USAID Environmental Procedures

1. USAID Environmental Procedures

2. Objectives of this Module • Explain the regulations; • Help you understand how regulations affect the design and implementation process; • Assist you in obtaining environmental clearances; • Apply environmental assessment principles based on USAID procedures; • Support decentralization of responsibility for environmental review and decision-making.

3. USAID Environmental Policy and Regulations USAID’s environmental regulations contained in 22 Code of Federal Regulations (CFR) Part 216 -- commonly referred to as Reg. 16: • Identify and consider, with host country, environmental consequences prior to making decisions; • Ensure that appropriate environmental safeguards are adopted;

4. Assist developing countries in evaluating environmental effects of development strategies and activities; • Identify environmental impacts of USAID actions; • Define environmental limiting factors that constrain development; • Identify and carry out activities that “assist in restoring the renewable resource base on which sustained development depends.”

5. The Purpose of Reg. 16 • Implement regulations consistent with the National Environmental Policy Act (NEPA) and Executive Order 12114. • Ensure integration of environmental factors and values into the USAID decision-making process. • Assign responsibility for assessing environmental effects of USAID actions.

6. Reg. 16 Applies to: • All new USAID programs or activities. • Substantive amendments or extensions to ongoing activities with: • New components; • A significant expansion; • Imported commodities in addition to those in the original environmental review process; • Unforeseen adverse impacts that have occurred in original activity.

7. Environmental Review & USAID Design Process Environmental Review: • Strengthens activity proposals. • Aids...is not an obstacle to project design. • Identifies in advance “reasonably foreseeable impacts.”

8. Summary of Environmental Procedures Prepare an Initial environmental Examination (IEE) to make threshold determination: A negative determination means “no” significant impact. • A positive determination means “yes” significant impact. • A deferred determination applies to sub-activities where information is still insufficient and postpones analysis. • "A significant impact" does “significant harm to the environment.”

9. Activities with only beneficial impacts receive a negative determination. • Activities with benefits and significant harm to the environment receive a positive determination, because harm to the environment requires mitigation.

10. Some activities are exempt or excluded: • Exemptions may be for activities responding to emergencies, such as famine relief. • Exclusions apply to activities considered very unlikely to have significant impacts. • These activity types are eligible for "categorical exclusion," i.e., no IEE needed.

11. Reg. 16 also lists specific activities expected to have significant impacts: • Comprehensive analysis, the Environmental Assessment or EA, is typically required. • An IEE is often done to determine if EA is needed.

12. The Full Reg.16 Approach

13. Prepare IEE and Make Threshold Decision

14. Apply Environmental Screening Formfor Umbrella NGO/PVO Grant and Activity Proposals where Umbrella IEEs Exist

15. Prepare IEEs with initial proposal. • IEES have an approval process: • Regional Environmental Officer • Bureau Environmental Officer (BEO) • General Counsel's office.

16. Applicable Forms • Initial Environmental Examination or Categorical Exclusion form • Environmental Screening/Report Form for NGO/PVO Activities and Grant Proposals • Sample Outline for an Environmental Review.

17. Positive IEE Thresholds If IEE threshold is positive (significant or harmful impacts), prepare Environmental Assessment (EA) or an Environmental Impact Statement (EIS): • EISs are for projects affecting the United States or the global environment. • EAs are for projects with impacts more limited in geographic scope. • EAs and EISs require teams of consultants, usually with USAID environmental staff.

18. Non-Project Assistance (NPA) • NPA involves institutional or policy change & sectoral adjustment. • USAID requires IEEs for NPA.

19. Exemptions International disaster assistance: • Other emergency situations [requires Administrator (A/AID) or Assistant Administrator (AA/AID) formal approval]; and • Circumstances with exceptional foreign policy sensitivities [requires A/AID or AA/AID formal approval].

20. Categorical Exclusions • Education, training or technical assistance; • Controlled experimental research of limited scope and carefully monitored; • Analysis, studies, workshops, meetings; • Projects in which USAID is a minor donor; • Documents or information transfer; • Contribution to international, regional or national organizations not for the purpose of carrying out specifically identifiable activities;

21. Institution building grants to research and educational institutions in the US; • Nutrition, health, population and family planning activities, except for their construction components and other activities directly affecting the environment • Commodity Import Programs (CIPs), when USAID has no knowledge of or control over use; • Support to intermediate credit institutions if USAID does not review or approve loans; • Maternal or child feeding programs under Title II of PL 480;

22. Food for development programs under Title III, when USAID has no specific knowledge or control; • Grants to PVOs where USAID has no specific knowledge or control; • Studies or projects that develop the capability of countries to engage in development planning, except those resulting in activities directly affecting the environment; • Activities that involve the application of USAID approved design criteria. Note: Categorical exclusions are not applicable to assistance for the procurement or use of pesticides.

23. Actions Normally Requiring an Environmental Assessment (EA) • River basin development(What is not in a river basin?); • Irrigation or water management including dams; • Agricultural land leveling; • Drainage; • Large scale agricultural mechanization; • New land development; • Resettlement; • Penetration road building or road improvement;

24. Power plants; • Industrial plants; • Potable water and sewage, unless small scale (Size limit?); • Activities jeopardizing endangered and threatened plant and animal species and critical habitat; • Pesticides (require an IEE at least, often an EA).

25. If Not CE and Not EA? - Prepare an IEE to make determination - Probably a Negative Determination with or without conditions

26. Non-Project Assistance: Look at planned objectives, not just intermediate steps. If possible identify adverse environmental impacts, include mitigative measures.

27. Activities financed with host country local currency (not legally subject to Regulation 16 procedures) but: • Prepare IEE because of high visibility if negative impacts result. • Africa Bureau expects Missions to be sensitive to need for environmental examinations. • If local currencies are for general budget support, this may not be practical. • Governments want environmentally sound practices within their development activities. • In-country procedures to evaluate long term environmental impacts exist in many countries.

28. Mission Environmental Officer ensures that the responsible staff in appropriate ministry knows about environmental concerns, and asks for progress reports. • Cash grant program should include support for training environmental staff to carry out monitoring & mitigation and to develop response mechanisms if adverse impacts occur.

29. Intermediate credit: Categorical Exclusions apply only to capitalize an intermediate credit institution (ICI) where USAID has no right to review and approve each loan. • If a Categorical Exclusion is not appropriate, the MEO should recommend a negative determination or a deferral. • Must identify types of participating businesses, and existence of environmental guidelines.

30. Use Technical Assistance (TA), training, and promotional support to help monitor process. Note: Credit programs for agricultural inputs, promotion of export crops, or other activities that might increase pesticide use, even indirectly, should be funded concurrently with programs to provide farmers with alternatives to pesticides.

31. Environmental Impact Statement (EIS) An EIS is a detailed study of reasonably foreseeable environmental impacts, both beneficail and adverse when a proposed Agency action could significantly affect: • Global environment or areas outside jurisdiction of any nation (e.g., the oceans); • Environment of the United States; or • Other aspects of the environment at Administrator’s discretion.

32. Other Categories Of Activities Where Assistance May Be Denied, Or An IEE Or Environmental Assessment Is Required

33. Tropical Forests: Section 118 of the Foreign Assistance Act as amended 1986. Assistance must either be denied or an EA carried out, pursuant to Reg. 16, for any activities that: • involve procurement or use of logging equipment; • have the potential to significantly degrade national parks or similar protected areas or introduce exotic plants or animals into such areas;

34. According to Section 118, assistance is denied unless an EA shows proposed activity contributes significantly to improving the livelihood of the rural poor and is conducted in an environmentally sound manner supporting sustainable development for: • activities which would result in the conversion of forest lands to the rearing of livestock; • entail construction, upgrading or maintenance of roads which pass through relatively undegraded forest lands; • the colonization of forest lands; or • entail construction of dams or other water control structures which flood relatively undegraded forest lands.

35. Biological Diversity: Section 119 and of the Foreign Assistance Act as amended 1986. Under this section assistance must be denied for actions which significantly degrade national parks or similar protected areas or introduce exotic plants or animals into such areas.

36. Commercial Extractive Forestry: Section 533(c)(3) of the Foreign Operations, Export Financing and Related Programs Act, 1991 Expenditure prohibited if it "would result in any significant loss of tropical forests" or involve "commercial timber extraction of primary tropical forest areas," unless EA shows: • potential impacts on biological diversity; • all timber extraction conducted according to environmentally sound management system to maintain the ecological functions of the natural forest and minimize impacts of biological diversity; and • activity contributes to reduced deforestation.

37. Classifying Activities With Multiple Components

38. The Deferral Process • Environmental analysis deferred when programs, activities or sub-activities not specifically identified at the time of authorization. • Deferral should be minimized, i.e., do the IEE to avoid or mitigate impacts during design. • Covenants or conditions precedent needed to ensure environmental review completed prior to irreversible commitment of resources.

39. If there is deferral of IEE, proposal must: • explain why the IEE cannot be completed; • estimate amount of time required to complete the IEE; and • recommend that a Threshold Decision be deferred until the IEE is completed. • Assistant Administrator acts on deferral request concurrently with action on initial proposal and designates time to complete IEE. • Normally completion date is sufficient for preparation of an EA or EIS, if required, before final funding decision.

40. Categorization Process for PVO/NGO Grants and Subgrants • USAID has increased funding to private voluntary organizations (PVOs) and non-governmental organizations (NGOs). • Generally support is through "umbrella" projects with many subgrants, and several NGO/PVO grantees. • USAID must ensure that activities are consistent with Reg. 16.

41. Environmental Review procedures and Environmental Screening Form have been developed for umbrella project subgrantees, where the umbrella grant IEE has already received a negative determination with conditions.

42. Screening and Environmental Review Procedures for PVO/NGO Grantees and Subgrantees Category 1: Subgrants that would normally qualify for a categorical exclusion under Reg. 16. Category 2: Subgrants that would normally qualify for a negative determination under Reg. 16, based on the fact that the grantee used an environmentally-sound approach to the activity design and incorporated appropriate mitigation and monitoring procedures.

43. Category 3: Subgrants where significant environmental impacts are likely such as those typically requiring an EA. Category 4: Activities not fundable or fundable only when specifically defined findings to avoid or mitigate the impacts are made, based on an Environmental Assessment.

44. Use Screening Form to review subgrant proposals to determine in which Category the activity falls. • The MEO reviews and clears the category determination and any environmental review reports prepared as result of categorization. • Most subgrants will fall within Categories 1 and 2, and will be approvable by the USAID Mission. • Categories 3 and 4, and 2 if MEO so desires, must have Regional and Bureau review to determine if an EA is needed.

45. Promotion of Environmental Review and Capacity Building • Environmental review procedures specify how subgrants will be identified and reviewed. • Procedures ensure environmental accountability and soundness, with these assumptions: a. Subgrants individually reviewed and screened; b. Environmental assessment and management training provided;

46. c. Development and application of host country environmental policies encouraged; d. Monitoring and evaluation process in place; and f. Mission tracking and reporting on subgrants to the BEO and REO in place.

47. Environmental Responsibilities • USAID Mission responsible for environmental review and decision-making for all sub-grants: • PVO and NGOs or CBOs submit proposals that consider potential environmental impacts and mitigation, including avoidance, and monitoring. • PVO, NGO or CBO uses Screening Form to categorize proposals. • MEO reviews and passes to REO and BEO Category 3 or Category 4 and, if uncertain, Category 2 activities.

48. Lead PVO, NGOs or CBOs ensure implementation of mitigating measures and long-term environmental impact monitoring. • MEO and the Project Officer and/or Project Manager ultimately responsible for monitoring environmental impacts of the grants. • Periodic visits of the REO or REA for advice and validation of the process.

49. Environmental Monitoring and Mitigation • Address monitoring of interventions and identify indicators in proposal design. • Plan for monitoring and mitigation to assure funding to do so will later exist. • Spell out how negative impacts will be mitigated, if and when they are detected during monitoring and evaluation. • For example, an agricultural production activity could adopt policy to encourage integrated pest management and sustainable agricultural practices.

50. SAMPLE OUTLINE FOR AN ENVIRONMENTAL REVIEW 1.0 PROGRAM/PROJECT DESCRIPTION 2.0 COUNTRY AND ENVIRONMENTAL INFORMATION (BASELINE INFORMATION) 3.0 EVALUATION OF PROJECT/PROGRAM ISSUES WITH RESPECT TO ENVIRONMENTAL IMPACT POTENTIAL 4.0 RECOMMENDED MITIGATION (INCLUDING MONITORING AND EVALUATION)