RFP No: WB/MOF/MINIS/CS/CQS/1.1.14/2014

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1 Terms of Reference for a Cumulative Impacts Assessment in Tavan Tolgoi Coal Mine Region in Mongolia to be financed by Mining Infrastructure Investment Support Project (MINIS) RFP No: WB/MOF/MINIS/CS/CQS/1.1.14/2014 A. Background Mining development is growing rapidly in Mongolia. The International Monetary Fund expects growth to average 14% a year between 2012 and 2016.Despite the slowing of commodities demand from China (Mongolia s primary consumer), the sector experienced 8.9 per cent annual growth in 2012, up from 7.3 per cent growth in Although the mining sector s share of GDP has been decreasing since 2009 (15.7 per cent of GDP in 2012), other industries associated with mining industry investment (construction, transportation and other services) are increasing, and there has been a 17.9 per cent growth in mining sector employment since Much of Mongolia s mineral potential remains untapped only 15 per cent of the country is fully mapped, and only 17 per cent is under exploration. Underlying these statistics is the reality that commodity demands will increase over the long term, and the enormous potential of Mongolia s mineral resources will remain valuable.however, there is not a clear or shared vision of how mining growth may affect the development of Mongolia and the lives of Mongolians. The Mining Infrastructure Investment Support Project (MINIS) financed by the World Bank aims to facilitate investments in infrastructure to support mining related activities and downstream value-added processes (regardless of funding source) and to build local capacity to prepare and transact infrastructure Projects.The environmental assessment work should be conducted so that the results are able to support a due diligence process required for access to international financing sources. The process and detailed requirements described in this TOR are based on World Bank Guidelines but all work and the end products of the ESIA must conform to applicable Mongolian Laws and Regulations. Erdenes Tavan Tolgoi Feasibility Study. The project has undertaken a limited number of deposit level assessments which were largely advice on geological, legal, economic, and financial aspects. These activities in scope were consistent with the legal arrangements and had no direct effect on the environment. The one assignment that went deeper was a feasibility study undertaken in 2010 for the Eastern Tsankhi Coalfield, a project of Erdenes TavanTolgoi (ETT), a state-owned mining company under Erdenes MGL. The feasibility study, prepared by Norwest Corporation (USA), assessed geological potential of the coalfield and technical issues to start up the operation of a 15 million ton per annum mine. The study was also in part intended to properly define targets for the initial public offering for ETT planned at that time. The feasibility study provided recommendations on the need for an Environmental Impact Assessment (EIA). The former Ministry of Environment and Tourism formally approved the Environmental Impact Assessment Report for East Tsakhi in Environmental Safeguards. To review that generated information was adequate from a safeguards point of view (even if post-factum in the absence of a clear mechanism at the time the work had been undertaken); an environmental safeguards mission took place in May The mission visited 1

2 Ulaanbaatar and the mine site in the South Gobi region. Based on the review of documentation and interviews, the mission concluded that while the general legal requirements for EIAs in Mongolia were followed, there were a number of shortcomings that need to be addressed. The issues can be grouped in three areas: (i) strategic and cumulative issues related to the development of coal resources in the region (SESA level); (ii) gaps in the EIA prepared by ETT for East Tsankhi, including lacking information on disclosure and consultation and technical level gaps; and (iii) gaps in ETT (and local level) capacity to manage environmental and social risks of mine development. The mission developed an Action Plan recommending specific steps to address these shortcomings; however more detailed work to be carried out by ETT is required. As a Technical Assistance project, following the example of more recent Bank-financed projects supporting mining sector governance reforms, the sensitivity of the mineral sector in general and the work supported for the Erdenes TavanTolgoi (ETT) project, a detailed assessment of the environmental and social impacts from the ETT development, including an assessment of compliance with international best practice and World Bank norms, and recommendations for any remedial actions resulting from implementation need to be conducted. In its final phase of implementation have a number of activities planned that are related to safeguards issues. (i) A Sector Strategic Environment and Social Assessment are expected to be completed by mid (see the ToRs attached); (ii) the Ministry of Environment and Green Development (MEGD) is leading on the work to develop sector specific regulations including those for mine closure. SESA. In parallel to this cumulative assessment, a Strategic Environmental and Social Assessment to assess the regional environmental and social impacts caused by the development of coal mine projects and their associated facilities in the region is prepared. The SESA will be a planning tool that will involve a participatory consultative process aimed to help the Government to: (a) diagnose the key environmental and social problems and opportunities associated with the anticipated growth of Mongolia mining and gas sectors; (b) identify the policy, legal, regulatory, and institutional adjustments and capacity-building actions needed to minimize the adverse cumulative environmental and social impacts of mining and gas operations and associated infrastructure development, while enhancing the positive impacts; and (c) propose specific measures that Government can implement in the near future to improve the environmental and social sustainability of mining and gas sector in Mongolia. SESA was launched in November 2013 and is expected to be completed by the fall of GIS analysis and data from SESA will be made available as appropriate to support preparation of the Cumulative Assessment in TavanTolgoi. 2

3 B. Objectives The objectives of the proposed cumulative impact assessment are to: (a) Evaluate if the ETT project (including its associated facilities) will have an effect on Valuable Ecological Components (VEC); (b) Evaluate if the effect of the ETT project will act cumulatively with that of other projects (either from the past, current time, or in the future); (c) Evaluate if the effect of the ETT project, in combination with the other effects, may cause a significant change now or in the future in the characteristics of the VEC, after the application of mitigation measures. (d) Identify appropriate actions for the ETT project to address its contribution to significant impacts. C. Scope of Work The firm is required by the Government of Mongolia, represented by Ministry of Mining and Ministry of Environment and Green Development, to assist it to: Step 1: Describe the TavanTolgoi coal field development, its setting and other projects and activities that may give rise to cumulative effects. This cumulative impacts assessment will need to sequence planned developments of the mines in the coal fields and ancillary and regional infrastructure development (approximate time horizon of 20 years to start operation). Step 2: Identify key ETT-related contributions to cumulative effects on selected resources of concern, such as ground water, biodiversity, and livelihood of local communities; Step 3: Assess the level of cumulative effects (according to the manual on Cumulative impact assessment, MEGD). Step 4: Determine the impacts of cumulative effects; and Step 5: Recommendations: Analyze reasonable, feasible options for mitigating or avoiding contribution to any significant cumulative effects, following the national legal system related to the cumulative impact assessment1. The final conclusions of the CIA should define the following: (i) to what extent the ETT project will contribute to cumulative impacts; (ii) the mitigation measures which should be implemented by the ETT project; and (iii)the management/mitigation measures which are needed but beyond the scope of the ETT project, including the need for consequent additional assessments that the Government will need to require to ensure sustainable development of the area and to develop core principles for environmental and social management in the area that respective investors and project developers will need to be guided by. D. Main Tasks. Step 1: Describe the ETT development and its setting. Project Description. The first step in the CIA is to describe the ETT project and its phases, including key components that may give rise to cumulative effects. This will include the following: 1 Decree of Minister of Environment and Green Development (dated 14 January

4 Phases and timing of the project; Description of the scheme and project area of influence; Description of offsite facilities including coal transportation, power transmission lines, access roads; Identify environmentally sensitive areas, including protected areas, key stakeholders and affected people. Past, present, and probable future projects. Once ETT project issues have been identified, analyze past, present and probable future projects and activities within a defined temporal and spatial framework. The evaluation of other projects and activities should consider the following: Include those projects of known footprint that can be assessed; Consider a time frame that extends backwards to a pre-development scenario and forwards as realistically as possible; Include projects that are approved, awaiting approval, announced or under design; Include those projects whose environmental and social impacts and contribution to cumulative effects can be reasonably predicted, particularly projects with direct impacts on water resources, land and biodiversity; and, Discuss pending projects with regulators and incorporate the concerns of affected stakeholders. Prepare a map or schematic of all existing and planned projects with the basic information on location, water intake, wastewater discharge points, mining waste, and coal transportation roads. Define VECs. The domestic EIA has already identified some key issues of concern associated with the construction, operation, and decommissioning of the ETT project. Typical impacts include the following: Impacts on water resources (water use, quality, quantity) Impacts on biodiversity and wildlife Impacts on land use and soil? Loss of archaeological and cultural resources Impacts of mining wastes on environment Impacts on air quality Impacts on the livelihood of local communities and herders. Visual Impacts The VECs should be defined based on the assessment of impacts on the above aspects and consultations with stakeholders. VECs could be (but are not limited to): water resources, land erosion, wildlife, cultural resources, air quality etc. Step 2: Identify key ETT-related contributions to cumulative effects on selected resources of concern. The CIA should identify key impacts of ETT project activities throughout all phases (construction, operation and decommissioning) in conjunction with other projects and activities. The following questions should be answered: Are other projects and activities in the defined project area affecting the VECs? Do the effects of the project overlap or increase the effects on the resource? Do the effects of the project have a potential to affect the long-term sustainability of the resource? 4

5 Step 3: Assess the level of cumulative impacts. The next step in the CIA process is to assess the level of cumulative impacts. This uses a similar methodology to that employed in the EIA, but the difference is that it assesses the impacts of other projects and activities, in addition to the project in a defined spatial and temporal framework. For each resource/issue in question, the cumulative effects should consider typical components of an EIA assessment extent, frequency, duration, magnitude, uncertainty and probability. Step 4: Determine the impacts of cumulative impacts. Once the cumulative impacts are determined, their significance must be considered relative to an established threshold limit, an established legal guideline or policy, or a qualitative assessment based on professional opinion and consultation. In any case, the significance of the cumulative impacts must be defensible. The significance of the cumulative impacts and the contribution of the project must be subsequently evaluated by project decision makers. The significance of the ETT project interventions contribution to the cumulative impacts should be defined in one of the following ways: The project has a measurable effect on the resource; The project acts in conjunction with the effects of past present or future projects and activities; and The project in conjunction with other projects and activities shifts the resource to an unacceptable level or exceeds a threshold such that the impact is considered significant, in that: - The project s contribution to cumulative effects is responsible for exceeding the threshold and therefore is significant or, - The project is contributing with the effects of other projects and activities and the project contribution may or may not be significant, depending on the level of the contribution. Step 5: Formulate recommendations. The CIA should reach a conclusion on whether the contribution, if any, to the cumulative impacts by the ETT project is significant or not. An action plan (with time, institutional responsibilities, budget) should be developed based on this conclusion, and clearly define what mitigation measures need to be incorporated into the project Environmental Management Plan, and what mitigation/environmental management measures should be carried out above the project level. For example: Project level mitigation to reduce the impacts of the contribution of the project to cumulative effects; Cooperative mitigation measures between project proponents to reduce cumulative effects, or Regional intervention on behalf of government or regulators to reduce the overall cumulative effect through the establishment of thresholds or policy intervention. Mitigation/environmental management measures that are needed but beyond the scope of the ETT project, will be presented to relevant (government) agencies/entities in the form of a workshop andfinalized based on the views by the agencies. Their endorsement/acknowledgement on the recommendations from the CIA should be sought. 5

6 Presentation and Consultation The consultant will organize and carry out workshops in the Tavan Tolgoi region (the specific sites will be agreed upon with MEGD) to present the findings of the Cumulative Impact Assessment. To ensure meaningful consultations throughout the course of the CIA, key stakeholders, particularly for defining the Valuable Ecosystem Components and final results should be clearly documented. The records of public consultations undertaken will form part of the final deliveries by the consultant. The expected result of the workshops will be the following: (i) stakeholders will validate environmental, social (including labor and resettlement), health, safety and security priority concerns at the local level; (ii) workshops should also be a way of informing and engaging stakeholders in the immediate vicinity of the ETT project and impacted area subject to this cumulative assessment; (iii) vulnerable stakeholders (women, children, youth and others) should fully participate in the process, not only leaders, groups and NGOs that claim to represent their interests. E. Outputs Report and Consultation. Based upon the results of the Cumulative Impact Assessment Report, the firm will organize and carry out workshops in the Tavan Tolgoi region (the specific sites will be agreed upon with MEGD and MINIS). F. Duration and Timing The Cumulative Impacts Assessment Report should be completed within 4months of commencement. All reports should be prepared in Mongolian and English both in CD and hard copy. The final presentation workshop should be held within 5months of commencement of the contract. G. Institutional Arrangements The consultant shall report to MEGD and liaise with other agencies of the government including Ministry of Mining, and local authorities. Data will be provided by MEGD, MoM and aimag/soum authorities. Existing EIAs, EMPs, and plans for development will be provided by relevant ministries with facilitation from MEGD. Coordination and contract management will be carried out by MINIS Project Implementation Unit. The final output will be subject to acceptance by MEGD and World Bank for compliance with the World Bank guidelines for safeguards. H. Requirements for the Consultant Team To qualify to carry out the work the consultant should be a consulting firm experienced in performing work on projects similar in size and subject ( the consultant ). The consultant must have the following qualifications: (i) Consultants must have sound knowledge and at least five years work experience plus experience on at least two similar assignments, and must have good knowledge of mining regulations. (ii) The team should comprise the following specialists: 6

7 (1) A Team Leader who is skilled at leading and managing inter-disciplinary teams, can produce well-written reports on time, and is knowledgeable about strategic environmental assessments and extractive industries. (2) An Infrastructure Specialist with at least ten years of relevant experience in infrastructure policy and public administration of the mining sector. (3) A Mining Specialist who is knowledgeable in Mongolian geology and in modern mining technologies and practices. Proven experience in environmental regulatory frameworks and environmental standards for mining activities is required. (4) An Environmental Engineer or Scientist who is knowledgeable about the impacts of miningrelated activities on natural habitats, water, land and biodiversity. Experience in Mongolian terrestrial and aquatic ecosystems is desirable. (5) A Social Development Specialist who is knowledgeable about the direct and indirect social impacts (positive and negative) of mining-related activities including public health. S/he should have proven experience in anthropological studies of indigenous populations. (6) A Stakeholder Engagement Specialist who can effectively manage stakeholder engagement throughout the preparation process, including the facilitation of public consultation events and other large meetings. Specific technical inputs on legal, infrastructure development projects and gender should be provided by the team as needed. I. Payment Schedule Amount and payment of contract shall be in USD. The lump sum fee would be paid in the following manner: Ten percent (10%) upon acceptance of the Inception Report / Work Program and the Consultation and Communications Program. (Advance payment is optional) Fifteen percent (15%) upon acceptance of the Annotated Outline of Cumulative Impact Assessment Report. Twenty five percent (25%) upon acceptance of detailed report on workshops and findings. Twenty Five percent (25%) upon acceptance of Preliminary Draft Cumulative Impact Assessment Reports. Twenty percent (25%) after receiving an approval letter from the Client and upon acceptance of the Final Cumulative Impact Assessment Report. 7