MINISTRY OF PUBLIC WORKS AND HOUSING REGIONAL INFRASTRUCTURE DEVELOPMENT AGENCY INDONESIA TOURISM DEVELOPMENT PROGRAM ENVIRONMENTAL AND SOCIAL MANAGEMENT FRAMEWORK FINAL EXECUTIVE SUMMARY January 19, 2018 TABLE OF CONTENTS TABLE OF CONTENTS ............................................................................................. 2 LIST OF ACRONYMS ................................................................................................ 3 EXECUTIVE SUMMARY ............................................................................................ 5 1.0 Description of the Project ................................................................................ 5 2.0 Overview of the ESMF ..................................................................................... 6 3.0 Potential Environmental and Social Impacts of the Project ............................. 7 4.0 Comparison of World Bank Safeguards Policies and Indonesian Laws and Regulations.................................................................................................... 13 5.0 Applying World Bank Environmental and Social Policies and Government Regulations in Components 1, 2, 3 and 4 (excluding ITMPs and other plans)............................................................................................................. 13 6.0 Incorporating Environmental and Social Considerations Based on Bank OPs into the ITMPs and Other Plans of Component 4 .................................. 15 7.0 Institutional Capacity Requirements .............................................................. 16 8.0 Capacity Building Program ............................................................................ 16 9.0 Budget for Implementing the ESMF ............................................................... 16 10.0 Monitoring and Evaluation Arrangements of the Implementation of ESMF .... 17 11.0 Grievance Redress Mechanism (GRM) ......................................................... 17 12.0 Public Consultation ........................................................................................ 17 2 LIST OF ACRONYMS AMDAL Analisis Mengenai Dampak Lingkungan (Environmental Impact Assessment) APBN Anggaran Pendapatan dan Belanja Negara (State Revenue and Expenditure Budget) APBDI Anggaran Pendapatan dan Belanja Daerah Tingkat I (Provincial Revenue and Expenditure Budget) APBDII Anggaran Pendapatan dan Belanja Daerah Tingkat II (Kota dan Kabupaten Revenue and Expenditure Budget) BAPPENAS Badan Perencanaan Pembangunan Nasional (National Development Planning Agency) BAPPEDA Badan Perencanaan Pembangunan Daerah (Development Planning Agency at Subnational Level) BKPM Badan Koordinasi Penanaman Modal (Indonesia Investment Coordinating Board) BPN Badan Pertahanan Nasional (National Land Agency) CBT competency based training CMEA Coordinating Ministry of Economic Affairs DED Detailed engineering design DDP Detailed Development Plan EA Environmental Assessment ECOP Environmental Code of Practice EEP Eligible Expenditures Program ESA Environmental and Social Assessment EHS World Bank Group Environmental, Health and Safety Guidelines Guidelines ESIA Environmental and Social Impact Assessment ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan ESSA Environmental and Social Systems Assessment FPIC Free, prior and informed consultation FS Feasibility study GDP Gross Domestic Product GoI Government of Indonesia GRM Grievance Redress Mechanism HHTL Horwath Hotel, Tourism and Leisure ICT Information and communications technology IP Indigenous Peoples IPF Investment Project Financing IPP Indigenous Peoples Plan IPPF Indigenous Peoples Planning Framework ISDS Integrated Safeguard Data Sheet ITMP Integrated Tourism Master Plan LARAP Land Acquisition and Resettlement Action Plan LARPF Land Acquisition and Resettlement Policy Framework 3 LAT Land Appraisal Team LAC Land Acquisition Committee MAPPI Masyarakat Profesi Penilai Indonesia (Indonesian Society of Appraisers) M&E Monitoring and evaluation MOEF Ministry of Environment and Forestry MPWH Ministry of Public Works and Housing NGO Non-governmental organization PDO Proposed development objective OP Operational Policy PforR Program-for-Results PCR Physical Cultural Resources PMS Program Management Support PPE Personal protective equipment RIDA Regional Infrastructure Development Agency (Badan Pengembangan Infrastruktur Wilayah, BPIW) RPJMN Rencana Pembangunan Jangka Menengah Nasional (Medium-Term Development Plan) RKL Rencana Pengelolaan Lingkungan (Environment Management Plan) RPL Rencana Pemantauan Lingkungan (Environment Monitoring Plan) SA Social Assessment SME Small and medium-sized enterprise SOP Standard operating procedure SPPL Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup (Statement Letter for Environmental Management and Monitoring) STO Sustainable tourism observatory SKPD Satuan Kerja Pemerintah Daerah (Regional Working Unit) TA Technical assistance TOR Terms of reference TVET Technical and vocational education and training UKL-UPL Upaya Pengelolaan Lingkungan Hidup- Upaya Pemantauan Lingkungan Hidup (Environmental Management Plan-Environmental Monitoring Plan) WBWS willing-buyer-willing seller 4 EXECUTIVE SUMMARY 1.0 DESCRIPTION OF THE PROJECT The Government of Indonesia (GoI) has decided to transform Indonesia’s economy using tourism as one of the main growth drivers. The government, in its National Medium-Term Development Plan (Rencana Pembangunan Jangka Menengah Nasional, RPJMN) 2015- 2019, has set several objectives to increase the role of tourism in the Indonesian economy. In 2017, the GoI’s overall program for developing tourism, the Indonesia Tourism Development Priority Program (Program Prioritas Nasional Pembangunan Parawisata Indonesia, PPNPPI) aimed to shift towards a more comprehensive and inclusive approach to tourism development. The government objectives are to increase foreign and domestic visitors and related foreign exchange earnings, employment, contribution to GDP as well as tourism competitiveness. The PPNPPI includes six program areas: (i) international marketing and promotion; (ii) destination development; (iii) human resource and institutional development; (iv) international openness and access; (v) local economy linkages; (vi) safety and security and health and hygiene. The GoI is refining and augmenting its tourism development program. The World Bank has been requested to support part of the government program, in a Project focusing on three of the GoI’s priority tourism destinations: Lombok in West Nusa Tenggara province, Borobudur- Yogyakarta-Prambanan in Central Java province and the Special Region of Yogyakarta, and Lake Toba in North Sumatra province. The Project Development Objective (PDO) of the Tourism Development Program (the ‘Project’) is to improve tourism-relevant road quality and basic services accessibility, strengthen local economy linkages to tourism, and promote private investment in three tourism destinations in Indonesia. The Project has four components that together will enable the achievement of the PDO: • Component 1: Improve tourism-relevant road quality and basic services accessibility of selected destinations. • Component 2: Promote local participation in the tourism economy. • Component 3: Enhance the enabling environment for private investment and business entry in tourism. • Component 4: Increase institutional capacity to facilitate integrated and sustainable tourism development. The Regional Infrastructure Development Agency (RIDA) of the Ministry of Public Works and Housing (MPWH) will be the Executing Agency for the Project. RIDA will be guided by a Steering Committee and a Technical Committee. The Steering Committee is composed of Echelon 1 officers from each involved ministry or agency. It is proposed to be co-chaired by the Deputy Infrastructure of the Ministry of National Development Planning ( Badan Perencanaan Pembangunan Nasional, BAPPENAS) and the Deputy Destination Development and Tourism Industry of the Ministry of Tourism. The Head of RIDA will be secretary of the Steering Committee. The Technical Committee consists of Echelon II officials of each involved ministry or agency. It is proposed to be co-chaired by the Director of Industry, Tourism and Creative Economy in BAPPENAS and the Deputy Assistant Infrastructure Development and Impacts of Tourism in the Ministry of Tourism. Head Strategic Area Development Center, RIDA, will be secretary. The day-to-day responsibility for the Environmental and Social Management Framework (ESMF) implementation, and for the environmental and social safeguard performance of the Project, is under RIDA. RIDA is the focal point for all matters relating to environment and social safeguards during the implementation of the Project. 5 2.0 OVERVIEW OF THE ESMF This document presents the ESMF for the Project. It is meant to provide guidance to RIDA (or Badan Pengembangan Infrastruktur Wilayah, BPIW) for the incorporation of the requirements of the World Bank safeguards policies and Indonesian environmental and social laws and regulations in the activities that are proposed to be financed under the Project. It also provides guidance for training and other capacity-building activities to strengthen Project implementing units/agencies at the central and destination level. The application of the ESMF varies by component and type of activity. Applicable to all components are: a description of the environmental, cultural and social characteristics of the three priority tourism destinations; a summary of the potential positive and negative impacts of the four project components, and typical mitigation measures for them; a summary of relevant World Bank Operational Policies (OPs) and Indonesian legislation and regulations, accompanied by a gap analysis; institutional arrangements for implementing the ESMF and recommendations for necessary capacity building; a grievance redress mechanism; requirements for disclosure and stakeholder consultation; and a procedure for monitoring, evaluating, and reporting on ESMF implementation and effectiveness. For Component 1, the ESMF includes: • A screening procedure for determining the appropriate environmental and social safeguards instrument for any proposed investment, based on scale and risk, and in accordance with World Bank safeguards policies and Indonesian environmental and social laws and regulations; • Guidance for preparation of instruments, in the form of procedures, frameworks, and annexes containing formats and templates; • Guidance for implementation of safeguards instruments; and • Arrangements for monitoring and enforcing implementation. For Component 2, the ESMF describes opportunities to enhance environmental and social outcomes of tourism development through inclusion of environmental awareness in programs to upgrade the skills of job-seekers (technical and vocational education and training, TVET), tourism workers/professionals (upskilling) and their trainers/teachers as well as business owners of tourism firms. It also identified opportunities to enhance social outcomes through ensuring sufficient IPs will be included in community satisfaction surveys, so that their satisfaction can be monitored as well. The training can include relevant aspects of World Bank Group Environmental, Health and Safety Guidelines (EHS Guidelines), including the industry sector guidelines for tourism and hospitality development.1 For Component 3, the ESMF describes the need for awareness raising amongst investors on relevant aspects of EHS Guidelines, including industry sector guidelines for tourism and hospitality development. While experience in Indonesia shows that significant licensing simplification opportunities are possible by reducing/making more efficient the administrative processing (e.g. parallel processing, online submission), without the removal of any of the requirements that safeguard environmental and social risks, there is the risk that streamlining processes for establishing tourism-related industries could lead to reduced attention to impact assessment and management and possibly creating short-cuts in the permitting processes. For the activities under Component 4 (excluding the planning documents discussed below), the ESMF recognizes the contribution of the Project in strengthening environmental monitoring. For the planning documents under Component 4 a different approach is required. Its direct impacts are limited, but the plans that will be produced under it will include recommendations for developments that could have significant adverse impacts. Some of those developments will be implemented within the Project and will thus be subject to the safeguards requirements 1 www.ifc.org/ehsguidelines. 6 for Component 1 described above. Others may be implemented in the future and/or with funds external to the Project. Safeguards arrangements for Component 4 must address both sets of circumstances. • In the case of Integrated Tourism Master Plans (ITMPs), the ESMF provides for ‘upstream’ incorporation of the requirements of the World Bank’s OPs into the planning process, so that they are considered in selection of sites for various types of investments. For example, in the identification of ‘no-go zones’ based on sensitivity of natural or cultural features; and in the consultations with all stakeholders, including indigenous peoples (IPs)2 and vulnerable groups. • In the case of sectoral plans financed by the Project, the ESMF requires that outputs include a preliminary assessment of environmental and social impacts based on the World Bank safeguards policies and applicable Indonesian laws and regulations. The terms of references (TORs) for the ITMPs and sectoral master plans and other studies include the requirements specified in this ESMF. Selected TORs under Component 1 for feasibility studies (FSs) and detailed engineering designs (DEDs), all TORs for ITMPs, selected TORs for other plans, and the TOR for the Program Management Support (PMS) Consultant under Component 4 should be discussed with and approved by the Bank. 3.0 POTENTIAL ENVIRONMENTAL AND SOCIAL IMPACTS OF THE PROJECT Possible mitigation measures and environmental Potential environmental impacts assessment (EA) Instruments Component 1: Improve tourism-relevant road quality and basic services accessibility of selected destinations – physical works Positive: This component focuses on addressing existing basic services These risks can be mitigated gaps for the population of the key tourism areas and reversing by: a) environmental analysis environmental degradation. of alternatives in FSs; b) preparation of good Negative: Environmental and Social a) Risks common to most construction activities, e.g., roads, walkways, Management Plans (ESMPs);3 information centers, pipelines, water and wastewater treatment works: c) implementation of those • Loss of vegetation and topsoil from land clearing ESMPs though inclusion of • Soil erosion and stream sedimentation mitigation measures in DEDs • Dust and construction contracts • Noise and air emissions from heavy equipment incorporating EHS Guidelines; • Improper disposal of construction waste and d) providing Environmental • Spills of fuel and lubricants Code of Practice (ECOP) or • Damage to other infrastructure or physical cultural resources Standard Operation Procedures (SOPs) for other • Visual intrusion of infrastructure into natural and cultural landscapes activities for which screening b) Additional risks from construction and operation of water supply weirs and indicates that RKL and UKL stream channel stabilization are not required. • Water quality and aquatic habitat degradation caused mainly by suspended solids • Obstruction of fish movements upstream and downstream • Impacts on downstream water uses and users c) Risks from operation of public toilets • Groundwater pollution from septic tanks because of location on unsuitable soils, malfunction, or poor maintenance • Odors and health hazards caused by inadequate housekeeping 2 Indigenous Peoples (IPs), or Masyarakat Adat (Customary Communities) or Masyarakat Hukum Adat (Customary Law Communities) or “Masyarakat Tradisional� (or Traditional Communities), are three terms used interchangeably for IPs in Indonesia. IPs is used as the term to encompass all. 3 Such as Upaya Pengelolaan Lingkungan (UKL, Environmental Management Plan) and Rencana Pengelolaan Lingkungan (RKL, Environmental Management Plan), which both also cover social issues. 7 d) Additional risks from construction or expansion/upgrading and operation of waste water treatment plants • Eutrophication from nutrients in effluent • Mortality of aquatic organisms caused by low dissolved oxygen, or toxic substances introduced into the collection system • Odors caused by plant upsets e) Additional risks from operation of water treatment systems • Improper disposal of sludge and backwash water • Exposure of workers and community members to water treatment chemicals during delivery and use f) Additional risks from construction and operation of solid waste collection and disposal facilities • Groundwater contamination by leachate because of location on unsuitable soils or ineffective lining and leachate collection • Surface water pollution from contaminated runoff or uncollected or inadequately treated leachate • Smoke and fire During implementation, • Vermin and disease vectors mitigation measures can be g) Conversion of productive agricultural land to non-agricultural use better monitored through h) Workplace and health and safety risks supervision and enforcement • Injuries and falls from not using proper personal protective equipment by EHS supervision personnel, (PPE) protection while carrying out construction activities. including attention to provision • Risk to surrounding communities for not providing enough barricades and use of PPE and use of or hazards signage to inform the boundary project area risks during signage and barricades at on-going construction activities. locations of hazards. • Improper disposal of construction wastes and waste from worker’s camp as some contractors do not provide proper portable toilets and good housekeeping practices. Component 1: Improve tourism-relevant road quality and basic services accessibility of selected destinations – DEDs and FSs Positive: The studies provided opportunities to improve environmental TORs for FSs will require outcomes of investments provided. analysis of alternatives, where appropriate, and comparison of Negative: The studies themselves will not have direct negative impacts. alternatives on environmental grounds. DEDs will incorporate design-related mitigation measures from UKL, RKL, ECOPs or SOP and will be consistent with EHS Guidelines. Component 2: Promote local participation in the tourism economy Positive: Opportunity to enhance impact management in tourism sector. Environmental awareness to be included in relevant training, Negative: Population increase will impact on the additional land needs and including relevant aspects of potentially cause environmental damage. EHS Guidelines, including the industry sector guidelines for tourism and hospitality development. Local capacity to monitor and manage social and environmental impacts including those of induced development will be enhanced under Component 4. Component 3: Enhance the enabling environment for private investment and business entry in tourism Positive: The component can provide an opportunity to strengthen the Use relevant aspects of EHS consideration given to EHS matters, particularly workplace health and safety Guidelines in formulating and waste management. guidance to business license applicants and Negative: Simplification of the business licensing process, including for reviewers/approvers. environmental permits, could be misinterpreted as providing short-cuts that impede adequate review prior to approval, with the result that insufficient attention would be paid to EHS issues when new businesses are established. 8 Component 4: Increase institutional capacity to facilitate integrated and sustainable tourism development - environmental and social monitoring Positive: The Project will be measuring the periodic Sustainable Tourism No mitigation needed. Observatory (STO), or equivalent, monitoring reports published based on pre-agreed geographic scope of tourism development areas and list of key ‘sustainable tourism’ indicators. Negative: None anticipated. Component 4: Increase institutional capacity to facilitate integrated and sustainable tourism development – Integrated Tourism Master Plans (ITMPs) Positive: The ITMPs are developed to avoid one of the negative impacts of World Bank safeguards unintegrated tourism development, which is that increased tourism can policies and EHS Guidelines degrade the environmental, cultural and social resources on which tourism are incorporated in the ITMP depends if necessary preventative infrastructure and management terms of reference. ITMPs will arrangements are not put in place. ITMPs will provide assessment by pre- include: screening potential activities and associated impacts that would be well • Recommendations for identified in the planning process. ITMPs will help to inform all stakeholders capacity-building to and provide a vehicle for consultation to obtain stakeholder concerns and enhance plan aspirations. They will minimize uncertainty and lack of transparency. The implementation ITMP will also identify the priority programs needed to strengthen tourism • Articulation of activities at the local level and provide detailed recommendations for the environmental, social, socio- preparation and revision of local and provincial spatial plans and sectoral economic, and cultural master plans (if necessary). The in-depth analysis and stakeholder heritage opportunities and engagement in the ITMP will incorporate a bottom-up approach that was constraints; lacking in previous spatial analysis conducted in the priority tourism • Preparation of growth destinations. The ITMP is thus conceived as a coordination platform for the projections and development of the tourism destination and as the instrument that will pave development scenarios; the way for effective and sustainable tourism development. • Detailing of the preferred development scenario; Negative: The ITMPs may not be implemented at the desired standard, • Formulation of the which would limit their effectiveness as guides for sustainable tourism integrated tourism master development. Facilities constructed upon the recommendation of the ITMPs plan; and may have indirect or induced adverse impacts or cumulative impacts either • Ensure active stakeholder not foreseen, not effectively managed, or both. Unplanned development engagement. induced by the provision of tourism facilities is a common example; it can create traffic congestion, generate effluents or solid waste that are not properly managed, and affect visual amenity. Other examples of potential adverse impacts include: depletion of sensitive natural resources upon which tourism often depends; poor maintenance of the facilities after completion of construction, lack of operating budget and capable human resources to manage the facilities and monitor and manage their environmental and social impacts. Component 4: Increase institutional capacity to facilitate integrated and sustainable tourism development – Downstream sectoral plans Positive: By minimizing the risk of poor planning, the financing of Capacity building and joint downstream sectoral master plans helps to integrate international standards training program for the for sustainability in tourism development. This also provides the necessary institutions responsible. risk assessment on the potential environmental and social constraints and benefits and helps to advise the government on the latest techniques and methods for sustainable development, such as improved building materials or ways to incorporate climate resilience in infrastructure, especially in sensitive and vulnerable tourism destinations. Negative: The sectoral master plans may not be implemented at the desired standard, which would limit their effectiveness. Facilities constructed upon the recommendation of the sectoral master plans may have indirect or induced adverse impacts or cumulative impacts either not foreseen, not effectively managed, or both. Unplanned development induced by the provision of facilities is a common example; it can create traffic congestion, generate effluents or solid waste that are not properly managed, and affect visual amenity. Other examples of potential adverse impacts include: depletion of natural resources upon which tourism often depends; poor maintenance of the facilities after completion of construction, lack of operating budget and capable human resources to manage the facilities and monitor and manage their environmental and social impacts. 9 In some regions, the capacity of the preparers of Analisis Mengenai Dampak Lingkungan (AMDAL, Environmental Impact Assessment) and Upaya Pengelolaan Lingkungan Hidup- Upaya Pemantauan Lingkungan Hidup (UKL-UPL, Environmental Management Plan-Environmental Monitoring Plan) may be inadequate, as may that of reviewers and enforcement officers in the local government environment agencies, to ensure that all necessary mitigation actions are included in the environmental management plans and are properly implemented by the contractors. Component 4: Increase institutional capacity to facilitate integrated and sustainable tourism development – Program Management Support Positive: The PMS Consultant will provide better solutions and incorporate No mitigation needed. better efficiency in delivering the necessary key deliverables for the Program. It also will improve the risk assessment and mitigation measures for investments supported by the Program. It will eventually increase the quality and quantity of the deliverables for sustainable tourism development through central-local government coordination and public-private coordination Negative: None anticipated Possible mitigation measures and social Potential social impacts safeguards instruments Component 1: Improve tourism-relevant road quality and basic services accessibility of selected destinations – physical works Positive: • The subproject proponents should include social a. Local communities and visitors will have improved impact assessment in the Environmental and quality of roads and improved access to public Social Impact Assessment (ESIA) or UKL-UPL; transport facilities, parks, basic services and and develop a social management plan in the infrastructure that will lead to better health ESMP or in the UKL-UPL to address the conditions, reduced expenditures for transport, identified potential adverse social impacts. better living conditions and environmental quality, • Mitigation measures to address potential adverse increased convenience, increased economic and social impacts during construction should be social productivity; included in the bidding document and contracts b. Increased attractiveness of tourist destinations may for physical works, so that the costs for the lead to an expansion in tourism-related activities in mitigation measures will be part of the overall the area, which could socially and economically contract amount. benefit the local community (including IPs) and the • For land acquisition issues, land could be local government. obtained by the subproject proponents either through willing-buyer-willing seller (WBWS) Negative: and/or through eminent domain principles, in a. Temporary disturbance during construction: health which both Law 2/2012 and its implementing impacts of dust, disruption of local economic and regulations and OP 4.12 apply. social activities, limited access to particular areas, • The RIDA (with the assistance of the PMS temporary limited access to basic services (for Consultant) as the executing agency will monitor instance disruption of the existing water supply the implementation of the WBWS; subproject availability to households during the expansion of proponents will document the process of WBWS. the water supply pipes); • Subproject proponents who will acquire the b. Land acquisition for the expansion and/or newly built needed land with the eminent domain principle infrastructure and facilities and/or for the access will prepare a Land Acquisition and Resettlement road to the newly built infrastructure and facilities; Action Plan (LARAP) in compliance with the Land c. Improved access to IPs’ natural and cultural Acquisition and Resettlement Policy Framework resources may lead to the unsustainable (LARPF) in this ESMF. commercialization of these assets without benefitting • The proponents of subprojects affecting IPs the IPs and may degrade their quality and ultimately (positively or negatively) will screen and prepare could lose the attractiveness for tourism; a Social Assessment and Indigenous Peoples d. Conversion of agricultural land to non-agricultural Plan (IPP) in accordance with the Indigenous land which may lead to unemployment for the Peoples Planning Framework (IPPF) in this farmers and labor farmers, which could increase ESMF. social conflict; • Potential conversion of agricultural land, e. Induced impacts such as the mushrooming of especially irrigated agricultural land, into non- informal settlements and small businesses in the agricultural land will be avoided or minimized surrounding of the tourist cluster destination due to through the ITMPs; similarly, induced the increased attractiveness of the area with better development such as the growing informal infrastructure and basic services. 10 settlements and small businesses will be address through the ITMPs. Component 1: Improve tourism-relevant road quality and basic services accessibility of selected destinations – DEDs and FSs Positive: The Feasibility studies (FSs) and detailed Terms of Reference for FS must: cover the engineering designs (DEDs) for physical investments identification and assessment of potential social under Component 1 provide opportunities to identify, impacts and need for land acquisition and/or avoid and/or minimize potential adverse social impacts resettlement; provide alternatives to avoid and/or and potential needs of land acquisition and/or minimize such impacts and need for land acquisition resettlement that entail from the physical investments. and/or resettlement; and include estimated costs to The DEDs could provide inputs to the refinement of address such impacts and land acquisition/ the social safeguards instruments (LARAP and/or IPP) resettlement as part of the subproject costs that as results of technical designs that optimize technical, define the social and economic feasibility of the construction methodology, costs, and risks. proposed subproject. Terms of Reference of DEDs should consider the Negative: If the social issues are not considered in the ESIA or UKL-UPL, and/or LARAP, IPP’s FSs and DEDs, implementation of physical recommendations to address social impacts and to investments may involve social impacts and risks. avoid and/or mitigate land acquisition and/or affect to IPs. Recommendations of the DEDs to be implemented during constructions should be implemented through the bidding documents and contracts for the civil works. Component 2: Promote local participation in the tourism economy Positive: Local community members improve their The program should prioritize strengthening local workforce skills for jobs in the tourism economy and training providers, monitoring community satisfaction local firms improve their services and quality with access to training programs, and—based on standards, which ultimately could lead to the increased that feedback—explore ways to ensure equal opportunities or access to gaining better employment opportunities to participate in the training. and/or better income. Community empowerment and awareness programs In preparing training materials, the government will and participation in these in the three destinations. incorporate local context and values into them, where relevant. Negative: a. There could be bias in those who will be able to take Social outcomes can be strengthened through the training (no equal opportunities for men and ensuring sufficient IPs will be included in community women, for small-scale informal tourist-related satisfaction surveys, so that their satisfaction with operators and large-scale formal operators, for community empowerment programs can be members of local community and for outsiders; for monitored as well. vulnerable peoples and for IPs; etc.) b. Training materials may not consider the local context and values while offering international standards and quality. Component 3: Enhance the enabling environment for private investment and business entry in tourism Positive: Enhancing the enabling environment for When advising and assisting local governments in private investment and business entry will provide simplifying the requirements and procedures for reduce costs and increase opportunities for new firms business entry and licensing, this will include and the expansion of existing firms. recommendations on: • Transparent procedures, requirements and costs Negative: Small, local firms might have less access to for business licensing in the tourism sector; government officials and be less aware of reforms, • Communication to the public on the simplification and therefore may not consider the possible benefits of procedures, requirements and related costs of the reforms for them. through appropriate media (websites, media, brochures, etc.); • Easy access to process the licensing; and • Complaint handling systems at the subnational levels. Component 4: Increase institutional capacity to facilitate integrated and sustainable tourism development - environmental and social monitoring Positive: The Project will be measuring the periodic No mitigation needed. Sustainable Tourism Observatory (STO), or equivalent, monitoring reports published based on pre- agreed geographic scope of tourism development areas and list of key ‘sustainable tourism’ indicators. Negative: None anticipated. 11 Component 4: Increase institutional capacity to facilitate integrated and sustainable tourism development – Integrated Tourism Master Plans (ITMPs) Positive: The ITMP is a planning tool that will include The TOR for the ITMP includes among others, the consideration of social issues, land acquisition and IPs requirements as follows (Appendix 1): while it integrates multi-sector activities in each of the • Preparation of the ITMP at all stages must be tourist destinations. The ITMP will promote tourism participatory and inclusive whereby all concerned development that can avoid and/or minimize potential parties are invited and participated. The adverse impacts on social assets, values and cultural Consultant should develop a stakeholders’ resources on which tourism depends. It will carry out engagement plan for the preparation of the ITMP. assessment by pre-screening potential activities and In areas where local/traditional community and associated social impacts and provide scenarios for IPs are present and affected within the boundary spatial development for avoiding and/or minimizing of ITMP areas (especially in the DDP areas), impacts and risks. It will also provide guidance to engage them in local languages. Include a wide stakeholders who will implement the recommended range of community/IPs leaders. Where those physical investments on the scope and how to prepare communities consist of IPs, communities should safeguards instruments to address potential social have the opportunity to give or decline for the issues, to carry out land acquisition and/or involuntary land taking, from access restriction resettlement and manage the affected IPs. ITMPs will and/or from the use of their assets, cultural help inform all stakeholders and provide a vehicle for heritage and values through a free, prior and consultation to understand their concerns, obtain informed consultations (FPIC) that lead to broad insight on their aspirations and seek their advice to community support to tourism-related avoid and/or minimize potential adverse social impacts development. and risks. The ITMPs will also identify the priority • Areas that are identified as having land legacy programs needed to strengthen tourism activities at issues will be assessed further through a rapid the local level and provide detailed recommendations assessment to be carried out by the ITMP for the preparation and revision of local and provincial Consultant. Land legacy issues can be spatial plans and sectoral master plans (if necessary). considered as constraints for further development The in-depth analysis and stakeholder engagement in of the affected area, until the issues are resolved the ITMPs preparation and implementation will or if there is a clear plan to resolve the issue (with incorporate a bottom-up approach that was lacking in monitoring milestones and clear timeline). The previous spatial analysis conducted in the priority potential risks, opportunities and solution of this tourism destinations. The ITMPs are thus conceived issue will be considered in the development as a coordination platform for the development of the scenarios, possibly with a later development tourism destination and as the instrument that will phase to be implemented depending on the pave the way for effective and sustainable tourism assessment of the ITMP Consultant and development. agreement between the RIDA and the Bank. Detail on how to address legacy issues are Negative: The ITMPs may not be implemented at the presented in the LARPF of this ESMF. desired standard, which would limit their effectiveness as guides for sustainable tourism development. Facilities constructed upon the recommendation of the ITMPs may have indirect or induced adverse impacts or cumulative impacts either not foreseen, not effectively managed, or both. Unplanned development induced by the provision of tourism facilities is a common example. Local communities can be ‘left behind’ when it comes to the benefits of tourism and their ability to participate effectively in its development. Tourism development may affect their traditions and cultures. Loss of land, loss of access to customary resources or sources of livelihood, and impacts on the integrity of local culture are also potential negative effects. Some visitors will engage in anti-social behavior, such as drug and alcohol abuse and sex tourism. Component 4: Increase institutional capacity to facilitate integrated and sustainable tourism development – Downstream sectoral plans Positive: By minimizing the risk of poor planning, the The TOR for the preparation of the sectoral master financing of downstream sectoral master plans helps plans should include social issues, concerns and to integrate international standards for sustainability in assess potential adverse social impacts and need tourism development and provides an opportunity for for land acquisition and/or resettlement and potential inclusive basic services and infrastructure. This also impacts on IPs of the physical investments provides the necessary risk assessment on the recommended by the plans if they are implemented potential social constraints and benefits and helps to in the future. In addition, the TORs should include advise the government on the latest techniques and the preparation of specific guidance for preparing methods for sustainable development, such as design ESIA, UKL-UPL, FS, DED, LARAP and IPP to the basic services and infrastructure for vulnerable assess social impacts, potential land acquisition 12 peoples including the disabled, women and the and/or resettlement and impact on IPs, and develop poorest which tailored to local culture and practices. mitigation measures. Guidance for preparing the All community members should have the same access LARAP and IPP should follow the LARPF and IPPF to basic services and infrastructure and affordable to in this ESMF. all. Negative: The sectoral master plans may not be prepared based on inclusivity for all community members including vulnerable groups and may not be implemented at the desired standard, which would limit their effectiveness. Facilities and basic service infrastructure constructed upon the recommendation of the sectoral master plans may require land acquisition and/or resettlement, and may affect the IPs. Local communities including IPs or a segment of population can be ‘left behind’ when it comes to the benefits of improved services. Component 4: Increase institutional capacity to facilitate integrated and sustainable tourism development – Program Management Support Positive: One of the tasks of the Program The terms of reference for the PMS should include Management Support (PMS) Consultants’ Services is (a) clear scope of the tasks in environmental and to ensure that the Project will implement the ESMF social safeguards management; (b) preparation of consistently throughout Project implementation. social-related practical guidelines for the subproject proponent/local governments such as stakeholders’ Negative: Risks of inadequate support from the social engagement, livelihood restorations, implementation and resettlement experts in the PMS consultant team of FPIC, etc.; (c) providing assistance and training to and unclear scope of tasks, responsibilities and subproject proponents/local governments; (d) deliverables related to social issues and land assisting RIDA in reviewing social safeguards acquisition and/or resettlement. instruments; (e) monitoring and evaluating the implementation of safeguards instruments; (f) managing the grievance redress mechanism (GRM); etc. The TOR also includes the need for a social/cultural expert and resettlement specialist with specific qualifications. 4.0 COMPARISON OF WORLD BANK SAFEGUARDS POLICIES AND INDONESIAN LAWS AND REGULATIONS The activities in the Project need to comply with both Indonesian laws and regulations and World Bank safeguards policies. The goal is that all safeguards documents will be compliant with Indonesian laws and regulations as well as the World Bank safeguards policies as indicated in the ESMF. The ESMF provides a comparison of Indonesian and World Bank safeguards policies focusing only on the World Bank policies that might be relevant for the types of activities the Project will support. Many of the differences are related to the implementation of Indonesian laws and regulations in the preparation of UKL-UPL and AMDAL and the limited technical and institutional capacity to prepare and implement UKL-UPL and AMDAL. Table 9 in the ESMF identifies measures to address World Bank safeguards policy requirements that are not covered by Indonesia laws or regulations and their implementation. The Project triggers several World Bank Safeguard policies including OP 4.01 on Environment Assessment, OP 4.04 on Natural Habitats, OP 4.11 on Physical Cultural Resources, OP 4.36 on Forest, OP 4.12 on Involuntary Resettlement, and OP 4.10 on Indigenous Peoples. 5.0 APPLYING WORLD BANK ENVIRONMENTAL AND SOCIAL POLICIES AND GOVERNMENT REGULATIONS IN COMPONENTS 1, 2, 3 AND 4 (EXCLUDING ITMPS AND OTHER PLANS) The ESMF implementation process for components other than the ITMPs and other plans of Component 4 consists of: screening of proposed investments, preparation of safeguards instruments, review and approval, implementation of the instruments, and monitoring and enforcement. 13 Screening. The activities financed under Components 2, 3 and 4 of the Project are unlikely to have adverse environmental or social impacts and will not require formal screening. However, training administered under Component 2, where relevant, will include basic environmental awareness, including relevant aspects of EHS Guidelines, including the industry sector guidelines for tourism and hospitality development. Businesses that emerge in the future because of Component 3 could have adverse impacts, but these cannot be foreseen and will not be directly related to the Project. To improve environmental outcomes, however, Component 3 will include awareness raising of the EHS Guidelines, including the industry sector guidelines for tourism and hospitality development.4 Investments proposed for support under Component 1 will undergo environmental and social screening in a three-stage process: (a) eliminating proposed investments that would contravene prohibitions in Indonesian law and regulations or Bank OPs; (b) screening based on physical thresholds established by Indonesian regulations; and (c) screening based on the risks and potential environmental and social impacts in accordance with World Bank OPs. The outcome of the third stage will be a determination of which environmental assessment category applies – Category A requiring a full ESIA, Category B requiring an ESMP or another less intensive study and instrument, or Category C for sub-projects with minimal impacts for which no safeguards instrument is required. The outcome of this three-stage screening process will determine eligible sub-projects and the appropriate environmental management instrument to be used for each sub-project. Screening will consider associated activities and ancillary facilities. The physical thresholds are established by Ministry of Environment and Forestry (MoEF) for activities that would require AMDAL, or full ESIA, and by the MPWH for activities below the AMDAL threshold that would require UKL-UPL, or ESMP. Below the ESMP threshold, some investments may require SOPs, and some may not require any further safeguards work. Prospective investments will also be examined to determine whether a Land Acquisition and Resettlement Plan (LARAP) or an Indigenous Peoples Plan (IPP) is needed. The ESMF contains frameworks to guide the preparation of LARAP and IPP, and a screening checklist for investments. With the assistance of the PMS Consultant, RIDA will review all screening results and indicate either that it concurs with the screening conclusion or has advised the implementing entity to reconsider the screening. Preparation of Safeguards Instruments. The entity that will implement the proposed investment will prepare the required environmental management instrument (UKL-UPL or AMDAL) based on the result of the screening process and on the DED of the subproject. If the screening process concludes that a SOP is sufficient, the implementing entity will obtain the appropriate SOP from RIDA, which will prepare and issue all SOPs with the assistance of the Project Management Support Consultant. The implementing entity will prepare and submit an Statement Letter for Environmental Management and Monitoring (Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup, SPPL) containing its commitment to monitor and manage environmental and social impacts of the investments that are subject to SOP. The preparation of UKL-UPL and AMDAL documents must be in accordance to the Regulation of the Minister of Environment No.16 of 2012 concerning the Guidelines for Preparation of Environmental Document and World Bank OP 4.01. Templates for all of the environmental and social impact management instruments are provided in appendices. It is the intent of the ESMF that a single instrument will meet both Bank and Indonesian requirements, and that whichever requirement is more stringent will apply. Implementation and Monitoring of Safeguards Instruments. Measures in the ESMPs become part of the contract agreement to be signed by the implementing entity and the contractor, and must be supervised by a supervision consultant. A sample of general clauses 4 www.ifc.org/ehsguidelines. 14 for the agreement with the contractor is presented in the ESMF. If subprojects are screened as Category A, independent supervision will be required as part of the ESMP. During its supervision activities, RIDA will review plans, studies, designs, and any UKL-UPL (or AMDALs) prepared under the Project to confirm that the requirements of the ESMF are being adequately incorporated. In the case of physical investments for which DEDs were prepared under the Project, RIDA supervision will include confirmation that the required UKL- UPL (or AMDAL), LARAP, and IPP have been prepared and approved and are of adequate quality. Preparation of safeguards instruments and direct supervision of construction and operation of the physical investments financed by the Project, including compliance with the safeguards instruments, will be the responsibility of the implementing entity but will be monitored by RIDA. Every six months, RIDA will prepare reports for the Steering Committee and the World Bank on ESMF implementation. The World Bank will review and provide comments and technical advice on the issues included in the reports. RIDA will immediately inform the Steering Committee and the World Bank Task Team of any circumstance or occurrence that could have a materially adverse impact on the environmental and social performance of the Project. In addition, Component 4 will finance activities for stronger environmental and social monitoring capacity in the destinations. 6.0 INCORPORATING ENVIRONMENTAL AND SOCIAL CONSIDERATIONS BASED ON BANK OPS INTO THE ITMPS AND OTHER PLANS OF COMPONENT 4 Because ITMPs, consisting of an overall development plan for the entire tourism destination area and detailed development plans (DDPs) for existing and selected future key tourism areas within the tourism destination area (Appendix 1), will include recommendations for infrastructure investments with the potential for adverse impacts, impact avoidance and mitigation should be part of the planning processes. This will be accomplished by incorporating the requirements of Bank safeguards policies requirements upstream, where they have maximum potential to prevent adverse impacts, in contrast to downstream when plans are fixed and designs are proceeding, and the focus of safeguards shifts to mitigation. The ITMP’s DDPs will provide dedicated planning guidelines to manage and control development. Planners will use the relevant sections of the EHS Guidelines. Elements of DDPs based on the application of the safeguards policies as identified in ESMF will include: • Environmental protection guidelines to protect and restore natural areas; • Cultural, religious, historic and archeological guidelines to protect valued features; • Visitor Management/Crowd Control Plans for tourism sites with limited carrying capacity such as temples, heritage sites and cultural villages; • Proposed institutional arrangements to monitor the condition of natural, social and cultural assets and to implement the plans for their protection; • Assessment of environmental, social (including IPs) and cultural heritage impacts related to the preferred development scenario at an appropriate scale and level of detail, taking into account cumulative, indirect and induced impacts and impacts of associated facilities, and prepare a high-level mitigation and monitoring plans; • Social Management Guidelines to avoid, or minimize potential social conflicts or adverse impacts due to the implementation of the development plan; • Identify and discuss land acquisition and tenure issues related to the preferred development scenario; and provide guidance (in compliance with the LARPF) for the implementing stakeholders to prepare LARAP in case there is a potential involuntary land acquisition and resettlement; • Indigenous Peoples Planning Framework to guide stakeholders in implementing the development plan in case that activities potentially affect IPs. 15 7.0 INSTITUTIONAL CAPACITY REQUIREMENTS The outputs/outcomes from the Project activities, if and when implemented, may have a wide range of potential environmental and social impacts. MPWH as the Executing Agency is a well-established government agency with a growing and substantial workforce from different areas of expertise. Among these areas of expertise are Architecture, Engineering, Regional and Urban Planning, Environmental Engineering, Anthropology, Law, and Economics. However, the RIDA as the Project Executing Agency requires the capacity of experts from other fields not currently employed by RIDA. To support such activities, RIDA’s core team will be strengthened by additional civil servants or individual consultants and supported by the PMS Consultant. In addition, RIDA is considering to establish, through the Work Unit of the Strategic Area Development Center, a Technical Expert Team consisting of experts from several areas of expertise stipulated through Decree (SK), especially related to environmental and social aspects. 8.0 CAPACITY BUILDING PROGRAM The Project will finance the PMS Consultant for RIDA, for which the TOR includes Tourism Development Program planning, budgeting, quality control, monitoring, reporting, and coordination to ensure that the Project is in line with its objectives and in accordance with the loan agreement. The duties for the PMS Consultant include: a) Providing overall Program management assistance; b) Coordinating Program activities; c) Creating synergies among all stakeholders; d) Ensuring accountability in the management, monitoring and financial reporting of the program; e) Assisting in the preparation of the program’s consolidated annual spending proposal; f) Building a Transparent Information Management System for Tourism Development; g) Ensuring the application of the ESMF; h) Ensuring the active participation of local communities; i) Encouraging appropriate spatial planning practices in accordance with the ITMP; j) Capacity building at the tourism destination level for monitoring and conservation of natural and cultural assets essential to tourism; k) Ensuring proper handling and resolution of complaints; l) Ensuring adequate capacity of all Program stakeholders; m) Ensuring timely delivery of reports and ensuring the presentation of relevant documents. 9.0 BUDGET FOR IMPLEMENTING THE ESMF The activities and capacities needed to address the safeguards aspects of the Project as described in the ESMF, including the capability building and staffing for safeguards are incorporated into the Project activities and TORs of the activities financed under the Project themselves and therefore there is no need for a separate ESMF implementation budget. For instance, the RIDA will allocate sufficient budget (through government co-financing) for training costs. The costs related to the preparation and implementation of sub-project safeguards instruments are financed separately, through APBN, APBDI, APBDII and the IBRD loan.5 Eligible expenditures under Component 1 of the Project include DEDs and FSs and includes related safeguards instruments. The costs related to STOs, or equivalent bodies, for environmental, social and cultural monitoring are covered under the Ministry of Tourism budget and enhanced through Project financing (Component 4). The scope of the ITMP and sectoral 5 APBN - Anggaran Pendapatan dan Belanja Negara Indonesia (State Expenditure Budget); APBDI - Anggaran Pendapatan dan Belanja Provinsi (Regional Expenditure Budget for Provincial level); APBDII - Anggaran Pendapatan dan Belanja Daerah (Regional Expenditure Budget for District level). 16 master plans and other studies include the requirements specified in this ESMF. A significant amount of the PMS Consultants’ Services (total budget of $8,400,000 for 5 years) will specifically focus on facilitating ESMF implementation. The PMS Consultant will also cover an environmental specialist and a social specialist, both with international experience, in RIDA to provide additional capacity to provide time for RIDA to build its capacity. 10.0 MONITORING AND EVALUATION ARRANGEMENTS OF THE IMPLEMENTATION OF ESMF Monitoring and evaluation (M&E) will be conducted to ensure that tourism development proceeds in a manner that adheres to the concepts of sustainability, and in accordance with the principles of capacity management. During its supervision activities, the RIDA as the Executing Agency will review plans, studies, designs, and any UKL-UPLs (or AMDALs) prepared under the Project to confirm that the requirements of the ESMF are being adequately incorporated. In the case of physical investments for which DEDs were prepared under the Project, RIDA supervision will include confirmation that the required UKL-UPL (or AMDAL), LARAP, and IPP have been prepared and approved and are of adequate quality. Supervision of construction and operation of physical investments to ensure that the safeguards instruments are being effectively implemented. Every six months, RIDA will prepare reports for the Steering Committee and World Bank on ESMF implementation, including an assessment of ESMF effectiveness and recommendations for any necessary amendments to the ESMF. The World Bank will review and provide comments and technical advice on the issues included in the reports. RIDA will immediately inform the Steering Committee and World Bank Task Team of any circumstance or occurrence that could have a materially adverse impact on the environmental and social performance of the Project. 11.0 GRIEVANCE REDRESS MECHANISM (GRM) MPWH will establish a GRM team to receive and facilitate resolution of specific concerns of affected communities and Project participants regarding environmental and social performance. The GRM will aim to resolve concerns promptly, in an impartial, understandable and transparent process tailored to the specific community, and at no cost or without retribution to the complainant(s). GRM composition, systematic procedures, and functions are outlined in the ESMF. 12.0 PUBLIC CONSULTATION RIDA has carried out two rounds of public consultations on, first, the TOR for the ESMF (including the TOR for the ITMP Consultant) and, second, the Draft ESMF and Draft Environmental and Social Systems Assessment (ESSA) in three destinations and in Jakarta. The consultations on the TOR were carried out in Jakarta, Parapat (Lake Toba destination), Magelang (Borobudur-Yogyakarta-Prambanan destination), and in Senggigi (Lombok destination) during April 3-12, 2017. The public consultations on the Draft ESMF and Draft ESSA took place in Medan (Lake Toba destination), Mataram (Lombok destination) and Yogyakarta (Borobudur-Yogyakarta-Prambanan destination), as well as in Jakarta, during July 10-19, 2017. The same invitees of the first round of public consultations were invited for the second round with additional invitees added to the list as recommended by stakeholders who had attended the first round of consultations. In particular, RIDA invited more NGOs, including representatives from Aliansi Masyarakat Adat Nusantara (AMAN, Indigenous Peoples Alliance of the Archipelago), an NGO concerned with IPs in Indonesia. At the time of these consultations, what is now the Project was being prepared as a combination of two financing instruments: Program-for-Results Financing and Investment 17 Project Financing. The ESSA that was prepared for the Program-for-Results covered the activities that are now Components 1, 2, 3 and (part of) Component 4 of the Project, and the Draft ESMF disclosed on 22 June 2017 (and following consultations disclosed in English and Bahasa Indonesia, on RIDA’s website www.bpiw.pu.go.id on October 30, 2017) covered the technical assistance packages under Component 4, the content of which has become part of Component 4. Much of the content of the ESSA has been added to the initial ESMF that was consulted on in July 2017, and the new ESMF thus covers all four components. Since the ESSA and the initial ESMF were consulted on together, the public consultations covered the same material that is now in this ESMF, and all the issues, concerns and recommendations expressed by stakeholders have been incorporated in it. 18