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Component 2

Component 2 - Environmental certification, monitoring and enforcement of environmental conditions

The focus of this component is to support and improve the regulation and monitoring of major industrial and development projects in Lao PDR. Mining and hydropower sectors are the booming sectors from which the government hopes to collect revenues for the country and thus the project must emphasise these sectors accordingly in addition to industrial and infrastructure projects mentioned in the original Project Document.

Based on completed baseline studies among the industries, experiences from cooperation with the MoIC and continuous demand for support in EIA report reading at MONRE show that support to basic skills development is still needed. Therefore, the original plan presented in the Project Document of mainly on-the-job training will be supplemented with workshops and more intensive environmental/technical training.

MoIC has a functioning cleaner production program and sees that inclusion of activities related to cleaner production is not necessary in EMSP. Activities supporting MoIC should thus focus on promoting self-monitoring (SM) and environmental management systems (EMS) in industry.


The purpose of this component is that the environmental impacts of major mining, hydropower, industrial and infrastructure projects are properly regulated and monitored by MONRE and DONREs. Specific indicators for the component purpose are:

  1. Percentage of major projects with relevant, enforceable environmental conditions from all major projects;
  2. Number of inspection reports;
  3. Number of mechanisms for submitting and following up complaints about environmental nuisances which are established, communicated and available to all interested groups and persons affected by major projects.

The long term goals of Component 2 are that major development projects in Lao PDR do not cause excessive negative environmental and social impacts and that any such impacts are mitigated effectively. Furthermore, that communities potentially affected by major development projects have access to efficient grievance mechanisms.


The approach in this component builds on the achievements of SEM II and other donor interventions in the field of ESIA capacity building. The project design relies heavily on intensive technical and environmental training along with on-the-job training through sector specific technical and legal assistance in real cases of licensing, compliance monitoring and enforcement.

Compliance with environmental regulations is also facilitated by supporting good practices in self-monitoring and safe chemical management in industry to complement end-of-pipe pollution control measures. Partnership and division of tasks between MONRE and MoIC is bridged by sponsoring these promotion activities through MoIC. In addition, studies will be conducted and initiatives taken to support the sustainability of inspection and monitoring tasks in MONRE.


Results under Component 2 are:

  1. Good practices are applied in preparing environmental certificates;
  2. Sustainable inspection and compliance enforcement system for environmental conditions and standards is in place;
  3. Polluting industry is practicing self-monitoring (SM) and using environmental management systems (EMS) to control hazardous emissions;
  4. The financial sustainability of compliance monitoring has improved.

The first two results form a logical approach from the procedure of issuing certificates into inspections and enforcement. Result 3 connects MoIC into the activities, mainly concentrating on capacity building in the industrial sector. The last result aims at achieving financially independent, transparent and sustainable compliance monitoring.

Risk mitigation

The risks and assumptions for Component 2 evolve around support from the Provincial Governors, good coordination and collaboration between MONRE and concerned line ministries including clarification of division of labour in licensing and inspection. There are also issues related to cooperation with the private sector and other donor funded projects.

Support from the Provincial Governors will be sought through entering into agreements and through openness and attention to the specific environmental context and issues in the concerned provinces. The Provincial Administrations will also be involved in implementation of activities and they will be participating in annual evaluation and planning workshops.

The division of labour in terms of licensing and inspection is an integral part of the Component where the execution of licensing and inspection activities will contribute to clarifying the required improvements and this will be brought forward in the ongoing process of formulating rules and regulations.

Cooperation with the private sector mainly refers to supporting industries in establishing self-monitoring and environmental management systems. The approach is to select cooperation partners together with MOIC and in close collaboration with GIZ SME carefully based on trust and commitment and to encourage their participation through offering training and recommendations. Additional approaches such as selecting pilot industries among those most interested and capable of implementing proactive environmental management measures will be explored once implementation is underway and collection of baseline information has been finalized.

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1 Component 2 Reports Amkha VAYAPHATH 941
2 Component 2 Work Plans Amkha VAYAPHATH 917