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Everything to Know about Environmental Risk

The meaning of Environmental Risk, causes and how to mitigate Environmental Issues.

1. What is Environmental Risk?

Environmental Risk in construction refer to any ecological disturbances caused by or affecting, construction projects. This includes impacts on land, air, and water quality, biodiversity, and local ecosystems. Such issues can stem from the release of pollutants, destruction of habitats or ecosystems, resource depletion, and improper waste disposal during construction activities.

2. What does Environmental Risk mean?

Environmental Risk means any negative impact on the natural environment directly or indirectly caused by construction activities. These issues can lead to regulatory fines, project delays, and increased costs for the Project Owners or General Contractors due to mitigation measures and can significantly affect public perception and stakeholder confidence.

3. Environmental Issues Example

An example of an environmental issue in construction is excessive sediment runoff during site preparation, which can pollute local waterways. This runoff can lead to turbidity in streams and rivers, harming aquatic life and disrupting local ecosystems. Another example may be construction of a wharf into the sea or ocean, affecting the natural habitat of this ecosystem.

The Deepwater Horizon oil spill (also referred to as the "BP oil spill") was an environmental disaster in 2010 off the coast of the United States in the Gulf of Mexico. BP agreed to pay $20.8 billion in fines, the largest environmental damage settlement in United States history.

4. The History of Environmental Issues

Historically, environmental considerations were often overlooked in the rush to develop and build construction projects. However, with growing awareness of sustainable practices and the introduction of environmental regulations, the construction industry has seen a shift towards more eco-friendly and sustainable construction practices. We cannot just destroy the earth. Environmental impact assessments and sustainability certifications have become standard parts of project planning and execution.

5. Causes of Environmental Issues

Environmental issues can be caused by:

  • Deforestation: Clearing trees without adequate plans for reforestation affects ecosystems and wildlife habitats.
  • Erosion: Disturbance of the soil without proper erosion control measures can lead to significant sedimentation in nearby water bodies.
  • Resource depletion: Overuse of local water and materials resources can lead to shortages and ecological damage.
  • Pollution: Emission of pollutants through construction activities, including noise, air, and water pollution.
  • Waste management: Improper disposal of construction waste can lead to environmental contamination.

6. Likelihood of Environmental Issues

The likelihood of encountering environmental issues varies based on the project location, the nature of the construction activities, and the rigor of environmental management in the juristiction. Urban and sensitive ecological areas are at higher risk of having Environmental Issues or Risks.

7. Consequence / Impact of Environmental Issues

The consequences of not properly managing environmental issues can be severe, ranging from regulatory penalties and cleanup costs to public backlash and potential halts in project construction. Long-term impacts may include irreversible damage to local ecosystems and loss of biodiversity.

The Amazon rainforest is sought after for purposes such as cattle ranching, the extraction of valuable hardwoods, land for housing and farming (especially soybeans), the construction of roads (including highways and smaller roads) etc.

8. Environmental Clauses in Construction Contracts

Environmental considerations will appear in Standard Form Contracts in Australian and North America, with contract authorities such as Standards Australia and AIA Contract Docs respectively. Clauses the may appear, are:

  • Compliance with Environmental Laws: Mandate adherence to all relevant environmental legislation and guidelines.
  • Environmental Management Plans: Require the development and implementation of an environmental management plan.
  • Mitigation and Restoration: Obligate contractors to undertake mitigation measures and, where necessary, restoration work to address any environmental damage caused.

9. Mitigations and Treatments for Environmental Issues Risk

Effective mitigation and treatment strategies for environmental issues include:

  • Eliminate the Risk: Consider not doing the project in that location or at all, to eliminate any environmental risk or issue.
  • Environmental Site Assessments: If you must do the project, conduct assessments to understand the environmental baseline before starting construction.
  • Erosion and Sediment Control Plans: Implement measures to manage erosion and prevent sediment runoff.
  • Resource Management: Use resources efficiently and source sustainable materials.
  • Pollution Controls: Implement systems to reduce and monitor noise, air, and water pollution.
  • Waste Management Plans: Ensure proper disposal and recycling of construction waste.
  • Ongoing Monitoring and Audits: Regularly monitor the environmental impact during construction and conduct audits to ensure compliance with environmental standards.

10. Risk Management and Reporting of Environmental Risks

As we've seen above, there are alot of considerations when it comes to Risk Management. Implementing Risk Management and Reporting controls will make managing this risk easy, and ensure success of your Capital Project.

  1. Risk Management Plan: Download a free Risk Management Plan Template and put a Risk Management process in place.
  2. Risk Register: Download a manual Risk Register Template or use an automated Risk Register solution to track all risks, causes, consquences and mitigations.
  3. Reporting: Create automated Risk Reports, Project Status Reports or Dashboards for communicating with stakeholders. If you need a free Report Template, you can find some examples here.
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