1. 1 The World Bank “Safeguard "Policies: An Overview Dushanbe, Tajikistan September 28, 2009

2. 2 Overview of Presentation 1. World Bank SG Policies in context: what are they, why do we have them, where do they come from? 2. Overview of each SG Policy (10 + 1) 3. Roles and responsibilities 4. OP/BP 4.01 Environmental Assessment

3. 3 1. Safeguard Policies in Context

4. 4 World Bank Operational Policies n Based on WB’s Articles of Agreement, General Conditions, & specific policies approved by WB Board n Set out in WB Operational Manual (Manual covers OPs, BPs (Bank Procedures), Guidance Notes, etc.) n Guide all aspects of WB Operations n Cover wide range of topics (e.g. financial terms/conditions of WB loans, “emergency response,” tobacco, Development Policy Lending, Financial Intermediary lending, economic evaluation of investment lending, water resources, procurement, project cycle steps, etc. )

5. 5 Legal Policies OP 7.60 Disputed Areas OP 7.50 International Waterways Environmental Policies OP 4.01 Environmental Assessment OP 4.04 Natural Habitats OP 4.09 Pest Management OP 4.36 Forestry OP 4.37 Safety of Dams Social Policies OP 4.11 Physical Cultural Resources OP 4.12 Involuntary Resettlement OP 4.10 Indigenous Peoples WB Safeguard Policies (10+1) BP 17.50 Bank Disclosure Policy

6. 6 Purpose of the World Bank Safeguard Policies n Do no harm: protect people and environment from adverse impacts n Reduce and manage risk for the Client and for the WB n Do good: enhance social equity and environmental sustainability n Respond to a world-wide constituency

7. 7 Cross-cutting Principles of SG Policies n Avoid negative impacts where possible; otherwise minimize, reduce, mitigate, compensate (in that order) n Match level of review, mitigation and oversight to level of risk and impacts n Inform the public and enable people to participate in decisions which effect them n Integrate environmental and social issues into project identification, design and implementation n Strengthen Borrower capacity = Ingredients of Sustainable Development

8. 8 Who Influences the Safeguard Policies? WB Board Donors Project Beneficiaries Civil Society Civil Society NGOs Media WB Management Affected Persons Borrowers

9. 9 Environmental and Social “Due Diligence” n WB Management’s fiduciary responsibility to its shareholders (along with Financial Management, Procurement): assurance that all reasonable measures have been taken to ensure lending is environmentally/socially sound n Applies to sub-projects within projects n Applies to all project components and investments regardless of source of financing n “Safeguard Documents” = Assessments and plans required by SG policies (publicly disclosed)

10. 10 2. Overview of Safeguard Policies

11. 11 World Bank Safeguard Policies: Three-Part Format n Operational Policies (OP) – concise statement of policy objectives and operational principles including the roles and obligations of the Borrower and the Bank n Bank Procedures (BP) – Mandatory procedures to be followed by the Borrower and the Bank n Good Practice (GP) – Non-mandatory advisory material Also (more detailed): Environmental Assessment Sourcebook, Involuntary Resettlement Sourcebook, Pollution Prevention and Abatement Handbook

12. 12 OP/BP 4.01: Environmental Assessment Objectives: n To inform decision makers of the nature of environmental and social risks n To ensure that projects proposed for Bank financing are environmentally and socially sound and sustainable (promote positive impacts, avoid/mitigate negative impacts) n To increase transparency and participation of stakeholders in the decision-making process as one essential element

13. 13 n Applies to all Investment lending (not Development Policy Lending); triggered for almost all investment projects n Umbrella EA policy: subsumes elements of others n Based on screening of operations (Category A, B, C, FI) n Scope of EA issues (integrated env & social); types of EA instruments (based on risks and on type of lending) n Bank and Borrower responsibilities (incl. consultation and disclosure) n Operational Annexes OP/BP 4.01: Environmental Assessment Key elements:

14. 14 OP 4.04 Natural Habitats Objectives: n Protect, maintain, restore natural habitats and their biodiversity; Ensure sustainability of services and products which natural habitats provide to human society n Precautionary approach to natural resources management

15. 15 OP 4.04 (Natural Habitats) Key elements n no WB support for significant conversion or degradation of critical natural habitats* (if unavoidable, compensation through additional protected area of equivalent value) n Precautionary approach to natural resource management in interests of sustainable development n Where potential for impacts exists, assess/address Client capacity to implement protection n Preparation/appraisal/supervision to include qualified experts n Take into account views/roles/needs of local communities, NGOs; involve in planning, implementation (incl. PA management), monitoring; support local conservation incentives *Definitions in Annex A

16. 16 BP 4.04 (Natural Habitats) n Any project with potential for significant conversion or degradation of natural habitat = Category A n Other projects involving natural habitats = Category A or B n Use of “compensation” approach requires V.P. approval n Costs of compensatory conservation (offsets) are included in project financing

17. 17 OP 4.09 Pest Management Objectives: n Support Integrated Pest Management (IPM) approach for sustainable agriculture and health (promote use of biological/ environmental/ agronomic controls, reduced reliance on synthetic chemicals) n Reduce human exposure and health risks n Help develop national capacity for IPM and pesticide regulation/monitoring

18. 18 OP 4.09 (Pest Management) Key Elements n Assess issues through EA process (mitigation through EMP or separate Pest Management Plan depending on scale) n Pesticides may be financed in context of IPM (criteria for pesticide selection and handling ) n Triggered by projects likely to trigger new/increased pesticide use (not just if project finances pesticides) n No BP 4.09 - Pest Management Handbook

19. 19 OP 4.10: Indigenous Peoples IP – distinct, vulnerable, social and cultural group attached to geographically distinct habitats or historical territories, with separate culture than the project area, and usually different language Objectives: n To foster full respect for human rights, economies, and cultures of IP n To avoid adverse effects on IP during the project development n One of the most controversial and contested OPs in other regions; few applications in ECA (Siberia only)

20. 20 OPN 4.11 Physical Cultural Resources Objectives :  Physical Cultural Resources (PCR) are identified and protected in World Bank financed projects  National laws governing the protection of physical cultural property are complied with  PCR includes archaeological and historical sites, historic urban areas, sacred sites, graveyards, burial sites, unique natural values

21. 21 OP 4.11 (Physical Cultural Resources) Key Elements & BP 4.11 n Implemented as integral element of EA (EMP to include PCR Plan as needed, or “Chance Finds” provision) n Typically triggered by: – any project involving significant scale excavation, earth moving, flooding – any project in or near PCR site recognized by borrower n Archaeological survey to identify/characterise PCR (or to confirm none are present) n Mitigation may range from full protection to salvage & documentation (Borrower decides)

22. 22 OP 4.12 Involuntary Resettlement Objectives: n Minimize displacement n Treat resettlement as a development program n Provide affected people with opportunities for participation n Assist displaced persons in their efforts to improve their incomes and standards of living, or at least to restore them n Assist displaced people regardless of legality of tenure n Pay compensation for affected assets at replacement cost n The OP Annexes include descriptions of Resettlement Plans and Resettlement Policy Frameworks

23. 23 OP 4.37 Safety of Dams Objectives, Key Elements n To protect downstream populations and ecosystems from consequences of dam failure n Triggered if WB project finances dam construction or rehabilitation, but also when performance of a WB- financed project is dependent on an existing dam* n Distinguishes between large and small dams: – 15 m +, or 10 m + with other risk factors – Reservoir size – Likelihood of later increase in height/size n Requires dam independent panel to assess design/construction; detailed plans for construction/quality assurance; instrumentation, operation & maintenance, emergency preparedness *due diligence requirements more modest in this case

24. 24 OP 4.36 Forests Objectives: n Forests are managed in a sustainable manner n Significant areas of forest are not encroached upon n The rights of communities to use their traditional forest areas in a sustainable manner are not compromised

25. 25 OP 4.36 Forests Key Elements & BP n Applies to projects which may have impact on health and quality of forests; projects which aim to bring about change in management, protection or utilization of forests n Applies to natural forests & plantations n OP 4.04 applies, also to critical downstream habitats which may be affected n Plantations preferred to be made on unforested sites n Attention to risk of invasive species n Commercial harvesting may be financed for areas not identified as critical forests/natural habitats

26. 26 OP 7.60 Projects in Disputed Areas n Legal Safeguard Policy n The Bank may support a project in a disputed area if governments concerned agree that, pending the settlement of the dispute, the project proposed for one country should go foreword without prejudice to the claims of the other country

27. 27 OP 7.50: Projects on International Waterways (Legal SGP)  Objective: to ensure projects will neither affect the efficient utilization and protection of international waterways, nor adversely affect relations between the Bank and its Borrowers and between riparian states  Triggered by any project which involves utilization of, or release of effluents into, an international waterway, regardless of scale, but exemptions may be approved in some cases  Legal Safeguard Policy – requirement for notifying other riparian States

28. 28 BP 17.50 Disclosure Policy/ Disclosure Handbook n Supports decision making by the Borrower and Bank by allowing the public access to information on environmental and social aspects of projects n Mandated by six safeguard policies that have specific requirements for disclosure n In country:  Before project appraisal in local language and in English n World Bank INFO-Shop:  Before project appraisal in English (documents can be in draft but must meet WB standards and sufficiently advanced to provide essential input for project design)

29. 29 Consultation (beyond disclosure) n Mandated by Environmental Assessment, Involuntary Resettlement and Indigenous Peoples Policies n A two-way process in which beneficiaries provide advice and input on the design of proposed projects that affect their lives and environment n Promotes dialogue between governments, communities, NGOs and implementing agencies to discuss all aspects of the proposed project n At least 2 consultations for a Category A Project (or Sub- project) and 1 consultation for a Category B Project (or Sub-project) before appraisal (or sub-project approval)

30. 30 3.Roles and Responsibilities

31. 31 OP/BP 4.01- Breakdown of Responsibilities: Bank vs. Borrower Bank n Screens and Sets Project EA Category n Advises Borrower on the Bank’s EA requirements n Reviews and gives “No Objection” for EA reports (Due Diligence instruments) n Makes report available in Info shop n Supervises implementation of EA/EMP n Makes mutually agreeable changes during implementation Borrower n Prepares and Implements EA/EMP/EMF in accordance with national laws and WB OPs n Consults project-affected groups and local NGOs n Discloses draft/final documents in country n Responds to Bank and public n Monitors implementation of EMP n Ensures compliance under national laws Project TeamSG Unit

32. 32 Key Roles – Who does What? World Bank n WB Board (representing Donor & Borrowing Countries) identifies needs and approve policies n Operations Policy and Country Services Unit (OPCS) and Legal Dept (LEG): draft OPs, BPs, set Bank-wide standards for interpretation and compliance, report to Management and Board n ECA Region Safeguards Team: (in consultation with Task Team and as needed with Senior ECA Management and/or OPCS, LEG): for each project, determines which OPs are triggered, appropriate EA category & specific compliance requirements; approve “Due Diligence” instruments (may delegate); clear Appraisal and Legal Documents; n WB Project Task Team: work with Borrower and SG Unit to ensure appropriate triggering/screening; advise Borrower on compliance throughout project cycle; evaluate “Due Diligence” instruments and Client capacity; disclosure (Infoshop); verify/ report to Management throughout project cycle n Quality Assurance Group and Internal Evaluation Group: Review performance of WB Staff and Management and quality of operations vis a vis SG (application, compliance, implementation, impact) n Inspection Panel: Independent body, investigates complaints by affected people; Reports independently (makes recommendations) to WB Board

33. 33 Key Roles: Who Does What? Borrower/Client n Implementing Agency/Entity: responsible for preparation, disclosure/consultation and implementation of “Due Diligence” instruments; reporting to Government and WB n WB’s official Government counterpart (e.g., MoF): legal commitment to implement DD instruments n Sub-project grant/loan recipients: specific obligations as spelled out in sub-grant or sub-loan agreements n Contractors/suppliers/consultants: specific obligations as spelled out in contracts n Public (civil society, “Project Affected Persons”, NGOs): advise on project design (consultations); raise legitimate grievances and complaints through appropriate channels

34. 34 Roles and Responsibilities – FI Project World Bank Financial Intermediary Sub-borrower

35. 35 World Bank: - EA classification of Project (FI); -NOB for EAF/Ops. Manual; -Appraisal & Supervision of EAF implementation (pre & post-review) -Review Category A sub-project EIAs (sometimes Category B) -In-Bank disclosure (Infoshop) Financial Intermediary: - Prepare EAF/Ops Manual -In-country disclosure, consultation on EAF -Implement EAF/OM (including sub- project screening, review sub-project EA/EMP, ensure Gov & WB requirements met, monitoring & reporting) Sub-project Borrower: - Prepare sub-project EA/EMP -Local consultation/disclosure -Implement s-p EMP (including requirements for/supervision of contractors) Environmental Authorities: - Monitoring/enforcement of implementation of Gov regulations & standards Government: ensure EAF implemented per Loan Agreement Roles and Responsibilities – FI Project

36. OP/BP 4.01- Environmental Assessment EA Screening Categories Environmental “Due Diligence” Documents Compliance Procedures Common Issues OP 4.01 Annexes

37. 1. Environmental Screening/EA Categories Proposed projects classified based on the type, location, sensitivity, nature and reversibility of environmental impacts: n Category A – adverse environmental impacts are broad, diverse, beyond local site, irreversible; any major resettlement or conversion/degradation of natural habitats; hazardous materials n Category B – potential adverse impacts more limited, fewer, site-specific, largely reversible, readily and reliably mitigated through known methods n Category C – likely to have no adverse environmental impacts, or minimal and easily mitigated n Category FI – project involves investments (sub-projects) to be financed through a financial intermediary; sub-projects undefined at the time of appraisal. – Sub-projects to be screened as A, B or C and handled accordingly – Requirements and procedures set out in Environmental Management Framework NOTE: For non-FI projects involving sub-projects: overall project category is determined by highest category among potential sub-projects

38. OP (Operational Policy) 4.01 Category A “indicators” n large-scale conversion or degradation of natural habitats n extraction, consumption, or conversion of substantial amounts of forest n direct discharge of pollutants resulting in degradation of air, water or soil (domestic/municipal, industrial, agricultural) n production, storage, use or disposal of hazardous materials and wastes n Construction of large dams

39. OP (Operational Policy) 4.01 Category A project examples n Large-scale infrastructure: ports and harbor development, transport (rail, road and waterways), large- scale water resources management (river basin development, water transfer); dams and large reservoirs, hydropower and thermal power, extractive industries and oil and gas transport; n Large-scale agriculture, irrigation, drainage and flood control, aquaculture; agro industries, and production forestry; n Major urban projects involving housing development, water treatment, wastewater treatment plants, solid waste collection and disposal; n Industrial pollution abatement, hazardous waste management, industrial estates, manufacture and large-scale use of pesticides; n Projects that, regardless of scale/type, would have severe adverse impacts on critical/natural & cultural resources.

40. Some Category A projects Plovdiza Dam, Bulgaria Rijeka Port, Croatia Storage of Chemicals, Kosovo

41. OP (Operational Policy) 4.01 Category B project characteristics n impacts less significant, diverse, more localized, more readily reversible n wide range (barely more than C to almost A) n Full EIA not required; various EA “Due Diligence” instruments acceptable… for lower range, with routine/predictable impacts and mitigations, EMP alone may suffice n “Checklist EMP” available for small scale building rehabilitation/construction with no site-specific issues

42. OP (Operational Policy) 4.01 Category “B” project examples n Rehabilitation of large-scale infrastructure; construction of small-scale infrastructure; power transmission and distribution networks, rural electrification, mini (run of the river with no major water impoundments) or micro-hydropower projects, small-scale clean fuel fired thermal power plants, renewable energy (other than hydropower), energy efficiency and energy conservation, rural water supply and sanitation, road rehabilitation, maintenance and upgrading; telecommunications, etc.; n Health care service delivery, HIV-AIDS, education (with limited expansion of existing schools/buildings), repair/rehabilitation of buildings when hazardous materials might be encountered (e.g., asbestos, stored pesticides); and n Small-scale irrigation, drainage, agricultural and rural development projects, rural water supply and sanitation, watershed management and rehabilitation, and small-scale agro-industries, tourism (small-scale developments).

43. Category B Project examples Rehabilitation of tertiary irrigation canal, Serbia Hospital rehabilitation, Turkey Wastewater Treatment Plant Rehabilitation, Ukraine

44. OP (Operational Policy) 4.01 Category C Projects n no adverse impacts, or minimal impacts easily eliminated n e.g., many (not all) Technical Assistance, capacity building projects, Education and Health projects not involving construction; equipment purchase, etc. n Caution: apparent C projects may include “sleeper” B category activities (sometimes even A category)

45. It’s not Category C if… n … the project will/might finance new construction or building rehabilitation* (beyond minimal painting, wiring, etc.) n …the project provides Technical Assistance or other support which could lead directly to activities which would trigger SG policies n …any of the above are financed by WB, or Government or other co-financers (covered by overall Project financing plan) * Not explicitly excluded in PAD, Operational Manual, Legal Agreement

46. OP (Operational Policy) 4.01 FI Category Projects n Involve an on-lending (or granting) Financial Intermediary; n Investments are made by other parties receiving loans/grants for sub- projects n Sub-projects can differ significantly in type, size, risk n Examples include community-driven development, Small Grants Programs, enterprise development programs, Green Investment Schemes, Municipal Services projects, etc. n Due Diligence instrument is Environmental (and Social Management Framework, outlining criteria and procedures for sub-project level EA n FI screens each proposed sub-project classifies it into any one of three categories: A, B or C – Env. Framework can indicate A sub-projects not eligible – Category A EIAs must be submitted to Infoshop, Exec. Summaries to WB Executive Directors

47. Category FI Project Examples Istanbul Municipal Infrastructure, Turkey Municipal Services, Turkey Rural Education, Romania Social Investment Fund, Romania

48. “Rapid Response” (Crisis/Emergency) Operations (OP 8.00) n Objective: Ensure due diligence in managing potential risks, while recognizing the emergency nature of the proposed rapid response operation and the need for providing immediate assistance – Safeguard and Disclosure policies apply – SG issues to be addressed in “flexible yet timely manner” n Approach (for Category A & B projects)*: – SG Specialists involved in preparation & implementation – Team prepares: n “Environmental and Social Screening and Assessment Framework”— describes approach to be taken during project implementation (project selection/design, identification/planning of mitigation measures, consultation/disclosure) n Appraisal stage ISDS - submit to Infoshop after Decision Meeting – ESSAF consultation/disclosure during implementation – Other SG documents produced/disclosed in timely manner, per ESSAF n Exemption: Decision to exempt operation from usual OP 4.01 timing/disclosure requirements is taken at Decision Meeting; Formalized through RVP exemption memo. *Category C projects: Prepare Concept stage ISDS explaining grounds for C category

49. 2. Kinds of Environmental Safeguard Documents (required for Appraisal) n Full Environmental Impact Assessment (EIA) (Category A) n Limited Environmental Assessment (EA) n Strategic Environmental Assessment (SEA) (regional, sectoral) n Environmental Audit n Hazard or Risk Assessment n Environmental Management Plan (including Checklist EMP) n Environmental Management Framework

50. Most Commonly used ESG Instruments in WG Operations: n Environmental Assessment = report identifying and analyzing potential positive and negative environmental impacts and recommending measures to avoid, minimize and mitigate negative impacts. Clearance/approval indicates the report provides a satisfactory analysis n Environmental Management Framework = a detailed outline of procedures which Borrower commits to follow to ensure that sub- projects will be implemented in accordance with OP 4.01 and other environmental SG policies. May be part of an EA or freestanding (for simpler, lower risk projects); n Environmental Management Plan = outlines mitigation and monitoring actions to be carried out as an integral part of the project; specific obligations on the part of the Borrower. May be part of EA or free-standing (with sufficient background info). May be incorporated into Operational Manual.

51. Less commonly used ESG instruments: n Strategic Environmental Assessment: EA addressing a sectoral or geographic development program rather than individual projects; typically emphasizes upstream analysis of alternatives and cumulative and secondary/induced impacts. More variable/ less well defined than EIA. Facilitates but does not substitute for project-specific EA. n Environmental Audit: systematic and objective assessment of the environmental status and performance of properties, facilities, processes, and/or operations; typically used to identify and evaluate risks involved in ongoing operations (including reputational risk to WB of association with same)

52. OP 4.01 Annexes n Annex A: Checklist of potential issues for EIA n Annex B: Outline of a full EIA Report n Annex C: Environmental Mitigation/Management Plan (contents) n Annex D: Internal EA procedures (1991) n Annex E: Environmental Screening/Classification (1991) – See EA Sourcebook for 1993 update n Annex F: Environmental Data Sheet - obsolete