Compensatory measures must be implemented with utmost caution, taking due account of the need to avoid potential adverse environmental impacts.

The effectiveness of measures should be monitored to ensure that targets are met and measures should be designed to be sufficiently flexible and responsive to new information obtained from such monitoring.

Decisions on compensatory measures should consider both the short term and long term effects of proposed activities on neighbouring ecosystems, including transboundary effects.

Accordingly, the Panel considers that compensatory restoration is appropriate in this case.

The Panel has been guided by the following principles in considering modifications to the compensatory measures proposed Measures that pose unacceptable risks of ecological harm should be avoided.

Measures that facilitate natural recovery processes should be preferred, and they should build on and enhance natural recovery that has already occurred.

Saudi Arabia also claims compensation for 45 square kilometres of roads that it excluded from restoration because they were used by Bedouin herders.

In assessing the appropriate compensatory restoration project for damage to shoreline resources, Kuwait considered six alternatives.

Iraq states that, in any case, all other intertidal habitat types have either recovered or will be addressed by primary restoration.

The Panel also finds that the primary restoration envisaged by the award in the fourth F4 instalment will not fully compensate for the loss resulting from this damage.

The Panel finds that the primary restoration envisaged by the award in the third F4 instalment will not fully compensate for the loss resulting from this damage.

Saudi Arabia proposes to establish 10 terrestrial nature preserves in unaffected areas to compensate for the loss of terrestrial ecological services from the time of the alleged damage until full restoration of services.

The Panel recognizes that, in carrying out the various compensatory measures, claimants may find it necessary to make further modifications to take account of new information or changing environmental conditions.

The Panel notes that the presence of mines and other ordnance initially prevented the removal of nearby oil contamination, and reconstruction operations in the oil fields further delayed remediation efforts.

This requires the use of flexible and site specific approaches, incorporating a broad set of techniques that are capable of addressing the wide range of habitats the nature, extent and types of damage and the different ecological conditions present.

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Rome, 27 30 September 2005

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With regard to the 45 square kilometres of roads that Saudi Arabia excluded from restoration because of their continued use by herders, the Panel considers that Saudi Arabia's decision has resulted in benefits instead of losses to Saudi Arabia.

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When the objectives and practices for ecological restoration are established by agreement between the interested groups, the success of the programme will depend more on maintaining their collaboration to achieve the agreed objectives than on the strength of enforcement measures.

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