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Report 17<br />

411<br />

Mwawughanga<br />

3. ENVIRONMENTAL LEGISLATION AND IMPACT ASSESSMENT<br />

Environmental Impact Assessment (EIA) is a fundamental development component in most countries<br />

today, and even in countries that do not have <strong>environmental</strong> regulations, multilateral financial institutions<br />

have made EIA mandatory before lending. Thus, <strong>environmental</strong> legislation has become a crucial<br />

component, alongside finances and other factors in development <strong>of</strong> projects.<br />

Environmental regulations <strong>of</strong> different countries are remarkably similar. Most require an <strong>environmental</strong><br />

analysis <strong>of</strong> proposed power projects, as well as having specific regulations defining quantities <strong>of</strong> pollutants<br />

that may be emitted to the atmosphere or discharged to land and water. The analysis usually comes with<br />

a report referred to variously as Environmental Assessment (EA), Environmental Impact Assessment<br />

(EIA), Environmental Impact Statement (EIS), or Environmental Impact Report (EIR) (Hietter, 1995).<br />

Major variations exist in terms <strong>of</strong> agencies involved and time required for the process to be completed.<br />

The purpose <strong>of</strong> the EIA is to ensure that potential impacts are foreseen and addressed at the earliest<br />

possible opportunity. It also provides information that helps in proper planning and should provide an<br />

opportunity for stakeholder involvement.<br />

3.1 Environmental legislation <strong>of</strong> Iceland and its role in power development projects<br />

In Iceland, there are a number <strong>of</strong> laws addressing <strong>geothermal</strong> development (Andrésdóttir et al., 2003).<br />

These include the following:<br />

1. Planning and Building Act no. 73/1997. The Act states that in order to obtain development permits,<br />

substantial development projects shall be in accordance with development plans and decisions on<br />

<strong>environmental</strong> impact assessment (EIA).<br />

2. Research and Use <strong>of</strong> Underground Resources Act no. 57/1998. The Act requires the developer to<br />

apply for an exploration permit before starting further research and drilling <strong>of</strong> exploration wells, and<br />

utilisation permit before constructing a power plant.<br />

3. Nature Conservation Act no. 44/1999. According to the Act, certain landscapes and habitats enjoy<br />

special protection. Amongst these are hot springs and other <strong>geothermal</strong> sources, surface <strong>geothermal</strong><br />

deposits, volcanic craters and lava fields, all being frequent features <strong>of</strong> high- temperature <strong>geothermal</strong><br />

areas.<br />

4. The Energy Act no. 65/2003. The Act requires that developers planning to exploit <strong>geothermal</strong><br />

resources for producing more than 1 MW electric power must apply for operation permits.<br />

The Environmental Impact Assessment Act no. 106/2000 deals with all projects that may have impact<br />

on the environment in Iceland and went into effect in June 2000. Legislation on <strong>environmental</strong> impact<br />

assessment was first passed in Iceland in 1993. The main aim <strong>of</strong> the new Act is to ensure that<br />

<strong>environmental</strong> impacts <strong>of</strong> projects likely to have significant effects on the environment, natural resources<br />

or community are assessed before any permission is given for implementation. High priority is given to<br />

public review, unlike the earlier Act, and to cooperation among different groups and the developer. The<br />

main changes from the earlier Act are that responsibility for the screening process has been transferred<br />

from the Ministry <strong>of</strong> Environment to the Planning Agency, and a new formal scoping process has been<br />

introduced whereby the developer prepares and submits an EIA programme for the proposed project to<br />

the Planning Agency as early in the procedure as possible (Thors, 2000). Thus, the Planning Agency<br />

(Skipulagsst<strong>of</strong>nun) monitors the application <strong>of</strong> law and regulations on planning, building, and EIA.<br />

The Minister for Environment has supreme control <strong>of</strong> planning and building under the Planning and EIA<br />

regulations. The assessment must be part <strong>of</strong> a planning process. A regulation supplementing the<br />

Environment Act lists project categories requiring an EIA. Other projects that may or may not be subject<br />

to an EIA depending on their magnitude are listed in Appendix 2 <strong>of</strong> the regulations. This includes drilling

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