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: 05/29/2007 INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE Repopr6io.- 1. Basic Project Data Countr idonesia Project ID: P Project Name: Pontianak Landfill Gas Flaring Project Task Team Leader: James Orehmie Monday Estimated Appraisal Date: May 23', 2007 Estimated Board Date: NA Managing Unit: EASRE Lending Instrument: Carbon Finance Sector: Environment Theme: Climate Change Mitigation, Municipal Solid Waste Management IBRD Amount (IJS$m.): 0.00 IDA Amount (US $m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): TBD Other financing amounts by source: BORROWER/RECIPIENT Environmental Category: B - Partial Assessment SimPlified Processing SimPle Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) [] No E] 2. Project Objectives The project objective is to reduce Landfill Gas (LFG) emissions from municipal solid waste disposed of at the City of Pontianak's landfill, TPA Batu Layang through a carbon finance transaction. The key indicator for this objective will be the annual delivery of ERs. In addition to the global benefits of GHG reductions through a LFG collection and flaring system, the agreement between PT Gikoko Kogyo Indonesia (Gikoko), and the City Government will provide funds from the ER revenues to improve landfill management and waste collection, and increase social benefits for the surrounding communities. 3. Project Description The project includes the installation of an LFG collection and enclosed LFG flaring system to destroy methane gas that is generated at the landfill. In addition, the project will utilize some of the collected LFG for the generation of electricity required to operate the facility. This CDM project will be implemented under a Build Own & Operate (BOO) commercial agreement between Gikoko and the City Government that will cover the LFG collection and flaring system as well as budgetary requirements for landfill management and waste collection improvements.

2 The LFG collection and flaring facilities will include the following components: (i) collection system consisting of horizontal and vertical wells and collection pipes will be installed in the areas filled with waste; the additional areas will be expanded and filled over time; (ii) LFG pumping equipment will include a pipeline and blowers; (iii) LFG treatment and flare system which will remove moisture and combust the LFG; (iv) monitoring and control system; and, (v) 120kW generator for on-site electricity needs.' 4. Project Location and salient physical characteristics relevant to the safeguard analysis Pontianak City is the capital of West Kalimantan province with square kilometers of land area. The Pontianak landfill, TPA Batu Layang, is located 15 km from the city center on a 26.6 hectare parcel of land owned by the City Government. The landfill is estimated to have received approximately 400,000 tons of municipal solid waste by the end of The landfill receives waste from the city -- mainly organic wastes from residential areas. It also receives waste from commercial, markets, offices, public facilities and industrial areas. Disposal of hazardous waste is not allowed in the landfill. In , 5.4 hectares of land was acquired for phase 1, followed by an acquisition of 4.1 and 3.3 hectares for phase 2 and 3, respectively. The landfill started its operation in Within the current 12.8 hectares of land, 11 hectares have been used for waste disposal and the remaining area is earmarked as a buffer zone. The next land acquisition is planned adjacent to the existing site, which will increase the land area from 12.8 hectares to 26.6 hectares. The landfill is surrounded by crop, fruit orchards and agricultural lands, Some areas are also covered by bushes and paku-pakuan. The are two villages near the landfill, namely Batulayang Village and Siantan Hilir Village have a population of 556 and 52 residents respectively. The Sahang River provides surface water to the Musa Ditch on the east of the landfill and Maduxa Ditch on the west of the landfill. 5. Environmental and Social Safeguards Specialists Ms Sulistiowati Nainggolan (EASSO) Mr Hiroshi Ono (EASRE) Ms Vivianti Rambe (EASRE) A percentage of the LFG captured will be used to produce the electricity from the 120kW generator that will supply the site's electricity requirements, but no emission reductions will be claimed from the displacement of electricity from the grid.

3 6. Safeguard Policies Triggered No Environmental Assessment (OP/BP 4.01) Natural Habitats (OPIBP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) Physical Cultural Resources (OPJBP 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 environmental benefits from the destruction of methane will result from: (a) improved management of leachate, capturing projected levels of methane and capping of closed cells; and (b) the use of part of the ER revenues being ploughed back into the City's waste collection operation which will in turn lead to increase in the city's waste collection rate. Notwithstanding, there are significant environmental concerns at the existing landfill. For example, at the existing landfill site where the LFG collection and flaring system is installed, the collection of leachate will be captured by ditches and pits around waste cells. There are no collection pipes at the bottom of the waste layer, or sufficient leachate treatment facilities. The drainage system is not managed well and is often blocked by waste, which leads to the leachate overflowing into nearby land during the rainy season. The quality of surface and ground water near the landfill does not meet the applicable water quality standards. Test results for water quality often indicates high organic contents and strong acidity due to natural humus as the site is located on compiled peat soil, and it is unclear to which extent the leachate contributes to the organic and other contents of the water. In addition to these existing problems, the installation of LFG collection and flaring facilities may also cause adverse environmental consequences such as air pollution unless it is properly designed and implemented. Also, the planned landfill expansion may cause environmental impacts such as noise, dust, odor and water pollution both in the construction and operation phases. The City of Pontianak has acquired land for TPA Batulayang from 1994 to 2006 and plans to acquire an additional 2.08 ha within this year. 2 The project does not anticipate 2 Refer to the Presidential Decree No 36 of 2005 and 65 of 2006 compensation refers to the market price.

4 any resettlement or relocation of affected people. The existing peat land has no building or inhabitants. The people living around the TPA are ethnic Dayak and are migrants from other districts and working in informal sector. Theses Dayak people who are living near the landfill site are not indigenous peoples as described in OP4.12 as they are: (i) migrants from other towns and villages, not the original inhabitants of the area, (ii) not dependent on the natural resources, and (iii) working in the informal sector. Therefore, no indigenous peoples are effected. There are two large waste picker communities near the landfill site, whereby the Batulayang Village and Siantan Hilir have about 556 residents (more than 20%) and 52 residents (of which 80%) work as waste pickers, respectively. Those who live close to the landfill site are affected by noise and vibration from heavy machinery operation. The resident children collect recyclables from disposed waste without wearing any protective devices from the loading areas before the waste is moved by an excavator to a cell. Given these, environmental pollution, health and safety conditions, and from surface and possible ground water contamination due to leachate, there remains major health hazards for the waste pickers. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: This project is expected to improve management of the landfill including appropriate leachate management and waste picker controls as these measures are a pre-requisite for generating the projected levels of methane. These improvements are driven by a strong economic incentive to achieve more ERs by means of generating and collecting more methane. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. The alternatives include: (i) continuation of current landfill operations and management practices and passive landfill gas venting (without project scenario - Alternative 1); (ii) LFG capture and flaring (Alternative 2); (iii) LFG capture and power generation or offsite gas supply (Alternative 3); and (iv) LFG capture and flaring as well as composting of organic fraction of waste streams (Alternative 4). The feasibility study showed that Alternatives 3 and 4 are not economically feasible. While Alternative 1 option is the least costly, environmental problems associated with the existing landfill -- such as poorly controlled leachate, unstable slopes and generation of disease vectors -- will remain since current low revenue sources would not allow the City Government to make additional investments for addressing such problems. Therefore, Alternative 2 was selected where the improvement of landfill management and other waste management system can be undertaken by using the carbon revenues with minimal

5 associated investment risks. Within Alternative 2, the application of the LFG collection and flaring system, and the expanded landfill site meeting sanitary landfill requirements is also considered. However, this option was rejected because of a lost opportunity to improve poorly managed existing landfill site where environmental conditions are most sernous. 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. To ensure compliance with the Safeguards Policy, Environment Assessment (EA) was conducted for the LFG collection and flaring system and an Environmental Management Plan (EMP) is established. It is expected that the adverse environmental impacts such as air pollution due to the installation and operation of LFG collection and flaring facilities are not significant, and can be well managed by the planmed mitigation measures. Gikoko, in cooperation with the owner and operator of the landfill, which is the City Government, is responsible for the implementation of the EMP. Although Gikoko has not been involved in any World Bank projects, it has 40 years of experience in environmental engineering and operation business in Indonesia. Gikoko is familiar with the Indonesian EA requirements and has a sound capacity to meet these requirements. Recently, Gikoko has established a CDM team including three environmental staff to fully engage in CDM business. It also hires international consultants with strong expertise in landfill management and CDM projects. Gikoko, with full support of the City Government, is now equipped with the capacity to plan and implement adequate mitigation measures for the project. A Due Diligence assessment on the existing landfill performance and on the draft ELA/EMP for the landfill expansion was conducted. The City Government, with financial support from the National Public Works Department, has and is implementing a comprehensive plan to improve drainage and leachate management of the landfill, as well as, water quality monitoring and public health and sanitary services. The expanded landfill site will be equipped with leachate collection pipelines and treatment facilities such as facultative pond, sludge drying bed, sedimentation and maturation ponds. Although environmental impacts such as noise, dust, odor and water pollution are expected both during the construction and operation phases of the expanded landfill, these potential impacts could be well managed by implementation of the measures in the EMP. The Provincial Government is now reviewing the draft EIA for the landfill expansion and its approval is expected soon. The commencement of the use of expanded site is subject to the final approval of the EIA report. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Consultation with local communities (including waste pickers), government officials and journalists has been undertaken several times; including two rounds of stakeholder meetings in December 2006 and January More than 80 people attended these

6 meetings. A local community interview was also conducted in March The majority of the participants had, in principle, no objection to the implementation of this project and strongly supported the improved waste management activities associated with the project. They, however, raised concerns on negative impacts in waste transportation and leachate encroachment to their lands, and expected that the project would give an opportunity to mitigate such problems. The environmental and social report was disclosed locally as well as at InfoShop in May B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Date of receipt by the Bank 05/04/2007 Date of "in-country" disclosure 05/29/2007 Date of submission to InfoShop 05/04/2007 For category A projects, date of distributing the Executive NA Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop * 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/ ERPA? 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? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank's Infoshop?

7 Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? 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? D. Approvals Signed and submitted by: Namne Date Task Team Leader: Mr James Orehnie Monday y/-- J 5/29/2007 Environmental Specialist: Hiroshi - /- 5/28/2007 Social Development Specialist Ms Sulistiowati Nainggolan 5128/2007 Additional Environmental and/or $s. Vivianti Rambe 5/28/2007 Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Comments: Sector Manager: C-~omments: Not applicable r Mts Rahl Raturi 4u s L