Strategic Environmental Assessment of Policy, Plan, and Program Proposals Handbook

2004

Introduction

What is Strategic Environmental Assessment?

Strategic environmental assessment (SEA) is the systematic and comprehensive process of evaluating the environmental effects of a policy, plan, or program and its alternatives. The emphasis is on examining environmental effects, but most SEAs may also identify significant economic and social effects. In short, its purpose is to promote integrated decision-making.

"…the objective is not the production of an SEA report, but rather informing decision makers on potential environmental impacts and providing rapid and objective responses when required … it is about comparing valid options at a strategic level."

(OECD/DAC, 1997).

Development assistance, in the form of policies, plans, and programs, can have effects on the environment. SEA is an analytical tool to link possible positive or negative environmental issues to higher level decision-making. SEA is, in many ways, similar to environmental assessment for projects. Like typical environmental assessments, the process of conducting an SEA involves answering a series of questions during the development of a policy, plan, or program proposal. In addressing these questions, any potential negative impacts of the proposal can be identified and mitigated. At the same time, potential positive impacts can be enhanced. The key benefits of SEA are presented in the text box on page 2.

Purpose of the SEA handbook

This handbook is intended for those who may be involved in the development of a policy, plan, or program proposal-Cabinet liaison staff, environment specialists, program and project analysts, and policy-makers. The handbook guides CIDA employees through the Agency's SEA process. The process, created in consultation with the operational branches, has been developed to complement existing decision-making structures and approval processes. In addition to this handbook, it is recommended that CIDA employees seek advice from their Branch's environment specialist and Policy Branch on matters pertaining to SEA.

Requirements for an SEA

Cabinet directive on strategic environmental assessment

In 1990, Cabinet directed departments to consider environmental concerns in the development of their policies, plans, and programs. This directive was updated in 1999 to clarify the obligations of departments and agencies with regard to SEA. It also linked environmental assessment to the implementation of sustainable development strategies. The directive was also amended to include provisions for improved transparency. As of January 2004, public statements on policy, plan, and program proposals, for which an assessment of environmental effects has been conducted, must include comments on the environmental effects. Guidance on the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals can be found on the Canadian Environmental Assessment Agency web site.

Ministers expectan SEA for a policy, plan, or program proposal when the following two conditions are met:

• a proposal is submitted to an individual Minister or to Cabinet for approval, and
• implementation of the proposal may result in important environmental effects, whether positive or negative.

Departments and agencies are also encouraged to conduct SEAs for other policy, plan, or program proposals when circumstances warrant. For example, an initiative may be selected for assessment to help implement departmental or agency goals in sustainable development, or if there are strong public concerns about possible environmental consequences. The text box on page 3 presents a list of CIDA documents for which an SEA may be required.

There may be policy, plan, or program proposals for which no SEA will be required. These special cases (as documented in the Directive) include:

• Proposals prepared in response to a clear and immediate emergency where time is insufficient to undertake a strategic environmental assessment. (Ministers are responsible for determining the existence of an emergency.) In such cases, every effort should be made to undertake an SEA once the policy, plan, or program proposal has been approved, as well as on any implementation plan or strategy resulting from the proposal;
• Where the matter is of such urgency-for example, for the economy or a particular industrial sector-that the normal process of Cabinet consideration is shortened and even a simplified strategic environmental assessment cannot be conducted; and
• Issues that have previously been assessed for their environmental impact, for example, an initiative that is a subset of a policy, plan, or program that was previously assessed, or Treasury Board submissions on matters already assessed under a previous proposal to Cabinet or assessed as a project under the Canadian Environmental Assessment Act.

The Cabinet Directive may be subject to internal audits, managed by the Performance and Knowledge Management Branch, and occasional audits by the Commissioner of the Environment and Sustainable Development. The President of CIDA has overall accountability for the Cabinet Directive. The accountability structure for SEA in CIDA is presented in the text box on page 4.

Preliminary scan (to determine if there are important environmental effects)

Determining whether a CIDA initiative meets the first condition in the Cabinet Directive-e.g. submission to Minister for approval-is fairly straightforward; however, the second criterion is less clear. It is not always initially known whether a policy, plan, or program will have important environmental effects. The process of quickly identifying potential significant environmental effects^{Footnote 1}, whether any such change occurs within or outside Canada., whether they are positive or negative, is referred to as a "preliminary scan."

This preliminary scan involves reading key resources and talking to a variety of experts to identify if any significant environmental effects may result from a policy, plan, or program proposal. It is strongly recommended that Branch environment specialists, and those in Policy Branch responsible for environ-mental policy, should be involved in this process. It is also recommended that there be consultations with stakeholders outside CIDA (e.g. NGOs and industry) as well as staff within the Agency, as part of the SEA. Normally, this would be combined with the consultations for the policy, plan, or program proposal. Questions that can be asked as part of the preliminary scan, to determine if an SEA is required, are presented in the text box on page 6.

If the preliminary scan indicates that the implementation of the proposal may result in important environmental effects, whether positive or negative, an SEA should be conducted. An SEA may also be conducted if it will help achieve sustainable development goals, or if there are strong public concerns about the potential environmental consequences of a policy, plan, or program.

As a result of the preliminary scan there will be an enhanced understanding of the number of environmental issues involved, their magnitude, scope, and possible cumulative effects. This information will help estimate the level of effort required to complete the SEA.

Note: In cases where the preliminary scan indicates that the implementation of the proposal will not result in important environmental effects, the results of the preliminary scan-documenting that no significant environmental effects were identified-should accompany the policy, plan, or program proposal document as it moves through the Agency's approval process.

Preparing for an SEA

Principles for conducting an SEA

An SEA should explicitly document the consideration of any potential environmental effects that may result from a policy, plan, or program proposal. To support sound decision-making that is consistent with the principles of sustainable development, the SEA should not be viewed as an add-on process, but one linked with ongoing economic and social analyses of the proposal. Most importantly, the SEA must demonstrate that environmental factors have been integrated into the decision-making process and must show how these findings have influenced the final product.

The level of effort involved in conducting the SEA will vary according to the scope of the initiative and the significance of the anticipated environmental effects. If previous research or assessments related to the initiative are available, this information should be included in the SEA. Resources both human and financial, and the time required for conducting the SEA, should be built into the planning process for the policy, plan, or program proposal.

SEAs should be started early in the development of a policy, plan, or program proposal. The development of these initiatives often involves a steering group or team-they too should be involved in the process of conducting the SEA. SEAs benefit from the inclusion of outside perspectives. If stakeholder consultations are being conducted for the policy, plan, or program proposal, this feedback should be integrated into the SEA.

A good-quality SEA process informs planners, decision-makers, and affected public about the sustainability of strategic decisions; it also facilitates the search for the best alternative and ensures a democratic decision-making process. Appendix A contains a set of principles on SEA that provides general guidance on how to undertake an effective SEA. These principles can be broadly divided into two categories: those that pertain to the substantive or content aspects of the SEA, and those that pertain to the procedural aspects of the SEA. Appendix A outlines the basic principles of SEA, the implications for CIDA, and the actions that should be taken as part of the SEA analysis. These principles allow for a variety of SEA applications depending on the context of the policy, plan, or program proposal.

Conducting the SEA

The CIDA SEA process and management framework were designed based on consultations with CIDA employees. The principal design criterion was to ensure that the process is sufficiently flexible that it can be adapted to the many different types of policy, plan, and program proposals that the Agency develops and implements. As a result, the foundation of CIDA's SEA process is a series of questions to be posed throughout the development of an initiative. Further, CIDA employees already consider many of these questions as part of their normal policy, plan, and program proposal development processes. The SEA analysis requires that the respective questions probe deeper into possible environmental linkages.

By addressing the questions below and by following the guidelines on how to present the SEA report (Section 5), the basic requirements for an SEA will be met. The following questions do not necessarily need to be considered in sequence.

What is the existing situation (in a particular sector or region)?

The preliminary scan has indicated that the implementation of the proposal will result in important environmental effects (whether positive or negative). In addition, the strategic environmental issues raised by the proposal, as they relate to changes in the physical (terrestrial, aquatic, atmospheric) and biological environments, have also been identified in the preliminary scan. The next step involves identification of the social, economic, and biophysical resources that should be improved, maintained, or enhanced to reduce or eliminate the potential adverse environmental consequences of the proposal. To accomplish this, the following should be identified: existing environmental resources, institutions, the level of public awareness of the issue, legislation, policies, plans, programs, and multilateral environmental agreements. Much of the information for this part of the SEA may be derived from analyses already underway or completed for the proposed policy, plan, or program. The amount of detail provided will depend on the scope of the initiative and the available data.

What are the goals and objectives of the policy, plan, or program? Do these support relevant CIDA and Government of Canada policies (particularly those related to the environment and sustainable development)?

Goals are broader than objectives; they contain general statements such as "improving the nutritional status of newborn infants" or "reducing pollution associated with industrial development by integrating cleaner production principles." Objectives support the intended goal and are more specific. For instance, a supporting objective for the cleaner production goal might be "provision of incentives for increased industrial efficiency."

Because the key objective of an SEA is to contribute to policies, plans, and programs that help contribute to sustainable development, the goals and objectives should be clearly linked to the CIDA's Policy for Environmental Sustainability and to CIDA's Sustainable Development Strategy. Links should also be made to key corporate priorities (e.g. Key Agency Results) and relevant policies (e.g. related to gender equality, untying of aid, etc.).

As well, the level of analysis should be consistent with the nature of the policy, plan, or program proposal in question. If, for example, an SEA analysis is being undertaken for a CDPF for China, then the analysis needs to be more general in scope as it is too difficult to identify all significant issues at this stage. However, if an SEA analysis were to be done on a health program that involves many infrastructure projects, such as hospitals, then the potential environmental issues can be identified and explained in more detail.

In general, the rigour of the SEA analysis depends on whether the policy, plan, or program proposal's goals and objectives are broad or specific, and whether direct linkages to environmental issues can be identified.

What are the feasible options for delivering the policy, plan, or program?

The purpose of this question is to examine the alternatives for delivering the goals and objectives of the policy, plan, or program. The delivery method, the participants involved, the scope, timing, and extent, will all result in different impacts on the environment. If local groups, indigenous groups, and environmental NGOs participate in the design of an initiative, their information about existing environmental conditions could help ensure that the resulting programs have a low environmental impact.

There is no alternative to a CDPF: this must be done. However, within the CDPF one can discuss various options that respect the goals and objectives of the framework. For example, if one of the goals was to address the energy sector of a particular country, then one could discuss the options for meeting the energy sector goals. If more energy is needed, would this come from high sulphur coal (a least-desirable option), or from rather more environmentally sustainable options such as solar, natural gas, or hydro? Demand management could also be an option for consideration.

What are the most pronounced environmental issues (positive and negative) associated with each of the preferred options?

Having identified feasible options, the next step is to describe the likely environmental effects associated with each option. To answer this question, compare the existing situation with the changes that may result from implementing an option. For example, a water supply program may favour integrated watershed management as opposed to simply considering the access point. The SEA can identify where more environmental benefits can be achieved, so that less water is wasted and the health of the local population is improved.

Assessments will largely be qualitative, due to the difficulty in obtaining quantitative information, but quantitative information should nevertheless be sought. A source of valuable quantitative information may be found in the environmental economics and social literature.

How significant are these environmental effects?

This step is essentially a risk analysis. To determine the significance of the environmental effects, the following criteria can be used:

1. Compliance or conformity with standards (applicable international codes, domestic standards, regulations, and other stated norms for compliance);
2. Capacity of the environment or institutions to respond to the effects resulting directly or indirectly from the initiative;
3. Likelihood of the environmental effects occurring (positive or negative);
4. Identifying the potential for cumulative effects (e.g. unsustainable demand for water from access points); and
5. Level of public concern at the local, national, and international levels about the policy, plan, or program proposal.

What can be done to avoid or lessen the negative effects and enhance the positive ones?

The purpose of this question is to identify measures that will avoid or lessen the negative environmental effects associated with each of the preferred options. There may also be ways to enhance the positive effects resulting from the initiative. Using the example in Section 4.4, water prices could be set higher for industry clients than for the poor. In another example, a natural resource conservation program could be paired with an education initiative in which local residents learn more about their ecosystem.

What is the most feasible policy, plan, or program?

Once the options have been examined, the best option is selected. The most feasible option is one that:

• most effectively achieves the goals and objectives of the policy, plan, or program proposal (in terms of cost, time, human resources, development objectives, etc.);
• best supports CIDA and Government of Canada environmental and sustainable development policies;
• has the least negative environmental effects after mitigation measures have been established; and
• has the least number of unknown environmental effects.

Sometimes it may be necessary to reject all the options considered-often called choosing the "no go" option.

How can environmental effects be measured, monitored, and reported?

Your Branch environment specialist, other sector specialists, and the Performance and Knowledge Management Branch may be able to provide advice on appropriate monitoring and evaluation methods. These methods and indicators will be similar to, or the same as, those identified in the performance management framework created for the policy, plan, or program. It is important to ensure that the monitoring respects the key agency results (KAR) protocols of CIDA. Key to this aspect of the KAR, the monitoring activities must ensure that the environmental issues identified in the SEA are considered in the evaluation phase of the policy, plan, or program. Remember, SEA in CIDA is not an end unto itself. Rather, it is a planning tool to assist CIDA in developing policies, plans, and programs that result in more effective and environmentally sound development. Monitoring the respective environmental issues of the policy, plan, or program needs to be seen as part of the overall monitoring and reporting framework.

The SEA Report

The last step in conducting an SEA is to present the findings in a short report (2-10 pages) which:

• Addresses the questions in Section 4 of this document;
• Describes the process and outcomes of any internal or external consultation processes that were integrated in the SEA;
• States how the findings of the SEA influenced the final product; and
• Identifies how the environmental effects associated with the policy, plan, or program proposal will be measured, monitored, and reported upon.

This report is to be reviewed by a Branch environment specialist, and must be attached to the policy, plan, or program proposal approval documents as they proceed through the Agency's approval processes. The SEA applicability form (see Appendix C) must be completed and attached to the documents for approval.

A copy of the SEA must be sent to the Environmental Assessment and Compliance Unit, Environment Division, Policy Branch for corporate compliance and accountability purposes.

Appendix A outlines the basic principles of SEA, the implications for CIDA, and the actions that should be taken as part of the SEA analysis. A sample SEA checklist (and accompanying SEA process flowchart) is provided in Appendix B. The SEA applicability form is provided in Appendix C. A bibliography containing useful SEA resources is included in Appendix D.

Appendix A

Strategic Environmental Assessment Principles

Appendix B

The SEA process at CIDA - graphic

A. Preliminary exploration

If environmental effects are not important, document results of preliminary scan and proceed to step D.

If environmental effects (positive or negative) are important, continue to next step.

B. Conduct Strategic Environmental Assessment (SEA)

Consultations

Consult with Agency environment specialists and environment policy-makers, as well as external stakeholders (e.g. NGOs and industry)

Address SEA questions

1. What is the existing situation (in particular sector or region)?
2. What are the goals and objectives of the policy, plan, or program? Do these support relevant CIDA and Government of Canada policies (particularly those related to the environment and sustainable development)?
3. What are the different feasible options for delivering the policy, plan or program?
4. What are the most pronounced environment issues (positive and negative) associated with each of the preferred options?
5. How significant are these environmental effects?
6. What can be done to avoid or lessen negative effects/issues and to enhance positive ones?
7. What is the most feasible policy, plan or program?
8. How can environmental effects be measured, monitored and reported?

C. Prepare SEA report

The report is reviewed by branch environment specialist.

D. Approval of the policy, plan or program

SEA applicability form and preliminary scan/SEA report to accompany proposal through approval process.

Send a copy of SEA applicability form and preliminary scan/SEA report to Environmental Assessment and Compliance Unit, Environment Division, Policy Branch.

Appendix C

SEA Applicability Form

Available as a Lotus SmartMaster

Appendix D

Bibliography

CIDA and Sustainable Development

CIDA, CIDA's Policy for Environmental Sustainability, January 1992.

CIDA, Policy Branch, Country Development Policy Framework Guidelines, June 1992.

CIDA, Towards Coherence in Environmental Assessment. Results of the Project on Coherence of Environmental Assessment for International Bilateral Aid. Volume III: Summary of Country Policies and Procedures, Submitted by Canada to OECD/DAC Working Party on Development Assistance and Environment, April 1994.

CIDA, Policy Branch, Social Development Priorities: A Framework for Action, September 2000.

CIDA, CIDA's Sustainable Development Strategy 2001-2003: An Agenda for Change, February 2001.

CIDA, Canada Making a Difference in the World: A Policy Statement on Strengthening Aid

Effectiveness, 2002.

Selected Specific SEA References

Department of Foreign Affairs and International Trade, Framework for Conducting Environmental Assessment of Trade Negotiations, 2001.

Environment Canada, Strategic Environmental Assessment at Environment Canada: How to Conduct Environmental Assessment of Policy, Plan and Program Proposals, 2000.

Hong Kong Environmental Protection Department, Examples of Strategic Environmental Assessment in Hong Kong, 2000.

International Institute for Environment and Development, The Application of Strategic Environmental Assessment in Developing Countries, 1998.

IUCN, South Asian Strategic Environment Assessment Workshop for Senior Planners, 2000.

IUCN, Strategic Environmental Assessment, Asian Regional Environmental Assessment Program, 1998.

OECD/DAC, Strategic Environmental Assessment (SEA) in Development Cooperation: State of the Art Review, 1997.

Sadler, B., and Verheem, R., Strategic Environmental Assessment: Status, Challenges and Future Directions. Ministry of Housing, Spatial Planning and the Environment, The Netherlands, 1996.

South Africa Department of Environmental Affairs and Tourism (DEAT), Strategic Environmental Assessment in South Africa - Guideline document, 2000.

Web Sites

• Canadian Environmental Assessment Agency
• EA at World Bank
• Earthscan