PREAMBLE

Environmental and social welfare considerations were embedded in the founding Treaty, between the governments of the Kingdom of Lesotho and the Republic of South Africa, for Phase 1 of the Lesotho Highlands Water Project (LHWP). These commitments are quoted in the Box below. The relevant Treaty articles were given effect through the commissioning of environmental impact assessments (EIAs), which led to the implementation of Environmental Action Plans (EAPs) for both Phases 1A and 1B. The Phase 1 EAPs have, to date, applied only to the dam basins and upstream catchment areas.

In the mid-1990s, attention turned to the downstream environment, as global environmental awareness turned the spotlight on the mitigation and/or management of downstream impacts of large dams.

The Treaty, although it was written at a time when the overriding concern was upstream impacts, compels the Project Authorities to account for all areas and communities affected by the Project.

The complexities of riverine systems, as revealed in the studies undertaken, make the formulation of a clear statement of policy intent and commitment an essential precursor to the implementation of a management system for downstream impacted areas.

In-stream Flow Requirements Studies (IFR)

LHDA in 1997 contracted consultants to undertake an in-stream flow assessment of the Project, a process that was completed in March 2002. The study was ground breaking with respect to the importance attached to and level of study of socio-economic aspects of flow modifications. A key aspect of the study was the estimation of potential resource losses to communities due to reduced flows, and estimation of the value of these losses (in local prices), such as fish, wild vegetables and wood, and of mitigation of impacts, such as increased public and animal health risks.

Since increased downstream releases, above the Treaty mandated minima, for IFR purposes would have impacts on the project yield, hence on project benefits, an additional study was commissioned to model the impacts of IFR flows on project economics.

Policy Development Process

A vital component of policy development is the involvement of affected parties in the process. In addition to a pilot survey and consultation process in 16 downstream villages, undertaken by the consultants during April and May 2002, LHDA’s public liaison group is continuing to consult with potentially affected downstream communities. LHDA also held a conference or pitso with the 24 Principal Chiefs of Lesotho, who are key public representatives, to inform them about the policy development process and engage their participation. A workshop was held with them on the IFR Public Information Documentation. A further meeting/workshop was held to present the Draft IFR Policy. A further workshop will be held to present the approved Policy and Procedures. The study reports have been released for public inspection and the Draft Policy posted on websites and lodged in libraries for public comment.

The Project Authorities, in determining appropriate river condition targets, allocating water for the IFR and establishing a sound approach to mitigation and compensation, have had to:

Ø strike a balance between the water resources development goals and ecosystem conservation and protection goals;

Ø assess the trade-offs between river condition, community needs, and the implications of different release options in terms of financial losses and lost economic benefits to the two countries;

Ø decide, in the context of the Treaty, what are “reasonable measures” for maintaining the welfare and livelihoods of affected persons and communities, and for ensuring the protection of the quality of the environment.

Policy Implementation

The implementation of the Policy will be guided by detailed Procedures and Action Plans, which will provide the operating framework for Phase 1 dams.

DEFINITIONS OF KEY CONCEPTS

Capping levels for lowflows are the limits placed on lowflow rates for a particular flow scenario or release regime. For management purposes, this means that lowflows up to the upper capping level would be released downstream, while any amount above that would be stored in the dams and used for transfer to South Africa. Capping levels are a more flexible way of accounting for natural flow variability than specifying a single lowflow rate for any particular season or set of conditions. The lower limit is the 99^th percentile, that is, flow rates below this occur only 1% of the time.

Compensation is the restitution of losses sustained because of Project effects. Compensation in the downstream context refers to cash, goods and services offered and distributed to replace or compensate for assets or resources lost, and/or activities/resources which are impeded sufficiently to affect their productivity or efficacy, due to project development and implementation.

Compensation Bands are broad categories of compensation correlated to the severity of impacts (e.g. high for the villages in the proximal reaches and low for villages in the distal reaches) calculated on a per household basis, with the number of households fixed at the number identified by the IFR study approval (because LHDA is compensating for the estimated loss of resources).

DRIFT (Downstream Response to Imposed Flow Transformations) methodology, uses the present-day flow regime of the river as a starting point, then holistically describes the biophysical and social consequences of several possible future flow regimes, or flow scenarios, each of them comprising a different combination of flow reductions.

Flow regime refers to the seasonal pattern and quantities of flow in a river, whether natural or modified.

Flow scenarios are projections of possible flow regimes downstream of the control structures. The scenarios are ‘constructed’ from different combinations of components of the natural or modified flow regimes of each river, also taking limitations of release mechanisms from the dams into account.

Hydrological year class is one of the five classes categorising the hydrological record into Extra wet (Plus 2), Wet (Plus 1), Average, Dry (Minus 1) and Extra dry (Minus 2) in which the ensuing hydrological year is predicted to fall.

Instream flow requirements (IFR) describe a modified flow regime for a river that is linked to a description of the condition or health of the river that this flow regime achieves. In relation to water resource development projects, the IFR refers to the amount, quality and timing of water released through or over dams and associated structures to meet riverine ecosystem and social needs in the reaches downstream thereof.

The flow regime of a river consists of several different kinds of flow, each of which contributes to the overall maintenance of the aquatic and riparian ecosystem:

Ø Low flows occur when the river is not in flood. They are larger and more varied in the wet season than in the dry season. They create different conditions in different seasons, dictating the occurrence and densities of aquatic species.

Ø Freshets are a component of low flows scheduled either to complement the required magnitude of low flows, in a form of small floods, or introduced to increase variability of flow within the system.

Ø Small floods occur several times within a year. They stimulate spawning in fish, flush out poor quality water, cleanse the riverbed and sort the river stones by size, thereby creating different kinds of habitat. They trigger and synchronize activities as varied as upstream migrations of fish and germination of seedlings on riverbanks.

Ø Large floods occur less than once a year. They trigger the same responses as small floods, but, in addition, they provide the scouring flows that shape the river channel. They move and cleanse cobbles and boulders on the riverbed, and deposit silt, nutrients, eggs and seeds on floodplains. They inundate backwaters, secondary channels and floodplains, and trigger bursts of growth in many species. They also recharge soil moisture levels in the banks, enabling seedlings of riparian trees to grow.

Ø Flow variability on a daily, seasonal or annual basis, acts as a form of natural disturbance. Fluctuations between low flows and small and large floods change conditions through each day and season, creating mosaics of areas inundated and exposed for different lengths of time. The more diverse the physical conditions, the higher the biodiversity and the greater the resilience of the ecosystem to disturbance.

IFR encompasses the entire riverine system, including the requirements of the aquatic ecosystem occurring within the river channel banks, the riparian zone and floodplain.

Other terms applied to the IFR concept are river or ecological reserve and environmental flow requirements. The term IFR has been retained in this policy to maintain consistency with all the documentation on this matter in the LHWP, from consultants’ reports to correspondence records.

Impoundment means any in-channel storage of relatively large volumes of water behind control structures, such as a dam or weir.

Local Legal Entity (LLE): A legally constituted body, comprising representatives of communities and nominated by them, established to act as a vehicle for managing community trust funds.

Mean annual runoff (MAR) refers to the long-term average annual water flow from a watershed; it is a measure of the average amount of water available as natural river flow.

Mitigation means changes in project design, operations and or/project area management in order to reduce levels of impact and/or resource losses.

Off-set compensation, is a form of compensation where a requested benefit may be delivered which does not constitute direct replacement of a loss, eg. village infrastructure is requested as compensation for loss of wood resources.

Population at risk (PAR) is the human population, which is deemed to be at risk of being impacted by flow changes in rivers downstream of the LHWP impoundments.

Project is ‘the Project’ or the Lesotho Highlands Water Project.

Reach (as in river reach) is a stretch of river that has consistent or more or less homogenous characteristics throughout, in terms of geomorphology, hydrology and aquatic biota.

Proximal Reach is the river reach close to the dam structure, where the level of degradation is more than 40% of the present river condition, where present implies condition prior to impoundment.

Distal Reach is the river reach further away from the dam structure, where the level of degradation is equal to, or less than 40% of the present river condition, where present implies condition prior to impoundment.

Release regime, similar to flow regime, refers to the seasonal pattern and quantities of water released from an impoundment into downstream rivers.

Resources, at their most generic meaning, are anything that is useful to people, that can be utilized to generate economic wealth or sustain life. Hence, a mineral is an economic resource, while a wild vegetable is a survival resource to Highlands' people. In environmental terms, a distinction is made between renewable resources--plants and animals, solar energy--and non-renewable resources--minerals, land area. Non-renewable resources are resources of which there is a finite supply on the planet; they do not replenish themselves like renewable resources.

Riparian zone/area [inhabiting or situated on the bank of a river] is that part of the riverine ecosystem which occupies the banks of the river channel and areas immediately adjacent to them, where the influence of river flow/water flowing in the river is felt. It is usually distinguished by an assemblage of plant species, which is different from that in nearby terrestrial habitats, often dominated by woody plants.

River condition classification is a way of describing the condition of a river. Such classification systems generally comprise a set of five or six qualitative descriptions of the state of the riverine ecosystem, from pristine, natural conditions through progressive (or regressive) changes until the ecosystem is so transformed as to be non-functional. The river condition classification developed by the LHDA for the Lesotho Highlands Water Project affected rivers is loosely related to the river condition classification used by the South African Department of Water Affairs and Forestry for the management of rivers, but differs in the number of condition states defined and in the way in which it is used. The Project affected rivers classification adopted in this policy was also developed using the DRIFT database. Another major difference is that there is no government policy context for the application of the river condition classification in Lesotho, so that LHDA has developed an approach to its application which will have to be refined and tested in relation to broader policy developments in Lesotho.

System Supply Capability: The amount of water computed using the LHDA WRMS model that determines the capability of the system then build to supply for a specific year, all Project required water uses, without compromising the medium-term (5 to 10 years) reliability, taking into account the current status of the reservoir levels.

System Demands: The quantities of water demand from the system for IFR releases provided by the IFR Policy and water delivery to RSA, which includes hydropower.

System Surplus: The amount of water remaining after allocations have been made to IFR releases and water delivery to RSA.

System Deficit: A shortfall in water allocated to RSA demand as determined from time to time during the operations of the system.

Surplus water (in the storage system) is water present in the dams that exceeds the Nominal Annual Yield of the system as indicated by the system yield model on a monthly basis and as defined in Article 7(6) of the Treaty.

1. PURPOSE & OBJECTIVES

1.1 Purpose

1.1.1 The purpose of the IFR Policy of the Lesotho Highlands Development Authority is to provide for the management of flow releases for the maintenance of predetermined conditions for riverine ecosystems downstream of Phase 1 impoundments. It will also provide for the mitigation of, and compensation for, flow related impacts on resources, ecosystems and communities in downstream areas, and other secondary or indirect losses.

1.1.2 This means that the Policy will

Ø Specify the core components of a system to manage water releases from Phase 1 impoundment structures which will

· guarantee that some water is reserved for riverine ecosystems and human communities downstream of control structures;

· ensure that reserved water is made available to the ecosystems at appropriate times, including responses to any emergency environmental events.

Ø Lay down a framework for the determination of resource losses and other downstream impacts, and for the delivery of compensation to affected downstream communities for such losses and impacts.

1.2 Objectives

1.2.1 To provide for the maintenance of specific target river conditions;

1.2.2 To provide for an appropriate release regime from each impoundment, namely, Katse and Mohale Dams, Muela Tailpond and Matsoku Weir, to achieve the above objective;

1.2.3 To establish principles of mitigation of impacts and compensation for losses;

1.2.4 To establish the basis for the assessment of resource and social losses and levels of and procedures for compensation;

1.2.5 To set out the objectives of a monitoring programme which will support the IFR release regime, compensation and mitigation policy; and

1.2.6 To provide for an appropriate IFR management system, which allows for the systematic and periodic review and audit of performance.

2. PRINCIPLES

2.1 In compliance with Treaty commitments, management of the downstream environment shall, as for upstream areas of the project, aim to maintain and where feasible improve the welfare of project-affected people; and it will aim to protect the quality of the environment as far as is practically and reasonably feasible.

2.2 Releases of water from the dams shall be optimised to meet environmental criteria and community user requirements, except to the extent that emergencies may override such considerations, in which case community concerns will be addressed through the established Emergency Preparedness Programme.

2.3 There are uncertainties about river ecosystem behaviour in response to flow modifications. In this context, due diligence is adopted as the over-riding criterion to be implemented in the form of adaptive management, which will aim progressively to reduce the levels of uncertainty, by monitoring and assessing actual conditions against expected and desired conditions (‘expected’, as predicted by the DRIFT database, and ‘desired’ condition as per the river condition targets).

2.4 Ecological management of the downstream rivers affected by the LHWP shall be undertaken in relation to the river condition classification, which has been developed for Lesotho Highlands Water Project affected rivers. [This classification is set out in Table 4.1] LHDA’s management objective for affected Project rivers is to target the highest river condition class or state that is feasible, bearing in mind that the release of water out of the LHWP structures is not the only determinant of river condition. The general goal, where feasible, is to prevent affected rivers from degrading beyond a “moderately modified” state. The specific objective is not to transform, degrade or modify any given river reach by more than two states from its baseline state (see Table 4.2).

2.5 Adaptive management to address the impacts of reduced downstream flows will provide for mitigation and compensation by payment for resource losses and increased risks, and flow release adjustments, in accordance with clearly articulated procedures. Payment for compensation of resource losses and health aspects will primarily take the form of cash payments to community trust accounts, which will empower communities to decide amongst a range of developmental programmes and projects, as they deem appropriate. Individual claims will be considered on their merits. Adaptive management will also include for the review of impacts other than those involving resource losses. Appropriate responses will be made.

2.6 Due emphasis shall be placed on the welfare, safety, involvement, and the needs of the Population at Risk. Downstream communities shall be kept aware of the possible effects of dam operation. When floods are to be expected, an early warning system in downstream areas shall be activated.

2.7 A participatory management style shall be adopted in downstream areas. Management shall be transparent, so that all and ongoing decisions will be inclusive of community concerns and can be scrutinized by affected persons, communities and interested parties.

2.8 When water yield in the Phase 1 storage system cannot meet all allocations, the order of priority in allocations shall be:

Ø IFR releases;

Ø water delivery;

Ø power generation, which is tied to the water delivery.

2.9 When water yield in the Phase 1 storage system exceeds all initial allocations, the Surplus water shall first be allocated to increasing IFR releases to that designated for the next highest hydrological year class, and second between all possible uses, namely additional hydropower, water delivery or some other use, unless compelling circumstances dictate otherwise.

2.10 The resources identified in the IFR study as being impacted by reduced river flows shall form a basis for mitigation and compensation planning and payments, so that compensation shall take account of, and be guided by, the IFR studies and further consultations with affected communities.

2.11 Recognising that losses of non-direct use value (i.e. intangibles) have arisen from the Project, LHDA will study the extent of these losses (in the context of other Project losses and benefits) and identify offset and other options for further development as was done in the case of the Maluti Minnow.

2.12 All costs relating to the implementation of the IFR Policy and its mitigation and compensation shall be regarded as Project costs and shall be borne by the Project.

2.13 IFR Procedures will be subject to on-going management review and revision.

3. SCOPE OF THE POLICY

3.1 Ambit of policy

3.1.1 The Policy addresses the release of water from Phase 1 dams for ecosystem and socio-economic requirements in downstream river reaches (see 3.3).

3.1.2 The Policy addresses mitigation of impacts and compensation for resource losses that can be directly linked to changes in flow patterns in rivers downstream of LHWP structures.

3.1.3 The Policy will cover changes in downstream river reaches that can be shown to have been caused or exacerbated by the Project.

3.2 Temporal scope

3.2.1 This Policy shall take effect from the date of its approval. Calculation of compensation, however, will make allowance for the differences in impoundment date of the three structures.

3.2.2 The policy shall apply for an indefinite period.

3.2.3 The IFR Policy will be subject to an annual review by independent experts and an independent audit at least once every five years. The IFR Policy may be changed only after independent audit, review and consultation with stakeholders.

3.2.4 The bulk allocation in the IFR Policy will not be changed within 3 years of Policy approval, unless there are compelling reasons that emerge from review, and provided that stakeholders are consulted.