FOR DISCUSSION ONLY. (A) ADB Safeguard Policy Statement. (C) Extent of Equivalence 2

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1 Comparative Analysis of Lao PDR s Legal Framework and Environment Safeguards in the Environmental Safeguards Objectives: To ensure the environmental soundness and sustainability of projects and to support the integration of environmental considerations into the project decision-making process Key Element (1) Ensure the environmental soundness and sustainability of projects Environmental Protection Law Article 4 Explanation of Terminologies (new) Defined terms used in this law shall have following meanings: 5. Environmental Impact Assessment means a process of studying, surveying, data analysis and anticipation of both positive and negative impacts on social and natural environment caused by various projects in short and long term, along with taking appropriate methods and measures to protect, avoid and mitigate those environmental impacts. Forestry Law 2007 Article 6. Principles of protection, development and utilization of forests and Forestlands Protection, development and utilization of forests and Forestlands shall be implemented according to the following principles: 5. Ensuring effective, efficient and sustainable utilization of forests and Forestlands without negative impacts on the environment. Ministerial Instruction No. 8029/MONRE on the Process of Initial Environmental Examination of the Investment Projects and Activities (IEE Instruction 2013) 1.1 Objectives of the Instruction This Instruction aims to ensure the uniformity in the conductance of the Initial Environmental Examination by every 1 All text in Column B is direct citation from the legal instruments. Citations to non-legally-binding policies and guidelines are in Column C. In this analysis, the words shall and must are interpreted to mean that an action is mandatory; the word may is interpreted to mean that an action is discretionary. 2 Full denotes that the national legal instruments are in complete harmony with the corresponding Objective, Scope and Trigger, Principle or Key Element thereof. Partial denotes that the national legal instruments are in partial harmony with the corresponding Objective, Scope and Trigger, Principle or Key Element; and No denotes that no legal requirement can be found that corresponds to the particular Objective, Scope and Trigger, Principle or Key Element. It is intended that the referenced text of the national legal instruments be sufficiently clear to demonstrate the findings of Full or No without further explanation, except in those instances where an explanation would appear necessary and is given. A finding of Partial normally requires the explanation provided. 3 Unofficial translation 4 Unofficial translation 1 As of August 2016

2 Key Element (2) Support the integration of environmental considerations into the project decision-making process Investment Projects and Activities of a public and private both domestic and foreign enterprises which operate business in Lao PDR that cause or are likely to cause environmental and social impacts. Those Investment Projects and Activities shall conduct the efficient Initial Environmental Examination Process, contribute to the sustainable socio economic development of the country Environmental Protection Law 2012 Article 4 Explanation of Terminologies (new) Defined terms used in this law shall have following meanings: 5. Environmental Impact Assessment means a process of studying, surveying, data analysis and anticipation of both positive and negative impacts on social and natural environment caused by various projects in short and long term, along with taking appropriate methods and measures to protect, avoid and mitigate those environmental impacts. IEE Instruction Environmental Compliance Certificate Environmental Compliance Certificate is the certificate approving the IEE Report and ESMMP of the Investment Projects and Activities that the Ministry of Natural Resources and Environment shall issue. The validity and the conditions attached to such Environmental Compliance Certificate should be undertaken as follows: - The Environmental Compliance Certificate approving the IEE Report shall be valid throughout the investment period of the Investment Projects and Activities; provided, however, such Environmental Compliance Certificate shall be terminated in case the Environmental Compliance Certificate approving the ESMMP is terminated or is not renewed; - The Project Owner shall review and revise the ESMMP to reflect the actual circumstance of each period in the Investment Projects and Activities and submit the revised ESMMP to the Ministry of Natural Resources and Environment for the approval and the renewal of the Environmental Compliance Certificate. - The Environmental Compliance Certificate shall contain certain conditions that the Project Owner shall strictly comply with; 2 As of August 2016

3 - In case that it is found that the Project Owner fails to comply with any conditions set out in the Environmental Compliance Certificate resulting in causing substantial social and environmental impacts, the Ministry of Natural Resources and Environment, in the agreement from the high-ranking authorities, shall be entitled to revoke or suspend the validity of the Environmental Compliance Certificate any time during the investment period of the Investment Projects and Activities. Also, the Ministry of Natural Resources and Environment shall be entitled to propose to the investment competent authority to consider revoking the Concession Registration. Ministerial Instruction No. 8030/MONRE on the Process of Environmental and Social Impact Assessment of the Investment Projects and Activities 2013 (ESIA Instruction 2013) 5 Instruction 2.10 of ESIA Instruction 2013 is identical to the cited provision of Instruction 2.6 of the IEE Instruction 2013, with the exception that the ESIA Instruction 2013 replaces the acronym IEE with ESIA. Scope and Triggers: Environmental safeguards are triggered if a project is likely to have potential environmental risks and impacts. IEE Instruction List of Investment Projects and Activities List of Investment Projects and Activities divides the Investment Projects and Businesses into 2 groups as follows: - Group 1: Investment Projects and Activities that are anticipated to cause the insignificant or minimal environmental and social impacts; therefore, are required to conduct an Initial Environmental Examination Process; - Group 2: Investment Projects and Activities that are anticipated to cause the significant or major environmental and social impacts; therefore, are required to conduct an Environmental and Social Impact Assessment Process. List of Investment Projects and Activities categorizing these 2 groups of Investment Projects and Activities shall be prescribed The legal regime is fully equivalent on the basis of the trigger as stated that environmental safeguards are triggered if a project is likely to have potential environmental risks and impacts. But the legal regime does not explicitly stipulate that proposed development in a national natural heritage area should be categorized in Group 2. See Principle 8, Key element 4. Amend the National Heritage Law 2005, the IEE Instruction 2013, and the ESIA Instruction 2013 to explicitly stipulate that proposed development in a national natural heritage area should be categorized in Group 2. 5 Unofficial translation 3 As of August 2016

4 separately in the Decision of the Ministry of Natural Resources and Environment. ESIA Instruction 2013 Instruction 2.2 of Ministerial Instruction No. 8030/MONRE on the Process of Environmental and Social Impact Assessment of the Investment Projects and Activities (ESIA Instruction 2013) is identical to the cited provision of Instruction 2.2 of IEE Instruction Fisheries Law 2009 Article 33. Requirements for a commercial fisheries operation Any commercial fisheries operation must satisfy the following main requirements: In certain cases, be in possession of a Report on the Environmental Impact Assessment; Law on National Heritage Article 54. Regulations on the Protection and Conservation of National Natural Heritage The protection and conservation of national natural heritage shall be carried out as follows: 1. Individuals or organizations intending to pursue socio-economic development in any national natural heritage area, in particular industrial, agricultural and infrastructural development shall obtain prior approval from the Ministry of Information and Culture and other concerned sectors; Principle 1: Use a screening process for each proposed project, as early as possible, to determine the appropriate extent and type of environmental assessment so that appropriate studies are undertaken commensurate with the significance of potential impacts and risks. Key element (1) Screen as early as possible IEE Instruction Screening of the Investment Projects and Activities Screening is the first step in the Environmental Impact Assessment process and is the important step to determine whether or not the proposed Investment Project and Activities need any Environmental Impact Assessment. The details for the screening are as follows: 6 Unofficial translation 7 Translation endorsed by the Law Committee of the National Assembly of the Lao PDR 4 As of August 2016

5 - The Project Owner shall apply the List of Investment Projects and Activities as the reference for the screening to determine which level of the Environmental Impact Assessment, the Project Owner shall conduct; - In case the Investment Projects and Activities are not categorized in any group in the List of Investment Projects and Activities, the Provincial/Capital Department of Natural Resources and Environment shall apply a separate criteria to compare the environmental and social impacts by taking relevant information as specified in the investment application to conduct further screening to determine which level of the Environmental Impact Assessment such Investment Projects and Activities shall conduct or the Environmental Impact Assessment is not required; Key element (2) Determine the appropriate extent and type of environmental assessment so that appropriate studies are undertaken commensurate with the significance of potential impacts and risks. ESIA Instruction 2013 Instruction 2.1 of ESIA Instruction 2013 is identical to the cited provision of Instruction 2.1 of the IEE Instruction 2013, with the exception that MONRE is responsible for ESIA, while Provincial/Capital Departments of Natural Resources and Environment are responsible for IEE. Ministerial Instruction No. 8030/MONRE on the Process of Environmental and Social Impact Assessment of the Investment Projects and Activities 2013 (ESIA Instruction 2013) 2.3 Determining the Scope of Study and Terms of Reference After the screening, if perceiving that Investment Projects and Activities that are categorized as Group 2, the Project Owner shall conduct the Environmental and Social Impact Assessment Process. Before conducting impact assessment the Project Owner shall prepare the scope of study and terms of reference as report in the designated format and in pursuant to the relevant technical guideline with the full assurance of the appropriate Public Involvement and shall submit the report to the Ministry of Natural Resources and Environment for their review and approval prior to the conductance of the Environmental and Social Impact Assessment Process. During the preparation of the Scope of Study and Terms of Reference for the conductance of the Environmental and Social Impact Assessment, the Project Owner shall pay attentions for 5 As of August 2016

6 implementation as follows: - For the determining the scope of study, the Project Owner shall clearly define the scope of the environmental and social impact that are assessed to incur from the Investment Projects and Activities and shall incorporate the material information collected that would constitute basis for the Environmental and Social Impact Assessment Process; - For the determining the terms of reference, the Project Owner shall clearly and comprehensively define the scope of works to be undertaken to achieve the result for each aspects of the scoping for the Environmental and Social Impact Assessment Process. Also see Scope and Triggers and Principle 1, Key element 1. Principle 2: Conduct an environmental assessment for each proposed project to identify potential direct, indirect, cumulative, and induced impacts and risks to physical, biological, socioeconomic (including impacts on livelihood through environmental media, health and safety, vulnerable groups, and gender issues), and physical cultural resources in the context of the project s area of influence. Assess potential trans-boundary and global impacts, including climate change. Use strategic environmental assessment where appropriate. Key element (1): Identify indirect as well as direct impacts No corresponding legal provision. No equivalence Amend the IEE Instruction 2013 and the ESIA Instruction 2013 to explicitly require identifying indirect as well as direct impacts. Key element (2) Identify cumulative impacts ESIA Instruction Principles of Environmental and Social Impact Assessment Process The Environmental and Social Impact Assessment Process shall be implemented based on the principles as follows: - The Project Owner shall conduct additional cumulative impact assessment in case its project and activities are expected to generate cumulative Environmental and Social Impacts to other investment project located in the adjacent areas; provided that such cumulative impact assessment shall be conducted pursuant to the related technical guidelines; The National Environmental and Social Sustainability of the Hydropower Sector in Lao PDR 2005 (National Hydropower 2005), which is not legally binding, supports this key element: Purpose An integrated approach to river basin management will be practiced for multiple projects planned to dam a single river. Such an approach will include addressing cumulative impacts and their mitigation 1. ENVIRONMENTAL ASSESSMENT All large hydropower projects as stipulated above [installed capacity of higher than 50 Megawatts or inundating more than 10,000 hectares of land at their fully supply level] must produce a full Environmental Impact Assessment (EIA) report and Environmental Management Plan (EMP) The EIA will include a sub-basin cumulative impact analysis. Key element (3) No corresponding legal provision. No equivalence Amend the IEE Instruction 6 As of August 2016

7 Identify induced impacts 8 Key element (4) Identify physical impacts IEE Instruction Duties and Responsibilities of the Project Owner in the Initial Environmental Examination Process In the Initial Environmental Examination Process, the Project Owner shall have the following duties and responsibilities: - to conduct study on overall physical aspects,,, which may arise from the Investment Projects and Activities 2013 and the ESIA Instruction 2013 to explicitly require identifying induced impacts. Key element (5) Identify biological impacts ESIA Instruction 2013 Instruction 2.12 of ESIA Instruction 2013 is identical to the cited provision of Instruction 2.8 of the IEE Instruction IEE Instruction Duties and Responsibilities of the Project Owner in the Initial Environmental Examination Process In the Initial Environmental Examination Process, the Project Owner shall have the following duties and responsibilities: - to conduct study on overall biological aspects which may arise from the Investment Projects and Activities Key element (6) Identify socioeconomic impacts (including on livelihood through environmental health and safety, vulnerable ESIA Instruction 2013 Instruction 2.12 of ESIA Instruction 2013 is identical to the cited provision of Instruction 2.8 of the IEE Instruction Environmental Protection Law 2012 Article 2 Environment (revised) Environment means any organic and inorganic features existing naturally or created by mankind and the positive and negative interaction and impacts on livelihood IEE Instruction Duties and Responsibilities of the Project Owner in the Initial Environmental Examination Process In the Initial Environmental Examination Process, the Project Owner shall have the following duties and responsibilities: The National Hydropower 2005, which is not legally binding, supports this key element: 2. Project-Affected People Project-affected people will be recognized as those whose assets, resource use and livelihoods, and/or social or cultural structures are involuntarily altered by the project, and will identified on the basis of social, economic, health and cultural studies and impact assessments. 8 ADB defines induced impacts as adverse and/or beneficial impacts on areas and communities from unintended but predictable developments caused by a project, which may occur later or at a different location. 7 As of August 2016

8 groups, and gender issues) - to conduct study on overall socio-economic aspects, including prediction of social impacts which may arise from the Investment Projects and Activities Key element (7) Identify impacts on physical cultural resources Key element (8) Identify impacts in the context of the project s area of influence ESIA Instruction 2013 Instruction 2.12 of ESIA Instruction 2013 is identical to the cited provision of Instruction 2.8 of the IEE Instruction No corresponding legal provision. No equivalence Amend the IEE Instruction 2013 and the ESIA Instruction 2013 to explicitly require identifying impacts on physical IEE Instruction Public Involvement of the Project-Affected Persons and the Stakeholders The Project-Affected Persons and the Stakeholders shall have the following participation in the Initial Environmental Examination Process: - to cooperate and provide information on local context of social and environmental aspects in the area of the Investment Projects and Activities and in the nearby locations to be used in the preparation of the IEE Report and ESMMP; cultural resources. Key element (9) Assess potential trans-boundary impacts ESIA Instruction 2013 Instruction 2.14 of ESIA Instruction 2013 is identical to the cited provision of Instruction 2.10 of the IEE Instruction 2013, with the exception that the ESIA Instruction 2013 replaces IEE Report and ESMMP with ESIA Report. Law on Electricity 2008 Article 40. Using Land for Electricity Project Using land for electricity project shall do: 1. Project developer must detail limit of land using impact to social and natural environment of project; ESIA Instruction Principles of Environmental and Social Impact Assessment Process The Environmental and Social Impact Assessment Process shall be implemented based on the principles as follows: The National Hydropower 2005, which is not legally binding, supports this key element: 4. Consultation 8 As of August 2016

9 Key element (10) Assess potential global impacts, including climate change - The Project Owner shall conduct additional transboundary impact assessment in case its Investment Project and Activities are expected to cause transboundary social and environmental impacts to other neighboring countries; provided that such transboundary impact assessment shall be conducted pursuant to the related regulations and technical guidelines; IEE Instruction Objectives of the Instruction This Instruction aims to ensure the uniformity in the conductance of the Initial Environmental Examination by every Investment Projects and Activities of a public and private both domestic and foreign enterprises which operate business in Lao PDR that cause or are likely to cause environmental and social impacts. Those Investment Projects and Activities shall conduct the efficient Initial Environmental Examination Process and shall mitigate and enhance the global warming adaptation. Consultations on trans-boundary impacts, if materially identified, may also be conducted with neighboring governments through processes established by the Mekong River Commission. Consultations will continue throughout project implementation. Partial equivalence Assessing climate change is an objective of the IEE Instruction 2013 and the ESIA Instruction 2013, but there is no corresponding substantive requirement in either Instruction to assess potential climate change impacts. Amend the IEE Instruction 2013 and the ESIA Instruction 2013 to explicitly require assessing climate change impacts in the event that a project may potentially create such impacts. Key element (11) Use strategic environmental assessment where appropriate ESIA Instruction 2013 Instruction 1.1 of ESIA Instruction 2013 is identical to Instruction 1.1 of IEE Instruction 2013, with the exception that the ESIA Instruction replaces the words initial environmental examination with the words environmental and social impact assessment. Environmental Protection Law 2012 Article 4 Explanation of Terminologies (new) 3. Strategic Environmental Assessment means a process of anticipating an environmental impact and including environmental protection while developing policies, strategies, and programs undertaken by sectors. Article 19 Strategic Environmental Assessment (new) A strategic environmental assessment (SEA) is a process of anticipating an impact that may affect social and natural environment, while developing policies, strategic plans, and programs, including considerations towards impacts of climate change. This impact assessment shall determine methods and measures to avoid or mitigate impacts on social and natural environment in order to accomplish sustainable development goals. 9 As of August 2016

10 While developing the policies, strategic plans, and programs, particularly of energy and mining, agriculture and forestry, industry and commerce, public works and transportation, posttelecommunication and communication, information-culture and tourism sector, a strategic environmental assessment shall be conducted, except a plan, which applies to uses of small-scale areas and subject to the Integrated Spatial Plans. By conducting the SEA, there shall be participations by organizations, local concerned authorities and people, who are directly or indirectly affected by the sectoral policies, strategic plans and programs. Principle 3. Examine alternatives to the project s location, design, technology, and components and their potential environmental and social impacts and document the rationale for selecting the particular alternative proposed. Also consider the no project alternative. Key element (1) Examine alternatives to the project s location, design, technology, and components and their potential environmental and social impacts Key element (2) Document the rationale for selecting the particular alternative proposed Key element (3) Also consider the no project alternative No corresponding legal provision. No equivalence The National Hydropower 2005, which is not legally binding, supports this key element: 1. Environmental Assessment The EIA will include a comprehensive risk analysis over the entire life-span of project, an analysis of alternatives for project structure and location, including the no-project alternative Amend the IEE Instruction 2013 and the ESIA Instruction 2013 to explicitly require examining alternatives to the project s location, design, technology, and components and their potential environmental and social impacts No corresponding legal provision. No equivalence Amend the IEE Instruction 2013 and the ESIA Instruction 2013 to explicitly require documenting the rationale for selecting the particular alternative proposed. No corresponding legal provision. No equivalence See Principle 3, Key element 1. Amend the IEE Instruction 2013 and the ESIA Instruction 2013 to explicitly require considering the no project alternative. Principle 4: Avoid, and where avoidance is not possible, minimize, mitigate, and/or offset adverse impacts and enhance positive impacts by means of environmental planning and management. Prepare an environmental management plan (EMP) that includes the proposed mitigation measures, environmental monitoring and reporting requirements, related institutional or organizational arrangements, capacity development and training measures, implementation schedule, cost estimates, and performance indicators. Key considerations for EMP preparation 10 As of August 2016

11 include mitigation of potential adverse impacts to the level of no significant harm to third parties, and the polluter pays principle. Key element (1) Partial equivalence Avoid adverse impacts where possible Key element (2) Where avoidance is not possible, minimize and/or, mitigate adverse impacts to the level of no significant harm to third parties Environmental Protection Law 2012 Article 7 Commitment in Environmental Protection (revised) Persons, households, legal entities and organizations have commitments of protecting, improving, rehabilitating, controlling, monitoring and inspecting the environment based on regulations to avoid creating impacts on the environment, causing degradation and polluting that exceeds the Pollution Control Standard and the National Environmental Quality Standard IEE Instruction Principles relating to Initial Environmental Examination Process of the Investment Projects and Activities The Initial Environmental Examination Process of the Investment Projects and Activities shall be implemented pursuant to the following principles: - The Project Owner shall ensure the implementation of the environmental and social mitigation measures as defined in the Environmental and Social Management and Monitoring Plan ESIA Instruction 2013 Instruction 1.2 of ESIA Instruction 2013 has a provision identical to the cited provision of Instruction 1.2 of IEE Instruction 2013, with the exception that the ESIA Instruction replaces the words initial environmental examination with the words environmental and social impact assessment. The Environmental Protection Law 2012 includes avoiding adverse impacts as a general commitment to environmental protection, but there is no substantive provision in the Law or in the implementing Instructions that requires this. Amend the IEE Instruction 2013 and the ESIA Instruction 2013 to explicitly require, as part of the IEE/ESIA process, documenting how a project will avoid adverse impacts. Fisheries Law 2009 Article 7. Obligations in the protection, development and exploitation aquatic fauna Any individual, juristic entity and organization has [certain] obligations in the conservation, protection, development and exploitation of aquatic fauna according to the regulations and the use of necessary measures to limit any adverse impact whether natural or man-made, on the aquatic fauna such as the discharge of pollutants into natural bodies of water Law on Electricity 2008 Article 5. State policy for electrical State promotes reducing social and environmental impact. 11 As of August 2016

12 Article 10. Electrical planning Electrical planning must: 2. Set up goals, strategy, mechanism and methods reducing impact of social and environmental from electric business; Article 15. Electricity production Electric production must limit and reduce social and environment impact. Article 16. Electricity transmission Installation of electricity transmission grid through Lao PDR must limit adverse environmental impact and people safeguard, Article 31. Environment, Social and Natural Resources Impact Assessment Environment, Social and Natural Resources Impact Assessment shall include: 1. Assessment of Environmental Impact (EIA) in each case, together with proposals methods and measures for solving or mitigation any adverse impact on the environment, ecology, society and wildlife habitats; Forestry Law 2007 Article 39. Categories of utilization of the forest and forest products Utilization of all categories of forest and forest protection shall avoid causing any negative impacts to forest and forest production areas, nature, the environment and society. Key element (3) Offset adverse impacts Article 49. Logging and harvesting of forest products Logging and harvesting of forest products in the Production Forest area shall abide by the following main principles: 6. Applying the selective cutting system to ensure natural regeneration, minimizing impacts on the natural environment and society No corresponding legal provision. No equivalence Amend the IEE Instruction 2013 and the ESIA Instruction 2013 to explicitly require as part of the IEE/ESIA process, 12 As of August 2016

13 Key element (4): Enhance positive impacts Key element (5) Prepare an environmental management plan (EMP) that includes the proposed mitigation measures documenting how a project will offset adverse impacts. No corresponding legal provision. No equivalence Amend the IEE Instruction 2013 and the ESIA Instruction 2013 to explicitly require as part of the IEE/ESIA process, documenting how a project will enhance positive impacts. Environmental Protection Law 2012 Article 4 Explanation of Terminologies (new) 10. Social and Natural Environmental Management Plan of Investment Project means a plan that consolidates various key tasks of social and natural environment, identifying methods and preventive measures, mitigation, solving of environmental impacts, which are already reported by Social and Natural Environmental Impact Assessment, and identification of organizational structures, responsibilities, time schedules and sufficient budgets for implementing the management and inspection of the social and natural environment. The National Hydropower 2005, which is not legally binding, supports this key element: 1. Environmental Assessment The EMP will include a strategy for avoiding and/or mitigation of impacts, and risks, including accidents and emergency events. The EMP will also provide cost estimates for these activities, identify their sources of funding and an implementation schedule. IEE Instruction Screening of the Investment Projects and Activities - In case any Investment Projects and Activities are screened as not being required to conduct any Environmental Impact Assessment, the Provincial/Capital Department of Natural Resources and Environment will impose certain conditions or any requirement to the Project Owner for the implementation of the environmental and social management and monitoring plan. 2.8 Duties and Responsibilities of the Project Owner in the Initial Environmental Examination Process In the Initial Environmental Examination Process, the Project Owner shall have the following duties and responsibilities: - to prepare the IEE Report including the ESMMP that defines all the protective and mitigation measures on social and environmental impacts; ESIA Instruction 2013 Instruction 2.1 of ESIA Instruction 2013 has a provision identical 13 As of August 2016

14 to the cited provision of Instruction 2.1 of IEE Instruction 2013, with the exception that MONRE is responsible for ESIA, while Provincial/Capital Departments of Natural Resources and Environment are responsible for IEE. 2.9 Environmental and Social Management and Monitoring Plan (ESMMP) In the preparation of the ESMMP, the Project Owner shall comply with the following conditions: - In case that any Investment Projects and Activities are the Investment Projects and Activities that cause a major social and environmental impacts and are the complicated Investment Projects and Activities, the Project Owner shall prepare the Environmental and Social Management and Monitoring Plan separately for the Construction Period and the Operation Period and submit those two separate plans for the Ministry of Natural Resources and Environment s review and approval, before the Project Owner can start its construction and operation. Instruction 2.12 of ESIA Instruction 2013 has a provision identical to the cited provision of Instruction 2.8 of IEE Instruction 2013, with the exception that the ESIA Instruction replaces the words IEE Report and ESMMP with the words ESIA Report which includes the ESMMP. Key element (6) Prepare an Forestry Law 2007 Article 74. Lease or concession of forestland The lease or concession of forestland shall follow the principles: 3. Formulation of an environment and social impact assessment including appropriate mitigation measures, with the approval from the concerned authorities. 4. Formulation of an action plan which focuses on preserving of water resources and the environment, land preparation, village development, promote people to participate in the production process, by applying technology, and including benefit sharing. See Principle 7, Key element As of August 2016

15 environmental management plan (EMP) that includes the proposed monitoring requirements Key element (7) Prepare an environmental management plan (EMP) that includes the proposed reporting requirements IEE Instruction Reporting Obligations Throughout the investment period of the Investment Projects and Activities, the Project Owner shall perform the following reporting obligations: - The Project Owner shall prepare and submit the report periodically such as: A monthly report, quarterly report and annually report as specified in the Environmental Compliance Certificate issued for each Investment Projects and Activities. Those reports shall include important contents as follows: + the progress, breach or omission including the results of its selfmonitoring in the implementation of mitigation measures of the environmental and social impacts as specified under the ESMMP including the conditions defined in the Environmental Compliance Certificate and other relevant contracts; + the difficulties confronted by the Project Owner during the implementation period of the environmental and social measures;.. - For accidents, emergency, incidents or any breach on the environmental aspects of the Project Owner which have occurred resulting in the severe social and environmental impacts, the Project Owner shall prepare and submit the incident report to the Provincial/Capital Department of Natural Resources and Environment within 24 hours since the Project Owner becomes aware of such incidents. An Environmental and Social Management and Monitoring Plan (ESMMP) explicitly includes monitoring. The National Hydropower 2005, which is not legally binding, supports this key element: 1. Environmental Assessment A comprehensive monitoring and evaluation framework consisting of both internal and independent or third party monitoring arrangements should also be included in the EMP. 2. Project-Affected People The plan will consider distributional effects of development activities with provision for monitoring and evaluation There is no requirement that an ESMMP contain reporting requirements, but both IIE Instruction 2013 and ESIA Instruction 2013 have detailed provisions on reporting requirements. ESIA Instruction As of August 2016

16 Key element (8) Prepare an environmental management plan (EMP) that includes related institutional or organizational arrangements Key element (9) Prepare an environmental management plan (EMP) that includes related capacity development and training measures Key element (10) Prepare an environmental management plan (EMP) that includes an implementation schedule Key element (11) Prepare an environmental management plan (EMP) that Instruction 2.19 of ESIA Instruction 2013 is identical to Instruction 2.15 of IEE Instruction 2013, with the exception that MONRE is responsible for ESIA, while Provincial/Capital Departments of Natural Resources and Environment are responsible for IEE. No corresponding legal provision. No equivalence Amend the IEE Instruction 2013 and the ESIA Instruction 2013 to explicitly require that an EMMSP must include institutional or organizational arrangements. IEE Instruction Funding Obligations of the Project Owner The Project Owner shall be obliged to provide sufficient funding for all of these budget items: including the cost for capacity building ESIA Instruction 2013 Instruction 2.12 of ESIA Instruction 2013 has a provision identical to the cited provision of Instruction 2.12 of IEE Instruction No corresponding legal provision. IEE Instruction Information Disclosure to Public - The Project Owner shall publicly disclose the information relating to budget for the implementation of mitigation measures of the environmental and social impacts as specified under the ESMMP; There is no requirement that an ESMMP contain measures for supporting capacity building, but both IIE Instruction 2013 and ESIA Instruction 2013 require this. No equivalence The National Hydropower 2005, which is not legally binding, supports this key element: 1. Environmental Assessment The EMP will also provide an implementation schedule. There is no requirement that an ESMMP contain cost estimates, but both IIE Instruction 2013 and ESIA Instruction 2013 require publicly disclosing a budget for implementing the ESMMP. Amend the IEE Instruction 2013 and the ESIA Instruction 2013 to explicitly require that an EMMSP must include an implementation schedule. 16 As of August 2016

17 includes cost estimates ESIA Instruction 2013 Instruction 2.20 of ESIA Instruction 2013 has a provision identical to the cited provision of Instruction 2.16 of IEE Instruction Key element (12) Prepare an environmental management plan (EMP) that includes performance indicators Key element (13) Consider the polluter pays principle in environmental management planning The National Hydropower 2005, which is not legally binding, supports this key element: 1. Environmental Assessment The EMP will also provide cost estimates for these activities, identify their sources of funding No corresponding legal provision. No equivalence Amend the IEE Instruction 2013 and the ESIA Instruction 2013 to explicitly require that an EMMSP must include performance indicators. Environmental Protection Law 2012 Article 6 Principles of Environmental Protection (revised) 5. Liabilities in damages of social or natural environment resulted by an offender s action, with the evidences and application of the Pollution Control Standard as the obligations of him or her. Article 96 Penal Measures (revised) Persons violating this Law as criminal offences shall be punished based on the Penal Law, depending on the seriousness degree of each case, and including remedies to all damages caused by him or her. Law on Electricity 2008 Article 31. Environment, Social and Natural Resources Impact Assessment Environment, Social and Natural Resources Impact Assessment shall include: 1. Assessment of Environmental Impact (EIA) in each case, together with proposals methods and measures for solving or mitigation any adverse impact on the environment, ecology, society and wildlife habitats; 4. Calculation of expenses for restoration of impact provided in paragraph 1 of this article shall be incorporated in to the project cost. 17 As of August 2016

18 Article 66. Points for Inspection Points for Inspection are following: 10. Payment of compensation for damage to the environment and peoples lives and property; Article 77. Fines Individuals or organizations that have violated this law shall be fined an amount equivalent to the amount of actual damage caused by any one of the following acts: 7. Failing to adhere to standards to limit adverse environmental impact; Principle 5: Carry out meaningful consultation with affected people and facilitate their informed participation. Ensure women s participation in consultation. Involve stakeholders, including affected people and concerned nongovernment organizations, early in the project preparation process and ensure that their views and concerns are made known to and understood by decision makers and taken into account. Continue consultations with stakeholders throughout project implementation as necessary to address issues related to environmental assessment. Establish a grievance redress mechanism to receive and facilitate resolution of the affected people s concerns and grievances regarding the project s environmental performance. Key element (1) Carry out meaningful consultation with affected people and facilitate their informed participation. Environmental Protection Law 2012 Article 6 Principles of Environmental Protection (revised) 3. Active participation and consultation of individuals and organizations into protection of social and natural environment; Article 48 Public Participation (new) A strategic environmental assessment, environmental action plan, social and natural environmental impact assessment, environmental management and monitoring plan, pollution control and others, shall be developed with participations by organizations, local authorities and people, who are directly or indirectly affected by investment projects or activities. IEE Instruction Principles relating to Initial Environmental Examination Process of the Investment Projects and Activities The Initial Environmental Examination Process of the Investment Projects and Activities shall be implemented pursuant to the following principles: - During the conductance of the Initial Environmental Examination, the Project Owner shall ensure strict Public Involvement and the consultation with the Project-Affected Persons and other related Stakeholders based on this Instruction, the Technical Guideline on Public Involvement and other relevant laws and regulations; The National Hydropower 2005, which is not legally binding, supports this key element: 4. Consultation Free, prior and informed consultations will be conducted with all project-affected communities, to enable public involvement in environmental and social assessment Consultations would be meaningful, balanced and transparent As much as possible, the villages will be afforded opportunities to build their skills through the involvement of independent facilitators, who will guide the process at the village-level. Comprehensive environmental education and awareness activities will also be undertaken. Every effort will be made to ensure representative participation of vulnerable groups such as women, elderly, disabled and ethnic minorities. 18 As of August 2016

19 2.4 Review of the Initial Environmental Examination Report The process for the review of the IEE Report shall be undertaken in the following steps: - The Project Owner shall submit 1 set of an application and the final version of the IEE Report including the Environmental and Social Management and Monitoring Plan with comments gathered from the village/district consultation meeting to the related Provincial/Capital Department of Natural Resources and Environment, including attaching with the minutes from every consultation signed by the minutes taker representatives of the Project Owner, and related Provincial/Capital Department of Natural Resources and Environment; The review of the IEE Report shall be completed within 40 business days from the date that the Project Owner submits every documents required The review process shall be undertaken as follows: c. The Provincial/Capital Department of the Natural Resources and Environment, in coordination with the Project Owner, shall hold the consultation meeting at the district/provincial level in due time during the review period. During such consultation meeting, the Project Owner will explain about the IEE Report. The Project- Affected Persons and the relevant Stakeholders should be at present at such consultation meeting as appropriate 2.8 Duties and Responsibilities of the Project Owner in the Initial Environmental Examination Process In the Initial Environmental Examination Process, the Project Owner shall have the following duties and responsibilities: - to conduct study including prediction of social and environmental impacts which may arise from the Investment Projects and Activities, by using information gained from consultations with the Project-Affected Persons and other Stakeholders, both at the central and local levels; - to coordinate in arranging the dissemination meetings at the local and central level to explain the development plan of the Investment Projects and Activities, the expected benefit, social and environmental impacts including summarizing and taking various minutes of comments from the Project Affected Persons 19 As of August 2016

20 gained from the consultation meetings to incorporate into the IEE Report; 2.10 Public Involvement of the Project-Affected Persons and the Stakeholders The Project-Affected Persons and the Stakeholders shall have the following participation in the Initial Environmental Examination Process: - to receive information on the development plan of the Investment Projects and Activities, the benefit to be received, the social and environmental impacts that may arise from the Investment Projects and Activities; to participate in the field inspection and to be the main party participating in the consultation meetings at all levels to give comments on the preparation and review process of the IEE Report and ESMMP; ESIA Instruction 2013 Instruction 1.2 of ESIA Instruction 2013 has a provision identical to the cited provision of Instruction 1.2 of IEE Instruction 2013, with the exceptions that the ESIA Instruction replaces the words initial environmental examination with the words environmental and social impact assessment. Instruction 2.6 of ESIA Instruction 2013 has a provision identical to the cited provision of Instruction 2.4 of IEE Instruction 2013, with the exceptions that: (1) the ESIA Instruction replaces the acronym IEE with ESIA ; and (2) MONRE is responsible for ESIA, while Provincial/Capital Departments of Natural Resources and Environment are responsible for IEE. Instruction 2.12 of ESIA Instruction 2013 has a provision identical to the cited provision of Instruction 2.8 of IEE Instruction 2013, with the exceptions that: (1) the ESIA Instruction replaces the acronym IEE with ESIA ; and (2) MONRE is responsible for ESIA, while Provincial/Capital Departments of Natural Resources and Environment are responsible for IEE. 20 As of August 2016

21 Key element (2) Ensure women s participation in consultation Key element (3) Involve stakeholders, including affected people and concerned nongovernment organizations Instruction 2.14 of ESIA Instruction 2013 is identical to the cited provision of Instruction 2.10 of IEE Instruction 2013, with the exception that the ESIA Instruction replaces the words IEE Report and ESMMP with ESIA Report. No corresponding legal provision. IEE Instruction Review of the Initial Environmental Examination Report The process for the review of the IEE Report shall be undertaken in the following steps: c. The Provincial/Capital Department of the Natural Resources and Environment, in coordination with the Project Owner, shall hold the consultation meeting at the district/provincial level in due time during the review period. During such consultation meeting, the Project Owner will explain about the IEE Report. The Project- Affected Persons and the relevant Stakeholders should be at present at such consultation meeting as appropriate No equivalence The National Hydropower 2005, which is not legally binding, supports this key element: 2. Project-Affected People The plan will consider distributional effects of development activities and the participation of vulnerable groups, including women and ethnic minorities participatory planning and adaptive management. In cases where ethnic groups are in the project area a specific plan to meet their aspirations would be prepared in consultation with these communities. Partial equivalence Neither IEE Instruction 2013 nor ESIA Instruction 2013 specifically refers to associations. The Decree on Associations 2009 appears to indicate that associations could be eligible to participate in consultations during IEE and ESIA processes. Amend the IEE Instruction 2013 and the ESIA Instruction 2013 to explicitly require ensuring women s participation in consultations for the IEE/ESIA processes. Amend the IEE Instruction 2013 and the ESIA Instruction 2013 to explicitly require ensuring associations participation in consultations for the IEE/ESIA processes. ESIA Instruction 2013 Instruction 2.6.c of ESIA Instruction 2013 is identical to the cited provision of Instruction 2.4.c of IEE Instruction 2013, with the exceptions that: (1) the ESIA Instruction replaces the acronym IEE with ESIA ; and (2) MONRE is responsible for ESIA, while Provincial/Capital Departments of Natural Resources and Environment are responsible for IEE. Decree No. 115/PM on Associations 2009 Article 3 Wordings Association, when used in this Decree, refers to associative federations, federations, councils, clubs or bodies however 21 As of August 2016

22 designated that are civil society organizations with members; Key element (4) Involve stakeholders early in the project preparation process Article 18 Rights and Duties of Associations Associations have the following rights and duties: 5. Provide advice and recommendations in their fields or sectors of activities in line with the laws and regulations; 8. Exercise other rights and perform other duties set out in the associations charters and in the laws and regulations. IEE Instruction Public Involvement of the Project-Affected Persons and the Stakeholders The Project-Affected Persons and the Stakeholders shall have the following participation in the Initial Environmental Examination Process: to participate in the field inspection and to be the main party participating in the consultation meetings at all levels to give comments on the preparation process of the IEE Report and ESMMP; 2.11 Public Involvement Process - During the process of data collection for the preparation of the IEE Report and ESMMP, the dissemination meeting shall be held for the Project-Affected Persons and the Stakeholders in various forms both in Lao language and local language to explain the development plan of the Investment Projects and Activities, the benefits to be gained and the social and environmental impacts; and to gather the comments from the Project-Affected Persons and other Stakeholders; - During the process of the preparation and review of the IEE Report and ESMMP, the consultation meetings shall be held at the village/district and district/provincial levels in consistent with the review process of the IEE Report and ESMMP to give an opportunity for the Project-Affected Persons and the Stakeholders to have comments on the first to the final IEE Report and ESMMP; ESIA Instruction 2013 Instruction 2.14 of ESIA Instruction 2013 is identical to the cited provision of Instruction 2.10 of IEE Instruction 2013, with the 22 As of August 2016

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