Governance
Hydropower projects require successful management of both corporate governance - the set of internal rules and processes by which businesses are operated - and external governance, the political, institutional, legal and regulatory system within which the project is developed and operates.
Good corporate governance requires that key management processes are demonstrated, including corporate, political and public sector risks; compliance; social and environmental responsibility; procurement; ethical business practices; grievance mechanisms; transparency; and independent review. External governance risks that should be well-assessed include political risk, transboundary risks and corruption risks.
Understanding good practice
Adhering to good practice in governance will help a project developer, owner or operator to develop sound corporate business structures, policies and practices, as well as address transparency, integrity and accountability issues.
International industry good practice in governance for hydropower projects is defined in the Hydropower Sustainability Guidelines on Good International Industry Practice (HGIIP).
Assessing project performance
Two assessment tools are available to measure hydropower project performance:
In Hydropower Sustainability Assessment Protocol (HSAP), Governance is addressed in P-2 for the preparation stage, I-2 for the implementation stage and O-2 for the operation stage.
In Hydropower Sustainability ESG Gap Analysis Tool, Governance is addressed in Section 9.
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