The World Bank Second Livestock Sector Development Project (P177825) Concept Environmental and Social Review Summary Concept Stage (ESRS Concept Stage) Public Disclosure Date Prepared/Updated: 11/30/2021 | Report No: ESRSC02476 Nov 30, 2021 Page 1 of 15 The World Bank Second Livestock Sector Development Project (P177825) BASIC INFORMATION A. Basic Project Data Country Region Project ID Parent Project ID (if any) Uzbekistan EUROPE AND CENTRAL ASIA P177825 Project Name Second Livestock Sector Development Project Practice Area (Lead) Financing Instrument Estimated Appraisal Date Estimated Board Date Agriculture and Food Investment Project 3/30/2022 5/26/2022 Financing Borrower(s) Implementing Agency(ies) Ministry of Finance State Committee of Veterinary and Livestock Development Proposed Development Objective Public Disclosure The proposed Project Development Objective (PDO) is to support the development of a productive, market-oriented and sustainable livestock subsector in Uzbekistan. Financing (in USD Million) Amount Total Project Cost 300.00 B. Is the project being prepared in a Situation of Urgent Need of Assistance or Capacity Constraints, as per Bank IPF Policy, para. 12? No C. Summary Description of Proposed Project [including overview of Country, Sectoral & Institutional Contexts and Relationship to CPF] The proposed project seeks to achieve this objective by strengthening public livestock support services for better and enhanced service delivery, improving the access to market and finance of livestock farmers, agribusinesses and other value chain actors. This will further contribute to increased productivity and production; and enhancing quality and value addition of livestock value chains. The project will foster a transformation of livestock production, while ensuring that the supply response to growing demand is sustainable, inclusive, safe, and environmentally conscious. To this end, the project will improve the ecosystem for value chain development by financing key infrastructures including markets, and access to market, and financial products and services, capacity building for both private value Nov 30, 2021 Page 2 of 15 The World Bank Second Livestock Sector Development Project (P177825) chain actors, and public agencies in supportive regulation; as well as knowledge. It will establish partnership with participating financial institutions (PFIs) to promote credit for farmers and agro-entrepreneurs. Climate resilient livestock production systems will be developed through the promotion of appropriate CSA practices addressing feeding strategies, animal health and welfare, animal husbandry and breeding, as well as manure and waste management (including production of energy), improved storage and processing, and generation of renewable energy from solar and livestock manure sources. Project activities on animal health and food safety will embrace the One Health principles since it will address public health at the human animal interface. The project will systematically ensure that all activities and investments financed include climate-smart and good environmental management practices, and that the technical support and financial incentives provided by the project facilitate the wide adoption of such practices from adaptation and increased productivity (resulting in lower emission intensities) to specific mitigation options such as covered manure storage, biogas and energy saving devices. Component 1: Strengthen public livestock support services. The objective of this component is to improve the management and delivery of public livestock support services . The main areas of support under this component include: (i) strengthen the capacity of the State Committee of Veterinary and Livestock Development (SCVLD), including the national network of laboratories (NNLs) and artificial insemination (AI) centers; (ii) strengthen livestock extension and advisory services; and (iii) strengthen research and development. Subcomponent 1.1: Strengthen the State Committee of Veterinary and Livestock Development (SCVLD). The objective of this subcomponent is to improve the technical independence, coordination, management, and service delivery capacity of the SCVLD. The current capacity of the SCVLD is limited: it is not organized with relevant Public Disclosure units/departments, and systems and procedures are either missing or poorly designed. The agency is underfunded, and lacks the requisite physical and human resources, including IT system to support its activities and improve coordination capacity. Subcomponent 1.2: Strengthen public livestock extension and advisory services. The objective of this subcomponent is to improve livestock extension and advisory service provision. Uzbekistan does not have a well-functioning livestock extension and advisory services. The lack of an effective system for disseminating climate smart knowledge and information (linking them with research and education) and effective advisory services to producers and other value chain actors in the livestock subsector is one of the most serious obstacles to the development of the subsector. Subcomponent 1.3: Strengthen public livestock research and development. The objective of this subcomponent is to build the capacity of selected public institutions involved in livestock research and development, including the Research Institute of Livestock Sector and Poultry Farming, Scientific Research Institute of Karakul sheep Breeding and Deserts Ecology, Research Institute of Aquaculture at the Research and Production Center of Livestock and Food supply of the Academy of Sciences of the Republic of Uzbekistan. There are also universities involved in livestock research and development. However, research and development institutions are seriously underfunded. Component 2: Strengthen market access. The objective of this component is to improve the market access of livestock farmers and agribusinesses and improve international trade i.e., enhance import control of animals and animal products. Subcomponent 2.1: Enabling environment. The objective of this subcomponent is to improve the policy and legal framework of livestock production in general and livestock marketing and international trade in particular. Nov 30, 2021 Page 3 of 15 The World Bank Second Livestock Sector Development Project (P177825) Subcomponent 2.2: Strengthen livestock market infrastructure. The objective of this subcomponent is to improve the livestock market infrastructure so that the volume of livestock and livestock products sold is increased, the quality improved and the supply of healthy and quality livestock products ensured. Physical market infrastructure includes well-facilitated market centers, roads, and stock routes or slaughtering houses, processing plants, milk collection centers, etc. that are supported by a real-time market information system to enhance efficiency. Subcomponent 2.3: Strengthen border security and quarantine. The objective of this subcomponent is to enhance international trade by strengthening border security and quarantine. Border security and quarantine are important in controlling animal disease and facilitating international trade by preventing entry of animal diseases into the country as well as facilitating the export of disease-free animal and animal products. Border Inspection Points (BIP) and quarantine stations are critical in this regard. Subcomponent 2.4: Animal Identification, Registration, & Traceability (AI&T). The objective of this subcomponent is to support the GOU in the implementation (rolling out) of the AI&T system in Uzbekistan. Appropriate identification and registration of establishments (farms or units where animals are kept), livestock markets, pastures and animals are essential for improvement of disease prevention and control programmes as well as facilitating trade. Component 3: Improve access to finance for livestock farmers, agribusinesses, and other value chain actors. The objective of this component is to improve the access to finance of livestock farmers, agri-business enterprises and other actors involved in the livestock value chains. Livestock farmers, agribusinesses and value chain actors operating Public Disclosure in Uzbekistan’s livestock subsector lack access to longer-term financing and suitable products and services due to the funding structure of financial institutions, limited use of appropriate lending methodologies and higher risks associated with the subsector. Subcomponent 3.1: Credit line for livestock farmers, agribusinesses, and other value chain actors. The objective of this subcomponent is to improve the access to finance of livestock farmers, agribusinesses, and value chain actors. The subcomponent will be compliant with World Bank Guidance for Financial Intermediary Financing and adopt a set of acceptable Credit Line Guidelines. Subcomponent 3.2: Capacity building of participating financial institutions (PFIs). The objective of this subcomponent is to build the capacity of PFIs. The capacity building includes trainings, study tours and exchange visits to staff and managers of PFIs so that they are able to introduce innovative financing instruments such as digital financial services and value chain financing modalities for livestock farmers and agribusiness enterprises. Subcomponent 3.3: Establishing livestock complexes. The objective of this subcomponent is to support investments in the establishment of livestock complexes with an aim to increase production and productivity, enhance marketing and value addition, and improve quality of livestock value chains. Component 4: Project management and coordination. This component will support project management, coordination, M&E, and implementation of environmental and social standards, and fiduciary aspects of the project. The proposed project would utilize the capacity of the existing PIU for LSDP at SCVLD, that is already well experienced with implementation of World Bank projects. Nov 30, 2021 Page 4 of 15 The World Bank Second Livestock Sector Development Project (P177825) D. Environmental and Social Overview D.1. Detailed project location(s) and salient physical characteristics relevant to the E&S assessment [geographic, environmental, social] The proposed Project will be implemented at the national level with a strong impact on provinces through the Project’s main target groups, the private micro, small and medium enterprises (MSMEs) in rural areas. It will also work on the improvement of capacity of selected public institutions involved in livestock research and development. At this stage, specific locations cannot be identified; therefore, all E&S aspects of individual investments will be evaluated through instruments once the locations are identified and determined. E&S conditions may differ from different geographical locations. The Republic of Uzbekistan has a territory of 458,000 square km and lies between the Syr Darya and Amu Darya Rivers. Most of the country is occupied by vast plains, and the rest by mountains with heavily dissected relief. The mountain region is in the eastern and south-eastern parts and links with the Tien Shan and the Altay Range mountains with hilly foothills and foothill slopes. Diversity of soil forming rocks, ecological regimes, vegetation, extreme c continental climate, and vastness of the territory contribute to great diversity and complexity of soil cover in the republic. On most plains with a continental climate, a desert type of soil prevails, while on river plains with their favorable soil moisture, there are as a rule hydromorphic soils - meadow-desert, meadow-swamp, swamp and solonchak soils. Uzbekistan’s geographical position contributes to the dryness and continentality of its climate. The country has dry hot summers, cool and wet autumns, and cold winters with thaws. Public Disclosure Uzbekistan is a lower middle-income country aspiring to become an upper middle-income country by 2050. The structure of its economy has not changed significantly since its independence in 1991 with agriculture, industry, and services each contributing a third of the gross domestic product (GDP). Livestock is one of the key economic subsectors of Uzbekistan constituting 13 percent of the GDP and about 50 percent (livestock value added) of the national agricultural GDP (AgGDP) and this is without accounting for the estimated monetary value of organic matter from livestock (manure). Out of the total livestock value-added, cattle (meat and milk) contribute 76 percent; whereas sheep and goat (meat) contribute 9 percent; poultry (eggs, breed, and meat) 7 percent; and fish (meat) 2 percent. The rest of the livestock value added comes from other livestock activities, including apiculture (bees), rabbits, and camels. The livestock subsector is also an important source of employment and household income. It provides for about 27 percent of agricultural employment, including in primary production and along livestock value chains; the share of farm household income in gross livestock products is 19 percent. Within the subsector, 47 percent of the labor consumption in the total labor force employed in the livestock subsector is spent on milk production and 21 percent on meat production. More than 10 percent of the population works in such sectors of economy as industry, trade and public catering, as well as science and education. The most popular sectors of employment for women are health care and the social security sector (71% of the occupied women) as well as education, culture and science. The country is vulnerable to the impacts of climate change, particularly in the sectors of agriculture, energy, and water resource management. Anticipated climate impacts include increases in monthly maximum temperatures, high variability of rainfall, and increased glacier melting with implications for water availability and river flow. D. 2. Borrower’s Institutional Capacity The implementing agency will be the Project Implementation Unit (PIU) established under the State Committee of Veterinary and Livestock Development (SCVLD). SCVLD was established in 2019 and is the Competent Authority (CA) Nov 30, 2021 Page 5 of 15 The World Bank Second Livestock Sector Development Project (P177825) for veterinary, animal health, animal welfare, and some elements of veterinary public health. The SCVLD is currently undergoing institutional reforms that are meant to improve service delivery capacity, and that the proposed project will support. The current capacity of the SCVLD is limited: it is not yet aligned with the new strategic vision of the Government and adequate systems and procedures are not yet in line with a modern and forward-looking. The SCVLD is underfunded, and lacks the requisite physical and human resources, including IT system to implement the strategy, support its activities, monitor sector performance, and improve coordination capacity. The Uzbekchorvanasl Agency and other research and development institutions, including the Scientific Research Institute of Karakul sheep Breeding and Deserts Ecology, Research Institute of Aquaculture at the Research and Production Center of Livestock and Food supply of the Academy of Sciences of the Republic of Uzbekistan, Samarkand Institute of Veterinary and other public and private institutions to be identified at later stage of project preparation, will also be involved in implementation of the project. The project steering committee (PSC), which was established to provide an oversight to the implementation of the on-going Livestock Sector Development Project (LSDP) will continue to play the same role. The LSDP PIU will continue to be the PIU for the proposed project. The LSDP PIU is well experienced in implementing donor-financed projects in livestock, including those financed by Asian Development Bank (ADB) and French Development Agency (AFD). In its existing project portfolio i.e., LSDP, the PIU has performed satisfactorily. The central LSDP PIU currently has an Environmental Specialist with experience in livestock projects and will need to hire a Social Specialist and Community Development specialist. The E&S team also needs to hire additional capacity in the regional PIUs where this project will have representation. Project activities with environmental and social impacts will not commence until the social specialist has been hired. SCVLD does not have ESF experience; the WB team will work closely with the PIU to develop a training plan during the Public Disclosure early stages of implementation on (i) E&S management instruments, incl. requirements of the Environmental and Social Commitment Plan (ESCP); (ii) relevant emergent trainings in animal welfare, animal husbandry and antimicrobial resistance and their EHS aspects; (iii) managing gender based violence (GBV) or sexual exploitation and abuse/sexual harassment (SEA/SH) risks; and (iv) monitoring of the E&S standards and requirements. II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Substantial Environmental Risk Rating Moderate The environmental risk of the project is rated as “Moderate”; however, this will be further evaluated during the project preparation. The diversity of areas for potential investments, complex institutional set-up (with different capacities) involved in the implementation combined with country-wide project scale should be factored in the re- evaluation of the project risk. Under Component 1, project’s main efforts will be on strengthening public institutions in the livestock sector through consultant services, capacity building, purchase of training and goods, purchase of new equipment, development of information management systems, transfer of technologies and knowledge, etc. Some of these activities may have limited environmental impacts, such as the generation of waste, in case there is obsolete electronic equipment to be discarded. Physical capacity building works such as construction, rehabilitation/renovation of existing administrative and laboratory facilities under Subcomponent 1.3 will generate site-specific, temporary impacts (dust, noise, construction litter, occupational and safety risks) that can be reliably mitigated by applying good construction management practices. The majority of environmental risks of the project Nov 30, 2021 Page 6 of 15 The World Bank Second Livestock Sector Development Project (P177825) would be associated with Component 2 aimed at improving physical livestock market infrastructure and Component 3 aimed at improving access to finance for livestock farmers country-wide, which, in turn, encourage farmers to increase number of livestock and build new infrastructure. From project perspective, risks will stem from construction of the livestock complexes, investments in improving physical market infrastructures (well-facilitated market centers, roads, and stock routes or slaughtering houses, livestock product processing plants, milk collection centers, etc.), as well as rehabilitation/renovation and refurbishment (existing and new) office and laboratory buildings. During the construction phase, these impacts would be associated with noise, dust, air and water pollution, health hazards and labor safety issues, etc. All of them are expected to be typical for small to medium scale construction/rehabilitation works or for various livestock processing activities, temporary by nature and site specific and can be easily mitigated by applying best construction and/or livestock-processing practices and relevant mitigation measures. However, at this stage, the scale or complexity of renovations, the estimated number of investments on new roads, markets, centers, plants are not known to assess the significance of the impacts . During the operational phase, impacts from these facilities would be associated with manure generation and storage, sewerage, other types of waste, odor and potentially, pesticides use for the forage crops. From an environmental and climate perspective, the project may lead to significant increase of GHG emissions due to increased number of livestock. The project aims to mitigate this by facilitating improved manure storage and biogas technologies. The net GHG emissions remain to be determined. On the other hand, the Project aims to provide many positive environmental outcomes. The Project aims to improve livestock production and invest in climate smart technologies. Moreover, improved livestock production, and improved public veterinary and animal health services can contribute to positive public goods including improved public nutrition and health and provision of a social safety net for rural communities. Public Disclosure Social Risk Rating Substantial The main social risks relate to: (i) possible exclusion of farmers (e.g. small farms, women headed farms) from access to credit lines; (ii) land acquisition and resettlement related economic and physical displacement; (iii) SEA/SH, labor management, forced and child labor; and (iv) social risks related to the construction of livestock infrastructure, such as demonstration centers, livestock market infrastructures, quarantine stations, and livestock complexes. Some small and marginal farms and households may feel excluded because of the insufficiency of credit lines to support them. This inclusion risk will be mitigated through enhanced attention to public awareness, outreach, and transparency in selection procedures. There is a need to ensure that all farmers, and particularly small farmers, women farmers and vulnerable groups such as the rural poor, have equal access to participate in and benefit from project initiatives. There are also a number of social risks in the broader context of the livestock sector, including the capacity of the implementing agency which lead to project social risk being assessed as Substantial. These relate to the transparency and equity of land allocation and land tenure security in the establishment of livestock complexes, information constraints, the overall ability of smaller farmers to partake in benefits of the project, risks of reduced access to land and productive assets due to land reallocation, and the capacity of state institutions and financing institutions to monitor labor and working conditions across rural enterprises. The labor influx, GBV risk, including SEA/SH, is assessed as moderate mostly due to the status of national GBV legislation, gender norms, and little or no labor coming from outside local rural communities; nevertheless, there may be some risks. All the proposed large investments and civil works include substantial social risks related to labor management, land acquisition and involuntary resettlement. The project will also provide a special window for loans up to US$20, 000 targeting small livestock farmers. The special window is deemed necessary to fill the credit gap of small livestock farmers who have not been able to access previous credit lines under the LSDP. E&S procedures to be put in place under the project have to take into account these contextual risks, manage and monitor them as they relate to project-supported Nov 30, 2021 Page 7 of 15 The World Bank Second Livestock Sector Development Project (P177825) activities, and provide adequate attention to capacity-building activities of the involved implementing institutions. Significant reputational risks are also present given a prior history of forced evictions and forced and child labor in the country. These need to be mitigated with sufficient awareness, capacity-building, and monitoring systems during project implementation. B. Environment and Social Standards (ESSs) that Apply to the Activities Being Considered B.1. General Assessment ESS1 Assessment and Management of Environmental and Social Risks and Impacts Overview of the relevance of the Standard for the Project: This standard is relevant to this Project. The other standards relevant to this project are ESS1, ESS2, ESS3, ESS4, ESS5, ESS6, ESS9 and ESS10. The project will have mostly positive benefits as the interventions will address challenges related to access to finance for livestock farmers, agribusiness enterprises and other value chain actors. The environmental impacts of the project are also expected to be largely positive as it will support improving the quality of livestock production and promote climate-smart energy-efficient livestock technologies on a country-wide scale. The majority of environmental risks of the project would be associated with Component 2 aimed at improving physical livestock market infrastructure and Component 3 aimed at providing financing for livestock farms. Adverse environmental risks during the construction phase include site-specific, temporary risks from construction activities, such as construction waste, noise, air and water pollution, occupational hazards. Further risks from operation and maintenance of livestock complexes include wastewater discharge, odor and other emissions, the use of fertilizers Public Disclosure during feed production and solid and organic waste disposal. These risks are expected to be reversible, short-term, and easily mitigable with proper mitigation measures in place, both during construction and operational phases. Due to the fact that the specific locations and numbers of sub-activities are not known, a framework approach will be applied. To help screen environmental and social potential risks and determine the best mitigation instruments, an ESMF and RPF will be developed, including criteria for sub-project eligibility, and an exclusion list for sub loan applications and activities posing severe biodiversity impacts and involving risky pest management activities. The ESMF will provide: (a) a high level characterization of potential contextual E&S risks and issues which may be present in different beneficiary locations; (b) identification of applicable national legislation and overall potential direct and indirect E&S risks and impacts from proposed investments, based on the typology of activities to be financed and eligible areas; (c) provide generic management and mitigation measures to likely E&S impacts associated with these types of investments; (d) details of the requirements for site-specific Environmental and Social Management Plans (ESMPs), incl. Pest Management Plans (PMP) if relevant; and (e) implementation arrangements, capacity building measures, and budget for E&S management. It also considers and appropriately references the WB’s Environmental, Health and Safety (EHS) General and good practice Sector-Specific Guidelines. The ESMF will also include an Infectious Disease Prevention and Response Procedure for potential infectious diseases which could affect project workers including COVID-19. These procedures will be in line with the WBG’s EHS Guidelines and Good International Industry Practice, including WHO and PAHO guidance. The ESMF will be prepared and consulted by SCVLD prior to Appraisal. Given the social risks related to land tenure, access to finance and possible economic and/or physical displacement, the social risks and impacts could be significant . Labor influx is likely to be low as most workers may be contracted locally, but, given the context in the country, the project will require due diligence to ensure there is no child labor or Nov 30, 2021 Page 8 of 15 The World Bank Second Livestock Sector Development Project (P177825) forced labor. It will be essential to develop strong and inclusive stakeholder engagement mechanisms to ensure that all potential beneficiaries are being reached by the project. Establishment of strong labor management procedures, including a specific grievance mechanism for workers, is required. Strong screening and risk management procedures need to be introduced to manage risks in sub loan and direct investment components under the project. A gender analysis will be conducted to identify entry points for expanding economic opportunities for women-headed livestock farms. Other social risks related to labor and working conditions and a labor management procedure (LMP) shall be developed as a part of the POM to ensure compliance with ESS 2. As indicated above, broader The project social risks and impacts are also related to land or asset-related impacts associated with allocation of land for livestock infrastructures such as demonstration centers, livestock market infrastructures, quarantine stations, and livestock complexes. Therefore, it is essential to conduct screening of possible impacts related to land acquisition, restrictions on land use, and involuntary resettlement, and avoid if possible or develop appropriate mitigation measures to ensure compliance with ESS 5. In terms of inclusion and exclusion risks, there is the possibility that some farmers are excluded from full participation in project benefits either due to lack of information, land allocation decisions and conditions, availability of collateral to access finance, and among other reasons. An SEP and ESCP will be developed by the borrower by project appraisal to ensure identification and consultation with all relevant stakeholder and address inclusion/ exclusion risks to ensure compliance with ESS 10. The location of specific investments will be determined during implementation stage. As such, risks related to the Public Disclosure physical footprint of the project will be managed are predictable and manageable via measures included in the project's Environmental and Social Management Framework (ESMF) and Resettlement Policy Framework (RPF) Areas where “Use of Borrower Framework” is being considered: Given the nature and complexity of project activities and considering existing deficiencies and institutional capacities of the Borrower, in particular the newness of the ESF for the Implementing Agency, the Borrower’s E&S Framework will not be used for the Project as a whole or for any of its parts. ESS10 Stakeholder Engagement and Information Disclosure Project-affected parties include: the State Committee of Veterinary and Livestock Development (SCVLD); Uzbekchorvanasl Agency; large-scale commercial farmers; agribusiness enterprises; smallholder farmers (dehkans); value chain actors; veterinary & animal health services; research, extension and advisory services; private micro, small and medium enterprises (MSMEs); commercial banks; the Research Institute of Livestock Sector and Poultry Farming; the Scientific Research Institute of Karakul sheep Breeding and Deserts Ecology; the Research Institute of Aquaculture at the Research and Production Center of Livestock and Food Supply of the Academy of Sciences of the Republic of Uzbekistan; universities involved in livestock research and development; administrations of livestock market infrastructures; and, the general public in communities in which project activities will take place. Farmer’s organizations and cooperatives should also be considered as project-affected parties, as their activities may directly affected by the project. Other interested parties include local authorities, agri-business sector representatives, and Nov 30, 2021 Page 9 of 15 The World Bank Second Livestock Sector Development Project (P177825) central level authorities, including but not limited to the Ministry of Agriculture, the Council of Farmers, owners of Dehkan and Commercial farms, Livestock Research Institutes. Mapping of other interested parties such as other government agencies, academia institutions, NGOs and specific livestock clusters, will be conducted as part of preparation of Stakeholder Engagement Plan (SEP). PIU under SCVLD will develop a SEP which will include full stakeholder mapping, outline the activities and timeframe for engaging with different stakeholder groups throughout the life of the project, define roles and responsibilities, human resources and budget needed for implementing SEP activities. Key objectives of the SEP will be to maintain a constructive relationship with stakeholders, ensure that stakeholder views can be taken into account in project design and implementation, specifically in the management of environmental and social performance, provide means for inclusive engagement with all project-affected parties, and ensure that appropriate project information is disclosed to stakeholders in a timely, understandable, accessible, and appropriate manner and format. To achieve these objectives, the SEP will be prepared with inputs from stakeholders and reflect methods of engagement that they would consider most effective. The SEP will also set out the requirements for a grievance mechanism which would handle complaints about environmental and social issues raised by project-affected people and other stakeholders. The grievance mechanism will be available to local communities and may draw upon existing local or national mechanisms. It will include a channel for handling anonymous or confidential complaints, including those related to SEA/SH. B.2. Specific Risks and Impacts Public Disclosure A brief description of the potential environmental and social risks and impacts relevant to the Project. ESS2 Labor and Working Conditions This standard is relevant. Labor risks are substantial and thus the project shall be carried out in accordance with the applicable requirements of ESS 2, in a manner acceptable to the World Bank, including through, inter alia, setting out requirements for employment and working conditions, implementing adequate occupational health and safety measures (including emergency preparedness and response measures), promoting equal opportunities for work, addressing SEA/SH risks, setting out grievance arrangements for project workers and incorporating labor requirements into the ESHS specifications. These measures will be documented in labor management procedures (LMP) that will be included in the POM. The project will include direct workers (e.g. consultants, employees of PIU SCVLD, Uzbekchorvanasl Agency, receivers of subloan application and other institutions receiving loan from WBG directly) as well as contracted workers (trainers, subcontractors, employees of civil works contractors). Community workers are not likely to be involved in the project; this will be confirmed during preparation. Primary suppliers are likely to include suppliers of livestock to farmers. A process for screening of primary suppliers particularly to ensure no history of forced and child labor or other significant labor, environmental and social violations will be conducted. A Labor Management Procedure (LMP) will be prepared by the PIU by project appraisal to i) protect workers’ rights as set out in ESS2; and (ii) include a responsive grievance mechanism to allow workers to file complaints for timely resolution by the project. Adherence to standard Codes of Conduct by all project workers addresses measures to prevent Sexual Exploitation and Abuse/Sexual Harassment (SEA/SH). Regular monitoring of workplaces and trainings on SEA/SH delivered by Nov 30, 2021 Page 10 of 15 The World Bank Second Livestock Sector Development Project (P177825) PIU/Contractors to their workers will be undertaken during the project implementation Bidders for civil work contracts would be required to express commitment to develop Contractor’s LMP when selected and prior to start of civil works. A grievance mechanism (GM) for all project workers will be established, or – where one exists – will be assessed and strengthened to comply with the objectives of ESS2. The Project and Contractor’s LMP will also include Occupational Health and Safety measures. These would have a special focus on handling potentially dangerous or toxic materials. The labor and working conditions will be subject to spot checks by the Borrower and the World Bank as part of monitoring and supervision requirements. Incidents (e.g. health and safety incidents in the workplace) involving any type of labor hired under the project should be reported to World Bank through the reporting mechanisms established for the project. Considering the risks due to COVID-19, the Bank’s “ESF/Safeguards Interim Note: COVID-19 Considerations in Construction/Civil Works Projects” will be applied. Participating Financial Institutions (PFIs) will need to adhere to the labor management requirements of the project and the sub borrower-level due diligence procedure will need to cover the screening out of child labor/forced labor risks. ESS3 Resource Efficiency and Pollution Prevention and Management This standard is relevant. The procurement of equipment for offices, construction of value-chain facilities should incorporate technically viable and feasible energy-efficient considerations. Financed cold-storage facilities should not use ozone-depleting substances prohibited for use on the territory of Uzbekistan. The proposed investments involve Public Disclosure some civil works. The types of potential pollution sources include construction waste, runoff, use of materials, and low-level noise and dust. Improper manure and waste management as well as overuse of fertilizers to produce feed may lead to soil, water, and air pollution, occupational health and safety for workers and community health and safety concerns, including COVID-19 and other infections risks. Relevant mitigation and management procedures will be outlined in the ESMF (which in some cases may warrant the need for waste management plans). Respectively, it is proposed that the ESMF will identify and assess all the potential risks and impacts associated with material use and waste generation of all sub-projects and determine if additional management plans such as Manure and Waste Management Plans, as are necessary, based on the initial assessments. ESS4 Community Health and Safety This standard is relevant since some of the project activities may pose adverse risks and impacts on the wellbeing of livestock farmers, workers, and other community members. The potential risks on community safety and health are associated with the proposed activities under subcomponent 2.2 which will finance civil work for improving livestock market infrastructure (market centers, roads, and stock routes or slaughtering houses, processing plants, milk collection centers ) as well as subcomponents 3.1 and 3.3 that plan to support livestock farmers and establish livestock complexes. These potential risks and impacts include emissions of dust, noise, odor, and vehicle exhausts. The ESMF will require that site specific ESMPs specify the necessary measures for ensuring efficient manure and waste management, compliance with good labor management practices, disclosing information and maintaining effective communication with relevant actors throughout the duration of works. In particular, controlled access and fencing should be installed around all construction sites, water reservoirs and other areas where there is a risk to community health and safety. Further these facilities need to be designed for universal access (geohazards and Nov 30, 2021 Page 11 of 15 The World Bank Second Livestock Sector Development Project (P177825) climate change). In particular, a controlled access and fencing should be installed around all construction sites, water reservoirs and other areas where there is a risk to community health and safety. Additional measures for addressing SEA/SH risks to local communities may also be included, as necessary. ESS5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement This standard is considered relevant. The project aims to finance large investments such as: establishing demonstration centers under subcomponent 1.2; establishing new and strengthening and modernizing existing livestock market infrastructures under subcomponent 2.2; establishing quarantine stations under subcomponent 2.3; and establishing livestock complexes under subcomponent 3.3. All these activities may involve significant land acquisition leading to temporary or permanent economic and/or physical displacement and/or large scale impacts on land Impacts on private land and assets will be avoided to the extent possible by using state or community-owned plots for civil works activities. PIU SCVLD will develop a Resettlement Policy Framework to guide the process for possible land acquisition and involuntary resettlement. ESMPs will also guide to avoid possible involuntary resettlement by Contractors during the construction phase. Sub loan applications will be subjected to a social screening process by Participating Financial Institutions (PFIs) and the PIU which will include criteria related to the impacts foreseen under ESS5. ESS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources The ESS6 is considered relevant, because the project will focus on the development of a productive, market-oriented Public Disclosure and sustainable livestock subsector in Uzbekistan, which is a form of primary production of living natural resources. However, at this stage, the specific locations of sub-projects (works) are still unknown. It is anticipated that the impacts related to environment from the proposed activities are generally positive. The project is expected to boost the conservation of biodiversity and the promotion of sustainable management of living natural resources. The project will promote the use/adoption of Good International Industry Practices (GIIP) in rearing, housing, transport, and slaughter of animals for meat or other animal products (milk, eggs, wool), in line with cultural and religious considerations. The E&S requirements of ESS6 (incl. GIIP standards) will be considered for all technical assistance and any other project intervention to be provided under the Project. The ESMF will provide guidance on the requirements of the ESS6. Exclusion criteria will be included in the ESMF to avoid any negative impacts on natural habitats and biodiversity. The use of any invasive alien species will be excluded. If deemed necessary, site specific ESMPs will address biodiversity impacts. ESS7 Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities This standard is not relevant since there are no indigenous groups in Uzbekistan who meet the ESS’s definition of Indigenous Peoples. ESS8 Cultural Heritage Currently not relevant Nov 30, 2021 Page 12 of 15 The World Bank Second Livestock Sector Development Project (P177825) ESS9 Financial Intermediaries This standard is relevant since the Project will establish partnerships with participating financial institutions (PFIs) to promote credit for livestock farmers and agro-entrepreneurs under sub-component 3.1. The main areas of support include: (a) credit line to PFIs for provision of working capital and investment finance to the livestock subsector nationwide, including for farming, marketing, distribution, and processing; (b) capacity building for PFIs on sector- specific loan product development, loan appraisal, environmental and social standards, and monitoring in the livestock subsector; and (c) establishing livestock complexes. Besides the normal window, the project will include a special window for loans of up to US$20, 000 targeting small livestock farmers. The PFIs would need to draw on both windows and ensure a well-diversified sub-loan portfolio, possibly with some ring-fencing for the small loan window. As such, the project follows the example of prior and ongoing World Bank supported projects, such as the Livestock Sector Development Project (P153613), Horticulture Development Project (P133703), the Ferghana Valley Rural Enterprise Development Project (P166305) and the Agricultural Modernization Project (P158372), which provide sub- lending to farmers via commercial banks. Under the ongoing projects, subsidiary agreements are signed between PFIs, Implementing agency, and Uzbekistan's Ministry of Finance under the credit line. These agreements outline a set of commitments - including environmental and social due diligence – by PFIs under the project. Further, a sub-loan agreement will be signed between PFIs and beneficiaries. A number of PFIs have adopted internal Environmental and Social Management Systems (PFI-ESMS), and those selected for Agricultural Modernization Project (AMP) are in the process of finalizing their PFI-ESMS policies in line with ESF guidelines. As a condition of disbursement, the project will conduct due diligence on the Public Disclosure banks' ESMS to verify/check its compliance with the requirements of ESS9. Upon positive result, the first three sub- loans made by the PFIs will be reviewed by the PIU and the WB. This requirement will be reflected in the ESCP. C. Legal Operational Policies that Apply OP 7.50 Projects on International Waterways No OP 7.60 Projects in Disputed Areas No III. WORLD BANK ENVIRONMENTAL AND SOCIAL DUE DILIGENCE A. Is a common approach being considered? No Financing Partners No. There are no other partners B. Proposed Measures, Actions and Timing (Borrower’s commitments) Nov 30, 2021 Page 13 of 15 The World Bank Second Livestock Sector Development Project (P177825) Actions to be completed prior to Bank Board Approval: Prior to Appraisal, the Client will prepare, to a level acceptable to the World Bank, consult on, and disclose the following documents: 1. ESMF that includes relevant Environment and Social Standards requirements, along with the potential project impacts, as well as rules and procedures for site specific project activities (i.e., ESIA/ESMPs); 2. Stakeholder Engagement Plan (SEP), including a GRM; 3. Labor Management Procedures (LMP); 4. Resettlement Policy Framework (RPF); and 5. ESCP that sets out the material measures and actions required for the project to meet the ESSs over a specified timeframe. Possible issues to be addressed in the Borrower Environmental and Social Commitment Plan (ESCP): The ESCP will likely address, at a minimum, commitments related to the following: − Developing an ESMF, taking into account the WB Group´s Environmental, Health and Safety Guidelines; − Developing Stakeholder Engagement Plan, including a Grievance Redress Mechanism; − Detailing the list of possible project activities, regions and sites; E&S screening of proposed activities; − Developing Labor Management Procedures and a relevant Grievance Redress Mechanism for Project workers; - Preparing and implementing as well as monitoring Resettlement Action Plans (RAP); − Detailed commitment to developing sub-project E&S tools and their implementation and institutional arrangement; including a designated staff(s) to ensure implementation of ESF commitment; − Proposal for staffing and capacity building of implementing/executive agency and safeguards team at national Public Disclosure and sub-national levels on environmental and social risk management; − Environment and social screening of project activities based on the ESMF, including preparation of site specific ESIA/ESMPs; − Continued stakeholder engagement throughout project cycle and beyond project closure; − Regular review and updating, as necessary, of the ESCP; and − Developing, disclosing, consulting on and implementing site-specific RPs, if required. C. Timing Tentative target date for preparing the Appraisal Stage ESRS 15-Apr-2022 IV. CONTACT POINTS World Bank Contact: Teklu Tesfaye Toli Title: Senior Agriculture Economist Telephone No: 5771+2446 / 998-78-1202446 Email: ttesfaye1@worldbank.org Contact: Aira Maria Htenas Title: Agriculture Economist Nov 30, 2021 Page 14 of 15 The World Bank Second Livestock Sector Development Project (P177825) Telephone No: +1-202-458-4445 Email: ahtenas@worldbank.org Borrower/Client/Recipient Borrower: Ministry of Finance Implementing Agency(ies) Implementing Agency: State Committee of Veterinary and Livestock Development V. FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects VI. APPROVAL Task Team Leader(s): Aira Maria Htenas, Teklu Tesfaye Toli Practice Manager (ENR/Social) Varalakshmi Vemuru Recommended on 30-Nov-2021 at 08:45:44 GMT-05:00 Public Disclosure Safeguards Advisor ESSA Varalakshmi Vemuru (SAESSA) Cleared on 30-Nov-2021 at 11:48:2 GMT-05:00 Nov 30, 2021 Page 15 of 15