INITIAL DRAFT FOR DISCUSSION
BANGLADESH BANK
Investment Promotion and Financing Facility (IPFF)
ENVIRONMENTAL AND SOCIAL MANAGEMENT FRAMEWORK
ESMF
FOR
IPFF
28 January 2010
Prepared by:
Infrastructure Investment Facilitation Center
Dhaka, Bangladesh
Ver. 4 on 28 Jan 2010
TABLE OF CONTENT
Acronyms
EXECUTIVE SUMMARY
PART – A GENERAL
1THE ESMF DOCUMENT
1.1Overview of ESMF
1.2Structure of the DOCUMENT
1.3Methodology
1.4Purpose of ESMF
1.5Users of ESMF
2IPFF PROJECT DESCRIPTION
2.1Background Of IPFF Project
2.2Objectives & aims of IPFF
2.3Components of IPFF
2.3.1Infrastructure Development Sub-Loans
2.3.2Technical Assistance
2.4Anticipated Project Types under IPFF
2.5The IPFF Project Cycle
3SUB-PROJECTS OF IPFF - APPROVAL AND MONITORING
3.1IPFF Projects Management
3.2Project Document Preparation
3.3Appraisal and Approval
3.3.1Environmental and Social Due Diligence (ESDD)
3.3.2Environmental and Social Assessment Process
3.3.3Approval Process of Loan
3.4ProjectS ReportING under IPFF
3.5Annual Reviews for IPFF
4CAPACITY BUILDING, TRAINING ON ESMF
4.1Institutional Capacity Assessment
4.2Capacity Building
4.3Training needs and Plans
4.4Technical Assistance for Capacity Building Implementation
PART – B ENVIRONMENTAL MANAGEMENT FRAMEWORK
5GENERAL ENVIRONMENTAL MANAGEMENT
5.1OVERVIEW
5.2TARGET AREAS OF ENVIRONMENTAL MANAGEMENT
5.2.1Physiographic and Land Use Pattern
5.2.2Hydrology
5.2.3Ground Water
5.2.4Ecology
5.2.5Climate
5.2.6Environmentally and Ecologically Sensitive Areas
5.3Main Environmental Concerns
6LEGAL AND INSTITUTIONAL FRAMEWORK (ENVIRONMENTAL)
6.1OVERVIEW
6.2ENVIRONMENT RELATED POLICIES IN BANGLADESH
6.2.1National Environmental Policy, 1992
6.2.2National Environmental Management Action Plan, 1995
6.2.3National Conservation Strategy, 1992
6.2.4National Water Policy, 2000
6.2.5National Water Management Plan, 2001
6.3RELEVANT LAWS AND REGULATIONS IN BANGLADESH
6.4ENVIRONMENTAL GUIDELINES FOR PROJECTS IN BANGLADESH
6.4.1Green Category
6.4.2Orange A and B Category
6.4.3Red Category
6.5INSTITUTIONAL ORGANIZATIONS
6.5.1Department of Environment (DoE)
6.5.2Department of Forest
6.6DOE REQUIREMENTS ON ENVIRONMENTAL ASPECTS
6.7WORLD BANK SAFEGUARD POLICIES
6.8CATEGORIES OF PROJECTS ACCORDING TO THE WORLD BANK
6.8.1Category A:
6.8.2Category B
6.8.3Category C
6.9COMPARISON BETWEEN GOB AND WB GUIDELINES
7ENVIRONMENTAL IMPACT AND MITIGATION MEASURES
7.1OVERVIEW
7.2POTENTIAL IMPACTS
7.2.1Pre-Construction (Planning and Design) Phase
7.2.2Construction Phase
7.2.3Operation and Maintenance Phase
7.3MAJOR ENVIRONMENTAL IMPACTS
7.4ASSESSMENT OF IMPACTS
7.4.1Cumulative Impacts
7.5MITIGATION MEASURES
PART – C SOCIAL MANAGEMENT FRAMEWORK
8LEGAL AND INSTITUTIONAL FRAMEWORK (SOCIAL)
8.1OVERVIEW
8.2RELEVANT NATIONAL LEGISLATION
8.3ACQUISITION AND REQUISITION ORDINANCE, 1982
8.4WORLD BANK’S SAFEGUARD POLICIES
8.4.1OP 4.12 Requirements (Involuntary Resettlement)
8.4.2OP 4.10 Requirements (Indigenous Peoples)
8.5COMPARISON OF REQUIREMENTS OF GOB AND WB
8.6ADDRESSING WORLD BANK SAFEGUARD POLICIES
9SOCIAL MANAGEMENT PROCESS
9.1General
9.2STAGES IN PROJECT DEVELOPMENT
9.3FLOWCHART FOR SMF
9.4SOCIAL COMPLIANCE MATRIX
9.5SOCIAL SCREENING
9.6PUBLIC INFORMATION CAMPAIGN and CONSULTATION
9.6.1Involvement of the Host Populations
9.6.2Formal Consultation Process
9.6.3Formal Consultation Process
9.7Record of Consultation
9.8SOCIAL IMPACT ASSESSMENT (SIA)
9.8.1Identifying Social Impact Assessment Variables
9.8.2Combining Social Impact Assessment Variables, Project Stage, and Setting
9.8.3Steps in the Social Impact Assessment Process
9.9IDENTIFICATION OF IMPACT
9.10IMPACT MITIGATION
9.11LAND ACQUISITION FOR PROJECTS
9.11.1Steps in Land Acquisition
9.12RESETTLEMENT ACTION PLAN (RAP)
9.12.1Land Acquisition Plan
9.12.2Resettlement Types
9.12.3Resettlement Action Plan (RAP) Preparation
9.12.4Abbreviated Resettlement Plan
9.13Indigenous Peoples Development Plan (IPDP)
9.14Grievance Redress Mechanism
PART-DOPERATIONAL MANUAL
10OPERATIONAL MANUAL
10.1SEQUENCE OF TASKS OF THE ESMF IN DIFFERENT PHASES OF IPFF PROJECT
10.1.1Pre-Construction Phase Activities
10.1.2Criteria For Site Clearance Of Projects/Industries
10.1.3Procedure for Issuing Environmental Clearance Certificate
10.1.4Land Acquisition Phase
10.1.5Financing Phase
10.1.6Construction Phase
10.1.7Post-Construction Operation Phase
10.2INSTITUTIONAL FRAMEWORK FOR ESMF IMPLEMENTATION
10.2.1Environment and Social Cell (ESC) of IPFF
10.2.2The Project Management Unit (PMU) in Sub-project
10.2.3Project Environmental and Social Cell (PESC) under sub-project
10.2.4Resettlement Unit (RU) under PESC
10.3ESMF IMPLEMENTATION BUDGET
10.4MONITORING OF ESMF
10.4.1Construction Phase Monitoring
10.4.2Operational Phase Monitoring
10.4.3Monitoring Plan
10.5ESMF AUDITING FRAMEWORK
10.6PERIODIC REPORTING ON ESMF
11ANNEXURE
12REFERENCES
Acronyms
APOAnnual Plan Operation
BBBangladesh Bank
BECABangladesh Environment Conservation Act
BMPBest Management Practices
BPBank Procedures
BRTABangladesh Road Transport Authority
COCarbon Monoxide
CULCompensation under Law
DCsDistrict Commissioners
DLACDistrict Land Acquisition Committee
DoEDepartment of Environment
EAEnvironmental Assessment
ECAEnvironment Conservation Act, 1995
ECCEnvironmental Clearance Certificate
ECREnvironment Conservation Rules, 1997
EIAEnvironmental Impact Assessment
EMPEnvironmental Management Plan
EMMPEnvironmental Mitigation and Management Plan
ERDEconomic Relations Division
ESAEnvironmental and Social Assessment
E&S Environmental and Social
ESDD Environmental and Social Due Diligence
ESMFEnvironmental and Social Management Framework
ESMPEnvironmental and Social Management Plan
FCDFlood, Control and Drainage
FGDFocus Group Discussion
FIFinancial Intermediary
FILFinancial Intermediary Loan
GoBGovernment of Bangladesh
GRCGrievance Resolution Committee
ICTInformation and Communication Technology
IDAInternational Development Association
IEEInitial Environmental Examination
IIFCInfrastructure Investment Facilitation Centre
IPFFInvestment Promotion Financing Facility
IPDPIndigenous People Development plan
LAPLand Acquisition Proposal
MoEFMinistry of Environment & Forest
NEMAPNational Environmental Management Action plan
NGONon-Government Organization
NOxOxides of Nitrogen
ODOperational Directives
OPOperational Policies
PADProject Appraisal Document
PAPProject Affected Person
PFIParticipatory Financing Institution
PIPublic Involvement
PICOMPrivate Infrastructure Committee
PPPPublic-Private Partnership
PRAParticipatory Rural Appraisal
RAPResettlement Action Plan
RDPRegional Development Plan
SCCSite Clearance Certificate
SIASocial Impact Assessment
SMPSocial Management Plan
SOxOxides of Sulphur
TATechnical Assistance
WBWorld Bank
WARPOWater Resources Planning Organization
WQSWater Quality Standard
EXECUTIVE SUMMARY
Environmental and Social Management Framework (ESMF) is a safeguard instrument a and compliance policy covering both the IDA and GOB requirements. This establishes a mechanism to determine and assess future potential environmental and social impacts of different projects and other activities associated with the projects regardless of funding agency. The framework sets out mitigation, monitoring and institutional measures to be taken during design, implementation and operation of the project activities to eliminate adverse environmental and social impacts, offset them, or reduce them to acceptable levels. This instrument has been prepared as a separate and stand-alone document to be used for IPFF project. This framework is a diagnostic tool to support decision-making but is not a substitute for decision making either at the strategic or detailed implementation levels. This framework is part of the overall due diligence that will be conducted once a Participating Financial Institution has applied for IPFF funding and recommendations for corrective actions, including a corrective action plan.
The ESMF details the agreed policies, guidelines, and procedures to be integrated into the implementation of IPFF projects. It is a detailed guide on principles and procedures for incorporating environmental and social issues into project preparation. The ESMF is designed for use by IPFF project staff, project sponsor, project associates (Bangladesh Bank, other shareholders, consultants, lenders, etc.), other relevant government agencies, including DOE, for reference: It explains the compliance requirements for environmental and social requirements for projects that receive financing for IPFF projects.
The IPFF project has exhausted its first phase allocation with the power sector being the exclusive beneficiary of the funds allocated. The proposed additional financing targets expanding into other sectors requiring boost in infrastructure financing, as well as in familiarization with the PPP framework.
With the completion of the first phase allocation of the IPFF additional financing of US$257 million is proposed. This amount is divided into $7 million for capacity building (technical assistance) and US$250 million for the lending pipeline.
Anticipated Project Types Under IPFF
Infrastructure Projects from the power sector will be given special emphasis, however under the Private Sector Infrastructure Guidelines, infrastructure projects from the following sectors or sub sectors may be implemented as Private Infrastructure Projects:
(a)power generation, transmission, distribution, renewable energy and services.
(b)port development (sea, river and land) including inland container terminals, inland container depot and other services;
(c)environmental, industrial and solid waste management projects
(d)highways and expressways including mass-transit , bridges, tunnels, flyovers, interchanges, city roads, bus terminals, commercial car parking, etc;
(e)airports, terminals and related aviation facilities;
(f)water supply and distribution, sewerage and drainage;
Project Document Preparation
The Operational Directives of IPFF provides a Documentation Checklist, which needs to be followed by the PFIs before submitting a loan application to BB. This is provided in Table 3.1.
ENVIRONMENTAL AND SOCIAL ASSESSMENT PROCESS
The ESMF will establish a unified process for addressing all the environmental and social safeguard issues. Table 3.2describes the steps in environmental and social assessment process at different stages of a project cycle. IPFF will review against these steps for compliance and corrective actions, if any, which may be required.
TA approval Process of Loan
The 5-steps approval process of Loan Applications under IPFF as per OP consists of procurement of private sector by government agency; proposal to PFI from promoter; loan application to BB from PFI; review of loan application by Technical Advisor.
Bangladesh Bank has the responsibility for selecting the PFIs, deciding whether to finance the loan proposals submitted by the PFIs, based on a list of pre-determined criteria and providing capacity building to financial institutions in infrastructure finance and related themes, eligibility criteria will be followed to select PFIs under IPFF. The IPFF is open to both bank and non-bank financial institutions. IIFC provides technical assistance to BB during this review process
CAPACITY BUILDING, TRAINING ON ESMF
The environmental sustainability of the IPFF that involves funding of multiple, small-scale subprojects is highly dependent on the capacity of implementing agencies to carry out the associated design, planning, approval and implementation work. Thus, to ensure this, it is vital that IPFF allocates sufficient resources to training and capacity building.
General Environmental Management
An Environmental Management Plan (EMP) is an implementation plan for mitigation, protection and/or enhancement measures, which are recommended in the EIA. It documents key elements of environmental management including the environmental policy, responsibilities, applicable standard operating procedures and best management practices (BMP), record keeping, reports, communication, training, monitoring, and corrective action.
Main Environmental Concerns
The key environmental concerns in Bangladesh that require special care needs for preparing an EMP are: flooding, drainage, river bank erosion, surface water quality, seasonal fluctuations in ground water table, groundwater quality, arsenic contamination of aquifers, saline intrusion (coastal areas), wetland deterioration, land degradation, ambient air pollution, indoor air pollution, forestry management, biodiversity conservation, and fish and fisheries resource management.
LEGAL AND INSTITUTIONAL FRAMEWORK (ENVIRONMENTAL)
The institutional and legal setting in Bangladesh provides the context within which the environmental assessment procedure for IPFF projects was developed. It is imperative that the project sponsors for IPFF projects are aware of and comply with the legal and institutional requirements of the GOB.
A large number of laws related to environmental issues, some dating back to 19th century exist in Bangladesh. The most important of these are the Environmental Conservation Act, 1995 (ECA 1995) and the Environmental Conservation Rules (under the ECA, 1995) 1997, (ECR 1997). Table 6.1 presents an outline of the National legal instruments along with a list of key governmental institutions that have regulatory power over environmental aspects associated with the projects financed by IPFF.
DEPARTMENT OF ENVIRONMENT (DOE)
The primary institution for environmental management in Bangladesh is the Department of Environment (DoE), working under the Ministry of Environment and Forest (MoEF). The Department of Forest is responsible for sensitive area protection in four types of legally protected areas, wildlife sanctuaries, game reserves, reserved forests, and natural forests.
For any projects, the sponsor needs to obtain the clearance from the DOE in two stages:
a) Initial Stage: for obtaining the SCC, two documents need to be submitted to the DOE: an Initial Environmental Examination (IEE) Report and a TOR for detailed Environmental Impact Assessment (EIA) (with a process flow diagram)
b) Advanced Stage: the EIA has to be submitted to DOE for clearance. After EIA approval, construction of super-structure and erection of capital machinery can be done. ECC needs to be obtained before commercial operation.
There are 3 project categories namely Green, Orange A & B, Red, with validity periods of 1, 1, and 3 years respectively. The renewal period for all the categories is 30 days before expiry.
WORLD BANK SAFEGUARD POLICIES
Safeguard policies, incorporating environmental principles, are designed to protect the interests of third parties from adverse impacts of World Bank-assisted projects. The Safeguards are given in Table 6. 1
Categories of projects according to the World Bank
Based on project type and scale, project location, sensitivity of issues, nature of impacts and magnitude of impacts, World Bank has classified all projects into three categories, viz: Category A, Category B and Category C.
Category A: A project is classified as Category A if it is likely to have significant adverse environmental impacts that are sensitive, diverse, or unprecedented.
Category B: Category B project has potential adverse environmental impacts on human population or environmentally important areas--including wetlands, forests, grasslands, and other natural habitats--are less adverse than those of Category A projects.
Category C: a project is classified as Category C if it is likely to have minimal or no adverse environmental impacts. Beyond screening, no further EA action is required for a Category C project.
COMPARISON BETWEEN GOB AND WB GUIDELINES
In general OP 4.01 requirements are more comprehensive when compared with the requirements of Bangladesh legal system. The key comparisons between GoB and World Bank guidelines are provided in Table 6. 2.
Mitigation Measures
A mitigation plan has been adopted to highlight the action procedures to avoid/minimize / control the resultant impacts arising out of the different project phases i.e. pre-construction, construction and operation which are elaborately described in Table 7. 1.
SOCIAL MANAGEMENT FRAMEWORK
LEGAL AND INSTITUTIONAL FRAMEWORK (SOCIAL)
The World Bank (the financer of the IPFF project), requires the project sponsors to identify, review and abide by all laws of the host country that are applicable to land acquisition and involuntary resettlement. Table 8.1 lists the relevant National laws relevant for the project sponsor to comply with and the government agencies responsible for different aspects of the social management for sub-project to be funded by IPFF.
Acquisition and Requisition Ordinance, 1982
In 1982, the Acquisition and Requisition of Immovable Property Ordinance came in force. This is the major basis for all the present actions regarding acquisition, resettlement and rehabilitation.
WORLD BANK’S SAFEGUARD POLICIES
OP 4.12 Requirements (Involuntary Resettlement)
The primary objective of the World Bank policy on is to explore all alternatives to avoid or minimize involuntary resettlement. World Bank's policy on Involuntary Resettlement requires payment of compensation and other assistance to project affected people before they are displaced from their existing locations.
OP 4.10 Requirements (Indigenous Peoples)
Indigenous Peoples are frequently among the most marginalized and vulnerable segments of the population. The requirements for involving such people are given in OP4.10.
COMPARISON OF REQUIREMENTS OF GOB AND WB
While Bangladesh law (Ordinance 1982) provides for land acquisition, the regulations and rules are not very explicit regarding the resettlement and rehabilitation of PAPs. The World Bank ODs, on the other hand, are more comprehensive and stringent.
Table 8.2 lists some key comparisons between Bangladesh Law and WB policy regarding land acquisition and compensation.
SOCIAL MANAGEMENT PROCESS
Social issues are usually common to all sectors with the degree of effect of any issue varying on an individual basis. The major social issues related to infrastructure projects include: site planning; involuntary resettlement; protection of marginalized and vulnerable groups; and public consultation, participation, and consensus building.
The flow chart for SMF is given in Fig. 8.1 will guide the project sponsor in carrying out the necessary steps to address social requirements of a sub-project for IPFF funding.
SOCIAL IMPACT ASSESSMENT (SIA)
The SIA is one of the primary requirements of the project sponsor in order to comply with social requirements for a World Bank-assisted project.
Identifying Social Impact Assessment Variables.
A general list of social variables are:Population characteristics; community and institutional structures: political and social resources; individual and family changes; Community Resources.
Steps in the Social Impact Assessment Process
The process in the social assessment is as follows: public involvement, identification of alternatives, baseline conditions, scoping, projection of estimated effects-investigate the probable impacts, predicting responses to impacts, indirect and cumulative impacts, changes in alternatives, mitigation, monitoring
Table 9.3 provides a list of probable impacts during the various phases of a project.
LAND ACQUISITION
Land Acquisitionis the action of acquiring private land by the state as per provisions of the law of the land. Section 9.10.1 gives the major steps of Bangladesh Government’s Immovable and Movable Properties / Land Acquisition (LA) after the finalization of the engineering designs.
RESETTLEMENT ACTION PLAN (RAP)
Land Acquisition Plan: for any land acquisition a Land Acquisition Plan (LAP) is needed. Preparation of the land acquisition plans will include locating each of the components; sorting out the ownership status of the lands in which project shall be established; and preparing the schedules of plots (with ‘dag’ or Plot numbers and other information required by the acquiring body) from which lands are to acquired.
Resettlement Types: for acquisition of land, if the SIA indicates that a resettlement Action Plan (RAP) is required, then the project sponsor will engage a Social Specialist who will prepare a RAP considering all World Bank OPs. The major resettlement effects in projects are set out in table 9.4
Resettlement Action Plan (RAP) Preparation
According to WB OP 4.12, the Resettlement Action Plan (RAP) for any project shall cover the following elements. The outline of a RAP is given in OP 4.12.
Indigenous Peoples Development Plan (IPDP)
If the SIA indicates the need for an Indigenous Peoples Development Plan IPDP, then an IPDP will be prepared by the project sponsor through social experts. The IPDP will include the following elements, as mentioned in the WB OP 4.10
OPERATIONAL MANUAL
SEQUENCE OF TASKS OF THE ESMF IN DIFFERENT PHASES OF IPFF PROJECT
The ESMF tasks have been grouped in five phases, as mentioned below. The activities, by a project sponsor, in different phases are described in detail in the subsequent sections. The phases are: Pre-Construction Phase; Land Acquisition Phase; Financing Phase;Construction Phase; Post-Construction Operation Phase