Auditing Environment:

Use of Environmental Accords

Nameeta Prasad,

Director (Training and Research)

iCED

Session Learning Objectives

• Objective of the session

– To learn about Environment auditing

– To learn about Multilateral Environment Accords (MEAs)

and their implementation mechanisms

– To learn about MEAs related to environment

– Approaches to audit of MEAs

– Using MEAs as criteria

– Discussion of audit reports on MEAs

• Training method

• Presentation

Environment Audit

• Environment audit is a general term that reflects various types

of evaluations intended to identify compliance to environmental

rules and regulations, environment management systems and

their implementation gaps, along with related corrective actions

– Evaluations based on criteria which may be local, national or global

environmental standards

• Eg: examining pollution of rivers in the backdrop of National Water

Quality standards

• Examining air pollution with regard to National Ambient Air Quality

Standards

• Thus it is a systematic process of obtaining and evaluating

information about environmental aspects of any organisation,

programme etc

Environment auditing: INCOSAI

• At the XV International Congress of Supreme Audit

Institutions (INCOSAI) in Cairo in 1995, environment

audit (EA) emerged, for the first time, as a major

theme

– The term “environmental auditing” is used in the context of

the independent external audit.

– Supreme audit institutions agree that environmental auditing

is, in principle, not very different from the audit approach as

practised by SAIs, and it could encompass all types of audit

– Provided an overall framework for EA

• This Framework definition of ‘environmental auditing’

reflects consensus among SAIs

Environment auditing

• Basic principles underlying this definition are:

– EA is not significantly different from normal auditing as

practiced by SAIs

– EA can encompass all types of audit: financial, compliance, and

performance audits.

• With respect to performance audits, the three E’s of

Economy, Effectiveness and Efficiency can be included.

• Environment– the 4th E

– Adoption of the fourth E, that is Environment, depends very much

on SAIs mandate and its government’s environmental policy but

is not critical to carrying out environmental audit

Environment audit – Need for it

• Resources spent by the government on environment

conservation and protection have grown exponentially

• Rethinking of the role and responsibilities of both

governments in light of evidence of environment

degradation

• Global awareness of environmental issues has also

grown rapidly

– More scientific knowledge and interest in environment issues

like ozone depletion, the destruction of rain forests, and global

warming, climate change

– Prospect of irreversible losses

Environment audit – Need for it

– Resources spent by both sectors on pollution control have

increased, and both businesses and government bodies are

looking for more cost-effective ways of dealing with compliance

issues.

• Following the UN Conference on the Environment in

Rio , governments and corporations around the world

shown more concern about sustainable development

• Increasing concern that organisations affecting the

environment should be accountable for their actions led

to requirements for consequences of those actions to

be reported by external agencies like SAIs.

– Implications for SAIs as public auditors

INTOSAI Guidelines: environment audit

• How do auditors fit in?

– environmental auditing: catch all term used to describe a range

of audit activities with a focus on the environment

– When conducting environment audits, auditors might ask the

following questions:

• Is the government complying with international environmental treaty

obligations, domestic environmental laws and regulations and

government policies and programs?

• Is government meeting environmental performance targets it has set

for itself, and what results has it achieved?

• Has government put in place an effective accountability framework for

its environmental policies and programs?

• Do financial statements properly reflect environmental costs, liabilities

(including contingent liabilities) and assets?

Environment Audit: framework

Regularity audit

• Compliance audit

• Financial audit Performance audit

Environment Auditing is the 4th E

Environment auditing framework

10

Financial

Compliance

Performance

Planning

Executing

Reporting

Waste Water climate change Biological Diversity

Types of performance audits on

Environmental issues

Audits of Government monitoring of compliance with environmental laws

Audits of the performance of Government environmental programmes

Audits of the environmental impact of other Government programmes

Audits of environmental management systems

Environmental assessment of proposed environmental policies and programmes

Framework for environment protection in

India

• At central level

– Ministry of Environment & Forests (MoEF) is the nodal agency in

the administrative structure of the Central Government, for the

planning, promotion, co-ordination and overseeing the

implementation of environmental and forestry programmes

– Multi-sectoral: many other government departments involved–

mining, petroleum, external affairs, water resources, agriculture

• At state level

– Department of environment and forests in every state

• MoEF frames policy for protection and conservation of

environment and is implemented by the states

– States also have power to frame own legislation for protection of

environment

Framework for environment protection in

India

• Central Pollution Control Board and State pollution

Control Boards constituted under Section 3 of the

Water (Prevention and Control of Pollution Act, 1974 (6

of 1974)

– Assigned responsibility for the prevention and control of

pollution under this Act

– Are nodal agencies at the central and the state level to set

standards for ambient air/water quality & source specific

emissions and effluents

– monitor compliance with them at regular intervals

Conducting environment audits

14

Audit Reporting

Audit process

Choose kind of auditCompliance financial audit Performance Audit

Choose theme (based on risk assessment)

Waste, water, climate change, biodiversity

15

Multi Lateral Environment Agreements:

MEAs

• One of the most prominent features that regulate the

process of global environment protection

– MEAs a subset of the universe of international agreements

– What distinguishes them from other agreements is their focus

on environmental issues, their creation of binding international

law, and their inclusion of multiple countries

• Legally binding instrument between two or more

nations that deals with some aspect of the environment

• Over the past few decades, the number and scope of

international environmental agreements have grown

rapidly

– UNEP identified over 280 agreements which are wholly

directed to environmental protection as of December 2009

Why MEAs?

• Growing understanding that environmental issues are

often regional and global and that solutions and tools to

deal with them should also be regional and global

– Environment problems are trans-national– eg: water pollution,

air pollution

– Action by one country affects neighbors

• A response to the gravity of environmental problems

• The United Nations Conference on the Human

Environment (the Stockholm Conference) 1st major UN

conference on environment issues (1972)

17

MEA entering into force

Adoption

Signature

Ratification

Entry into force

Accession

Withdrawal or denouncing

Implementing MEAs

• On-the-ground’ implementation

– done by Parties (national governments) at the national level

through domestic legislative and administrative arrangements

• Eg– After India signed CBD, it made a law called Biological Diversity Act, 2002

and Set up NBA to implement this MEA

• Compliance mechanisms like

– requiring Parties to report on, monitor and verify compliance;

– requiring Parties to undertake national implementation plans; and

– setting terms for mechanisms to address and remedy non-

compliance

MEAs: Biodiversity

• The Ramsar Convention on Wetlands (1975)

– to promote the conservation and wise use of all wetlands

through local, regional, and national actions and international

cooperation, as a contribution towards achieving sustainable

development worldwide

– India ratified in February,1982

• 26 Ramsar sites in India; eg: Chilika, Ashtamudi, Bhoj,

Chandertal

• National Wetland Conservation Programme (NWCP)

– Operated in cooperation with state government

– 115 wetlands identified for urgent conservation and

management initiatives.

MEAs: Biodiversity

• Convention on Trade of Endangered Species, 1975 (CITES)

– To ensure that international trade in specimens of wild animals and plants

does not threaten their survival

– Imposes a duty on Parties to subject international trade in specimens of

selected species to certain controls via licensing of import, export, re-

export, and introduction from the sea of species

– India ratified it in 1977

– CITES cell set up in India in 2010

• Wildlife (Protection) Act, 1972 and Export- Import Policy

implement CITES

– Species covered by CITES listed in three Appendices 1 to III of Act,

according to the degree of protection they need

– About 300 Indian animal and 40 Indian plant species in various CITES

appendices

MEAs: Biodiversity

• Convention on Biological Diversity, 1992

– aims at conserving biological diversity, the sustainable use of

its components and the fair and equitable sharing of the

benefits arising out of the utilization of genetic resources,

taking into account all rights over those resources

– Ratified by India in 1994

– To implement this, India introduced Biological Diversity Act,

2002

– Set up National Biodiversity Authority, State Biodiversity

Authority

MEAs: Biodiversity

• Other important conventions

– Convention on the Conservation of Migratory Species of Wild

Animals, 1979

– International Tropical Timber Agreement, 1994

– Convention to Combat Desertification, 1994

– Convention Concerning the Protection of the World Cultural

and Natural Heritage, 1972

MEAs: Climate Change

• United Nations Framework Convention on Climate Change, 1992

– aims at achieving stabilization of GHGs concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with climate by setting emission limits to be accomplished within a determined timeframe to allow ecosystems to adapt naturally to climate change, to ensure the non-threat to food production and to enable economic development to proceed in a sustainable way

– India ratified in 1993

– National Action Plan on Climate Change, 2008

• 8 sectors identified for mitigation and adaptation measures

– State level Action Plans: Delhi, Arunachal Pradesh, Rajasthan, Sikkim, MP, Mizoram, Manipur, Mizoram, Tripura, WB, Assam, Meghalaya, Odisha

MEAs: Climate Change

• Montreal Protocol on Substances that Deplete the

Ozone Layer, 1987

• Convention for the Protection of the Ozone Layer, 1985

• Protocol to the United Nations Framework Convention

on Climate Change, 1997

MEAs– Hazardous Materials/Waste/

Chemical-related

• Convention on the Control of Trans-boundary Movements of

Hazardous Wastes and their Disposal (Basel Convention,

1989)

– to ensure that management of hazardous wastes and other wastes,

including their trans-boundary movement and disposal, is consistent

with the protection of human health and the environment whatever the

place of disposal

• reduction of hazardous waste generation and the promotion of environmentally

sound management of hazardous wastes, wherever the place of disposal;

• the restriction of trans-boundary movements of hazardous wastes except where it is

perceived to be in accordance with the principles of environmentally sound

management; and

• a regulatory system applying to cases where trans-boundary movements are

permissible

– India ratified in 1992

– framed The Hazardous Wastes (Management, Handling and Trans-

boundary Movement) Rules,2009, to implement Basel Convention

MEAs– Hazardous Materials/Waste/

Chemical-related

• Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides on International Trade, Rotterdam Convention,1998)

– aims at promoting shared responsibility and cooperative efforts among Parties in the international trade of certain hazardous chemicals in order to protect human health and the environment from potential harm and to contribute to their environmentally-sound use

– It is based on the fundamental principle of Prior Informed Consent (PIC)

– a chemical listed in the Convention may only be exported with the importer's prior consent

– Annex I, II and III

– India ratified in 2005

Others

• Convention on Persistent Organic Pollutants, 2001

• Protocol on Biosafety 2000

MEAs: Marine and freshwater

• United Nations Convention on the Law of the Sea,

1982

– establishes national sovereignty over marine resources lying within

coastal waters and aims to provide countries with incentive to better

manage these resources, by obligating Parties to protect and

preserve the marine environment

– India ratified in 1995

• The MARPOL Convention for the Prevention of

Pollution from Ships, 1978

– Main international convention covering prevention of pollution of

marine environment by ships from operational or accidental causes

– Ratified by India in

Audit issues

• MEAs can be used to focus on 2 different audit

themes:

– audit of compliance of the government to a MEA

• eg: how well is India meeting its commitments to RAMSAR

Convention, is India meeting its commitments under UNFCCC

and Kyoto protocol

– Use MEAs for auditing purposes

• India has signed and ratified many treaties

• Conditions and commitments made under the treaty can be used

as audit criteria for audits on environment issues

– India signed the CBD so we used commitments under CBD

to do an audit of Regulation of Biodiversity in India by

National Biodiversity Authority as well as an audit on “

Audit of compliance of the government to

commitments under MEA

• If a country is a Party to an MEA

– Audit can consider

• whether government has developed sufficient and appropriate domestic

policy and procedures to meet commitments in the MEA

• Requires the auditor to find out what the commitments are

• How these commitments are implemented in the country’s legislation

• What are the governance mechanisms

– When domestic policy and procedures in place

• whether the policy is implemented in the most efficient, economic, and

effective manner

• Can involve the assessment whether aims of the policy are met

• whether the domestic policy actually serves the purpose (and

commitments) of the MEA

Audit questions

• What are my country’s commitments related to a specific MEA?

• Is there domestic policy and legislation in place?

• Can the policy and legislation assure the compliance with these

commitments?

• Is the policy and related legislation actually implemented and

enforced?

• Is it implemented in the most economic, efficient and effective

manner?

• Does the policy implementation meet the commitments of the

MEA?

Report

of the audit on the enforcement of Basel

Convention

• SAI of the Netherlands and it is carried out by a total of eight audit

institutions (the Netherlands, Bulgaria, Hungary, Norway, Poland,

Greece, Ireland and Slovenia) during 2011-2012

– How the obligations, arising from Basel Accord, – regulating and

supervising the waste shipment within, into and out of the European

Community – are met and whether the purpose of the regulation had

been reached

• Found that compliance to Basel was not complete

http://www.environmental-auditing.org/Portals/0/AuditFiles/Hungary_s_eng_EU-

regulations-on-waste-shipment.pdf

Audit on the Fulfillment of the Convention on

Wetlands of International Importance (Ramsar

Convention)

• Portuguese Court of Auditors conducted an audit aiming to assess

– the accomplishment of the commitments undertaken Ramsar Convention

– to evaluate management of the resources allocated to wetlands

protection and conservation and the results obtained under an

environmental standpoint

• The audit concluded that the existing legal framework, although

there is no specific legal framework or even the legal definitions for

the concepts of wetland and sustainable use of wetlands, provide

adequate protection

– Wetlands listed as Ramsar sites enjoy the status of protected areas and

are mostly also included in the Natura 2000 network.

– The ecological conditions of listed wetlands are satisfactory and only

occasionally have threats to their sustainability been identified

http://www.environmental-auditing.org/Portals/0/AuditFiles/Portugal_s_eng_Fulfilment-of-

RamsarConvention.pdf

Use MEAs for auditing purposes

• MEAs a good source of audit criteria

• 2 scenarios possible:

– Country has signed and ratified an MEA and we use the commitments made under that MEA to audit an environment issues

• E.g. In the audit of waste management in India, we used provisions of Agenda 21 as audit criteria, which India had ratified

• Commitments like making a waste policy, making regulations for proper management of all kinds of waste, giving the 3 Rs presence over disposal in waste management etc., were used

– Country is not a party to MEA

• If country not a Party to an MEA, then the MEA can still be a good source of audit criteria for the SAI.

• Many agreements can be referred as a best practice or a benchmark for better environmental governance. Also, the reasons not to be the “signatory” for the MEA can be exercised and brought to public attention

Management of waste in India

• Due to absence of a policy on the management of waste, it was not apparent whether the

objectives and programmes outlined in Agenda 21 of the World Commission on Sustainable

Development had been adequately represented in the waste management programmes being

implemented all over India

• Agenda 21 stated that governments should “promote waste prevention and minimization as the

principal objective of national waste management programmes” and that governments should

“develop and implement national plans for waste management that take advantage of, and give

priority to waste reuse and recycling”

• Article 21.4 and 21.5 of Agenda 21 of World Commission on Sustainable Development states

that “environmentally sound waste management should focus on (a) minimizing wastes (b)

maximising environmentally sound waste reuse and recycling (c) promoting environmentally

sound waste disposal and treatment and (d) extending waste service coverage.” According to

Article 21.10 of Agenda 21, governments should initiate programmes to achieve sustained

minimisation of waste generation and according to Article 21.9 (b) of Agenda 21, by the year

2000, all industrialised countries should have in place programmes to stabilise or reduce, if

practicable, production of wastes destined for final disposal, including per capita wastes, at the

level prevailing at that date; developing countries as well should work towards that goal without

jeopardising their development prospects.

SAI India

• Role of Botanical Survey of India in meeting India's commitments to the Convention on

Biological Diversity

• CBD was ratified in 1994 by 150 countries including India.

• To implement the provisions of CBD, objectives of Botanical Survey of India (BSI) were

remodeled.

• However, BSI was not effective in meeting its remodeled objectives as there was

inadequate identification/ documentation and monitoring of plant species.

• Very few surveys and explorations were carried out to identify and document the

Protected Areas and Fragile ecosystems.

• The Red Data Book was updated in 1990 and last updated version was printed in 2003

thereby impacting conservation efforts.

• Further, identification of different ethnic groups associated with usage of plant species

for different purposes was not done.

• BSI did not generate adequate data for in-situ conservation and it did not carry out ex-

situ conservation, which impacted conservation of biodiversity.

• As such, BSI could not effectively fulfill its role in meeting India's commitment to CBD

SAI India

• Regulation of Biodiversity in India

– National Biodiversity Authority (NBA) was established in 2003 by the Government of India

for the regulation, conservation and sustainable use of bio-resources of India and to meet

its commitments under CBD

– Even six years after its formation, NBA could not notify important regulations like access

to biodiversity, transfer of results of research and intellectual property rights etc.

– Lists of endangered medicinal plants in India and measures for their conservation were

not drawn up.

– NBA's efforts in identifying threatened, endangered and endemic species and

recommending guidelines for their conservation were inadequate as list of endangered

species was prepared for only seven out of 28 states.

– It also failed to get the Peoples' Biodiversity Registers and database of biological

resources prepared, both of which were vital for efforts at protection and conservation of

biological resources.

– It had no information on grant of Intellectual Property Rights outside India on any

biological resource obtained from India or knowledge associated with such biological

resources which is derived from India.

SAI Iceland

• Audit objective

– Examine how the national government applied its commitments under the CBD, including

activities of the Ministry of Environment, along with its institutions for the

– execution and implementation of CBD in Iceland.

• Criteria

– Both, the CBD and Icelandic legislation and public policy in the field of biological

– biodiversity were used as criteria.

• Results

– Signing the CBD had a very limited effect on Icelandic legislation and public policy related

to biodiversity.

– Nationwide plans for protecting and monitoring biological diversity had not been made

– The government had conducted little research regarding the status of Icelandic

biodiversity, contrary to the requirements of the CBD

– It was not clear which government department of agency had the principal responsibility

for carrying out commitments under the CBD

– Implementation of the CBD was random and unsystematic