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Peat is comprised of decomposed organic materials. Its moisture content and compressibility are extremely high, whilst its bearing capacity is very low. Dry peat is friable and highly susceptible to fire. The characteristics of peat are extremely dependent upon the conditions of its subsurface water. For this reason, it is suggested that the concept of physical management and monitoring in peat environment be focussed on the subsurface water issue.This paper describes the characteristics of peat and peat hydrology, the effects of some construction activities on peat and the mitigative measures expected to inhibit the problems induced by these activities. These measures are a part of the Environmental Monitoring and Management Programs being intensively carried out in Kurau area, Padang Island, Riau.Unless indicated otherwise, all observatory and experimental activities referred to in this paper were carried out between March 1989 and May 1990 during the development of Hudbay Oil Kurau oilfield.