natural resource base

Possible consequences for economic development:

A continuing degradation of natural resources can also impede economic development of the province.

 main investment sectors depend on the natural resource base.

Types of data General Information Investment data Social Company information Project location Financial data Taxes Employment Training/knowledge transfer Working conditions Health and security name, address, licences, type of business, concession size, ESIA/IEE address, GPS, proximity to communities capital, revenues, expenses different types of taxes, tax exemptions domestic, international, female staff on different levels. staff training provided average salaries, leave regulations, availability of contracts, social security safety and health protection, accidents, access to water and sanitation, HIV or drug abuse prevention

Types of data Community Environment Resources Land Soil Water Air Contribution to community (infrastructure, training), community issues (concession boundary encroachment, food security) water usage, energy sources, green technologies productive area, boundaries, forest/wetland clearings, clearing or displacement of agricultural land signs of erosion signs of bad water quality, wastewater facilities, distances between areas with use of chemicals to water bodies Dust, burning, air pollution control

Types of data Compliance check Biodiversity Waste Risk protected areas, signs of illegal hunting, wildlife as main resource disposal of oil, chemicals or medical waste, rubbish management, sewage disposal storage and handling of hazardous materials compliance check against a project specific list of all agreements Compensations Other agreements

Constraints of the monitoring • Does not cover impact monitoring where specific equipment for analysis is needed • Can only assess basic social and environmental impacts, without specific reference to regulatory standards.

• Covers mostly indicators that can be assessed on a one-time spot check (some questions need to be asked to the community to assess past and current situations)

Law Concession IEE/ESIA Learning, adaptation changing conditions

Development plans and priorities

assumptions, actions Investments social impacts environmental impacts Analysis/ reporting economic impacts immediate action Data base Data entry Monitoring

Investment monitoring data and support for investment decisions

Investment Management Cycle Data analysis Learning, adaptation Identify criteria for quality investments Investment promotion, calling list Enforcement of relevant laws and agreements Monitoring Evaluation of investment applications, incl. ESIA Contract negotiations and approval

Support for investment decisions

What is the contribution of monitoring data to sustainable management of investments?

1. Identification of sustainable investments  monitoring can show that some sectors or management standards may have less social and environmental impacts than others  Help to focus on good quality investments and to promote them specifically – what types of management and social responsibility standards create quality?

Support for investment decisions 2. Identification of shortcomings in investments to inform better management  Example: the monitoring can show that investors are not providing adequate protective equipment for staff or that they are not complying with contract/concession agreements.  This information can lead to changes in investment management (new conditions for investors)

Support for investment decisions 3. Assessment if investments are effectively contributing to strategies and plans  Contribute important data towards Monitoring & Evaluation requirements at the Central level to assess progress and achievements of the NSEDP  Over time this data contributes to evaluation of provincial investment strategies and development goals

Monitoring data for Investment planning ?

Which types of investments have proved to: • have generated added value to local socio-economic development • to be also environmentally sustainable

Monitoring data for Investment planning

Monitoring data contributes to

effective management of investments

and supports

identification of quality investments

5 steps of investment monitoring

1 Preparation

Pre-monitoring protocol: • What actions do you need to take before going to do the monitoring? (i.e. announcement, authorization) • • What do you need to bring with you?

Preparation for compliance monitoring   you need to know the investor agreements put together project specific list of agreements

5 steps of investment monitoring

2 Monitoring / site visit

• • • • Project data collection Compliance check Impact and risk assessment Talk to community members   Different team members have different areas of expertise Monitoring supports the mandate of the different departments

5 steps of investment monitoring

3 Follow-up and enforcement of compliance

Possible situations that should trigger action: • • • non compliance immediate threat to the environment immediate threat to the health of people   Identify questions and tresholds in the monitoring form that will trigger action Identify mechanism for reporting and enforcement of compliance and laws

5 steps of investment monitoring

4 Data entry into database

 Make information accessible for all involved line ministries

5 steps of investment monitoring

5 Data analysis and reporting

Assessing data for provincial Monitoring & Evaluation and for development planning  PEI/UNDP/IPD to develop guidance to how to analyze data and assess cumulative impact of investments in the province

3 main goals of investment monitoring

1 2 3

assessment of impacts of risks and identification control of compliance get data for reporting and data analysis for further development planning

2 main benefits of monitoring for the province

1 2

Protect communities and the environment from negative impacts . Monitoring data contributes to effective management of investments and supports identification of sustainable investments