INTEGRATED SAFEGUARDS DATA SHEET RESTRUCTURING STAGE Note: This ISDS will be considered effective only upon approval of the project restructuring Public Disclosure Copy Report No.: ISDSR8587 Date ISDS Prepared/Updated: 20-Jun-2014 Date ISDS Approved/Disclosed: 20-Jun-2014 I. BASIC INFORMATION 1. Basic Project Data Country: Moldova Project ID: P118518 Project Name: Moldova Agriculture Competitiveness Project (P118518) Task Team Anatol Gobjila Leader: Estimated 29-Feb-2012 Estimated 01-May-2012 Appraisal Date: Board Date: Managing Unit: ECSAR Lending Specific Investment Loan Instrument: Sector: Agricultural extension and research (42%), Agro-industry, marketing, and trade (35%), Public administration- Agriculture, fishing an d forestry (23%) Theme: Rural policies and institutions (40%), Land administration and management (28%), Rural markets (16%), Rural services and infrastruct ure (16%) Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and No Public Disclosure Copy Emergencies)? Financing (in USD Million) Total Project Cost: 37.44 Total Bank Financing: 18.00 Financing Gap: 0.00 Financing Source Amount BORROWER/RECIPIENT 2.00 International Development Association (IDA) 18.00 Global Environment Facility (GEF) 4.44 SWEDEN Swedish Intl. Dev. Cooperation Agency (SIDA) 3.00 LOCAL BENEFICIARIES 10.00 Total 37.44 Environmental B - Partial Assessment Category: Is this a No Repeater project? Page 1 of 9 2. Current Project Development Objectives The Project Development Objective is to enhance the competitiveness of the agro-food sector by supporting the modernization of the food safety management system; facilitating market access for Public Disclosure Copy farmers; and mainstreaming agro-environmental and sustainable land management practices. Proposed New PDO (from Restructuring Paper) The Project Development Objective is to enhance the competitiveness of the agro-food sector by supporting the modernization of the food safety management system; facilitating market access for farmers; and mainstreaming agro-environmental and sustainable land management practices. 3. Project Description The Project will focus on three priority enabling areas and their elements: - Firstly, it will focus on the modernization of the public system of food safety management which is critically necessary to maintain domestic market share and increase access of food exports to traditional markets in the FSU countries and the EU market. - Secondly, it will focus on organization of farmers and facilitation of investments for modern post-harvest technologies and equipment. - Thirdly, it will focus on providing information and incentives to farmers aimed at mainstreaming sustainable land management practices. The three areas above are modeled according to the EU CAP pillars. The design of the proposed project, which will fully blend an IDA allocation of $18 million and GEF resources of $4.4 million, will take into account investments and activities that the Government of Moldova and the international donor community have already conducted, launched, or programmed under any of these areas (EU, MCC, USAID and IFAD). As such, the Project would aim to: (a) complement these investments; and (b) enhance the integration of investment efforts and technical assistance in these areas; while (c) remaining sufficiently focused to address issues in key value chains with comparative advantages and thus potential competitive advantages on domestic and Public Disclosure Copy foreign markets. The Project will have the following components: Component 1 (US$ 9.25 million): Enhancing Food Safety Management. This component would support the Government ambitious agenda in engendering critically necessary adjustments in the food safety and quality management systems. The country has embarked on a process of deep and comprehensive reforms in the sphere of Sanitary and Phyto-Sanitary actions (SPS) in order to ensure high levels of consumer protection on the internal market, as well as create a platform for expansion of Moldova produce into the EU market. As the Moldovan Government has explicitly set a strategic course for EU integration, the implementation of EU legislation in the field of SPS is inevitable, and is in fact a primary factor in the impending negotiations on the Deep and Comprehensive Free Trade Agreement, as part of a future Association Agreement with the EU. Adoption of EU acquis on SPS carries significant implications for state institutions in charge of food safety and quality, producers and consumers. EU regulations in these fields demand some of the highest standards in the world and consequently compliance by Moldova to these rigors would entail a lengthy and complex process that requires substantial financial efforts for necessary human and technical capacity enhancements. The component would be structured in two sub-components that would aim to address key priorities identified in the framework of Deep and Comprehensive Free Trade Agreement negotiations, focused on regulatory, institutional and technical strengthening of the food safety management system. Page 2 of 9 Component 2 (US$15.00 million): Enhancing market access potential. Acknowledging that the need for investments promoting marketability and market integration of hey agricultural products – specifically in the horticultural sector– is positively correlated to progress in improving post-harvest Public Disclosure Copy infrastructure and in promoting increased levels of farmer organization, this component would support the establishment and further organization of productive partnerships, and the application of modern post-harvest technologies by these emerging entities. This support would be expected to translate into an increasing share of quality products that meet international quality standards, and therewith strengthen the sectors relative competitiveness and consequently its income generation potential. Support under this component recognizes that the ability of the horticultural sector to serve increasingly demanding national and regional markets will ultimately also remain a function of producers’ ability to organize and cooperate both (a) through cooperation in production logistics, adaptation of voluntary international standards, and implementation of quality management and promotion schemes, and (b) cooperation in the establishment and use of post-harvest technologies and in the joint marketing of horticultural products. The design and configuration of this component would fill a critical gap in the incentive system for producers to actually enter into productive partnerships by providing an initial incentive in the form of conditional investment support. Component 3 (US$11.00 million): Enhancing land productivity through sustainable land management. As part of a broader push of the project to increase competitiveness of the agriculture sector, this component would support activities aimed at enhancing land productivity through mainstreaming of sustainable land management and good agro-environmental practices. The activities of the component will be aligned along three lines of support: (i) strengthening of human, institutional and technical capacity (both locally and nationally) for the implementation of SLM activities; (ii) financial incentives to farmers for the adoption of sustainable land management; and (iii) investment support for the rehabilitation of anti-erosion protection strips (hedges) with the purpose of maintaining and enhancing the productivity of agricultural land. Component 4: Project Management (US$1.59 million). This component will provide technical and financial support for project management. The implementation agencies for the proposed Project Public Disclosure Copy will be the Ministry of Agriculture and Food Industry (MAFI) and the Ministry of Environment (ME). The Consolidated Agricultural Project Management Unit (CAPMU), which has nearly 10 years of experience in implementing World Bank and GEF Projects will serve as a fiduciary agent for both implementation agencies. This component will finance activities such as (i) the PMU staff and operations, (ii) Monitoring and Evaluation activities, (iii) training programs and (iv) audits. Contingencies: US$0.6 million. 4. Project location and salient physical characteristics relevant to the safeguard analysis (if known) The project will be implemented countrywide. 5. Environmental and Social Safeguards Specialists Arcadii Capcelea (ECSEN) Klavdiya Maksymenko (ECSSO) 6. Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/ Yes Same rationale as in the original ISDS BP 4.01 Page 3 of 9 Natural Habitats OP/BP 4.04 No Public Disclosure Copy Forests OP/BP 4.36 No Pest Management OP 4.09 Yes Same rationale as in the original ISDS Physical Cultural Resources OP/ Yes Rehabilitation of the building of the Food Safety BP 4.11 Agency which is on the National Registry of State-protected Monuments. Indigenous Peoples OP/BP 4.10 No N/A Involuntary Resettlement OP/BP No 4.12 Safety of Dams OP/BP 4.37 No N/A Projects on International No N/A Waterways OP/BP 7.50 Projects in Disputed Areas OP/BP No N/A 7.60 II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the Restructured project. Identify and describe any potential large scale, significant and/or irreversible impacts: While generally the project will provide many environmental and social benefits (such as increased food safety and farmer income due to higher agricultural productivity, enhanced Public Disclosure Copy agricultural competitiveness, improved farmer skills in land conservation or increased opportunity for engagement in small scale agri-businesses by farmers), it may also cause some negative impacts. These impacts might be associated with the project supported competitive and matching grant schemes which are expected to finance: (a) producer-mobilization interventions on a pilot basis and supporting post-harvesting investments aimed at improving quality, consistency and quantity of primary supply (washing, grading, packing, ripening room equipment, cold-storage, minor-processing); and (b) investments in technologies and equipment for soil conservation- friendly agriculture as well as for soil management activities. The proposed activities under these schemes, if not adequately implemented, may cause some environmental impacts related to: (a) increased pollution of ground and surface waters due to soil erosion, use of fertilizers and pesticide, as well as the processing of agricultural products; (b) threats to human health and wildlife due to poor handling of fertilizers and pesticides; (c) increased siltation of water bodies due to soil erosion; (d) solid waste resulting from pre- processing of agricultural products. Additionally, the project will support the rehabilitation of buildings, border control points and laboratory facilities which may include minor civil works which also might generate solid wastes, air pollution and health hazards. The project will also have positive impacts on the environment and natural resource base of the project area: prevention of soil degradation; increase of soil moisture; increase in biomass and Page 4 of 9 organic matter of soils; reduction of sediment loads to the rivers; and a decrease of run-off and soil losses. This would result in a series of economic benefits: (a) increased soil productivity due to the adoption of SLM practices; (b) the value of nutrient recovery in the soil; and, (c) increased Public Disclosure Copy agricultural crops yields. The project triggers two WB OPs and specifically OP 4.01 on Environmental Assessment and OP 4.09 on Pest Management. The OP 4.01 is triggered as the project will support a series of activities which will generate some environmental and social impacts. To address these impacts the borrower prepared an EMF (see point above). While the project will not finance the purchasing and/or application of pesticides, it is possible that pesticide use will increase due to the increased intensity of cropping supported by the Project's grant schemes of the project and/or due to promoting conservation agriculture. To address the issues related to this OP the EMF includes measures to raise awareness and educate potential beneficiaries regarding safe pesticide handling and use of Integrated Pest Management to enhance sustainability and reduce human and environmental exposure to dangerous products. Such measures are described in the section VI of the EMF. The borrower confirmed the project will not support activities and sub-projects that might result in resettlement. The EMF clearly indicates that any infrastructure constructed/rehabilitated under the project will be: (a) located on land already owned by participants, or will be bought or leased on a willing buyer-willing seller basis, and, (b) will be screened to ensure that it is free of legal encumbrance, or informal use or occupation by others who lack formal title. Furthermore, these documents will also specify pasture improvement will not entail any form of involuntary pasture closure or diminished access. As stated in the EMF prepared by the borrower, OP/BP4.04 on Natural Habitats also would not be triggered as the project will not support any activities which might involve conversion of natural areas. The OP/BP 4.36 on Forests policy also will be not triggered as all project activities will be implemented on existing agricultural land and on the currently functioning border control points Public Disclosure Copy and laboratory facilities. Originally the project has not triggered the OP/BP 4.11 on Physical Cultural Resources. During the project implementation (in 2013) the Government of Moldova has decided to house the newly established Food Safety Agency in a building which is on the National Registry of State-Protected Monuments. This building requires essential rehabilitation and the works are to be supported by the project. This has led to the triggering of OP/B P4.11 and the ensuing restructuring of the project. The proposed building is in severely decrepit state and it will be radically improved with support from the project. The designs for the rehabilitation works have been carried out in full compliance with the national requirements for such types of civil works, with all necessary approvals from the Moldovan Ministry of Culture and necessary construction checks and permits (construction expertise). Per national regulations, the renovation activities will be implemented under strict supervision of the Agency for inspection and rehabilitation of cultural monuments of the Ministry of Culture of Moldova, as well as of the State Construction Inspection. A site-specific Environmental Management Plan was prepared for the building of the Food Safety agency, which was disclosed and consulted with all interested stakeholders (disclosure on May 23, 2014 and completion of consultations on June 13, 2014), including the Ministry of Culture of Moldova, the Chisinau city Council, environmental and cultural NGOs and local population. The project's safeguards category will remain B. Page 5 of 9 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: The potential long term impacts are positive and relate to increased agricultural competitiveness Public Disclosure Copy as well as increased soil productivity and crop yields. The project will also bring long term positive impacts in terms of soil conservation by improving land management practices. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. N/A 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. To address project-related potential negative impacts the borrower prepared an EMF which specifies the Environmental Impact Assessment (EIA) requirements for the project activities and sub-projects to be financed. This document covers the following: rules and procedures for environmental screening; guidance for preparing sub-projects EIA and/or simple EMPs as well as of EMP Checklist for identified small scale construction and reconstruction activities; possible mitigation measures for different types of sub-projects; requirements for monitoring and supervision of implementing of EIA/EMPs. The EMF contains also a series of measures to raise awareness and educate potential beneficiaries regarding safe pesticide handling and use of Integrated Pest Management. These measures are targeted at providing a framework for educating farmers on issues related to pesticide handling and promoting integrated pest management (IPM) and thus, understanding and managing pest problems in the horticultural sector, reducing human and environmental health risks associated with pesticide use, and protecting ecosystem by conserving beneficial agents such as natural enemies of pests and pollinators to increase productivity. The project will hire a national research institution and/or an NGO with necessary expertise in horticultural crop and IPM capabilities as well as with capacity to deliver training for farmers. Based on the research and technical support needs of the project beneficiaries, the selected consultant will develop IPM packages for horticultural systems, develop and deliver a Public Disclosure Copy training program with the aid of demonstrations, adaptive research trials and experiential learning in the farmer fields. This institution will train the trainers and project specialists, as well as sub- project beneficiaries and assist the Project Management Unit in designing a monitoring and evaluation program. The proposed activities would also cover field demonstrations with improved pesticide usage as well as IPM technologies. The Consolidated Agricultural Project Management Unit (CAPMU) will coordinate the implementation of these activities. The EMF will be integrated into the Project's Operational Manual and will be used as part of all contracts involving proposed activities and selected sub-projects. The Bank is expected to provide a special training to the CAPMU team, so they can promote compliance with the EMF and EMP. The subproject EMPs will be also integrated into the contracts for approved activities, both into specifications and bills of quantities and the Contractors will be required to include the cost in their financial bids and grant proposals. The EMF specifies its implementing responsibilities and arrangements. The proposed Project will be implemented by the Ministry of Agriculture and Food Industry (MAFI) and the Ministry of Environment (ME). MAFI has extensive experience in successfully implementing World Bank projects (ex. on-going RISP-II and RISP-IIAF, Avian Influenza projects), while the ME has extensive experience in implementing GEF funded projects (ex. Moldova Agricultural Pollution Control and POPs projects). CAPMU, which has nearly 10 years of experience in implementing Page 6 of 9 World Bank and GEF projects will serve as a fiduciary agent for both implementation agencies. CAPMU has a highly qualified Environmental Specialist, being responsible for project safeguards issues. Up to now the CAPMU environmental and social performances have been qualified as Public Disclosure Copy adequate. The WB team will continue to monitor closely EMF implementation, providing, if needed, relevant assistance. The EMF and sub-projects EMPs implementation will remain under the direct responsibility of the CAPMU, including responsibilities for supervision and monitoring of construction activities. Compliance with the EMF and EMPs and monitoring of the impact during the construction phase will be undertaken by the CAPMU Environmental Specialist as part of his contract supervisory duties. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The EMF was disclosed and consulted in the country. On January 18, 2011, CAPMU has disseminated the draft summary EMF to key project stakeholders (Ministry of Environment; Ministry of Agriculture and Food Industry; State Ecological Inspectorate) for review and comments, also posting it in the same day its full English version along with the EMF Summary in Romanian for wide public on CAPMU web site (www.capmu.md). On January 26, 2012, CAPMU conducted a public briefing and consultation meeting on the EMF document. The meeting concluded that the draft EMF document covers practically all potential impacts and possible mitigation measures. The draft document was revised after the meeting, taking into account outputs from the consultation. The final version of the EMF (Romanian) and its English version were posted on the CAPMU website and submitted to the World Bank for its disclosure in the Infoshop. EMF will be used by the client during the project implementation. B. Disclosure Requirements Environmental Assessment/Audit/Management Plan/Other Date of receipt by the Bank 02-Feb-2012 Date of submission to InfoShop 22-Feb-2012 For category A projects, date of distributing the Executive Public Disclosure Copy Summary of the EA to the Executive Directors "In country" Disclosure Moldova 18-Jan-2012 Comments: There were no ammendments to the original EA/EMF. A site-specific Environmental Management Plan was prepared for the building of the Food Safety Agency, which was disclosed and consulted with all interested stakeholders - disclosure for consulations on May 23, 2014 and publication on June 13, 2014. Pest Management Plan Was the document disclosed prior to appraisal? NA Date of receipt by the Bank NA Date of submission to InfoShop NA "In country" Disclosure Moldova // Comments: If the project triggers the Pest Management and/or Physical Cultural Resources policies, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/ Audit/or EMP. Page 7 of 9 If in-country disclosure of any of the above documents is not expected, please explain why: C. Compliance Monitoring Indicators at the Corporate Level Public Disclosure Copy OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) Yes [ ] No [ ] NA [ ] report? If yes, then did the Regional Environment Unit or Sector Yes [ ] No [ ] NA [ ] Manager (SM) review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated Yes [ ] No [ ] NA [ ] in the credit/loan? OP 4.09 - Pest Management Does the EA adequately address the pest management issues? Yes [ ] No [ ] NA [ ] Is a separate PMP required? Yes [ ] No [ ] NA [ ] If yes, has the PMP been reviewed and approved by a Yes [ ] No [ ] NA [ ] safeguards specialist or SM? Are PMP requirements included in project design?If yes, does the project team include a Pest Management Specialist? OP/BP 4.11 - Physical Cultural Resources Does the EA include adequate measures related to cultural Yes [ ] No [ ] NA [ ] property? Does the credit/loan incorporate mechanisms to mitigate the Yes [ ] No [ ] NA [ ] potential adverse impacts on cultural property? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the Yes [ ] No [ ] NA [ ] World Bank's Infoshop? Public Disclosure Copy Have relevant documents been disclosed in-country in a public Yes [ ] No [ ] NA [ ] place in a form and language that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional Yes [ ] No [ ] NA [ ] responsibilities been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included Yes [ ] No [ ] NA [ ] in the project cost? Does the Monitoring and Evaluation system of the project Yes [ ] No [ ] NA [ ] include the monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed Yes [ ] No [ ] NA [ ] with the borrower and the same been adequately reflected in the project legal documents? III. APPROVALS Task Team Leader: Anatol Gobjila Page 8 of 9 Approved By Sector Manager: Name: Dina Umali-Deininger (SM) Date: 20-Jun-2014 Public Disclosure Copy Public Disclosure Copy Page 9 of 9