Kingdom of Saudi Arabia General Auditing Bureau

The 4TH SEMINAR ON ENVIRONMENTAL AUDITING AND 3RD WORKING MEETING OF ASOSAI WORKING GROUP ON ENVIRONMENTAL AUDIT (WGEA)

18TH 20TH SEPTEMBER 2012

This paper is structured as follows

1. National concern with environmental issues 2. SAIs' environmental auditing concerns 3. GAB environmental auditing efforts, including

a. Participation in regional/international task forces/committees on environment b.Building GAB's environmental auditing capacity c. Implementation of environmental audits, including a review of sample cases of environmental auditing

National

Concern

with

Environmental

Issues

The Kingdom of Saudi Arabia created the Presidency of Meteorology and Environment (PME) in 1981 as the state agency concerned with environmental affairs. Royal Decree No. 5/B/5635, dated 14/04/1410 H, provided for restructuring the kingdom's environmental policies through the formation of an environmental ministerial committee, the country's highest environmental authority. In addition to PME, the committee comprises some governmental agencies involved in environmental protection such as the National Commission for Wildlife Conservation and Development, King Abdulaziz City for Science and Technology and other institutions, universities, research centers and national authorities.

National Concern with Environmental Issues

KSA passed laws and regulations that ensure environmental protection. Key among these are the following: Barren land distribution regulation, ratified by Royal Decree No. M/26, dated 06/07/1388 H. Public utilities protection regulation, ratified by Royal Decree No. M/62, dated 20/12/1405 H. These regulations are meant to preserve water facilities, protect wades from waste dumping and protect water utilities from abuse. Charter of the National Commission for Wildlife Conservation and Development, ratified by Royal Decree No. M/22, dated 12/09/1406 H. Regulation of fishing and exploitation and protection of marine life in the territorial waters of Saudi Arabia, ratified by Royal Decree No. M/9, dated 28/03/1408 H.

National Concern with Environmental Issues

Regulation of marine scientific research in the territorial waters of Saudi Arabia, issued by Cabinet Resolution No. 103, dated 10/08/1413 H, and ratified by Royal Decree No. M/12, dated 11/08/1413 H. Regulation of trade in endangered species of wild animals and plants and their products, promulgated by Cabinet Resolution No. 54, dated 25/02/1421 H and ratified by Royal Decree No. M/9, dated 06/03/1421 H. Royal Order No. 1166/M, dated 04/09/1421 H, subjecting the exploitation or investment of any national resources to the enforced rules and regulations. General pastures and forests regulations, ratified by Royal Decree No. M/55, dated 29/10/1425 H. General Environmental Regulations, promulgated by Royal Decree No. M/34, dated 28/07/1422 H, based on Cabinet Resolution No. 193, dated 07/07/1422 H.

National Concern with Environmental Issues

KSA signed a number of international and regional agreements aiming at environmental conservation and protection. Key among these are the following: Vienna Convention for the Protection of the Ozone Layer The Convention on the Conservation of Migratory Species of Wild Animals (CMS) The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES); Basel Convention on the Control of Trans boundary Movements of Hazardous Wastes and Their Disposal The Convention on Biological Diversity The International Framework Convention on Climate Change and Kyoto Protocol

National Concern with Environmental Issues

The United Nations Convention to Combat Desertification Kuwait Regional Convention for Cooperation on the Protection of the Marine Environment from Pollution and its protocols The International Convention for the Prevention of Pollution From Ships the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter (London Convention) The International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties The International Convention on Civil Liability for Bunker Oil Pollution Damage

National Concern with Environmental Issues

The United Nations Convention on Law of the Sea The International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (IOPC Fund) The Convention on the Prior Informed Consent (PIC) The Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction; The International Convention for the Regulation of Whaling The International Plant Protection Convention The Convention on Persistent Organic Pollutants The Ramsar Convention on Wetlands The World Heritage Convention The Convention of Conservation of Wildlife and its Natural Habitat in the GCC Countries; The Uniform Regulations for the Management of Hazardous Medical Waste in GCC Countries.

GAB Environmental Auditing Efforts

The General Auditing Bureau (GAB) recognized the important role to play in environmental auditing as part of its auditing mandate and, therefore, was among the early SAIs that directed great attention to this issue, utilizing the experiences of other SAIs in environmental auditing, improving its capacity and implementing several auditing tasks that were aimed at supporting the state's efforts to preserve and develop the environment and protect it from pollution. Key GAB environmental auditing efforts may be summed up as follows:

GAB Environmental Auditing Efforts

I. Participation in regional and international committees and working groups on environmental auditing, II. Building GAB's environmental auditing capacity, III.Implementation of environmental audits.

Participation in regional and international committees and working groups on environmental auditing

1. INTOSAI's WGEA,
2. ARABOSAI's sub-committee on environmental auditing, 3. ASOSAI environmental auditing committees.
Through its participation in the above bodies, GAB contributed several working papers that detailed its environmental auditing experience. In addition, it reviewed the draft documents of these bodies, gave its feedback on them, and translated some of them

II-Building GAB environmental auditing capacity

Recognizing the novelty of the environmental auditing issue and the required skills and knowledge, GAB kept pace with the increasing interest in this issue through developing its capacity and utilizing advanced tools and the experiences of other SAIs. GAB adopted a number of programs and plans intended for building staff's environmental auditing capacity. These include:

II-Building GAB environmental auditing capacity

1. Holding an annual training course on environmental auditing 2. Giving staff members the opportunity to participate in internal and external symposiums and seminars, particularly on environmental management and auditing; 3. Utilizing publications of the working groups which GAB is member to administer courses on environmental auditing to GAB and ARABOSAI staff, including:

II-Building GAB environmental auditing capacity

3.1.Coast pollution control for the staff of GCC SAIs, Riyadh, 2001, 3.2.Waste management control for the staff of GCC SAIs, Riyadh, 2005,

3.3.Environmental auditing techniques for ARABOSAI staff, Riyadh, 2005

II-Building GAB environmental auditing capacity

4. Establishing an environmental auditing unit with the aim of coordinating with the concerned GAB departments regarding the selection of environmental topics and working out their relevant plans, coordinating GAB efforts and contributions to local, regional and international conferences, meetings, seminars and symposiums, creating and updating a database for environmental rules and regulations, and collecting and circulating EA reports and publications among GAB staff.

II-Building GAB environmental auditing capacity

5.Organizing a special symposium to highlight the importance of EA that

was attended by about 300 officers from audited ministries and government departments. Through the working papers presented and the opening speech by H.E. the President of the General Auditing Bureau, it highlighted the serious harm done to the environment because of the inequitable use of natural resources since the so-called Industrial Revolution and the ensuing air and soil contamination with toxic gases and deadly waste, as well as the removal of the plant cover and deterioration of natural resources in many developing countries due to attrition by the industrialized states

III-Implementation of environmental audits Article 110 of INTOSAI's Auditing Standards (INTOSAI's guidelines on auditing activities impacting the environment) classified entities which impact the environment as follows: 1. Entities which operations directly or indirectly impact the environment, whether positively or negatively. 2. Entities entitled to draft, regulate or influence environmental policies, locally or nationally. 3. Entities entitled to monitor the environmental activities of others

III-Implementation of environmental audits Like other types of auditing, environmental auditing operations can be implemented through verifying the following: 1.The various levels of environment-related administrative practices, whether these are environmental development projects or other projects that impact the environment, negatively or positively. 2.The efficient use of resources used for environmental projects. 3.Efficiency of programs/activities in achieving environment-related goals. 4.Monitoring compliance with environmental laws and regulations. 5. Auditing the performance of governmental environment-related programs

III-Implementation of environmental audits

a. This section presents example cases, auditing results and GAB recommendations b. These cases are selected based on Type of environmental impact of the audited body/activity, and Type of environmental standards national (General Environmental Regulations), or international used in the audit.

CASE 1: DESALINATION PLANTS

Rated environmentally, desalination plants belong to the third category (projects with hazardous and negative impacts on both the environment and humans). Due to these environmental impacts, GAB undertook an environmental performance audit of a desalination plants. Following are the key findings.

CASE 1: DESALINATION PLANTS

1. The desalination plant failed to reorganize its environmental conditions according to the granted deadline as stated in the GER, promulgated by Royal Decree No. M/34, dated 28/07/1422 H. Article 15 of GER states that: "Projects existing at the time of the publication of these regulations shall be given a maximum term of five years as of the date of validity of the regulations in order to reorganize their conditions accordingly. If the said term is not sufficient for projects of special nature, an extension may be granted by a decision from the Council of Ministers based on a proposal by the competent minister."

CASE 1: DESALINATION PLANTS

GAB made a recommendation that the concerned corporation conduct the necessary studies to determine an appropriate period for the reorganization of the environmental conditions of the plant pursuant to the above article of GER and presenting this study to the Council of Ministers for approval

CASE 1: DESALINATION PLANTS

2. The plant did not take recent environmental measurements of pollutants from operations, which is in violation of article 5-5 of GER, stating that "Public and concerned agencies and persons in charge of implementing or operating projects shall periodically provide the Competent Agency with a statement advising that they are in compliance with environmental standards and guidelines."

CASE 1: DESALINATION PLANTS GAB made the following recommendations: 1.To secure fixed and mobile instruments to monitor emissions from the plant. 2.To set up the necessary programs/plans for the regular monitoring of the work environment of the plant. 3.To conduct environmental studies for monitoring pollution sources and rates of pollutants emitted. 4.To conduct the necessary environmental studies to find ways to handle the various pollutants and eliminate/reduce them. 5.To provide the PME with the findings of these studies.

CASE 1: DESALINATION PLANTS 3. Due to the use of heavy fuel oil, gaseous emissions from the plant exceeded PME standards

GAB made the recommendation that alternative projects be identified to eliminate gasses emitted from the plant in a manner that is appropriate to the environment, under advice to GAB.

CASE 1: DESALINATION PLANTS

4. Water from cleaning reverse osmosis filters, containing iron and chemicals, and from chemical treatment is discharged into seawater ,which is in violation of article 13.1.4 of the Rules for Implementation of GER, stating that: "Prevent the discharge, in any quantity, of any type of solid or liquid wastes, substance, element, organic or inorganic compound that may be classified as hazardous into surface, ground or coastal waters.

GAB made the recommendation that the R&D center in the concerned corporation, in coordination with PME, conduct a study of the impact the plant has on the surrounding area of the sea and the area where water is discharged, and that ways need to be explored to reduce elements discharged into the sea, under advice to GAB.

CASE 1: DESALINATION PLANTS

5. Water from washing the boilers and air heaters containing unburned carbon is discharged into a hole inside the plant which is in violation of article 13.2.1 of the Rules for Implementation of GER, stating that: "To take all precautions required to prevent and control contamination and degradation of soil and land, remediate degraded and contaminated soil and use best available means and technologies for this purpose in accordance with the standards and criteria."

GAB recommended coordination with PME to obtain directions with regard to discharging that water into the hole, under advice to GAB.

CASE 1: DESALINATION PLANTS 6 . The rubber barrier, set up at water outlets as part of the plant's efforts to control incidents of oil leakage into seawater, lacks proper maintenance

In accordance with article 13.2.1 of the Rules for Implementation of GER, stating: "use best available means and technologies for this purpose in accordance with the standards and criteria," GAB recommended providing proper maintenance of the barrier, under advice to GAB

CASE 2: INDUSTRIAL CITIES

1 . Due to the hazards industrial cities pose to the environment and the impact on the environment of industrial wastes (gaseous, liquid or solid) associated with manufacturing and production, GAB implemented a performance audit of a Saudi Arabian industrial city in the field of environment protection. Following are the key audit findings:

CASE 2: INDUSTRIAL CITIES

2 . Leakage high resulted in high concentrations of ammonia in the underground water in the vicinity of fertilizer-manufacturing companies. (The table below presents analysis results of underground water samples taken in 2004.)
Sample well No./ammonia concentration rate (mg/l) 1 2 3 4 5 6 7 8 10 11 Maximum permissible limit: 3 mg/ml 955 797 799 62 2810 330 540 27.7 28.7 48.6 357 318 0.98 3.3 1049 25.03 0.177 64.66 70

GAB made the following recommendations: 1.To treat contaminated underground water without delay and bind companies responsible for the contamination to undertake such treatment and relevant costs, including a study of the environmental impacts and extent of contamination. 2. To bind companies to install environmental instruments and detectors to help detect and deal with leakages

CASE 2: INDUSTRIAL CITIES 3 . Irrigation water treated in the plant contained lower chlorine than the minimum permissible rate of 0.5 mg/l
Sample date 26/04/04 07/09/04 07/09/04 07/09/04 07/09/04 30/03/05 30/03/05 28/06/05 28/06/05 28/06/05 28/06/05 Result < 0.01 mg/l < 0.01 mg/l < 0.01 mg/l < 0.01 mg/l < 0.01 mg/l < 0.01 mg/l < 0.01 mg/l < 0.01 mg/l < 0.01 mg/l < 0.01 mg/l < 0.01 mg/l

GAB recommended that the issue be dealt with without delay, taking all the necessary measures that ensure that chlorine remains within the minimum permissible rate and that the use of substitute water be considered until the issue is solved.

CASE 2: INDUSTRIAL CITIES

4 . High concentrations of mercury were detected in coastal water in the vicinity of the city
Sample collection date Location 1 2 3 4 15/04/05 0.0033 0.0022 0.0005 09/05/05 0.0005 0.0009 18/08/05 0.0012 0.0003 0.0005 0.0002 31/08/05 0.002 0.0017 0.0026 0.0002 07/09/05 0.0028 0.0024 0.0024

Permissible rate: 0.0005 mg/l

GAB made the following recommendations: 1. To identify and deal with causes of increased mercury in coastal water. 2. To maintain regular monitoring of mercury in coastal water at short intervals. 3. To notify the PRE, which will enhance cooperation and help find appropriate solutions

CASE 2: INDUSTRIAL CITIES

5. The contractor used inaccurate, unapproved standards in some monthly reports

Pollutants SO2 H2S NH3 O3 365 ppb 40 ppb 1,800 ppb 240 ppb Measurement standard Standard used in report 140 ppb 30 ppb 2.6 ppb 120 ppb Approved standard

GAB made the following recommendations: 1. To hold the contractor responsible for the use of unapproved standards in the report and take the necessary procedures against them if alteration is proven intentional. 2. To verify monthly reports against the approved standards and demand the contractor to pay for any environmental damages caused by altered standards

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