6.5 Performance Bond

By definition, an environmental performance bond is a deposit that likely polluters and violators of environmental standards must pay to a certain environmental fund. These bonds are aimed at providing financial incentive to industry to adhere to environmental requirements. In order for environmental institutions to efficiently administer the bonds the following must be done:

 registration of facilities and activities that have or are most likely to cause significant impacts on the environment when operated or carried out in a
manner that is not consistent with good environmental practice; the government (environmental institutions) should have the power to require facilities included
in the register to post a bond as security for good environmental practice;
 further powers should be given to environmental institutions to confiscate a bond if it is satisfied that the operator of a registered facility has breached the provisions of an environmental statute; and,
 alternatively, environmental institutions may require a bond subject to EIA or licence requirements, and if the facility fails to comply with the EIA or licence requirements, then the bond may be confiscated.