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Aid risk management

Environmental and social safeguards

The Environmental and Social Safeguard Policy came into effect 1 January 2018 and applies to all DFAT Official Development Assistance funded aid investments regardless of value or funding mechanism. Departmental non-aid investments should consider their program risks in relation to the safeguard policy.

The Environmental and Social Safeguard Operational Procedures and guidance notes help staff to manage our safeguards requirements at each step of the aid management cycle described in the Aid Programming Guide.

A strong and consistent approach to safeguards can help avoid negative impacts on the environment and people, reduce program delays and prevent budget blow outs.

The safeguard policy provides guidance on DFAT's safeguard responsibilities in aid investments and how to meet them, and sets out requirements for five key safeguards:

  1. Environmental protection
  2. Children, vulnerable and disadvantage groups
  3. Displacement and resettlement
  4. Indigenous peoples
  5. Health and safety

All program investments, regardless of value or delivery mechanism must be screened for safeguard risks. Where screening indicates an environmental or social impact may occur, the safeguard risk must be assessed and rated. Where indicated by the risk assessment, a proportional environmental and social impact assessment and management plan must be completed and implemented. Ongoing program management requires effective oversight to monitor the implementation of safeguard risk management measures.

Safeguard principles

Investment design and implementation must meet the safeguard principles, which must be considered at each stage of DFAT's aid management cycle:

  • policy and planning
  • design and procurement
  • implementation and performance management, and
  • review and evaluation.

The safeguard principles underpin the successful application of the five environmental and social safeguards.

Principle 1: Do no harm

  • Seek to protect the rights, health, safety, and livelihoods of people including, children, women, indigenous peoples, and other vulnerable or disadvantaged groups. Maintain the health, diversity and productivity of the environment.

Principle 2: Identify, assess and manage environmental and social impacts

  • Identify potential environmental and social risks and impacts early in the investment design process, to ensure they are adequately assessed and managed in investment concepts, designs and implementation.
  • Avoid, or where avoidance is not possible, minimise, mitigate or as a last resort, offset or compensate for negative impacts.
  • Assess and manage direct and indirect environmental and social impacts of the investment in a way that is proportional to potential impacts.
  • Manage risks and impacts of the investment through management plans and monitor and report on their delivery.
  • Consider how the environment or different people groups are affected, including children, people of different genders, indigenous peoples and other vulnerable or disadvantaged groups. The assessment and management of potential impacts must consider these different needs.

Principle 3: Engage effectively with stakeholders

  • Be transparent about the investment, its risks and impacts in a way that is timely, accessible, and culturally and socially suitable for the affected people.
  • Engage with affected parties and other stakeholders early in identifying and managing risks and impacts and continue this throughout the investment.
  • Ensure consultations include affected parties, are inclusive, free of external manipulation, interference, coercion, or intimidation, and enable meaningful participation.
  • Provide accessible and culturally appropriate grievance redress mechanisms and ensure that grievances are handled promptly, transparently, and without retribution or cost to the party that raised the concern.
  • Disclose information about the social and environmental performance of aid investments in accordance with DFAT's aid transparency commitments.

Principle 4: Work effectively with partners

  • Comply with partner country safeguard laws and policies and where possible build partners' capacity to develop and implement environmental and social governance systems.
  • Work with multilateral, bilateral, NGO and private sector development partners to ensure environmental and social impacts are managed in a way that is consistent with this policy.
  • Work with partners to manage safeguard risks to maximise the use of country systems and avoids duplication or unnecessary safeguard assessment and management planning requirements.

Principle 5: Promote improved environmental and social outcomes

  • Where possible, promote improved environmental and social outcomes by integrating ecologically sustainable development into aid investments. Improve the implementation and outcomes of aid investments by effectively identifying and managing risks
Last Updated: 28 March 2019
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