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BBOP Pilot Project Case Study – Ambatovy Project
6. Business Case for a
Biodiversity Offset
The vision of the Ambatovy Project is stated as follows: The Ambatovy partnership will develop and operate a
sustainable nickel / cobalt mining and processing enterprise that significantly contributes to our host country,
delivers outstanding safety, environmental and social records and generates attractive economic returns.
The environmental strategy designed to honour the Project’s vision to deliver outstanding environmental
records consists of:
Ensuring full regulatory compliance and conformity with international loan agreements;
Minimising residual impacts through the stringent application of the mitigation hierarchy;
Reducing environmental risks through dynamic management guided by Malagasy know-how and
stakeholder consultation; and
Producing positive
CONSERVATION OUTCOMES
on biodiversity through the offset programme that aims at
achieving no net loss on biodiversity, and possibly net gain, in order to sustain ‘a good citizen project’
status in a host country recognised as constituting a biodiversity hotspot.
The business benefit of its offset programme is essentially linked to risk management. As a world class mining
project, Ambatovy and its shareholders believe in demonstrating good environmental management practices
to secure its license to operate. To Ambatovy, a license to operate consists of the permanent support of civil
society, local communities, national and international NGOs and governmental authorities in the manner
social and environmental affaires are managed. Because Madagascar’s biodiversity is universally considered
of utmost importance by national and international
STAKEHOLDERS
producing positive conservation outcomes
that offset the residual impacts on biodiversity is a critical component of this license to operate.
It is recognised by the Project’s shareholders that the Ambatovy offset programme has provided additional
confidence to the lender banks in securing access to capital. This has created reputational benefits to the
shareholders that can result in easier access to land, human and financial resources for future projects in
Madagascar and elsewhere in the world. It is expected that this approach will result in competitive advantage
for the shareholders in relation to other governments.
Conversely, bad environmental practice is bound to produce higher operating costs, expensive permit delays,
liabilities, and lost revenues. Consequently, engaging in good environmental practice will maximise the overall
long-term economic return to shareholders, stakeholders and government.
It is worth mentioning that the Malagasy governmental policy, through the Madagascar Action Plan, refers to
biodiversity offsets. The Ambatovy offset programme under the BBOP guidance is thus aligned with
Madagascar’s endeavour to protect its unique biodiversity heritage.
