Download A Brief Introduction to the Safeguard Policies

INTRODUCTION:
World Bank
Environmental and
Social
Safeguard Policies
Training Workshop for
Financial Intermediaries and
Implementing Agencies
May, 2011
Agi Kiss
Regional Safeguards Coordinator
Europe and Central Asia

Safeguards and Risk Management

Overview of the Policies (10+1)

A Closer Look:
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OP
OP
OP
OP
4.01 (Environmental Assessment)
4.12 (Involuntary Resettlement)
4.04 (Natural Habitats)
4.37 (Dam Safety)
Protect people and environment from adverse
impacts (“Do No Harm”)
Enhance environmental sustainability and social
equity (“Do Some Good”)
Sustainable
Finance
Integrate environmental and social aspects into
decisions on project selection, design and
implementation (quality and risk management)
Build borrower capacity for environmental and
social management
Provide a mechanism for information disclosure,
stakeholder consultation and participation,
accountability
Respond to local and global constituencies
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Increasingly enterprises (and those who finance them) seek to be
good “corporate citizens” and apply “Triple Bottom Line” (Economic,
Environmental, Social)
a voluntary set of standards for determining, assessing and
managing social and environmental risk in project financing
based on the International Finance Corporation (IFC) Performance Standards
and World Bank Group’s Environmental Health and Safety Guidelines
currently 71 adopting institutions (mostly commercial banks
Principles:
•Risk review & categorization (A,B,C)
•Do Environmental & Social assessment
•Apply relevant Env & Social standards
•Management System/Action Plan based on assessments/standards
•Consultation and disclosure
•Grievance mechanism
•Independent review of assessment, Action Plan and consultation
•Covenants for compliance
•Independent monitoring & reporting of loan
•Financial Institution annual public reporting
Almost every development or business activity has the potential to
cause damage to people, property, environment. If they (and those
who finance them) don’t identify and manage these risks, can suffer:
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Costly financial and legal liabilities
Damage to reputation and reduced public and political support
Reduced access to capital
Loss of access to markets and value chains
For Financing Institutions, E & S risk management involves:
◦ Assessing the potential environmental and social risks of projects and the extent to which they
can be avoided, reduced or mitigated
◦ Assessing the borrower’s capacity to manage these risks
◦ Building realistic measures to avoid/control/mitigate risks into the financing transaction –
incorporating into loan documents
◦ Monitoring compliance with loan documents and national requirements
OVERVIEW of WORLD BANK SAFEGUARD POLICIES
Environmental Policies
• OP 4.01 Environmental Assessment
• OP 4.04 Natural Habitats
• OP 4.09 Pest Management
• OP 4.11 Physical Cultural Resources
• OP 4.36 Forests
• OP 4.37 Safety of Dams
Social Policies
•OP 4.12 Involuntary Resettlement
• OP 4.10 Indigenous Peoples
Legal Policies
• OP 7.50 International Waterways
• OP 7.60 Disputed Areas
+ Access to Information Policy
Not all environmental/social issues of concern are covered by Safeguard
OPs (e.g.: gender, poverty alleviation, climate change…)
OBJECTIVES:

Avoid negative impacts where possible; otherwise minimize,
reduce, mitigate, compensate (in that order)

Match level of review, mitigation and oversight to level of risk and
impacts

Inform the public and enable people to participate in decisions
which effect them
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Integrate environmental and social issues into project
identification, design and implementation
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Strengthen Borrower capacity
Application: to all activities of any project receiving
funding from WB, even if financed from another source
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Borrowers
WB
Board
Media
Project
Beneficiaries
Private
Investors
International
Financial
Institutions
NGOs
WB
Management
Civil
Society
Affected
Persons

OP 4.01 (EA): Need to prepare EA &/or EMP
Triggers: direct or indirect physical investments (civil works; provision of
goods with “issues”); TA linked to physical investments; any other OP
triggered
Documents: SEA, EIA/EA, EMF, EMP, Env. Guidelines, Env. Audit, etc.

OP 4.04 (Natural Habitats): Protect biodiversity and
ecosystems
Triggers: investments in, near or likely to affect natural ecosystems
(terrestrial, riverine, coastal, marine, aerial); Protected Areas
Documents: Incorporated in EA/EMP

OP 4.09 (Pest Management): Reduce human & environment
exposure to hazardous pesticides; promote Integrated Pest
Management
Triggers: financing purchase of pesticides; investments likely to introduce or
increase pesticide use (expansion or diversification of agricultural
production)
Documents: Pest Management Plan (or section in EA)

OP 4.10 (Indigenous Peoples): Protect livelihoods and
cultures, support economic and social integration on peoples’
own preferred terms
Triggers: investment within an area occupied or used for economic
purposes (presently or traditionally) by a group which falls within
definition of IP (in ECA, only northern Russia) Document: Indigenous Peoples Plan

OP 4.11 (Physical Cultural Resources): Preserve cultural
heritage
Triggers: civil works on historical buildings or in historic areas or areas with
rich cultural history)
Documents: Incorporated in EA/EMP
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OP 4.12 (Involuntary Resettlement): Protect people from
economic & social impacts of losing land or access to landbased resources
Triggers: potentially any case where land is required for investment
(privately owned or publicly owned). Residence or economic use; legal title
or not. New construction: presume triggered unless clearly demonstrated
otherwise.
Documents: Resettlement (or Land Acquisition)
Policy Framework; Resettlement (or LA) Action Plan

OP 4.36 (Forestry): Promote sustainable forest management; rural
poverty reduction
Triggers: investments in/near/upstream of forest areas (esp. natural forest) which are
likely to result in forest loss/encroachment; enterprises involving wood or nontimber forest products

OP 4.37 (Safety of dams): Protect people and investments from dam
failure
Documents: Dam safety analysis, emergency plan, etc.
Triggers: dam construction/rehabilitation; water or power projects dependent on dams

OP 7.50 (International Waters): riparian States notified of projects affecting
common water bodies
Triggers: ANY investment involving water abstraction, release of water or materials into
water, or hydrological impacts (regardless of scale) on water body shared by 2 or
more countries (aquifers, open seas excluded; exception available for rehabilitation
of existing schemes)
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OP 7.60 (Disputed Areas): Ensure disputing States agree to proposed
project
Trigger: investments in area which is under dispute between countries (e.g.
disagreement on precise border)
Access to Information: Transparency, stakeholder participation,
better projects
Trigger: all operations
Responsibilities: Direct Investment Projects
World Bank
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Screens and Sets Project EA
Category
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Advises Borrower on the
Bank’s EA requirements
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Reviews and gives “No
Objection” for EA reports (Due
Diligence instruments)
Borrower

Prepares and Implements
EA/EMP/EMF in accordance
with national laws and WB OPs
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Consults project-affected
groups and local NGOs
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Discloses draft/final
documents in country
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Responds to Bank and public
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Makes report available in Info
shop
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Supervises implementation of
EA/EMP

Monitors implementation of
EMP
Makes mutually agreeable
changes during
implementation

Ensures compliance under
national laws
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Responsibilities: “Intermediated” Projects
World Bank
Assigns SG Category to the overall Project (FI,
A, B, C)
Contractual relationship
FI (or other Intermediary)
Assesses FI capacity to implement SG
Advises FI on SGs and on Framework
Documents; gives No Objection to Framework
Documents
Discloses all SG documents in Infoshop and
sends to Board as required
Prior and/or Post-review of EAs/EMPs/RAPs
Supervises implementation together with FI
(Sub) Borrower
Prepares Framework Documents for the
overall Project (Environmental
Management Framework; Resettlement
Policy Framework)
Disclosure and public consultation on
Framework Documents
Screens, categorizes, evaluates, approves
and monitors Sub-projects based on
Framework documents (including
ensuring preparation of acceptable
EAs/EMPs; RAPs)
Prepares EA/EMP, RAP* based on guidance
from FI
Disclosure & public consultation of EMP/RAP
Implementation of EMP/RAP* (including
selection of contractors; incorporating EMP
in contracts; ensuring compliance)
*Preparation and/or implementation of RAP
might be responsibility of a Government agency
Transfer to SM
Transfer to SM
Prepare PCN &
PCN stage
ISDS
PCN review
mtg.
PCN stage ISDS mtg.
& clearance–
Provisional EA
category; agreement
on SG requirements
Follow-up SG
meeting (?)
Transfer to SM
Preparation of
EA/EMP/EMF;
RPF/RAP
Implementation
SG
implementation
& supervision/
reporting
Prepare draft
PAD & Appraisal
Stage ISDS
QER
Disclose final
EA/EMP;
RFP/RAP
Appraisal
stage ISDS
mtg. &
clearance
EA/EMP/EMF &
RFP/RAP
disclosure &
consultation
Decision Mtg.
Appraisal
Effectiveness
Negotiations
A Closer Look: OP 4.01 (Environmental Assessment)
Environmental Management Process
Screening/Scoping – determine what are likely potential
issues, including what (other SG) policies triggered
Assessment – confirm and evaluate the significance of issues
Baseline (valued ecological components)
Likely impacts
Acceptable changes from baseline
Mitigation – identify measures to avoid/reduce/compensate for
negative impacts including the expected results (e.g. standards
to be achieved); identify who is responsible and confirm they
have the capacity and resources
Monitoring – verify that mitigation measures are being
implemented and that they are achieving the expected results (if
not, need to modify them)
Refer to
other SG
Policies
Environmental Screening/EA Categories
Category A
adverse environmental impacts are broad, diverse
[not easily predictable], extend beyond local site,
likely irreversible
major resettlement
conversion/degradation of natural habitats
hazardous materials
Category B
potential impacts less adverse & more
limited, fewer, site-specific, largely
reversible
Category FI
project provides funds to a bank,
credit institution, etc. for onlending at FI’s own risk (OP/BP 8.30
– FI lending)
Sub-projects to be screened
and categorized as A, B or C
and handled accordingly
Requirements and procedures
set out in Environmental
Management Framework
readily identified and reliably mitigated
through known methods
Category C
expected to have no adverse environmental
impacts, or only minimal impacts easily and
fully mitigated
Criteria approach = flexibility
List approach = consistency
Identifying Category A Projects: Relevant Information
Project type: some sectors/industries presumed to be Category A regardless
of scale (unless demonstrated otherwise)
Project scale: some sectors/industries are only Category A at large scale,
due to area of land take, input materials required, waste volume generated, etc.
(thresholds set based on experience)
Project location: some investments are acceptable only in non-sensitive
locations (social, cultural, environmental significance and vulnerability)
Types and magnitudes of activities: some projects in generally “nonrisky” sectors can include specific activities which are risky
Types and magnitude of impacts: Broad, irreversible, beyond
project site, etc.
“Sensitive issues”: some projects are in sectors or include activities which
raise concerns at a wider (e.g. international) level, beyond the risks and potential
impacts of the specific project, and their risks must be seen in that context
Identifying Category A Projects
Type of Project
Scale of project
Directly financed
Project Activities
Associated
Project location
Geographic location
Site’s environmental significance
and sensitivities
Nature of impacts
Magnitude of impacts
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Subprojects financed through a Financial Intermediary
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( E.g.: SME credit lines, community-driven development, Small
Grants Programs, Green Investment Schemes, etc.)
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FI assumes responsibility for sub-project screening, evaluation,
monitoring
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WB prior and/or post-review
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Criteria, procedures, responsibilities set out in an
“environmental (and social) management framework” -- free
standing, or environmental section of Project Implementation
Manual or FI Operational Manual
 allow or exclude Category A sub-projects
 if Cat. A sub-projects eligible, EMF may be subject to Pelosi requirement
 Category A sub-project EIAs must be submitted to Infoshop, Exec. Summaries to
WB Executive Directors
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Full Environmental Impact Assessment (EIA) (Category A)
Limited Environmental Assessment (EA) (Category B)
Strategic Environmental Assessment (SEA) (regional, sectoral)
Environmental Audit
Hazard or Risk Assessment
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Environmental Management Plan (including Checklist EMP)
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Environmental Management Framework
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(Category FI)
(Details in upcoming presentation)
(Category FI)
Environmental Assessment Requirements For projects and sub-projects
Category A:
full, comprehensive EIA (or Strategic EA for program level)
at least 2 public consultations (scoping/TOR stage and draft EIA)
independent preparation
Category B:
limited/partial EA and/or EMP (in some cases, just applicable
regulations and standards)
at least 1 public consultation (draft EA)
Category C: No EA requirement (for new investments)
Support for pre-existing operations: Environmental audit; hazard risk
assessment :
o for Category A or B investment, in addition to other EA requirements
o for Category C investment, in place of other EA requirements
o for low-risk sectors and non-direct linked investments may be limited to
verifying compliance with national regulations/permit requirements
What is Cumulative Impact
Assessment?
Project A zone of impact
Project A site
Zone of Impact of directly
linked or induced
development
Facility B
zone of impact
Important Env.
Asset
Important Cultural
Asset
Zone of impact of
planned/reasonably foreseeable
development or trend
Existing
Facility
B site
EIA Screening: Category A vs. B
Approach 1: Difference between Category A and B -- breadth and depth of EA
required
Category A requires full EIA including:
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•
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Stakeholder consultation on TOR/scoping (as well as on draft EA)
Assessment of offsite, cumulative and indirect impacts
Analysis of environmental pros and cons of feasible alternatives (site, technology, scale, etc.)
Up-to-date, detailed baseline data on site conditions (biological, hydrological, etc.)
Institutional analysis (responsibilities, capacity)
Independent preparation to ensure unbiased analysis and consideration of alternatives
Approach 2: high risk activities e.g.:
production/use/storage/disposal of significant quantities of hazardous material;
large scale burning of fuel or other pollution-emitting processes;
construction of new permanent roads, etc.
Approach 3: Scale sale and irreversibility criteria (e.g.: physical resettlement
of 100+ households; new dam > 15m and/or new reservoir > 3 mill m3;
total volume of earthworks >100,000 m3; land “take” > 1000 ha, etc.)
(NOTE: Figures are illustrative – not WB policy)
Approach 4: How many other SG policies apply? (especially Natural Habitats,
Forests, Dam Safety)
Plovdiza Dam, Bulgaria
Storage of Chemicals, Kosovo
Rijeka Port, Croatia
EIA Screening: “High” B vs. “Low” B vs. C
“High B” requires a limited EA to provide site-specific information (e.g.
due to environmentally sensitive site, or need to better define and
understand potential issues)
“Low B” requires only basic EMP (mitigation and monitoring tables), or
Checklist EMP, or can make a case for application of specific national
regulations and standards if acceptable monitoring/enforcement system is
in place
C requires no EA or EMP and no regular monitoring, only general good
practice (e.g. building codes, construction standards)
Construction of a new
juice manufacturing and
canning plant in an
industrial zone?
Construction of a
small eco-lodge
within a multiple-use
protected area?
Construction of a
primary school on a
“brownfield” site
Cleaning and Rehabilitation of existing irrigation canals?
Construction of a landfill for mixed urban
and industrial waste?
Rehabilitation of tertiary
irrigation canal, Serbia
Hospital rehabilitation,
Turkey
Wastewater Treatment
Plant Rehabilitation,
Ukraine
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…the project will/might/could finance new
construction or building rehabilitation* (beyond
minimal painting, wiring, etc.)
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…the project provides Technical Assistance
or other support which could lead directly to
activities which would trigger SG policies
…any of the above are financed by WB, or
Government or other co-financers (covered
by overall Project financing plan)
Caution: apparent C projects may include “sleeper” B category
activities (sometimes even A category)
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Screening methodology and outcomes (when
is EIA required)
Alternative EA documents (e.g. EMP)
Contents of EIA
One integrated EIA vs. separate EIAs for
different project components
Timing (at what stage of project preparation)
Consultation (timing, frequency, scope,
reporting)
A Closer Look: OP 4.04 (Natural Habitats)
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Does promote and support natural habitat conservation and
improved land use through integration of natural habitat
conservation into national and regional development, and the
rehabilitation of degraded natural habitats;
Does not support projects that involve significant conversion or
degradation of critical natural habitats
Does not support projects involving the significant conversion or
degradation of natural habitats unless:
 there are no feasible alternatives for the project and its siting, and
 comprehensive analysis demonstrates that overall benefits from the project
substantially outweigh the environmental costs
If EA indicates a project would significantly impact a (non-critical)
NH, it must include mitigation measures acceptable to the WB

Natural Habitat : land and water areas where
o
o
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Critical Natural Habitat:* subset of Natural Habitats which have very high
biodiversity value, e.g.:
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the biological communities are formed largely by native plant and animal species, and
human activity has not essentially modified the area's primary ecological functions
required for survival of endangered, threatened or migratory species;
have special significance for endemic species or species with limited ranges;
support high concentrations of individuals of congregatory species;
Have unique assemblages of species or are associated with key evolutionary processes
Support biodiversity of highly significant social, economic or cultural importance to local communities;
OR
Are strictly protected under national laws and/or international agreements
Significant conversion/degradation: elimination or severe diminution of integrity of NH
caused by a major, long-term change in land or water use (or short term change with a long
recovery time) or by severe pollution. Can result directly or indirectly from the project

Appropriate conservation/mitigation: measures to eliminate or reduce adverse impacts
to levels within socially defined limits of acceptable change. May include:
full or strategic partial site protection;
◦ restricting conversion or modification to non-essential elements of ecosystem
◦ habitat restoration/species re-introduction
◦ establishment and maintenance of an ecologically similar (equal value) protected area of suitable size
and contiguity.
(Mitigation measures should always include provision for monitoring/evaluation and adaptive
management based on the results)
◦
* Paraphrased combination of WB and IFC definitions
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Identify geographic/ecological Zone of Influence of the project;
Determine whether ZoI includes any likely Natural Habitat
Some Indicators of Natural Habitat:
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•
•
vegetation entirely or mostly comprised of wild plant species
no large scale livestock presence
water body with little or no surrounding development
few or no permanent residences or other significant structures or
infrastructure (except small dirt roads and tracks roads)
• no significant economic activity other than moderate harvesting of wild species
• no significant sources of pollution (sufficient to impair ecosystem functions)
• above conditions cover ecologically significant area (varies by ecosystem)

If yes, carry out desk and site assessment and consultations to
determine:
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baseline biodiversity and ecological values;
whether it qualifies as Critical Natural Habitat or Natural Habitat
If project could effect (non-critical) Natural Habitat:
◦ EA is required, involving special expertise;
◦ Ensure consultations involve suitable stakeholders (NGOs, resource user groups)
Projects likely to trigger Natural Habitats Policy
Infrastructure:
•Transportation construction (roads, railways, ports, etc.)
•Power (hydroelectric, wind, thermal, transmission lines, access roads)
•Water (reservoirs, diversions, canals)
•Urban or rural development (large land conversion, wetland drainage or filling…)
Agriculture/livestock: land clearing, fencing, pesticides, irrigation
Fisheries: conversion of wetlands or near-shore habitats for aquaculture,
destructive/over fishing
Forestry/wood : intensive logging of natural forest; conversion to
plantation
Industry: pollution of terrestrial and aquatic habitats, land clearing, access roads
Tourism: land clearing, wetland drainage or filling, excessive disturbance
Telecommunications: transmission lines and towers (often on mountain tops)
Privatization: sale of state-owned lands, water rights
A Closer Look: OP 4.12 (Involuntary Resettlement)
It’s all about the land
Indicators for OP 4.12:
Investment with a physical footprint (needs land)
New construction or expansion of infrastructure; land use changes
The land is being occupied or used by someone
Legal or illegal/informal; permanent or sporadic; verify on the ground!
Resettlement
X
Land Acquisition

Loss of land or land-based assets
Loss of access to land or land-based assets due
to creation of a Protected Area

Loss of shelter /relocation of residence
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Loss of income sources or means of livelihood
(whether or not the affected persons must move
to another location)
Restriction of access to legally designated parks
and protected areas that result in adverse
impacts on the livelihoods of affected persons
The many faces
of land acquisition/involuntary resettlement
OP 4.12 applies to:

all projects involving land take, regardless of the total number of
people affected or the significance/severity of impacts

all components of the project involving land take, regardless of the
source of financing

other activities requiring land take that are:
 directly and significantly related to a Bank-assisted project,
 necessary to achieve its objectives as set forth in the project
documents, and
 carried out, or planned to be carried out, contemporaneously
with the project

both privately owned and public lands

both public and private investments
 WHO IS ELIGIBLE: WB requires compensation/
assistance to informal land users & occupants
(“squatters and encroachers”)
 VALUATION: WB requires compensation equal to
replacement value of land/assets
 BEYOND COMPENSATION: WB requires assistance for
restoration of livelihoods (not worse off as result of
project)
 TIMING: WB requires compensation/assistance
provided in full prior to beginning implementation of
works
A Closer Look: OP 4.37 (Dam Safety)
Failure of large dams can have catastrophic consequences for
human safety, environment, economic assets.
For the life of the dam, the owner is responsible to take measures to
avoid and mitigate this risk.
Construction of a new dam WB requires:
 Design and construction supervision by experienced, competent experts:
Large dams (>15 m, or >10 m with other risk factors):
review by Panel of experts (appointed by Borrower; acceptable to Bank)
preparation/implementation of detailed plans for
quality assurance,
instrumentation,
operation and maintenance,
emergency preparedness
prequalification of bidders during procurement and bid tendering
periodic safety inspections of the dam after completion
Small dams: generic safety measures designed by qualified engineers
 Borrower adopt and implement dam safety measures for the design, bid
tendering, construction, operation, and maintenance of the dam and associated
works
PANEL OF EXPERTS
Terms of Reference:
Primary: review and advising the borrower on matters relative to dam safety and other critical
aspects of the dam, its appurtenant structures, the catchment area, the area surrounding the
reservoir, and downstream areas
Usually extend also cover:
• project formulation
• technical design
• construction procedures
• associated works (e.g. for water storage dams – power
facilities, river diversion during construction, shiplifts, fish ladders)
Operation and reporting:
 PoE is formed early in Project preparation.
 Meets regularly during feasibility, design, construction, filling, early start-up
stages (WB notified of meetings, usual participates as observer).
 After each meeting, report signed by all PoE members is sent to Borrower & WB
 After filling and start-up, WB reviews PoE findings and recommendations
 PoE may be disbanded if no problems found after start-up
Existing Dams and Dams Under Construction
Situation:
WB-financed project does not include dam construction, but does rely on the performance of a dam:
 dam failure  damage project infrastructure
 poor dam operation  project cannot achieve objectives
 Increased dam capacity  required to achieve project objectives
What are some examples
of such projects?
World Bank policy requires Borrower to:
Arrange for independent specialists to :
Inspect and evaluate safety status/performance history of the dam
Review/evaluate operation and maintenance procedures
Provide a written report with recommendations for any measures to upgrade to
acceptable safety standard (can be financed by the project)
OR, in low/moderate risk cases:
Provide acceptable existing inspections and dam safety assessments and evidence that
an effective dam safety program is in operation