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.: ISDSR8098 Date ISDS Prepared/Updated: 21-Apr-2014 Date ISDS Approved/Disclosed: 11-Feb-2014, 21-Apr-2014 I. BASIC INFORMATION 1. Basic Project Data Country: Philippines Project ID: P064925 Project Name: Support for Strategic Local Development and Investment Project (P064925) Task Team Christopher T. Pablo Leader: Estimated 15-Mar-2006 Estimated 29-Jun-2006 Appraisal Date: Board Date: Managing Unit: EASPS Lending Specific Investment Loan Instrument: Sector: General water, sanitation and flood protection sector (50%), Urban Transport (20%), Hydropower (13%), Sub-national government admini stration (9%), Housing construction (8%) Theme: Other urban development (33%), Municipal finance (33%), Decentralization (17%), Other Private Sector Development (17%) Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and Public Disclosure Copy Yes Emergencies)? Financing (in USD Million) Total Project Cost: 109.00 Total Bank Financing: 100.00 Financing Gap: 0.00 Financing Source Amount Borrower 9.00 International Bank for Reconstruction and Development 100.00 Total 109.00 Environmental F - Financial Intermediary Assessment Category: Is this a No Repeater project? 2. Current Project Development Objectives The project development objective is to improve local public service provision and management by Page 1 of 10 facilitating LGU access to viable financing to implement strategic infrastructure investments. 3. Project Description Public Disclosure Copy The project has two components: (1) Subprojects for Infrastructure and Finance Improvement (USD99 million) enables local government units (LGUs) to implement infrastructure subprojects that have been identified in development plans and multi-year investment programs as a result of CDS or similar participatory, multi-year planning exercises; and (2) LGU Capacity Building and Project Implementation Support (USD 8.0 million) provides assistance to LGUs participating in the subprojects for subproject preparation work including feasibility studies and detailed engineering design, procurement, supervision and management, and improved management and operations of municipal enterprises and services. 4. Project location and salient physical characteristics relevant to the safeguard analysis (if known) The project will finance reconstruction of municipal infrastructure of LGUs located in areas affected by the three major disasters, namely: (1) Typhoon Haiyan that hit central Philippines including Aklan, Capiz, Iloilo and Palawan, Leyte, and Samar, among others; (2) the 7.2 magnitude earthquake in the Bohol and Cebu islands; and (3) the Zamboanga City siege by separatist rebels. As a financial intermediary operation, the location and nature of the investment subprojects will be determined by the demand by disaster-affected LGUs in the aforementioned areas and LBP’s appraisal of specific LGUs’ financial creditworthiness. 5. Environmental and Social Safeguards Specialists Victoria Florian S. Lazaro (EASPS) Gerardo F. Parco (EASPS) 6. Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/ Yes The project will be funding infrastructure BP 4.01 subprojects, which will have environmental Public Disclosure Copy impacts. The nature of these impacts will depend on location, type and scale of the subprojects. In the implementation of SSLDIP, subprojects financed were typically municipal facilities such as public markets, and water supply systems, among others. An updated Integrated Environmental and Social Safeguards Framework (IESSF) will be prepared by LBP to guide subproject proponents in the screening, categorization and preparation of specific instruments of each subproject during implementation. It will also take into account lessons learned from implementing the IESSF in the original project. Natural Habitats OP/BP 4.04 Yes The IESSF screening process will be used to determine whether a subproject would significantly convert or degrade any protected areas, known natural habitats, or established or proposed critical natural habitats as defined under Page 2 of 10 the policy. These types of subprojects would be ineligible in compliance with the policy. If it is determined that a subproject will affect Public Disclosure Copy noncritical natural habitat, appropriate mitigation measures will be put in place as part of the environmental assessment (EA) for the subproject. Forests OP/BP 4.36 No The project, which will finance rehabilitation of damaged infrastructure, is not expected to finance activities that would involve significant conversion or degradation of critical forest areas as defined under the policy. Specifically, the project is not envisaged to have impact on the (1) health and quality of forests; and, (2) rights and welfare of people and their level of dependence upon or interaction with forests. It is also not envisaged to bring about changes in the management, protection, or utilization of natural forests or plantations, whether they are publicly, privately, or communally owned. Pest Management OP 4.09 No The project will not procure any pesticides nor will an increased use of pesticides result from the project. No further action is required under this policy. Physical Cultural Resources OP/ Yes The project may entail excavation, earth BP 4.11 movement and/or inundation of land areas. An assessment of physical cultural resources to be Public Disclosure Copy affected by potential subprojects will be carried out within the EA process. The updated IESSF will include Chance Find Procedures and construction contracts will have the chance find provisions. Indigenous Peoples OP/BP 4.10 Yes Most subprojects are expected to be located in urban centers, although some may be located in the periphery. Some provinces affected by the typhoon where the restructured project will operate have known indigenous peoples (IP) such as Palawan, Aklan, Zamboanga City, etc. Some subprojects maybe located in areas where these IPs are present. The updated IESSF shall include an updated IP Framework that would address IP concerns and issues during implementation of the restructured project. Involuntary Resettlement OP/BP Yes The policy is triggered because some land will be 4.12 acquired for project activities. The updated IESSF shall include a Resettlement and Compensation Page 3 of 10 Framework that would provide the procedures and guidelines for the compensation of lost assets and assistance to at least restore to pre-project Public Disclosure Copy level, the economic condition of persons affected by subprojects under SSLDIP. Safety of Dams OP/BP 4.37 Yes Under the original project, a mini-hydropower subproject in the Municipality of Cantilan is being financed. Requirements under the policy have been adequately addressed in this subproject. Generic dam safety measures were prepared by qualified engineers as required under the policy. The structure and design of the dam have been verified by the team and found to be generally acceptable. Two specific recommendations have been communicated by the team to the project proponents. The Safeguards Action Plan includes specific and time bound activities to ensure that these recommendations are complied with. The restructured project has specifically excluded the financing of any additional dam subprojects due to the limited time and available resources. The screening process of the IESSF will therefore screen out activities involving construction, repair and rehabilitation of dams. Projects on International No N/A Waterways OP/BP 7.50 Public Disclosure Copy 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: There are currently 78 subprojects funded by the project. The cost of each subproject ranges from Php 18 to 190 million (USD 400 thousand to 4.2 million). These subprojects include public markets, water supply systems, and sports centers, among others, which have localized and short- term impacts. There are no potential large scale, significant or irreversible impacts expected as a result of the implementation of the restructured project. The safeguards issues faced so far by the project relate to (1) application of OP 4.37 (Dam Safety) and OP 4.10 (Indigenous Peoples); and (2) right of way (ROW) acquisition involving a large water supply project. The two safeguards policies (OP 4.37 - Dam Safety and OP 4.10 - Indigenous Peoples) were not triggered for the parent project. The ISDS and the IESSF of the parent project were also not disclosed in InfoShop. OP 4.37 Dam Safety and OP 4.10 Indigenous Peoples are now being triggered because the Land Bank of the Philippines (LBP), the implementing agency, funded the Sipangpang mini- Page 4 of 10 hydropower development subproject (located in Cantilan, Surigao del Sur) that involves construction of a small dam and is located in an IP area. The team closely monitored the subproject and visited the site four times; the latest in November 2013 when the Task Team Public Disclosure Copy carried out due diligence of this subproject. The Task Team verified that the subproject generally complies with the Bank dam safety policy. The Team advised LBP to require the local government unit (LGU) of Cantilan, the subproject owner, to post an engineer from the design consultant onsite who will ensure construction quality and supervise adjustments to the design. This subproject is now nearing completion and the LBP has instructed its project implementation consultant (PIC) to continue to monitor the dam construction and ensure that the design requirements are being met. On presence of and impacts on IPs in the project area, the prescribed processes were carried out by LBP, including the requirement to secure clearance from the National Commission on Indigenous Peoples (NCIP), as well as free and prior informed consent from the affected IP community for the subproject to proceed. The regional office of the NCIP has endorsed the clearance to its head office and the formal clearance is expected soon. The consent by the IP community is embodied in a Memorandum of Agreement between the LGU, the NCIP and the tribal community in the area. The Team further found that (a) extensive consultations were carried out by the LGU and the NCIP during project preparation in 2004-2005, which resulted in the IP granting its Free and Prior Informed Consent; (b) six IP coordinators were hired by the LGU to be part of the Project Management Unit and were paid a small honorarium. The coordinators represent the IP community in the project as well as in the water management program of the LGU, particularly in the regulation of logging and harvesting of forest products; (c) at least 80 percent of the workers are members of the IP residing in the municipality; and (d) interviews with women and the elderly reveal that the project has resulted in better access of the IP community to health and welfare activities of the LGU. A number of subprojects involved ROW acquisition that resulted in voluntary sale of the required ROW. One large subproject, the Iligan water supply subproject, involves ROW acquisition Public Disclosure Copy through expropriation. Due diligence was carried out. The Task Team reviewed the land acquisition and compensation documents, and visited the project site during several supervision missions during 2011-2013, and was an observer in series of consultations between the LGU and landowner to agree on compensation for property affected by the laying of water pipes and the construction of water impounding facilities. These consultations did not result in an agreed compensation package. Thus, the LGU initiated expropriation with the courts as a last resort as prescribed by the Resettlement and Compensation Framework that was prepared in fulfillment of the requirements for OP 4.12 Involuntary Resettlement. Furthermore, the Team communicated to the LBP the need to continuously monitor the expropriation proceedings. The Task Team has documented these Safeguards issues, the required actions and recommendations to address these issues, as well as updates on key actions in project documents including project monitoring reports, Aide Memoires and back-to-office reports, among others. Under the restructuring, investments in disaster-hit areas will be eligible for financing. The project will support investments of varying sizes. The impacts of the restructured project are expected to be localized and short term. And these temporary impacts will be minimized by proper planning, application of preventive measures, and mitigated by corrective actions in the Environmental Management Plans of each subproject. Page 5 of 10 A list of negative activities specific to disaster situations will be included in the updated IESSF. Subprojects involving dam construction would not be eligible for financing under the restructured Public Disclosure Copy project. This is due to the limited funding and time available under the restructured project, which will not allow enrolment of such subprojects th at normally entail large funding requirement and long preparation and implementation timetables. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: The conditions in the typhoon-ravaged area are generally degraded. Vegetation has been stripped, debris has been left uncollected and water and sanitation services are not fully restored. The impact of the projects activities will be generally positive by providing access to basic services. No negative, long term impacts are expected. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. The subproject approval process incorporates the consideration of project alternatives. This process is conducted prior to the finalization of project design to ensure that adverse impacts are avoided or minimized. 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. This project adopts an open-menu approach to the provision of financing subprojects of LGUs and local service providers. With this approach, the safeguards instrument of the project is the IESSF. In the IESSF, the sub-borrowers (LGUs or private sector participating entities) are responsible for the implementation of the Environmental Assessment and Social Assessment that are required by the Philippine regulatory framework and World Bank safeguards policies. The sub-borrowers would need to obtain the necessary clearances as defined in the IESSF for each subproject before project implementation. On the other hand, LBP is responsible for supervising and monitoring subproject implementation, and for ensuring that sub-borrowers follow the Public Disclosure Copy processes and requirements prescribed in the IESSF. The World Bank provides guidance and reviews compliance with safeguards policies. Capacity to Implement Safeguards Policies LBP capacity in implementing social and environment safeguards was assessed during project preparation. LBP has demonstrated capacity to implement the Safeguards Instruments, having satisfactorily implemented the Bank-funded Water Districts Development Project (WDDP). The WDDP Project Management Office (PMO) was retained to manage SSLDIP. Furthermore, WDDP was a Category A project that financed four drainage subprojects, a wastewater treatment subproject, and around 15 community-based piped-water supply and sanitation systems. These subprojects were supervised by the PMO and were comprised of qualified engineers, social safeguards/community participation specialists, and environmental specialists. The PMO is supported by a Project Implementation Consultant (PIC) with similar skills complement. The PMO and the PIC conduct regular field visits to subprojects, provide orientation to sub-borrowers on the social and environmental safeguards requirements of the project. They also extend assistance to sub-borrowers in the implementation of subprojects, including the conduct of consultations with various subproject stakeholders. The project environmental and social safeguards specialists have the capacity in presenting, discussing and analyzing environmental and social issues with LGUs, communities and non-government organizations (NGOs). They have Page 6 of 10 provided guidance to LGU staff, NGOs and community-based organizations in following community participatory procedures. The PMO has also recently increased its complement of safeguards staff to 10. Public Disclosure Copy Environment protection is a priority concern of LBP. It established an Environment Unit that is responsible for ensuring compliance by LBP projects with the country’s environmental laws. LBP has an ISO 14001 Certification. At the sub-borrower level (LGU and participating institutions), orientation and training on Philippine and Bank regulatory framework on environment and social safeguards were carried out. Further technical support and close supervision were provided to these sub-borrowers. Assessment of Safeguards Implementation Safeguards implementation by LBP has been rated, on average, Moderately Satisfactory for the last seven years of project implementation. The IESSF is generally adequate in its coverage and effectiveness in managing most of the impacts of the enrolled subprojects, but is inadequate with respect to Dam Safety guidelines and in addressing IP issues. While LBP generally complied with safeguards policies during implementation, the quality of compliance was affected by the weak performance of the implementation support consultant during certain years of implementation (this consultant has since been changed by LBP). Another set of implementation support consultants were recruited to ensure adequate monitoring of Environmental Management Plans and in screening of subprojects. LBP also enlisted its regional Lending Centers to assist in the monitoring of environmental and social impacts of the subprojects. In addition to the consultants, LBP recruited on full time basis a social safeguards and environment specialist for SSLDIP. Request for exemption under OP 10.00 paragraph 11. At the request of the Borrower, the Task Team is processing the restructuring following para. 11 of OP 10.00, i.e. Projects in Situations of Urgent Need of Assistance or Capacity Constraints. For Public Disclosure Copy such projects, the fiduciary and environmental and social requirements during preparation phase may be deferred during implementation phase. Also, such projects may be processed under special procurement arrangements. The proposed restructuring aims to enable the project to process reconstruction projects that would require immediate funding approval and procurement of goods and services, and therefore meets the provisions of this para of OP 10.00. OP 10.00 (Investment Project Financing) requires that the project safeguards instrument (in this case, the Integrated Environment and Social Safeguards Framework (IESSF)) is updated, consulted upon and disclosed prior to approval of the restructuring. The policy however also provides for an exception from this requirement in situations where the restructured project responds to an urgent need (paragraph 11(a)). RVP approval for this exception is therefore sought as consultations on, and disclosure of, the updated IESSF will only take place after approval of the restructuring. Safeguards Action Plan Consistent with the requirements of the Instructions: Preparation of Investment Project Financing- Situations of Urgent Need of Assistance or Capacity Constraint , the team and the Government have prepared a safeguards action plan, which references the updated IESSF and sets out the due diligence undertaken by the team with respect to several ongoing subprojects that have safeguard Page 7 of 10 issues. Specifically the action plan presents time-bound activities that include a) updating, consultation on and disclosure of the updated IESSF; (b) ensuring compliance with agreed technical improvements to the Sipangpang mini hydro power subpproject; (c) due diligence to Public Disclosure Copy address outstanding issues in the application of the IP Policy in the implementation of the Sipangpang mini hydro project; and (d) due diligence of the Iligan subproject. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The LBP-PMO, Lending Centers, and participating LGUs disseminate information on the project and its environmental and social safeguards requirements. Direct consultations will continue to be carried out with the LGUs and project beneficiaries, communities, non-government organizations, indigenous/tribal groups, and other affected persons in the subproject areas. The Bank will continue to monitor and address potential environmental and social issues that may arise during project implementation. Supervision missions will put particular attention to stakeholder feedback on project compliance to safeguards requirements. B. Disclosure Requirements Environmental Assessment/Audit/Management Plan/Other Date of receipt by the Bank 20-Jun-2014 Date of submission to InfoShop 20-Jun-2014 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors "In country" Disclosure Philippines 20-Jun-2014 Comments: Disclosure refers to the original safeguards instrument - IESSF Resettlement Action Plan/Framework/Policy Process Public Disclosure Copy Date of receipt by the Bank 20-Jun-2014 Date of submission to InfoShop 20-Jun-2014 "In country" Disclosure Philippines 20-Jun-2014 Comments: Indigenous Peoples Development Plan/Framework Date of receipt by the Bank 20-Jun-2014 Date of submission to InfoShop 20-Jun-2014 "In country" Disclosure Philippines 20-Jun-2014 Comments: Since the Restructuring Project is under exception of the OP 10.00 (paragraph 11), the IESSF is being updated and is expected to be disclosed locally and in the InfoShop on June 20, 2014. 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. If in-country disclosure of any of the above documents is not expected, please explain why: Page 8 of 10 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/BP 4.04 - Natural Habitats Would the project result in any significant conversion or Yes [ ] No [ ] NA [ ] degradation of critical natural habitats? If the project would result in significant conversion or Yes [ ] No [ ] NA [ ] degradation of other (non-critical) natural habitats, does the project include mitigation measures acceptable to the Bank? 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? OP/BP 4.10 - Indigenous Peoples Has a separate Indigenous Peoples Plan/Planning Framework Yes [ ] No [ ] NA [ ] (as appropriate) been prepared in consultation with affected Indigenous Peoples? If yes, then did the Regional unit responsible for safeguards or Yes [ ] No [ ] NA [ ] Public Disclosure Copy Sector Manager review the plan? If the whole project is designed to benefit IP, has the design Yes [ ] No [ ] NA [ ] been reviewed and approved by the Regional Social Development Unit or Sector Manager? OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/ Yes [ ] No [ ] NA [ ] process framework (as appropriate) been prepared? If yes, then did the Regional unit responsible for safeguards or Yes [ ] No [ ] NA [ ] Sector Manager review the plan? OP/BP 4.37 - Safety of Dams Have dam safety plans been prepared? Yes [ ] No [ ] NA [ ] Have the TORs as well as composition for the independent Yes [ ] No [ ] NA [ ] Panel of Experts (POE) been reviewed and approved by the Bank? Has an Emergency Preparedness Plan (EPP) been prepared and Yes [ ] No [ ] NA [ ] arrangements been made for public awareness and training? The World Bank Policy on Disclosure of Information Page 9 of 10 Have relevant safeguard policies documents been sent to the Yes [ ] No [ ] NA [ ] World Bank's Infoshop? Have relevant documents been disclosed in-country in a public Yes [ ] No [ ] NA [ ] Public Disclosure Copy 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: Christopher T. Pablo Approved By Regional Safeguards Name: Josefo Tuyor (RSA) Date: 21-Apr-2014 Coordinator: Sector Manager: Name: Ousmane Dione (SM) Date: 21-Apr-2014 Public Disclosure Copy Page 10 of 10