The World Bank “Safeguard "Policies: An Overview Dushanbe , Tajikistan September 28, 2009

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The World Bank “Safeguard "Policies: An OverviewDushanbe, Tajikistan September 28, 2009

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Overview of Presentation

1. World Bank SG Policies in context: what are they, why do we have them, where do they come from?

2. Overview of each SG Policy (10 + 1)3. Roles and responsibilities 4. OP/BP 4.01 Environmental Assessment

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1. Safeguard Policies in Context

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World Bank Operational Policies

Based on WB’s Articles of Agreement, General Conditions, & specific policies approved by WB Board

Set out in WB Operational Manual (Manual covers OPs, BPs (Bank Procedures), Guidance Notes, etc.)

Guide all aspects of WB Operations Cover wide range of topics (e.g. financial

terms/conditions of WB loans, “emergency response,” tobacco, Development Policy Lending, Financial Intermediary lending, economic evaluation of investment lending, water resources, procurement, project cycle steps, etc. )

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Legal Policies• OP 7.60 Disputed Areas• OP 7.50 International Waterways

Environmental Policies• OP 4.01 Environmental Assessment• OP 4.04 Natural Habitats• OP 4.09 Pest Management• OP 4.36 Forestry• OP 4.37 Safety of Dams

Social Policies• OP 4.11 Physical Cultural Resources• OP 4.12 Involuntary Resettlement• OP 4.10 Indigenous Peoples

WB Safeguard Policies (10+1)

BP 17.50 Bank Disclosure Policy

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Purpose of the World Bank Safeguard Policies

Do no harm: protect people and environment from adverse impacts

Reduce and manage risk for the Client and for the WB

Do good: enhance social equity and environmental sustainability

Respond to a world-wide constituency

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Cross-cutting Principles of SG Policies

Avoid negative impacts where possible; otherwise minimize, reduce, mitigate, compensate (in that order)

Match level of review, mitigation and oversight to level of risk and impacts

Inform the public and enable people to participate in decisions which effect them

Integrate environmental and social issues into project identification, design and implementation

Strengthen Borrower capacity

= Ingredients of Sustainable Development

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Who Influences the Safeguard Policies?

WB Board

Donors

Project Beneficiaries

CivilSociety

NGOs

Media

WB Management

Affected Persons

Borrowers

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Environmental and Social “Due Diligence”

WB Management’s fiduciary responsibility to its shareholders (along with Financial Management, Procurement): assurance that all reasonable measures have been taken to ensure lending is environmentally/socially sound

Applies to sub-projects within projects Applies to all project components and investments

regardless of source of financing “Safeguard Documents” = Assessments and plans

required by SG policies (publicly disclosed)

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2. Overview of Safeguard Policies

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World Bank Safeguard Policies: Three-Part Format

Operational Policies (OP) – concise statement of policy objectives and operational principles including the roles and obligations of the Borrower and the Bank

Bank Procedures (BP) – Mandatory procedures to be followed by the Borrower and the Bank

Good Practice (GP) – Non-mandatory advisory material Also (more detailed): • Environmental Assessment Sourcebook, • Involuntary Resettlement Sourcebook, • Pollution Prevention and Abatement Handbook

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OP/BP 4.01: Environmental AssessmentObjectives:

To inform decision makers of the nature of environmental and social risks

To ensure that projects proposed for Bank financing are environmentally and socially sound and sustainable (promote positive impacts, avoid/mitigate negative impacts)

To increase transparency and participation of stakeholders in the decision-making process as one essential element

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Applies to all Investment lending (not Development Policy Lending); triggered for almost all investment projects

Umbrella EA policy: subsumes elements of others Based on screening of operations (Category A, B, C, FI) Scope of EA issues (integrated env & social); types of EA

instruments (based on risks and on type of lending) Bank and Borrower responsibilities (incl. consultation

and disclosure) Operational Annexes

OP/BP 4.01: Environmental AssessmentKey elements:

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OP 4.04 Natural Habitats

Objectives: Protect, maintain, restore natural habitats and

their biodiversity; Ensure sustainability of services and products which natural habitats provide to human society

Precautionary approach to natural resources management

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OP 4.04 (Natural Habitats)Key elements no WB support for significant conversion or degradation

of critical natural habitats* (if unavoidable, compensation through additional protected area of equivalent value)

Precautionary approach to natural resource management in interests of sustainable development

Where potential for impacts exists, assess/address Client capacity to implement protection

Preparation/appraisal/supervision to include qualified experts

Take into account views/roles/needs of local communities, NGOs; involve in planning, implementation (incl. PA management), monitoring; support local conservation incentives

*Definitions in Annex A

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BP 4.04 (Natural Habitats)

Any project with potential for significant conversion or degradation of natural habitat = Category A

Other projects involving natural habitats = Category A or B

Use of “compensation” approach requires V.P. approval

Costs of compensatory conservation (offsets) are included in project financing

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OP 4.09 Pest Management

Objectives: Support Integrated Pest Management (IPM)

approach for sustainable agriculture and health (promote use of biological/ environmental/ agronomic controls, reduced reliance on synthetic chemicals)

Reduce human exposure and health risks Help develop national capacity for IPM and

pesticide regulation/monitoring

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OP 4.09 (Pest Management)Key Elements

Assess issues through EA process (mitigation through EMP or separate Pest Management Plan depending on scale)

Pesticides may be financed in context of IPM (criteria for pesticide selection and handling )

Triggered by projects likely to trigger new/increased pesticide use (not just if project finances pesticides)

No BP 4.09 - Pest Management Handbook

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OP 4.10: Indigenous Peoples

IP – distinct, vulnerable, social and cultural group attached to geographically distinct habitats or historical territories, with separate culture than the project area, and usually different language

Objectives: To foster full respect for human rights, economies, and

cultures of IP To avoid adverse effects on IP during the project

development One of the most controversial and contested OPs in other

regions; few applications in ECA (Siberia only)

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OPN 4.11 Physical Cultural Resources

Objectives :¨ Physical Cultural Resources (PCR) are

identified and protected in World Bank financed projects

¨ National laws governing the protection of physical cultural property are complied with

¨ PCR includes archaeological and historical sites, historic urban areas, sacred sites, graveyards, burial sites, unique natural values

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OP 4.11 (Physical Cultural Resources)Key Elements & BP 4.11 Implemented as integral element of EA (EMP to

include PCR Plan as needed, or “Chance Finds” provision)

Typically triggered by:– any project involving significant scale excavation, earth

moving, flooding – any project in or near PCR site recognized by borrower

Archaeological survey to identify/characterise PCR (or to confirm none are present)

Mitigation may range from full protection to salvage & documentation (Borrower decides)

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OP 4.12 Involuntary Resettlement

Objectives: Minimize displacement Treat resettlement as a development program Provide affected people with opportunities for

participation Assist displaced persons in their efforts to improve their

incomes and standards of living, or at least to restore them Assist displaced people regardless of legality of tenure Pay compensation for affected assets at replacement cost The OP Annexes include descriptions of Resettlement

Plans and Resettlement Policy Frameworks

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OP 4.37 Safety of DamsObjectives, Key Elements

To protect downstream populations and ecosystems from consequences of dam failure

Triggered if WB project finances dam construction or rehabilitation, but also when performance of a WB- financed project is dependent on an existing dam*

Distinguishes between large and small dams:– 15 m +, or 10 m + with other risk factors– Reservoir size – Likelihood of later increase in height/size

Requires dam independent panel to assess design/construction; detailed plans for construction/quality assurance; instrumentation, operation & maintenance, emergency preparedness

*due diligence requirements more modest in this case

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OP 4.36 Forests

Objectives: Forests are managed in a sustainable

manner Significant areas of forest are not

encroached upon The rights of communities to use their

traditional forest areas in a sustainable manner are not compromised

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OP 4.36 ForestsKey Elements & BP Applies to projects which may have impact on health and

quality of forests; projects which aim to bring about change in management, protection or utilization of forests

Applies to natural forests & plantations OP 4.04 applies, also to critical downstream habitats which

may be affected Plantations preferred to be made on unforested sites Attention to risk of invasive species Commercial harvesting may be financed for areas not

identified as critical forests/natural habitats

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OP 7.60 Projects in Disputed Areas

Legal Safeguard Policy The Bank may support a project in a

disputed area if governments concerned agree that, pending the settlement of the dispute, the project proposed for one country should go foreword without prejudice to the claims of the other country

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OP 7.50: Projects on International Waterways (Legal SGP)

¨ Objective: to ensure projects will neither affect the efficient utilization and protection of international waterways, nor adversely affect relations between the Bank and its Borrowers and between riparian states

¨ Triggered by any project which involves utilization of, or release of effluents into, an international waterway, regardless of scale, but exemptions may be approved in some cases

¨ Legal Safeguard Policy – requirement for notifying other riparian States

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BP 17.50 Disclosure Policy/Disclosure Handbook

Supports decision making by the Borrower and Bank by allowing the public access to information on environmental and social aspects of projects

Mandated by six safeguard policies that have specific requirements for disclosure

In country: Before project appraisal in local language and in English

World Bank INFO-Shop: Before project appraisal in English (documents can be in

draft but must meet WB standards and sufficiently advanced to provide essential input for project design)

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Consultation (beyond disclosure)

Mandated by Environmental Assessment, Involuntary Resettlement and Indigenous Peoples Policies

A two-way process in which beneficiaries provide advice and input on the design of proposed projects that affect their lives and environment

Promotes dialogue between governments, communities, NGOs and implementing agencies to discuss all aspects of the proposed project

At least 2 consultations for a Category A Project (or Sub-project) and 1 consultation for a Category B Project (or Sub-project) before appraisal (or sub-project approval)

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3. Roles and Responsibilities

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OP/BP 4.01- Breakdown of Responsibilities: Bank vs. Borrower

Bank Screens and Sets Project EA

Category Advises Borrower on the Bank’s

EA requirements Reviews and gives “No Objection”

for EA reports (Due Diligence instruments)

Makes report available in Info shop Supervises implementation of

EA/EMP Makes mutually agreeable changes

during implementation

Borrower Prepares and Implements

EA/EMP/EMF in accordance with national laws and WB OPs

Consults project-affected groups and local NGOs

Discloses draft/final documents in country

Responds to Bank and public Monitors implementation of EMP Ensures compliance under national

laws

Project Team SG Unit

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Key Roles – Who does What?World Bank

WB Board (representing Donor & Borrowing Countries) identifies needs and approve policies

Operations Policy and Country Services Unit (OPCS) and Legal Dept (LEG): draft OPs, BPs, set Bank-wide standards for interpretation and compliance, report to Management and Board

ECA Region Safeguards Team: (in consultation with Task Team and as needed with Senior ECA Management and/or OPCS, LEG): for each project, determines which OPs are triggered, appropriate EA category & specific compliance requirements; approve “Due Diligence” instruments (may delegate); clear Appraisal and Legal Documents;

WB Project Task Team: work with Borrower and SG Unit to ensure appropriate triggering/screening; advise Borrower on compliance throughout project cycle; evaluate “Due Diligence” instruments and Client capacity; disclosure (Infoshop); verify/ report to Management throughout project cycle

Quality Assurance Group and Internal Evaluation Group: Review performance of WB Staff and Management and quality of operations vis a vis SG (application, compliance, implementation, impact)

Inspection Panel: Independent body, investigates complaints by affected people; Reports independently (makes recommendations) to WB Board

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Key Roles: Who Does What?Borrower/Client

Implementing Agency/Entity: responsible for preparation, disclosure/consultation and implementation of “Due Diligence” instruments; reporting to Government and WB

WB’s official Government counterpart (e.g., MoF): legal commitment to implement DD instruments

Sub-project grant/loan recipients: specific obligations as spelled out in sub-grant or sub-loan agreements

Contractors/suppliers/consultants: specific obligations as spelled out in contracts

Public (civil society, “Project Affected Persons”, NGOs): advise on project design (consultations); raise legitimate grievances and complaints through appropriate channels

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Roles and Responsibilities – FI Project

World Bank

Financial Intermediary

Sub-borrower

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World Bank:

-EA classification of Project (FI); -NOB for EAF/Ops. Manual; -Appraisal & Supervision of EAF implementation (pre & post-review)-Review Category A sub-project EIAs (sometimes Category B)-In-Bank disclosure (Infoshop)

Financial Intermediary:

-Prepare EAF/Ops Manual-In-country disclosure, consultation on EAF-Implement EAF/OM (including sub-project screening, review sub-project EA/EMP, ensure Gov & WB requirements met, monitoring & reporting)Sub-project Borrower:

-Prepare sub-project EA/EMP-Local consultation/disclosure-Implement s-p EMP (including requirements for/supervision of contractors)

Environmental Authorities:

-Monitoring/enforcement of implementation of Gov regulations & standards

Government: ensure EAF implemented per Loan Agreement

Roles and Responsibilities – FI Project

OP/BP 4.01-Environmental Assessment

EA Screening CategoriesEnvironmental “Due Diligence” Documents

Compliance Procedures

Common Issues

OP 4.01 Annexes

1. Environmental Screening/EA Categories

Proposed projects classified based on the type, location, sensitivity, nature and reversibility of environmental impacts:

Category A – adverse environmental impacts are broad, diverse, beyond local site, irreversible; any major resettlement or conversion/degradation of natural habitats; hazardous materials

Category B – potential adverse impacts more limited, fewer, site-specific, largely reversible, readily and reliably mitigated through known methods

Category C – likely to have no adverse environmental impacts, or minimal and easily mitigated

Category FI – project involves investments (sub-projects) to be financed through a financial intermediary; sub-projects undefined at the time of appraisal. – Sub-projects to be screened as A, B or C and handled accordingly– Requirements and procedures set out in Environmental Management

Framework

NOTE: For non-FI projects involving sub-projects: overall project category is determined by highest category among potential sub-projects

OP (Operational Policy) 4.01 Category A “indicators”

large-scale conversion or degradation of natural habitats

extraction, consumption, or conversion of substantial amounts of forest

direct discharge of pollutants resulting in degradation of air, water or soil (domestic/municipal, industrial, agricultural)

production, storage, use or disposal of hazardous materials and wastes

Construction of large dams

OP (Operational Policy) 4.01 Category A project examples

Large-scale infrastructure: ports and harbor development, transport (rail, road and waterways), large- scale water resources management (river basin development, water transfer); dams and large reservoirs, hydropower and thermal power, extractive industries and oil and gas transport;

Large-scale agriculture, irrigation, drainage and flood control, aquaculture; agro industries, and production forestry;

Major urban projects involving housing development, water treatment, wastewater treatment plants, solid waste collection and disposal;

Industrial pollution abatement, hazardous waste management, industrial estates, manufacture and large-scale use of pesticides;

Projects that, regardless of scale/type, would have severe adverse impacts on critical/natural & cultural resources.

Some Category A projects

Plovdiza Dam, Bulgaria

Rijeka Port, Croatia

Storage of Chemicals,Kosovo

OP (Operational Policy) 4.01 Category B project characteristics

impacts less significant, diverse, more localized, more readily reversible

wide range (barely more than C to almost A) Full EIA not required; various EA “Due Diligence” instruments

acceptable… for lower range, with routine/predictable impacts and mitigations, EMP alone may suffice

“Checklist EMP” available for small scale building rehabilitation/construction with no site-specific issues

OP (Operational Policy) 4.01 Category “B” project examples

Rehabilitation of large-scale infrastructure; construction of small-scale infrastructure; power transmission and distribution networks, rural electrification, mini (run of the river with no major water impoundments) or micro-hydropower projects, small-scale clean fuel fired thermal power plants, renewable energy (other than hydropower), energy efficiency and energy conservation, rural water supply and sanitation, road rehabilitation, maintenance and upgrading; telecommunications, etc.;

Health care service delivery, HIV-AIDS, education (with limited expansion of existing schools/buildings), repair/rehabilitation of buildings when hazardous materials might be encountered (e.g., asbestos, stored pesticides); and

Small-scale irrigation, drainage, agricultural and rural development projects, rural water supply and sanitation, watershed management and rehabilitation, and small-scale agro-industries, tourism (small-scale developments).

Category B Project examples

Rehabilitation of tertiaryirrigation canal, Serbia

Hospital rehabilitation,Turkey

Wastewater TreatmentPlant Rehabilitation,Ukraine

OP (Operational Policy) 4.01Category C Projects

no adverse impacts, or minimal impacts easily eliminated

e.g., many (not all) Technical Assistance, capacity building projects, Education and Health projects not involving construction; equipment purchase, etc.

Caution: apparent C projects may include “sleeper” B category activities (sometimes even A category)

It’s not Category C if…

…the project will/might finance new construction or building rehabilitation* (beyond minimal painting, wiring, etc.)

…the project provides Technical Assistance or other support which could lead directly to activities which would trigger SG policies

…any of the above are financed by WB, or Government or other co-financers (covered by overall Project financing plan)

*Not explicitly excluded in PAD, Operational Manual, Legal Agreement

OP (Operational Policy) 4.01 FI Category Projects

Involve an on-lending (or granting) Financial Intermediary; Investments are made by other parties receiving loans/grants for sub-

projects Sub-projects can differ significantly in type, size, risk Examples include community-driven development, Small Grants

Programs, enterprise development programs, Green Investment Schemes, Municipal Services projects, etc.

Due Diligence instrument is Environmental (and Social Management Framework, outlining criteria and procedures for sub-project level EA

FI screens each proposed sub-project classifies it into any one of three categories: A, B or C– Env. Framework can indicate A sub-projects not eligible– Category A EIAs must be submitted to Infoshop, Exec.

Summaries to WB Executive Directors

Category FI Project Examples

Istanbul Municipal Infrastructure, Turkey

Municipal Services, Turkey

Rural Education,

Romania

Social Investment Fund, Romania

“Rapid Response” (Crisis/Emergency) Operations (OP 8.00)

Objective: Ensure due diligence in managing potential risks, while recognizing the emergency nature of the proposed rapid response operation and the need for providing immediate assistance

– Safeguard and Disclosure policies apply– SG issues to be addressed in “flexible yet timely manner”

Approach (for Category A & B projects)*:– SG Specialists involved in preparation & implementation– Team prepares:

“Environmental and Social Screening and Assessment Framework”—describes approach to be taken during project implementation (project selection/design, identification/planning of mitigation measures, consultation/disclosure)

Appraisal stage ISDS - submit to Infoshop after Decision Meeting– ESSAF consultation/disclosure during implementation– Other SG documents produced/disclosed in timely manner, per ESSAF

Exemption: Decision to exempt operation from usual OP 4.01 timing/disclosure requirements is taken at Decision Meeting; Formalized through RVP exemption memo.

*Category C projects: Prepare Concept stage ISDS explaining grounds for C category

2. Kinds of Environmental Safeguard Documents (required for Appraisal)

Full Environmental Impact Assessment (EIA) (Category A)

Limited Environmental Assessment (EA) Strategic Environmental Assessment (SEA) (regional,

sectoral) Environmental Audit Hazard or Risk Assessment Environmental Management Plan (including Checklist

EMP) Environmental Management Framework

Most Commonly used ESG Instruments in WG Operations:

Environmental Assessment = report identifying and analyzing potential positive and negative environmental impacts and recommending measures to avoid, minimize and mitigate negative impacts. Clearance/approval indicates the report provides a satisfactory analysis

Environmental Management Framework = a detailed outline of procedures which Borrower commits to follow to ensure that sub-projects will be implemented in accordance with OP 4.01 and other environmental SG policies. May be part of an EA or freestanding (for simpler, lower risk projects);

Environmental Management Plan = outlines mitigation and monitoring actions to be carried out as an integral part of the project; specific obligations on the part of the Borrower. May be part of EA or free-standing (with sufficient background info). May be incorporated into Operational Manual.

Less commonly used ESG instruments:

Strategic Environmental Assessment: EA addressing a sectoral or geographic development program rather than individual projects; typically emphasizes upstream analysis of alternatives and cumulative and secondary/induced impacts. More variable/ less well defined than EIA. Facilitates but does not substitute for project-specific EA.

Environmental Audit: systematic and objective assessment of the environmental status and performance of properties, facilities, processes, and/or operations; typically used to identify and evaluate risks involved in ongoing operations (including reputational risk to WB of association with same)

OP 4.01 Annexes

Annex A: Checklist of potential issues for EIA Annex B: Outline of a full EIA Report Annex C: Environmental Mitigation/Management Plan

(contents) Annex D: Internal EA procedures (1991) Annex E: Environmental Screening/Classification (1991)

– See EA Sourcebook for 1993 update Annex F: Environmental Data Sheet - obsolete