Involuntary Resettlement 0P 4.12 Principles and Objectives

A Resettlement Overview Why does the Bank have an Involuntary Resettlement Policy? How has the Bank’s policy evolved? What are policy objectives and key principles What is role of Financial Intermediaries?

An Evolving Resettlement History No mitigation: Those losing land must make a sacrifice for national development Eminent domain: compensation for assets favors relatively well-to-do. Risks of impoverishment: Recognizing interests of poor and vulnerable, too Resettlement can be a development opportunity: Extending the reach of project benefits

Key Policy Objectives Avoid, minimize, or otherwise mitigate land acquisition and associated adverse impacts Assist all affected people to improve, or at least restore, incomes and living standards Resettlement as a development opportunity for households and community infrastructure (Mitigating risks for affected people helps minimize risks to borrower and Bank, too)

Key Planning Principles The Bank requires the borrower to prepare and implement a plan to identify, minimize or mitigate adverse impacts. Implementers and affected people should be involved in planning process Plan scope of coverage includes all contemporaneous impacts essential to functioning of Bank-supported project Bank acceptance of plan required at appraisal (or prior to subproject approval in FI projects)

Key Guiding Principles All affected persons should be compensated or assisted in other ways, regardless of legal status Compensation for all assets at replacement cost (enough to obtain assets of equivalent value) Income restoration may require supportive measures in addition to compensation for assets Affected persons should be involved in resettlement planning and implementation Consultation Information Disclosure Grievance Procedure

Role of Financial Intermediaries Prepare and agree a Resettlement Policy Framework with the Bank Screen all proposed on-lending activities for land acquisition and associated resettlement impacts If RPF deemed unnecessary, legal documents require compliance if impacts should arise For all subprojects involving relevant impacts, Bank approval of a resettlement plan required before accepted for financing

Recurring Issues and Problems Defining project scope: “Indirect impacts” and “linkage” in application of Bank policy Bridging the eligibility gap: Assisting vulnerable people and those who lack full legal recognition Covering all costs: ‘Replacement cost’ valuation, transaction costs and transitional support Asset stock versus income flow: Going beyond compensation to income restoration and incorporation of development opportunities In FI projects, ensuring coordination with subclients in implementation and reporting