The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Activists have warned that the watering down of performance bond obligations imposed on developers in new Environmental Impact Assessment (EIA) regulations could render such security "meaningless".

A coalition of Bahamian environmental groups, in an October 9, 2020, letter to the Prime Minister, argued that capping such bonds at a sum equivalent to five percent of a development's value would provide insufficient funds to cover any damage caused by a "high risk" project that involved relatively minimal investment.

The groups, including reEarth, Save the Bays, Waterkeepers Bahamas and the Bahamas Reef Environment Educational Foundation (BREEF), decried revisions to an earlier draft of the recently-enacted EIA regulations which required developers to post performance bonds up to 50 percent of a project's value.

"In our respectful submission the regulations, as they currently stand, are inadequate to offset potential adverse environmental impacts identified in the assessment process, and the restriction of the bond to less than five per cent of the value of the project will render the bond requirement meaningless," the groups protested to Dr Hubert Minnis.

"This is particularly a concern in cases where the project value may be low, but the risk of causing significant environmental damage may be high." The performance bond requirement appears to have been altered to make it less financially onerous for developers.

The first version stipulated that the Department of Environmental Planning and Protection's director, currently Rochelle Newbold, will "fix" the size of the performance bond that a developer has to lodge or deposit as security to cover the costs of remediating any environmental damage their project may cause.

The sum required was to be based on "the probable cost" of any environmental issues or infractions that were likely to arise, with the initial draft setting both a 'floor' and 'ceiling' for the size of the performance bond. This was to be "no less than 5 percent, and no more than 50 percent, of the value of the project".

However, the final EIA regulations tabled in the House of Assembly drastically reduced the performance bond obligation imposed on developers "to a sum no more than 5 percent of the value of the project".

The change was likely due to fears that requiring developers to post a bond equivalent to 50 percent of their project's value is simply too financially onerous, and will deter both foreign direct investment (FDI) and Bahamian investment at a time when the Bahamian economy needs every cent it can get to create jobs and earn foreign currency amid the COVID-19 pandemic.

Taking the $400m figure given by the Government for the next stage of Sir Franklyn Wilson's Jack's Bay development as an example, a performance bond equivalent to 50 percent would equal $200m - immediately making the project non-viable. A security equal to 5 percent would be a much more manageable $20m.

Tribune Business was subsequently told by EIA specialists, and persons who work closely with developers, that requiring a performance bond equal to 50 percent of a project's value would deter both local and foreign investment at the worst possible time for the Bahamian economy.

Meanwhile, the environmental groups also spelled out for the Prime Minister their concerns that the EIA regulations hand too much power to one person in the shape of the Department of Environmental Planning and Protection's director and the minister of the environment and housing.

"The regulations leave it up to the discretion of the director to determine which projects will require an Environmental Impact Assessment to be done and which will not," the activists said. "The regulations have failed to include the suggested requirement for a full Environmental Impact Assessment to be conducted in the case of certain types of projects.

"The suggested revisions that were submitted included a schedule of types of hazardous or high-impact projects for which the requirement to conduct a full Environmental Impact Assessment should be obligatory."

Similar concerns were raised over the minister's role in the appeals process, with the groups arguing: "Under the appeals section of the regulations, the final version tabled in the House stated that 'a project proponent may appeal any decision of the director to the minister, who may vary or reverse such decision'.

"The regulations as they stand place all of the power in the hands of the minister, and provide no transparency of process. Our revisions include detailed additions that give the project proponent and the public a stronger voice in the decision-making process and provide avenues for further appeals if they feel the decision is unjust.

"Suggestions were made with regard to the conduct of an environmental audit to determine the accuracy of the projections made in the Environmental Impact Assessment. In addition, the proposed revisions also included detailed provisions with regard to the mechanism for appeals by members of the public opposing the grant of a Certificate of Environmental Clearance."

Sam Duncombe, reEarth's executive director, said in a statement: “We put a significant amount of time and energy into these solicited comments, which proposed important revisions to make the EIA process more effective and efficient.

"We are eager for the Government to pause the tabled regulations until our submission is fully considered. This is no time to be watering down our ability to protect our vital, fragile ecosystems and our communities. This is why strengthening the regulations is so important."

Casuarina Mckinney-Lambert, BREEF's executive director, added: “The Bahamas is facing some of the most severe threats from climate change. We are at a turning point when it comes to ensuring a sustainable environment and economy. Strong EIA regulations are essential to accomplishing this goal, and climate change and other critical impacts must be considered in all developments.”