Report No. 23700 Report No: I070962 <--Please check for duplicates! Integrated Safeguards Data Sheet (Updated) Date ISDS Prepared/Updated: 02/13/2002 Section I - Basic Information A. Basic Project Data Country: ZAMBIA Project ID: P070962 Project: Zambia - Copperbelt Environment Task Team Leader: Yves Andre Prevost Authorized to Appraise Date: January 22, 2002 IBRD Amount ($m): Bank Approval: June 18, 2002 IDA Amount ($m): 40.00 Managing Unit: AFTES Sector: VP - Pollution Control / Waste Management Lending Instrument: Specific Investment Loan (SIL) Status: Lending I.A.2. Project Objectives: The Copperbelt Environment Project (CEP) proposes to help the GRZ address environmental liabilities and obligations associated with the privatization of mining asset that are incumbent on GRZ, in particular the liabilities related to public health and safety. The CEP forms one of a series of measures funded by the World Bank, to facilitate the successful and sustainable privatization of Zambia's mining assets. I.A.3. Project Description: The 3 components of the Project are: Component 1 - Consolidated long-term Environmental Management Plan (CEMP). This component will focus on the preparation of an EMP consolidating the EMPs prepared by investors and by ZCCM-IH for each privatized facility. The CEMP will determine the cumulative impact of mining activities outside of current mine license areas, including impacts on the Kafue River watershed, on critical ecological processes and on neighboring populations. It will establish the overall environmental management priorities within the broader context of environmental and social sustainability and indicate how these liabilities are to be addressed. Component 2 - Establishment of an Environmental Mitigation Fund (EMF). The EMF will serve as a mechanism to fund environmental and social mitigation measures to mitigate the historical legacy of mining-related environmental degradation, based on the priorities set within the CEMP. Those measures that have high human health and safety implications will be given the highest priority. Time-bound environmental and contractual obligations to investors of an environmental nature will also be given priority consideration. Component 3 - Strengthening the regulatory framework for environmental management in the mining sector. The CEP will help ensure full compliance of the mining sector with national environmental regulations. For this purpose, CEP will fund appropriate capacity building within Environmental Council of Zambia (ECZ), Mines Safety Department (MSD) and delegated agencies under the Environmental Protection and Pollution Control Act (EPPCA), as well as universities and recognized training and research institutions. I.A.4. Project Location: (Geographic location, information about the key environmental and social characteristics of the area and population likely to be affected, and proximity to any protected areas, or sites or critical natural habitats, or any other culturally or socially sensitive areas.) The Copperbelt region covers an area of 150 km by 50 km close to Zambia's northern border with the Democratic Republic of Congo. The current population of the Copperbelt is estimated to be 1.6 million (CSO, 2001) or about 159 of the total Zambian population. A majority of the population on the Copperbelt is still dependent on mining and its related activities.Approximately 90% of the region is drained by the Kafue River and its tributary network (e.g., Kakosa stream at Konkola, the Mushishima stream at Nchanga, Mufulira stream at Mufulira) (Figure 2). The Kafue River bisects the Copperbelt in a south-southeasterly orientation, rising from headwaters close to the Congo border, approximately 100 km upstream of the Konkola Division. Discharges affected by mining occur along an 80 km length of channel extending from Konkola to Luanshya stream. Kabwe is situated about 130 km north of Lusaka and provides a strategic linkage between Lusaka and the northern region, including the Copperbelt, Northern and Luapula Provinces. A town 180,556 persons (2000), is strategically located at the centre of the country at the crossing of the road leading to the Copperbelt and just north of the road connecting Eastern and Western Zambia. As the major town in Central Province, Kabwe continues to attract in-migration. This has resulted in some of the largest unplanned settlements in the country. The terrain of the Kabwe area is generally a gentle relief and is approximately 1180 m above sea level. Streams to the west and southwest drain to the Kafue catchment while those to the north and east drain to the Lunsemfwa. Surface drainage from the Kabwe Mine is mainly into the Mine Canal, which flows eastwards towards the Muswishi River into the Lunsemfwa drainage. B. Check Environmental Classification: A (Full Assessment) Comments: The overall objectives of the EA were to ensure that actions proposed under the project do not cause negative environmental or social effects, that the proposed measures to mitigate identified environmental and social impacts are appropriate, and that the level of public consultation and disclosure complies with national environmental legislation and World Bank Safeguard policies. C. Safeguard Policies Triggered Policy Applicability Environmental Assessment (OP/BP/GP 4.01) Yes Forestry (OP/GP 4.36) Yes Natural Habitats (OP/BP 4.04) Yes Safety of Dams (OP/BP 4.37) No Pest Management (OP 4.09) Yes Involuntary Resettlement (OP/BP 4.12) No Indigenous Peoples (OD 4.20) Yes Cultural Property (OP 4.11) Yes Projects in Disputed Territories (OP/BP/GP 7.60)* No Projects in International Waterways (OP/BP/GP 7.50) No *By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas -2 - Section II - Key Safeguard Issues and Their Management D. Summary of Key Safeguard Issues. Please fill in all relevant questions. If information is not available, describe steps to be taken to obtain necessary data. II.D.la. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts. The EA for the CEP evaluates mining hazards in the Copperbelt and Kabwe from a risk-based perspective, focusing on the impacts on human health, animals and plants. The primary environmental health issue in the Copperbelt mining sector is exposure to sulphur dioxide and particulate emissions in the towns of Mufulira, Kitwe and Chambishi. Other mining and non-mining issues include: Mining Related Issues Environmental: Kabwe health effects of lead contamination, primarily in soil and possibly food. Sulphur dioxide emissions from Mufulira, Nkana, Chambishi and Luanshya smelters. Siltation into streams Localized accidents from residential access of mine sites Social: Possible resettlement of people currently in potentially unsafe areas on ZCCM-IH land. Loss of income generating opportunities based on using the sites (scavenging or fishing) versus remedial measures to ensure long-term stability of these sites and to protect users from potential hazards. Increases in deforestation, vandalism of mine sites and mine site accidents, with decline in mine security. Non-Mining Related Issues Environmental: Rapid increase in deforestation and settlement in national forest reserves and watershed areas in the Kafue basin. Outdated, poorly maintained sewage treatment plants and direct discharge of sewage into the Kafue River. Increased levels of solid waste being disposed within neighbourhoods and on ZCCM-IH lands, causing increased air pollution from burning waste and breeding grounds for rats and malaria. Theft of PCB-based oil from electricity transformers for use as cooking oil. Social: Increasing tariffs for water, electricity, education, health care and other services are felt most acutely by certain groups that have not benefited directly from the recent growth in the mining sector. These groups include municipal employees (many of whom have not been paid for many months), public sector and university employees on fixed salaries, residents of Luanshya who are dependent on the now non-functioning mining sector, residents of Kabwe, retrenched miners with few skills, retired miners, other already vulnerable groups such as widows and those affected by AIDs. Overtaxed public health facilities; increased fee payments and more restricted access to mine hospitals mean that retrenchees, retirees and others are overwhelming the already stretched public facilities in some -3 - towns. Compounding this problem has been the drain of medical personnel reported to have left the country for more lucrative positions within the past year. Weak municipal governments unable to effectively collect tax revenues from mining sector, yet needing to augment services. Financing of urgent environmental mitigation measures. Following completion of the privatization process, ZCCM established a list of activities that required urgent attention. Given the need to deal immediately with these issues and the speed and probable availability of funding from various sources (e. g., ZCCM-IH's own funds, the IDA Project Preparation Facility [PPF] advance, other donors), it was concluded following discussions with Government and ZCCM-IH that the fastest course of action was to amend the Subsidiary Loan Agreement for financing ZCCM's Labor Reduction Program (LRP) to utilize surplus funds that are available as a result of savings in the cost of retrenchments of the work force, which are currently estimated at about US$ 7 million to fund the following activities: Actions specified in the Interim Environmental Management Plan agreed with KCM. Lack of fulfillment of these liabilities may affect the capacity of KCM to mobilize the funds required to develop the Konkola Deep Project, the cornerstone of the privatization process. These obligations include: - Resettlement Action Plan (RAP) for villagers that will be affected by the Konkola Deep Project, - Removal of scrap material, - Demolition of defunct facilities, most particularly the High Grade Leach Plant in Nchanga. - Preparation of final EMP for historical liabilities associated with assets taken over by KCM The obligation to rehabilitate the Kansanshi mine, agreed to with Cyprus Amax (now Phelps Dodge), as a prerequisite for mine redevelopment. Failure to comply has already caused delays. The stabilization of Tailings Dam 33C, south of the Nkana mine. This dam breached in 1997, releasing an estimated 1 million tons of tailings into the Chibuluma stream and damaging traditional farmlands. It is now the rainy season in the Copperbelt, and unless the dam is stabilized within the next few weeks it will most likely breach again. Removal of PCBs. Part of the PCB stock accumulated by ZCCM is stored in a brick shed at the Nkana plant. At least one barrel has spilled; PCBs have seeped into the soil and are entering into one of the watersheds. The ongoing rainy season will accelerate this process. The implementation of the Resettlement Action Plan at Konkola constitutes a priority social activity as expectations have been raised and agreements made with villagers that will be affected by the Konkola Deep Project. A resettlement action plan (RAP) was reviewed by IDA and a field visit by Sr. Sociologist confirmed that the RAP was in compliance with Bank's safeguards policies. Although some of the defunct facilities do not appear to be a major environmental issue, their demolition and removal are a priority because of contractual agreements reached with KCM, and because of their impact on operations. II.D.lb. Describe any potential cumulative impacts due to application of more than one safeguard policy or due to multiple project component. Aside from sulphur dioxide, copper is the key element that is found in excessive quantities immediately downstream from mine sites and downwind - 4 - of smelters in the Copperbelt. Because of the geology of the Kafue River basin, there is little acid rock drainage (ARD), which limits the availability of other elements, such as lead and arsenic, to pose a significant health threat. Kafue River water is generally within World Health Organisation (WHO) water quality guidelines for copper. However, water sources closer to mine sites can, in certain instances, exceed WHO limits for copper. In Kabwe, lead contamination in soil presents an immediate health concern due to high lead contamination within residential areas. Based on the review of existing information by a medical toxicologist, other health issues related to mine pollution are not likely to be significant, and specific recommendations have been provided on those items that require further testing to rule out health effects during the CEMP process. If these impacts on on human health, animals and plants are not addressed and managed, cumulative and long-term effects will be further exacerbated and more devastating to the health and livelihoods of people, as well as the viability of mining operations in Zambia. II.D.lc Describe any potential long term impacts due to anticipated future activities in the project area. see above II.D.lb. II.D.2. In light of 1, describe the proposed treatment of alternatives (if required) An analysis of alternatives to the design and implementation plan for the CEP was undertaken as a component of the EA process. The non-intervention option is not considered viable. The proposed CEP structure draws upon experience from a number of ongoing, or previously executed World Bank programs in the minerals sector, for example in Ecuador, Bolivia and Argentina. The concurrent process of task identification and institutional capacity building has proved effective in all such instances. Finally, the only other alternative to the current CEP structure would be for GRZ to seek grant funding sources from other donors. Given the magnitude of the clean-up required in Kabwe and in the Copperbelt, it is recommended that the GRZ seek such funding sources to complement the CEP and to minimize the future debt burden on the country. The funding mechanism within the project may facilitate such supplemental financing. II.D.3. Describe arrangement for the borrower to address safeguard issues In principle, the CEP is a large-scale mitigation/management plan. With the implementation of this project, the GRZ hopes to ensure the completion of the privatization of Zambia Consolidated Copper Mines (ZCCM) assets, to address the historical environmental liabilities and obligations from the mining sector incumbent on ZCCM and the Borrower, in particular the liabilities related to public health and safety. Strengthening capacity: The CEP's design assumes that the model of an investor EMP and a counterpart EMP by ZCCM-IH will be applied to all investment groups to ensure that all environmental issues are included and that there is concurrence between the two EMPs on who is responsible for what issues. It also assumes that the investor and counterpart EMPs will be reviewed and approved concurrently by ECZ and by the Mines Safety Department (MSD), the latter as the delegated authorizing agency for handling environmental issues related to mining licenses, under the - 5- Environmental Protection and Pollution Control Act (EPPCA) and the Mines and Mineral Act of 1995. To ensure full compliance of the mining sector with national environmental regulations, CEP will fund appropriate capacity building within ECZ, MSD and delegated agencies under the EPPCA, as well as universities and recognized training and research institutions. Safeguards mechanism for EMF activities: CEP activities will be subject to World Bank's environmental and social safeguards screening and review. Those projects that trigger Bank safeguard policies would necessitate a more detailed environmental and social evaluation, careful third-party review and assistance, as well as prior approval by the World Bank. A manual of procedures will detail the specific triggers for such review. The screening and review process will include the participation and consultation of stakeholders through various vehicles like a project steering committee with wide stakeholder representation (including NGOs and local government) to ensure adequate screening and consensus among stakeholders. II.D.4. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Analysis and stakeholder consultations carried out as part of this EA raised a number of environmental and social issues affecting the Copperbelt province and the Kabwe region. Participatory planning is an integral part of the design and implementation of the CEP. Several vehicles for participation and consultation of stakeholders i.e. project steering committee with wide stakeholder representation (including NGOs and local government), have been and will be established to ensure adequate consensus among stakeholders. E. Safeguards Classification. Category is determined by the highest impact in any policy. Or on basis of cumulative impacts from multiple safeguards. Whenever an individual safeguard policy is triggered the provisions of that policy apply. [XI S1. - Significant, cumulative and/or irreversible impacts; or significant technical and institutional risks in management of one or more safeguard areas I S2. - One or more safeguard policies are triggered, but effects are limited in their impact and are technically and institutionally manageable I S3. - No safeguard issues I SF. - Financial intermediary projects, social development funds, community driven development or similar projects which require a safeguard framework or programmatic approach to address safeguard issues. F. Disclosure Requirements Environmental Assessment/Analysis/Management Plan: Expected Actual Date of receipt by the Bank 12/17/2001 1/24/2002 Date of "in-country" disclosure 1/24/2002 2/8/2002 Date of submission to InfoShop 1/24/2002 2/8/2002 Date of distributing the Exec. Summary of the EA to the ED (For category A projects) 1/24/2002 2/8/2002 Resettlement Action Plan/Framework: Expected Actual Date of receipt by the Bank Date of "in-country" disclosure -6- Date of submission to InfoShop Indigenous Peoples Development Plan/Framework: Expected Actual Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Pest Management Plan: Expected Actual Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Dam Safety Management Plan: Expected Actual Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop If in-country disclosure of any of the above documents is not expected, please explain why. Signed and submitted by Name Date Task Team Leader: Yves Andre Prevost 2/7/2002 Project Safeguards Specialists 1: Project Safeguards Specialists 2: Project Safeguards Specialists 3: Approved by: Name Date Regional Safeguards Coordinator: Serigne Omar Fye 2/13/2002 Sector Manager/Director: Agi Kiss 2/13/2002 For a list of World Bank news releases on projects and reports, click here -7 -