e. IP :~ection Panel I THE WORLD BANK IBRD • IDA I WORLDBANKGROUP GONZALO CASTRO DE LA MATA Chairman The Inspection Panel IPN REQUEST RQ 17/02 May 31,2017 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND ALTERNATES OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Request for Inspection SERBIA: Floods Emergency Recovery Project (P152018) Notice of Non-Registration. Enclosed please find a copy of the Inspection Panel's Report entitled "SERBIA: Floods Emergency Recovery Project (P 152018) - Notice of Non-Registration, "dated May 31, 2017 and its attachments. This Memorandum was also distributed today to the President of the International Bank for Reconstruction and Development. Yours sincerely, 1818 H Street, N.W.,Washington, DC 20433 GONZALO CASTRO DE LA MATA Chairman The Inspection Panel IPN REQUEST RQ 17/02 May 31, 2017 MEMORANDUM TO THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Request for Inspection SERBIA: Floods Emergency Recovery Project (P152018) Notice of Non-Registration Enclosed please find a copy of the Inspection Panel’s Report entitled “SERBIA: Floods Emergency Recovery Project (P152018) – Notice of Non-Registration,” dated May 31, 2017 and its attachments. This Memorandum was also distributed today to the Executive Directors and the Alternates of the International Bank for Reconstruction and Development. Yours sincerely, 1818 H Street, N.W., Washington, DC 20433 • GONZALO CASTRO DE LA MATA Chairman The I nspection Panel IPN REQUEST RQ 17/02 May31,2017 MEMORANDUM TO THE EXECUTIVE DIRECTORS INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Request for Inspection SERBIA: Floods Emergency Recovery Project (PI52018) Notice of Non-Registration Summary 1. In accordance with paragraph 1 7 of the Resolution 1 establishing the Inspection Panel (the "Panel"), I hereby inform you that on January 6, 2017, the Panel received a Request for Inspection (the "Request") of the Serbia Floods Emergency Recovery Project (the "Project"), financed by an International Bank for Reconstruction and Development (IBRD) loan. The Project supports works in several priority sectors, including energy, agriculture, and flood protection, that were affected by flooding occurring in May 2014. 2. The Panel conducted extensive due diligence in line with its updated Operating Procedures.i Based on the information provided in this note, the Panel decided not to register this Request. The Project 3. The Project, supported by an IBRD loan of US$300 million, was approved on October 3,2014, and is expected to close on December 31, 2017. The loan was 64.3 percent disbursed at the time of receipt of the Request. It is a Category B Project that triggered the following safeguard policies: Environmental Assessment (OP/BP 4.01); Pest Management (OP/BP 4.09); Involuntary Resettlement (OP/BP 4.12); and Projects on International Waterways (OP/BP 7.50). 1 The W orId Bank Inspection Panel, International Bank for Reconstruction and Development, Resolution No. IBRD 93-10 (referred to as the "Resolution"). 2 Available at: http:// ewebapps.worIdbank.orglapps/ip/PanelMandateDocuments/20 14 %2OUpdated%2OOperating%2 OProcedures.pdf 1818 H Street, N.W., Washington DC 20433 -2- 4. The Project development objectives are to "(i) help restore power system capability to reliably meet domestic demand; (U) protect livelihoods of farmers in the flood affected areas; (iii) protect people and assets from floods; and (iv) improve the Borrower's capacity to respond effectively to disasters. ,,3 The Project finances works in several priority sectors that were affected by floods in May 2014 through four components, including energy sector support, agricultural sector support, flood protection, and contingent emergency response. 5. The Request specifically concerns works under Component 3 of the Project, which supports the rehabilitation offlood protection and drainage control infrastructure, and "aims to reduce imminent risk of recurring floods by restoring and/or improving the functioning of existing infrastructure. ,,4 It includes civil works and supply and installation of electrical and mechanical equipment for the rehabilitation and reconstruction of flood protection and drainage systems, including flood protection dikes/levees and retention systems, cleaning and restoration of drainage canals, and refurbishment of pump stations. It concentrates on areas known to be vulnerable and affected by flooding, in which urgent protection is required in order to reduce the risk of future flooding and further devastating social and economic impacts. The Request 6. The Panel received an initial complaint regarding the Project from a single complainant on October 28, 2016. The Panel held a phone call on November 4, 2016, to inform the complainant he need to bring the issues to Management's attention first before submitting a Request for Inspection to the Panel. The Panel referred the complainant to the Grievance Redress Service (GRS), which took on the case and issued its assessment in early December 2016. The complainant found the assessment from GRS unsatisfactory, and on January 6,2017, the Panel received a Request for Inspection with two signatures. 7. The Request raises concerns regarding the "illegal action of taking over our private properties" in the city of Novi Pazar. The Requesters claim that their lands along the Raska River have been acquired by force for the Project without any financial compensation, and that the authorities started construction activities without informing the residents. The Request states that "many honest people have experienced that their properties be plundered without compensation. " The Requesters also express concern regarding the lack of consultation and the determination of the market value for their properties. Panel's Observations and Determination 8. In accordance with its Operating Procedures, after receipt of the Request the Panel issued a Notice of Receipt on January 9, 2017, on its website.' The Panel conducted its due diligence by reviewing the information contained in the Request and Project documents. To better understand the Project and the issues raised in the Request, the Panel held several phone calls with the Requesters and met with Management on different occasions. The 3 Project Appraisal Document, para. 21, p. 6. 4 Project Appraisal Document, para. 24, p. 65. 5 http://ewebapps. worldbank.org/apps/ip/PagesN iewCase.aspx?Caseld= 123 -3- Panel stayed in close contact with both Requesters over the following weeks, and learned that one of the Requesters was mostly interested in exploring a reasonable settlement. 9. During a meeting with the Panel on February 3, 2017, Management expressed that as a result of the complaint to the Panel, it intended to work with the Government of Serbia to find a solution to the Requesters' concerns. Subsequently, the Municipality initiated a process to renegotiate the compensation amounts for expropriated lands in order to reach in-court settlements with PAPs in Novi Pazar.· The Panel continued to receive updates regarding Management's progress with the ongoing discussions between the Municipality and the affected people. The Panel held another meeting with Management on March 15, 2017, and was informed that many PAPs had expressed their intent to settle in-court. Management provided the Panel with a schedule of the court hearings with dates ranging from March to May 2017. ' 10. On March 21,2017, the one of the Requesters confirmed his intent to settle the land valuation issues in court during an upcoming hearing. On May 16, 201 7, he informed the Panel that he had accepted the in-court settlement and received the agreed compensation amount in his bank account. This Requester expressed satisfaction with the outcome of his case and explained that there was no need to pursue the case with the Panel. He reiterated the importance of a timely settlement in order to protect the PAPs' lands from floods, which according to him, occur every year. He also explained to the Panel that he believed he would benefit from the flood protection measures provided by the Project. During the past weeks, 25 of the 41 PAPs in Novi Pazar have accepted higher compensation offers as a result of renegotiations with the Municipality and have signed in-court settlements. An additional 5 PAPs have agreed to accept the revised offer and are scheduled for in-court settlement. 11. Since one of the two Requesters expressed satisfaction with this outcome and no longer wanted to pursue his case with the Panel, the request lacks the two signatures required under the Panel procedures. In light of the foregoing and in accordance with the Panel Resolution, its Clarifications, and its Operating Procedures, the Panel is not registering the Request for Inspection. 12. The Panel notes that, if new evidence becomes available, the Panel would be in a position to reassess the existence of a plausible link between a Bank-supported project and the alleged harm. Hence, in such a case, the affected people retain their right to re-submit a Request for Inspection concerning the issues raised. Yours sincerely, /~~ Gonzalo Castro de la Mata Chairman -4- Attachments Mr. Jim Yong Kim, President International Bank for Reconstruction and Development The Executive Directors and Alternates International Bank for Reconstruction and Development Landowners in the city of Novi Pazar, Serbia Attachment