Abstract Since the 1970s, countries have protected the environment by means of various legal instruments, including environmental approvals and licensing. An environmental task force created under the Hydropower Agreement was appointed by the IEA to compare and determine the efficiency and effectiveness of such mechanisms, as they apply to each phase of hydropower development (policy level, project planning, project implementation, plant operation and plant upgrading, relicensing and decommissioning). It also examined whether legal mechanisms respected ethical principles as well as the protection of the environment, human rights and the right to economic development. This paper reports on the essential findings outlined by the task force. It discusses common deficiencies in national legal mechanisms relating to hydropower development and also proposes practical solutions and potential improvements. The main conclusion of this study is that environmental approval and licensing processes have become excessively rigid and cumbersome in many countries and that governments need to rethink the approval process and reform the legal and regulatory frameworks. Governments should consider a mechanism such as a strategic environmental assessment implemented at the policy level and processes that systematically integrate information gathered by previous monitoring studies. And since hydropower development raises ethical dilemmas that are difficult to reconcile, some decisions should be made by the legislative branch and not by the executive branch or other decision-making body. Moreover, proponents should adopt a code of conduct based on ethics and principles of international environmental law.