Environmental

& Social Audit

Sintayehu B. Gossa
Adama,Dec,2022
Content
 Introduction
 What Is Environmental Auditing

 Objective of Environmental Audit

 Benefits of Environmental Auditing

 Types of Environmental Audit

 Environmental Audit Process/Stages

 Contents of Report

 Tools & Techniques Used

Introduction
Legal framework
Constitution of Ethiopia (proclamation 1/1995)
In article 43: The Right To Development:
1. The peoples of Ethiopia as a whole, and each Nation, Nationality and people in Ethiopia
in particular have the right to improved living standards and to sustainable development

2. Nationals have the right to participate in national development and, in particular, to

be consulted with respect to policies and projects affecting their community.
3. All international agreements and relations concluded, established or conducted by the
State shall protect and ensure Ethiopia’s right to sustainable development.
4. The basic aim of development activities shall be to enhance the capacity of citizens for
All persons haveand
development thetoright
meettotheir
livebasic
a clean and healthy environment
needs.
Article 44
Continued
 Article 92 Environmental Objectives,
1. Government shall endeavor to ensure that all Ethiopians live in a clean and

healthy environment.

2. The design and implementation of programs and projects of development shall

not damage or destroy the environment.

3. People have the right to full consultation and to the expression of views-in the

planning and implementations of environmental policies and projects that affect

them directly.

4. Government and citizens shall have the duty to protect the environment.
 Environmental policy of Ethiopia 1997
Overall objective of EPE:to improve and enhance the health and

quality of life of all Ethiopians and to promote sustainable social and

economic development through the sound management and use of

natural, human-made and cultural resources and the environment as a

whole so as to meet the needs of the present generation without

compromising the ability of future generations to meet their own needs.

 Specific policy objective
 Ensure that essential ecological processes and life support
systems are sustained, biological diversity is preserved and
renewable natural resources are used in such a way that
their regenerative and productive capabilities are
maintained ……
 Ensure that the benefits from the exploitation of non-

renewable resources are extended as far into the future as

can be managed, and minimize the negative impacts of
their exploitation on the use and management of other
natural resources and the environment;
Continued...
 Incorporate the full economic, social and environmental
costs and benefits of natural resource development into the
planning, implementation and accounting processes by a
comprehensive evaluation of the environment and the
services it provides, and by considering the social and
environmental costs and benefits which cannot currently
be measured in monetary terms;
Continued…
 Prevent the pollution of land, air and water in the most
cost-effective way so that the cost of effective
preventive intervention would not exceed the benefits;
Continued….
 Sectoral Environmental Policies:
1. Soil Husbandry and Sustainable Agriculture
2. Forest, Woodland and Tree Resources
3. Genetic, Species and Ecosystem Biodiversity
4. Water Resources
5. Energy Resource
6. Mineral Resources
7. Human Settlement, Urban Environment and
Environmental Health
8. Control of Hazardous Materials and Pollution From
Industrial Waste
9. Atmospheric Pollution and Climate Change
10. Cultural and Natural Heritage
 Human Settlement, Urban Environment and
Environmental Health (16 points.)

 To integrate harmoniously, human-produced and natural

elements in order to maintain the natural ecosystems in
the development and management of urban areas;
 To ensure that improved environmental sanitation be
placed highest on the federal and regional agendas for
achieving sustainable urban development;

To promote the construction by individual families of their own

houses and create conducive conditions for communities and

individual families to make improvements to their immediate

habitats as well as to provide human and domestic waste disposal

facilities;
 To recognize the importance of and help bring about behavioural

change through education and public awareness of environmental

sanitation problems in trying to achieve demand-driven community

led programmes of improved urban environments as well as the

sustainable use and maintenance of sanitation facilities;

 Cross-Sectoral Environment Policies
1. Population and the Environment
2. Community Participation and the Environment
3. Tenure and Access Rights to Land and Natural Resources
4. Land Use Plan
5. Social and Gender Issues
6. Environmental Economics
7. Environmental Information System
8. Environmental Research
9. Environmental Impact Assessment (EIA)
10. Environmental Education and Awareness
 Continued..

Proclamation 176/2005
Article 3(10) (h) ESIA Report shall include procedures of
auditing &monitoring and evaluation during project
implementation
Audit Directive 06/2021 (Oromia EPA)
Audit Guideline 2022 (federal EPA)
 DLI 1 - ULG Minimum Conditions (MCs)

1 A rolling three year and Annual Procurement Plan; Capital investment plan
(CIP) with Annual Action Plan (AAP), Annual Budget,

2 Submitted financial statements for the last EFY on time;

3 Received an external audit report from previous EFY that is not adverse or
has a disclaimer opinion;

4 Provided for its ULGDP II co-funding requirements;

5 Staff in place in six key positions required for ULGDP II implementation,

including a functional internal audit unit;

6 A fully operational environmental and social management safeguard

system in place;

7 A fully operational procurement system in place; and

A fully operational complaints handling system in place

8
 DLI 2: Institutional Performance
DLI 2: Indicators Performance Measure/Indicators

1 Planning and Budgeting CIP (consistency with AAP, AB, APP & alignment with AMP, REP ), Participation,
budget used, Capacity building performance (2)

2 Assets Management AMP-Asset inventory updating, Conditions, value and deficit

3 .Public Financial IBEX functioning (budget & expenditure report), Audit report , Fixed
Management
asset and inventory (stock) management (4)
APP, Individual Procurement Transactions, Procurement Planning and Bidding,
4 Procurement and
Contract Admin Bid Evaluation and Contract Award, Contract implementation and procurement
recording, Procurement Outcomes (Procurement efficiency and effectiveness
& Competitiveness, Fairness and Transparency and Controls)

5 Own-source Revenue
Enhancement
REP, Plan Vs Actual, Revenue increasing/decreas ing, Co-funding

6 Accountability and
Transparency
Services delivery, Public dissemination (APA results announced to
public) , timely report

7 Environment and social Projects screening, EMP, RAP, ES Audit report, compliant handling
Safeguards system functioning

8 Land Management and

Urban Planning
Updated SP, Investment as per SP, Effective land management
( serviced land releasing , Proportion of land plots released,
Tools for Implementing Environmental Laws

Environmental and Social Impact Assessment

 Monitoring/Inspection
 Environmental Auditing
What is environmental Audit?
 A management tool comprising/embracing systematic,
documented, periodic and objective evaluation of how well
environmental organization, management and equipment are
performing with the aim of helping to safeguard the
environment by facilitating management control of practices
and assessing compliance with company policies, which would
include regulatory requirements and standards applicable.
Source: International Chamber of Commerce (1989)
Continued …
 Environmental audit is “a systematic, documented,
periodic, and objective review by regulated entities of
facility operations and practices related to meeting
environmental requirements” (EPA, 2003 cited in
Anthony et al., 2003, p.36).
Continued….
 The term ‘environmental audit’ was defined by Confederation of
British Industry as: the systematic examination of the interactions
between any business operation and its surroundings. This
includes all emissions to air; land and water; legal constraints;
the effects on the neighboring community; landscape and ecology;
the public’s perception of the operating company in the local area.
Environmental audit does not stop all compliance with legislation.
Nor is it a ‘green-washing’ public relations exercise. Rather it is a
total strategic approach to the organization's activities (CBI, 1990
cited in Paramasivan 2002, p. 149).
Continued ….
Environmental audit is a management tool for evaluation
of how well Environmental Management Systems (EMS)
are performing with the aim of preventing environmental
damage; assessing compliance with regulatory
requirements; facilitating control of environmental
practices by a company/enterprise or facility
management; and placing environmental information in
the public domain(EEPA,2022)
Generally
 Environmental Audit is the management tool that embrace
systematic approach to evaluate environmental & Social
performance .
 Systematic:
 organized, planned, scientific method
 Documented:
 recorded in writing
 Verification:
 information is confirmed, cross-checked, validated
 Objective:
 independent, unbiased, no conflict of interest
 Evaluating:
 assessing
 Evidence:
 verified observations, verified verbal and written
information
Objective of Environmental audit
The objective of environmental audit is to:
 Determine and document compliance status

 Improve environmental performance

 Assist facility management

 Increase overall level of environmental awareness

 Development of environmental management

control system
 Improve risk management systems

 Protect corporation from potential liability

 Develop a basis for optimizing environmental

resources
Benefits of Environmental Auditing
 Improves efficiency of EMS
 Compliance with environmental laws and standards
 Risk mitigation
 Meeting stakeholders expectations
 Reduction in operational inefficiencies
 Encourages continual improvement
 Compliance with certification requirements
 Employee awareness
 Helps management in decision-making
Elements of Audit
 Management commitment
 Objectivity
 Professionalism
 Systematic approach
 Written report
 Quality assurance
 Follow-up and implementation
Types of environmental Audit
I)Environmental Compliance Audit:
The compliance audit is a systematic accumulation
of evidence about an organizations compliance
status to the regulatory requirements relevant to
that organization and provides an indication of the
environmental risk that it poses.
Criteria: regulatory standards, Internal standards,
Continued …
Benefits of Environmental Compliance Audit:
 Helps in ensuring compliance with laws
 Reduces risk / costs with non­compliance
 Gap between promises and results
 Pollution & Waste reducing, conserving

resources
 Helps in improving Environmental

Performance
Continued..
ii)Performance Audit: PA Examine the effectiveness of
policies and programs that heavily influence their
implementation.
Performance auditing is probably a more appropriate
and useful form of environmental audit for public sector
needs.
Criteria: Indicators prescribed by professional institutes,
Govt. / NGO, academic literature or Environmental
Organization, policy programes, PIM
Continued…
 Benefits of Environmental Performance Audit: Health
& Safety, Site Audit, Activity Audit, Process Audit
Product Life Cycle audit
Environmental Financial Audit
 Objective :To enable an auditor to establish whether the
reporting entity has appropriately recognized, valued &
reported all significant environmental costs, benefits,
assets, liabilities and contingencies.
 Criteria: Standards issued by recognized bodies,

standard setting authorities & other academic literature.

Continued…
Benefits of Environmental Financial Audit
 International Auditing Practices Statement (IAPS)

Environmental Matters affect financial statements.

Initiatives to prevent damage to Environment.
Consequences of violating laws. Consequences of damage
to resources. Consequences of vicarious liability levied by
law.
 Continued…
Product safety audit
Single issue audits
Liability audits
 Forms of Environmental Audit
 Self-Audit: conducted when an organization chose to carry out the audit by
team members selecting the team members from the staff of the business,
operating unit or department to be audited. This could be by the senior
operatives in the unit being audited.
 Internal Audit: conducted when an organization chose to carry out the audit by
team members selected from staff from various units of an organization but
not from the operating unit or department to be audited to audit a particular
unit. The aim is to identify and report problems without bias. In some
circumstances it may, however, be of benefit to have a representative of the
unit on the audit team. They should not be team leaders.
 External audit: conducted when an organization chose to carry out the audit
by selected team members from outside the organization/department.
However, employees of the organization being audited may assist the team.
External auditors could be Consultants or Regulators. It is important
especially where 3rd party benchmarking and neutrality is required.
Stages in the Audit Process
Stages in the Audit Process Although every audit project is
unique, the audit process is similar for most audit
engagements like for compliance, performance or
financial audit and normally consists of four stages:
i. Planning for the audit/pre-audit activities
ii. Conducting field audit/ on-site activities
iii. Audit reporting/post-site activities
iv. Follow up review
 Continued …
Stage – I Pre­audit / Planning stage
Develop Audit Plan
 Define audit site & boundary with overview

 Developing the objectives and scope,

 How to conduct the audit, which includes:

site personnel interview, audit protocols;

site logistics and administrative arrangement
 planning and preparing the audit team

Developing audit schedule and milestone including site logistics and administrative
arrangement
Review Background Information and Relevant Regulations
Review Relevant Regulations
Set the Scope of Audit
Set the Scope of Audit
 Scope is determined by factors such as physical
location, specific project activities, timing and
organizational activities as well as the type of
Environmental audit reporting.
(Spatial scope , temporal scope, depth of the study )
Continued…
Prepare Pre-Audit Questionnaire- The purpose of this
questionnaire is to gather the necessary information on the
audit site prior to undertaking an on-site audit. Develop On-
Site Questionnaire and Audit Protocols-
Considering the scope and objective of the audit, the auditor
should develop assessment questions and audit criteria
Setting Audit Criteria -Setting Audit criteria help in assessing
the performance of the entity with reference to certain laid
down standards and performance benchmarks.
Conduct Initial Site Visit Finally

The audit team should arrange and carry out an initial

visit to pave the ground for effective implementation of
normal operation of audit site.
Environmental Audit Process Stage­II Onsite /Field Audit

 Opening conference
 Facility tour
 Site/facility inspection
 Evidence
 Records/document review
 Staff interviews/stakeholder
 Initial review of findings
 Closing/exit conference
Continued…
Environmental Audit Process Stage­III Post Audit
 Final evaluation of findings
 Drafting of preliminary audit report

 Approval of the management

 Holding of exit conference

 Discussion on recommendations, if any

 Preparation and submission

of final report
Sample Summary sheet for preliminary
Audit Findings
Audit Level of Conformity with Recommendation
Finding compliance policy, procedures
Stage ­IV Follow up/ Review stage
Stage ­IV Follow up/ Review stage
1.Develop Action Plan
An action plan should cover:
Action objectives;
Specific actions required;
Responsible party(ies);
Budget allocated; and
Implementation program
2. Implement Action Plan
 Responsible party(ies)to undertake actions

according to the allotted budget, and the agreed

timescale for completion.
Tools & Techniques Used to collect EA data Collection Tools

• Checklist
• Questionnaires
• Questioning
• Observation
• Photographs / Electronic data
• Research
Elements EA Report
 Contents of report Findings ­
• Status of compliance with environmental
legislative & standard requirements
• Status of conformity with internal environmental
policies
• Status of good environmental practices
implementation
• Measurements of environmental costs, benefits,
assets and liabilities, risks & contingencies
• Level of staff awareness / staffing
• Overall status of environmental performance
positive /negative
Outline of report
1. Executive Summary
2. Introduction ( back ground of the company, legal issues, & Environmental Audit …)
3. Objectives
4. Scope
5. Criteria
6. Methodology used
7. Evidences used
8. Findings
9. Conclusion
10. Recommendations
11. Annex
12. Signatures of auditors with date
Exercise
UIIDP constructed masonry drainage in shaggar
city in Nonoogafarsaa sub-city.As agreed in UIIDP
ESMSG& RSG conducting environmental & social
auditing is mandatory. You are appointed as Audit
team member of this sub project Thus:
A) Set Audit Objective
B) Set Audit Scope
C) Set Audit criteria
D) Develop Audit schedule
E) Develop sample checklist for Audit
Thank You All
Integrated municipal solid waste
management
Bakka gataa Magaalotaa Oromiyaa
Bakka gataa M/Adaamaa
Waste Segregation
Composting
Recycle/reuse
Disposal
Land fill
HORAA BULAA !!!