REPORT OF THE INTERNATIONAL ADVISORY PANEL

August 2011

The Critical Role of the Evaluator/Regulator: The Office National of l’Environment (ONE)

The Panel expressed major concerns last year over the situation of the ONE and the relationship between the ONE and QMM. A strong and effective ONE is essential to its role as social and environmental regulator of the QMM project and, more broadly, as the principal institution charged with ensuring the nation’s environmental heritage. One year ago, the ONE confronted a perilous and uncertain future. The political crisis and resulting freezing of development assistance had starved it of financial resources and it risked an imminent loss of the technical and professional capacities it had built up over time. This situation had also created problems of confidence and mutual trust in the relationship between ONE and QMM. So serious was the situation that the Panel recommended direct financial support to ONE from QMM as an “exceptional voluntary gesture” but one with legal safeguards to avoid a conflict of interest precedent of continuous financing of its regulator by the company.

The Panel was pleased to learn during this year’s visit that this recommendation had been implemented through a two year interim agreement and a protocol that furnishes a comprehensive framework to guide the work of both parties by stipulating governance rules, commitments and the frequency of tasks to be performed. Welcome as they are, the interim two year financial arrangements do not comprise a permanent solution to ONE financing imperatives if it is to meet its obligations and ensure that it has the professional and technical resources equal to the quality of analysis and oversight required of it. Accordingly, this report recommends a number of additional initiatives aimed at achieving sustainable, longer-term solutions.

The interim arrangements, however, have permitted ONE to complete its comprehensive evaluation for the period March 2010-April 2011. That evaluation reported solid and steady performance in almost all areas of the project. It also drew attention to some weaknesses in general communications on the project (specifically in public communications regarding the management and monitoring of radiation) and to a need for further improvements in the provision of information to ONE in order for its technical evaluators to furnish thorough assessments.

In addition, with regard to the ONE:

a) There is interest in reactivating the Comité régional de l’environnement (CRE), a now-moribund stakeholder and participatory forum that used to focus on the conservation potential in the region, including sustainable fisheries and issues such as household fuel. If this is done, it will be important to delineate clearly the CRE role vis-à-vis that of ONE in the environmental monitoring of QMM operations in order to avoid duplication, confusion or conflict.

b) The ONE continues its role as the technical evaluator on formal local complaints against QMM. Of 40 registered complaints, several were found to be baseless, several more resolved through negotiation, and only two are still outstanding.

c) While ONE is receiving from QMM and Ambotavy the resources to monitor these two large mining investments, it does not currently have the resources to fulfill its mandate to monitor and assess most other investments. It is therefore not able to ensure a level playing field and the application of the MECIE, the law that defines its mandate.

d) ONE shares the serious concern raised frequently by the Panel that the severe imbalances in the distribution of the proceeds from the ristournes required under Madagascar law risk generating serious social-economic imbalances and political tensions in the region. It also shares the Panel’s concern that – at least in many instances – these proceeds are applied by recipients to administrative costs rather than invested in longer-term development.