To help arrest biodiversity depletion, new concepts such as biodiversity offsetting are gaining popularity. For the past three years, we have been experimenting with biodiversity offsetting, initially by developing a methodology for offset planning, followed by implementing several pilot programmes at our mining operations in Madagascar, Brazil, and Peru Through the course of this work, we have realised that programme governance is a key issue.

Net positive impact
Along with climate change and water management, loss of biodiversity was identified, in the mid 1990s, as a critical environmental risk for the group’s operations. The response was to establish a biodiversity strategy with the long-term goal for Rio Tinto to have a Net Positive Impact (NPI) on biodiversity. We believe that this goal can be achieved as we conduct our mineral extraction business. We also believe it will deliver value to the company’s shareholders by helping us to maintain access to new resources.

Biodiversity offsets are a critical factor in our thinking around NPI. We recognise however, that offsetting in this way is only valid as a compensatory measure when linked with the actions we take to reduce the on-site impact of our operations. These on-site actions include avoidance, mitigation and rehabilitation and we refer to them collectively as the mitigation hierarchy (see Figure 1).

The Madagascar project
Rio Tinto’s QIT Madagascar Minerals (QMM) offset programme provides a sophisticated case study in offset planning and implementation. The complex ecological and social issues in the Fort Dauphin region of south east Madagascar have dictated that Rio Tinto QMM’s ilmenite operation takes a true multi-sector partnership approach to its biodiversity management and offset programme. The approach started with the establishment of an advisory panel of eminent scientists, all specialising in different aspects of Madagascan biodiversity. The panel guided Rio Tinto QMM’s strategic approach to biodiversity research and management, including the decision to set aside significant parts of the mining lease for the in-situ conservation of littoral forest.

Baseline ecological inventory work has been carried out by teams of scientists from Rio Tinto QMM, global and local NGOs, and research institutions such as Royal Botanic Gardens Kew, Fauna and Flora International, Earthwatch International, Birdlife International, Conservation International, Missouri Botanical Gardens, Asity Madagascar. Hamburg and Oxford Brookes Universities, both well known for their work on Malagasy biodiversity, also contributed.

The focus of this work has been to characterise the impact that Rio Tinto QMM will have on the environment, and assess the biodiversity offsets that will compensate for this impact. The conclusion of this research is that a composite offset (more than one offset initiative) will be needed to mitigate the impact of the Rio Tinto QMM operations. To this end management recently proposed to take conservation management actions at four separate sites in and around the Fort Dauphin region: Ambatostigorongo, Ste Luce, Tsitongambarika, and Mahabo.

Research at these four sites gives us a valuable insight into the ecology of remnant forests in southeast Madagascar. For example, the forest at Tsitongambarika (TGK) is now recognised as one of the most important areas of lowland rainforest left in southern Madagascar. This whole area is under immense degradation pressure from a growing population trying to eek out a subsistence living through slash and burn agriculture or Tavy, and the production of charcoal for fuel. Once the importance of TGK was recognised, a programme was developed to designate it as a protected area.

Governance
The TGK offset programme has made considerable progress in the last couple of years. Pilot community based conservation projects are beginning to show success in reducing impacts on the remnant forest. The next step will be to consolidate this early success into long-term sustainable conservation gains. Much of this future success will be dictated by the long-term planning and governance structures that are implemented to manage TGK.

Effective governance structures have the authority to make decisions and act in the best interests of all parties. The form these structures take and their mandate needs to be commensurate with the size and complexity of the programmeme they are managing. When the initiatives are far reaching, a governance structure with greater powers may be needed to take control for the long term.

Rio Tinto QMM is using the TGK offset programme to compensate for its residual impact on biodiversity. For this strategy to be successful it is important that any conservation gains generated by the programme last in perpetuity. Long-term governance of an offset site programme is therefore considered to be a critical risk factor.

Rio Tinto QMM’s view is that long-term governance of the TGK offset/protected area should eventually sit solely with the highest possible authority. This is in accord with global conservation management models which rely on government or proxies for government, often conservation NGOs, to undertake the planning, management, and governance of protected areas.

In the case of the TGK project, it can be argued that current local government capacity in southeast Madagascar is not sufficient to effectively manage TGK as a protected area. Our focus therefore is to set in place a governance structure that will enable the programme to easily adapt to changing requirements. Specifically this ‘interim’ governance structure should allow for an eventual transfer of control to the national government of Madagascar.

In the meantime, the Rio Tinto QMM approach is to develop a mutli-stakeholder governance structure that provides:

• Effective management
• Clear accountability and responsibilities
• Equity of decision making
• Diversity of funding

The development of this structure commenced in November 2007 with the convening of a workshop in Fort Dauphin. The meeting succeeded in bringing together a diverse set of stakeholders, and resulted in the formation of a working group that is responsible for the continued development of the TGK protected area programme. Its function has been improved through the recent appointment of a co-ordinator. The working group’s primary role is the delivery of specific TGK projects. But it is clearly understood that this is a temporary arrangement. The working group is far too big, and does not have the necessary authority to make the overall programme a lasting success.

Rio Tinto QMM proposes to improve this situation by forming a high-level project steering committee. This committee will effectively act as the CEO of the project, sharing accountability for the success of the programme with representatives from the four key stakeholders groups; government, local community, QMM/Rio Tinto and conservation NGOs. Once established, the committee will be charged with the continued planning and implementation of initiatives within the offset/protected area. Our long-term strategy is to work with the Madagascan government to build their capacity in the southeast of Madagascar, so that they can eventually take control of the TGK protected area.

Our hope is that this model will succeed in demonstrating how government, public, and private sector agencies can collaborate to deliver positive biodiversity gains as part of private sector development projects.

Stuart Anstee is Principal Adviser-Environment, Rio Tinto.

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(1) In the future we are planning to establish more programmes, including initiatives in Australia and the USA.