LAO PDR: SECOND ROAD MAINTENANCE PROJECT (RMP-2) Safeguards Policies, Social and Environmental Issues Summary (UPDATED for RMP-2 in June 2004)

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized A) INTRODUCTION LAO PDR: SECOND ROAD MAINTENANCE PROJECT (RMP-2) Safeguards Policies, Social and Environmental Issues Summary (UPDATED for RMP-2 in June 2004) The Government of Lao PDR (GOL) has been implementing the Road Maintenance Project (RMP) with support from the World Bank (WB). Arising from the success of the project, the Second Road Maintenance Project (RMP-2) has been proposed to expand the work nation-wide and to focus on the rehabilitation, periodic maintenance and routine maintenance of national and provincial roads in all 17 Provinces and one Special Zone of the country. During the preparation and appraisal of RMP-2 by a Bank mission, the management of the environmental and social impacts of the first RMP was reviewed with the objective of ensuring improved performance in these key areas in RMP-2. The main areas of concern observed during civil works undertaken in RMP1 included the following: the lack of supervisory budget for environmental and social impact monitoring; the limited capacity of the implementing units responsible for social and environmental performance (ESD and DTCPC); potential adverse impacts in sensitive areas; and compliance performance of contractors, especially in the areas of road safety, dust, disposal of wastes, location and treatment of borrow pits/quarries, and consultation with local communities. Other concerns noted are related to the post-maintenance phase of the project and include dust re-suspension, road safety, community participation, and encroachment of road right-of-way. To address these concerns, the Ministry of Communication, Transportation, Post and Construction (MCPCT), assisted by consultants, has conducted an initial environmental evaluation (IEE) for RMP-2 and prepared a Strategic Environmental Assessment (SEA) report presenting the findings of the IEE and a strategic plan to address key issues. The Environmental Guidelines for Road Projects (EGRP) prepared in 1999, which have been applied to RMP-1, have also been reviewed and updated (see Section C below). Although new adverse impacts are generally not expected to arise from most work undertaken in RMP-2, the Ministry is also proposing an additional precautionary measure in the form of a safeguard screening framework (see ESSF in Section C) that would be applied to all the civil work subprojects for RMP-2. The EGRP and the RCG have been reviewed and will become an integral part of the new screening procedure. Finally the Ethnic Minority Development Policy (EMDP) framework has been developed for RMP-2 (see Section B below), and this will be applied where appropriate. To ensure consistency of the Safeguard Policies to be applied in RMP-2, the Safeguard Policies proposed and publicly announced in late February 2004 have been updated as shown below. The updated Safeguard Policies for RMP-2 now comprise the ESSF, the updated EGRP, the RCG, and the EMDP. These documents will be publicly disclosed (both in English and Lao languages) before June 14, N:\LAO PDR\RMP2\Env and social\sea\appendix 1 sea part A\Final Safeguards Policies (updated) June5.doc 1

2 B) SOCIAL ASPECTS 1. Land Acquisition and Resettlement The Project is not expected to cause land acquisition nor resettlement. However, minor infrastructure or the use of some areas as deposits may result in unexpected low-level impacts/damages to parcels of land or buildings. Road maintenance activities may also require the temporary occupation of plots or may cause crops or income losses to settlers along the roads. 1.1 Resettlement and Compensation Guidelines In order to ensure that impacts are compensated in compliance with World Bank policy, Resettlement and Compensation Guidelines (RCG) specifying eligibility and entitlement principles have been prepared based on a Draft decree by the Prime Minister prepared by the national environmental protection agency (STEA). The RCG fully comply with OP/BP 4.12 and reflect Lao laws and regulations. The RCG text (see Attachment 1) will be translated in Lao and distributed as part of the Operations Manual to the local agencies responsible for the maintenance works. 1.2 Implementation The compensation of impacts will be implemented and managed by the Districts. The Environment and Social Division (ESD) of the Department of Roads will have a supervisory role and will ensure that the provisions contained in the Resettlement and Compensation Guidelines are implemented. 1.3 Public Information and Consultation MCTPC will ensure that all districts and villages are properly and timely informed of the road maintenance activities to be carried out. MCTPC will also ensure that the provisions of the RCG are effectively disclosed to the population living along the roads targeted by the project by means of a public information campaign. All communities along the roads targeted by the project will be consulted by means of ad hoc meetings regarding their priorities and needs in matters of road maintenance. 1.4 Complaints and Grievances Complaints and grievances at the local administrative level will be dealt with by an independent committee including leading members of the local communities. In case complaint and grievances issues are appealed they will be dealt with in the first instance by the district administration and in the second instance by the provincial authorities. Project affected persons will be exempted from all administrative and legal fees incurred in pursuant to the grievance redress procedures. 1.5 Voluntary Contributions Where local communities elect to make voluntary contribution of affected land without compensation, this should be acceptable only for marginal impacts (partial impact on land without causing any displacement or impact on structures, and with remaining assets viable for continued use) and only when benefits to affected people can be assured. The process of consultation with potential contributors should, be conducted in an open and transparent manner by district officials and decisions for 'voluntary' contributions should be based on the 'informed choice' of affected people. People who elect to make voluntary contributions must be informed of their rights to compensation, and the process and decisions must be documented by the district authorities N:\LAO PDR\RMP2\Env and social\sea\appendix 1 sea part A\Final Safeguards Policies (updated) June5.doc 2

3 2. Impact on Ethnic Minorities The project is not expected to generate adverse impacts on ethnic minorities living alongside the roads or in the vicinity of the project area. The experience from provinces during RMP1 generally reflects the fact that project impacts are not ethnic group-specific but relate to all communities in the project area. However, given the nationwide coverage of RMP-2 and in view of the large presence of ethnic minority communities in parts of the country where the project works will be undertaken, an Ethnic Minorities Development Policy (EMDP) framework has been prepared (see Attachment 2) as required by the Bank s OD Ethnic Minorities Development Policy Framework The broad objective of the EMDP is to ensure that ethnic minority communities do not suffer adverse effects during the project operations and that they receive culturally compatible social and economic benefits. As part of the framework, the EMDP includes mitigation measures and assistance aimed at institutional strengthening and capacity building of these communities. The framework also specifies community participation and consultation and grievance redress mechanisms that are developed in culturally appropriate ways. 2.2 Ethnic Minorities Action Plan In conformity with OD 4.20, the EMDP will guide the preparation of separate and free-standing Ethnic Minorities Action Plans (EMAP) as appropriate to meet the needs of the Bank s policy on Indigenous Peoples. C. ENVIRONMENTAL ASPECTS 1. Potential Negative Impacts and Safeguard Policies Road maintenance operations may potentially affect the environment in a number of ways. For example, environmental concerns can stem initially from poor road design and planning, mobilization of construction crews, construction camp maintenance, storage and handling of wastes and hazardous materials, location of borrow pits and quarry sites, associated earthworks, and drainage design. Poorly executed maintenance activities may create localized soil erosion problems affecting streams or other water bodies; lack of clear plans for environmental management will create opportunities for inappropriate disposal of solid waste materials and could lead to lack of controls of noise and dust which can create a nuisance for individuals and communities. Better maintained roads could lead to increased accessibility in remote areas thus increasing the potential for uncontrolled resource extraction and land conversion along the road sides. Concern over such issues are heightened in areas where roads pass through protected areas or other sites of a sensitive ecological nature such as wetlands, streams or forest areas. The alternative to road maintenance program is basically a no maintenance approach. This scenario also has adverse environmental implications. Lack of maintenance could generate unstable road bed conditions leading to localized erosion and drainage problems. In areas of high rainfall and geologic instability, these risks can be substantial. Road maintenance programs also provide an opportunity to address some basic design problems which can create drainage and erosion problems. 1.1 Environmental Category and Justification The RMP-2 is an expansion of the RMP1 and no new major environmental issues are anticipated. RMP1 experience has suggested that most of the potential impacts during maintenance works will N:\LAO PDR\RMP2\Env and social\sea\appendix 1 sea part A\Final Safeguards Policies (updated) June5.doc 3

4 be localized, temporary, and can be mitigated through the application of the EGRP and the RCG adopted in the RMP-1. The maintenance program will be on the existing roads and the incremental induced effects will be minimal. No new road construction will be undertaken under RMP-2 and the ESSD screening framework (Section C) will ensure that appropriate actions will be undertaken for the subprojects involving sensitive areas, land acquisition, or indigenous people. 1.2 Safeguards Arrangements under RMP-2 Based on the Strategic Environmental Assessment (SEA), maintenance activities to be funded under the project will be screened using the screening criteria specified in the ESSF by the subproject proponent in close consultation with DOR s environmental management unit (ESD). This is to ensure that the proposed maintenance activities will have no adverse effect on a number of environmental (and social) areas of concern such as protected areas or other sensitive sites which fall outside of protected status. To ensure appropriate safeguard measures are put in place, the EGRP (1999) has been updated (see Attachment 3) to facilitate effective application of the guidelines. Due consideration was given to improve consultation and information disclosure, ensure close supervision and monitoring of the contractor s performance, and address the impacts after maintenance operations. Specific guidelines and/or manuals, including monitoring/reporting requirements and specific criteria for maintenance operations in sensitive areas (ecologically and socially), will be developed. Training on safeguard operations for central and provincial staff and contractors will also be provided, This includes increasing awareness and capacity building for senior management. Results of the safeguard screening and application of the guidelines and frameworks will be included in the semi-annual report. The EGRP during the construction phase will form the basis of contractual obligations to be carried out by road maintenance crews. Contracts for maintenance will include specific clauses for environmental protection based on the guidelines. Supervision and monitoring of environmental performance will be carried out in the field by the project supervising engineer with assistance from ESD. Periodic audits will also be carried out during regular Bank supervision missions. The ESD of DOR will also prepare periodic (semi-annual) reports on the adherence to environmental measures under the project. 2. Institutional Capacity for Environmental Safeguards MCTPC recognizes the importance of environmental protection and has made basic commitments to addressing environmental concerns. In 2001, an Environmental and Social Division (ESD) was formally created in DOR to assist with project screening and to evaluate environmental risks of proposed projects. In 2003, a ministerial regulation on EA procedure was established and ESD is currently developing guidelines and procedures to facilitate effective execution of this regulation. Technical assistance has been provided to ESD and the national environmental agency (STEA) in the preparation of the guidelines related to the EIA process, including consultation and training. At national level, the Government is currently processing enactment of the Resettlement and Compensation Guidelines, including a policy to address issues related to ethnic minorities, to be part of the body of national regulations. Capacity enhancement at local level on the environmental and social safeguards work in all 17 provinces represents a substantial challenge in the new phase of the RPM2 program. There is also need to ensure that the environmental and social requirements are fully integrated into DOR s operational procedures. It is the responsibility of MCTPC (not only ESD) to ensure effective implementation of potential negative impacts at all stages (planning and pre-construction, N:\LAO PDR\RMP2\Env and social\sea\appendix 1 sea part A\Final Safeguards Policies (updated) June5.doc 4

5 construction, operations). To ensure effective implementation of safeguards for RMP-2, technical assistance will be provided to ESD and DCTPC to strengthen: (i) supervision and monitoring of safeguard compliance; (ii) consultation with local communities and authorities; (iii) mainstreaming of safeguards into DOR operations, and (iv) knowledge related to construction resource mapping, community inventory in the road right-of-way, and related social activities. 3. Public disclosure The updated Safeguard Policies as well as the SEA report will be disclosed (both in English and Laos) to the public in Vientiene (at MCTPC s office and the World Bank office) as well as in MCTCP s provincial offices (i.e. DTCPC offices) by June 14, D. ENVIRONMENTAL AND SOCIAL SAFEGUARDS FRAMEWORK (ESSF) Objectives. The ESSF aims to ensure that (a) the Project activities do not create or result in serious adverse impacts on the local community and environment, (b) the mitigation plan is carried out effectively, and (c) possible complaints from the local government authorities and community are minimized. The ESSF has been developed based on the lessons learned during supervision of RMP1 and it may be modified or revised when necessary with close consultation with the Bank. Strategies. To achieve these objectives, the following actions will be undertaken: All proposed subprojects will be screened by ESD through the screening process described below and the results will be documented and properly kept for review by the Bank. Appropriate mitigation measures will be included in the bidding document (BD) and contract document (CD); compliance with these measures will be monitored, and the results will be documented and properly kept for review by the Bank. ESD will supervise and monitor the overall activities and prepare a semi-annual report on the application of the EGRP and RCG guidelines and other frameworks and action plans during the planning, design, and construction phase of the project. ESD will also develop the reporting requirements and procedures to ensure compliance of the contractors; conduct public consultation and public awareness programs, and carry out periodic training for field engineers and contractors as appropriate. A semi-annual report on the implementation of the guidelines will be submitted to the Bank. Assumptions. The screening is based on the assumptions described below. If this is not the case, the Bank will be informed and consulted. The main civil works to be carried out under RMP2 will be limited to activities typically defined as routine and periodic maintenance (resurfacing and bridge repairs; flood repairs or emergency maintenance; regular upkeep of safety features and road signs, etc.) and small rehabilitation works to strengthen the road, repair structural defects, restore the road to its initial condition, make small changes or improvements to alignment, and small construction of drainage and footpaths. If large-scale rehabilitation works are involved, DOR will inform the Bank before proceeding with the contract. The works will be carried out within the existing right of way (ROW) and will not involve relocation and land acquisition. If land acquisition and relocation is needed, the Bank will be informed, and the Resettlement and Compensation Guidelines (RCG) will be applied. N:\LAO PDR\RMP2\Env and social\sea\appendix 1 sea part A\Final Safeguards Policies (updated) June5.doc 5

6 The project-related impacts are site specific; few of the effects are irreversible; and appropriate mitigation measures can be developed and implemented by the contractors and MCTPC. Screening procedures. The screening process is not intended to prohibit DOR from carrying out maintenance-related works in sensitive areas but is meant to ensure that proper mitigation measures are prepared and carried out effectively to avoid adverse impacts on the affected population, natural environment and cultural heritage. If the subproject is located in or near protected areas or other critical habitats or cultural property, an Initial Environmental Examination (IEE) for the subproject will be prepared and carried out in close cooperation with ESD and other concerned agencies and in consultation with the Bank. The civil works contracts for office building and construction of weigh stations will also be subject to this screening. The ESSF will be conducted by the subproject administrator (RAD, LAD, DTCPC, etc.) during the screening and preparation of the Annual Work Plan (AWP). Steps and actions for the screening are presented in Table 1. Key steps of the ESSF is shown in Figure 1. Table 1. Screening Process for Each Subproject Screening check list Yes Actions to be undertaken Involves land acquisition, relocation, indirect loss of access and assets, and has adverse impacts on ethnic minorities Scale of the civil works is larger than those identified for maintenance or involves new construction The project site is located near villages, residential, or other sensitive areas (schools and hospitals) and dust and road safety issues will significantly affect the human health/life Y Y Y Planning/Project engineer will consult ESD and apply RCG, EMDP. If the impacts are significant, ESD seeks Bank clearance before selection of the subproject. Extensive consultation with affected population is expected during the planning and implementation Consult ESD to apply appropriate guidelines. If the impacts are significant, ESD seeks Bank clearance before selection of the subproject. If new road construction is required, EA study will be required and Bank clearance will be necessary Planning/Project engineer will consult ESD and include appropriate mitigation measures during planning and design stages. DOR and ESD will establish criteria and technology appropriate for dust suppression in the sensitive areas. {preparation of action plan to mitigate impacts and consultation with local authority and communities will be necessary). Periodic monitoring of air quality, noise level, and opinions of local authority/community may be necessary. The issues and actions will be included in the EMP and recorded in the progress N:\LAO PDR\RMP2\Env and social\sea\appendix 1 sea part A\Final Safeguards Policies (updated) June5.doc 6

7 Screening check list Yes Actions to be undertaken report and/or the semi-annual report. The project site is located in or less than 50 m away from protected areas, areas of cultural heritages; or involves the use of large amounts of toxic chemicals or herbicides. Large amount of materials will be needed Fully comply with the assumptions specified above and a contractor will be hired to carry out the works *If No go to next step Y Y Y Planning/Project engineer will consult ESD to ensure that the mitigation measures are adequate to address the issues. Use of borrow pits and quarry sites and operation of asphalt plants in the sensitive areas must be prohibited. Specific requirements may be required to minimize the potential impacts. A standard clause should be included in all construction contract regarding the procedures to be followed in the event culturally significant sites are found. Planning/Design engineer will consult ESD with respect to locations and practices of material excavation. MCTPC (subproject administrator) prepares an action plan to mitigate potential impacts of the subproject in line with the EGRP and disclose the plan to the public (consultation with local authority and local community is encouraged). Endorsement of ESD will be necessary. MCTPC includes the environmental requirements in the bidding/contract document and ensures compliance of the contractors during the bidding process. Field engineers will closely monitor the contractor performance and document it in the supervision/progress report. Recommendations that are useful to increase efficiency and effectiveness of the mitigation plan should be provided. ESD will periodically review the supervision report, periodically inspect the contractor performance, conduct public consultation, and prepare a semi annual report to send to the Bank. N:\LAO PDR\RMP2\Env and social\sea\appendix 1 sea part A\Final Safeguards Policies (updated) June5.doc 7

8 Attachment 1. RESETTLEMENT AND COMPENSATION GUIDELINES (RCG) FOR RMP-2 PART I. INTRODUCTION 1. Background 1.1 Development projects, even when undertaken in the public interest, have social impacts and associated costs on individual persons, communities, and the environment. Said adverse social impacts may be any or a combination of the following: loss of abode, loss of fixed assets, loss of income and/or employment, displacement, separation of family members, disintegration of communities, etc. These impacts may be marginal or severe and/or irreparable. Yet, these adverse social impacts are often borne by projectaffected persons (APs) not by their own wish but involuntarily. 1.2 The resettlement efforts to mitigate adverse social impacts of development projects need to be carried out within an overall legal framework following clearly defined resettlement principles and operational procedures. Additionally, the Lao PDR's policy on poverty reduction needs to be integrated into resettlement efforts, with special attention to vulnerable groups. In view of the Government's efforts to give impetus to its development efforts and to deal with adverse social impacts and implementation problems, there is an urgent need for a national policy on involuntary resettlement and compensation with an aim to: (i) integrate social dimensions in development projects, (ii) address measures to mitigate adverse social impacts with a particular focus on vulnerable groups, and (iii) have a comprehensive approach to address social issues. 1.3 Although land acquisition and relocation are not expected in the Road Maintenance Program (RMP), as a safeguard measure, a Resettlement and Compensation Guidelines (RCG) was prepared and applied successfully in RMP-1. The RCG will be applied in RMP-2 and is considered as an integral part of the Environmental and Social Safeguards Framework (ESSF). 2. Definitions 2.1 Definitions of key terms are provided as follows: a) Compensation. Compensation means payment in cash or in kind for an asset to be acquired or affected. by a project at replacement cost. b) Cut-off Date. 'Cut-off date' is the date prior to which the occupation or use of the project area makes residents/users of the project area eligible to be categorized as affected persons. In many projects, the cut-off date coincides with the commencement of the census of affected persons within the project area

9 boundaries. Persons not covered in the census are not eligible for compensation and other entitlements. c) Entitlements. Range of measures comprising compensation, income rehabilitation assistance, transfer assistance, income substitution, and relocation, which are due to, affected people, depending on the type and degree of their losses. to restore their economic and social base. d) Implementing Agency (or Project Proponent/Project Authority/Executing Agency) is the divisions/offices/units of the Ministry of Communication, Transportation, Post and Construction (MCTPC) who is responsible for planning, design and implementation of a development project. e) Land Acquisition means the process whereby a person is compelled by a public agency to alienate all or part of the land a person owns or possesses, to the ownership and possession of that agency, for a public purpose in return for compensation. f) Project Affected Person (PAP/AP) includes any person or persons, household (sometimes referred to as project affected family), a firm, or a private or public institution who, in the context of acquisition, or repossession, of assets or change in land use, as of the cut-off date, on account of the execution of a development project, or any of its subcomponents or part, would have their: i) Standard of living adversely affected; ii) Right, title or interest in all or any part of a house, land (including residential, commercial, agricultural, plantations, forest and grazing land) or any other moveable or fixed assets acquired or possessed, in full or in part, permanently or temporarily adversely affected: or iii) Business, occupation, place of work, residence, habitat or access to forest or community resources adversely affected, with or without displacement. AP means persons or affected household and consists of all members of a household residing under one roof and operating as a single economic unit, who are adversely affected by a project or any of its components. For resettlement purposes, affected persons will be considered as members of affected households. g) Rehabilitation means assistance provided to APs seriously affected due to the loss of productive assets, incomes, employment or sources of living, to supplement payment of compensation for acquired assets in order to improve, or at least achieve full restoration of living standards and quality of life to preproject level. h) Relocation means the physical shifting of an AP from his/her pre-project place of residence, place of work or business premises.

10 i) Replacement Cost is the amount needed to replace an asset and is the value determined, as compensation for Agricultural and the pre-project or pre-displacement, whichever is higher, market value of land of equal productive potential or use located in the vicinity of the affected land, plus the cost of preparing the land to levels similar to those of the affected land, plus the cost of any registration and transfer taxes; ii) Land in urban areas, it is the pre-displacement market value of land of equal size and use, with similar or improved public infrastructure facilities and services and located in the vicinity of the affected land, plus the cost of any registration and transfer taxes, iii) Houses and other related structures based on current market prices of materials, transportation of material to construction site, cost of labor and contractor's fee, and cost of any registration and transfer taxes. In determining replacement cost, depreciation of the assets and value of salvaged building materials are not taken into account and no deductions are made for the value of benefits to be derived from the project, iv) Crops, trees and other perennials based on current market value; and v) Other assets (i.e. income, cultural, aesthetic) based on replacement cost or cost of mitigating measures. j) Resettlement refers to all measures taken by the Project Proponent to mitigate any and all adverse social impacts of a project on the APs, including compensation for lost assets and incomes and the provision of other entitlements, income restoration assistance, and relocation, as needed. k) Social Assessment (SA) or Social Impact Assessment (SIA). SA or SIA is a framework for incorporating social analysis and participatory process in project design and implementation. l) Vulnerable groups. These are distinct groups of people who might suffer disproportionately or face the risk of being marginalized from the effects of resettlement and specifically include: (i) female headed households with dependents, (ii) disabled household heads, (iii) households falling under the generally accepted indicator for poverty, (iv) elderly households with no means of support and landlessness, (v) households without security of tenure, and (vi) ethnic minorities.

11 PART II. SCOPE, ELIGIBILITY & LEGAL FRAMEWORK 3. Scope of the Policy The Policy would be applicable to all development projects carried out by public and private sector, regardless of funding sources, resulting in acquisition, of land and/or other assets, change in land use and restriction on access to community resources affecting community livelihood and income sources. 4. Eligibility. All people residing, cultivating or making a living within the area to be acquired for a project as of the formally recognized cut-off date should be considered as project affected persons (APs) for purposes of entitlements to compensation, resettlement and rehabilitation assistance in accordance with the policy, and lack of legal title to the land or structure affected by project should not bar any person for such entitlements/assistance. 5. Legal Framework. The Policy is based on the following laws and decrees that provides legal framework for resettlement: The Constitution of the Lao PDR The Land Law No. 01/97 SPS, dated 12 April The Forestry Law No. 01/96, dated 11 October The Water and Water Resources Law No. 02/96, dated 11 October The Environmental Protection Law No. 02/99 SPS, dated 3 April The Electricity Law No. 02/97 SPS, dated 12 April The Road Law No. 04/99 SPS, dated 03 April The Mineral Resources Law (April 1997). The Town Planning Law No. 03/99 SPS, dated 03 April Regulation 1266/95 of MCTPC on Valuation of Vehicles, Houses, Built Structures and Household Facilities for Government Employees and Personnel PART III OBJECTIVES 6. Objectives The objectives of the Policy include the following: Projects are designed so that resettlement is avoided or, if unavoidable, minimized by examining all design options available to the project and the losses incurred by affected people are redressed such that APs share project benefits, assisted to develop their economic, social and cultural potential in order to improve or at least restore their incomes and living standards to preproject levels and are not worse off than they would have been without the project.

12 Attention is paid to affected ethnic minority and other vulnerable groups, especially the poor, in order to enhance their future prospects and for poverty alleviation. The entire resettlement process is carried out through a meaningful involvement of project affected communities, and their existing social and cultural institutions are supported to the greatest extent feasible. Resettlement is envisioned and carried out as an integral part of the development project. PART IV. COMPENSATION AND ENTITLEMENTS. 7. Compensation Principles 7.1 APs will be provided with compensation for their lost assets affected in full or in part, at full replacement cost. 7.2 Where significantly large or entire land holding affected by a project, the general mechanism for compensation for affected agriculture, residential or commercial land will be through provision of "land for land" arrangements of equivalent size and productivity and at location acceptable to the AP. In case suitable land is not available, and at informed request of the AP cash compensation at current market value will be provided in addition to the assistance for relocation. However, when the portion of the land to be lost represents 20% or less of the total area of the landholding with remaining area viable for continued use, where the livelihood is not land-based, cash compensation a t full replacement value for the affected portion will be provided. In cases where only part of the land holding is affected but the remaining land becomes economically unviable, the AP will be entitled to surrender the entire holding and to compensation for entire holding at full replacement value, or land-for-land option. 7.3 If the house or structure is only partially being affected by the Project and the remaining structure is rendered unviable or in area less than the minimum house size under the prevailing standards, the AP will be entitled to surrender the entire structure and to compensation for the entire structure at full replacement cost without depreciation or deductions for salvaged material. 7.4 In case of APs affected by partial loss of structures and the remaining structures are viable for continued use, they will be entitled to assistance in cash or material for restoration of the remaining structure in addition to the compensation at replacement cost for affected portion. 7.5 APs whose land or assets are temporarily taken by the works under the project will be fully compensated for their net loss of income, damaged assets, crops and trees, as the case may be. Assets which are only temporarily affected or inoperable, will be compensated at 10% of the replacement cost of affected assets provided that such assets or properties are required by the project for a maximum of 6 months. In case the assets are required by the project for periods longer than six months, the amount of

13 compensation should be negotiated with the owner of said property, and the project shall insure that the land and structures are returned in its pre-project state. 7.6 Tenants, who have leased a house / structures for residential or other purposes and affected by the project, will be provided with a cash assistance equivalent to three months M1 allowance and, expenses to cover for other losses, and will be assisted in finding aiterne6 rental accommodation. 7.7 APs without any legal title or ownership right to the affected land and assets they occupy should be compensated for their lost assets at replacement cost. If needed such APs wig b provided additional assistance to ensure that they are able to improve their household income levels and are not worse-off due to the project. 7.8 All previous claims and unresolved issues related to tenure status and ownership of land art other assets on each sub-project or components will be resolved prior to initiating any new fart acquisition measures on the respective sub-project or component. 8. Other Assistance During Relocation and Transition Period 8.1 APs displaced and severely affected due to the loss of incomes and means of livelihood would be provided with a food allowance and suitable development assistance after displacement during the transition period until they are able to restore their incomes a livelihood standards or reach the targeted level of household incomes on a sustainable basis. 8.2 All displaced persons will be given a transport allowance or a assisted in transfer to the resettlement site or their choice of relocation, as the case may be. 8.3 In the case of loss of business, APs will be provided with a special allowance for the loss pf business-income during the transition period. 9. Economic Rehabilitation 9.1 All APs severely affected by the project due to the loss of productive assets (agricultural. commercial or industrial land), means of livelihood, incomes, employment or businesses, and access to community resources will be entitled to rehabilitation measures including income restoration programs, training to improve skills and other assistance for self-employment over and above their entitlements for compensation and other allowances, enabling them to attain, at a minimum, pre-project livelihood levels on sustainable basis. 9.2 These rehabilitation measures would specifically focus on vulnerable groups such as households without tenure security o r with weak tenure status, female-headed households, disabled-headed households, itinerant workers, households falling below the national poverty line or those severely affected by the project and are likely to fall below the poverty line, elderly households with no means of support and landless households.

14 Adequate assistance, in addition to compensation for affected assets and other allowances, should be provided such that t heir economic and social w ell-being c an b e improved and to enable such A Ps achieve household income targets set above the national poverty line. At least 30% of such rehabilitation assistance measures will be reserved for women. 9.3 For displaced persons whose land-based livelihood are affected due to the project, preference should be given to land-based resettlement strategies, or where land is not available, non-land-based options built around opportunities for employment or self employment in addition to cash compensation for lost assets. 10. Community Services and Resources 10.1 In cases community facilities and infrastructure such as schools, factories, water resources, roads, sewage system or electrical supply is damaged due to the project, the project developers will ensure that these would be restored or repaired as the case may be, at no cost to the community Any acquisition of, or restriction on access to resources owned or managed by affected community as a common property should be mitigated by arrangements ensuring access to improved or at least equivalent resources on a continuing basis, 11. Local Culture & Practices 11.1 Local cultural and religious properties, practices and beliefs should be respected and to the extent possible preserved Where local communities elect to make voluntary contribution of affected land without compensation in accordance with traditions practices, this should be acceptable only for marginal impacts (partial impact on land without causing any displacement or impact on structures, and with remaining assets viable for continued use) and only when direct benefits to affected people can be assured. The process of consultation with APs should, be conducted in an open and transparent manner by district officials of MCTPC and decisions for 'voluntary' contribution should be based on 'informed choice' of affected people. People who elect to make voluntary contributions must be informed of their rights to compensation, and the process and decisions must be documented by the provincial DCTPC. 12. Ethnic Group Issues 12.1 Where in a project cultural minorities are affected, the mitigation measures and social and economic benefits they receive to improve their status would be in harmony with their cultural preferences and would be decided in consultation with affected communities. The mitigation measures and assistance should also include institutions strengthening and capacity building of tribal elders, and community groups working on resettlement activities.

15 12.2 Community participation and consultation framework and grievance redress mechanism for ethnic minority groups should be developed in culturally appropriate ways, familiar to the affected community, in consultation with their leader-"s and in close collaboration with local officials. 13. Resettlement Linked to Project Resettlement transition period should be minimized and the acquisition of assets, compensation payment in full, resettlement and rehabilitation activities for a segment/section or phase (except where long-term rehabilitation measures such as vocations training or other measures recommended) should be completed prior to the initiation of construction work under the respective segment/section or phase thereof. PART V. RESETTLEMENT SITE DEVELOPMENT 14. Resettlement Site Development 14.1 All relocating persons should be provided with suitable housing or developed houselots, shop-lots as necessary, agricultural sites of sufficient size with productive potential and locations advantages better or at least equivalent to the old site. Replacement agricultural land, house/business plot will be as close as possible to the land that was lost and/or acceptable to the APs The replacement land for residential resettlement will be provided in fixed plot sizes according to the prevailing standards and planning practices. However, if the lost land of AP is in size larger than the plot sizes for relocation, a cash compensation to cover the difference of the area will be given to the AP All replacement land for agriculture, residential and businesses will be provided with secured tenure status and without any additional cost, sales taxes, fee, and surcharge to the APs at the time of transfer. Land titles for replacement land shall be issued in the joint names of husband and wife Attention should be paid to ensure that resettlement site development does not cause any adverse environmental impacts to the surrounding areas. All resettlement sites for relocation of displaced persons will be provided with adequate access to public facilities and services, income earning opportunities and market Where relocation is considered necessary, the 'host' community would also be entitled to compensation and other assistance similar to the project affected persons. Infrastructure and public services provided to the host community as necessary to improve, restore, or maintain accessibility would be the same level as provided for the displaced persons.

16 PART VI PUBLIC PARTICIPATION & CONSULTATION 15. Public Participation and Consultation The resettlement process should be carried out in a participatory manner, in which stakeholder concerns are taken into account at all stages of the project cycle, particularly during the planning and implementation phases of land acquisition, valuation and resettlement process. APs should be fully informed of the provisions of the policy, their entitlements to compensation for their lost assets, allowances and other assistance as provided for in the Policy. 16. Grievance Redress Mechanism 16.1 There should be effective mechanisms in place for hearing and grievance redress during the resettlement planning and implementation in a project The GoL PDR at the request of the Project authorities will establish a Grievance Redress Committee (GRC) for each district to address complaints and grievances pertaining to land acquisition, compensation and resettlement and to pre-empt all disagreements being referred to courts. The committee will consist of: i) District official ii) Village heads iii) Representative of the APs, other than the village head; iv) Village elders or representatives of MO; v) Project official Grievances related to any aspect of the project or sub-project will be handled through consultations conducted in a transparent manner and aimed at resolving matters through consensus at the project level before complainants forward these to higher level and ultimately to the court of law. The Project Authorities will document all complaints received in writing (or written when received verbally) from the APs APs will be exempted from all administrative and legal fees incurred i n pursuant t o the grievance redress procedures including cases of complaints taken to the court of law. PART VII. REPORTING-AND DOCUMENTATIONIT. 17. Reporting and Documentation The Project Proponents would carry out necessary studies and field investigations and prepare following required reports and documents for submission to the respective ministry and the Regulatory Agency for review and approval Initial Social Assessment (ISA) and Land Acquisition Assessment Project Proponents will carry out necessary field investigations for ISA, either as part of the IEE or as a standalone exercise, in order to identify relevant social issues, likely

17 impacts and the types of groups of people likely to be affected by the project. The report on ISA should be submitted by project proponents to the relevant ministry (in the case of private sector developer) and to the Regulatory Agency for review and approval prior to proceeding for further studies Social (Impact) Assessment In major projects with likely indirect and economic impacts on communities, within or in the vicinity of project areas, project proponents will conduct social assessment at the prefeasibility or feasibility stage of the project-preparation, as the case maybe, to address indirect social and economic impacts using appropriate mitigation measures with special attention paid to vulnerable groups, including ethnic minority groups. The report on social assessment should be prepared by Project Proponents for submission to the Regulatory Agency and the World Bank for review and approval to facilitate project process Resettlement Plans Land Acquisition and Compensation Report In case the impacts of the project are mostly marginal such that less than 200 persons (about families) are affected by the project either marginally or with limited displacement, a Land Acquisition and Compensation Report for each project, sub-project, or component will be prepared by Project Proponents and submitted to the Regulatory Agency and the World Bank for review and approval. Compensation, resettlement and rehabilitation activities will only commence after the Report is found acceptable to the Regulatory Agency and the World Bank Resettlement Action Plans (RAPs) In case the impacts of the project are severe, regardless of number of affected people or where more than 200 people (40-50 families) are affected by the Project, its component or sub-project; a Resettlement Action Plan (RAP) for each component or sub-project will be prepared in accordance with the provisions of this Policy. Project proponents will submit the required RAP to the World Bank for review and approval. Compensation, resettlement and rehabilitation activities will only commence after the Report is found acceptable to the Regulatory Agency and the World Bank Ethnic Minority Development Plans (EMDPs) a. Where in a project any ethnic minority groups are affected, particular attention should be paid to collect additional information focusing upon household ownership of economic and productive assets; economic information of community (e.g., brief information on economic and natural resources, production and livelihood systems, tenure systems); social information of community (e.g.. brief description of kinship, value system, types of social organizations of formal/informal groups, farming groups, etc.), especially those that can help the group in adjusting to potential impacts from the project; and potential impact of sub-project on the social and economic livelihood. The Resettlement Action Plans should include a separate section to address ethnic minority issues and suggested actions to ensure that the social and economic benefits they receive are in harmony with their cultural preferences.

18 b. Where the impacts on ethnic minority are likely to be significant, a standalone Ethnic Minority Development Action Plan (EMAP) will be prepared in line with the Ethnic Minorities Development Policy (EMDP) which has been developed for RMP-2. The EMAP will be submitted for approval by the World Bank. The description of resettlement measures and the types of development assistance proposed will ensure that the social and economic benefits proposed will be in harmony with their cultural preferences. PART VIII. MONITORING, SUPERVISION & EVALUATION 18. Resettlement Monitoring and Supervision 18.1 Adequate arrangements should be made for effective and timely supervision and internal monitoring of the implementation of the resettlement and rehabilitation measures In projects with major resettlement component, an experienced and independent external monitoring agency would be contracted by project authorities to periodically carry out external monitoring of the implementation of resettlement activities in accordance with the Resettlement Action Plans. Mechanisms should be put in place to involve the affected community in monitoring of resettlement implementation activities. The External Monitoring Agency will submit monitoring reports to the project authorities regularly. MCTPC will regularly provide a copy of the external monitoring reports to the Regulatory Agency and the World Bank In projects with major resettlement component, project authorities will make provision for post-evaluation of resettlement implementation activities, six months to one year after the completion of economic rehabilitation measures in the project, to check whether the economic rehabilitation objectives of the Policy and the Resettlement Action Plans have been achieved. If the evaluation indicates that the APs have not been able to achieve the stated objectives and income targets, project authorities will make arrangements for provision o f additional assistance to meet the stated objectives. PART IX. RESETTLEMENT COST AND BUDGETS 19. Resettlement Cost and Budget Each Resettlement Action Plan will include detailed cost estimates for compensation and other resettlement entitlements and relocation of APs, if that be the case, with a breakdown by category of APs; agricultural, residential and business land; houses, structures and other fixed assets affected; rehabilitation assistance, transport and other allowances; monitoring and evaluation; management and administration; phases of the project and by financial year. The cost estimates will make adequate provisions for contingencies.

19 Ethnic Minorities Development Policy Framework (EMDP) for RMP-2 World Bank Policy OP 4.0 Purpose is to ensure that indigenous people benefit from development projects, and (b) avoid or mitigate potentially adverse effects on indigenous people caused by Bank-assisted activities. The Bank's policy is that the strategy for addressing the issues pertaining to indigenous peoples must be based on the informed participation of the indigenous people themselves. The key step in project design is the preparation of a culturally appropriate development plan based on full consideration of the options preferred by the indigenous people affected by the project Remote or neglected areas where little previous experience is available often require additional research and pilot programs to fine-tune development proposals. As needed, the plan should include general education and training in management skills for indigenous people from the onset of the project. Studies should make all efforts to anticipate adverse trends likely to be induced by the project and develop the means to avoid or mitigate harm. The institutions responsible for government interaction with indigenous peoples should possess the social, technical, and legal skills needed for carrying out the proposed development activities. Implementation arrangements should be kept simple. They should normally involve RMP-2 Project Policy Framework All sub-projects located in areas that contain ethnic minority groups will identify the representatives of such minority groups and consult with them whether the subproject has the potential to provide benefits or adversely affect these groups If potential positive and negative effects are identified, the sub project will inform local communities of the nature of the subproject and record and incorporate into the design of the subproject the communities wishes in relation to obtaining benefits from the project and avoiding or mitigating any adverse impacts. If the project area is located in a very remote area where indigenous communities have restricted links with local government, the project manager will request the assistance of the ESD to manage the community consultation and participation process The project manager will distribute information and awareness raising material packages produced by ESD in relation to the potential impacts of the project on the well being of the community. These materials should preferably be in the language of the ethnic community The project manager will refer to the EMP for the project and associated guidelines and use this information to identify any potential adverse impacts arising from the project. This information will be included in the monitoring reports and be available for review. A national consultant will be appointed to the ESD with experience in social impact assessment and community participation to assist in monitoring subprojects and identify actions necessary for the subprojects in mitigating adverse impacts. The consultant will prepare regular reports on these

20 appropriate existing institutions, local organizations, and nongovernmental organizations (NGOs) with expertise in matters relating to indigenous peoples. Local patterns of social organization, religious beliefs, and resource use should be taken into account in the plan's design. Development activities should support production systems that are well adapted to the needs and environment of indigenous peoples, and should help production systems under stress to attain sustainable levels. Planning should encourage early handover of project management to local people. Where effective programs are already functioning, Bank support can take the form of incremental funding to strengthen them rather than the development of entirely new programs. For an investment project that affects indigenous peoples, the borrower should prepare an indigenous peoples development plan that is consistent with the Bank's policy. activities. The consultant will also be required to identify possible subprojects where a standalone Ethnic Minorities Development Plan may be required in view of serious impacts. The project manager of all environmentally and socially sensitive subprojects will coordinate with representatives of local communities to identify areas that are important in terms of providing livelihoods or are of socio-cultural and religious significance. The project manager will ensure that such areas are protected, and where necessary, will negotiate compensation for damage or reduced access to such areas. Where a subproject has the potential to influence or change the system of livelihood of an ethnic minority community, the project manager will coordinate with representatives of local communities to identify alternative sustainable production systems that are well adapted to the needs and environment of ethnic minority peoples. On completion of subprojects, they will be handed over to provincial authorities who will monitor the impacts of the project on ethnic minority peoples. The ESD will compile all monitoring reports and lobby donors and other funding agencies to support projects that mitigate the longer-term indirect impacts of improved access. When a subproject has the potential to seriously affect the livelihood or interests of ethnic minority communities, ESD in consultation with the World Bank may deem it necessary for the subproject to prepare an Ethnic Minorities Development Plan. The plan will be prepared according to guidelines*specified in the Bank s OD 4.20 on Indigenous People