EXECUTIVE SUMMARY OF THE ENVIRONMENTAL AND SOCIAL ASSESSMENT FOR THE PROPOSED SECOND NORTE GRANDE WATER INFRASTRUCTURE PROJECT (P125151)

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized EXECUTIVE SUMMARY OF THE ENVIRONMENTAL AND SOCIAL ASSESSMENT FOR THE PROPOSED SECOND NORTE GRANDE WATER INFRASTRUCTURE PROJECT (P125151) ARGENTINE REPUBLIC UNIDAD COORDINADORA DE PROGRAMAS Y PROYECTOS CON FINANCIAMIENTO EXTERNO (UCPYPFE) March 15, 2011 Sustainable Development Department Argentina, Paraguay and Uruguay Country Management Unit Latin America and the Caribbean Region

2 Table of Contents 1. Introduction Project Description Process and Approach to environmental and social safeguards assessment Anticipated environmental risks, impacts and benefits Anticipated social risks, impacts and benefits Eligibility Criteria and Environmental and Social Management Framework (ESMF) Capacity Building Program

3 1. Introduction 1. The objective of the proposed Project is to increase sustainable access to water supply and sanitation services in the Norte Grande Region of Argentina. This proposed Project will support the ongoing Government of Argentina (GoA) Development Program for the Norte Grande Provinces, an over US$3 billion investment program which has thus far been financed by the GoA, the Inter-American Development Bank (IADB), the Andean Development Corporation (CAF), and the World Bank through the first Norte Grande Water Infrastructure (P120211) and Road Infrastructure Projects (P120198) approved in December The overall objective of the ongoing Development Program for the Norte Grande Region (NGR) is to contribute to the sustainable economic development of the Norte Grande provinces and to raise the standard of living of the local population by providing the necessary infrastructure to promote social welfare and the environmentally sustainable use of water resources. 2. The objectives of the proposed Project are consistent with the strategy outlined by the GoA to combat poverty and inequality through infrastructure investment. These objectives are also fully consistent with the World Bank Group Country Partnership Strategy (CPS) for the period discussed by the Board on June 9, 2009 (Report No AR). 3. This Executive Summary document represents an update of the Executive Summary of the Environmental and Social Assessment submitted to SECPO distributed to the Executive Directors on November 9, This document presents the results from the analysis of the environmental and social issues of the proposed Project and provides a description of: (i) the proposed Project; (ii) the process of environmental and social assessment; (iii) the anticipated environmental and social impacts; (iv) the subprojects environmental and social eligibility criteria and environmental and social management framework; (v) the capacity building program and (vi) an overall environmental action plan. 2. Project Description 2.1 The Norte Grande Region and Sector Context 4. The NGR epitomizes the marginalization, underdevelopment and extreme poverty. Despite the economic recovery in Argentina and overall decrease in poverty levels, growth has historically been unequally distributed and poverty still endures in the North of the country. The region includes the nine provinces of Catamarca, Chaco, Corrientes, Formosa, Jujuy, Misiones, Tucumán, Salta and Santiago del Estero. Although it covers one-third of the national territory and comprises about 7.5 million people, representing 21 percent of the Argentine population, it produces only 10 percent of the country s GDP and 8 percent of the total exports. In contrast to declining national poverty levels, poverty stands at 48 percent of the population (3.6 million people), with 24.6 percent (1.85 million people) living in extreme poverty. According to the Bank s Provincial Development Index, which compiles measures of poverty and deficits in social and basic infrastructure services for all twenty-four provinces, eight of the nine NGR provinces occupy the bottom eight spots. 3

4 The proportion of homes with Basic Unsatisfied Needs (Necesidades Básicas Insatisfechas, NBI ) is 18.6 percent compared to the national average of 14.3 percent. 5. The Water Supply and Sanitation (WSS) sector faces significant challenges to increase coverage rates and improve service delivery. Sector policies have changed repeatedly and drastically over the last two decades. The concessions to private operators introduced in the 1990 s often resulted in opportunistic renegotiations and tariff changes. The economic and social crisis of 2001 led to a freezing of water tariffs which affected the utilities selffinancing capacity. Many of the concessions were ultimately terminated. As a result of these upheavals, many WSS companies are facing financial and operational difficulties and sector institutions have been weakened. Argentina compares unfavorably with other uppermiddle income countries and continues to lag behind some of its neighbors, with only 80 percent piped water supply and 48 percent piped sewerage coverage as of The same is true of wastewater treatment, with only 10 percent of the collected wastewater receiving treatment. 6. Improving WSS services is a priority for the GoA which has launched an ambitious investment program in the sector. Water services are widely seen in Argentina as a fundamental basic necessity for the population, a vision which is quite common in the Latin America region and elsewhere in the world. The GoA recognizes that water, sanitation and wastewater treatment help guarantee the provision of certain public goods with important externalities such as health and environmental sustainability and is a allocating significant amounts from the federal Government as public subsidies for infrastructure investment. Concessional financing programs are commonly used worldwide including in OECD and middle income countries such as the US, Colombia and Mexico - to deal with these externalities and address problems of underinvestment in the sector. In Argentina, investments reached US$500 million in 2008, an increase of over 50 percent from the previous year (US$330 million), and almost five times the average of the previous five years (US$120 million for the period of ). 1 Increasing the efficiency of WSS provision is also an objective of the federal government support to the WSS sector. The GoA is channeling funds through several programs to promote operational efficiency and service quality improvements. Important initiatives are also underway at the local level to re-organize regional utilities. Such initiatives are not always optimally coordinated, which has generated some duplication of efforts and inconsistencies between different programs. Initial steps have been taken however to harmonize investment criteria, rationalize federal programs, and coordinate donor activities. 7. The NGR suffers from particularly acute problems in the WSS sector. The NGR is characterized by low coverage rates, poor service levels, contamination of water sources, limited availability of water resources (Chaco, Jujuy, Catamarca), high investment needs, limited funding, as well as governance and institutional challenges. The models for service provision within the region are wide-ranging. Seven out of the nine provinces in the NGR entered into concession contracts with private operators, most of which subsequently 1 These investments include only those managed at the Federal level through the Ministry of Planning, and therefore do not account for provincial and municipal governments' investments with their own resources, or those financed by privately managed WSS utilities, NGOs, and others. 4

5 underwent renegotiation 2. While the situation of the different service providers varies significantly, all have been negatively affected by the economic and social crisis of 2001 and by institutional instability. As a result, the NGR is the most deprived region after the Metropolitan Region of Buenos Aires 3, with nearly 15 percent of the population (more than 1 million people) lacking piped water supply and 61 percent of the population (more than 4.5 million people) without piped sewerage services. As shown in Graph 1, the NGR presents some of the biggest disparities in terms of WSS coverage, with four of its nine provinces ranking the lowest in the nation and only two provinces above the national average. Graph 1: Water Supply and Sanitation Coverage in the Provinces of Argentina % 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% Water Supply Sanitation 10.0% 0.0% Capital Federal T. de Fuego Santa Cruz Chubut Neuquen Jujuy Mendoza Salta Entre Rios Rio Negro San Luis La Pampa La Rioja Corrientes Tucuman Catamarca Santa Fe Cordoba San Juan Buenos Aires Formosa Chaco Sgo. del Estero Misiones 8. The Project will build on the ongoing investments of the IADB Program 5 and complement the broader program of the World Bank in Norte Grande to help address WSS infrastructure gaps as well as sustainability issues in order to generate long-lasting performance improvements in the NGR WSS sector. Moving towards greater cost recovery for service providers while maintaining affordability for users, especially the poorest, is a key challenge in the NGR. Nevertheless, service providers in provinces such as Chaco and Santiago del Estero have managed to improve cost recovery since 2007, thanks to several changes in rate structures and pricing levels which were deemed socially acceptable. The Project will seek to build on these successes and on the GoA s commitment to give the NGR prioritized access to concessional public funding to improve operational efficiency and institutional capacity. The Project will pursue two main objectives: (i) to reduce 2 Some provinces continue to provide the services in their main localities through concessions with privately owned operators (Santiago del Estero, Misiones, Formosa, Corrientes), others have undergone recent private to public processes (Catamarca, Salta ), and others are served by provincially owned entities (Chaco, Jujuy, Tucuman). 3 In the Metropolitan Region of Buenos Aires nearly 18 percent of the 14 million residents live in extreme poverty, primarily in the peri-urban areas surrounding the capital city, where 28.6 percent (close to 4 million people) lack household access to water supply and 54.2 percent of the population (more than 7.5 million people) lack household access to sewerage services. 4 Access to service % from the National Census of Population and Housing (2001). 5 Implementation of the IADB Program, although at the onset suffered significant delays mostly due to capacity constrains at the local level for the preparation of the subprojects, is well underway, with 100% of the funds committed and current good standards in the preparation of bidding documents, procurement and supervision of ongoing works. 5

6 poverty and inequality through provision of priority WSS infrastructure; and (ii) to carry out institutional and capacity strengthening activities to improve the overall efficiency of participating WSS service providers. 2.2 Project Description and Components 9. The Project has been designed as a framework project comprising several sanitation and water subprojects 6, each of which will be selected for funding during project implementation from a pipeline of potential investments. The pipeline subprojects were identified by the UCPyPFE based on the priorities indicated by provinces during the preparation of the ongoing IADB financed Water Infrastructure Project 7 (see Annex 2). The investments will be fully funded by the federal Government from loan proceeds and will be transferred to the provinces once completed. The Project will also provide technical assistance to support pipeline development and subproject preparation through its component 2. To help encourage investment in sanitation and provide capacity building in the NGR, the technical assistance would include a broader group of municipalities and provinces than those that would be ultimately funded under the investment component of the project. 10. Specific subprojects approved for funding will need to comply with the technical, economic, financial, institutional, environmental and social eligibility criteria set forth in the Project s Operational Manual, as well as with consultation and disclosure requirements. Consideration for funding will be made on first-come, first-served, basis from those subprojects that are ready for implementation. Subproject proposals will be examined in the context of: (i) consistency with Project objectives, in particular their poverty reduction potential; (ii) compliance with all eligibility criteria; and (iii) level of subproject s ownership and results of stakeholder consultation at the local level. 11. Works financed under the subprojects will be operated by the providers in charge of the services within the different provinces, who will commit to provide O&M funding and operate the subproject in accordance with Project rules and an Action Plan to be prepared by the Province for the sustainability of the investments. During the preparation of each specific subproject, the relevant service provider will undertake a capacity and needs assessment and will benefit from an institutional and operational strengthening program financed under the Project to help address the established targets and address identified weaknesses. 6 The Project will focus on sanitation investments although it could eventually fund water supply investments that are considered category A from their environmental impact assessment perspective and thus would be excluded for funding under the first Norte Grande Water Infrastructure Project (P120211). 7 Water Infrastructure Project: Northern Provinces Development (AR-L1015), IADB, This Project is part of the overarching Norte Grande Development and Integration Program. 6

7 Project components 12. Component 1: Water Supply and Sanitation Infrastructure (US$209 million, with US$169.5 million of Bank funding 8 ): Carrying out of demand-driven Subprojects consisting of the rehabilitation, upgrading and/or reconstruction of Participating Provinces : (i) wastewater collection, conveyance, treatment and disposal systems, such as wastewater treatment plants, pumping stations, main collectors and secondary sewerage networks; and (ii) water supply systems including, for instance, production and distribution systems that are considered category A from their environmental impact assessment perspective. 13. Component 2: Institutional and Operational Development and Technical Assistance (US$15 million, all financed by the Bank): Carrying out of: (i) tailored institutional and/or operational strengthening programs and provision of technical assistance for participating WSS Service Providers to improve their institutional organization, investment planning, management capabilities and technical, operational, commercial and financial efficiency including, for instance: (a) the development of WSS-related management and information systems; (b) the development of WSS customer databases and cadastres; (c) the provision of technical assistance related to strategic planning, energy efficiency and operational efficiency programs; (d) the carrying out of analysis of cost-recovery options and optimization of rates and subsidy structures; (e) design and implementation of macroand micro-metering (including minor works), and non-revenue water reduction programs; (f) the provision of technical assistance for institutional reorganization; and (g) the design of training programs for operation and maintenance of systems and installations (focused on wastewater treatment plants, water treatment plants and pumping stations), and the carrying out of studies related thereto, all under terms of reference acceptable to the Bank 9 ; (ii) carrying out of technical studies required to support the preparation and implementation of Subprojects, for instance, feasibility studies, analysis of alternatives, engineering designs, economic and financial analysis, socio-economic surveys, environmental and social impact assessments and management plans (including screening and risk assessments, support to the preparation of safeguard instruments and monitoring) and other studies related thereto, all under terms of reference acceptable to the Bank; and (iii) carrying out of communication plans, dissemination and knowledge-sharing activities related to the Project, and training and capacity building for the institutional strengthening of UCPyPFE and Participating Provinces. 14. Component 3: Project Management and Supervision (US$15 million, all financed by the Bank): This component will finance the: (i) carrying out of specialized independent technical, environmental and social supervision, of Subprojects, as required; (ii) carrying out of Project audits and monitoring and evaluation activities under the Project; and (iii) provision of administrative and operational support (including the provision of Operating 8 These amounts include price and physical contingencies. 9 If both the first (P120211) and second (P125151) NG Water Infrastructure Projects were to finance works operated by the same service provider, only one Project would generally support the entire institutional strengthening program for that service provider. This component, and subcomponent (ii) can also support service providers or subproject preparation in provinces that do not have an infrastructure subproject financed under Component 1. 7

8 Costs) to UCPyPFE in the administration, monitoring, coordination and supervision of Project implementation Process and Approach to environmental and social safeguards management 15. The Project is the second of two projects for water infrastructure in the Norte Grande Region. The first Norte Grande Water Infrastructure Project (P120211), approved by the Board on December 20, 2010, focuses on water supply and urban drainage, while this second project focuses mainly on sanitation infrastructure. Originally conceived by the Borrower as a single operation for US$400 million, the operation was split during preparation in order to respond promptly to the need to prepare and implement priority investments in water supply under the first operation, which are relatively simpler from a technical perspective, while allowing additional time to consider the approach to financing the sanitation investments which present more complex technical, economic and safeguards issues. 16. The Second Norte Grande Water Infrastructure Project (P125151) focuses on sanitation subprojects that are likely to be considered to be Category A from the perspective of their environmental impact assessment (while the first Project P focuses on Category B subprojects). Both Projects (P120211, P125151) will provide technical assistance specifically designed to accompany the preparation of the works which they finance and each will support various WSS service providers throughout the region. In addition, the first loan (P120211) includes technical assistance and institutional strengthening for regional sector entities (with policy, regulation, and oversight functions) in the entire NGR and will therefore facilitate the implementation of the works to be financed under the second Project (P125151). 17. The proposed Project (P125151) like the first Norte Grande Water Infrastructure Project (P120211) - has been designed as a framework operation. At the onset of Project preparation, two sanitation subprojects that had reached an advanced preparation stage were proposed by the Government for funding under the proposed Project. These subprojects are the Gran Resistencia Metropolitan Area Sanitation System in Chaco Province and the Santiago del Estero Sanitation and Wastewater System in Santiago del Estero Province. Preparatory activities were launched with the objective of including these two subprojects as fully prepared investments ready for financing during the first year of Project implementation. However, the assessment concluded that in-depth additional discussion and studies will be needed to identify the best technical solutions and to ascertain the economic and environmental sustainability of these subprojects. The overall design and structure of the Project was therefore revised to adopt a framework approach that accommodates the need to undertake these studies and allows flexibility in the final choice of investments. In that regard the proposed Project includes substantial technical assistance to ensure careful consideration and due diligence that would allow these projects to reach fruition with the proper safeguards in place. This design provides the opportunity 10 As mentioned in paragraph 8 above, implementation arrangements for both the first and the second NG Water Infrastructure Projects are the same. Each Project will fund its share of the combined management and supervision costs. 8

9 to include these and other subprojects as they are identified, designed and shown to meet eligibility criteria. 18. Given the framework nature of the Project, no individual subproject has been approved yet for financing under the Project. In order to be approved, all subprojects without exception would need to comply with the criteria established for inclusion in the program, which include having background studies and consultation processes that meet Bank standards and comply with Bank safeguard policies. 19. The safeguards approach under the Project was developed to accommodate this approach and the scope of the redesigned project but also to take advantage of the analysis done under the initial larger project. In particular, the preparation of instruments to address safeguard policy issues includes three key aspects: (i) scoping of potential subproject issues using the analysis of these two potential subprojects from the preliminary pipeline of investments and through a rapid social assessment and an environmental analysis undertaken for the entire Project; (ii) development of an Environmental Social Management Framework (ESMF) that includes detailed due diligence for safeguards compliance and meaningful consultations for Category A subprojects; and (iii) institutional assessment and capacity building program. 20. As described in section 6.3 below, the draft ESMF and other environmental and social safeguard related frameworks were first disclosed in country on September 28, 2010 and in the Bank s Infoshop on October 20, 2010 as part of the original design for the Norte Grande Water Infrastructure Project (P120211) which envisaged category A water suppl, urban drainage and sanitation investments. Updated drafts including the results of recently completed consultations (see summary below) were disclosed in-country and through the Bank s Infoshop on February 24, Scoping Activities 21. As part of the Project preparation, a scoping process was undertaken to identify the main potential environmental and social issues and the potential applicability of the World Bank's safeguards policies to the Project. The scoping activities included a Rapid Social Assessment of the Project that reviews the overall social context, and included: (i) diversity and gender; (ii) analysis of main stakeholders; (iii) institutional framework, including formal and informal rules; (iv) culture of participation; (v) social opportunities, risks and impacts, among them those related to social safeguards; (vi) mitigation and compensation measures and (vii) impacts on indigenous peoples. 3.2 Environmental and Social Management Framework (ESMF) 22. The GoA has developed an Environmental and Social Management Framework (ESMF), which covers the Environmental Assessment process and includes an Indigenous Peoples Planning Framework (IPPF), a Resettlement Policy Framework (RPF), and a Communication Framework for dissemination and consultation. Once specific subprojects are developed, they will be required to follow the procedures outlined in the ESMF to 9

10 ensure they meet eligibility criteria and are compliant with safeguards policies applicable to the subproject. See section 6 below for additional details. 3.3 Capacity Building Program 23. An assessment of the institutional capacity at the UCpyPFE and local provincial levels for Project implementation was conducted during Project preparation and in light of the quality and completeness of the studies reviewed as part of the scoping process. A capacity building program was incorporated in the Project to be funded under components 2 and 3 to address these issues. See section 7 below for additional details. 4. Anticipated environmental risks, impacts and benefits 4.1 Anticipated general environmental impacts of participating subprojects 24. Overall the works associated with construction and rehabilitation of the sanitation and wastewater systems in the possible subprojects to be financed under the Project are expected to be environmentally beneficial and sustainable, if they are properly managed using good practice standards. The construction of an efficient wastewater treatment system will reduce the discharge of contaminated wastewater into the local water bodies. It will also help improve the quality of life of the local population by reducing the risk of contracting waterborne diseases and improving the surrounding environment by reducing water pollution. 25. Impacts during the construction phase:. During construction, the main potential environmental impacts will be temporary and typical of the construction of large-scale civil works such as the expansion of sanitation systems. Possible impacts and risks include the following: (i) temporary disruption to local traffic flows; (ii) temporary loss of access to recreational, residential and commercial areas during the construction period; (iii) dust and noise; (iv) handling and management of wastes and construction materials; (v) occupational emergency response planning; (vi) erosion and sediment control; (vii) disposal of construction debris; (viii) chance archeological finds; and (ix) excavation for the new plants/lagoons, transportation of sand, concrete and construction materials, earth compacting, concrete pouring and operation of heavy construction equipment. With appropriate prevention, mitigation and supervision measures, these impacts are considered moderate and temporary and readily manageable. The management of construction impacts will be the responsibility of contractors and specific environmental measures will be specified within the construction contract. 26. Impacts during the operational phase: During the operational phase, the main environmental impacts and risks relate to: (i) the risk of poor operation resulting in environmental and human health effects from the wastewater discharges; (ii) the potential environmental and human health risks associated with the management and disposal of continuously generated bio-solids and sludges; (iii) odor and noise nuisances; and (iv) health and safety risks. 10

11 27. Cumulative Impacts: The Project is expected to contribute to significant improvements in the water quality and quality of life for the population living in targeted areas and along the coasts of the receiving water bodies. Cumulative impacts should be highly positive if the sanitation systems are built and operated with appropriate supervision and environmental management. The cumulative benefits to the region will depend on the combined effectiveness of all the various programs in the Norte Grande region, the growth and development trends in the different basins as well as other development projects currently being developed or planned. 4.2 Environmental safeguards policies triggered 28. Environmental Assessment (OP 4.01): The Project has been classified as a Category A following the Environmental Assessment safeguard policy (OP4.01), in consideration of the impacts and mitigation programs needed as part of the construction and rehabilitation of large scale wastewater treatment systems which are anticipated to be funded under the project. In addition to this, the categorization process takes into account: (i) the social and environmental sensitivities of the project area, (ii) the types of proposed investments, (iii) the weak provincial, municipal or utilities capacities; and (iv) the unknown scope of future investments. 29. Natural Habitats (OP/BP 4.04). The screening process and environmental analysis undertaken for the example subprojects highlighted that discharges from a new wastewater system subproject could occur in wetlands or important riparian areas that would require careful design accounting for contingencies and distance to important habitats. The Environmental and Social Management Framework (ESMF, see next section for details) prepared for the Project includes provisions to understand the applicability and ensure compliance with this policy. 30. Pest management (OP 4.09). Some pesticides could be used during the closure of old infrastructure or during the maintenance of new infrastructure. Products to be procured could include defoliators, soil sterilizers, herbicides, pesticides, disinfectants or polymers. The ESMF includes specific requirements to ensure that all construction contracts will include measures to manage pesticides following Bank s policy. 31. Physical Cultural Resources (OP/BP 4.11). It is possible that the civil works constructed under the Project may directly or indirectly affect physical cultural property in cities. These could include known local structures or sites of historic or cultural importance. The ESMF includes specific requirements to screen for these impacts and includes mitigation measures. 32. Safety of Dams (OP/BP 4.37). This policy is triggered as the Project may finance projects that do not include the construction of a new dam but could rely on the performance of an existing dam or a dam under construction (DUC) such as water supply systems that draw directly from a reservoir controlled by an existing dam or a DUC; hydraulic structures downstream from an existing dam or a DUC, where failure of the upstream dam could 11

12 cause extensive damage to or failure of the new Bank-funded structure; and water supply projects that will depend on the storage and operation of an existing dam or a DUC for their supply of water and could not function if the dam failed. The ESMF includes appropriate guidance to identify and manage impacts when identifying these types of subprojects during implementation. 33. Forests. (OP/BP4.36). Some subprojects could affect small fractions of native forest in the locations of the wastewater treatment plants. In these cases the EA to be undertaken for each future subproject will analyze this issue in depth, and the EMP will determine the specific management measures and eventual compensation measures following the ESMF guidelines. If the relevant forest were to involve natural habitats, these would be analyzed as per the requirements of OP Projects on International Waterways (OP/BP 7.50). This policy is triggered as the subprojects to be considered for funding may be located on waterways that form part of the Paraná/Paraguay River system which originates in Brazil and flows into Bolivia and Paraguay (the Paraguay River) and Paraguay and Argentina (the Paraná River). The Paraguay discharges its water in the Parana and further downstream it merges with the Uruguay River to form the La Plata River, a river that flows from Argentina to Uruguay. This system comprises an international waterway for purposes of The World Bank's OP 7.50 paragraph 1. It is the assessment of Bank staff that the Project will not cause appreciable harm to other riparians and will not be appreciably harmed by the other riparian's possible water use. 35. Following OP/BP 7.50 requirements, a formal notification of the proposed Project and its details has been sent by the Bank to the Republic of Paraguay and the Oriental Republic of Uruguay on behalf of the Government of the Argentine Republic through their Executive Director at the Bank. The notification period expired on March 3 and no response has been received. 5. Anticipated social risks, impacts and benefits 5. 1 Anticipated general social impacts of participating subprojects 36. The Rapid Social Assessment (SA) undertaken during preparation concluded that the subprojects to be funded under the Project are anticipated to have an overall positive impact. The main opportunities for positive impacts during the construction and operation phases arise from: (a) direct and indirect employment creation and multiplier effects in the provision of goods, supplies, equipment, services and income generation, which will contribute to growth of local economies and discourage out-migration; and (b) better health and hygiene conditions stemming from increased access to WSS and reduced contact with untreated and polluted wastewater sources, and decreasing costs associated with treating these health problems; and (c) reducing vulnerability to flooding through more and better urban drainage systems. 12

13 37. Potential negative social impacts of the subprojects are few, temporary and mostly affecting localized population during the construction phase (public safety, movement or excavations of land and possible collapse of housing and public facilities foundations, disruptions of water, gas, energy, commerce and industries, noise and other nuisance). 38. The Rapid SA also identified significant urban population growth resulting from migration from rural areas due to land tenure and natural resources pressure, which has increased human informal settlements, including indigenous peoples mostly integrated to the urban communities. Potential impacts of the subprojects on these groups are expected to be highly more positive than negative due mainly to the social and environmental setting of the project: (i) essentially rehabilitation and expansion of existing systems in urban areas integrated in the existing land-use legal framework; and (ii) access to WSS services and urban drainage systems in these urban areas have been a long-standing aspiration of these communities, including indigenous peoples. 5.2 General Risks and Impacts anticipated for Indigenous Peoples 39. An Indigenous Peoples Policy Framework (IPPF) for the Project has been developed (see below for summary) to guide the preparation of specific Indigenous Peoples Plans (IPPs) during subproject implementation for cases in which Indigenous People (IPs) could be affected under potential subprojects. 5.3 Social Safeguards triggered by the Project 40. Indigenous Peoples (OP/BP 4.10). The Project triggers OP/BP 4.10 due to the presence of approximately 122,863 indigenous peoples living or having collective attachment in the NGR and the fact that the definition of specific subprojects and thus their exact location and associated social risks and impacts, including both positive and negative effects on indigenous peoples, will only be known during implementation. Therefore, an Indigenous Peoples Planning Framework (IPPF) following the domestic's legislation and OP/BP 4.10 has been prepared by the Borrower and disclosed for public consultations since September 28, The IPPF will guide subproject screening and requirements for preparation and implementation of specific Indigenous Peoples Plans (IPPs) for cases in which IPs are affected. 41. The IPPF takes into account some key aspects, which include: (i) a social assessment and prior, free and informed consultations for affected IP; (ii) an action plan duly budgeted with measures to ensure that IP obtain adequate social and economic benefits generated by the project as appropriate or to prevent, reduce, mitigate or compensate negative effects; and (iii) a monitoring and grievance mechanism. The IPPF was also based on the Rapid SA of the Project, which evaluated the broader social opportunities and risks in the region for IP and solicited feedback from interviews with the National Coordinator of the National Institute for Indigenous Affairs (Instituto Nacional de Asuntos Indígenas) and members of the Council of Indigenous Participation (Consejo de Participación Indígena). For any subprojects where indigenous peoples (IP) are present in the subproject area of influence, a 13

14 specific social assessment will be carried out to evaluate the benefits and risks and define the need for a specific IPP. 42. Involuntary Resettlement (OP/BP 4.12). Any resettlement required as a result of the construction activities will follow the guidelines of the Resettlement Policy Framework (RPF) prepared for the Project. This RPF has been prepared by the Borrower according to the Argentina Legislation and in line with the Bank's OP/BP 4.12, and was first disclosed in-country on September 28, 2010 and in the Bank's Infoshop on October 20, The RPF will guide the Borrower to prepare Resettlement Action Plans (RAPs) as required. It covers physical displacement, impact on building structures, possible loss of income as well as involuntary restriction of access to legally designated parks and protected areas. The RPF includes inter alia: (i) freedom of choice of the compensatory measure; and (ii) compensation at cost reposition when appropriate and finalized before starting of civil works. 6. Eligibility Criteria and Environmental and Social Management Framework (ESMF) 43. The project manages environmental and social issues through two mechanisms: (i) eligibility criteria that include environmental and social requirements; and (ii) an Environmental and Social Management Framework (ESMF) which outlines the process to prepare eligible projects in line with environmental and social local regulations and Bank s safeguard policies. As stated above, the ESMF addresses Bank environmental and social policies and includes an Indigenous Peoples Planning Framework (IPPF) and a Resettlement Policy Framework (RPF). 6.1 Eligibility and Readiness criteria 44. Subprojects for Project financing will need to meet environmental and social eligibility and readiness criteria, including environmental and social assessments as required. In addition, each subproject must comply with the applicable environmental laws in the relevant province as well as the safeguard policies of the Bank. Specifically, subprojects must comply with the following criteria: (i) (ii) The subproject must have an Environmental Assessment (EA) acceptable to the environmental authority of the relevant province and the Bank. The EIA will incorporate the results of public consultations, and meet the guidelines of the ESMF. The EIA must include mitigation measures and programs for the construction and operation phases. In the case of subprojects involving involuntary resettlement or affecting indigenous peoples, specific provisions will be outlined in a Resettlement Plan (RP) or Indigenous People Plan (IPP). (iii) All costs associated with the implementation of the subproject EMP, RP and/or IPP and any mitigation measures and monitoring programs must be budgeted for. (iv) The subproject must demonstrate sustainability from an environmental and social standpoint, which entails preventing: (a) permanent negative impacts on protected areas or cultural heritage; (b) negative impacts on species threatened by extinction; 14

15 (c) negative environmental impacts that cannot be mitigated to acceptable levels; and (d) social costs deemed unacceptable and/or unable to be mitigated by the affected communities. 6.2 Environmental and Social Management Framework 45. The ESMF addresses several goals, including: (i) ensuring the environmental and social sustainability of the subprojects; (ii) complying with national environmental legislation; (iii) complying with the Bank s environmental and social safeguards policies; and (iv) defining institutional responsibilities for the environmental and social management instruments. 46. The ESMF comprises a methodology for subproject screening and consultation, including a Screening Datasheet with criteria to guide the environmental and social classification of potential works and a negative list of actions/activities to allow exclusion of works. After the screening stage, the Borrower will ensure that an environmental and social assessment is performed to analyze specific environmental and social impacts and identify additional studies and consultation processes required to follow ESMF requirements (e.g, local regulations and Bank safeguard policies). The ESMF also contains tools and procedures for carrying out preparation, implementation and monitoring of environmental and social management plans associated with the subprojects. 47. The ESMF contains procedures for undertaking consultation and public disclosure as per World Bank safeguards policies and Policy on Information Disclosure. Disclosure requirements for category A will follow a rule of having the documents available for meaningful consultations and to ensure the time required for the consultation of TOR of the EIA of category A subprojects. 48. The ESMF also includes specific requirements for monitoring compliance with environmental and social requirements for both the construction and operational phases in subprojects. Any associated costs would be incorporated in the relevant contracts when applicable. Service providers will have the primary responsibility for establishing baselines and monitoring specific activities under construction and plant operations, under the supervision of the UCPyPFE. 49. For subprojects, the EIA process will solicit stakeholder concerns and provide an open process of debate and discussion about the subproject objectives and goals. Other stakeholder consultation events to disseminate information on the Project and gather stakeholder views will be planned during implementation as part of the specific subprojects EMPs. Previous, open and informed consultations to the indigenous communities will follow specific provisions that are respectful of their culture as foreseen in the IPPF. This process will include measures such as works announcements in the language of each ethnic group and utilization of disclosure materials considering the cultural diversity of indigenous peoples. 15

16 50. All subprojects will have the required environmental permits and all studies will be conducted according to the current national requirements and approved in due course by the local authorities. 6.3 Public disclosure and consultation of Project Safeguards documents 51. The draft ESMF, IPPF and RPF were first disclosed in country on September 28, 2010 and in the Bank s Infoshop on October 20, 2010 as part of the original design for the Norte Grande Water Infrastructure Project (P120211) which envisaged category A water supply and sanitation investments 11. Updated drafts including the results of recently completed consultations (see summary below) were disclosed in-country and through the Bank s Infoshop on February 24, All three safeguard frameworks (ESMF, IPPF and RPF) have been consulted through three different channels: (i) expert peer review of the documents by two internationally recognized 12 professionals with substantial experience in the WSS sector and also in working with indigenous communities in Argentina; (ii) a virtual review through communication of the documents to a variety of institutional stakeholders, including provincial environmental agencies and institutions related to water resources provision and management, NGOs and indigenous affairs institutions; and (iii) organization of focus group discussions through targeted meetings in two provinces of the NGR on January 25-27, 2011, to solicit feedback from the same stakeholders. 53. Although at this stage no subprojects are approved by the Bank or GoA for inclusion under the Project, some of the subprojects proposed by the provinces and included in the preliminary pipeline of potential investments, like the sanitation works in Resistencia and Santiago del Estero, were consulted following the legal form of an audiencia pública ( public audience ). This exercise was led by the provinces with the participation of the UCPyPFE. During the audiencia pública held in Santiago del Estero in June 2010, some objections and questions on the EIA and the consultation process were raised from several participants. These objections were reported to the Bank by a representative from Universidad Nacional de Santiago del Estero on November These objections will be taken into account in the environmental and social assessment process to be undertaken for this particular subproject under the eligibility criteria and safeguards related requirements of the loan. For any subproject to be approved for funding they will have to show compliance with eligibility criteria and a meaningful consultation process. 6.4 Institutional Arrangements 54. UCPyPFE s role. The UCPyPFE (through a dedicated unit) within the MFP at the federal government level will be responsible for ESMF implementation, including safeguard compliance and supervision of environmental and social management issues. The UCPyPFE will assign qualified staff dedicated to supervise the implementation of EMPs 11 The first Norte Grande Water Infrastructure Project (P120211) was subsequently redesigned before Appraisal to fund only category B water supply and urban drainage subprojects 12 Angel Menendez (ESMF), Pia Pacheco (IPPF and RPF). 16

17 (and IPP and/or RP if applicable) during subproject construction and ensure periodic independent audits, and supervise environmental and social performance by contractors, the provinces and service providers. The UCPyPFE will also provide support in coordinating information disclosure and consultations. 55. Contractor s role. All construction contractors will be required to assign an environmental engineer or other suitably qualified staff, including a social specialist, to oversee compliance with the EMP (construction phase) and IPP and/or RP if applicable, on a dayto-day basis. The specific requirements for environmental and social mitigation measures will be included in bidding documents and as part of the construction contract. 56. Province and Service Provider role. As part of the PTA to be signed between the federal and provincial governments, the UCPyPFE will transfer to the provincial level the following roles and responsibilities: co-participation with the UCPyPFE in subprojects screening, consultations processes, environmental and social assessments, design and implementation of IPPs and RPs, and monitoring and supervision. The WSS service providers will have the primary responsibility for establishing baselines and monitoring specific activities under the construction and operation of the systems. This co-participated transfer of roles and responsibilities will also include coordination arrangements to ensure that local service providers internalize capacity towards the operation of the proposed works. This capacity will be created in collaboration with the UCPyPFE during construction, though it will continue during the operation as necessary. 57. During the operational phase, the relevant WSS service provider in charge of operating the applicable subproject will have specific institutional responsibilities to address prevention and mitigation of operationally related environmental and social impacts. Through their staff, utilities will ensure that competent core staff will be available at all times to supervise the implementation of environmental and social management measures directly under their control and to ensure compliance with the agreed EMPs (operational phase) and environmental license obligations. The Project, through component 2, will finance capacity building and TA activities to help provide sufficient and qualified resources are available for the management of environmental and social aspects related to the proposed works during their operation. 58. Management of Claims and Disputes System. A Management of Claims and Disputes System has been established in the ESMF and will be the joint responsibility of the UCPyPFE and the participating Provinces, and will be channeled through four levels, one internal (at the subproject level in the field through contractors, the Province and the UCPyPFE), and the other three external including mediations, ombudsman, and judicial. Specific mechanisms will be located in the work sites, in the Provinces, and in the UCPyPFE s facilities in Buenos Aires. Channels to receive claims and disputes will comprise a phone line, web site, social monitoring, among others, according to the characteristics and needs of users, including indigenous peoples as needed. In all cases, a systematic record will be kept of the date of reception and resolution of claims. 17

18 7. Capacity Building Program 59. An assessment of the current institutional capacity at the UCPyPPF and local provincial levels was conducted during Project preparation. Overall, it was found that the staff in the UCPyPFE is competent to manage safeguard issues, but the unit will require an additional human resources to handle the increased work load involved by the three new Bank financed projects at the UCPyPFE level and to incorporate specific specialization (i.e in the area of communications) Areas that have been identified for strengthening include: (i) the generation of baseline and environmental monitoring studies at the local level; (ii) the design and implementation of mitigation measures; (iii) the capacity to incorporate social dimensions in EIA processes, including consultation and social participation and indigenous peoples planning in all stages of subproject s cycle; (iv) the dissemination, consultation and claims and redress mechanisms at the local level, and the coordination mechanism with the central level; (v) involuntary resettlement practices; (vi) the integration of communication plans into the institutional system both at the federal and provincial level; and (vii) capacity for monitoring activity outcomes at both federal and provincial levels. A specific assessment of the implementation of environmental and social instruments will be undertaken within the mid-term evaluation and at Project completion stage. 60. During implementation, the GoA and the Bank will determine the strengthening needs in each subproject implementing agency in terms of environmental and social management and will propose specific activities for each agency team. The provinces will create counterpart teams to lead institutional development efforts, staffed with environmental and social specialists as needed. These arrangements would be complemented by specific supervision contracts hired by the UCPyPFE at the national level to ensure proper safeguards monitoring if this is required during subproject implementation. The Project will support capacity expansion requirements due to the Bank-funded subprojects and their wide provincial dispersion. Project design includes an institutional development component that includes funding for environmental and social management activities and technical assistance, including consultants required to complement the existing capacity at the provincial level to conduct the screening and assessment of subprojects proposed for funding, the monitoring of subprojects in execution and the training of permanent staff at the central and local levels in environmental and social issues. 61. The following table includes a summary of the Institutional Strengthening Plan for the management of social and environmental issues which is part of and described in more detail in the ESMF. Activity Component Estimated cost (US$) Regional workshops on social and environmental management, with emphasis on Bank Component 2 50,000 safeguards. Environmental baseline and a platform to monitor the sewerage systems Components 2 and 3 1,000,000 Elaboration of corporate guidelines for environmental management for WSS service providers. Component 2 500,000 Participation in national and international workshops and other events related to environmental Component 2 20,000 and social management in the sector. 18