INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized I. Basic Information Date prepared/updated: 06/03/2008 INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE Report No.44054: 1. Basic Project Data Country: Brazil Project ID: P Project Name: BR Novagerar CDM Solid Waste Program II Task Team Leader: Paul Procee Estimated Appraisal Date: 6/10/2008 Estimated Board Date: 06/15/2008 Managing Unit: LCSUW Lending Instrument: Carbon Finance Sector: Climate Change (P); Pollution management and environmental health (S) Theme: Carbon Finance (P) IBRD Amount (US$): IDA Amount (US$): GEF Amount (US$): PCF Amount (EUR): 12,000,000 Other financing amounts by source: Borrower Environmental Category: B - Partial Assessment Simplified Processing Simple [ ] Repeater [ ] Is this project processed under OP 8.50 (Emergency Recovery) [ ] No [] 2. Project Objectives 1. The main objective of the Novagerar Landfill Gas Project is to mitigate greenhouse gas emissions and reduce environmental and social impacts of solid waste disposal. This would be accomplished by improving final treatment and disposal of solid waste and capturing landfill gases. The project includes the installation of landfill gas capturing and flaring systems at old dumpsites, new sanitary landfills, and the exploration of alternative waste treatment options, such as composting, to reduce carbon emissions. Depending upon the quality/quantity of gas collected, some projects might generate electricity from the landfill gas captured. 3. Project Description 2. The Novagerar Carbon Finance and Solid Waste Management Project II intends to extend the successful business model developed for the first Novagerar project in Nova Iguaçu, and to develop an umbrella of Landfill Gas Capture projects in Brazil. The project comprises several distinct subprojects aimed at capturing landfill gas from new sanitary landfills and old dumpsites. Given project feasibility and sufficient landfill gas volume, a gas-to-energy plant could be included among these sub-projects. A pilot composting site is also being considered at one of the landfill sites. The captured methane would then be either flared or used to generate electricity, to be sold to the grid if the potential is deemed significant. An LOI encompassing the whole umbrella was signed with Novagerar on February 14, 2007, and each sub-project would have its own individual PIN, PID and ISDS. The proposed project

2 2 comprises of individual sub-projects at different stages of preparation. A preliminary assessment has identified 5 initial sub-projects, from which carbon emission reductions would be purchased, with more to be added as they are identified: 3. Sub-project 1: Operation of the existing landfill of São Gonçalo (850 tons/day), a.k.a Itaoca. The landfill has already been contracted in the form of a municipal concession and will be closed in About 200 waste-pickers are living on the project site and have been organized into a cooperative since the beginning of São Gonçalo s rehabilitation process from dumpsite into proper landfill. 4. Sub-project 2: Novagerar is developing an entirely privately operated landfill in Muribeca, part of the Municipality of Jaboatao dos Guararapes, close to the city of Recife, a.k.a CTR Candeias. The site is already operating and waiting for nearby municipalities to begin bringing their solid wastes. It currently recieves an estimated 900 tons/day of municipal waste, and the addition of Recife would bring its potential up to 2,700 tons/day. 5. Sub-project 3: As part of the concession for the rehabilitation and closing of the old São Gonçalo dumpsite, the contract with the municipality also includes the opening of a new sanitary landfill in the municipality, with an estimated disposal of around 900 tons/day. A study of alternatives for the new site identification has been completed and Novagerar has submitted the findings to the municipality and public attorney for review and approval. 6. Sub-project 4: Novagerar has identified a site for a new landfill in the southern part of the metropolitan area of Rio de Janeiro (Santa Rosa), and is currently seeking the requisite environmental license. The potential amount of solid waste to be disposed is high (between 3 to 5,000 tons/day), and there are also plans to use an existing railway link to transport the waste between the city of Rio de Janeiro and the landfill, thereby providing additional benefits. This sub-project is likely to be ready by next year. 7. Sub-project 5: Novagerar is currently operating a landfill, but is planning construction of a composting plant in Petrolina, Bahia, which could receive waste from neighboring cities, including Juazeiro. The organic content of the waste is high, but no detailed studies have yet been undertaken to assess the project s emission reduction potential. 2

3 3 4. Project siting and salient physical characteristics relevant to safeguards analysis The sub-projects are all located within or near major urban areas. The identification of new landfill sites ensures that none would be located within fragile habitats or adjacent to densely populated areas. Any doubts concern the existing dumpsite in São Gonçalo, which has already been partially rehabilitated by Novagerar, but is sitting in a mangrove area next to Guanabara Bay. There is an urgency to definitively close the dumpsite, finalize the rehabilitation process, and monitor impacts on the surrounding environment. Field visits and documentation provided by Novagerar show that the company has already made good progress and will continue to work on minimizing the landfill s impacts 5. Environmental and Social Safeguards Specialists Paul Procee Environmental Specialist 6. Safeguard Policies Triggered No Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.11) Indigenous Peoples (OP/BP 4.10) Involuntary Resettlement (OP/BP 4.12) Safety of Dams (OP/BP 4.37) Projects on International Waterways (OP/BP 7.50) Projects in Disputed Areas (OP/BP 7.60) II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: The project triggers and addresses the following Bank safeguard policies: OP 4.01 Environmental Assessment As mentioned, the project is focused on the implementation of gas capture and treatment systems on existing dumpsites and new landfills. These investments impose no significant impacts and actually offer a number of benefits, in terms of emissions and explosion risk reductions, as well as additional resources for environmental monitoring and social activities in and around the landfills. The project has thus been rated a Category B. As discrete investments are part of larger investments in the opening of new landfills and closing of existing dumpsites, the team has reviewed the overall environmental and social assessments and management plans prepared by Novagerar at the various sub-project sites, including specific investments in gas capture and treatment systems. 3

4 4 To ensure that the project identifies and mitigates all major environmental risks, Novagerar has prepared two social and environmental management frameworks; one specific to existing dumpsites, and the other for new sites, to be applied to individual sub-projects, depending on their operating status. The frameworks include procedures for the closing of open dumpsites, the construction and operation of new landfills, and mitigation measures for the economic displacement of waste pickers, as well as landfill-to-gas facilities. As each subproject is identified, the appropriate framework would be applied and a Social and Environmental Assessment and Management Plan (SEMP) prepared and shared with the Bank for no objection prior to the signing of any agreement for the purchase of ERs of sub-projects. Environmental Assessments have been conducted for the New Landfill of Candeias, Pernambuco State, and the Proposed Landfill of Santa Rosa, Rio de Janeiro. An Environmental and Social Management Plan (ESMP), based on the Environmental and Social Framework, has been prepared for the Itaoca Dumpsite in São Gonçalo, Rio de Janeiro. Based on these assessments, detailed management plans are being developed, including. among other things: (i) Social Consultation and Outreach Plans; (ii) Environmental Monitoring Plans; (iii) Waste Picker Social Integration Plans; (iv) Environmental Monitoring Program for Landfill Gas Recovery and Flaring; and (v) Environmental Monitoring of the Project Natural Habitats Procedures for the siting of new landfills include criteria to avoid environmentally sensitive areas, wetlands, and significant protected areas and natural habitats. Unfortunately, existing dumpsites often are located in river valleys, swamps and natural habitats: for example, the existing Itaoca Landfill is located in a sensitive mangrove area. In this case, the team has worked to ensure that Novagerar implements appropriate measures to reduce and minimize impacts, that carbon finance revenues are provided to fund dumpsites closings, that appropriate remediation measures are implemented and that adequate environmental monitoring is done in and around the landfill to ensure impacts are controlled and minimized. 4

5 5 OP 4.12 Involuntary Resettlement The Itaoca sub-project triggers the Bank OP/BP 4.12, due to the presence of waste-pickers on the site, as the closing of the existing dumpsite and installation of landfill gas recovery systems would require the relocation of waste-pickers currently working there. While no actual physical relocation of the waste-pickers is necessary to address this issue, OP/BP 4.12 is triggered, due to their "economic displacement (specifically, impacts on access to resources). These impacts are being addressed through a a comprehensive waste picker integration strategy already developed and currently being implemented by Novagerar, in coordination with the municipality, and aimed at helping waste-pickers to engage in alternative income-producing activities, which includes: (i) a census and registration of waste pickers and their families; (ii) creation of a safer and cleaner working environment for recycling and support in the wholesaling of materials; (iii) the offering of viable income generation alternatives at the new landfill site or the municipality; and (iv) the providing of improved access to health care and education, especially for children. Some of these measures are already being implemented by Novagerar at some sites, and the Bank would support their further implementation. The ESMF already developed includes a comprehensive framework for addressing these issues, and each new sub-project in which waste pickers are involved would develop a specific plan, based upon that framework (the Itaoca ESMP has already been written and applied). In Itaoca, a social analysis, consultation and accompaniment process has already resulted in the formation of a waste pickers recycling cooperative, the construction of a covered sorting facility, and other measures to improve the livelihoods and working conditions of waste pickers. Novagerar is also implementing public consultation and outreach programs in all of its subproject areas to improve public understanding of the need for a landfills and their basic principles of operation. This process also allow neighboring communities to express their concerns and promote community supported measures to compensate for impacts generated by the landfill and to increased traffic in the immediate vicinity. Novagerar has extensive experience in the design and implementation of such plans in other landfills and has already demonstrated great effectiveness in involving local communities. This project is further linked to a series of initiatives aimed at strengthening social inclusion in solid waste management in Brazil (specifically, the Integrated Solid Waste Management and Carbon Finance Project, the PPIAF-supported Private Participation in Municipal SWM Projects in Brazil, and the JSDF-supported Waste Picker Inclusion Initiative), would allow it to benefit from the advances of those other projects, as well as extra support. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: Positive Impacts The proposed project is expected to have highly positive environmental impacts, as it would enable environmental improvements in solid waste practices and the landfill gas recovery system would reduce both global emissions and local air pollution. The closing and rehabilitation of existing dumpsites would greatly reduce direct impacts of improper waste disposal on the surrounding environment and communities. ER revenues would assist the financing of these strategies and long-term environmental monitoring. 5

6 6 Negative impacts The proposed project is focused on the implementation of landfill gas capture and recovery systems, which have limited local environmental impacts, mostly related to the construction phase. Overall final disposal operations have the following impacts that must be properly addressed by Novagerar to avoid posing environmental or public health risks: (i) Air: emissions of methane (CH4), air pollutants (CO, SO 2, NO x, NMVOC, CO 2, N 2 O), heavy metals (Pb, Zn, Cu, As), dust, dioxins and odors; (ii) Water: leaching of salts, heavy metals, and biodegradable and persistent organics to surface water and groundwater; (iii) Soil: accumulation of hazardous substances in the soil; (iv) Landscape: visual intrusion, restriction for other users; (v) (vi) Ecosystem: contamination and accumulation of toxic substances in the food chain; and Human health: exposure to hazardous substances, spread of vector diseases, nuisance from odors, and increased traffic in surrounding communities. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. All sub-projects will improve overall conditions of waste disposal and reduce impacts on communities and environment. In the specific case of the Itaoca dumpsite, the alternative of not having the project would almost certainly worsen the situation and result in increasing impacts of the existing dumpsite on surrounding communities, deteriorating working conditions for the waste-pickers and growing pollution of Guanabara Bay and the very sensitive and scarce mangrove areas in the metropolitan region. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. The Novagerar Eco Energia Ltda has an excellent track-record in developing sanitary landfills and addressing environmental impacts from waste disposal sites. The company has a team of highly qualified consultants to address environmental impacts from solid waste operations and a team of social assistants to supervise and implement social programs in and around the landfill. Previous projects have demonstrated Novagerar s commitment to environmental and social causes, and have led to substantial improvements in local environment and quality of life. The project team has worked closely with Novagerar in project preparation to develop a comprehensive environmental and social framework to prevent, minimize, mitigate and/or compensate any environmental and social impacts of investments, through the use carbon revenues. In the specific case of Itaoca, carbon revenues would support the preparation and implementation of a social development plan addressing waste-pickers formerly living on the dumpsite. The project would strengthen the segregation process, and the stocking and selling of recycled materials in a cooperative form, through support for cooperatives, the providing of social assistance, and the providing of training, and improvements in infrastructure and equipment in order to improve waste pickers quality of life and increase their average income. The project would also help build municipal capacity to address environmental and social issues (which might possibly be financed from carbon revenues as well). 6

7 7 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Key stakeholders include: 3 Novagerar 3 Municipalities 3 Waste pickers (at old dumpsites) In accordance with the Bank Information Disclosure Policy (BP 17.50), a process of disclosure and public consultation was completed for Itaoca, Candeias and Santa Rosa, as part of the Environmental Assessment. Novagerar has also agreed to a consultation process that would continue under the implementation of the project. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Date of receipt by the Bank 5/06/2008 Date of "in-country" disclosure Date of submission to InfoShop 03/20/2008 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Date of receipt by the Bank 4/15/2008 Date of "in-country" disclosure 5/01/2008 Date of submission to InfoShop 5/07/2008 * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP Environment Assessment Does the project require a stand-alone EA (including EMP) report? If yes, then did the Regional Environment Unit or Sector Manager (SM) review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated in the credit/loan? OP/BP Natural Habitats Would the project result in any significant conversion or degradation of critical natural habitats? If the project would result in significant conversion or degradation of other (noncritical) natural habitats, does the project include mitigation measures acceptable to the Bank? OP/BP Physical Cultural Resources Does the EA include adequate measures related to cultural property? Does the credit/loan incorporate mechanisms to mitigate the potential adverse No N/A N/A 7

8 8 impacts on cultural property? OP/BP Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/process framework (as appropriate) been prepared? If yes, then did the Regional unit responsible for safeguards or Sector Manager review the plan? OP/BP Safety of Dams Have dam safety plans been prepared? Have the TORs as well as composition for the independent Panel of Experts (POE) been reviewed and approved by the Bank? Has an Emergency Preparedness Plan (EPP) been prepared and arrangements been made for public awareness and training? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project cost? Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? N/A D. Approvals Signed and submitted by: Name Date Task Team Leader: Environmental Specialist: Social Development Specialist Additional Environmental and/or Social Development Specialist(s): Paul Procee Paul Procee Peter Cohen Approved by: Regional Safeguards Coordinator: Comments: Sector Manager: Comments: Reidar Kvam Guang Zhe Chen 8