These negative impacts are partially inevitable consequence of the mining process and partially can be attributed to unsustainable practice and negligence of operating company towards the local community. Therefore, any arrangement for exploration should address these issues and contain measures to prevent the negative impacts. The legal arrangement - both regulatory and contractual framework of mineral exploration should accommodate the preventive strategies.

But sadly, the provisions on environmental protection and social and human rights aspects of operation are largely absent in the existing legal and regulatory framework of Bangladesh on oil and gas exploration. It is mainly based on Petroleum Act, 1974 and Model Contract, 1997. The Act merely provides that it shall be the duty of any person engaged in any petroleum operation to consider factors connected with the ecology and the environment. But it does not impose any liability for potential damage to the environment due to negligent conduct of the operating companies. And although the Environmental Conservation Act, 1995 is a comprehensive law to deal with environmental protection in Bangladesh which requires all projects including the oil and gas projects to conform to environmental standards, but it is silent on many issues pertaining to oil and gas exploration.

The Act prescribes for obtaining environmental clearance certificate for establishment of any industry including natural resources exploration and for this purpose, the law makes it mandatory to carry out environmental impact assessment. One of the striking features of this Act is making provision for corporate environmental crime, which is defined as violation of any provision of the Act or failure to perform duties in accordance with notice by the companies. Despite this provision, the Act has failed to effectuate the stated purpose of environmental protection, and hold accountable companies for environmental pollution as environmental regulations are never enforced against multinational companies operating in Bangladesh due to lack of effective enforcement capacities of regulatory bodies or simply environmental issues are overlooked for attracting investment.

Considering the fact that strong regulatory and contractual regime on environmental protection and social issues can prevent such negative impact, it is imperative that existing laws should be amended or a comprehensive new legislation on mineral exploration should be adopted taking into consideration the emerging sustainable practices. According to internationally accepted practice in mineral industry, the following strategies are discernible in this area:

Environmental Impact Assessment (EIA): This has emerged as the most important trend in natural resource development projects. Use of EIA in mineral development project is widely required by national and international environmental law, industry guidelines, international financial organisations and lending agencies for project approval and financing. A sound EIA should be based on analysis of comprehensive baseline data about existing environmental and socio-cultural conditions of the proposed project, and it should assess the full range of possible environmental and socio-cultural impacts that could result from the operations and identify measures to mitigate the adverse impacts; and suggest alternatives after comparing environmental costs with economic and social benefits.

Due diligence: It is commonplace that a company's failure to exercise due diligence in taking measures to prevent pollution can incur environmental liability. The concept of 'due diligence' refers to the conduct that a reasonable and prudent operator would undertake under a particular circumstance. It helps to ensure that companies have adequately identified and assessed the impacts and risks associated with mineral projects. It also helps them to identify appropriate risk management strategies to deal with negative impacts of operations.

Sound environmental management: It signifies a set of rules, procedures, standards and practices for internal regulation of companies' activities in the environmental sphere and sets out targets of environmental performance, regulatory compliance and internal environmental standards for the companies. A well crafted environmental management system (EMS) can provide a framework for integration of environmental management into the company's operations; help the company to identify and reduce environmental impacts; assist the company to set and meet its own environmental targets; and facilitate company managers to comply with existing legal requirements. The emerging practice EMS in the mineral industry testifies to its proven efficacy in preventing pollution and in avoiding future liability for environmental damage.

Environmental audit: The environmental audit proffers a concrete mechanism to continually improve environmental standards and performance of the company. In contrast to environmental impact assessment which focuses on the future impacts of the proposed project, environmental audit is concerned with the existing operations of a company and measuring a company's environmental performance.

Social planning: Considering the fact that failure to understand community needs and aspiration at the initial stage of the project can sow the seeds of social tensions and potential conflict in the future, social planning and should be an integral part of the project design and implementation. Carrying out social planning to address social and human rights issues in the mineral project is important for increasing the public acceptability and success of the project, obtaining a licence to operate, and reducing risks of potential conflict and consequent uncertainties.

Social impact assessment: Apart from social planning, a social impact assessment for the project is crucial to understanding the social and human rights risks the company may face. A social impact assessment is the main instrument for balancing the social concerns on the one hand and the economic gains on the other. The requirement of carrying out an independent and comprehensive social impact assessment in all phases of contract performance and the continuing process of monitoring social and human rights developments, which may arise as a result of exploration, can be a valuable tool for ensuring sustainable exploration. While it should be carried out on a mandatory basis in all mineral projects, the level of assessment can depend on the sensitivity of the project location. Extensive impact assessment is specially needed for projects where indigenous peoples live.

Participation of the indigenous/local community in project: Currently, most of the mineral contract negotiations are carried out in the binary process in which the government and company participate to the exclusion of local community or indigenous people. In view of the fact that total exclusion of host communities in the natural resource development is one of the important underlying causes of subsequent conflict. Public participation has emerged as the most significant new trend in natural resource development in the twenty-first century. Participation of community in mineral development becomes critically important when such development affects the traditional way of life of local and indigenous people in many ways. Accommodating their views in project designing, land use and implementation can prevent such negative impacts and overcome subsequent public outrage towards the project.

Payment of fair compensation: Payment of compensation is one of the most contentious issues pertaining to conflict between the affected community and the state vis a vis the company, the resolution of which is necessary for a stable contractual relationship. Currently compensation is payable to the individual landowners for acquisition of surface land and it remains the only mechanism to provide the direct fiscal benefits to the local communities in the exploration areas. But in most cases, amount of compensation is not fair enough to sustain evicted families and re-settle them. Compensation must be adequate and prompt not only in terms of loss of land but also in terms of loss of livelihood. Moreover, emerging norms indicate that a portion of revenue generated from mineral exploration should be shared with indigenous or local community to compensate them for the accompanying negative social, economic and environmental impacts.

The above strategies are not only intended for host state's benefit, but also for companies, who have considerable stake in sustained operation of projects from which they can gain their envisaged economic benefits. The legal and contractual framework for the exploration of mineral resources should incorporate such preventive strategies to avoid negative environmental and social impact to a significant extent, if not fully.

Dr. Abdullah Al Faruque is Assistant Professor, Department of Law, University of Chittagong. Can be contacted at: faruquecu@yahoo.com