Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00004702 IMPLEMENTATION COMPLETION AND RESULTS REPORT Credit Number 5175-VN ON A CREDIT IN THE AMOUNT OF SDR32.9 MILLION (US$ 50 MILLION EQUIVALENT) TO THE Republic of Vietnam FOR THE Vietnam Industrial Pollution Management Project May 17, 2019 Environment & Natural Resources Global Practice East Asia And Pacific Region CURRENCY EQUIVALENTS (Exchange Rate Effective: Sep 30, 2018) Currency Unit = Special Drawing Rights SDR0.7167 = US$1 US$1.3953 = SDR1 Currency Unit = Vietnamese Dong VND23,335.58 = US$1 US$0.0000428530 = VND1 FISCAL YEAR January 1 - December 31 Regional Vice President: Victoria Kwakwa Country Director: Ousmane Dione Senior Global Practice Director: Karin Kemper Practice Manager: Christophe Crepin Task Team Leader(s): Katelijn Van den Berg and Son Van Nguyen ICR Main Contributor: Sanne Agnete Tikjoeb ABBREVIATIONS AND ACRONYMS AMS Automatic Monitoring Station BOD Biochemical Oxygen Demand BR-VT Ba Ria-Vung Tau Province CETP Centralized Effluent Treatment Plant COD Chemical Oxygen Demand CPS Country Partnership Strategy DPC District People's Committee DPS Department of Public Security DONRE Department of Natural Resources and Environment (Provincial Offices) EC European Commission EIA Environmental Impact Assessment ESMF Environmental and Social Management Framework GDP Gross Domestic Product IZ Industrial Zone IZD Industrial Zone Developer IZMB Industrial Zone Management Board M&E Monitoring and Evaluation MOF Ministry of Finance MONRE Ministry of Natural Resources and Environment MPI Ministry of Planning and Investment NH4 Ammonium O&M Operation and Maintenance ODA Overseas Development Assistance ORAF Operational Risk Assessment Framework PBF Performance-Based Financing PCEM Provincial Center for Environmental Monitoring PDO Project Development Objective PIM Project Implementation Manual PMU Project Management Unit PP Procurement Plan PPC Provincial Peoples' Committee PSC Project Steering Committee RAP Resettlement Action Plan RPF Resettlement Policy Framework SEDP Social and Economic Development Plan SOEs State-Owned Enterprise TA Technical Assistance VDIC Vietnam Development Information Center VEA Vietnam Environment Administration VEPF Vietnam Environment Protection Fund VND Vietnamese Dong TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 5 A. CONTEXT AT APPRAISAL .........................................................................................................5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION ................................................................9 II. OUTCOME .................................................................................................................... 10 A. RELEVANCE OF PDOs ............................................................................................................ 10 B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 10 C. EFFICIENCY ........................................................................................................................... 17 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 18 E. OTHER OUTCOMES AND IMPACTS ......................................................................................... 19 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 19 A. KEY FACTORS DURING PREPARATION ................................................................................... 19 B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 21 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 23 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 23 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 25 C. BANK PERFORMANCE ........................................................................................................... 26 D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 27 V. LESSONS AND RECOMMENDATIONS ............................................................................. 28 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 30 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 77 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 79 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 80 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 85 ANNEX 6. SUPPORTING DOCUMENTS .................................................................................. 87 ANNEX 7. MAP & PROJECT AREA ......................................................................................... 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P113151 Vietnam Industrial Pollution Management Project Country Financing Instrument Vietnam Investment Project Financing Original EA Category Revised EA Category Full Assessment (A) Organizations Borrower Implementing Agency Ministry of Planning and Investment, Ministry of Natural State Bank of Vietnam Resources and Environment Project Development Objective (PDO) Original PDO The project development objective is to improve compliance with industrial wastewater treatment regulations in four of the most industrialized provinces in Vietnam. Page 1 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 50,000,000 50,000,000 23,010,941 IDA-51750 Total 50,000,000 50,000,000 23,010,941 Non-World Bank Financing 0 0 0 Borrower/Recipient 8,850,000 8,850,000 6,860,000 Total 8,850,000 8,850,000 6,860,000 Total Project Cost 58,850,000 58,850,000 29,870,941 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 25-Oct-2012 25-Mar-2013 01-Dec-2015 30-Sep-2018 30-Sep-2018 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Moderately Satisfactory Modest RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 23-Feb-2013 Satisfactory Satisfactory .29 02 20-Oct-2013 Moderately Satisfactory Moderately Satisfactory 1.79 03 24-May-2014 Moderately Satisfactory Moderately Unsatisfactory 3.41 Page 2 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 04 19-Dec-2014 Moderately Satisfactory Moderately Unsatisfactory 6.88 05 21-Jun-2015 Moderately Satisfactory Moderately Satisfactory 9.23 06 29-Dec-2015 Moderately Satisfactory Moderately Satisfactory 10.72 07 28-Jun-2016 Moderately Satisfactory Moderately Satisfactory 12.35 08 25-Aug-2016 Moderately Satisfactory Moderately Satisfactory 15.88 09 17-Mar-2017 Moderately Satisfactory Moderately Satisfactory 18.81 10 21-Sep-2017 Moderately Satisfactory Moderately Unsatisfactory 20.12 Moderately 11 20-Apr-2018 Moderately Unsatisfactory 21.32 Unsatisfactory Moderately 12 28-Sep-2018 Moderately Unsatisfactory 21.66 Unsatisfactory SECTORS AND THEMES Sectors Major Sector/Sector (%) Water, Sanitation and Waste Management 100 Sanitation 41 Public Administration - Water, Sanitation and Waste 59 Management Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Environment and Natural Resource Management 100 Environmental Health and Pollution Management 51 Air quality management 17 Water Pollution 17 Soil Pollution 17 Environmental policies and institutions 49 Page 3 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) ADM STAFF Role At Approval At ICR Regional Vice President: Pamela Cox Victoria Kwakwa Country Director: Victoria Kwakwa Ousmane Dione Senior Global Practice Director: John A. Roome Karin Erika Kemper Practice Manager: John A. Roome Christophe Crepin Task Team Leader(s): Jiang Ru Katelijn Van den Berg ICR Contributing Author: Sanne Agnete Tikjoeb Page 4 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Country Context 1. At the time of Project appraisal, the Vietnamese economy had achieved remarkable economic development, substantially transforming from a primarily agrarian nation into a modern, diversified and market-oriented economy. Sustained periods of rapid gross domestic product (GDP) growth (averaging 7.3 percent during 1990- 2010), high per capita gross national income of US$1,390 in 2011 (compared to US$130 in 1990), and significantly reduced poverty headcount ratio (from 35.79 percent in 2002 to 4.78 percent in 2011) had led to a dramatic improvement in the welfare of the average Vietnamese citizen. 2. Industrial development was - and remains - the driver of Vietnam's growth. As a percentage of overall national GDP, industry had risen from 22.7 percent in 1990 to 41.1 percent in 2010 (representing a value of about US$42.5 billion). Rapid industrial development in Vietnam was causing serious pollution and exerted tremendous pressure on the natural resource base. The Bank's 2010 Vietnam Development Report on Natural Resources Management concluded that poor management of natural resources and continued environmental degradation would likely jeopardize the pace, quality, and sustainability of the country's economic growth. Sectoral and Institutional Context 3. The development and expansion of Industrial Zones (IZs) has been a cornerstone in Vietnam’s rapid development. In 2010, IZs contributed about 30 percent of national industrial output and the aggregate turnover of IZs nationwide reached US$20.4 billion equivalent. In the same year, IZs attracted 35 percent of national foreign direct investment (FDI) and created 1.6 million jobs directly and 1.8 million more indirectly. As of December 2011, the Ministry of Planning and Investment (MPI) as the designated lead ministry for the development of IZs had approved the establishment of close to 300 IZs, and of these 180 IZs had started operations. 4. However, as in many emerging middle-income countries, Vietnam had yet to find a way to accommodate the costs of environmental externalities of industrial production. In 2009, IZs were required by law to provide sewer networks and centralized effluent treatment plants (CETPs) to collect and treat wastewater discharged by their tenants. However, at project start only about 60 percent of operating IZs had CETPs installed (Source: Ministry of Planning and Investment). The quality of CETP construction and proper operation, maintenance, and monitoring were under pressure from keen competition between provinces and IZs to attract domestic and foreign investors. At the time, it was estimated that IZs discharge about one million cubic meters of untreated wastewater per day directly to receiving water bodies i.e., about 70 percent of the total industrial effluent discharge. This particularly affects the Nhue-Day River in the north and Dong Nai River in the south, which pass through the country's most industrialized provinces. Recognized as the two most heavily polluted rivers in the country, water quality monitoring revealed that many environmental parameters did not meet national standards. 5. Poor compliance, ineffective enforcement, and inadequate provision for wastewater treatment reinforced each other to exacerbate the problem, and the key was to break the cycle. Recognizing the need to improve environmental performance of IZs, the Government of Vietnam (GoV) was taking action to address a number of policy and regulatory failures: (a) policies that promote industrial growth without sufficient regard to environmental consequences; (b) limited resources in terms of trained personnel and funding for environmental monitoring; (c) Page 5 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) insufficient enforcement because of inadequate resources and corruption; (d) low penalties for non-compliance; and (e) limited public disclosure of industrial pollution information. Rationale for World Bank Support 6. The World Bank Group’s strategic engagement was aligned with the national priorities outlined in the Socio- Economic Development Strategy (SEDS) and the Socio-Economic Development Plan (SEDP). It supported investments and policies designed to strengthen Vietnam’s competitiveness, increase the sustainability of its development, and broaden access to economic and social opportunity while strengthening environmental management. The Project fully supported the objectives of the Country Partnership Strategy (CPS) for Vietnam from FY12 to FY16, in which Pillar 2 on Sustainability was dedicated to strengthening the environmental management of water resources and pollution control. The CPS paid attention to addressing governance weaknesses such unclear legislation or jurisdiction which undermined enforcement of environmental regulation, and limited access to information, including monitoring data, which undermined accountability. 7. The Project formed part of a coordinated and complementary multi-donor program to support Vietnam to manage industrial pollution issues. It drew on the results of a number of analytical and capacity building activities financed by the World Bank-Korean Environment Partnership (BKEP): Study on Industrial Wastewater Management in Nhue-Day and Dong Nai River Basins (2010); and the Industrial Development and Environmental Management Report (2011). It came at the heels of a project by the Institutional Development Facility (IDF) on Improving the Institutional Capacity for Water Pollution Control in Vietnam Project (2009). 8. Seeking the World Bank’s expertise to address the multifaceted issues of industrial wastewater pollution, the project piloted a holistic approach in focusing not only on institutional arrangements and regulatory framework, but also: (i) provided concessional financing and technical assistance for CETP design, construction and operation, and environmental monitoring and enforcement; (ii) provided investments in automatic monitoring stations (AMS) network; (iii) supported improved capacity for monitoring and enforcement; (iv) promoted information disclosure among agencies and the public; and (v) supported the introduction of sizeable fines in case of incompliance. 9. The project was the Bank's first stand-alone investment project on industrial pollution management in Vietnam and proposed to pilot the approach in four provinces. It was expected that the project would generate valuable lessons for the design and scale-up of future pollution management interventions in Vietnam. Theory of Change (Results Chain) 10. The Project was articulated around a series of activities and outputs designed to address the structural obstacles to improving compliance with wastewater treatment standards in Industrial Zones with the overall outcome of reducing pollution of the Nhue-Day and Dong Nai river basins. On one hand, legal support to the enforcement of the Law on Environmental Protection and extensive training, capacity building and technical assistance for national and provincial authorities contributes to the strengthening of the regulatory and institutional framework and operations of waste water treatment plants, and support to a monthly monitoring and evaluation (M&E) program and enhancement of laboratory capabilities to monitor and inspect industrial effluent leads to improved compliance. On the other hand, provision of concessional financing for CETP construction, introduction of performance-based lending tied to operational compliance, and a public rating program of IZ environmental performance contributes to IZ’s self-monitoring of their environmental performance, which in turn, also leads to improved compliance. Long Term outcomes reflect national priorities and correspond to the objectives outlined in the CPS. The longer-term outcomes of the project is expected to reduce pollution of the Nhue-Day and Dong Nai river basins and be replicated to other provinces. Page 6 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Figure 1: Theory of Change for VIPM Project Intermediate Long-Term Activities Results / Outputs PDO/Outcomes Outcomes Provide performance- 8 quality CETPs Improve compliance with Reduce based loans to finance the constructed and industrial wastewater d. environmental construction or expansion operational treatment regulations in pollution of the of CETPs with repayment four of the most Nhue-Day and Dong schedules tied to b. industrialized provinces Nai river basins operational compliance. a. in Vietnam 7 documents and • Number of project- regulations to guide financed IZs in the project provinces in Improved pollution enforcement of control of water Environmental policy Environmental compliance with effluent discharge resources in the review and revision Protection Law industrial sector revised* standards Regular monitoring Improve compliance with Strengthen program of IZs by industrial wastewater Vietnam’s industrial Financial support to regular DONRE augmented to treatment regulations in competitiveness monitoring program at monthly missions for four of the most while increasing provincial DONREs duration of project industrialized provinces sustainability of its in Vietnam development All IZs with improved • Percentage of the 34 and automatic non-project-financed Acquisition of monitoring monitoring for waste operating IZs in the and laboratory equipment effluent four project for DONRE inspection provinces complying with effluent GoV’s laboratories discharge standards Installation of automatic strengthened monitoring stations to monitor river surface 17 AMS installed and water quality operating performance with public Pilot scalable rating Public compliance Critical assumptions program of IZs rating program scaled a. A combined approach based on policies, environmental to national level c. monitoring, enforcement as well as financing for performance with public investments are proven elements of improving participation and full 8 technical polluters’ compliance with environmental disclosure assistance packages regulation. implemented b. Demand for concessional finance Capacity building c. Monitoring data is made publicly available 2500 stakeholders d. Contaminated wastewater is a significant, but trained on waste- not the only, source of river water pollution water policy, monito- ring and compliance * List of documents found in Table 10 in Annex 1. Page 7 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Project Development Objectives (PDOs) 11. The PDO is to improve compliance with industrial wastewater treatment regulations in four of the most industrialized provinces in Vietnam. Key Expected Outcomes and Outcome Indicators 12. The project has a single expected outcome, namely, to improve compliance with industrial wastewater treatment regulations in four of the most industrialized provinces in Vietnam. 13. The project defined two outcome-level indicators to assess IZs compliance with national regulations for effluent discharge in the four project provinces: • Number of project-financed IZs in the project provinces in compliance with effluent discharge standards ( 8 project-financed IZs); • Percentage of the 34 non-project-financed operating IZs in the four project provinces complying with effluent discharge standards (50%). 14. As outlined in Annex 1 in a note on Evaluating Effluent Performance & Compliance: Methodology and Results, compliance was assessed on the basis of effluent standards in TT 35/2015/TT-BTNMT and QCVN40-2011. Compliance was interpreted by the Project team to mean no exceedances above 1.2 times the allowed limit for any of the 30 parameters measured. 15. For an overview of the four project provinces please see Annex 7 on Map & Project area. Components Component 1: Environmental Policy, Monitoring and Enforcement Estimated cost: US$22.68 million – Actual cost: US$14.5 million 16. Component I comprise of three subcomponents: (a) Policy Review and Revision, providing support for a comprehensive review of the legal and regulatory framework on pollution management including reviewing and revising laws, regulations, and other legal documents at central and provincial levels; (b) Environmental Monitoring and Enforcement, including (i) acquisition of testing laboratory equipment, standard samples, monitoring equipment, protection gears, and vehicles; (ii) acquisition and installation of automatic water quality monitoring stations; (iii) monitoring of surface water quality, IZ wastewater discharge, and inspection and enforcement; and (iv) development and upgrade of the environmental monitoring information management systems of Ministry of Natural Resources and Environment (MONRE) and the project provinces.; and (c) Information Disclosure and Public Participation, piloting a public rating program of IZs environmental performance with full disclosure of results and scaling the program to a national level. Component 2: Performance-Based CETP Financing Estimated cost: US$25.59 million – Actual cost: US$5.14 million 17. Component 2 provide pilot performance-based loans to finance the construction/expansion of new/existing CETPs, and the installation of AMS units at the CETP discharge point in addition to the improvement of other relevant infrastructure of industrial wastewater management. Comprehensive training and capacity building for the proper operation and maintenance of installed CETPs is also provided. Performance-based disbursements will be subject to satisfactory quality of construction as assessed by Vietnam Environmental Protection Fund (VEPF) (90% of loan) and a commitment letter by the CETP investors to meet compliance standards and a wastewater discharge permit issued by government agency (final 10% of loan). Recognizing that traditional CETP financing Page 8 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) (either concessional or commercial) has focused solely on CETP construction but paid little attention to actual performance of CETPs, the project pilots the use of performance-based loan repayment schedule to incentivize CETP investors to comply with environmental regulations during the operation phase. Failure to do so will result in reductions in the loan repayment term if discharge violations occur: immediate full repayment will be required if three violations occur. Together with improved enforcement pressure and improved technical capacity at CETP investors, this performance-based concessional financing is expected to improve compliance of project financed IZs with wastewater effluent standards. Component 3: Implementation Support Estimated cost: US$10.58 million – Actual cost: US$3.37 million 18. Component 3 provide support to implement project activities through three subcomponents: (a) Capacity Building, with facilitation of training on environmental management, surface water quality monitoring, CETP operation and maintenance, and environmental information disclosure and public participation, and participation in overseas training courses and international and domestic study tours; (b) Technical Assistance, a set of studies identified to improve knowledge of sound industrial pollution management in the project’s river basin context on a broad set of issues; and (c) Project Management, including monitoring and evaluation. 19. Actual and estimated component cost differ significantly. As detailed in Annex 3, project disbursements reached 49 percent at the end of the grace period following project closure. GoV’s disbursement also fell short of the original commitment of US$8.85 million pledged at appraisal with US$6.86 million disbursed, equal to 77 percent. B. SIGNIFICANT CHANGES DURING IMPLEMENTATION Revised PDOs and Outcome Targets 20. The project development objective and associated outcomes were not revised. Revised PDO Indicators 21. The outcome-level indicators were not revised. Revised Components 22. The components were not revised. Other Changes 23. There were no other changes during project implementation. Rationale for Changes and Their Implication on the Original Theory of Change 24. N/A Page 9 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) II. OUTCOME A. RELEVANCE OF PDOs Rating: High Assessment of Relevance of PDOs and Rating 25. The development objectives of the project have remained highly relevant to the strategic priorities of the GoV. During the course of the project, Vietnam graduated from IDA as a middle-income country (2017). This move has strengthened the GoV’s focus on sustaining economic growth while protecting the environment to strengthen Vietnam’s competitive edge in the growing green and blue economy. The current Country Partnership Framework (CPF) for the period FY18 through FY22 reflects these new priorities. The VIPM project directly supports Focus Area 3 to Ensure Environmental Sustainability and Resilience by reducing river water pollution through improved compliance with industrial wastewater treatment standards. Specifically, attainment of Objective #11 related to strengthening natural resource management and improving water security is supported through the VIPM project. B. ACHIEVEMENT OF PDOs (EFFICACY) Rating: Substantial Assessment of Achievement of Each Objective/Outcome 26. The project has a single development objective: To improve compliance with industrial wastewater treatment regulations in four of the most industrialized provinces in Vietnam. I. Results at the outcome-level 27. Compliance of Industrial Zones with wastewater treatment regulations in Dong Nai, Ba Ria Vung Tau, Ha Nam, and Nam Dinh provinces improved significantly between 2012 and 2018. At project start, there were 34 IZs operating in the four project provinces of which approximately 60 percent had a CETP installed on-site. At a national level, it was estimated that IZs discharged about 70 percent of total industrial effluent directly to receiving water bodies untreated (PAD p. 2). Meaning, 30 percent of wastewater was being treated, but not necessarily to a compliant level, before being discharged. 28. At project end, there are a total of 43 IZs operating in the four project provinces, of which 98 percent has CETPs installed on-site and 72 percent are compliant with wastewater treatment regulations. Table 1 shows IZs compliance levels estimated at project start compared to project end (see Table 2 for yearly results by province). Table 1: IZs compliance level in four project provinces at project start and at project end Year IZs in operation (#) IZs with CETPs (%) IZs in compliance (%) 2012 34 60%* < 30%* 2018 43 98% 72% Note: See Annex 1 for an overview of 2018 monitoring results for each IZ. * Estimated 29. A closer look by province and year show how compliance levels have developed since 2015 when the first monitoring results became available (Table 2). Dong Nai is home to most of the IZs in the four project provinces (70%), and compliance levels have grown steadily. In Ba Ria Vung Tau, IZs compliance dropped in 2016 and 2017, Page 10 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) but this was reversed in 2018 and one additional IZ was brought into compliance. In Ha Nam, the Project financed two CETPs, which were compliant in 2018, and two other IZs also became compliant that year. In Nam Dinh, a single IZ with a project-financed CETPs was brought into compliance in 2018. Table 2: IZs compliance with industrial wastewater treatment regulation QCVN40:2011* by project province and over time Compliant with QCVN40:2011 Project-financed CETPs Province 2015 2016 2017 2018 Dong Nai 6/13 17/28 19/30 22/30 2 Ba Ria Vung Tau 3/5 1/5 1/5 4/5 0 Ha Nam 0/3 0/4 0/4 4/5 2 Nam Dinh 0/2 0/2 0/3 1/3 1 Total # of IZs in compliance 9/23 18/39 20/42 31/43 5* % of total IZ in compliance 39% 46% 48% 72% 100% Note: No data available for 2012-2014. First monitoring results are available in 2015 when project- financed compliance monitoring and laboratory strengthening to measure the pollutants were put in place. * See for details paragraph 40 and onwards 30. IZs in the four project provinces have universally installed CETPs in accordance with legal regulation, which is a significant improvement over the baseline of approximately 60 percent at project start. This means that 90,000m3/day of effluent being discharged from all IZs in the four project provinces is being properly monitored at the time of project closure, and that in the future when operating IZs will be fully occupied and CETPs work at full capacity 165,000m3/day of effluent will be properly monitored for compliance. 31. The percentage of IZs in compliance with effluent discharge standards has improved from the start of compliance monitoring in 2015, and all observations of incompliance relate to non-hazardous substances. In 2015, 39 percent of IZs had no exceedances above 1.2 times the allowed threshold in any of the 30 parameters measured. That proportion grew 10 percent over the next two years, but of a larger base of 42 IZs now operating in the four project provinces. In 2018, compliance with industrial effluent discharge standards jumped 24 percentage points to 72 percent of 43 IZs in operation. As the target was set to have 50 percent of IZs be compliant, PDO Outcome Indicator #2 was achieved 138 percent (excluding project-financed CETPs, see Annex 1). II. Contribution of Project Activities 32. Project activities have contributed to improving IZ’s compliance by piloting a multi-layered monitoring system with: 17 river surface water AMS to monitor ambient water quality and to identify pollution sources and events; financing for 5 CETPs with installation of AMS to monitor performance in accordance with regulation; direct support to provincial Department of Natural Resources and Environment (DONRE) for monthly compliance inspections at all IZs in the four project provinces; provision of technical assistance and laboratory equipment capable of analyzing 30 parameters of hazardous and organic contaminants, and; the introduction of a public rating program of IZs compliance for community monitoring. Comprehensive training, capacity building, and technical assistance was provided to all stakeholders, including IZs, to operationalize the monitoring system, strengthen institutional capacity, and promote coordination and collaboration. Environmental policy, monitoring, and enforcement 33. Institutional capacity for environmental monitoring and pollution control is substantially strengthened as a result of the project. Adopting a proven approach to improving compliance among industrial polluters based on Page 11 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) international best practice1, in which soft regulatory interventions and financial support for construction of critical infrastructure are combined, the project has successfully helped move the culture of compliance from being enforcement-driven towards a higher degree of self-monitoring and evidence-based collaboration for improved environmental outcomes. This is, i.e., demonstrated in the universal adoption and proper installation of automatic monitoring stations at CETPs among all IZs in the four project provinces, which lays the foundation for rigorous compliance monitoring in the future. 34. The project supported key regulations supporting management and monitoring of pollution, such as the circular on regular environmental monitoring techniques for environmental components supporting provinces to refine and enhance their environmental monitoring techniques and procedures, decree on management of industrial and economic zones with one of the focus being on Table 3: Technical studies completed pollution control. In addition, substantial technical assistance Development of manuals on planning, management and through development of studies and manuals related to control of industrial pollution for IZs in Nhue-Day and Dong wastewater management in industrial zones, and through Nai river basins Study and proposal of environmental management model calculations and models on the pollution load and carrying using incentive technical instruments and cleaner production capacity of the river basins and sustainability of IZs for IZs operations, among other topics (Table 3). The technical Study and proposal of IZ development models toward assistance has been instrumental in strengthening sustainable IZ Calculation of maximum pollution load (carrying capacity) for institutional capacity for better monitoring and enforcement two river basins of Nhue-Day and Dong Nai of industrial pollution from IZs located in the Hue-Day and Development of manuals for operating industrial wastewater Dong Nai river basins. treatment plant (WWTP) Study and development of methods for pollution assessment 35. By augmenting the regular monitoring program at and proposal of rehabilitation solutions for polluted areas provincial DONRE with monthly inspection missions to IZs and Development of methodology for rating of IZ according to supplying advanced equipment to public laboratories for environmental performance for public information distribution better sample analysis, the project has developed closer Research on scientific base and practice to develop analytical collaboration between IZs and DONRE for better compliance and monitoring method for new POPs (PBDE and PFC), outcomes. To monitor the impact of compliance originated from industrial activities in Dong Nai and Nhue – downstream, 17 AMS were installed throughout the two Day river basins basins to measure river water quality (see results at the impact level below). 36. During implementation, over 75 workshops and training sessions were organized with more than 3,000 participants from various ministries, national and provincial agencies, industries, CETP investors, IZ developers, and other stakeholder groups (130% of the target for intermediate indicator #2 under Component III). Training modules were organized around four themes: i) Environmental management, ii) surface water quality monitoring, iii) CETP operation and maintenance, and iv) environmental information disclosure and public participation. Survey results of participants satisfaction with the training provided showed that 90 percent were satisfied with the content and significant scope of the modules and the training was directly relevant to the work that participants had in terms of operating and improving performance as well as monitoring and enforcement of compliance of wastewater treatment plants and its effluent. 37. The project supported review and revision of four out of seven legal and policy documents on environmental regulation planned and another five documents related to environmental management, though only one relate specifically to wastewater: “Circular on economical and technical norms for calibration of measurement devices of automatic and continuous monitoring stations”. Page 12 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 38. A public rating program of IZs compliance with wastewater regulation was piloted to incentive IZs environmental management and encourage the active involvement of the public in holding IZs accountable. A methodology was developed and 8 IZs participated in the program in 2017. Their ratings were publicly disclosed in a ceremony organized at the provincial level. However, the program was discontinued due to lack of interest from IZs to take part in the program the following year. 39. Overall, the project helped change the culture away from an enforcement-driven approach where DONRE was tasked with detecting incompliance, towards a self-monitoring approach in which the IZs are tasked with proving compliance. An enforcement-driven approach based on DONRE making regular announced visits to IZs to manually collect wastewater samples is problematic given the ease with which wastewater discharge flow can be managed. A self-monitoring approach underpinned by continuous 24-hour monitoring with online data transfer to provincial authorities and underpinned by independent analysis and verification of lab results, provide the best conditions for improving compliance and protecting against wastewater contamination of the river basins. Providing performance-based CETP financing 40. At project end, all five centralized effluent treatment plants financed by the project are considered in compliance with provincial and national effluent standards and environmental regulations, which require IZs to install CETPs prior to operation regardless of whether any industries on-site produce wastewater (Table 4). Table 4: Compliance performance ratings of project-financed CETPs by year (in the order they were financed) # IZ Province Capacity Status 2016 2017 2018 1 Nhon Trach 3 Phase 2 IZ Dong Nai 2000 m3/day In operation MS U HS 2 An Phuoc IZ Dong Nai 2000 m3/day No wastewater MS MS MS* 3 Hoa Mac IZ Ha Nam 1500m3/day In operation MU MU HS 4 Bao Minh IZ Nam Dinh 5000 m3/day In operation MU MU MS 5 Dong Van 3 IZ Ha Nam 2000 m3/day No wastewater - - MS* * No wastewater is rated as MS. See note to Annex 1 on Evaluating Effluent Performance & Compliance: Methodology and Results. 41. Of the 5 CETPs financed by the project, 3 are in operation (Nhon Trach 3 Phase 2, Bao Minh, and Hoa Mac), 1 is not receiving any wastewater (An Phuoc), and 1 is finalized and the IZ has just obtained a wastewater discharge permit from provincial DONRE (Dong Van 3). Given the target of 8 compliant IZs, PDO Outcome Indicator #1 is 63 percent achieved, even though 100 percent of project-financed CETPs are considered compliant at project end. As the law requires IZs to install CETPs regardless of whether any industries on site produce wastewater, CETPs that do not receive enough wastewater to be in operation are still considered compliant in accordance with the law. 42. Actual effluent monitoring reports by DONRE for 2016-2018 show an improving trend (Annex 1), and Table 4 summarizes the performance ratings for each of the IZs with project-financed CETPs. In 2018, Nhon Trach 3 Phase 2 and Hoa Mac are rated highly satisfactory, meaning there were no exceedances in any of the parameters. For Bao Minh, there were minor exceedances of non-hazardous substances such as Chloride, color, BOD, and COD in 2018, earning them a Moderately Satisfactory performance rating, which is still considered compliant. IZs An Phuoc and Dong Van 3 are also considered compliant as there is no ground for rating them incompliant based on insufficient wastewater intake from industries at the industrial zone. An Phuoc and Dong Van 3 are both expected to come into 1 Best Available Techniques Reference Document for “Monitoring of emissions to air and water” for industries as per the EC. Page 13 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) operation as soon as the industries located in the IZs begin producing wastewater. None of the exceedances in 2016 and 2017 were of hazardous contaminants. 43. This result can be fully attributed to project activities, as financing for the CETPs came from the line of credit funded by the Project and managed by VEPF. III. Discussion of evidence and attribution The source of evidence 44. The source of evidence used to assess IZ’s compliance with industrial wastewater regulation is based on provincial DONRE’s on-site monitoring inspection visits in which samples are collected and analyzed for compliance. The frequency of those visits range from quarterly visits per year, as is the case on Dong Nai, to biannual visits, as is the case in Ha Nam. During project implementation, the provincial monitoring program was augmented with monthly monitoring missions. However, this support was halted on Ministry of Finance’s (MoF) instruction from mid-2017 onwards (see Section III.B(a)), at which point they reverted to their usual schedule. The number of data observations from 2018 collected to measure compliance at project end is as follows (see also table in Annex 1): Table 5: Number of monitoring inspections to IZs conducted in 2018 by provincial DONRE, by province Province Dong Nai Ba Ria Vung Tau Ha Nam Nam Dinh # of observations 4 1 2 8 45. The reliability of using so few data points to ascertain that industrial wastewater discharge from IZs are in full compliance with effluent standards is low (see also Section IV.A for discussion of M&E Design). Wastewater flow can be managed by CETP operators to optimize compliance during scheduled visits from inspection authorities. For the same reason, a legal requirement was introduced in 2015 that IZs must have AMS installed at the CETP discharge point. The project supported this legal directive through technical assistance and direct CETP financing, and at project end 98 percent of all IZs in the four project provinces have AMS installed capable of relaying monitoring data to DONRE on My Xuan 2 (Ba Ria-Vung Tau): New AMS a continuous basis 24-hours a day. Meanwhile, provincial DONRE measuring CETP effluent being installed (April offices are in the process of adapting their technical capability to 2018). receive this data and summarize the continuous data flows in concise reports. For this reason and as the DONREs do not have the requirement to report this continuous monitoring data to the national level, it is not possible to use the data for compliance monitoring until DONRE has developed such capability, nor could it be accessed for the purposes of this Project. Page 14 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Attribution 46. Establishing attribution of project activities to project results would have been aided by the availability of benchmarking data to compare how IZ’s compliance level have developed in non-project provinces. However, no such data was available to the ICR team as there is not yet any summarized reports from the continuous 24 continuous data flows. DONRE’s monitoring data is also not publicly available information, and obtaining the data is a lengthy process subject to internal government approval procedures. However, the Provincial Environmental Monitoring data centers Screenshot of the continuous monitoring data transferred to DONRE that are receiving the monitoring data from the Industrial Zones were visited as part of the ICR mission. 47. To assist in determining attribution of project activities to project results, relative to other external factors, a timeline of events is helpful (Figure 2). Figure 2: Timeline of project-related events Public Debt Wastewater Law requires Management Law discharge Law requires IZs to MOF prohibits use IZs to install with 3-year profit permit Project install AMS at CETP of ODA funds for Project CETPs requirement requirement effectiveness discharge points recurring costs end 2009 2009/10 2012 2013 2014 2015 2016 2018 2017 1 CETP Procurement packages for Monitoring program is No monitoring program loan policy, monitoring and being implemented. and capacity building issued. enforcement are finalized. No CETP loans issued activities. 3 CETP loans issued. from WB window. 1 CETP loan issued. 48. In developing a counterfactual scenario in the absence of the Project, it should be noted that the phased introduction of legal regulation on IZs wastewater management has created a strong incentive for improved environmental compliance with wastewater regulation. Building on the pre-project legal requirement to have a CETP installed for IZ operation, a permit system was introduced in 2012, in which the CETP must be compliant with effluent regulation in order to obtain a wastewater discharge permit from provincial DONRE. In 2015, IZs were required to install AMS at the CETP discharge point with continuous 24-hour data collected with transmission of data with 5 minutes interval to provincial DONRE (see overview of legal regulations in Annex 6). The project did not support the introduction of these legal regulations but supported their monitoring and enforcement. 49. While project-supported monthly monitoring by the DONREs discontinued in mid-2017 (see Section III.B(a) and have returned to pre-project schedules, the project has been instrumental in changing the culture for compliance monitoring, and the sustainability of that outcome is both evident and substantial. Going forward, self- monitoring by the industries with automatic monitoring of the wastewater effluent and with continuous data transfer will enable DONRE to monitor actual compliance levels among IZs with greater reliability and more effective enforcement options. Page 15 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 50. Regarding CETP financing, the State Fund for Environmental Protection increased VEPF’s line of credit for CETP financing significantly during the Project implementation period. From 2012 onwards, VEPF provided loans for the construction of 28 performance-based CETPs in the amount of DONG332 billion, equivalent to approximately US$15 million. In comparison, the WB window financed 5 CETPs for a total of US$5.14 million with ODA funds. IV. Results at the impact-level 51. At the impact-level, the Project supported the installation and operation of 17 basic and extended automatic monitoring stations to measure river surface water quality. The basic stations are equipped with sampling technology that enable online data transmission for continuous monitoring. Over time, tracking actual pollution of river water downstream from industrial zones closes the monitoring loop to establish the effect of improved compliance at the impact-level. The stations were placed throughout the Nhue-Day and Dong Nai river basins (see map in Annex 7). 52. The first monitoring report from Center for Environmental Monitoring at MONRE covering data collected during the first year of operation became available in December 2018 (see Section III.B(a) for reasons for delay). The report shows that data was collected regularly from all 17 stations and provides in-depth analysis of the results - in itself evidence of the significant investment in equipment, training, and capacity building provided by the project. Many parameters measure above allowed thresholds, as expected as it typically takes time before a reduction of pollution sources lead to improved river water quality, and it is neither possible to discern a trend nor observe an effect at this moment already of improved compliance with effluent discharge standards among IZs in the four project provinces to the river water quality (see note to Annex 1 for results of the river water quality monitoring). Justification of Overall Efficacy Rating 53. Overall project efficacy is rated Substantial. The PDO was achieved, as evidenced in the high achievement of PDO Outcome Indicator #2. The percentage of IZs in compliance with effluent discharge standards has improved from 39 percent at the start of compliance monitoring in 2015 to 72 percent in 2018. It is worth noting that all observations of incompliance relate to non-hazardous substances. As monitoring results were not available at the time of the last ISR, the final efficacy rating was delayed until these data from 2018 were obtained. Based on 2018 compliance monitoring data, the final rating was upgraded. 54. This outcome was achieved by approaching compliance monitoring from a multi-layer and multi-actor perspective for the first time in Vietnam. The project contributed to strengthening institutional capacity for environmental monitoring, evaluation, and enforcement in the four project provinces and financed five compliant CETPs. Institutional capacity building, technical assistance, and stakeholder training workshop have developed significant awareness raising, knowledge repository, and technical skills among different parties that will help foster understanding and collaboration, which is needed to continue improving IZs wastewater pollution management. 55. Better evidence would be needed to fully attribute project outputs to project outcomes. Without proper benchmarking data, it is not possible to distill the effect of project activities on IZs compliance level compared to IZ’s compliance levels in non-project provinces. Lack of comparability also challenges the development of a counterfactual scenario to Project implementation. Though the introduction of legal regulation for IZs wastewater management, and the augmented funding level at the State Fund for Environmental Protection may be an indication that IZs compliance levels were on an upward trend. Page 16 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) C. EFFICIENCY Rating: Substantial Assessment of Efficiency and Rating a. Calculation of NPV and IRR 56. At the time of appraisal, an ex-ante economic and financial analysis showed that the aggregate economic net present value (NPV) discounted at 12% was positive with US$169 million over 17 years in the base case scenario. The internal rate of return (IRR) was positive with 28% and the results were robust to two sensitivity tests. 57. At the ICR stage, an ex-ante analysis was performed based on the same economic model developed at appraisal with updated cost figures and assumptions where possible. The benefits are defined in terms of averted health care costs and productivity gains, as presented in the PAD, but reduced 30 percent to acknowledge that wastewater pollution is but one source of pollution in the two river basins: (i) averted health care costs stemming from reduced pollution estimated to be US$10 per beneficiary per year; and ii) increased productivity stemming from 3 fewer sick days for two individuals in a household estimated to be app. US$7 per beneficiary per year. 58. Under the base model, the investments are economically viable. The aggregate economic NPV from improved compliance in four project provinces discounted at 12% is positive with US$ 17.6 million over 17 years. The economic internal rate of return (IRR) is positive at 26%. Table 6: Calculation of NPV and IRR Key Economic Indicator Results Interpretation NPV/17 years US$ 17.6 million Positive IRR/17 years 26% IRR > 12% Result: The above economic indicators show that the project was an economically viable investment 59. A sensitivity analysis shows that the cost of environmental compliance with wastewater regulations is moderately sensitive to a 5 percent decrease in benefits and a one-year delay in onset from 2014 to 2015. Table 7: Sensitivity analysis Scenarios NPV IRR Base case $17.6 million 26% Ben -5% $4.3 million 16% Delay 1 year (2013) $7.4 million 17% b. Cost-Effectiveness Analysis 60. CAPEX and O&M can be applied as measures of cost-effectiveness. At appraisal, the PAD refers to expert opinion in defining the average cost for construction, operation and maintenance of CETPs. These figures can be compared with the realized cost at project closing (see Table 21). Overall, realized project costs compare favorably to the appraised cost. Page 17 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Table 8: Comparison of appraised and realized costs for CETP construction, operation, and maintenance CETP Appraised cost per m3 flow (US$) Realized cost per m3 flow (US$) CAPEX 700 564 O&M 0.40 0.41 61. While there is an extant literature on overall costing methodology for wastewater treatment plants, there is little available with actual figures on the cost of operation. However, a 2010 benchmarking survey among +11,000 subscribers to Industrial WaterWorld Magazine showed that surcharges by municipalities for wastewater treatment ranged from $1.23 to $3.42 per 1000 gallons of water discharged. That is equal to $0.33 to $0.90 per cubic meter, which compares well to the $0.41 figure used in both the ex-ante and ex-post cost-benefit analysis. c. Efficiency of design and implementation 62. The project was led by two Task Team Leaders (TTL) from start to finish and benefitted from having a strong local presence in terms of a co-TTL located in the country office, and three project management units (PMU) steering each component within their respective line ministries. 63. Disbursements reached just 50 percent by project closing. For Component 1 (66% disbursed), low disbursement was caused by procurement delay because of low institutional capacity and by MoF’s position in the last two years of project implementation that recurring costs, such as support for monitoring and capacity building, should not be covered by development assistance (see Section II.B(a)). 64. For Component 2, disbursements reached just 25 percent of the allocated amount of US$21 million over five years of implementation. This was primarily due to an existing requirement in the Law on Public Debt Management for Industrial Zones to have three consecutive years of profits (see Section III.B(a)) and to the terms for commercial credit, which improved substantially after the project was approved (see Section III.B(c). d. In summary 65. Project efficiency is rated Substantial. This is justified by the economic and financial analysis that shows an overall positive return on the realized investment with substantial benefits to society. The analysis demonstrates the efficiency of realized CETP investments in meeting effluent standards in a cost-effective manner. 66. Elements of the project design and implementation process were less efficient. The incentive effect of performance-based concessional CETP financing was lost in the current sector context, and upon instruction from the MoF, support for the monthly monitoring program and other recurring costs were halted in the last two years of implementation. The project closed with just over 46 percent disbursed. D. JUSTIFICATION OF OVERALL OUTCOME RATING 67. Overall project outcome is rated Moderately Satisfactory. The project has remained highly relevant to Vietnam’s strategic development priorities, project efficacy is rated substantial and efficiency substantial. These ratings lead to an overall outcome rating of MS. Page 18 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) E. OTHER OUTCOMES AND IMPACTS Gender 68. The project was not gender-tagged. The project design did not provide for any outcome or impact specifically aimed at addressing gender considerations, nor are the actual achievements related to improving wastewater treatment compliance likely to help close the gender-gap in Vietnam. However, throughout implementation the project was concerned with providing equal opportunities to women in the training and capacity building activities undertaken. This is evident in the gender tracking of the more than 3200 participants, who took part in 77 workshops, study tours, and training sessions, and which shows that 40 percent of those in attendance were women. Institutional Strengthening 69. MONRE’s monitoring effectiveness has substantially improved with this implementation of AMS to measure contamination of the Nhue-Day and Dong Nai river basins. Previously, MONRE’s budget for this task was sufficient to undertake five monitoring missions per year to manually collect samples for lab tests and analysis. With the installation of AMS and continuous monitoring and transmission of data in 5 minutes intervals, much larger data sets become available enabling better analysis and more reliable results. However, proper maintenance and operation of AMS also requires a bigger budget, and the GoV has shown great support to this end guaranteeing sufficient budget for the next FY. Mobilizing Private Sector Financing 70. The Industrial Zones have financed 25% of the investments in the CETPs and therefore the project has contributed to mobilizing private sector financing. Poverty Reduction and Shared Prosperity 71. Since the early 1990s, Vietnam has had one of the fastest-growing GDP per capita rates in the world, which has been accompanied by income growth for the bottom 40 percent of the population of more than 4.5 percent for the 2010-2014 period, compared to two percent on average for the total population over the same period. Continued robust and inclusive growth relies on the effective management of environmental impacts of industrialization. By strengthening the capacity of the government and provincial offices to manage industrial pollution and improve environmental compliance, the Project contributes to the protection of the environment and raises the “green profile” of the Vietnamese economy, making it more competitive and attractive for foreign capital investments and export going forward. Other Unintended Outcomes and Impacts N/A III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 72. Overall, the Project was based on sound diagnostics of the development context and had strong linkages to the Government’s strategic priorities and the Bank’s engagement in the country. The project was based on a pre- Page 19 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) feasibility study, extensive stakeholder consultations, and lessons learned from other World Bank projects2, which showed the importance of adopting a complementary combination of technical assistance, capacity building and investment funding interventions. Project components were clearly linked to a realistically defined objective with a well-aligned results framework and a strong emphasis on M&E. 73. The Project design employed a holistic, multi-layered approach to improving compliance, which is commendable. Planned activities spanned all aspects of environmental compliance and enforcement from financing and monitoring CETP units, planning a scalable public rating program of IZs, and to measuring the impact of compliance on the entire basin. Accordingly, institutional arrangements for implementation were aligned with three key project stakeholders - MPI, MONRE, and VEPF - affording each of the PMUs the chance to fully embed project activities into their regular line work thereby increasing project ownership throughout. 74. One aspect of the project design that affected the outcome of Component 2 relate to an eligibility requirement in the Law on Public Debt Management, which requires beneficiaries of on-lend Overseas Development Assistance (ODA) funds to provide proof of three consecutive years of profit. Introduced in 2010, Decree 78/2010/ND-CP on On-Lending of the Government's Foreign Loans stipulates that applicants’ financial statement from three previous years must be used in the evaluation of their eligibility to access on-lend ODA funds. However, this requirement was not incorporated into the Operations Manual developed prior to Project effectiveness. The discrepancy was address in the supervision mission of May 2015, following which the Operations Manual was revised. During implementation, VEPF, who’s own financing window for CETP financing was not subject to same conditions, rejected many proposals for CETP financing under the WB window based on this requirement. 75. Parts of the project design was precisely specified to improve implementation readiness, but also removed degrees of operational flexibility needed during the start-up phase. Several of the implementing agencies had no prior experience working with The World Bank and institutional capacity for procurement was low at project start. This caused significant implementation delay. • The project design pinpointed the exact legal regulations and directives to be supported through expert reviews and technical revision for the enforcement of the newly approved Law on Environmental Protection. However, there was a gap in the timing of this planned support to MONRE as the demands from GoV changed often and the deadline was fast-tracked. Consequently, most of the legal documents that the Project initially planned to support were already finished while procurement for those law packages were still on-going. The project developed a flexible approach to support MONRE’s other legal work that contributed more broadly to improving monitoring for environmental protection and pollution control by industries. • Similarly, the Project detailed the exact technical specification for the automatic sampling and laboratory equipment to be procured in support to the Center for Environmental Monitoring within MONRE. Procurement of said equipment was challenging in part due to MONRE’s internal procedures and low capacity and in part because only a handful of global suppliers can deliver to those standards. Mis-procurement, incomplete order delivery, and user training delivered without translated material characterized the procurement process. To close the gap, MONRE approved of funds to buy missing parts and additional training to operate the equipment, though implementation of the monitoring program was significantly delayed. 2Several analytical and capacity building activities carried out by the Bank in cooperation with Government authorities: Study on Industrial Wastewater Management in Nhue-Day and Dong Nai River Basins (2010); and the Industrial Development and Environmental Management report (Bank-Korean Environment Partnership (BKEP). An important precursor to this project was the Improving the Institutional Capacity for Water Pollution Control in Vietnam Project (2009). Page 20 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) • Finally, the project pinpointed the exact location coordinates for the installation of 17 AMSs for monitoring contamination of surface water in the Nhue-Day and Dong Nai river basins. However, measuring river water quality requires regular relocation of the monitoring points in response to the information gathered. Equipment must be mobile, and the collection points optimized every two to three years. Approval of land clearances within the Ministry for the installation of the AMS at the specified coordinates on public lands along the river took longer than expected and did not leave enough time to implement consecutive years of monitoring. 76. Overall implementation risk was rated substantial at the time of project preparation. This related specifically to the low capacity for procurement at MPI and MONRE, neither of which had any prior experience implementing Bank projects. The project team made every effort to mitigate the risks through allocation of project funds for comprehensive training and capacity building at all levels of implementation, especially for procurement and financing management. Even so, a number of risks materialized, which were not foreseen at preparation, such as the falling commercial interest rate and restriction of use of ODA funds for certain expenditure categories. B. KEY FACTORS DURING IMPLEMENTATION (a) Factors subject to the control of government and/or implementing agencies 77. Implementation arrangements were fairly complex with three PMUs in MPI, MONRE, and VEPF, respectively, and with overall coordination handled by MPI PMU. While coordination was sometimes cumbersome, a strong institutional and personal commitment from the three PMUs steered the project through a challenging implementation period. 78. Harmonization of the provisions of the Law on Tendering in Vietnam and World Bank procurement guidelines caused early implementation delay. This affected the procurement of consultation services for the review and revision of legal documents initially designed to support the Law of Environment Protection and prolonged the selection process of a number of tender packages with complex technical requirements, some of which were forced into retendering. 79. Commercial interest rate fell sharply between 2012 and 2015, making concessional loans for CETP financing less competitive. In May 2015, the commercial interest rate had dropped to 5 percent, and in response VEPF reduced the interest rates of its own loan programs to 3.6 percent. The impact on the project was profound, with no loans issued from the WB financing window in all of 2015 and 2016 despite strong demand for CETP financing (see Note to Annex 1 for a list of CETP loans by VEPF and WB windows, respectively, from 2012-2018). 80. Due to the improving macro-economic situation in Vietnam, the MoF tightened eligible expenses for ODA funds, excluding all recurrent expenditures in both on-going and future projects. In the official document No.6681/BTC-QLN dated 26/5/2017, MOF requested that the Project must not use the loan to implement activities of recurrent costs. This particularly affected the project-financed monthly monitoring program at four provincial DONRE offices, but other aspects of the project were also affected, including capacity building and project management. This stifled disbursements in the last two years of implementation, and the project closed with just 46 percent of allocated funds disbursed. 81. Lengthy approval process within MONRE to obtain land clearances for the installation of basic and extended automatic monitoring stations at the specified coordinates along the river bed on public lands did not leave enough Page 21 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) time to implement consecutive years of river water quality monitoring. Issues with calibration and remote data logging further delayed implementation, as the network infrastructure both in the field and at provincial DONRE needed upgrading in order to collect, transmit, receive and store monitoring data. Plans for restructuring the project 82. Preparation for a restructuring began following the mid-term review, when it became apparent that only one of the PDO indicators could be achieved within the current time frame and scope (see factors outside the control of government and implementing agencies below). The PMUs undertook needs assessments and feasibility studies in all the 11 provinces along the two river basins and it was agreed to restructure the project and extend the closing date with one year to solidify project achievements and widen the geographical reach of project activities. 83. The restructuring document was approved by the Prime Minister in February 2017. The MoF meanwhile blocked the revision of the Financing Agreement due to the inclusion of project support for recurring expenditures already covered by budget support to line ministries. The project team was unable to reach a compromise despite multiple rounds of revisions and negotiations. (b) Factors subject to World Bank control 84. The Bank project team provided timely and engaged supervision of the project. The project benefitted from the involvement and continuity of a Co-TTL and local staff based in Vietnam, who liaised with the three PMUs on a regular basis. The team was proactive in exploring new opportunities for additional financing, project restructuring, and extension of closing deadline, but should have focused even more attention to finding common ground with the MoF to follow-through with the Prime Minister’s approval of the restructuring and extension. The Project team opened discussions with MOF to lower the interest rate and change the terms of on-lending, but to no avail as the terms govern all ODA funds to Vietnam. The team provided generous support in technical missions and safeguards assistance and has ensured appropriate transition arrangements as the work of the PMUs are phased into each of the line ministries. (c) Factors outside the control of government and/or implementing entities N/A Page 22 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) Rating: Modest M&E Design 85. The project’s theory of change was affected by issues related to attribution, risk, and assumptions that could have been better addressed at project preparation. In general, the results framework is outcome-focused at the right level measuring the effect of direct project investments and broader capacity building for environmental monitoring and enforcement on the compliance of all industrial zones in the four project provinces. In addition, with support for the installation of basic and extended river water quality stations throughout the two river basins, the project had a built-in aspiration to measure the impact of project outcomes in the future. Intermediate indicators are linked to project activities and captures most key project outputs, although no indicators capture outputs related to the significant investments in monitoring and enforcement. There was also a lack of reliable baseline data. Furthermore, a number of weaknesses in the RF makes it inadequate in assessing project achievements and attribution: • Definition of compliance: In the PAD, compliance was tied to industrial wastewater treatment regulation QCVN40:2011. However, during implementation it was found that this definition was too strict, and in accordance with international best practice, a scale was discussed and agreed upon within the project team to interpret compliance to mean “no exceedances above 1.2 times the allowed threshold in any of the 30 parameters”. • Measuring compliance: According to the RF, compliance performance would be assessed on a semi-annual frequency. However, sampling wastewater at the CETP discharge point biannually - or even quarterly, as in the case of Dong Nai province - is insufficient to establish IZs compliance with wastewater treatment regulations in general given the ease with which wastewater effluent can be managed. • Establishing attribution: The PAD p. 33 outlines a framework for benchmarking compliance of the four project provinces with compliance performance in four non-project provinces within the same two river basins in order to measure “actual improvements in environmental compliance” from project interventions. However, this monitoring plan was not made central to the RF, and it was never implemented. 86. The two outcomes indicators could have been combined to better align with the PDO. The purpose of separating compliance performance for IZs with project-financed CETPs and for IZs with non-project-financed CETPs at the outcome-level is not clear. A single combined indicator measuring IZs compliance as a percentage of all IZs in the four project provinces could have been a more precise measure of PDO attainment. Measuring the outcome of project-financed investments separately from the outcome of policy, monitoring, and enforcement interventions in the project provinces could have been included at the intermediate level. 87. A better measure than “improved compliance” would have been “reduced pollution load”. Reduced pollution load is a quantitative indicator, which forms part of the World Bank’s set of core indicators, and it is often applied in pollution control and abatement projects due to its effectiveness in linking activities to outputs to outcomes. Benchmarking against other World Bank project’s, such as Lebanon Environmental Pollution Abatement Project or Page 23 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Egypt Pollution Abatement Project, would have offered insights into using reduced pollution load in the design of the RF. In addition, monitoring is often a key element in improving compliance and used in other pollution management projects as an outcome indicator which would have been applicable in this case as well. M&E Implementation 88. Monitoring and evaluation data were collected and analyzed in a systematic way by the three PMUs: MONRE PMU, VEPF PMU, and at DONRE offices in each of the four project provinces. MPI PMU integrated all reporting into one combined report on a quarterly basis. 89. The results framework monitored implementation progress and environmental outcomes at different levels. In terms of environmental monitoring, the PMUs tracked: (a) VEPF’s monitoring of project-financed CETPs until commissioning; (b) environmental compliance monitoring by provincial DONRE and Environment Police of all IZs in the four project provinces; and (c) MONRE’s monitoring of river surface water quality. In addition, the PMUs tracked project progress and evaluated the satisfaction of capacity building activities throughout implementation. 90. However, M&E implementation neglected to collect monitoring and compliance performance data from four non-project-provinces in the Nhuy Day and Dong Nai river basins, which was required to establish the attribution link between project activities and results. Without a benchmark to compare project outcomes and given the enabling changes to the external environment (see timeline in Figure 2), it is not possible to fully attribute project activities related to strengthening monitoring, enforcement, and capacity building to observed improvements in compliance performance, although they have undoubtedly contributed. 91. It is worth noting here that for the purpose of compliance monitoring, DONRE provincial offices made no distinction between IZs with CETPs financed by the Bank and existing or new IZs with CETPs financed by other means. This artificial separation then only exists at the project-level and has no roots in compliance monitoring in practice. PDO Outcome Indicator #2 specifically refers to “34 non-project-financed operating IZs”, which existed at the time of project preparation. During implementation, however, this was interpreted to mean the global universe of all IZs operating within the four project provinces. At project end, there were a total of 43 IZs in operation in the four project provinces – counting both IZs with project-financed CETPs (4, as one CETPS was not in operation by project end) and IZs with non-project-financed CETPs (39). 92. There were some delays in implementing the full M&E program, and in the last two years of project implementation, the monthly monitoring program at provincial DONRE offices was halted on the instruction of MOF. M&E Utilization 93. MONRE and MPI PMUs reviewed collected monitoring, inspection and enforcement data and project implementation progress data to evaluate the performance of project interventions. This information was used to attempt to correct the course of project implementation. For example, mid-term M&E data showed the need to restructure the project and extend the closing data to improve the likelihood of achieving expected results. The Team pursued this option, but to no avail. Another example is how surveys among participants in training workshops were used to target themes that would match demand and refocused the material and the presenters to match the content. Justification of Overall Rating of Quality of M&E 94. The quality of M&E is rated Modest. The design of the M&E framework and choice of indicators did not allow for sufficient testing of project achievements and their attribution to project outcomes. There was some implementation delay, and institutional obstacles to implementing the monthly monitoring program. Benchmarking Page 24 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) compliance performance against non-project provinces was planned, but never implemented, thereby removing an option to establish full attribution. However, data for the RF was systematically collected and the local capacity for project implementation and environmental monitoring, evaluation, and enforcement was substantially raised. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE 95. The project was classified as a Category A project, which triggered the application of safeguards policy OP 4.01 on Environmental Assessment due the potentially negative environmental and social impacts from wastewater effluents, sludge from CETPs, and construction of AMSs and CETPs. Safeguards policy OP 4.12 Involuntary Resettlement also applied due to the land requirements for Component 2, where in some cases IZs had minor involuntary resettlement activities on-going at the time of CETP loan appraisal. Land requirements for Component I were expected to be met either by available public land or installed within public buildings, though in one case an AMS was installed on private land. A more in-depth elaboration of social and environmental safeguards is included as a note to Annex 6. 96. The project prepared an Environmental and Social Management Framework (ESMF), which was formally adopted by MPI, MONRE and VEPF, and that applied to all CETPs and AMSs financed under the project. During implementation, the CETPs and AMSs were carefully screened for financing and prepared in line with the ESMF. The Environmental Management Plans (EMPs) were satisfactorily prepared in line with the government and the Bank safeguard policies and duly disclosed at the Bank’s website in English and locally in Vietnamese. 97. The project satisfactorily addressed all environmental issues including construction of the CETPs and AMSs (for a discussion on compliance during operation see the results section and Annex 1). Due diligence of social safeguards was carried out on all IZs looking at land acquisition and compensation and the functionality of the grievances redress mechanism. The grievance mechanism was found to be accessible and functional. There are no outstanding environmental or social safeguard issues. 98. Regular financial management reviews confirmed that an adequate financial management (FM) system was in place to provide, with reasonable assurance, accurate and timely information that Bank loan proceeds were being used for the intended purposes. Nevertheless, the Project FM rating was consistently rated as Moderately Satisfactory since late 2013 and throughout Project implementation. This is mainly because there were some Moderate FM recommendations in the Project that were consistently raised including: (i) significant delays in Project budget approval and insufficient Project budget allocation; (ii) lack of coordination between different Project implementing agencies and disagreements with MOF on eligible expenditures; (iii) slow payments to contractors; (iv) contract management system needed to improve; and (v) need to fully and timely implement audit recommendations. These shortcomings may have prevented the Project from a full Satisfactory FM rating, and the issues on agreements with MOF on the eligible expenditures under the approved Project remained until after closure of the Project. The end disbursement date has been further extended to allow for the MOF approval of final applications for eligible expenses submitted previously. 99. Procurement was generally acceptable to the Bank and was therefore rated Moderately Satisfactory during the implementation period. The procurement plan was cleared by the Bank and approved by MONRE/MPI from Project start and was subject to various updates to accommodate changes such as modifications made to cost estimates, time schedules because of delays, and for adding new procurement packages. The most critical procurement issue was the delay of the implementation that occurred in all stage of the procurement cycle from planning to contract Page 25 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) implementation and was most pronounced for first few years of the project implementation (2014 and 2015). Significant progress on procurement capacity was noted from 2016 and onwards (see Annex 6 or details). C. BANK PERFORMANCE Rating: Moderately Satisfactory Quality at Entry 100. The Project built on the GoV’s development priorities and was closely aligned with the Bank’s engagement strategy in the country. 101. A holistic project design addressed compliance from a multi-layer and multi-actor perspective for the first time in Vietnam. Implementation arrangements corresponded well to the design with a PMU embedded into three different agencies to afford greater ownership. Responsibilities were clearly defined with no overlap and tasks were independent of each other. 102. Due diligence should have been paid in analyzing the foundation and context for Component 2. The legal framework for on-lending of ODA funds made the WB window for CETP financing less competitive due to a requirement for applicants to show three consecutive years of profit and due to the fixed interest rate. In contrast, VEPF’s existing window offering performance-based concessional financing for environmental investments to industries with conditions for construction and operational compliance identical to those proposed in the Project, was not subject to the same legal conditions and had an adjustable interest rate. There was no mention of neither the three-year profit requirement nor VEPF’s own financing-window in the Final Report on Industrial Wastewater management, financed by TF070760 as a pre-feasibility study to the VIPM project. 103. Shortcomings in the M&E design could have been addressed at project preparation by defining indicators capable of testing the results chain with greater attribution between project activities, outputs and outcomes. Risks associated with the implementation of the Project were analyzed and appropriate mitigation measures were identified, particularly as relates to strengthening PMUs implementation capacity. Arrangements for financial management and safeguards were all adequate. Quality of Supervision 104. The Bank conducted frequent supervision missions throughout the duration of the Project and was supported by a Co-TTL located in Vietnam. Project activities were adequately monitored, action points identified, and recommendations provided. Fiduciary management was closely monitored, procurement issues were identified and addressed, and training was provided to strengthen the capacity of the PMU staff. 105. With a keen focus on strengthening the development impact of the monitoring program and expand the pool of potential CETP investors, the Bank Team worked extensively to restructure the project and extend the closing deadline. Based on PM approval for restructuring, a Feasibility Study was prepared, and formal approval obtained by MONRE and the new total of 11 project provinces. Ultimately, the Bank and line ministries were unable to reach a compromise with the MOF over the proposed further direct support to monitoring and enforcement activities at provincial DONRE offices (see Section III.B(a)). Page 26 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 106. Support for implementation of the M&E plan was strong. However, one aspect of the M&E design, which was not implemented, relate to data collection on IZs compliance in non-project provinces. This data was supposed to be used in the final project evaluation by benchmarking outcomes to better attribute project activities to results. 107. Throughout implementation, the Bank maintained candor in performance reporting. The discrepancy between the legal framework and the Operation Manual was corrected. Supervision of fiduciary and safeguards was timely and high-quality technical assistance was generously shared. 108. Transition arrangements were partly secured: The CETPs financed by the project will continue cooperation with VEPF, and MONRE will maintain the 17 AMS installed to monitor river water quality. Meanwhile, the remaining funds for CETP financing will be repaid, and the regular monitoring program at four provincial DONRE have returned to pre-project schedules. Justification of Overall Rating of Bank Performance 109. Overall, Bank performance is rated Moderately Satisfactory due to the moderate shortcomings described above. D. RISK TO DEVELOPMENT OUTCOME 110. Risk to political commitment (likelihood: low, short-term impact: medium, long-term impact: high). In the current political climate, the GoV is strongly supportive of balancing economic growth with sustainable environmental management. Pollution control and environmental compliance is written into national policies to underpin Vietnam’s strategic objectives as a growing middle-income with increasing demands on the GoV and industries to take responsibility for human and environmental health. Future World Bank assistance will reinforce the achievements and commitment to environmental compliance and clean water ways. 111. Risk to institutional compliance enforcement (likelihood: modest, impact: high). Continuous enforcement of IZs compliance with industrial effluent discharge standards is highly dependent on regular monitoring activities from all stakeholders. The institutional capacity at MONRE, DONRE, CEM, VEPF is solid and growing, and with the introduction of advanced monitoring equipment better evaluation and coordination is enabled for improved control of polluting industries. Financial support to MONRE for continued operation of the 17 AMS beyond project implementation has been secured from the State Budget. However, MONRE is not continuing the elevated monitoring program in the four provinces supported by the project with monthly missions, but instead returning to pre-project frequencies of quarterly or biannual missions. 112. Risk to IZs self-monitoring role (likelihood: modest, impact: high). There are three factors that mitigate this risk. First, for CETP investors, compliance has become a business model with industries paying to have wastewater treated to regulatory standards. Second, for IZ Developers, being able to offer quality service at international standards raises their competitiveness to attract foreign and domestic industries to locate in their IZ. Finally, the investments in self- monitoring equipment, infrastructure, technology, and institutional capacity is a preventive measure against a reversal towards non-compliance. Page 27 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) V. LESSONS AND RECOMMENDATIONS 113. The design of the results chain and the M&E framework offers lessons learned on the importance of defining indicators that can be monitored in sufficient detail and representation to attest the theory of change. Two recommendations emerge: First, recognizing that monitoring is a critical element to improving IZs compliance, an indicator could have been included to reflect that, such as in other pollution abatement projects, i.e. Lebanon with an indicator on “regularly published monitoring reports covering environmental compliance of IZs by authorities”. Second, for IZs with project-financed CETPs using an indicator on pollution load reduction World Bank core indicators could have been applied, such as “m3 of industrial wastewater treated” or “Chemical Oxygen Demand (COD) pollution load reduction achieved”. For the indicator that measured compliance, since wastewater discharge is a continuous process, average representative sampling where either more samples are taken and averaged out or moving towards continuous sampling and including minor flexibilities for exceedances would be a better suited indicator to measure the improvement in compliance rather than the point samples that were included in the original M&E design. Designing a project that has soft regulatory and monitoring/enforcement support together with financing for CETP investments in a complex institutional context and multiple PMUs is challenging. With three Project Management Units and sometimes difficult inter-ministerial and cross-sectoral coordination, the challenge is how to navigate effectively, emphasize the importance of pollution management projects with the accompanying different type of activities that are typically included in such approach, and ensure sustainability of such approach. For example, the evolution of the GoV’s position on the appropriate expenditure categories for ODA funds, imposed restrictions on project activities and impeded operations in the last two years of project implementation. At entry, Vietnam was already classified as a middle-income country (2011) and in the process of transitioning from IDA to IBRD. While direct project support for recurrent expenditures is commonly used in development projects financed by IDA, such support is much less provided under investment projects financed by IBRD. Due to the changed macro-economic situation in the country, the MOF grew increasingly opposed to using borrowed funds to cover recurrent costs already included in the Ministries’ budget. This also applied to the difficulty of the restructuring that was envisaged to increase the number of participating provinces in the program but that was not possible at the end due to the same opposition of MOF toward certain expenditure categories. Implementation arrangements were fairly complex with three PMUs in MPI, MONRE, and VEPF, respectively, and with overall coordination handled by MPI PMU. While coordination was sometimes cumbersome, a strong institutional and personal commitment from the three PMUs steered the project through a challenging implementation period. 113. The approach piloted by the project in the four provinces to combine support for the regulatory framework, strengthening monitoring and enforcement and providing financing for wastewater treatment investments is replicable to other non-project provinces which was pursued under the restructuring that in the end did not go through. Even without such WB-financed support for scale-up, with the new regulations in place and a more affordable financing available for wastewater treatment investments and monitoring of the wastewater effluents and increased capacity for enforcement as well as operation of wastewater treatment plants, it will be easier for MONRE and DONREs to ensure improved compliance to wastewater effluent standards for Industrial Zones and separate industries. 114. A Project design too detailed in its specification of activities hampers flexible implementation and impedes the achievement of objectives. In deciding the exact rules and regulations to be reviewed and revised, the exact technical specifications for the technical equipment to be procured, and the exact location coordinates for AMSs to be installed, the Project did not allow for reasonable adjustment of the project design to accommodate the situation on the ground. Page 28 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Bidding procedures clashed with the GoVs timeline for review of legal documents, procurement was forced into retendering of technical packages, and lengthy approval process for land clearances at fixed locations delayed the monitoring program. While the Bank Team at entry was making every effort to improve implementation readiness, future projects would be advised to allow for greater flexibility at the implementation stage to make decisions tailored to the situation on the ground and changing circumstances over time. Part of the rigid project design also stemmed from government procedures, such as the impossibility for revise the results framework in the absence of a formal government feasibility study approving the same. . Page 29 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Number of project financed IZs in project provinces in compliance with effluent discharge standards Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of project financed Number 0.00 8.00 5.00 IZs in the project provinces in compliance with effluent 25-Oct-2012 30-Sep-2018 30-Sep-2018 discharge standards Comments (achievements against targets): Target 63% achieved. The indicator is defined as the number of Industrial Zones in the project provinces that have constructed Central Effluent Treatment Plant (at least one from each of the four project provinces) and is in compliance with effluent discharge standards (30 parameters). At the end of the project, 5 IZ developers or investors have received project-funding for the construction of CETPs and for the installation of continuous monitoring of wastewater discharge in addition to comprehensive training and capacity building for the proper operation and maintenance of installed CETPs. Of the 5 CETPs financed by the project, 3 CETPs are in full operation (Nhon Trach 3 Phase 2, Bao Minh, and Hoa Mac), 1 CETP is not receiving any wastewater as there are no industries producing wastewater within the IZ (An Phuoc), and 1 CETP is finalized and the IZ has just obtained a wastewater discharge permit from provincial DONRE (Dong Van 3). All 5 CETPs are in compliance with provincial and national effluent standards and environmental regulations, which require IZs to install CETPs prior to operation regardless of whether any of on-site industries produce wastewater. Actual effluent monitoring reports by DONRE for 2018 (Annex 1) show that the performance of Nhon Trach 3 Phase 2 and Hoa Mac is highly satisfactory, meaning there were no exceedances in any of the parameters. For Bao Minh, there were minor exceedances of C12, color, BOD and COD in 2018, earning them a Moderately Satisfactory performance in 2018. Page 30 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) The 5 CETPs are distributed over 3 project provinces. No IZ developers in Ba Ria Vung Tau received funding for CETP financing. Data sources are the DONRE monitoring data which were collected by the Monitoring and Evaluation Consultant and by MONRE as part of project agreement. See also Table 14 in Annex 1 for more details. Objective/Outcome: Percentage of 34 non project financed iZs in the project provinces complying with effluent standards Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of the 34 Percentage 0.00 50.00 69.00 nonproject financed operating IZs in the 4 project 25-Oct-2012 30-Sep-2018 30-Sep-2018 provinces complying with effluent discharge standards Comments (achievements against targets): Target 138% achieved. The indicator was defined as the proportion of all IZs located in the four project provinces that comply with effluent discharge standards. In 2015, when compliance monitoring began, 39 percent of IZs had no exceedances above 1.2 times the allowed threshold in any of the 30 parameters measured. Since the monitoring of the compliance could only be executed by DONREs after putting in place the laboratory equipment, training, capacity building and the monthly monitoring program, the baseline of 39% of IZs in compliance started in 2015. By project closing, a total of 39 non-project financed IZs were located in the four project provinces, of which 69% were proper monitored and in compliance with wastewater regulations. As the target was set to have 50 percent of IZs be compliant, PDO Outcomes Indicator #2 was achieved 138 percent. The project has facilitated better control of 90,000m3/day of effluent being discharged from IZs, and in the future will help better monitoring of effluent quality for more than 165,000m3/day when monitored IZs will be fully occupied and CETPs work at full capacity. Data sources are the DONRE monitoring data which were collected by the Monitoring and Evaluation Consultant and by MONRE as part of project agreement. See also Table 14 in Annex 1 for more details. Page 31 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) A.2 Intermediate Results Indicators Component: Environmental Policy, Monitoring and Enforcement Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Seven key legal documents Text 0 7 9 reviewed, revised or adopted 25-Oct-2012 30-Sep-2018 30-Sep-2018 Comments (achievements against targets): Target 57% achieved. The target was defined as a list of six identified legal documents that would support the implementation of the Law on Environmental Protection, which was newly approved in 2014. However, due to the overall timing of the project and the changing demands for legal support from the GoV, there was a need to change the nature of project support from fixed bid packages to direct and flexible support to MONRE’s legal work. Consequently, some of the circulars and technical regulatio ns actually supported by the project differ from those originally intended. The project supported three out of the six listed legal documents identified at appraisal: (i) Decree 29 and 164, which became Decree 82 on industrial zones and economic zones management (issued by GoV), (ii) Draft law on special economic and administrative zones (still pending further elaboration), (ii) Circular on regulations for environmental monitoring activities (Circular TT24 issued by GoV). Circular on economic and technical norms for calibration of measurement devices of automatic and continuous monitoring stations are also counted towards the indicator target, as only six of seven legal documents were identified. The project supported an additional five legal documents: (i) Circular on environmental protection for used ship breaking (changed to a decree and pending); (ii) Circular on technical regulations on environment (pending); (iii) Circular on environment protection for chemicals, plants, protection chemicals and veterinary drugs (changed to a decree and pending); (iii) Circular on economical and technical norms for calibration of measurement devices of automatic and continuous monitoring stations; (iv) Circular on economical and technical norms for development of national state of environment reports (Circular TT02 issued by GoV); (v) Circular on economic and technical norms for environmental monitoring of ambient air, surface water, soil, underground water and rain water. Data sources: the Vietnam Environment Administration. Page 32 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of operating IZs Percentage 10.00 100.00 97.00 in the project provinces under proper wastewater 25-Oct-2012 30-Sep-2018 30-Sep-2018 effluent monitoring Comments (achievements against targets): Target achieved. The indicator was defined to measure the presence of automatic monitoring stations at the CETP discharge point with online data transmission to provincial DONRE offices. At project closing, 97% of IZs in the four project provinces had continuous online monitoring of wastewater discharged from CETPs in a closed-off monitoring unit only accessible to DONRE. A note on the baseline: The original indicator as defined in the results framework of the PAD uses a baseline of 10 percent, which according to the M&E report from MPI PMU refers to all the 11 provinces located in the Nhue-Day and Dong Nai river basins. However, monitoring data is only available for the four project provinces. While an accurate baseline is not available for just the four project provinces, evidence shows that 79% of IZs in the four project provinces were under proper monitoring by December 2016. In 2015, regulation included in Circular 35/2015/TT-BTNMT required all CETPs to be equipped with automatic monitoring stations (AMS) at the discharge point and that the AMS should meet technical standards to transfer data to provincial DONRE offices. Data sources are the DONRE data which were collected by the Monitoring and Evaluation Consultant and by MONRE as part of project agreement. See also Annex 1 for more details. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion % of IZs in the project Percentage 0.00 100.00 24.00 provinces that are rated for their environmental 25-Oct-2012 30-Sep-2018 30-Sep-2018 Page 33 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) performance Comments (achievements against targets): Target 24% achieved. The indicator was defined as the percentage of IZ in the project provinces that are rated for their environmental performance. With a target of 100%, the project aimed to have all 34 IZs in the four project provinces participate in the voluntary performance rating program. In 2017, this output was partially achieved with 8 IZs participating in the public rating program of their environmental performance - equal to 24% achievement of the target. The program discontinued in 2018. Data source: DONREs and PMUs through the M&E Consultant. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of AMSs established Number 0.00 17.00 17.00 and functioning 25-Oct-2012 30-Sep-2018 30-Sep-2018 Comments (achievements against targets): Target achieved. The indicator was defined as the number of AMS installed and functioning for measuring river surface water quality. 17 automatic monitoring stations were installed throughout the project provinces along the Nhue Day and Dong Nai river basins. Of those, eight were basic stations and 9 were extended stations. Data source: Center for Environmental Monitoring under MONRE and data from M&E consultant. Component: Performance-Based CETP (Centralized Effluent Treatment Plant) Financing Indicator Name Unit of Measure Baseline Original Target Formally Revised Actual Achieved at Page 34 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Target Completion Number of CETP financing Number 2.00 8.00 13.00 proposals received 25-Sep-2012 30-Sep-2018 30-Sep-2018 Comments (achievements against targets): Target 125% achieved. By December 2017, 13 financing proposals had been received of which 5 proposals were appraised, assessed, and approved. Additional proposals were immediately rejected for not meeting the loan conditions, and are therefore not counted as part of the indicator result. Data source: Vietnam Environment Protection Fund and through M&E consultant. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of quality CETPs Number 0.00 8.00 5.00 completed/operational 25-Oct-2012 30-Sep-2018 30-Sep-2018 Comments (achievements against targets): Target 62% achieved. The target was defined as 8 properly constructed and operated CETPs. At the end of the project, 5 CETPs had been properly constructed of which 3 were in operation at project closing (see also PDO Indicator #1). To ensure proper construction, VEPF used a phased approach to tie the release of funds to the completion of certain conditions, including the obtainment of a discharge permit from the provincial authorities in order to withdraw the final 10 percent of the loan amount. Data source, Vietnam Environmental Protection Fund, site visits to the Industrial Zones and the CETPs, M&E consultant information. Component: Implementation Support Page 35 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Seven key TA packages on Number 0.00 7.00 8.00 sustainable industrial development and pollution 25-Oct-2012 30-Sep-2018 30-Sep-2018 baseline investigation completed Comments (achievements against targets): Target 114% achieved. The project implemented 8 technical assistance packages to improve knowledge on sound industrial pollution management in the project's river basin context. The manuals and studies developed were widely distributed. See Annex 1 Outputs by Component for a detailed overview. Data sources: the Vietnam Environment Administration. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of Participants Number 0.00 2500.00 3257.00 trained in project financed capacity building activities 25-Oct-2012 30-Sep-2018 30-Sep-2018 Comments (achievements against targets): Target 130% achieved. Over the course of the project, a total of 3,257 participants were trained in 77 workshops organized by the three PMUs respectively. Participants included five line ministries, public officials and other stakeholders in all 11 provinces of the two river basins. Training was delivered in 3 key training modules: i) Environmental management, covering 11 subjects including pollution management, ii) environmental monitoring, delivered by MONRE on CETP and AMS operation, and iii) Environmental information. For a complete overview of implemented capacity building activities, see Annex 1 Outputs by Component. Data sources: the Vietnam Environment Administration and Project Management Units through the M&E consultant. Page 36 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of trainees with Percentage 0.00 90.00 90.00 improved capacity after project financed training 25-Oct-2012 30-Sep-2018 30-Sep-2018 events Comments (achievements against targets): Target 100% achieved. The target is defined as the percentage of participating trainees stating that the knowledge and skills obtained from the training activities are useful and helped them improve their working capacity. This was measured in feed-back survey forms and direct interviews, in which 90% reported that the content was highly relevant and applicable to their work. Two needs assessment were implemented during project implementation and were used to target training sessions to the right topics and experts. For example, when the Law on Environmental Protection was updated in 2016/2017, VEA prepared visits to each of the provinces following a request for deeper discussions on the applicability of the Law at the provincial level. Seasoned presenters were invited and the participants expressed great satisfaction with the interpretation and discussion of the Law and helped close the knowledge gap to the benefit of the environment. Data sources: the Vietnam Environment Administration and the Project Management Units through the M&E consultant. Page 37 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Table 9: Output by Component Outcome (i): Improve compliance with industrial wastewater treatment regulations in four of the most industrialized provinces in Vietnam 1. Number of project financed IZs in the project provinces in compliance with effluent discharge standards Outcome 2. Percentage of the 34 non-project financed operating IZs in the four project provinces complying with effluent discharge Indicators standards Component I: Environmental Policy, Monitoring and Enforcement 1. Seven key legal documents reviewed, revised, and adopted 2. Percentage of operating IZs in the project provinces under proper wastewater effluent monitoring 3. % of IZs in the project provinces that are rated for their environmental performance 4. Number of AMSs established and functioning Intermediate Component II: Performance-Based CETP Financing Results Indicators 5. Number of CETP financing proposals received 6. Number of quality CETPs completed/operational Component III: Implementation Support 7. Percentage of trainees with improved capacity after project financed training events 8. Seven key TA packages on sustainable industrial development and pollution baseline investigation completed 9. Number of participants trained in project financed capacity building activities Component 1: Environmental Policy, Monitoring, and Enforcement 1(a) Policy Review and Revision: Comprehensive review of the Recipient's legal and regulatory framework on pollution Key Outputs by management. Component (linked to the The project supported nine legal documents in three different agencies related to environmental policy, monitoring, and achievement of the enforcement, with a focus on pollution management and wastewater treatment standards. The project had originally Objective/Outcome intended to support the operationalization of the Law on Environmental Protection, which was passed in June 2014 and took 1) effect in January 2015, through a series of studies that would help inform the regulations and guidelines needed to detail the enforcement of the Law. However, the list of required decrees and circulars was not fixed, but changed constantly in terms of required content, scope, type of documents, etc. Furthermore, the GoV had a strict requirement that all supporting Page 38 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) documents had to issued by September 2015 at the latest. Due to the overall timing of the project and the lengthy procurement processes stipulated in Vietnamese law and WB procurement standards, MONRE PMU proposed, and the WB agreed, to adjust the design of this sub-component for activities under MONRE PMU. Hence, the nature of project support changed from a set of studies offered in three consultancy bid packages to direct and flexible support to respond timely to MONRE’s need for legislation development. The table below outlines the nine documents supported and the current status of each document as of the writing of this ICR. Table 10: Legislative and regulatory support, by Agency. - MPI Department of Economic Zones Management No. Content of Support Progress Update 1 Decree on Industrial Zones and Economic Zones management Conduct studies to provide inputs to the The revised Decree has been issued by Government – Decree development process of the revision of No.82/2018/NĐ-CP. Decree No.29/2008/NĐ-CP and Decree No.164/2013/NĐ-CP on Industrial Zones, Manufacturing Processing Zones, Economic Zones 2 Law on Special Economic and Administrative Zones Conduct studies to provide inputs to the Draft Law was developed, using inputs from the project- development process of the law financed studies. The draft Law was submitted to National development. Assembly for finalization and further consideration of issuance. - MONRE Centre for Environmental Monitoring No. Content of Support Progress Update 3 Circular on environmental monitoring activities Support 2 workshops for comments and 2 Completed. Circular TT24/2017/BTNMT of 1 September 2017 workshops for propagation. on regular environmental monitoring techniques for environmental components including: ambient air, noise and vibration; inland surface water; ground water; sea water; rain water; wastewater; emissions; soil; sediment. This is Page 39 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) considered one of the most important regulations for environment monitoring. 4 Circular on economical and technical norms for calibration of measurement devices of automatic and continuous monitoring stations Project supports circular propagation. Draft Circular completed. It has been handed over to Ministry of Science and Technology for appraisal, finalization for issuance. Not yet issued. 5 Circular on economical and technical norms for development of national state of environment reports Project supports circular propagation. Completed. Circular TT 02/2017-BTNMT dated 7 March 2017 on technical and economic norms for formulating State of Environment report 6 Circular on economical and technical rates for air monitoring, continental surface water, underground water, acidic rainfall, sea water, air released from industries, and radioactivity. Project support: Completed. MONRE issued the Circular No. 20/2017/TT-BTNMT - two expert meetings; dated 8 Aug.2017. - one consultation workshop; - two dissemination workshops. - MONRE Department of Pollution Control No. Content of Support Progress Update 7 Circular on Environmental protection for used ship breaking Project supports meetings of experts, drafting Drafted Circular completed and submitted to MONRE for team and 2 workshops for comments to appraisal and finalization. improve the draft 8 National technical Regulations on Environment ((08 QCVN) Support survey, workshops for comments and All drafted regulations completed and on process for issuance. expert’s opinions 9 Circular on environment protection for chemicals, plant protection chemicals and veterinary drugs Project supports workshops for comments The consultation and appraisal for drafted Circular completed. and expert opinions. The draft has been submitted to MONRE, waiting for issuance. Page 40 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 1(b) Environmental Monitoring and Enforcement: Development of environmental monitoring infrastructure and the improvement in environmental enforcement activities. - Support to the regular monitoring program at DONRE in four project provinces Through delivery of equipment and a monthly monitoring program at each DONRE in the four project provinces, 39 non- project-financed IZs are now equipped with automatic and continuous monitoring of the effluent of the CETPs. This is 5 additional IZs to the 34 included at the appraisal stage. Compliance with effluent standards has clearly improved in the four project provinces over the course of the project. The table below shows the improvement from 2015 to 2018 among the 39 IZs that did not receive project-financing for CETP installation. In 2018, 97 percent of non-project IZs in the four project provinces had installed CETPs and 69 percent were in compliance with national effluent standards. The definition of compliance is explained in a note to Annex 1 on Evaluating Effluent Performance & Compliance: Methodology and Results. Table 11: IZs compliance with effluent standards in the four project provinces Compliant to QCVN40:2011 (with variable column and coefficients) No. Province IZ CETP 2015 2016 2017 2018 1 Bien Hoa 2 x Yes Yes Yes No 2 Amata x No No No Yes 3 Loteco x No No No No 4 Agtex Long Binh x NA No No No 5 Tam Phuoc x No No No No Dong Nai 6 Long Thanh x No Yes No Yes 7 Go Dau x Yes Yes Yes Yes 8 Nhon Trach 1 x No No Yes No 9 Nhon Trach 2 x No No Yes Yes 10 Nhon Trach 3 GĐ 1 x NA Yes Yes Yes Page 41 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 11 Nhon Trach 5 x Yes Yes Yes Yes 12 Nhơn Trach Textile x Yes No No No 13 Ho Nai x No No No No 14 Song May x Yes No Yes Yes 15 Bau Xeo x Yes Yes Yes Yes 16 Giang Dien x NA Yes Yes Yes 17 Tan Phu x NA Yes Yes Yes 18 Suoi Tre x NA Yes Yes Yes 19 Long Duc x NA Yes Yes Yes 20 Dinh Quan x NA Yes Yes Yes 21 NhonTrach 2 Nhon Phu x NA Yes Yes Yes 22 Nhon Trach 2 Loc Khang x NA No No No 23 Long Khanh x NA Yes Yes Yes 24 Loc An – Binh Son x NA Yes Yes Yes 25 Dau Giay x NA No No Yes 26 Thanh Phu x NA Yes Yes Yes 27 Xuan Loc x NA Yes No Yes 28 Ong Keo x NA NA Yes Yes 29 Nhon Trach 6 x NA NA Yes Yes 30 My Xuan A x Yes No No Yes 31 Ba Ria My Xuan A2 x No No No Yes 32 Vung My Xuan B1 -Conac x Yes No Yes Yes 33 Tau Phu My 1 x No Yes No Yes 34 Dong Xuyen x Yes No No No 35 Chau Son x No No No Yes 36 Ha Nam Dong Van I x No No No No 37 Dong Van II x No No No Yes 38 Nam Hoa Xa x No No No No 39 Dinh My Trung 0 No No No No Compliant number 38/39 9/23 17/37 19/39 27/39 Compliant % 97% 39% 46% 49% 69% Page 42 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) - Installation and operation of 17 Automatic Monitoring Stations to measure river surface water quality The project has installed and operated 17 automatic monitoring stations measuring river surface water quality since November 2017 (see the Map in Annex 7 for their specific location). The 17 AMS, which are owned by MONRE, provide reliable, real time and continuous 24 hour monitoring data of the Nhue Day and Dong Nai river basins. Data is sent to the Center for Environmental Monitoring within MONRE for analysis and storage. Budget for the continued operation of the 17 stations has been guaranteed. During the ICR mission, CEM provided the first available monitoring report based on one year of continuous monitoring data of nine parameters, namely pH, ORP, temperature, TSS, DO, EC/TDS, TOC, TN, and TP. The key points from the reports are outlined in a note to Annex 1 below. 1(c) Information Disclosure and Public Participation: Development of an industrial pollution information disclosure system. The Information Disclosure and Public Participation was piloted in 2017 when 8 IZ participated in the public rating program. A methodology and manual were developed, and each of the participating IZs were rated accordingly. Ratings were disclosed in a public consultation organized within each province. However, there was little interest to participation in the program from the ZI in general, and for that reason the program was discontinued in 2018. Component 2: Performance-based CETP financing 2(a) Construction of new CETPs, the expansion of existing CETPs, and the improvement of other relevant infrastructure of industrial wastewater management in the industrial zones of the project provinces. The project financed the construction and/or expansion of five CETPs in three project provinces: # IZ Province Status 2016 2017 2018 1 Nhon Trach 3 Phase 2 IZ Dong Nai 2000 m3/day MS US HS No wastewater 2 An Phuoc IZ Dong Nai MS* MS* MS* Capacity of 2000 m3/day 3 Hoa Mac IZ Ha Nam 1500m3/day MU MU HS 4 Bao Minh IZ Nam Dinh 1500m3/day MU MU MS No wastewater 5 Dong Van 3 IZ Ha Nam - - MS* Capacity of 2000 m3/day * No wastewater is rated as MS. See note to Annex 1 on Evaluating Effluent Performance & Compliance: Methodology and Results. Page 43 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) The basis for assessment of compliance is TT 35/2015/TT-BTNMT and QCVN40-2011 and 155/2016/ND- CP (list of hazardous parameters in effluent). The situation of the project financed CETPs is as follows: (i) Bao Minh: 24 parameters are monitored under the project monitoring program, there were minor exceedances in 4 parameters in the period Aug-Nov 2017. However, none of these exceedances were for hazardous parameters as per 155/2016/ND-CP legislation. In 2018, project financed monitoring by the provincials DONREs was halted, but self-monitoring by independent laboratory of the Industrial Zone demonstrated compliance. (ii) Nhon Trach 3: 30 parameters were monitored, only coliform exceeded in 2017, but that is not a hazardous parameter. Self-monitoring of the industrial zone by independent lab in 2018 shows compliance. (iii) An Phuoc, the CETP has been constructed, but no wastewater has yet been discharged, due to lack of wastewater by the industries. As the lack of wastewater by the industries is outside the responsibility of the project and there is no exceedance of the wastewater effluent regulations, the CETP is in compliance with legislation. In accordance with Vietnamese regulations, Industrial Zones need to have CETPs as per the Law on Environmental Protection in order for wastewater producing industries to be able to settle on said IZ. (iv) Hoa Mac: 21 parameters monitored under the project. In 2017, there were minor exceedances in 5 parameters in the months March-Sept but only one parameter in each of the months and only for non- hazardous parameters. In 2018, self-monitoring of the Industrial Zone by independent laboratory demonstrated compliance. (v) Dong Van 3. CETP has been constructed, but no wastewater effluent due to lack of wastewater by the industries. Therefore in compliance with legislation as there is no wastewater exceeding the wastewater effluent regulations. With the CETP, the IZ is in compliance with the law on environmental protection. Component 3: Implementation Support Page 44 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 3(a): Capacity building This sub-component will support four modules of training courses: (i) environmental management; (ii) surface water quality monitoring; (iii) CETP operation and maintenance; and (iv) environmental information disclosure and public participation. No. of Number of participants No. Training topics workshops Total Men Women I Training activities by PMU-VEA Environmental monitoring techniques – sampling, sample storage and 1 5 160 67 93 analysis (basic course), Ha Nam, BRVT, Dong Nai, Nam Dinh, Ha Noi Application of QA/QC and calibration of equipment for environmental 2 4 98 61 37 monitoring (Ha Noi, BRVT, Ha Nam, Nam Dinh) Environmental monitoring techniques – sampling, sample storage and 3 4 63 22 41 analysis (advanced course) (Nam Dinh, Ha Nam, Ha Noi, Vung Tau) II Training activities by PMU-VEPF Improvement of skills on appraisal of social, environmental and 1 1 61 36 27 economic effects of a project (Quang Binh) Improvement of skills on debt resolution, debt recovery and key points 2 1 63 35 26 in wastewater treatment technology during loan appraisal. (Da Nang) Improvement of skills on cost appraisal, project appraisal, financial 3 report assessment for loan applications in environmental protection 1 117 73 44 (with focus on WWTP loan) (Tuy Hoa) Training course on advanced financial statement analysis and collateral 4 1 202 96 106 appraisal (Quy Nhon) Risk management in project evaluation and creation, non-performing 5 3 100 48 52 loan management and collection (Thua Thien Hue) III Training activities by PMU-MPI Project management and Project Implementation Manual of VIPM 1 1 41 22 19 Project Planning and integrated environmental management (Vinh Phuc, TP 2 7 356 251 105 HCM, Nam Dinh, Ha Nam, BRVT, Dong Nai, Da Nang) Environmental audit (Da Nang, Singapore, Da Nang, Hai Phong, TP 3 5 171 100 71 HCM) Design and implementation of environmental communication and 4 education program (including TOT), (Hue, Quang Ninh, Da Nang, Nam 7 435 297 138 Dinh, Ha Nam, Dong Nai, BRVT) Page 45 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Updating on Law on Environmental Protection (Ninh Binh, TP HCM, Ha 5 6 226 155 71 Noi, TP HCM, Da Nang, Da Nang) Environmental English (Ha Nam, Nam Dinh, Dong Nai, BRVT, Ha Nam, 6 7 107 41 66 Dong Nai, BRVT) 7 Environmental Model and monitoring in Thailand 1 18 11 7 Community participation in planning and management of industrial 8 pollution (at central level) (Phu Yên, Phu Tho, Ha Noi, TP HCM, TP HCM, 9 470 304 166 Nam Dinh, Ha Nam, Dong Nai, BRVT) Environmental management system according to ISO standards for 9 3 123 68 55 enterprises and IZ (Phu Thọ, TP HCM, Ha Noi) Guidelines on operation and maintenance of WWTP in IZs – Tender 10 2 93 64 29 package CS11 11 Concepts of integrated management of water resources 2 81 51 30 Inspection and supervision of environmental compliance (Da Nang, Hai 12 4 201 156 45 Phong, BRVT) 13 Environmental management in Korea (8 days) 1 19 11 8 Application of Environmental Impact Assessment and Environmental 14 Protection Plan in Pollution management of IZ (TP HCM, Hai Phong) 2 110 75 35 IV TOTAL 2013-2017 77 3257 2044 1271 3(b): Technical Assistance: Improve knowledge on sound industrial pollution management in the project's river basin context The project planned to deliver seven technical assistance packages, as outlined in Table 12 below. Five out seven TA packages were delivered. Most notably, the project had planned to develop inventories of pollution sources in the four project provinces. Table 12: Planned and actual technical assistance packages No. Planned TA Packages Actual TA Packages Completed Status PMU Development of manuals and reports Development of manuals on planning, management and Completed MPI PMU 1 on planning and management of control of industrial pollution for IZs in Nhue-Day and Dong (Q1/2017) industrial pollution of IZs Nai river basins Identification and demonstration of Study and proposal of environmental management model Completed MPI PMU 2 environmental management models using incentive technical instruments and cleaner production (Q2/2018) Page 46 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) with effective economic, administrative for IZs and technological instruments Development of strategies for Study and proposal of IZ development models toward Completed MPI PMU 3 sustainable IZ development based on sustainable IZ (Q2/2018) the concepts of eco-IZ Establishment of site assessment and 4 remediation strategies for relocation of IZs Investigation on environmental carrying Calculation of maximum pollution load (carrying capacity) for Completed in VEA PMU 5 capacity of the two river basins with a two river basins of Nhue-Day and Dong Nai 2017 focus on the four project provinces Development of inventories of pollution 6 sources in the four project provinces Development of CETP operation and Development of manuals for operating industrial wastewater Completed MPI PMU 7 maintenance manuals treatment plant (WWTP) (Q1/2017) Study and development of methods for pollution assessment Completed MPI PMU 8 and proposal of rehabilitation solutions for polluted areas (Q3/2017) Development of methodology for rating of IZ according to Completed VEA PMU 9 environmental performance for public information (9/2016) distribution Research on scientific base and practice to develop analytical Completed VEA PMU and monitoring method for new POPs (PBDE and PFC), (Q2/2018) 10 originated from industrial activities in Dong Nai and Nhue – Day river basins 11 Credit manual Distribution of Technical Studies: • Set of 6 manuals on planning, management, and control of industrial pollution for IZs in the two river basins of Dong Nai and Nhue-Day (Study #1) distributed to DONRE, CEM, IZMB of 4 project provinces, universities, IZ developers, etc.: - (i) Handbook for management and control of pollution in industrial zones; - (ii) Technical guidance in pollution management and control for enterprises in the field of mechanical processing and metal finishing; Page 47 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) - (iii) Technical guidance on pollution management and control for enterprises in the field of producing construction ceramics; - (iv) Technical guidance on pollution management and control for enterprises in the field of chemical- cosmetic production; - (v) Technical guidance on pollution management and control for enterprises in sea food processing, and; - (vi) Technical guidance on pollution management and control for enterprises in the field of textile dyeing. • 1,500 printed copies of the manual for operating industrial wastewater treatment plant (Study #4) have been distributed to all 63 provinces nationwide (Provincial DONRE offices, PCEM, IZMBs, Universities, Technical Colleges, IZ developers, CETP investors, and individual researchers). • Handbook with methodology on rating IZs according to environmental performance disseminated within the 4 project provinces. 3(c): Project Management Implementation supervision, support to safeguards, and technical assistance. Page 48 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Evaluating Effluent Performance & Compliance: Methodology and Results Based on the legislative regulation on environmental pollution standards and datasets collected under the monthly monitoring program of 43 IZs, a framework was developed jointly between the MPI PMU and the World Bank Team in a participatory approach to define “compliance” for the purposes of evaluating project outcomes. Table 13 below shows how compliance was established. Based on the results from the regular monitoring sessions, a rating is assigned to the compliance level of each IZ. If rated Highly or Moderately Satisfactory, then the IZ is considered compliant. If rated Moderately Unsatisfactory or Unsatisfactory, then the IZ is considered non-compliant. Note: The CETP at Dong Van III IZ has been constructed but is not yet in operation. Hence, no compliance data is included in the Table 14 below. Table 13: Compliance Matrix Monitoring Compliance level Definition/Requirements Compliant Frequency 100% monitored parameters comply Highly satisfactory to the QCVN 40:2011/BTNMT If the IZ satisfies one of the two criteria: (1) The exceedance of the monitored parameters from 1.1 times or less Compliant Moderately satisfactory (equivalent to maximum 10% exceedance) Regular monitoring (2) The IZ has no discharged waste sessions water Have one monitored parameter exceed Moderately unsatisfactory the permitted level with the range from 1.1 times to less than 2 times Non-Compliant Have one monitored parameter exceed Unsatisfactory the permitted level with the range from 2 times. 100% monitoring sessions (monthly Highly satisfactory monitoring) be evaluated as Highly satisfactory Compliant Have one monitoring session (month) Annual monitoring Moderately satisfactory be evaluated as Moderately rating satisfactory Have one monitoring session (month) Moderately unsatisfactory evaluated Moderately Unsatisfactory Non-Compliant Have one monitoring session be Unsatisfactory evaluated as Unsatisfactory Improving COMPLIANCE: The IZ is moving toward compliance Page 49 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Table 14: Results of compliance monitoring for 43 IZs in the four project provinces (2018) with project-financed CETPs highlighted in yellow INDUSTRIAL ZONE'S WASTEWATER MONITORING RESULTS 2018 (January - October) Monitoring Points / Approx. Flow No Parameter Frequency Results 2018 HS MS MU US Notes Industrial Zones rate m3/day Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Dong Nai Highly Highly Highly 1 Bien Hoa 2 IZ 8000 30 parameters (thông số) Unsatisfactory 1 Cot A, Kq 1.2 Kf 0.9 Once/ month statisfactory statisfactory statisfactory Coliform exceeds 3.66 Highly Highly Highly Highly 2 Amata IZ 6000 30 parameters Quarterly 1 Cot A statisfactory statisfactory statisfactory statisfactory Highly Highly 3 Loteco IZ 7000 30 parameters Quarterly Unsatisfactory Unsatisfactory 1 statisfactory statisfactory Coliform exceeds 2.1 3.3 Highly Moderately Highly 4 Agtex Long Binh IZ 450 30 parameters Quarterly Unsatisfactory 1 statisfactory unstatisfactory statisfactory NH4 exceeds 1.26 Coliform exceeds 5 Highly Moderately Moderately Highly 5 Tam Phuoc IZ 2800 30 parameters Quarterly 1 statisfactory unstatisfactory satisfactory statisfactory Chloride exceeds 1.1 Coliform exceeds 2.1 Highly Highly Highly Highly 6 Long Thanh IZ 1250 30 parameters Quarterly 1 statisfactory statisfactory statisfactory statisfactory Highly Highly Highly Highly 7 Go Dau IZ 500 30 parameters Quarterly 1 statisfactory statisfactory statisfactory statisfactory Highly Highly Highly 8 Nhon Trach 1 IZ 4000 30 parameters Quarterly Unsatisfactory 1 statisfactory statisfactory statisfactory Coliform exceeds 5.6 Highly Highly Highly Highly 9 Nhon Trach 2 IZ 5000 30 parameters Quarterly 1 statisfactory statisfactory statisfactory statisfactory Highly Highly Highly Highly 10 Nhon Trach 3 (phase 1) IZ 4500 30 parameters Quarterly 1 statisfactory statisfactory statisfactory statisfactory Highly Highly Highly 11 Nhon Trach 3 (phase 2) IZ 2000 30 parameters (B column) Quarterly 1 statisfactory statisfactory statisfactory Highly Highly Highly Highly 12 Nhon Trach 5 IZ 5500 30 parameters Quarterly 1 statisfactory statisfactory statisfactory statisfactory Nhon Trach Textile IZ Highly Highly 13 4200 30 parameters Quarterly Unsatisfactory Unsatisfactory 1 (Vinatex) statisfactory statisfactory Coliform exceeds 2.6 Fe exceeds 2.6 Highly Highly Highly 14 Ho Nai IZ 2100 30 parameters Quarterly Unsatisfactory 1 statisfactory statisfactory statisfactory Total P exceeds 1.8 Coliform exceeds 6 Ni exceeds 1.5 Zn exceeds 1.8 Cr3+ exceeds 1.1 Highly Highly Highly Highly 15 Song May IZ 1100 30 parameters Quarterly 1 statisfactory statisfactory statisfactory statisfactory Page 50 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Monitoring Points / Approx. Flow No Parameter Frequency Results 2018 HS MS MU US Notes Industrial Zones rate m3/day Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Highly Highly Highly Highly 16 Bau Xeo IZ 860 30 parameters Quarterly 1 statisfactory statisfactory statisfactory statisfactory Moderately Moderately Moderately Moderately 17 Giang Dien IZ 200 30 parameters Quarterly 1 Satisfactory Satisfactory Satisfactory Satisfactory No wastewater Moderately Moderately Moderately Moderately 18 Tan Phu IZ 60 30 parameters Quarterly 1 Satisfactory Satisfactory Satisfactory Satisfactory Moderately Moderately Moderately Moderately 19 Suoi Tre IZ 280 30 parameters Quarterly 1 Satisfactory Satisfactory Satisfactory Satisfactory Moderately Moderately Moderately Moderately 20 Long Duc IZ 1800 30 parameters Quarterly 1 Satisfactory Satisfactory Satisfactory Satisfactory Moderately Moderately Moderately Moderately 21 Dinh Quan IZ 20 30 parameters Quarterly 1 Satisfactory Satisfactory Satisfactory Satisfactory Nhon Trach 2 - Nhon Phu Moderately Moderately Highly Highly 22 180 30 parameters Quarterly 1 IZ Satisfactory Satisfactory statisfactory statisfactory Nhon Trach 2 – Lộc Khang Highly Highly Highly 23 100 30 Parameters Quarterly Unsatisfactory 1 IZ statisfactory statisfactory statisfactory NH4+ exceeds 2.9 Coliform exceeds 3 Moderately Moderately Moderately Moderately 24 Long Khanh IZ 70 30 Parameters Quarterly 1 Satisfactory Satisfactory Satisfactory Satisfactory pH Moderately Moderately Moderately Moderately 25 Loc An - Binh Son IZ 45 30 parameters Quarterly 1 Satisfactory Satisfactory Satisfactory Satisfactory Moderately Moderately Moderately Moderately 26 An Phuoc IZ 6 30 parameters Quarterly 1 Satisfactory Satisfactory Satisfactory Satisfactory No wastewater Moderately Moderately Moderately Moderately 27 Dau Giay IZ 160 30 parameters Quarterly 1 Satisfactory Satisfactory Satisfactory satisfactory Moderately Moderately Moderately Moderately 28 Thanh Phu IZ 0 30 parameters Quarterly 1 satisfactory satisfactory satisfactory satisfactory No wastewater Moderately Highly Highly Highly 29 Xuan Loc IZ 100 30 parameters Quarterly 1 satisfactory statisfactory statisfactory statisfactory Total N exceeds 1.1 Moderately Moderately Moderately Moderately 30 Ong Keo IZ 230 30 parameters Quarterly satisfactory satisfactory satisfactory satisfactory 1 Moderately Moderately Moderately Moderately 31 Nhon Trach 6 IZ 400 30 parameters Quarterly satisfactory satisfactory satisfactory satisfactory 1 Subtotal Dong Nai 9 14 1 7 31 Source: Monitoring data by DONRE in each of the four project provinces. Page 51 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Monitoring Points / Approx. Flow No Parameter Frequency Results 2018 HS MS MU US Industrial Zones rate m3/day Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Ba Ria Vung Tau Highly 1 My Xuan A IZ 2000 27 parameters Bianually 1 statisfactory Col. B Kq=1, Kf=1 Highly 2 My Xuan A2 IZ 8000 27 parameters Bianually statisfactory 1 Col. B Kq=0.9, Kf=0.9 Highly 3 My Xuan B1-Conac IZ 300 27 parameters Bianually statisfactory 1 Col. B Kq =0.9 Kf =1 Coliform exceeds Highly 4 Phu My 1 IZ 2500 27 parameters Bianually statisfactory 1 Coliform exceeds Moderately 5 Dong Xuyen IZ 2000 27 parameters Bianually unstatisfactory 1 Col. B Kq =1 Kf =1 NH4 exceeds 1.28 Subtotal BRVT 4 0 1 0 5 Ha Nam Highly 1 Chau Son IZ 2500 21 parameters Bianually statisfactory 1 Col. A Kq =0.9 Kf =1 NH4+ exceeds Moderately 2 Dong Van I IZ 1000 21 parameters Bianually unstatisfactory 1 Col. B Kq =0.9 Kf =1 BOD exceeds 1.33 COD exceeds 1.02 Highly 3 Dong Van II IZ 2000 21 parameters Bianually statisfactory 1 Col. A Kq =0.9 Kf =1 Highly Highly 4 Hoa Mac IZ 400 21 parameters (A column) Bianually statisfactory statisfactory 1 Col. A. Kq=0.9 Kf=1 Subtotal Ha Nam 3 0 1 0 4 Nam Dinh Moderately Moderately 1 Hoa Xa IZ 4500 24 parameters Monthly Unsatisfactory 1 unstatisfactory unstatisfactory Col A, Kq=0.9 Kf=1 TSS exceeds 1.4 Color exceeds 1.5 2.68 2 Sulfur exceeds 2.22 1.44 Coliform exceeds 2.07 1.4 BOD exceeds 1.1 2.85 1.74 COD exceeds 1.23 2.46 1.78 Total N exceeds 1.44 1.22 Residue Cl exceeds 1.1 1.3 Cr6+ exceeds NH4+ exceeds 1.78 Highly Highly Moderately Moderately Moderately Highly Highly 2 Bao Minh IZ 4500 24 parameters (A column) Monthly Highly statisfactory 1 statisfactory statisfactory satisfactory satisfactory satisfactory statisfactory statisfactory Col A, Kq=0.9 Kf=1 Cl2 exceeds 1.06 Color exceeds 1.2 BOD exceeds 1.03 COD exceeds 1.07 Moderately 3 My Trung IZ ? 24 parameters Monthly Unsatisfactory Unsatisfactory 1 unstatisfactory Col B, Kq=1, Kf=1 TSS exceeds 1.58 Color exceeds 1.44 1.8 NH4+ exceeds 1.36 1.4 COD exceeds 1.2 1.83 1.93 BOD exceeds 1.54 2.64 2.76 Sulfur exceeds 1.2 1.74 Total N exceeds 1.05 Coliform exceeds 1.3 2.2 2.92 Sub-total 0 1 0 2 3 TOTAL 16 15 3 9 43 Page 52 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Graph 1: Set of graphs showing exceedances by IZ and by parameter (January 2016 to September 2018) 10 Loteco 5 Color exceeds 0 Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep Coliform exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 Amata 5 Nickel exceeds 0 Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep Coliform exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 Agtex Long Binh 5 NH4 exceeds 0 Coliform exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 30 Tam Phuoc 20 Fluoride exceeds 10 0 Chloride exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep Coliform exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 Long Thanh 5 0 Coliform exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 Page 53 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 10 Nhon Trach 1 5 Coliform exceeds 0 BOD exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 Nhon Trach 2 5 0 BOD exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 Nhon Trach 3/1 5 Flouride exceeds 0 Residue Cl exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 15 Nhon Trach 3/2 10 5 Residue Cl exceeds 0 Coliform exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 Page 54 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 10 Nhon Trach Textile 8 Coliform exceeds 6 4 NH4 exceeds 2 Fe exceeds 0 Residue Cl exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 20 Ho Nai 18 Residue Cl exceeds 16 Cl- exceeds 14 NH4+ exceeds 12 Total P exceeds 10 Coliform exceeds 8 BOD exceeds 6 COD exceeds 4 Total N exceeds 2 Ni exceeds 0 Zn exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 Cr3+ exceeds 10 Song May 5 NH4 exceeds 0 Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 Page 55 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 10 Nhon Trach 2 LK No wastewater 5 NH4+ exceeds 0 Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep Coliform exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 Dau Giay Total N exceeds 5 NH4+ exceeds 0 Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep Total P exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 Xuan Loc 5 0 Total N exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 My Xuan A 5 Total P exceeds 0 Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep NH4+ exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 My Xuan A2 8 Cr6+ exceeds 6 4 NH4+ exceeds 2 Total N exceeds 0 Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep Coliform exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 Page 56 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 10 My Xuan B1 CN 5 0 Coliform exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 Phu My 1 5 0 NH4+ exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep Coliform exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 Dong Xuyen 5 Mn exceeds 0 Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep NH4+ exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 Chau Son NH4+ exceeds 5 Color exceeds 0 Coliform exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep Total N exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 Page 57 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 10 Dong Van 1 8 Total N exceeds 6 Coliform exceeds 4 BOD exceeds 2 NH4+ exceeds COD exceeds 0 Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep Color exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 Dong Van 2 8 Coliform exceeds 6 Cloride exceeds 4 Total N exceeds 2 NH4+ exceeds 0 Color exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep Total P exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 Hoa Mac 8 Total N exceeds 6 Coliform exceeds 4 NH4+ exceeds 2 As exceeds 0 Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep Color exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 Page 58 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 10 Hoa Xa 9 8 TSS exceeds 7 Color exceeds 6 Sulfur exceeds 5 Coliform exceeds 4 BOD exceeds 3 COD exceeds 2 Total N exceeds 1 Residue Cl exceeds 0 Cr6+ exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep NH4+ exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 Bao Minh 8 Color exceeds 6 COD exceeds 4 BOD exceeds 2 Sulfur exceeds 0 Total N exceeds Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep Coliform exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 Page 59 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 10 My Trung 9 8 TSS exceeds 7 Color exceeds 6 NH4+ exceeds 5 4 COD exceeds 3 BOD exceeds 2 Sulfur exceeds 1 Total N exceeds 0 Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep Coliform exceeds 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 10 Bien Hoa 2 5 Coliform exceeds 0 Jan Mar May Jul Sep Nov Feb Apr Jun Aug Oct Jan Mar May Jul Sep 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 18 Page 60 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) 2018 monitoring results from river water quality stations One of the key project activities was to build a water environment monitoring system through automatic and continuous water monitoring stations in the four provinces of Ha Nam, Nam Dinh (Nhue - Day river basin), Dong Nai and Ba Ria Vung Tau (Dong Nai river basin). The objective is to monitor the water quality of the rivers of Nhue - Day and Dong Nai river basins on the basis of reliable, real time and continuous 24/24h data series. The project has developed and officially operated 17 automatic and continuous surface water monitoring stations since November 2017. Station maintenance and operation has been carried out regularly. Thereby, it is possible to detect and provide early warning for environmental issues, evaluate the current situation, trends and changes in water quality for environment management, protection and policy making. Key observation points: - The ratio of received data for most parameters of the station has met the requirements. However, there is sometimes a loss of data due to power outages, internet loss, and broken equipment being repaired, replaced, and other problems such as: failure of pontoon bridges, failure of water pumping system. - The measuring probes and the pipes of TN, TP, and TOC analyzers get dirty very quickly because the water environment in many areas has been polluted or have large amounts of sediment. Some monitoring stations in Ba Ria - Vung Tau are near the sea, and the saltwater degrades the equipment very quickly. - The water quality at 8 stations on Nhue-Day river basin over the year has recorded pollution by TSS parameter and organic pollution, with low DO values that could not meet QCVN, and high TOC values exceeding QCVN. Areas with degraded water quality and organic pollution are concentrated mainly on Nhue, Day and Chau Giang rivers. The water quality of Day and Dao rivers in Nam Dinh is still relatively good with most of the values of monitoring parameters meeting QCVN 08-MT: 2015 / BTNMT type B1. - The water quality at 9 stations on Dong Nai river basin is mainly still good, the upstream area of Dong Nai river and Thi Vai river section passing through Go Dau Port has the best water quality. However, it is noted that the water quality is showing signs of deterioration, water is polluted due to TSS parameters and organic pollution in some areas, such as Dong Nai river section running through Bien Hoa city, the intersection between Dong Nai river and Saigon river, Cha Va river section at Cha Va bridge and Thi Vai river section through Cai Mep Industrial Park. In these areas, there were many low DO values recorded which could not meet QCVN 08-MT: 2015/BTNMT types B1 and B2; and high TOC values exceeding QCVN 08-MT: 2015/BTNMT type A1 for many times. Below is a graphic summary for each of the 17 basic and extended monitoring stations. Page 61 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) I. Monitoring results from 08 stations in Nhue-Day river basin The results obtained from 08 automatic monitoring stations on Nhue - Day river basin have shown that the river water was polluted by TSS parameter and organic pollution. Monitoring results recorded many low DO values that could not meet QCVN 08-MT: 2015/BTNMT and high TOC parameter values exceeding QCVN. The water quality of Nhue, Day and Chau Giang rivers, for some periods, has been downgraded and polluted due to the impacts of receiving wastewater from Hanoi as well as industrial wastewater and domestic wastewater in the area. The water quality of Day and Dao rivers in Nam Dinh is still relatively good with most of the values of monitoring parameters meeting QCVN 08-MT: 2015/BTNMT type B1. However, it has also recorded a high TSS parameter exceeding QCVN. Specifically, the monitoring results of each parameter are as follows: • Temperature parameters Average daily value of the temperature parameters in 2018 fluctuated relatively strongly, there was a big difference between seasons. Temperature parameters tended to increase in summer and decrease in winter and spring. There was no big difference in temperature parameters between stations. Figure 3. Development of average daily values of temperature parameters in 2018 Page 62 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Figure 4. Development of average monthly values of temperature parameters in 2018 • TSS parameters The average daily value of TSS parameters in 2018 had strong fluctuations between stations as well as between days of the year. For Nhue - Day river basin, TSS values were relatively high, with 85.74% of the collected TSS values higher than QCVN 08-MT: 2015/BTNMT type B1. Of which, over 62.89% of collected TSS value exceeded QCVN 08-MT: 2015/BTNMT type B2. High TSS values exceeding QCVN were recorded at all stations. The value of TSS parameters increased substantially at times of flood or heavily polluted water. Figure 5. Development of average daily values of TSS parameters in 2018 Page 63 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Figure 6. Development of average monthly values of TSS parameters in 2018 • DO parameters The average daily value of DO parameters in 2018 had large differences between monitoring stations. The water environment at some stations has been polluted with low value of DO parameters, not meeting QCVN (especially at Nhat Tuu station). The ratio of collected DO values that could not meet QCVN 08-MT: 2015/BTNMT type B1 and B2 was 47.2% and 27.7%, respectively. However, only Quan Chuot and Thanh Loi stations (monitoring water quality of Dao river in Nam Dinh) recorded high DO values, reaching QCVN 08-MT: 2015/BTNMT type A1. Figure 7. Development of average daily values of DO parameters in 2018 Page 64 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Figure 8. Development of average monthly values of DO parameters in 2018 • pH parameters The average daily value of pH parameters in 2018 ranged from 5.1 to 9.7. The development of pH values obtained was relatively even among the stations. Particularly at Do Xa station, for some times in 2018, it was lower than at other stations. However, most of the pH values obtained met QCVN 08-MT: 2015/BTNMT type B1. Figure 9. Development of average daily values of pH parameters in 2018 Page 65 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Figure 10. Development of average monthly values of pH parameters in 2018 • ORP parameters The average daily value of ORP parameters in 2018 had a strong fluctuation between -527,3 to 553,0 mV. The development of ORP values recorded was relatively even among Quan Chu, Thanh Loi and Yen Tri stations. Meanwhile, at the remaining stations, the development of ORP values recorded had a relatively substantial change between times of the year. Figure 11. Development of average daily values of ORP parameters in 2018 Page 66 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Figure 12. Development of average monthly values of ORP parameters in 2018 • EC parameters The average daily value of EC parameters in 2018 ranged from 3.36 to 1197.49 µS/cm. Similar to ORP parameters, the development of EC values recorded was relatively even for Quan Chuot and Thanh Loi stations. Meanwhile, at the remaining stations, the development of EC values recorded varied unevenly. Figure 13. Development of average daily values of EC parameters in 2018 Page 67 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Figure 14. Development of average monthly values of EC parameters in 2018 • TP, TN and TOC parameters The monitoring results of TN, TP and TOC have recorded organic pollution at some monitoring stations, specifically as follows: • The average daily value of TP parameters in 2018 ranged from 0.02 - 10.38 mg/L. • The average daily value of TN parameters in 2018 ranged from 0.23 - 13.12 mg/L. The average daily value of TOC parameter in 2018 strongly fluctuated between 0.01 - 109.0 mg/L. The water environment of Nhue - Day river basin was recorded with pollution by organic matter with the rate of collected TOC values exceeding QCVN 08-MT: 2015/BTNMT type A1 over 78%, of which the exceeded values were mainly recorded at Do Xa and Nhat Tuu stations. Some other stations had TOC values still within the allowable limits (Quan Chuot, Yen Tri). Figure 15. Development of average monthly values of TN parameters in 2018 Page 68 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Figure 16. Development of average monthly values of TOC parameters in 2018 Figure 17. Development of average monthly values of TP parameters in 2018 II. Monitoring results at 09 stations of Dong Nai river basin According to the monitoring results obtained from 09 stations on Dong Nai river basin, most of the river sections have relatively good water quality such as the upstream area of Dong Nai river (Ta Lai station) and Thi Vai river section passing through Go Dau Port (Long Thanh station). However, it is noted that the water quality is showing signs of deterioration, water is polluted due to TSS parameters and organic pollution in some areas affected by wastewater from industrial parks in Binh Duong, Dong Nai province, and Ho Chi Minh City, domestic wastewater and waterway traffic activities, such as Dong Nai river section running through Bien Hoa city (Quyet Thang, Tan Hanh, and An Binh stations), the intersection between Dong Nai river and Saigon river (Rach Bay station), Cha Va river section at Cha Va bridge (Long Son station) and Thi Vai river section through Cai Mep Industrial Park (Cai Mep station). In Page 69 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) these areas, there were many low DO values recorded which could not meet QCVN 08-MT: 2015/BTNMT types B1 and B2; and high TOC values exceeding QCVN 08-MT: 2015/BTNMT type A1 for many times. • Temperature parameters The average daily value of the temperature parameters in 2018 ranged from 20.23 - 32.85 oC. Unlike the stations in the North, the values of temperature parameters were relatively even between months of the year. Figure 18. Development of average daily values of temperature parameters in 2018 Figure 19. Development of average monthly values of temperature parameters in 2018 • TSS parameters The daily average value of TSS parameters in 2018 had a strong fluctuation between 1.01 - 887.11 mg/L. The ratio of collected TSS values exceeding QCVN 08-MT: 2015/BTNMT type B1 was 36.15%, of which 31.26% was at a high level exceeding QCVN 08-MT: 2015/ BTNMT type B2. The high TSS values exceeding QCVN were recorded mainly on Dong Nai and Thi Vai rivers at Ta Lai, Tan Hanh, Cai Mep, Long Son stations. The development of collected TSS values in the quarter at Ta Lai and Cai Mep stations was quite changeable, while at the remaining stations, the values of TSS parameters was relatively even. Page 70 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Figure 20. Development of average daily values of TSS parameters in 2018 Figure 21. Development of average monthly values of TSS parameters in 2018 • DO parameters The average daily value of DO parameters in 2018 ranged from 0.26 - 8.89 mg/L. It has been recorded that the water environment was polluted with low values of DO parameters, not meeting QCVN. The ratio of collected DO values that could not meet QCVN 08-MT: 2015/BTNMT types B1 and B2 is 18.81% and 17.61%, respectively. Low DO values were recorded mainly in Dong Nai River at An Binh station and in Saigon Rivers at Rach Bay station. The development of DO parameters did not change strongly between months of the year. Some stations, such as Ta Lai, recorded DO parameters that were frequently high, and the water quality in these areas was still relatively good. Page 71 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Figure 22. Development of average daily values of DO parameters in 2018 Figure 23. Development of average monthly values of DO parameters in 2018 • pH parameters The average daily values of pH parameters in the first quarter of 2018 ranged from 4.68 - 8.97 pH. Most of the pH values obtained met QCVN 08-MT: 2015/BTNMT type B1. The development of pH values obtained is relatively even between the stations and between times of the year. Page 72 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Figure 24. Development of average daily values of pH parameters in 2018 Figure 25. Development of average monthly values of pH parameters in 2018 • ORP parameters The average daily value of ORP parameters in 2018 fluctuated strongly between -498,1 - 807,0 mV. The development of ORP values obtained was relatively even among Ta Lai, Quyet Thang, Long Son and Cai Mep stations. Figure 26. Development of average daily values of ORP parameters in 2018 Page 73 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Figure 27. Development of average monthly values of ORP parameters in 2018 • EC parameters Similar to the ORP parameters, the average daily value of EC parameters in 2018 also fluctuated substantially between 0.52 - 48.217.13 µS/cm. Figure 28. Development of average monthly values of EC parameters in 2018 • TP, TN and TOC parameters The monitoring results of TN, TP and TOC of stations in the south have found that some stations showed signs of organic pollution, however, but basically these parameters were still relatively low. - The average daily value of TP parameters in 2018 ranged from 0.05- 0.85 mg/L. - The average daily value of TN parameters in 2018 ranged from 0.05 - 81.27 mg/L. The average daily value of TOC parameter in 2018 strongly fluctuated between 0.09 – 81.27 mg/L. It has been recorded that the water environment of some stations in Dong Nai river basin was polluted with organic matter with the rate of collected TOC. Of which the TOC values exceeding QCVN were mainly Page 74 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) recorded in Thi Vai river at Cai Mep station, in Dong Nai river at Quyet Thang station and in Saigon river at Rach Bay station. Particularly at An Binh and Cai Mep stations, TOC values obtained were relatively low and met QCVN 08-MT: 2015/BTNMT. Figure 29. Development of average monthly values of TN parameters in 2018 Figure 30. Development of average monthly values of TOC parameters in 2018 Figure 31. Development of average monthly values of TP parameters in 2018 Page 75 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) List of signed contracts between VEPF and Industrial Zone Developers for CETP financing Table 15: List of signed contracts between VEPF and Industrial Zone Developers for CETP financing (January 2012 - December 2018) Loan from State Fund Loan from World Bank No. Year Industrial zone Province (Vietnamese Dong) (Vietnamese Dong) 1 Vinh Loc 2 Long An 15,000,000,000 2 Tien Son - Phase 2 Bac Ninh 7,000,000,000 Ba Ria - Vung 3 My Xuan B1 10,000,000,000 Tau 4 2012 Tam Hiep Quang Nam 10,000,000,000 5 Duc Loi Long An 10,000,000,000 6 Tam Phuoc Dong Nai 10,000,000,000 7 Bac Dong Phu Binh Phuoc 10,000,000,000 8 Long Thanh Dong Nai 14,000,000,000 9 2013 Tan Hoi Tay Ninh 10,000,000,000 10 Nhon Trach 3 Phase II Dong Nai 14,750,000.000 11 Yen Phong Bac Ninh 10,000,000,000 12 An Phuoc Dong Nai 19,097,000,000 13 Ba Thien 2 Vinh Phuc 10,000,000,000 2014 14 Bao Minh Nam Dinh 50,000,000,000 15 Phu Bai Thua Thien Hue 4,000,000,000 16 Hoa Mac Ha Nam 12,200,000,000 17 Quat Dong Ha Noi 14,000,000,000 18 Dinh Vu Hai Phong 14,000,000,000 19 Long Hau Long An 15,000,000,000 2015 20 Thanh Thanh Cong Tay Ninh 15,000,000,000 21 Nam Tan Uyen Binh Duong 14,000,000,000 22 Trang Bang Tay Ninh 15,000,000,000 23 Sa Dec Dong Thap 10,000,000,000 24 Thanh Thanh Cong Tay Ninh 13,500,000,000 2016 Minh Hung Han Quoc 25 Binh Phuoc 15,000,000,000 26 Thanh Thanh Cong Tay Ninh 15,000,000,000 27 Bao Minh (Phase 2) Nam Dinh 14,000,000,000 28 Bim Son Thanh Hoa 15,000,000,000 2017 29 Dong Van 3 Ha Nam 15,000,000,000 30 Gia Vân Ninh Binh 15,000,000,000 31 Lai Cach Hai Duong 13,500,000,000 2018 32 Yen My 2 Hung Yen 14,000,000,000 Total 332,000,000,000 111,047,000,000 Page 76 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Role Preparation Jiang Ru Task Team Leader Alan Coulthart Lead Municipal Engineer Environmental Douglas J. Graham Sr. Environment Specialist Environment Anjali Acharya Sr. Environment Specialist Environment Hisham A. Abdo Kahin Sr. Counsel Miguel-Santiago Oliveira Sr. Finance Officer Disbursements Jed Friedman Sr. Economist - Economic Analysis Yiren Feng Sr. Environment Specialist Environmental Monitoring Wei Zhang Financial Sector Specialist Ha Thuy Tran Financial Management Specialist Tuan Anh Le Social Development Specialist - Safeguards Hoai Van Nguyen Procurement Specialist Thao Thi Do Financial Analyst - Disbursements Huong Thi Mai Nong Jr. Counsel Bernardita Ledesma Operations Analyst Thu Thi Le Nguyen Operations Analyst Giang Thanh Huong Le Program Assistant - Administrative Support Ngozi Blessing Obi Malife Program Assistant - Administrative Support Quyen Thuy Dinh Program Assistant - Administrative Support Supervision/ICR Katelijn Van den Berg Task Team Leader Hoai Van Nguyen Procurement Specialist(s) Page 77 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Ha Thuy Tran Financial Management Specialist Nina Masako Eejima Counsel Parthapriya Ghosh Social Specialist Viet Quoc Trieu Team Member Quyen Thuy Dinh Team Member Son Van Nguyen Environmental Specialist Thu Ha Le Counsel Sanne Agnete Tikjøb ICR Main Contributor B. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY09 13.545 75,264.73 FY10 8.342 225,306.01 FY11 33.241 129,540.19 FY12 39.130 218,926.40 FY13 10.938 49,866.26 Total 105.20 698,903.59 Supervision/ICR FY13 10.263 60,166.53 FY14 21.355 83,104.64 FY15 19.825 78,760.18 FY16 17.554 60,378.18 FY17 19.782 74,220.34 FY18 16.575 118,439.55 FY19 13.158 93,887.64 Total 118.51 568,957.06 Page 78 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) ANNEX 3. PROJECT COST BY COMPONENT Table 16: Estimated and Actual Project Cost by Component and Source of Financing ESTIMATED AT PROJECT APPROVAL (US$M) ACTUAL AT PROJECT CLOSING (US$M) FINANCIAL RATIO Estimated IDA Borrower Actual IDA Borrower Percentage of Components Amount Financing Co-Financing Cost Financing Co-Financing Approval (US$M) Component I: Environmental Policy, 22.68 19.18 3.5 14.50 0 Monitoring and Enforcement Component II: Performance-Based CETP 25.59 20.47 5.12 5.14 0 (Centralized Effluent Treatment Plant) Financing Component III: 10.58 10.35 0.23 3.37 0 Implementation Support Total 58.85 50 8.85 29.87 23.01 6.86* 51 Note: Template adapted by ICR Author. * The ICR Team did not receive a break-down of GoV’s actual contribution by component and therefore the overall co-financing is reported. Page 79 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) ANNEX 4. EFFICIENCY ANALYSIS The project is expected to have positive social, economic and environmental impacts by contributing to sound environmental governance, sustainable IZ development, and a reduction in the risks that IZ's currently pose to public health and the environment. At the time of appraisal, the economic and financial viability of the project was prepared in terms of a Cost- Benefit Analysis (CBA). The economic model prepared at the time of appraisal was recreated at the ICR stage. Using updated figures where possible, the ICR team revised the model in analyzing the costs and benefits ex- post. The economic model is designed to calculate both the EIRR and the ENPV using a social discount rate of 12 percent. The sensitivity of the results was calculated for different levels of realization of benefits. I. Calculation of realized project NPV and IRR An ex-ante economic and financial analysis for investments related to Component 2 was performed at the time of appraisal. The analysis was two-fold: i) It considered economic benefits that would accrue to society from investments related to improved environmental compliance, including CETP construction, operation, and maintenance, and ii) it also included feasibility studies for two Industrial Zones pre-identified for financing under the proposed on-lending scheme. The former analysis is the basis for the ex-post analysis, while the feasibility studies are not reinvestigated, in part because one of the sites was never funded by the project, and in part because actual values for the other site could not be obtained as part of the ICR. The benefits for the economic analysis were identified as: (i) the averted health care costs stemming from reduced pollution; and ii) the increased productivity stemming from 3 fewer sick days for two individuals in a household. The underlying assumptions included in the analysis as detailed in the PAD are summarized in Table 19 below. The analysis showed that the aggregate economic net present value (NPV) discounted at 12% was positive with US$169 million over 17 years in the base case scenario. The internal rate of return (IRR) was positive with 28%. Two sensitivity tests were carried out to test the viability of the subcomponents with a 10 percent increase of costs and a 10 percent decrease of benefits and a 1-year delay of accrued benefits. The sensitivity analysis showed that in all scenarios the IRR remained positive with at least 10%. An ex-post economic and financial analysis for the ICR was performed based on the methodology presented in the PAD, updating the parameters and assumptions where possible. A full overview of the parameters and assumptions used in the model is given in Table 19. The ex-post CBA only covers the societal impact of improved compliance and does not consider the situation at the level of individual CETPs. The scope of the analysis varies in two ways. First, the geographical area is revised from the three Southern provinces included at the appraisal stage, two of which are project provinces and one which is upstream. In the ICR the four project provinces are included along with two other provinces which line the Nhue-Day and Dong Nai rivers downstream. Second, the measure of affected population is also conservatively revised from the total population in the three Southern provinces to 10% of the six provinces lining the river basins from the Page 80 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) intervention point to the mouth of the river downstream. The costs considered relate to the construction, operation, and maintenance of a CETP investment. The benefits are defined in terms of averted health care costs and productivity gains, as presented in the PAD, but reduced 30 percent to acknowledge that wastewater pollution is but one source of pollution in the two river basins. The cost of compliance monitoring and enforcement has been included in the model to acknowledge the importance of this work and to account for the costs of Component I. The cost of pollution to the environment would be a welcome inclusion in the model, but ecosystem valuation is beyond the scope of this ICR. Determination of updated NPV, IRR and Benefit/Cost Ratio Under the base model, the investments are economically viable. The aggregate economic NPV from improved compliance in four project provinces discounted at 12% is positive with US$ 17.6 million over 17 years. The economic internal rate of return (IRR) is positive at 26%. Table 17: Calculation of NPV and IRR Key Economic Indicator Results Interpretation NPV/17 years US$ 17.6 million Positive IRR/17 years 26% IRR > 12% Result: The above economic indicators show that the project was an economically viable investment Economic Sensitivity Analysis The same sensitivity analyses that were done at the time of appraisal are conducted again at the ICR stage with some modifications. The scenario with a 10 percent increase in cost is eliminated as the actual costs are now known. A scenario with a 5 percent reduction in benefits is included, and a scenario with a one-year delay in accrued benefits starting from 2015 instead of 2014 is maintained. In each scenario the NPV stays positive with an IRR ranging from 26% in the base case to 16% with a 5 percent reduction of benefit and a 1-year delay of onset (Table 18). Table 18: Sensitivity analysis Scenarios NPV IRR Base case $17.6 million 26% Ben -5% $4.3 million 16% Delay 1 year $7.4 million 17% The analysis shows that the cost of environmental compliance with wastewater regulations is moderately sensitive to a 5 percent decrease in benefits and a one-year delay in onset. In conclusion, the economic and financial analysis performed at the ICR stage shows a positive NPV with an IRR above 12%. The assumptions were purposely conservative and only two benefits were considered. Page 81 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) II. Assumptions & Calculations The table below lists the assumptions used and the calculations performed in the CBA at the time of project appraisal as detailed in the PAD and at the time of project closing for the purpose of this ICR. Where possible, assumptions were updated with real numbers and/or projected backwards and forwards in time using 2018 as the base year. The results table is presented in the following section. Table 19: Assumptions at project appraisal and closing Assumptions At appraisal (PAD) At closing (ICR) Year 2011-2030 2012-2018 2019-2030 A IZ development rate 5% Held constant Held constant B Population growth 1% Actual growth rates of 6 Average growth rate from provinces bordering the 2012-2018 Nhue-Day and Dong Nai downstream1 C Income growth rate 10% until 2020 Actual GDP growth rates at 2019-2020 projected from 5% from 2021-2030 constant prices (2010)1 2018 2021 – 2030 held constant at 5% D Total output 400,000 m3/day 2018: 90,000 m3/day actual Using 2018 as the base year, (m3/day) equal to total total wastewater output from total output is projected with wastewater output Industrial Zones in the four annual 5% development rate from Southern project provinces of Ha Nam, + Economic Zones in Nam Dinh, Dong Nai, and Ba 2019-2025: Annual increase of the provinces of Ria Vung Tau 10,000 m3/day to reach full Dong Nai, Ba Ria 2012-2017: Discounted 5% capacity of 160,000 m3/day of Vung Tau, and Binh existing CETPs (2018) Duong E Ratio of treated to 1:3 in 2011 2018: Actual ratio based on Scaled up with full compliance total output 1:1 in 2015 based on achieved 72% compliance and a ratio of 1:1 in 2021 assumption of full 2012-2017: Scaled from 1:3 to compliance 2:3 F Total treated output Estimated F=DxE F=DxE (m3/day) percentage of total output G New treated output F year-on-year F year-on-year difference F year-on-year difference (m3/day) difference H Number of affected Total population of 10% of total population in six 10% of total population in six residents Binh Duong, Dong provinces bordering the provinces bordering the Nai, and Ba Ria Vung Nhue-Day and Dong Nai rivers Nhue-Day and Dong Nai rivers Tau provinces in downstream in 2011 x B downstream in 2011 x B 2011 x B I Number of HxE HxE HxE beneficials J CAPEX per m3 per Estimated US$700 US$5642 based on actual US$5642 x 2% annual price year average investment of project increase supported CETPs Page 82 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) Assumptions At appraisal (PAD) At closing (ICR) Year 2011-2030 2012-2018 2019-2030 K O&M per m3 output Estimated US$0.41 US$0.41 based on actual US$0.41 based on actual information collected during information collected during ICR mission ICR mission L Health benefits Estimated US$15 Estimated US$15*0.70 Estimated US$15*0.70 (USD/p/yr) M Productivity Estimated US$10 x C Estimated US$10 x C*0.70 Estimated US$10 x C*0.70 benefits per year (USD/p/yr) Annual Economic Costs N CAPEX JxG JxG JxG O O&M K x F x 365 K x F x 365 K x F x 365 P Monitoring - US$14 million disbursed Conservative estimate equal amount under Component I / to ¼ of the annual project cost year Q Total economic cost N+O N+O+P N+O+P Annual Economic Benefits R Health benefits LxI LxI LxI S Productivity MxI MxI MxI T Total economic R+S R+S+T R+S+T benefits U Total economic T / (F x 365) T / (F x 365) T / (F x 365) benefits per m3 wastewater treated V Net economic T-Q T-Q T-Q benefits 1) Source: General Statistics Office of Vietnam available at www.gso.gov.vn. 2) Calculation of CAPEX is presented in table below. CAPEX: CAPEX is calculated based on the average capital investment per cubic meter wastewater flow. The assumption is the PAD was that each m3 would cost US$700 to construct. Based on the actual price per m3 of each CETP financed by the project, the calculated CAPEX is US$564. Table 20: Calculation of the Average Capital Investment per m3 Flow (CAPEX) Investment Capex per m3 Capex per m3 No. Name of IZ Capacity (m3) (VND) (VND) (USD) 1 Nhon Trach 3 2,000 18,627,265,416 9,313,633 399 2 An Phuoc 2,000 28,414,835,000 14,207,418 609 3 Bao Minh 5,000 76,089,137,999 15,217,828 652 4 Hoa Mac 1,500 18,062,000,000 12,041,333 516 5 Dong Van 3 2,000 23,444,000,000 11,722,000 502 Average 12,500 164,637,238,415 13,170,979 564 Page 83 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) III. Cost-Effectiveness Analysis CAPEX and O&M can be applied as measures of cost-effectiveness. At appraisal, the PAD refers to expert opinion in defining the average cost for construction, operation and maintenance of CETPs. These figures can be compared with the realized cost at project closing (Table 21). Overall, the realized project costs compare favorably to the appraised cost. Table 21: Comparison of appraised and realized costs for CETP construction, operation, and maintenance CETP Appraised cost per m3 flow (US$) Realized cost per m3 flow (US$) CAPEX 700 564 O&M 0.40 0.41 While there is an extant literature on overall costing methodology for wastewater treatment plants, there is little available with actual figures on the cost of operation. However, a 2010 benchmarking survey among +11,000 subscribers to Industrial WaterWorld Magazine showed that surcharges by municipalities for wastewater treatment ranged from $1.23 to $3.42 per 1000 gallons of water discharged. That is equal to $0.33 to $0.90 per cubic meter, which compares well to the $0.41 figure used in both the ex-ante and ex-post cost-benefit analysis for the VIPM project. Page 84 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS Vietnam Industrial Pollution Management Project (VIPM) Add: Ministry of Planning and Investment, 6B Hdang Dieu, Ba Dinh District, Hanoi, Vietnam Tel: 84-4-3726 5324; Fax: 84-4-3726 5323 March 15, 2019 Mr. Achim Fock Operations Manager for Viet Nam East Asia and Pacific Region Dear Mr.Achim Fock, Subject: Vietnam: Credit 5175- VN-Industrial Pollution Management Project Implementation Completion Report (ICR) for comments We thank the World Bank Vietnam for sending us the drafted ICR for our review and comments. In the past months, VIPM Project Management Board has strongly collaborated with the World Bank team to facilitate the information collection of the independent ICR author, and therefore, we are pleased that the ICR has been completed, reflecting comprehensively the implementation of this project, achievements, challenges and lessons learned. To echo the suggestion to comment on the impact of VIPM, I would like to further emphasize that, with the support ofthis project, some important legal documents have been developed and come into effect, as: The Circular TT24/2017/BTNMT issued on 1 st Sept.2017 (on regular environmental monitoring techniques for environmental components) has laid foundation for all provinces to refine and enhance their environmental monitoring techniques and procedures, which will certainly contribute to the overall improvement of the environmental monitoring quality, providing more and more reliable evidences for pollution control and inspections in many aspects; - The Decree No.82/2018/ND-CP issued on 22nd May.2018 (on management of industrial zones and economic zones) has regulated in detail the need for development/changing IZs to be ecological and sustainable, as well as strengthened the ministerial management in IZs, with one of the focus is industrial pollution control. I also want to add that, some qualified technical assistance activities under this project Page 85 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) have been deployed by Ministry of Planning and Investment (NIPI) and Ministry of Natural Resources and Environment (MONRE) in other projects to further advocate for better pollution confrol and compliance within Industrial Zones (IZ)s, such as: The study on IZ rating based on environmental protection performance; the research and develop models of environmental management through economic, technical and cleaner production tools for industrial zones; the research and development of eco-sustainable industrial park models. Specifically, the project's technical manual to guide the operation of industrial wastewater treatment plants have been also distributed and welcome by not only IZ Management Board (in most of provinces of Vietnam), but also by individual companies and manufactures inside IZs, for its detail and useful instructions in operating and maintaining a Centralized Effluent Treatment Plant (CETP). I strongly believe that, with this book being equipped to many investors in the IZs, the quality of waste water discharged will be gradually improved, so does the skills of CETP technicians. Beside these sharing, there are be some minor comments/ corrections/ verifications to be attached herewith for the ICR author to consider. In overall, we consider the ICR is acceptable. I thank you and the World Bank for your strong support. roject Director Mr. Nguyen Van Thuy, Director of Center of Environment Information and Data CC: Mr. Nguyen Duc Thuan, Director of Vietnam Environment Protection Fund Page 86 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) ANNEX 6. SUPPORTING DOCUMENTS World Bank Project and Financing Documents - Financing Agreement - December 24, 2012 (Credit Number 5175-VN) - Latest Audit Report of VIPM Project Finances - June 27, 2018 - Project Appraisal Document - September 25, 2012 (Report No: 69888-VN) - Aide Memoires for Project Supervision Missions, 2012 - 2018 - Project Implementation Status and Results Reports (ISRs), 2012 – 2018 WBG Engagement Strategy Documents - Vietnam Country Partnership Strategy for 2007-2011 - January, 2007 (Report No: 3826-VN) - Vietnam Country Partnership Strategy for FY12-FY16 - November, 2011 (Report No: 65200-VN) - Vietnam Country Partnership Framework for FY18-FY22 - May, 2017 (Report No. 111771-VN) Vietnamese Legal & Policy Documents - Decree 78/2010/ND-CP on On-Lending of the Government's Foreign Loans - Law No. 17/2012/QH13 on Water Resources Management dated June 21, 2012, which states that organizations and individuals discharging sewage into water sources must be licensed by competent state agencies. - Circular 35/2015/tt-Btnmt on The Protection Of The Environment In Economic Zones, Industrial Zones, Export Processing Zones, High-Tech Zones, which required all IZs to have AMS installed at the CETP discharge point. - Circular No. 111/2016/TT-BTC dated June 30, 2016, which introduced expenditure control of certain categories for effective financial management of programs and projects funded by official development assistance and concessional loans granted by foreign donors. Effective July 1, 2017. Other Documents - Final Borrower ICR from MPI PMU - Input from safeguards specialists (Note to Annex 6 – below) - Monthly monitoring reports from DONRE in the four project provinces based on readings from AMS installed at the discharge point of five project-financed CETPs - Monitoring report from CEM based on readings from 17 AMS measuring the quality of surface water in the two river basins of Nhue-Day and Dong Nai - VEPF overview on CETP financing from the State Fund for Environment Protection 2012-2018 - ICR Mission Agenda and Notes I. Supporting Information on Environmental Safeguards Page 87 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) The project was classified as a Category A project and triggered the application of safeguards policy OP 4.01 on Environmental Assessment due the potentially negative environmental impacts from wastewater effluents, sludge from CETPs, and construction of AMSs and CETPs. The project did not support the creation of new industrial zones nor would it result in increased wastewater effluent or CETP sludge production above and beyond what was already being discharged or discharge already planned and approved. There were no known potential large scale, significant and/or irreversible impacts anticipated from the CETP projects. However, the identity of all the IZs to be supported under the project, and therefore the nature of industries present in the IZ to be connected to the project-financed CETPs, were not known at the time of appraisal. Therefore, the project prepared an Environmental and Social Management Framework (ESMF) that applied to all CETPs and AMSs financed under the project. During implementation, the CETPs and AMSs were carefully screened for financing and prepared in line with the ESMF. The Environmental Management Plans (EMPs) were satisfactorily prepared in line with the government and the Bank safeguard policies and duly disclosed at the Bank’s website in English and at the project sites in Vietnamese. The EMPs included detailed practical mitigation measures and estimated budgets for their implementation, institutional responsibilities, monitoring plans, and building capacity for environmental management and supervision and a budget for implementation. The Bank missions consistently rated environmental performance of the project as moderately satisfactory during the project implementation. The project has satisfactorily addressed the environmental issues including construction of the CETPs and AMSs. During operation, sludge from the CETPs were well managed. However, monitoring reports noted that in some months some low risk parameters of the effluent discharged from the project financed-CETPs did not meet the national standards. There were no outstanding environmental safeguard issues with these CETPs and AMSs. As the project closed on September 30, 2018, the Bank project team and PMUs reiterated to IZs and MONRE/DONRE the importance of continuing to implement safeguards mitigation measures as committed in the EMPs to ensure compliance going forward. II. Supporting Information on Social Safeguards The project triggered safeguards policy OP 4.12 Involuntary Restettlement due to the land requirements for Component 2, where in some cases IZs might have minor involuntary resettlement activities on-going at the time of IZs' loan appraisal. Initially, land requirements for Component I were expected to be met either by available public land or installed within public buildings. In one case, however, an AMS was installed on private land. The project prepared an ESMF in 2012, which was formally adopted by MPI, MONRE and VEPF. Only Component 1b (construction, installation and operation water quality monitoring stations) and Component 2 (construction and operation of CETPs) had adverse impacts on society. The ESMF laid down the procedure for due diligence to ensure that (i) the concerned CETP land area was not acquired in anticipation of the project and that its compensation process for involuntary resettlement is completed for the entire service area of CETP; (ii) screen for larger resettlement in the IZ, which had legacy issues; Page 88 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) (iii) review of outstanding grievances, if any; (iv) checking whether an effective grievance redress mechanism was in place; (v) determine whether affected people, especially vulnerable ones, were able to restore their livelihoods. IZ with significant legacy issues or unresolved complaints were not considered for financing. The Overall Compensation, Support and Resettlement Plan was prepared and approved by the Provincial Authorities before the cut-off date, May 2010, when the project identification mission took place. The reason for establishing May 2010 as cut-off date was to confirm that land was not acquired in anticipation of the project and that the compensation process for involuntary resettlement is substantially advanced. Initially, Bank staff was responsible for carrying out social safeguards due diligence reviews of IZ areas. The responsibility of preparing the social safeguards due diligence report of CETP financing was transferred from the Bank to VEPF in March 2015. Accordingly, the ESMF was updated to reflect this change, and re-disclosed locally and at the InfoShop. With this change, VEPF appointed a qualified Social Specialist to undertake the social due diligence review for future CETP financing activities. The Bank, however, remained available for technical support on safeguard issues. Component 1B: Under this component, automatic river water quality monitoring stations were installed on the land area managed by the State except in one location. Before the installation of AMS, a screening exercise was carried out to ensure that the sites were owned by the State and is free of all encroachment and other encumbrances. Barring one location, all other sites were government land. In one case, an AMS was installed on a housing plot that was voluntarily donated by the land owner. None of the AMS installation had any impact on (i) tangible cultural resources, such as archaeological and historical monuments, old quarter area, religious monuments, funerals, or places of unique natural values; and (ii) groups of ethnic minorities. Component 2: For Component 2, the project evaluated involuntary resettlement that took place in the “CETP service area”, which was defined as being: i) the land area within the IZ physically occupied by the CETP financed by the project, or the area already occupied by a CETP that was upgraded; and ii) the entire land area within the IZ that was occupied by industries serviced by the CETP financed by the project. The project's criteria to consider an IZ eligible for investment with regard to involuntary resettlement issues includes the following provisions: • The Overall Compensation, Support and Resettlement Plan prepared and approved by the Provincial Authorities before the cut-off date, May 2010, date of the project identification mission to confirm that land was not acquired in anticipation of the project and that the compensation process for involuntary resettlement is substantially advanced. • The Bank assessed the scope of completed and on-going compensation activities in a due diligence report to determine the consistency with the Government of Vietnam's regulations and the Bank's policy objectives. Page 89 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) The Bank's due diligence methods (adopted by VEPF since 2015) used for gathering the information for the DD report included desk review of documents issued at the levels of the province, district and communes, collecting and analyzing the qualitative and quantitative information gathered in the field, results of the interviews with a representative sample of displaced persons, and analysis of other pertinent issues and documents related to involuntary resettlement and land compensation on a case-by-case basis. Due diligence was carried out on all IZs proposed. The DD reports apart from looking at land acquisition and compensation also assessed existence and functionality of grievances redress mechanism responding to claims, queries or any aspect related to the on-going resettlement plan implementation and monitoring of livelihood restoration of affected peoples. The DD reports confirmed that all IZs have met Bank's safeguards requirements per the project's Environmental and Social Management Framework (ESMF). The grievance mechanism was found to be accessible and functional. III. Supporting Information on Financial Management Financial management reviews recognized adequacy of FM staffing, accounting and internal control systems, maintenance of supporting documents in the Project and implementation of auditor recommendations for annual audit. Quarterly financial reports with acceptable quality have been submitted on time. Annual Project audited financial reports and entity audited report have been timely submitted to the Bank with unqualified (clean) audit opinions, with only one qualify with exception audit opinion in FY2017 for the Project and in FY2016 for VEPF. The main reasons are due to disagreement with auditor in fund recognition and expenditure classification. These issues have been later resolved. The Project accounting systems were observed to be in order and payments were well-controlled. The verifying and payment for contracts ensured timely and accurately, consistent with the provisions of the Vietnamese government and the World Bank. The regular FM reviews identified that an adequate financial management system was in place that could provide, with reasonable assurance, accurate and timely information that Bank loan proceeds were being used for the intended purposes. Nevertheless, the Project FM rating was consistently rated as Moderately Satisfactory since late 2013 and throughout Project implementation. This is mainly because there were some Moderate FM recommendations in the Project that were consistently raised including: (i) significant delays in Project budget approval and insufficient Project budget allocation; (ii) lack of coordination between different Project implementing agencies; (iii) slow payments to contractors; (iv) contract management system needs to improve; and (v) need to fully and timely implement audit recommendations. These shortcomings have prevented the Project from a full Satisfactory FM rating and considered as lessons learnt for future Project implementation. In addition, there is also some mis- understanding in using the incremental operating cost (IOC) for different Project implementing agencies. All issues were resolved by Project closing. IV. Procurement Procurement being conducted was generally acceptable to the Bank. Procurement performance was therefore rated Moderately Satisfactory during the project implementation. The procurement plan was cleared by the Bank and approved by MONRE/MPI from Project start and was subject to various updates to accommodate changes during the implementation due to modifications needed to be made to cost Page 90 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) estimate, time schedule because of delays, and for adding new procurement packages. The most critical procurement issue was the delay of the implementation that occurred in all stage of the procurement cycle from planning to contract implementation. The delay was more serious for first few years of the project implementation (2014 and 2015) and the progress was significantly improved after that (2016 and 2017). There were several key factors that caused procurement and project implementation delays: (a) lengthy internal approval process including approval of the procurement plan and procurement documents within project implementing agencies, (b) lengthy process to prepare procurement documents such as the technical specifications for procurement of goods and the ToRs for consulting services, (c) lengthy bid/proposal evaluation period, and (d) weak contract management that cause delay during contract implementation. It is also noted that there were several complaints relating to procurement of goods received during the project implementation under the responsibility of MONRE- PMU. Although the complaints caused some procurement delay, the PMU handled such complaints in satisfactory manners. These all issues can be taken as lessons learnt for the future projects. Page 91 of 92 The World Bank Vietnam Industrial Pollution Management Project (P113151) ANNEX 7. MAP & PROJECT AREA Page 92 of 92