WORK IN PROGRESS / DRAFT FOR DISCUSSION. Draft October 25, 2005

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1 Draft October 25, 2005 Safeguards Diagnostic Review For Piloting the Use of Jamaican Systems to Address Environmental Issues in the Proposed Bank-Assisted Jamaica: Inner Cities Basic Services Project October 2005

2 Equivalence and Acceptability Assessments For Piloting the Use of Country Systems in the Proposed Jamaica Inner Cities Basic Services Project (ICBSP) Background 1. Starting in 2005 and extending over the next two years the Bank will be supporting a limited number of pilot projects in which lending operations will be prepared using the borrowing country s systems 1 for environmental assessment and other environmental and social safeguards, rather than the Bank s operational policies and procedures on safeguards. The rationale for using country systems is to scale up development impact, increase country ownership, build institutional capacity, facilitate harmonization and increase cost effectiveness. These pilot operations are governed by a new operational policy 2 (OP 4.00) on Piloting the Use of Borrower Systems to Address Environmental and Social Safeguard Issues in Bank-Supported Projects. This Policy elaborates on the approach, enumerates the criteria for assessing country systems, and specifies documentation and disclosure requirements and respective roles of the client country and the Bank. 2. The Bank considers a borrower s environmental and social safeguard system to be equivalent to the Bank s if the borrower s system is designed to achieve the objectives and adhere to the applicable operational principles set out in Table A1 of OP Since equivalence is determined on a policy-by-policy basis in accordance with Table A1, the Bank may conclude that the borrower s system is equivalent to the Bank s in specific environmental or social safeguard areas in particular pilot projects, and not in other areas 3. Before deciding on the use of borrower systems, the Bank also assesses the acceptability of the Borrower s implementation practices, track record, and institutional capacity. The above approach and criteria for assessment were developed with inputs from external stakeholders such as representatives of governments, bilateral and multilateral development institutions, civil society organizations, and the private sector and is consistent with commitments made by the development community in the March 2005 Paris Declaration on Aid Effectiveness. 3. Jamaica is one of the initial few countries that are being considered for piloting the use of country systems, specifically in the proposed Bank-assisted Inner Cities Basic Services Project (ICBSP). The project will be implemented by the Jamaica Social Investment Fund (JSIF) 4. The following sections describe the equivalence and acceptability assessments, carried out by Bank staff in co-operation with the National Environment and Planning Agency (NEPA), as well as JSIF staff, local environmental legal specialist and consultants. The proposed pilot is expected to bring the added benefit of moving towards harmonization of environmental safeguards requirements among the Government of Jamaica (through JSIF), the World Bank and other development partners, such as the EU and USAID, who also work with JSIF. 1 Country systems is defined as the country s legal and institutional framework, consisting of its national, subnational, or sectoral implementing institutions and relevant laws, regulations, rules, and procedures that are applicable to the proposed pilot project. 2 OP/BP 4.00 can be viewed at this web-site: 3 The Bank s environmental and social safeguard policies will apply to the areas which the Bank has determined not to be equivalent to its applicable policy framework and will continue to apply to all projects that are not part of the pilot program. 4 JSIF is a Company Limited by Guarantee and Having a Share Capital, registered under the Companies Act of Jamaica. The shareholders are the Government of Jamaica, represented by the Accountant General, and the Financial Secretary. 1

3 Project Description 4. The proposed project will consist of the followin g four components: (i) Urban Infrastructure and Basic Services Provision: This primary component will support investments in basic local infrastructure, services and facilities in target inner-city communities. JSIF will be distributing grants to eligible communities, from the proceeds of the proposed Loan, for financing the following types of investments: - Drinking Water Supply public and household connections - Sewerage or On-site Sanitation, including small package treatment plants, if needed - Sanitary cores for unserviceable housing stock - Storm drainage - River training - Solid waste system improvements, such as collection points and pick-up service - Small roads, within the participating communities - Sidewalks - Street lighting - Fencing - Community centers and recreation facilities (ii) Crime and Violence Prevention (Technical Assistance): This component aims to assist inner-city neighborhoods to improve the crime and violence situation through a series of innovative and tested community-based methodologies. (iii) Management and Capacity Building: The third component will aim to build the capacity of community-based organizations, and also of utilities, parish councils (local governments) and JSIF to implement, manage and maintain the project investments. (iv) Micro-Credit Finance: This component aims to facilitate access to micro-credits for (i) micro-enterprise development (working capital and fixed assets), (ii) housing repairs and improvements, and (iii) connection fees for basic utility services. The component will be implemented by JSIF through eligible micro-finance institutions in Jamaica. Equivalence Assessment Bank s safeguards policies applicable to the proposed pilot project 5. As described above, the proposed ICBSP will be assisting the participating communities to improve their access to overall basic urban services. The investments proposed under component one 5 are expected to have generally positive environmental impacts, albeit that those could result in some minor adverse environmental impacts unless appropriate design, construction and operational practices are followed. In order to address these potential adverse impacts, the Bank policy area on Environmental Assessment (EA) is applicable to the proposed ICBSP. The investments to be implemented by JSIF under the proposed project are expected to produce local and reversible adverse environmental impacts 5 No adverse impacts are anticipated from the modest investments that are likely to be financed under the Micro- Credit Finance component. 2

4 mostly during implementation/construction. Under the Bank Policy on Environmental Assessment (OP 4.01) the project would be classified as environmental category B, and environmental management plans (EMPs), including consultation with project affected groups and NGOs as appropriate, instead of a full fledged EIA would be required. 6. Although the scoping of the extent of any involuntary resettlement required for the proposed project is still in process, it is expected that some land may be needed for road, drain and utilities improvements only. JSIF plans to avoid or minimize involuntary land acquisition by introducing options for voluntary donation or voluntary relocation of land owners within the same community 6. In any case, in conjunction with the scoping of land acquisition needs, JSIF is preparing a resettlement policy framework (RPF), in accordance with the requirements under Bank Policy OP 4.12 on Involuntary Resettlement, for any land acquisition, if needed. 7. There is no information to indicate that other environmental and social safeguard policy areas of the Bank are applicable to the proposed ICBSP. Jamaica s laws and regulations applicable to the proposed pilot project 8. The following laws, regulations, rules, and procedures govern the environmental assessment process in Jamaica: The 1991 Natural Resources Conservation Authority Act (NRCA Act) 7 ; this Act establishes the Natural Resources Conservation Authority (NRCA) to provide for the management, conservation and protection of natural resources in Jamaica, and provides the legal framework for EIA in Jamaica. The NRCA Act is the enabling legislation for the Regulations and Orders listed below: o Natural Resources Conservation Authority Act Proclamation, Rules and Regulations, o Natural Resources (Prescribed Areas) (Prohibition of Categories of Enterprise, Construction and Development) Order, o Natural Resources Conservation (Permits and Licences) Regulations, , as lastly amended in In 2001 the National Environment and Planning Agency (NEPA) was formed through a merger of the NRCA, the Town Planning Department, and the Land Utilization and Development Commission 12. This regulatory agency now has the responsibility for the application of the legislation listed above. NEPA is in the process of promulgating the National Environment and Planning Agency Act (NEPA Act) which will legally support the establishment of NEPA and the described merger. 6 Based on the preliminary scoping of sub-projects, it is not considered likely that any loss or serious impairment of livelihood will result from any land acquisition for sub-projects. 7 Act 9 of 1991, published in (to be completed with exact reference) 8 (to be completed with exact reference) 9 (to be completed with exact reference) 10 The Natural Resources Conservation (Permits and Licenses) Regulations, Published in Jamaica Gazette Proclamations, Rules and Regulations, Vol. CXIX, No 113, of Friday Dec 20, (to be completed with exact reference) 12 NEPA was established in April 2001 as part of a Public Sector Reform Program, under the Executive Agencies Act (act 4 of 2000) (provide exact reference ) 3

5 10. Under the above legislation, several categories of enterprises, constructions and developments have been defined that require an environmental permit or license from NRCA. The Natural Resources Conservation (Permits and Licenses) Regulations, 1996 (amended) 2004, sets out requirements and procedures for the granting of permits and licenses 13 : - A Permit is required for any (enterprise, development or construction) activity within certain prescribed categories. It is intended to safeguard the various environmental / natural resources from direct damage due largely but not exclusively to physical development. - The discharging of any sewage or trade effluent or other polluting matter to (air), ground or water requires the holding of a License; it is to safeguard the environment from contamination. 14 In case of new construction, a license application is subsumed in the permit application. 11. An applicant is required to complete a standard Application Form and Project Information Form for submission to NEPA/NCRA which enables NCRA to determine, at its discretion, whether an EIA seems warranted or not. Whenever NCRA is of the opinion that the activities are likely to have an adverse effect on the environment, it may require that the permit applicant undertakes an EIA. Consequently, it may grant the permit subject to such terms and conditions as it sees fit, or refuse to grant a permit. The NCRA Act prohibits the granting by any other agency of any approval, license, permit or consent for a project until after a decision to grant an environmental permit has been made Pursuant to the NCRA Act, these requirements apply only to designated areas. However, in 1996 (to be completed with exact title and reference of the Order), the whole of Jamaica was designated as an area within which EIAs may be required. 13. Furthermore, NCRA has issued guidelines for project proponents: the Natural Resources Conservation Authority (Permits and License System) Guidelines for Project Proponents, October 1996 which were revised in December In addition, in 1997 NEPA issued Guidelines for Conducting Environmental Impact Assessments that were revised in August 2005 ( Guidelines 2005 ), that describe the procedures for applying for permits and licenses and outline obligations, including disclosure of information to the public. 14. In practice, NEPA s current environmental permit and licence applications process works as follows (see Annex I for a detailed flow diagram): - Applicant (project proponent) submits an application accompanied by a detailed Project Information Form (PIF) to NEPA; - NEPA screens application and determines if EIA is required; 13 The Natural Resources Conservation Authority (Permits and Licence System) Guidelines for Project Proponents, October 1996, revised December 1996, provides more user-friendly and detailed guidance on the environmental permits and licence applications process. 14 A number of exceptions to the licence requirements are listed in the guidelines, such as for agricultural activities, emergencies, and domestic waste disposal. 15 Section 10(3). Once NEPA informs such other agency or department of Government that a notice requiring an EIA has been issued to the project proponent. 4

6 - If no EIA is deemed to be required by NEPA, a simple environmental analysis together with an Environmental Management Plan (EMP) and possibly other terms and conditions may be stipulated with the issuance of a permit 16 ; - If an EIA is required, Terms of Reference are agreed between NEPA and the project proponent with stakeholder inputs and a first public notice is issued; - Applicant completes EIA (based on approved Terms of Reference) submits the EIA report to NEPA and publishes second notice; - NEPA staff, relevant agencies stakeholders review and comment on EIA; - NEPA s Technical Review Committee reviews application (and EIA) and makes recommendations to NEPA s board; - Board grants (or refuses) the permit, with terms and conditions; - Project proponent may appeal from NEPA s decision (refusal or conditions subject to which permit is granted) to the Minister. NEPA monitors project implementation for compliance with conditions. 15. There are over 60 prescribed categories of projects for which environmental permits are, and EIAs may be, required under the existing legislation. The Table below provides an overview of project categories and types that are likely to be eligible for funding under the proposed ICBSP (component 1), and the corresponding environmental permit, and possible EIA, requirements under Jamaican Law: List of investments for which No Environmental Permit is required - no need to apply to NEPA - Drinking Water supply - public and household connections - On-site sanitation - Sanitary cores for unserviceable housing stock - Storm drainage - River training - Solid waste system improvements, such as collection points and pick-up service - Small roads, within the participating communities - Sidewalks - Street lighting - Fencing - Community centers and recreation facilities List of investments for which JSIF is required to apply to NEPA for an Environmental Permit - with Terms and Conditions as deemed necessary by NEPA/NCRA (EMP) - Underground Pipelines (Sewer Networks) with diameter 15 cm and above) - Small (package) domestic wastewater treatment plants List of investments for which an EIA is required for obtaining Environmental Permit None 16. For those sub-projects to be undertaken through the proposed ICBSP for which an environmental permit and EIA would not be required under the procedures described above, JSIF s existing environmental guidelines become particularly relevant. These guidelines are 16 Note: If no EIA is required the application skips the next three steps and goes directly to NEPA s Technical Review Committee for review and subsequent recommendations. 5

7 currently being revised/upgraded in to an Environmental Management Framework (EMF to quote the exact title) to cover all types of potential sub-projects under ICBSP and include additional rules/requirements for: (i) involvement of stakeholders, (ii) minimization of impacts, and (iii) provisions for adequate management and monitoring during implementation. (These are to be further described) Methodology/process followed in determining equivalence 17. This equivalence assessment was carried out by a team of Bank staff and consultants in consultation with relevant JSIF and NEPA staff members 17. The methodology included a desk review of currently in force legislation and mandatory(tbd] administrative guidelines, discussion with NEPA officials, review of available analysis of Jamaican EA laws 18, and lastly, a detailed review of experience with the Bank financed Jamaica: Loan 7148-JM. National Community Development Project (NCDP) which is currently being implemented by JSIF. And, the draft version of the equivalence review matrix (Annex II), comparing the EA policy objective and operational principles, as stated in Table A1 of OP 4.00, with requirements under the applicable Jamaican laws and regulations, including amendments. A local legal environmental specialist reviewed this draft report. Analysis of Gaps 18. As can be seen from the equivalence review matrix in Annex II, the Bank's EA policy and the Jamaican EIA system have several common features and are compatible in many aspects. For example, similar to the Bank s policy on EA, the Jamaican EIA system classifies projects and activities into three types of projects: (a) those that do not require an Environmental Permit because they are not on the list of prescribed categories; (b) those that after screening are assessed to require a limited environmental analysis and an environmental management plan (imposed through terms and conditions); and (c) lastly those that require a full EIA. 19. The significant differences between the Jamaican laws and regulations on EIA and the operational principles, as stated in Table A1 of OP 4.00 (including lack of, or inadequate references to) are as follows: (a) Transboundary Issues; (b) International environmental agreements; (c) Use of Pollution Prevention and Abatement Handbook Guidelines; (d) Budget and Staffing for EMPs; and (e) Use of Independent Expertise and Advisory Panels; (f) public consultation (- tbd). However, the above differences/gaps, except for (d) are not consequent to the proposed UCS pilot project. 20. JSIF is subject to Jamaican law, and its revised environmental guidelines [future EMF] will reflect the application of legal requirements decribed above (details to be elaborated later). 17 An earlier draft of the report was shared with key NEPA and JSIF staff but no substantial comments were received to date. 18 (1) Report on Jamaican Harmonization Analysis, James R. Newman (Final Report 2003), including Annex II: Jamaican EA Harmonization Congruency Composite. (2) Assessment of JSIF s Safeguards Compliance Capacity, Christine Toppin-Allahar, September

8 21. Since there are no equivalent Jamaican laws, regulations or procedures dealing with involuntary resettlement 19, the pilot use of country systems will not be extended to the Bank policy on Involuntary Resettlement. Current and proposed measures to improve the equivalence 22. As described before, JSIF is in the process of preparing an Environmental Management Framework (by revising its current environmental guidelines) to cover all types of sub-projects likely to be financed under the proposed ICBSP. It is expected that the EMF will be approved by the JSIF Board as JSIF s Environmental Policy and included in its Operational Manual. This would make application of EMF a mandatory requirement for all its sub-projects, irrespective of the funding sources. 23. With respect to activities that require full EIA, the recently completed (August 2005) revision of the Guidelines for Conducting Environmental Impact Assessments by NEPA has increased equivalence of Jamaican EA requirements significantly, especially in the area of public consultation and disclosure. Scope of Acceptability Assessment Acceptability Assessment 20. The following is not a comprehensive assessment of national institutional capacities or country / sector-wide implementation track records for environmental assessment in Jamaica. Instead, the scope and level of this acceptability assessment are commensurate with the requirements of the pilot project, i.e. the ICBSP. This acceptability assessment largely focuses on JSIF because, in practice, the subprojects to be financed under the proposed project are expected to fall in the first two categories described in paragraph 10 above. Most subprojects are in the first category of no environmental analysis, i.e. no environmental permit needed, with only a few in the second category requiring an environmental permit application, and subsequently, a limited environmental analysis and an EMP. For projects that fall within the first category JSIF is expected to addresses environmental analysis through its own environmental management process. NEPA will only get involved with projects of the second category above, i.e. the prescribed categories under Jamaican law, for which permit and.or license applications based on the project information forms (PIFs) must be submitted. Also, in case of sub-projects implemented by other agencies, JSIF will continue to be responsible to ensure satisfactory application of its environmental guidelines (future EMF). Methodology followed in determining acceptability 21. The main purpose of the acceptability assessment is to ascertain whether the capacity of JSIF and, to a more limited extent of NEPA, and their implementation practices and track record in addressing environmental assessment are acceptable to the Bank for projects similar to the selected pilot project. In this case, mainly JSIF as the project implementation agency is being assessed. See Annex III for a detailed matrix showing JSIF s compliance with its 19 A 1998 Green Paper on Involuntary Resettlement exists, but it would have to be a White Paper to constitute official Government policy.. 7

9 existing guidelines that generally would be used for the project cycle of a typical social fund project The National Community Development Project (NCDP), referred to further above, is the most appropriate operation for review since it is similar in scope and approach and it is currently being implemented by JSIF, the same entity that will implement the investments under the proposed Inner Cities Basic Services Project. First, a desk review of the project implementation procedures, practices and records was done by JSIF consultants 21 and subsequently, Bank staff and consultants. Subsequently, JSIF staff involved in the NCDP and in other projects, such as the EU-funded Whitfield Town Sanitation Project, was interviewed to verify and complement the written records and documents. Lastly, Bank environmental specialist staff and consultants carried out field visits to a number of random project sites of the NCDP to check the actual implementation of environmental management actions, both of ongoing and completed works. Informal consultations with affected stakeholders formed part of the field visits. Implementation Practice 23. In line with the above scope limitations, the implementation practice of JSIF during the recent past has been reviewed in detail and was analyzed for the degree of compliance with good environmental management practice throughout the entire sub-project cycle. It was found that JSIF has, to a great extent, fully integrated environmental analysis and management actions into its sub-project processing procedures as summarized in Annex III. As part of JSIF s monitoring and evaluation program, the environmental performance of 37 randomly selected sub-projects was reviewed in early 2005 by specialist environmental consultants: only minor problems were found with 6 of these sub-projects 22. For areas where the environmental performance was not up to good practice standards, JSIF, as part of its project preparation activities for ICBSP, is in the process of improving and amending its environmental guidelines. More specifically, JSIF will: (i) conduct more staff training focusing on environmental management of projects; (ii) hire additional environmental staff and retain consultants as needed to improve its performance; and (iii) extend its implementation monitoring system to cover environmental aspects as well. 24. JSIF has demonstrated its commitment to environmental management by a number of actions: - Detailed review by independent consultants of its environmental guidelines; - Detailed review by independent consultants of ongoing projects (see above); - Good environmental management of EU-funded Whitfield Town Sanitation Project; - Hiring and appointment of environmental staff and consultants. Institutional Capacity 20 Sub-project proposals, such as for schools, community centers, water supply, drainage, roads, are submitted to JSIF by local communities or their representatives and are evaluated against specific criteria. Although JSIF has mostly been operating in rural areas (like the current NCDP), the proposed ICBSP is targeting poor inner cities and peri-urban areas. 21 (1) Environmental Screening and Supervision of Thirty Seven JSIF Projects under Implementation, prepared for JSIF by Technological and Environmental Management Network Ltd. (TEMN), Kingston, January and (2) Assessment of JSIF s Safeguards Compliance Capacity, Christine Toppin-Allahar, September Examples of identified minor problems are: an uncovered manhole, missing garbage disposal facility at basic school, eroding gravel road surface, dust nuisance during construction. 8

10 25. Some potential weaknesses were observed and noted from the discussions with JSIF, NEPA, consultants and local NGOs with respect to NEPA s capacity to handle the workload of (i) timely reviews and issuance of environmental permits and licences, and (ii) monitoring and enforcement of project implementation, in particular with respect to the terms and conditions that may have been attached to any permit/license. It was suggested that there are delays beyond the stipulated maximum period for issuing permits, and also that NEPA does not always follow up with field visits to check on implementation and compliance with an EMP. However, in the case of the UCS proposed pilot, very few subprojects would require an environmental permit from NEPA, and the bulk of the subprojects will be dealt with using JSIF s environmental management framework. 26. JSIF has adequate staffing, i.e. an environmental coordinator and an environmental engineer, plus the services of experienced senior environmental consultants on a retainer basis. JSIF is also recruiting two entry-level Environmental Officers. This combination of inhouse staff, complemented by outside expertise that can deal with more complex issues, is working well. Since environmental management has been fully integrated into JSIF s operations, all project staff, including technical staff and community coordinators, are to some extent involved in dealing with environmental siting and design issues and implementing EMPs during the sub-project cycle. JSIF s responsibility for good environmental management extends to all types of sub-projects, including those to be implemented by other agencies, such as the National Water Commission or the National Works Agency. Gap Analysis 27. The proposed ICBSP expands the menu and scope of JSIF s investments considerably, since in addition to small community facilities, local urban infrastructure improvements will be financed. The current environmental guidelines that form part of the Operations Manual (OM) are not sufficient to cover all potential subprojects under ICBSP. 28. The newly appointed environmental consultant/staff require additional training to gain knowledge and experience in this area. Further, no sanctions are applied to contractors who do not comply with the EMP that is now attached to contract documents 23. Also, the monitoring of the environmental performance of projects is not yet included in the Management Information System (MIS) which may cause it to be given lower priority by supervision staff. Moreover, JSIF management has no quick access to information on the status of environmental performance of projects. Current and Proposed Measures to Increas e the Acceptability 29. As mentioned above, in 2001 NEPA was formed through a merger of the NRCA, the Town Planning Department, and the Land Utilization and Development Commission. However, the three entities in NEPA are still not fully integrated and problems of overlapping jurisdiction and other deficiencies inherent in the legislation remain. Consequently, NEPA is currently engaged in the process of consolidating and modernizing the legislation it 23 As noted in Assessment of JSIF Safeguards Compliance Capacity, Christine Toppin-Allahar, Kingston, September

11 administers. A first draft of a National Environment and Planning Act is in an advanced stage of preparation. This is the product of a process involving extensive consultations with stakeholders, including the local government authorities and the Bar Association. The enactment of this legislation will simplify and streamline the task of enforcement of national environmental legal requirements. 30. JSIF, assisted by their consultants is in the process of upgrading its existing environmental guidelines into an environmental management framework (EMF) for the implementation of the ICBSP. The recommendations of a review of the environmental guidelines carried out earlier in will be also incorporated into this new EMF. An important recommendation of this review -- with regard to the incorporation into the contract documents of specific penalties for non-compliance with EMP -- is still to be implemented. In order to provide adequate assurance of consistent compliance, JSIF s board will adopt the new EMF as a policy. In addition, JSIF will ensure that its Memorandum of Understanding (MOU) with its contracting agencies include the requirement of compliance with JSIF s EMF. In any case, JSIF will remain ultimately responsible for good environmental performance on all its projects. Project supervision and monitoring by JSIF will ensure that all project implementing agents, including contractors and other government agencies, will abide by the requirements of the EMF. The latter will require competent staff with environmental expertise, in-house and on a retainer basis, as needed. Staff training and refresher courses in environmental management will provide sustainable capacity. 31. Another internal procedural action is the inclusion by JSIF of environmental monitoring in the course of the current upgrading and expanding the management information system (MIS). This will allow management to easily check on the environmental performance of sub-projects and take corrective action if needed. It will also facilitate the periodical evaluation of the implementation of EMPs, as well as their effectiveness and usefulness. Updating and revisions of the EMF should result from such periodic evaluations. 32. In order to ensure a sustainable approach to good environmental management of all of JSIF s operations, JSIF has initiated the implementation of ISO 14001, a comprehensive environmental management system (EMS). Although the adoption of the international standards for good environmental management systems (EMS) is less common in Part 2 countries, and still rather rare in public sector agencies, JSIF is a good candidate and will especially benefit from the ISO objective to achieve and continuously improve the desired level of environmental performance. Additional reasons and benefits for JSIF of ISO certification are: - Method of demonstrating its environmental compliance, especially as a UCS pilot; - Process to attain local clients and international donor recognition; - Public declaration of its commitment to good environmental management; and - Enhanced compliance with local legislation and donor expectations. 33. ISO certification of JSIF is planned to be achieved during project implementation, and adequate support for consultants and partnership arrangements will be included as part of project implementation costs. An EMS manager has already been appointed by JSIF, and initial contacts for local and international partnerships have been made. Terms of reference for the first phase of the EMS program have been agreed, and the 24 Environmental Screening and Supervision of Thirty Seven JSIF Projects under Implementation, prepared for JSIF by Technological and Environmental Management Network Ltd. (TEMN), Kingston, January

12 preparation consultants will develop, prior to appraisal, a plan and terms of reference for the program implementation. Gap Filling Measures Gap filling measures agreed with JSIF and NEPA to improve and sustain the Equivalence and Acceptability: 34. The following actions are to be taken by JSIF (These will be revised/elaborated based on the consultation workshop discussions) Actions To Be Taken Target Date To Achieve Equivalence Finalize and disclose Environmental Management Framework (EMF) Incorporate EMF into JSIF s Operational Manual (OM) JSIF Board adopts updated OM, including the EMF, thereby making the EMF its environmental policy To Achieve (and Sustain) Acceptability Recruit permanent environmental engineer / specialist Complete staff training in environmental management Incorporate the monitoring of all environmental management actions into the MIS Start implementation of plan and program for achieving ISO 14001certification By Appraisal By Appraisal By Negotiations By Negotiations By Negotiations By Negotiations By Negotiations Monitoring and Reporting 35. JSIF will prepare quarterly monitoring reports with the following two objectives: i. to monitor the implementation status of the above discussed gap filling measures and their impact on achievement and sustenance of equivalence and acceptability of applicable Jamaican Environmental laws, regulations and procedures; and ii. to evaluate the implementation experience of the UCS pilot in Jamaica, covering the following aspects. (This section will be developed later, based on the consultation workshop discussions) Roles and Responsibilities of JSIF, NEPA and the Bank 36. JSIF is responsible for the following actions: - Satisfactory implementation of gap filling actions set out above to achieve and sustain equivalence and acceptability; - Satisfactory implementation of its Environmental Policy i.e. the updated EMF. This would involve timely screening all investment proposals from eligible communities and 11

13 determine the course of actions required to mitigate any potential environmental and social risks and impacts; - Performance of bi-annual environmental audits of sample investments under construction and under operation; and - Preparation of quarterly monitoring reports on the above, for the Bank s review. 37. NEPA is responsible for: - Timely processing of any applications by JSIF for environmental permits; and - Performance of annual spot checks/audits of sample investments financed by JSIF for their compliance with Jamaican Law, and imposition of corrective actions to achieve compliance. 38. The Bank is responsible for the following actions: - Monitoring the sustenance of equivalence and acceptability of Jamaican Environmental laws, regulations and procedures applicable to ICBSP; - Reviewing the quarterly monitoring reports prepared by JSIF; - Periodic supervision of project implementation, including field visits to completed subprojects and those under construction; - Reviewing of environmental audits carried out by JSIF and by NEPA; and - Agreement on remedial actions to be taken by JSIF and NEPA to achieve compliance. 12

14 Annex I: Flow Diagram of Permit Application Process (Source: NEPA) 13

15 Annex II: Assessment of Equivalence Summary Matrix (This assessment is based on the assumption that the revised Guidelines 2005 are mandatory) Environmental Assessment Bank Policy (OP 4.00) Requirements (Objective and Operational Principles) Objective: To help ensure the environmental and social soundness and sustainability of investment projects. To support integration of environmental and social aspects of projects into the decision- making process. Operational Principles: 1. Use a screening process for each proposed project, as early as possible, to determine the appropriate extent and type of environmental assessment (EA) so that appropriate studies are undertaken proportional to potential risks and to direct, and, as relevant, indirect, cumulative, and associated impacts. Use sectoral or regional environmental assessment when appropriate. Government of Jamaica s Equivalent Requirements Objectives and Operational Principles as stated in Government of Jamaica s corresponding laws, rules, regulations, procedures, and guidelines. The purpose of EIA is to prevent any activities that may have adverse effects on the environment, and that are likely to be injurious to public health or to any natural resources. A screening process is in place for those projects that are subject to permitting (prescribed categories) and licensing. It divides projects into three categories: (a) projects that require the preparation of a full EIA; (b) projects that require only a summary description of the project, its impacts and appropriate mitigation measures; (c) projects that do not require an EIA. NEP A reviews permit / licence applications for all projects in the listed categories for their potential impacts and determines the need for an EIA or a limited e nvironmental analysis, subject to specific terms and conditions. Government of Jamaica s corresponding laws, rules, regulations, procedures, and guidelines. Natural Resources Conservation Authority Act (1991) and Natural Resources Conservation Authority Act Proclamation, Rules and Regulations (1996) and Natural Resources (Prescribed Areas, Prohibition of Categories of Enterprise, Construction and Development) Order (1996) and Natural Resources Conservation (Permits and Licences) Regulations (Amended) 2004 and the Guidelines 2005 Beside the above, Jamaica has other relevant sectoral laws that may have implicit policies for environmental protection to varying degrees: Watersheds Protection Act (1963), Water Resources Authority Act (1995), Town & Country Planning Act (1948, amended 1999), Public Health Act (1985), Clean Air Act (1961), Litter Act (1985), Pesticide Act (1975, amended 1996), Land Development and Utilization Act, Quarry Control Act (1983), National Solid Waste Management Authority Act (2001), Jamaican National Heritage Trust Act (1985). Sections 9 and 10 of the NRCA Act (1996) on the power of the NRCA to require, after screening of any permit / licence application, the submission of an EIA. The screening process is set out in more detail in the Guidelines Significant differences between OP 4.00 and Government of Jamaica s requirements. No significant gaps. Social impacts are not specifically mentioned in the NRCA Act. However, the Guidelines 2005, under section 3.2.3, include the Human Environment in the Basic Checklist of Critical Aspects to be considered in an EIA. These include, among others, social structure, employment, livelihood, cultural values, & archeological heritage. The Objective is applicable to this project. No significant gaps. The NCRA and associated regulations have no references to indirect, cumulative & associated impacts, or the use of sectoral and regional EAs. However, the Guidleines 2005 for conducting EIA refer to cumulative impacts; Strategic Environmental Assessments (SEA) are also listed in these guidelines.the guidelines for conducting EIAs refer to cumulative (implying also regional) and associated impacts, albeit with inadequate details. System improvements to be undertaken by the Government of Jamaica before implementation of the project activities 14

16 This principle is applicable to project. 2. Assess potential impacts of the proposed project on physical, biological, socioeconomic and physical cultural resources, including transboundary and global concerns, and potential impacts on human health and safety. 3. Assess the adequacy of the applicable legal and institutional framework, including applicable international environmental agreements, and confirm that they provide that the cooperating government does not finance project activities that would contravene. Projects under (a) above are required to assess impacts on human health, physical, biological, socio-economic and physical cultural resources. EIA Guidelines 2005 and generic ToRs for EIA prepared by NEPA obligate project proponents to assess the adequacy of applicable legal and institutional framework. Under Basic Checklist of Critical Aspects to be Considered in an EIA, the Guidleines 2005 include the Human Environment as a separate category. Guidance is given on including socioeconomic and health aspects in the assessments. Pursuant to Guidelines 2005 NEPA provides guidance to project proponent which require the review of the legislative and regulatory framework, but no references to international environmental conventions are made. No significant gaps, although Transboundary and global concerns are not specially addressed but they are not pertinent to to the proposed project.. This principle is applicable to project. No provisions for compliance with international environmental agreements. Otherwise, no significant gaps. This principle is NOT applicable to project. None None 4. Provide for assessment of feasible investment, technical, and siting alternatives, including the no action alternative, potential impacts, feasibility of mitigating these impacts, their capital and recurrent costs, their suitability under local conditions, and their institutional, training and monitoring requirements associated with them. 5. Where applicable to the type of project being supported, normally apply the Pollution Prevention and Abatement Handbook (PPAH). Justify deviations when alternatives to measures set forth in the PPAH are selected. 6. Prevent and, where not possible to prevent, at least minimize, or compensate for adverse project impacts and enhance positive impacts through environmental management and planning that includes the proposed mitigation measures, monitoring, institutional capacity development and training measures, an implementation schedule, and cost estimates. The no action alternative must be considered under the EIA for all projects that are subject to a full EIA. The other points listed under this principle are referred to in varying degrees of detail in the EIA guidelines. Emissions, wastewater effluents, hazardous waste, and poisonous, noxious and polluting matter are defined in the Proclamations, Rules and Regulations (19996) for the NRCA Act. The Guidelines 2005 [and Act? ] emphasize both positive and negative impacts with focus on the mitigating measures for addressing negative impacts. These guidelines also prescribe the development of an EMP, including environmental quality objectives and a monitoring plan. However, no specific requirements are given in the guidelines for EMP implementation budget, or the staffing of the implementing agency. The Guidelines No reference to PPAH guidelines in any of the applicable laws or regulations. Under the Guidelines 2005 monitoring is provided for, including specific monitoring parameters. Such as: (i) quality of water, (ii) noise and air quality, (iii) relevant health indicators, (iv) waste management, (v) wildlife, (vi) public health, and (vii) workers health and safety. No significant gaps. The revised Guidelines 2005 make reference to these aspects but lack details. This principle is NOT applicable to project Significant gap. This principle is NOT applicable to project. Significant gap with respect to EMP Project proponent is not required to provide EMP implementation details such as budget and staffing requirements, implementation schedule etc., This principle is applicable to project. None. None. EMP implementation resources are to be covered by project budgets, and this should be reflected in JSIF s Environmental Management Framework. 15

17 7. Involve stakeholders, including project-affected groups and local nongovernmental organizations, as early as possible, in the preparation process and ensure that their views and concerns are made known to decision makers and taken into account. Continue consultations throughout project implementation as necessary to address EArelated issues that affect them. The Guidelines 2005 require proponent to hold public consultations with all affected parties and civil society, including NGOs. The results of the consultation are to be documented in the EIA report, and a second consultation is to be held for review of the draft EIA. The Guidelines 2005 cover consultation and also include an annex on Guidelines for Conducting Public Presentations. No significant gaps. This principle is NOT applicable project. None. 8. Use independent expertise in the preparation of EA where appropriate. Use independent advisory panels during preparation and implementation of projects that are highly risky or contentious or that involve serious and multidimensional environmental and/or social concerns. Not prescribed. However, it is a common practice to use separate specialist consultants and experts to prepare EIAs. Significant gap with respect to the requirement to use independent advisory panels. This principle is NOT applicable to project. None. 9. Provide measures to link the environmental assessment process and findings with studies of economic, financial, institutional, social and technical analyses of a proposed project. There is no such specific requirement. However, the Guidelines 2005 require that proponent do an analysis of alternatives including the noaction alternative. None No significant gaps. This principle is applicable to project. This will be addressed through the EMF, by the integration of all environmental concerns into the JSIF sub-project cycle. 10. Provide for application of the principles in this Table to subprojects under investment and financial intermediary activities. Financial intermediary (FI) types of projects are deemed to be covered. Under the existing legislation, NEPA is required to screen and review all projects in prescribed categories for their potential impacts. No significant gaps. This principle is NOT applicable to project. None. 11. Disclose draft EA in a timely manner, before appraisal formally begins, in an accessible place and in a form and language understandable to key stakeholders. The Guidelines 2005 require that the public be notified through newspaper advertising and all other suitable and appropriate means (including the NEPA website), in addition to specific invitation letters to affected stakeholders. These notices are to include advice on where and how to access the EIA report and where the public review will take place. Annex 2 to Guidelines 2005 deals in detail with public presentations. No significant gaps. This principle is applicable to project. JSIF will hold a public consultation and disclosure workshop prior to project appraisal. 16

18 Annex III: Assessment of Acceptability Summary Matrix JSIF Compliance with its current environmental guidelines (To be revised) in Project Cycle Step in Project Cycle Objective Actions JSIF Compliance Targeting & Promotion Ensure that environmental issues are introduced to beneficiaries Educate beneficiaries and intermediaries (CBOs/NGOs) and other executing agencies on environmental issues and subproject requirements An Environmental Module has been incorporated into the initial JSIF Training Workshop for beneficiary communities Project Formulation Project Appraisal Project Approval Project Implementation & Supervision Project Monitoring & Evaluation Ensure that environmental issues are considered at earliest stage of the project cycle Ensure that environmental impacts have been analyzed and appropriate mitigation measures designed Select most needed and environmentally sound projects for funding Ensure that all design standards and mitigation measures are being properly implemented Ensure that all environmental contractual obligations are being met and EA process is refined Ensure conformity with national environmental policies and strategies Provide technical assistance directly to project formulators when necessary, or direct them to qualified specialists who can help in project formulation Ensure impacts are identified and alternative sites and/or designs and mitigation measures are considered by project proponents Screen project proposals to categorize projects according to type of environmental review that will be necessary Carry out an Envi ronmental Review, Limited Environmental Assessment, or Full Environmental Impact Assessment, which will identify impacts and design appropriate mitigation measures Once project has been screened and any necessary environmental review or assessment has been carried out, project can be approved if it meets viability criteria In some cases, approval may be denied if the environmental assessment recommendations have not been incorporated into project design Prepare contracts with environmental clauses for contractors/communities/ NGOs to execute projects Undertake site visits to ensure that environmental criteria and mitigation measures, as required by contracts, have been incorporated into project Require changes to sub-project design and/or implementation if unforeseen impacts occur Approval required to issue final payment for sub-project construction Site visits during project execution and operation to assess how environmental screening and mitigation measures are succeeding/ have succeeded in minimizing impacts Determine if changes are needed to improve EA process Meet with contractors/community representatives to gather feedback 17 JSIF projects are subject to, and respect, all applicable Jamaican regulatory requirements JSIF provides technical assistance and/or expert assistance This is an integral aspect of the JSIF project design process This aspect of the JSIF project appraisal process has recently been enhanced This is an integral aspect of the JSIF project appraisal process. Because of their scale, JSIF projects ordinarily require only Environmental Review or Limited Environmental Assessment This is JSIF practice This is JSIF practice. Projects have been declined when required mitigation measures were unaffordable Standard forms of design and construction contracts incorporate environmental management plans. Site visits are undertaken by both JSIF staff and their project supervision consultants This is JSIF practice, i.e. recent introduction of chance find procedures for cultural property Checks for environmental compliance have recently been added to procedures for release of payment An environmental performance review of 37 NCDP subprojects was completed by consultants in January 2005 A review and update of JSIF Environmental Guidelines was completed by consultants in February 2005 A Workshop for this purpose is planned for late Source: Assessment of JSIF s Safeguards Compliance Capacity, Christine Toppin-Allahar, September 2005