INTEGRATED SAFEGUARDS DATA SHEET ADDITIONAL FINANCING Report No.: 83310 Date ISDS Prepared/Updated: December 10, 2013 Date ISDS Approved/Disclosed: December 13, 2013 I. BASIC INFORMATION 1. Basic Project Data Country: Independent State of Project ID: P146003 Papua New Guinea Parent Project P110959 ID: Project Name: Additional Financing for Productive Partnerships in Agriculture Project (P146003) Parent Project Name: Productive Partnerships in Agriculture Project (P110959) Task Team Leader: Kofi Nouve Estimated Appraisal Date: 12/ 13/2013 Estimated Board Date: 02/28/2014 Managing Unit: EASNS Lending Instrument: Project Investment Financing Sector(s): General agriculture, fishing and forestry sector (60%); Agricultural marketing and trade (40%). Theme(s): Rural services and infrastructure (67%); Rural markets (33%) Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid No Response to Crises and Emergencies)? Financing (In USD Million) Total Project Cost: 73.00 Total Bank Financing: 30.00 Financing Gap 0.00 Financing Source Amount Borrower 4.50 IDA Credit 30.00 EU Grant 6.40 IFAD Grant 22.00 Private sector 10.10 Total 73.00 Environmental Assessment B- Partial Assessment Category: Is this a Repeater Project? No 2. Project Objectives Parent Project Development Objective (PAD): To improve the livelihoods of smallholder cocoa and coffee producers through the improvement of the performance and sustainability of value chains in cocoa- and coffee- producing areas. Proposed Project Development Objective (AF): The PDO of the Additional Financing would be simplified and reformulated as follows: To improve the livelihoods of smallholder cocoa and coffee producers supported by the Project. 3. Project Description The Additional Financing will support the following original three Project components: Component 1: Institutional Strengthening and Industry Coordination. The specific objective of this component would be to improve the performance of sector institutions and to enhance industry coordination in the coffee and cocoa sectors. Existing stakeholder platforms for industry coordination would be consolidated to address short and long-term issues such as sector governance, skills development in the industry, improvement in extension services, industry strategy on threats to quality and quality promotion, information within the industry, market development and crop diversification. This component would have four sub-components as follows: Sub-component A: Industry coordination & policy development: This sub-component would build the capacity of industry coordination committees (ICC) to support sector dialogue and steer policy development in the cocoa and coffee subsectors. Sub-component B: Communication and information management systems. The project would strengthen the information management systems necessary to inform policy development in the coffee and cocoa industries. Sub-component C: Quality and sustainability management: This sub-component would strengthen quality management systems in the coffee and the cocoa industries and promote, where appropriate, the adoption of sustainability practices (Organic, Fair Trade, Rainforest Alliance, etc); Sub-component D: Project management and monitoring and evaluation (M&E). This sub-component would support all project management and M&E functions in the PMUs respectively located in the Cocoa Board and the CIC, as well as a small Project Coordinating Unit in DAL. It would also finance the related TA and the operations of the Technical Advisory Committee (TAC) under Component 2. Component 2: Productive Partnerships. The specific objective of this component would be to foster the integration of a greater number of smallholder producers in performing and remunerative value-chains, by developing and implementing public-private alliances in the project areas aimed at improving market linkages. Those partnerships would be demand-driven and would need to be consistent with the specific objectives of the PPAP. During project preparation, strategic priorities for support under the project have been identified as follows: (a) In the cocoa sector, activities which support CPB management such as training on good farming practices; the production of improved planting material (nurseries and budwood gardens) to increase their availability for replanting; the promotion of and support for rotational replanting; market-driven diversification of cocoa-farming system; and management of quality through the adoption of more efficient and environmentally friendly post-harvest and processing technology; (b) In the coffee sector, activities which support the adoption of sustainability practices and the expansion of the production of differentiated coffees; training on good farming practices; the production of improved planting material to increase their availability for replanting; replanting programs; market-driven diversification of coffee farming systems; and management of quality through the adoption of more efficient and environmentally-friendly post-harvest and processing technology. Project funding would be channeled through partnerships with legal entities in the private and associative sectors, which have already been successfully working with smallholders on productivity, quality and sustainability enhancement and are interested in scaling up those activities. Expected results and cost-sharing arrangements will be specified in the partnership agreements. The project will provide assistance for the development of those partnership proposals, as needed, through contracted local service providers. The detailed guidelines on cost sharing arrangements and the rules for the implementation of this component (e.g. eligibility criteria, selection process, evaluation process, etc) are described in the Project Implementation Manual (PIM). This component would have two subcomponents: Sub-component A: Productive partnerships in coffee growing areas. This subcomponent will cover coffee- growing areas and its implementation will be under the responsibility of the PMU within the CIC with support from a Technical Advisory Committee (TAC). Sub-component B: Productive partnerships in the cocoa growing areas. This component will cover cocoa- growing areas and its implementation will be under the responsibility of the PMU within the Cocoa Board with support from a TAC. Component 3: Market Access Infrastructure. The specific objective of this component would be to improve smallholder market access in targeted areas under the project. This component would have two sub-components as follows: Sub-component A: Preparation of market access infrastructure investments. This subcomponent will finance the identification and selection of priority investments in support of Component 2 partnerships. Sub-component B: Market access infrastructure development. This sub-component will finance the related investments in infrastructure rehabilitation and maintenance. The Additional Financing which more than doubles the resources available for the project will allow the project to expand coverage of Component 2 and Component 3 to other communities within the existing provinces covered by the original financing (i.e. East New Britain and Autonomous Region of Bougainville for Cocoa and Eastern Higlands, Simbu Province, Jiwaka and Western Highlands for Coffee) as well as to new provinces. After initial expansion to four new provinces (East Sepik, West Sepik, Madang and Morobe) in the first call for proposals for cocoa, all provinces may be eligible to submit proposals in the subsequent calls, but the selection of partnerships will remain competitive. The provision of additional finance would also enable the Project to focus on the gender, literacy and nutrition-related activities and to ensure that women and other disadvantaged groups fully share in benefits from the Project. The Additional Financing will not trigger any new policies as the environmental conditions of new areas to be covered will generally be the same as in the existing areas while the project design will be generally unchanged. The bank safeguard policies however will apply to the whole project, regardless of the funding sources. 4. Project Location and salient physical characteristics relevant to the safeguard analysis The project is currently being implemented in the core cocoa and coffee producing areas, which are East New Britain and the Autonomous Region of Bougainville for the cocoa industry and Eastern Highlands, Western Highlands, Jiwaka and Simbu Provinces for the coffee industry. The Additional Financing will expand coverage of Component 2 and Component 3 into other cocoa and coffee growing areas. The rolling out of project activities into other cocoa and coffee growing areas was fully anticipated in the Environmental and Social Assessments conducted during the project preparation. Coffee growing areas are mostly found in the highlands where the topography varies from flat to mountainous with altitudes of up to 2,000 masl. The vegetation on the flat areas are mostly agriculture crops, trees and grasses while in the mountainous areas the vegetation are mostly forests and grasslands with patches of coffee and food gardens. Cocoa growing areas are found in the lowlands where the topography varies from coastal plains to rolling hills, with altitudes of up to 500 masl. The vegetation in the project areas is composed mainly of cocoa trees mixed with other food crops and shade trees, and abandoned cocoa blocks which are at various stages of natural regeneration. The soils in both coffee- and cocoa-growing areas are naturally fertile as they are made up of volcanic material. Both areas also receive abundant rainfall which together with the type of soil and terrain presents some road building challenges including high erosion, landslides and drainage controls. The maintenance of perennial tree crops such as coffee and cocoa which require little or no tillage compared to annual or seasonal cash crops would alleviate soil erosion. 5. Environmental and Social Safeguards Specialists Jonas Bautista (Social and Environmental Safeguards, Consultant) 6. Safeguard Policies Triggered Safeguard Policy Triggered? Explanation (Optional) Environmental Yes The Environmental Assessment conducted as part of the preparation of the Assessment (OP/BP original financing focused on possible impacts and mitigation measures 4.01) related to coffee and cocoa production and processing, and any possible impacts of rehabilitation of existing and construction of small infrastructure. The civil works involved would have some localized impacts on the environment while farm production support is expected to initially result to an increase in the use of pesticide. The Environmental and Social Management Framework (ESMF) currently in use for Component 2 and Component 3 activities under the Original Financing has been updated incorporating lessons and innovations during the three years of project implementation. Natural Habitats No The project involves rehabilitation of smallholder cocoa and coffee (OP/BP 4.04) production and small scale infrastructure in existing production areas. Hence, it is highly unlikely that project-supported farm production or infrastructure would affect natural habitats. The screening procedures in the ESMF will also exclude activities which could potentially have adverse impacts on natural habitats. Forests (OP/BP No Similarly Component 2 will focus on existing or abandoned coffee and 4.36) cocoa blocks while infrastructure investment will be mostly rehabilitation of existing feeder roads and construction of paths, small wharves and jetties in populated areas, hence also unlikely to result to opening of new clearings or encroachment into forested areas. The screening procedures in the ESMF will also exclude activities involving significant conversion or degradation of critical forest areas or related critical natural habitats. Pest Management Yes Component 2 of the Project involves agricultural production activities, (OP 4.09) including pest control. There will be initially an increase in the use of pesticide. This is more likely to occur for cocoa and only in the initial phase of engagements. In the long term with the planting of CBP resistant clones, adoption of good cultural management practice and IPM, the project should result in less usage of pesticide. You should say something about the Pest Management Plan/IPM plan (it seems that you have one according to the instruments described below) …and mention if the document has been updated Physical Cultural No Construction and farm activities to be supported by the Project are not Resources (OP/BP likely to affect sites with archeological, paleontological, historical, 4.11) religious, or unique natural values. Construction contracts under Component 3 would include provisions for procedures to be followed in the event of "chance finds" of culturally significant artifacts or sites. Indigenous Peoples Yes The great majority of the rural population in Papua New Guinea is (OP/BP 4.10) considered indigenous people. There is therefore no need for separate Indigenous Peoples Plan (IPP). A social assessment and nationwide consultations were conducted during which cocoa and coffee growers have expressed strong support for the project. An Indigenous Peoples Policy Framework (IPPF) has been prepared to guide the conduct of free and prior informed consultation and ensure broad community support for Component 2 and 3 activities. Involuntary Yes Productive partnerships under Component 2 may require land for Resettlement communal facilities such as nurseries and budwood gardens. Under (OP/BP 4.12) Component 3, existing road improvement and rehabilitation has the potential to cause loss of assets located within or around the right of way. For example, works could affect gardens or trees planted within the existing right of way. A Resettlement Policy Framework (RPF) has been prepared as part of the preparation of the original project to address the potential loss of assets caused by infrastructure rehabilitation under Component 3. Safety of Dams No The project does not finance construction or rehabilitation of any dams, nor (OP/BP 4.37) will it rely on the performance of an existing dam or a dam under construction. Projects on No There are no known project components or activities that would involve International international waterways. Waterways (OP/BP 7.50) Projects in Disputed No Project activities will not be located in any known disputed areas as defined Areas (OP/BP 7.60) under this policy. II. Key Safeguard Policy Issues and Their Management A. Summary of key safeguards issues 1. Describe any safeguard issues and impacts associated with the project. Identify and describe any potential large scale, significant and/or irreversible impacts: Environmental Concerns - Some environmental impacts are likely to be associated with farming practices in the cocoa and coffee sectors. For cocoa, the main issue would be the management of the Cocoa Pod Borer pest and the fermentation process of the cocoa beans which entail use of chemical pesticides. Wastes are also generated in the cocoa fermentation processes. With regards to coffee, the main environmental issues are associated with significant water use and the subsequent generation of contaminated liquid waste in the processing of the coffee beans. Market Access Infrastructure under Component 3 and construction and rehabilitation works would include mostly minor rural roads and other small scale infrastructure such as jetties and storage facilities, and assembly and consolidation of loading points. Environmental impacts of these activities would be associated mainly with civil works and will be minor, low intensity and site specific. During the three years of project implementation, the above issues have all been adequately addressed through the Environmental and Social Management Plan. Pesticide use has been significant as expected but not excessive to be a serious concern. In cocoa, spraying is being done as often as once in every two weeks in order to control the cocoa pod borer (CPB) infestation. Herbicide is also used in both cocoa and coffee blocks to control weeds. In most cases, spraying has been done in accordance with standards either by the farmers under the strict guidance of the lead partners or by the lead partner themselves who organized highly trained spray teams. In terms of wastes, significant amount of solid and liquid wastes are generated from the coffee pulping factories but these factories are subject to CIC design standards which include recycling of process water and three-stage sump treatment of effluent. This has been validated by the previous World Bank mission. For most of the partnerships however, pulping is done by the farmer at their farms using manual pulpers which generate only little waste. Cocoa processing generates pod husk which are usually left to decompose on the farm. Cocoa bean fermentaries generate very little wastes and are also usually small scale. Social Concerns -Better farm management under Component 2 will lead to improved livelihoods and income of small-scale farmers. However, there is a possibility that increased incomes could aggravate existing social vices such as alcohol abuse leading to increased rates of domestic violence, STIs, and HIV/AIDS. On Component 3, the rehabilitation of roads and construction of small infrastructure could result in minor loss of or damage to assets. There may also be minor land acquisition to secure the sites and easements of the infrastructure and communal facilities of the partnerships. During the three years of project implementation, social vices have been confirmed in some areas but not in all partnership areas. Incomes from coffee and cocoa production are likely contributing to these vices. Many partnerships have included in their program of activities measures to address these issues such as training and awareness campaigns on gender equality and HIV/AIDS, and financial literacy training. Women groups have also been provided with support for activities related or unrelated to cocoa and coffee production and a significant number of women are themselves registered in the partnerships. There have been no involuntary land acquisitions and use of land for communal facilities (i.e. nurseries, budwood gardens and warehouses) have been voluntarily offered by with landowners who are themselves members of the partnerships. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: The EA has identified land degradation, lack of accessible good quality water for urban and rural inhabitants, environmental pollution (e.g. water contamination), loss of biodiversity, habitat and wetlands, deterioration of aquatic systems, and deforestation as critical environmental problems in the country. The project will not significantly contribute to these problems as it will not involve opening up of new roads and new agricultural clearings. All field production and rehabilitation activities will occur within existing coffee and cocoa blocks. Moreover, the project will promote good and sustainable agricultural practices including adoption of Integrated Pest Management that would minimize the use of pesticides and organic farming. The project will contribute to an increase in incomes for households which in turn will provide resources for schooling and other household expenses that will improve social outcomes. However, increased incomes may also contribute to social problems such as increased alcohol abuse, and increased rates of STI including HIV/AIDS. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. The overall project design remains the same under the Additional Financing. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. Measures to address environmental issues – Pesticide use in cocoa and coffee is currently being addressed through training on proper use, handling and storage, although the long term goal is the adoption of IPM. In cocoa, CPB-resistant clones are being promoted along with complete and frequent harvesting practice that minimizes pest infestation. Water usage in coffee factories is being minimized through recycling of process water while wastewater undergoes mandatory three-stage sump treatment. These measures are already adopted and enforced as design standards by the Coffee Industry Corporation. Measures to enhance focus on gender, literacy and nutrition-related issues –The issues on gender equality, literacy, health, nutrition and family food security are addressed in the Original Financing through inclusion of activities that specifically targets women and women groups, either as member of the partnerships or as spouses of members; the conduct of literacy and numeracy training courses and HIV/AIDS awareness campaigns; the intercropping of food crops into young cocoa and coffee blocks and the promotion of crop diversification using economic shade trees, Partnership proposals that include these activities are given preference over other proposals. Under the Additional Financing, focus on these issues will be enhanced by: (a) requiring proponents to conduct rapid social assessment of partner communities on the prevalence of these issues and to find culturally appropriate solutions; (b) integrating into their proposals culturally appropriate measures to address the issues; and (c) assigning higher weights on the partnerships responsiveness to gender and other social issues in the partnership selection criteria. Updating of the ESMF - For the Additional Financing, the borrower has updated the ESMF formally incorporating the innovations adopted during the three years of project implementation. The project’s safeguards performanc e has been satisfactory and the innovations adopted in the safeguards procedures and instruments have contributed to this good performance. These include: (i) the development and adoption of the Consultation Framework for Partnerships and for Infrastructure which supplement the existing guidelines; (ii) the refinement of the Resettlement Policy Framework (RFP) to reflect the proven strategy of seeking only voluntary acquisition of right of way and easements through community consultations and compensating for damage structure or crops. Other enhancements included in the updated ESMF are: the conduct of quick social and environmental scanning/assessment of the partnership communities to improve the Environmental and Social Management Plans in partnerships; and, the adoption of simplified Environmental and Social Screening Forms. These updated safeguard instruments will apply to both the existing and AF projects. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The key stakeholders are the cocoa and coffee growers, their households, associations and communities; the agribusiness players including traders, processors and exporters; the local level government; and other public sector institutions supporting the industry, including the national research and extension service providers, national and local institutions such as the Cocoa Board and the Coffee Industry Corporation (CIC). Numerous consultation meetings with stakeholders were conducted during the project preparation as part Social Assessment and Environmental Assessment. The consultations helped improved the project design and provided inputs into the Environmental and Social Management Framework (ESMF). The ESMF was disclosed both at the World Bank’s INFOSHOP and locally in Port Moresby, in Rabaul and in Goroka. The ESMF will also be made available in the satellite offices of the PMUs and the offices of CIC and Cocoa Board in the new provinces. During the three years of implementation, the Beneficiaries Participation Framework (BPF) supplemented by Guidelines for Preparing and Implementing Public Consultation and Consultation Framework for Partnerships has been in use, guiding Lead Partners in their social preparation work with the cocoa and coffee growing communities. The same frameworks and guidelines will be used in the new areas covered by the Additional Financing. A separate Consultation Framework (CF) for Infrastructure was also developed for Component 3. B. Disclosure Requirements Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 11/23/2009 Date of "in-country" disclosure 12/10/2009 Date of submission to InfoShop 12/08/2009 Re-disclosure Date of in-country re-disclosure 12/11/2013 Date of submission to InfoShop 12/12/2013 For category A projects, date of distributing the Executive Summary of N/A the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 12/01/2009 Date of "in-country" disclosure 12/10/2009 Date of submission to InfoShop 12/08/2009 Re-disclosure Date of in-country re-disclosure 12/11/2013 Date of submission to InfoShop 12/12/2013 Indigenous Peoples Plan/Planning Framework: There is no separate IPP for the Project as the indigenous people in Papua New Guinea context refer to the general population. However, an Indigenous Peoples Policy Framework (IPPF) has been prepared to guide the conduct of free and prior informed consultation and ensure broad community support for Component 2 and 3 activities. Key elements of the IPP have been integrated into the project design and a Beneficiaries Participation Framework (BCF) has been adopted to ensure broad community support for activities to be implemented under the PPAP. A Consultation Framework (CF) has also been adopted to guide the social preparation of partnerships under Component 2 and market access infrastructure under Component 3. The IPPF, including the BCF and CF, has been updated as part of the preparation of the additional financing, and the revised framework will apply to both the original and AF projects. Yes (Beneficiaries Participation Was the document disclosed prior to appraisal? Framework) Date of receipt by the Bank 11/23/2009 Date of "in-country" disclosure 12/10/2009 Date of submission to InfoShop 12/08/2009 Re-disclosure Date of in-country re-disclosure 12/11/2013 Date of submission to InfoShop 12/12/2013 Pest Management Plan: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 11/24/2009 Date of "in-country" disclosure 12/10/2009 Date of submission to InfoShop 12/08/2009 Re-disclosure Date of in-country re-disclosure 12/11/2013 Date of submission to InfoShop 12/12/2013 * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: The same safeguards instruments currently in use under the Original Financing (i.e. Environmental and Social Management Frameworks (ESMF), Compensation Policy Framework, Beneficiary Participation Framework and Integrated Pest Management Plan) have been updated and will be used under the Additional Financing. Updated instruments include: ESMF, IPPF (including the Beneficiary Participation Framework and the Consultation Framework), RPF (including the Compensation Policy Framework as well as the Consultation Framework), and Integrated Pest Management Plan. The updated instruments will be applied to both the original and AF projects. Specifically for partnerships and infrastructure rehabilitation subprojects Environmental and Social Management, the Plans (ESMPs) will be disclosed in the cocoa and coffee industry web sites. C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? No If yes, then did the Regional Environment Unit or Sector Manager (SM) review and An ESMF has been approve the EA report? prepared by the Borrower and reviewed and approved by the SM Are the cost and the accountabilities for the EMP incorporated in the credit/loan? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank's Infoshop? Yes Have relevant documents been disclosed in-country in a public place in a form and Yes language that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for Yes the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project cost? Yes Does the Monitoring and Evaluation system of the project includes the monitoring of Yes safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the borrower and the Yes same been adequately reflected in the project legal documents? III. Approvals Signed and submitted by: Task Team Leader: Kofi Nouve Approved by: Regional Safeguards Coordinator: Comments: Sector Manager (Acting): Denis Jordy Comments: