Page 1 Lao People’s Democratic Republic Peace Independence Democracy Unity Prosperity ----------000000---------- Ministry of Energy and Mines Cabinet Office Technical Assistance for Capacity Building in the Hydropower and Mining Sectors Approaches and Actions to Manage Potential Environmental and Social Safeguards Issues and Risks Vientiane, 13 November 2009 E2263 v2 Page 2 1 Technical Assistance for Capacity Building in the Hydropower and Mining Sectors Approaches and Actions to Manage Potential Environmental and Social Safeguards Issues and Risks A. Project Description 1. The project will provide technical assistance to increase the institutional and technical capacity of agencies within the Ministry of Energy and Mines (MEM) to forge sustainable development of the hydropower and mining sectors. The project will also support tertiary education in curriculum development and, importantly, inter-ministerial collaboration as it pertains to natural resource planning and monitoring. The project will not support any direct physical investment in the sector, and therefore will not cause any adverse environmental or social impacts. Instead, the project will enhance the awareness and technical knowledge of MEM agencies, especially the Department of Electricity (DOE), the Department of Mines (DOM), and the provincial departments of MEM (PDEM) and provide training at selected educational institutions to build capacity to address environment and social safeguard issues. Hence, the main project beneficiaries include MEM staff, operators in the private sector, members of civil society and communities, and students in the educational institutions. 2. Government of Lao PDR (GOL) and the World Bank (the Bank) have long-term collaboration in the hydropower sector and more recent, but significant, cooperation in the mining sector towards sustainable sector development. The current project will build on findings from previous sector analyses, lessons learnt and agreed plans for sector strengthening. Likewise, the activities will provide complementary inputs to capacity building which has been initiated through the Lao Environment and Social (LEnS) project and other support programs financed by the Bank and other development partners 1 . Taken together, the analytic work and proposed action plans already discussed and endorsed by GOL provide a solid foundation for the interventions and policy dialogue associated with the current project. The present project comprises four components. Environmental and social capacity building and awareness activities are designed as integral parts of the project activities as described below: · (1)Joint Hydropower and Mining Learning Program (HMLP). This component aims to building technical capacity and generating public awareness through the following subcomponents: (a) continuing learning program for sector professionals, (b) education sector support, and (c) outreach and information sharing. In terms of continuing education and professional training, a series of workshops and training sessions is proposed at least once a year for three years on assessment and mitigation techniques of environmental and social impacts of hydropower and mining projects. The training will be conducted by international experts who will also be charged with “train the trainers” at the educational institutions. Besides hands-on training of basic principles, safeguard issues will be addressed primarily through dedicated 1 Natural resource management, at large, have traditionally received strong support from agencies such as the Agence Francaise du Developpement, Asian Development Bank, AusAID, and the Mekong River Commission, all of whom have been consulted during project preparation. Page 3 2 training courses to senior-level staff concerning strategic environmental management and socially inclusive resource exploitation; · (2) Hydropower Sector Development. This component will build capacity in the entire process of hydropower development and operation to enhance sustainability of hydropower development through the following subcomponents: (a) hydropower planning, (b) hydropower concession management, and (c) hydropower development management and support to implementation of the National Policy on Environmental and Social Sustainability of Hydropower Sector (NPSH). Safeguard issues and management will be treated as integral parts of the subcomponents (a) and (b), while subcomponent (c) will directly address capacity building needs, at both central and provincial levels, for environmental and social safeguardmanagementrelated to hydropower development, through improving MEM’s internal regulations and technical standards with a view to implementing the NPSH; · (3) Mining Sector Development. This component will build capacity through the following subcomponents: (a) improvement of sector governance and the enabling environment, (b) strengthening of government oversight capacity, and (c) program to promote mineral development. Safeguards and environmental protection issues will be specifically addressed through extensive training in environmental inspections, including mitigation techniques (air, water, soil, ambient noise and conditions), scientific inspection and measurement techniques, legal and regulatory remedies and actions, and notions of responsible care. On social safeguards, procedures and training will be put in place on community consultations, disclosure and social responsibility. In particular, inspiration will be taken from recent studies on community benefits agreements which provide models for benefits sharing between the central government, developer and locally affected community; and · (4) Project Administration and Management. This component will facilitate effective implementation of Project activities, including environment and social safeguard. 3. This document gives an overview of existing regulatoryand institutional frameworks related to environment and social safeguards for hydropower and mining development in Lao PDR. It reviews previous studies related environmental and social performance in the mining and hydropowersectors and specifically the NPSH implementation progress. Finally, the document highlights the safeguard activities to be carried out under the project, including estimated costs, implementing agencies and intended beneficiaries. B. Existing Regulatory and Institutional Frameworks 4. The country has made considerable progressin establishing comprehensive regulatory and institutional frameworks related to environmental and social safeguards, especially for those related to hydropower and mining development. On the other hand, implementation and enforcement of Social and Environmental Impact Assessments (SIA and EIA, respectively) has proven deficient in various cases. At the same time, regulation and institutional mechanisms to balance competing uses of natural resources have been inadequate. This has resulted in concession holders contesting overlapping land titles or challenging access rights for local communities. Main reasons for these weaknesses are inconsistency of regulations, unclear division of responsibility among agencies, and inadequate human and financial Page 4 3 resources. In response to these weaknesses a new decree on Environmental and Social Impact Assessment (ESIA) was developed and has been submitted for government approval. The technical guidelines for implementation of the 2005 Compensation and Resettlement (CAR) decree and for public involvement are being finalized. Below summarizes the current regulations and institutional frameworks related to environment and social safeguards for hydropower and mining sectors in Lao PDR. Regulations · Environmental laws, decrees, and regulations. In Lao PDR, environmental and social safeguards are governed by the Environmental Protection Law (EPL) of 1999; the Decree on the Implementation of the EPL (2001); the Environmental Impact Assessment (EIA) Regulation (2003); and the Compensation and Resettlement Decree (2005). The EPL outlines the EIA process, the use of best available technology, and the establishment of an Environmental Protection Fund (EPF). The EPL Implementation Decree assigns responsibility for the EIA review to the sector agencies and the provinces, and requires them to establish EIA regulation and monitoring units in line with the general guidelines established by the national agency.The 1999 EPL are being reviewed and revised and the processes are expected to be completed by the end of 2010. · Environmental and Social Impact Assessment (ESIA) Decree. Due to the rapid development of the sectors and increased investor interest, the Government has launched a revision of the ESIA regulation with a view to upgrading to a decree status with the following positive features: (a) improved clarity on the ESIA procedures and process, including roles and responsibilities of key agencies and project owners; (b) a stronger role for WREA as the third-party regulating agency at all stages of approval and monitoring; and (c) clear requirement for social impact assessments, public involvement, and disclosure. The ESIA decree (draft) is expected to be approved in late 2009 and effective in early 2010. (the GOL approved the ESIA Degree by November 2009) · Electricity Law and Minerals Law (1997, 2008): Hydropower development is governed by the Electricity Law of 1997, as updated in 2008. The mining sector is governed by the Mining Law of 1997, updated and renamed the Minerals Law in 2008. The laws define sector operations, stipulate restrictions, and define operators’ technical obligations, including those related to safeguards. · National Policy on Environmental and Social Sustainability of Hydropower Sector (2005): To facilitate sustainable development of hydropower, GOL endorsed a National Policy on Environmental and Social Sustainability of Hydropower Sector (NPSH), in 2005. The NPSH applies to projects built after 1990 that are larger than 50 megawatt (MW) or inundate more than 10,000 hectares. It stipulates specific measures to be undertaken by project owners and the government agencies in the following areas: (a) Environmental assessment, (b) Project-affected population, (c) Watershed management and conservation, (d) Consultation; (e) Information disclosure, (f) Compliance monitoring, and (g) Revenue sharing. · Other safeguard related laws/regulations. Also of relevance are the Water and Water Resources Law (WWRL) of 1992 and its implementing decree; the Forestry Law of 1996, revised in 2007; the 1995 Mekong River Commission (MRC) Agreement; and other international conventions Page 5 4 (biodiversity, climate change, RAMSAR 2 , etc). Like the EPL, the WWRL will be reviewed and revised in 2010. While regulations on the discharge of toxic wastes and environmental standards for industrial operations do exist, they focus mainly on processing and manufacturing industries, with little consideration of extractive industries. No effluent/emission or ambient standards have been defined with regard to hydropower and mining operations. (the Draft Version of the Lao Environmental Standard under review by WREA, this standard are included the water quality, emission or ambient standards it can be uses as reference) Institutions · Water Resources and Environmental Administration (WREA) is the agency responsible for effective management of water resources and the environment. It was established in mid 2007 as part of the Prime Mini ster’s Office. The agency comprises the Cabinet, four departments, one center, and one institute. The departments are Department of Water Resources (DWR), responsible for ensuring effective management of water resources and the promotion of integrated river basin management; the Department of Hydrology and Meteorology (DHM), responsible for collection and analysis of meteorological and hydrological data and for emergency preparedness planning; the Department of Environment, responsible for the national policy, planning, and public outreach; and the Department of Environmental and Social Impact Assessment (DESIA), responsible for implementation of the ESIA process. The Water Resources and Environment Research Institute (WERI) is responsible for research and development, including the laboratory function. The technical and management capacity of these agencies is weak, but substantial operational support will be extended over the coming years through bilateral and multilateral agencies (ADB, MRC, the Bank, and bilateral donors). Additional Bank support through the LEnS project and the Mekong-Integrated Water Resources Management (M-IWRM) are being considered. · The Ministry of Energy and Mines (MEM) is the key ministry responsible for planning and oversight of hydropower and mining development in Lao PDR. MEM consists of seven departments, of which three are administrative, two cover the mining sector, and two cover the energy sector. ¾ For the energy sector , Department of Energy (DOE) is responsible for policy, planning, regulations and standards, environmental and social safeguards, and rural electrification. DOE also takes the lead in the implementation of the NPSH. The Department of Energy Promotion and Development (DEPD) is responsible for the promotion and monitoring of concessions agreements between GOL and private investors. ¾ For the mining sector, Department of Geology (DGEO) is responsible for administering geo- science and survey activities not related to specific mine site investments; and for developing and maintaining geological and mineralogical databases as well as mapping and library resources. Department of Mines (DOM) is responsible for all activities related to mine concession management and investments; and is the lead agency in all preparatory stages of mine investment (licensing, exploration, feasibility studies, etc.). DOM is also responsible for inspection and monitoring of performance requirements, health and safety issues, and environmental management in existing operations. 2 Convention on Wetlands of International Importance Especially as Waterfowl Habitat Page 6 5 ¾ In addition to the central agencies, provincial departments of MEM (PDEMs) exist in each of the 17 provinces. Provincial and district authorities have previously played a central role in planning and decision making. While this position is diminishing with regard to the approval and management of large-scale investments, their responsibility has become more formalized for small-scale investments, below the 50 MW threshold for hydro projects included under the NPSH. Local authorities also retain an important role in execution and monitoring of environmental and social programs. Notwithstanding, there is often a mismatch between the delegation of responsibility and the allocation of resources, which means that local offices are often not equipped to carry out the monitoring responsibilities they have been assigned. · Other key agencies. The Ministry of Agriculture and Forestry (MAF) is responsible for ensuring effective management and utilization of forests and natural habitats, and the protection of protected areas. The Environmental Protection Fund (EPF) was established in 2006 and Forest Protection Fund was established in 2005 as both funds are provided financial resources to promote institutional capacity building, investment, and conservation of biodiversity. EPF reports directly to the EPF board chaired by a deputy prime minister and an EPF office provides management and secretarial support to EPF operations. Its initial capitalization has been assured through ADB and Bank support, and it is expected to be made sustainable through allocations of Nam Theun 2 (NT2) revenues and contributions from other hydropower operations. However, detailed regulations and mechanisms to ensure its sustainability remain to be worked out.   C. Legal and Institutional Issues in the Mining and HydropowerSectors Review of previous studies 5. The recent surge in mining and hydropower operations in Lao PDR has triggered a considerable number of studies and sector assessments. The following list ofstudies are of particular interest from a safeguards perspective because of their emphasis on environmental and social impacts and management and the implementation of the NPSH, including analysis of institutional aspects and associated skill levels. The key findings are summarized below. Title Contents Findings with Regard to Safeguards 1. Review of the Lao Mining Sector (World Bank, 2003) • Assessment of geological resources; • Production and revenue estimates; • Legal and fiscal review; • Principles of sector sustainability. • Requirements and guidance need to be more clearly defined; • Safeguards enforcement needs strengthening; • Sustainability initiatives are largely company driven; • Existing Government staff needs more training, and more staff need to be recruited. 2. Review of Environmental and Safety Regulation in the Mining Sector (Flachberger, 2004) • Review of international benchmarks for environmental management; • Assessment of sector-specific environmental regulation; • Occupational health and safety procedures; • Principles of monitoring and • Decision-making and monitoring need streamlining; • Staffing needs to be expanded; • Capacities and resources at provincial level need enhancement; • Ambient standards and maximum values for emissions and discharges need to be determined. Page 7 6 enforcement; • Water and waste management. 3. Sector Plan for S ustainable Development of the Mining Sector (MINDECO 2006) • Assessment of geological resources; • Production estimates and industrial policy; • Principles of sustainable industry development; • Action plan for sector strengthening activities. • Staffing needs to be expanded; • Laboratory skills need enhancement; • Laboratory equipment needs refurbishment. 4. Sustainable Development of the Hydrpopower Sector in Lao PDR (Dr. Montri, 2007) • Institutional and human resources capacity assessment of MEM • Inter-ministerial collaboration of NPSH implementation • Action plan for NPSH implementation • No procedures exist for integrated river-basin planning and development • No guidelines exist for monitoring and evaluation of hydropower operations • Guidelines for compensation and resettlement are not operational 5. Work Plan for Strengthening of the Enviromental Management Division of Electricité du Laos (Earth Systems Lao, 2009) • Assessment of institutional structures within EdL • Capacity assessment of environmental and social staf fat head quarter and provincial branch offices • Training plan • Inadequate resource allocation for EMD activities • Unclear division of work in provincial offices of EdL • Need of stronger awareness among EdL management 6. Gender and Social Inclusion Study (Earth Systems Lao et al, 2009) • Emphasis on women, children and vulnerable groups; • Social impacts of mining (employment, environment, livelihood, social services, etc.); • Community consultation; • Benefit-sharing. • Early consultation and compensation procedures need to be improved; • Simple tool-kits for consultation need to be prepared; • Awareness of consultation procedures that are sensitive to vulnerable groups needs to be increased; • Artisanal and small-scale mining need to be promoted; • More research is needed on gender and social inclusion in the mining sector. 7. Social Impacts and Social Sustainability in Mining and Hydropower Development in Lao PDR (Earth System Lao, 2009) • Explores the social impacts of mining / hydro development in Lao PDR • Introduces risk mitigation and benefit sharing approaches • Reviews international and Lao specific good practices and case studies • Participatory consultation and community engagement need to be improved • Models for benefit sharing should be further explored / developed • Capacity enhancement to implement safeguard policies are needed Page 8 7 Key issues in the miningand hydropower development 6. While key legal institutions and frameworks are in place in the mining and hydropower sectors in Lao PDR, they tend to be constrained by low capacity and weak implementation. The underlying reasons for these constraints can be grouped as follows: · Overlapping regulations and lack of institutional capacity. In general, many agencies are involved in project approval, inspection, and enforcement of regulations, therefore delegation of responsibility is unclear, and operators risk either being subjected to dual regulation and inspection requirements or not being regulated and monitored at all. On safeguards, with the updated ESIA, parts of the conflicting mandates are expected to be solved, and WREA will assume stronger leadershipin the review of the ESIA process, including monitoring and enforcement of the Environment and Social Compliance Certificate (ESCC). However, practices and procedures have yet to be establishedand institutionalized. To this end, regulations on general and sector-specific requirementshave to be drafted and agreed to. Standards for emissions and discharges under Drafting by WREA and it would be submitted to GOL’s approvalby early 2010..Specific regulatory mechanism and technical capacity to forge effective management and monitoring of safeguards aspects of concession agreements (CA) between GOL and private investors will be critical. While the update of the Minerals Law and Electricity Law 2008 confirms the national intent to strengthen sector operations, the detailed work of drafting procedures and delegating responsibilities has yet to be addressed. The present project will support this process. · Lack of skill level and resource allocation . Government agencies responsible for the mining sector suffer from an acute shortfall of professional staff, since the number of staff has remained constant despite the nearly 100-fold increase in sector activities over less than a decade. More importantly, the capacity level of existing staff needs upgrading, since most staff have been forced to develop their skills by taking on increasingly complex tasks but with no formalized training andcontinued learning programs. Most personnel obtained their formal education in the former Soviet Union or Eastern Europe in the 1980s or early 1990s, and in most cases environmental and social principles were not included in the courses. Under the Department of Mines, a dedicated Division for Mines Inspection is charged with all aspects of inspection and monitoring, including safeguards. This is a small unit (about 5 staff) with limited technical and management capacity, equipment, and other facilities. Given the decentralized structure of safeguards regulation and inspection, DOM officers are supposed to collaborate with staff from the environmental agencies as well as provincial representatives. However, lack of modern and functioning equipment and resource allocations to conduct site surveys and surprise inspections has severely reduced the quality and quantity of inputs and collaboration. Because of these budgetary constraints, most of the monitoring relies on the operators’ corporate social responsibility. The skill level and experience of GOL officers will naturally expand as a result of increased exposure to and demands from mining operations. On the other hand, without adequate incentive/compensation structures and budget allocations for equipment, the regulating agencies will be unable to fulfil inspection requirements.In the hydropower sector, the situation is similar. Of about 30 DOE staff, six staff is responsible for review and monitoring of social and Page 9 8 environmental aspects of hydropower projects. Most of the staff have no or limited formalized training on environmental and social safeguards. Consequently, extensive training and capacity building will be necessary, as will procurement of contemporary equipment and facilities. · Gaps in disclosure and consultation practices. Disclosure and consultation practices are critical gaps in the planning and exploitation of natural resources in Lao PDR. Standard procedures are being developed, with good practice examples from various high-profile developments (Nam Theun2 and Theun-Hinboun hydropower projects and LaneXangMinerals Limited). However, adoption of best practices may not be implemented at local levels because of limited dissemination, training, and toolkits for on-site application.Conflicts have also emerged between developers and village communities since land and livelihood compensation procedures in general do not consider customary rights. Benefit-sharing and execution of the entire chain of participatory consultation have also proven complicated to implement since capacities and management tools at the local level are limited. Additional capacity building, outreach activities and implementation of operational practices will be required. · Limited capacity pertaining to water resource planning and management. As a result of limitation of the technical capacity and budget constraints, knowledge and understanding of the linkagesacross water resources, fisheries, watershed protection, land use, and local livelihoods remain limited. Integrated river basin management and awareness of cumulative impacts of cascade projects remain at an infant stage. Exploitation of mineral, water and other natural resource will increase environment and social pressure due to competing uses of water and land resources which are often represented by different industries and ministries. Issues and Experience in Implementation of the NPSH. 9. Implementation of the NPSH was initiated with technical assistance and operational support from LEnS project through the EPF. Implementation issues, experience, and progress are summarized below. These lessons have guided the design of the present project: · Lack of detailed regulations and administrative procedures to facilitate implementation and monitoring of the NPSH. The NPSH touches on ten issuesrelated to environmental and social sustainability of hydropower development. While the ESIA Decree and CRD are expected to stipulate detailed rules, requirements and procedures on identification of environment impacts and project-affected people as well asimplementation of mitigation measures, there are limited requirements and procedures for how to monitor compliance. As an example, the NPSH requires effective protection of watersheds and allocation of revenue to bio-diversity conservation and community development, but there are no procedures on how the watershed shall be managed, nor on how revenue is to be shared for bio-diversity conservation and community development. Different mitigation and management practices are adopted in each project and compliance with national regulations differ significantly. As an example, NT2 is the only project for which the owner has provided a budget for watershed protection (US$1 million for 25 years). NT2 is also the only project that requires tracking of how revenues are utilized, and in which environmental conservation is a priority activity. DOE, being the implementing agency of the NPSH, is particularly constrained by the lack of rules and guidelines. The coordination and integration of Page 10 9 the line agencies such as MEM, WREA and MAF as well as the concerned local authorities must be formally established to ensure that all activities related to Watershed Management Plan shall be included in Annex to CA · Lack of capacity and resources to monitor and bringing individual projects into compliance of the NPSH . During the implementation of NPSH, it has become clear that preparation of individual action plans to bring all existing hydropower into compliance with the NPSH will take time and effort since application of stricter rules would require changes to some of the existing concession agreements. DOE, in collaboration with WREA and MAF, will require legal and technical support to improve and enforce investors and operators contractual obligations pertaining safeguards and to ensure that concession agreements for future projects include adequate contractual requirements to ensure compliance with the policy principles. · Inconsistency between the NPSH and the existing institutional set-up. The NPSH was prepared in 2005 and included institutional arrangement for implementation and monitoring of NPSH. After the launch of the NPSH, institutional arrangements have changed (e.g. formation of MEM reform of WREA). As a result, important parts of the NPSH need to be updated. NPSH activities and progress · During 2007-08, DOE/MEM conducted a capacity assessment and developed a strategy to implement the NPSH. The preliminary assessment of NPSH compliance suggested that while most projects have carried out EIA and/or SIA as required by regulation, including at least partial consultations, the majority of projects have not met the specific requirements for information disclosure, watershed protection, compliance monitoring, and revenue sharing. After discussion, four implementation strategies have been adopted: (i) Ensuring NPSH compliance through project-by-project assessment and effective compliance monitoring; (ii) Forging effective cooperation among key agencies through training and capacity building, public outreach, and promotion of stakeholder involvement; (iii) Strengthening effectiveness of the regulatory and institutional framework; and (iv) Establishing a sustainable funding mechanism. · Priority actions during 2009-2010 are being carried out by DOE/MEM with technical assistance from LEnS. This includes undertaking meetings and workshops, conducting field visits to project sites, initiating national and local learning eventson watershed protection issues, and training of provincial staff. In early 2009, DOE/MEM and WREA conducted a national workshop to confirm GOL ’s commitment to implementing the NPSH, a large number of private investors participated. DOE has also recruited a national consultant and an accountant to assist in the planning and day- to-day management in line with EPF and Bank requirements. · Initial emphasis has been placed on bringing existing hydro operations into compliance by addressing actual negative impacts (mostly on livelihoods restoration). A feasible delegation of work has appeared with central-level agencies (DOE/MEM, WREA and project owners) identifying critical safeguard gaps of existing operations as well as funding resources, while provincial agencies, in close collaboration with local communities, are granted the responsibility Page 11 10 for protection and management of watershed resources and execution of benefit-sharing arrangements. Construction sites where hydropower operation will commence in the near future have also been visited, and action plans have been agreed with project-owners and stakeholders on requisite mitigation and management measures. Recruitment of a qualified consultant to assist in the NPSH compliance assessment and monitoring of safeguard performance is in process. D. Project Activities and Their Response to Safeguard Issues 10. This section describes the safeguard activities to be carried out under the project, starting with activities belonging to the Learning Program, and followed by the Hydropower Sector and Mining Sector components. Tables 1, 2, and 3 provide brief summaries of the safeguards-related activities, including project inputs, type/number of beneficiaries, estimated costs and its contribution to the safeguard capacity building. Joint Hydropower and Learning Program (HMLP) 11. This component aims to building critically needed capacity and generating public awareness across the hydropower and mining sectors. The provision of adequate skills and training to government staff and the next generation of leaders for the two sectors would remove critical bottlenecks to the development of both sectors. Besides capacity building to sector operators at all levels (executives, mid- career professionals and students aiming to become the “next generation of operators”), this component will also provide resources and TA to enhance public outreach and awareness creation among civil society concerning impacts and benefits of hydropower and mining activities. Table 1. Joint Hydropower and Mining Learning Program (Component 1) Objective/ Subcomponent Project Activities Project input & type /number of beneficiaries Positive impact on safeguard capacity building Estimated costsfor safeguards activities Component 1: Joint Hydropower and Mining Learning Program Skills development (a) Training courses in environmental and social management (b) Natural resource optimization and planning Professional and continuing education style training to MEM staff, selected representatives of private sector, civil society and educational institutions; training will be conducted at least one time per year for three y ears by international experts; a total of 120 beneficiaries are expected or the training Knowledge on environment and social safeguards will be part of the training courses Awareness of impact assessments and trade- offs between resource exploitation will facilitate the dialogue on national prioritization USD 200,000 over life of project Page 12 11 Outreach and information-sharing for stakeholders (a) Establishment of MEM library/resource centers in Vientiane and 3-4 selected provinces (b) Design of MEM web-site containing pertinent sector and project documentation with regard to safeguards (a) Rehabilitation of existing facilities (b) Consultant support in web design and disclosure Establishment of physical and virtual contact points for MEM to disclose information. Contact points for civil society USD 235,000 Safeguard activities in hydropower sector 12. The safeguard activities under this component will be mainstreamed into MEM’s regulatory and operational process. Under sub-component 2 (a), first , an exercise in least-cost development planningof hydropower development will incorporate environmental and social benefits and costs in to the overall hydropower development planning process. Second , capacity building for basin-wide hydropower development planning and introduction of basic knowledge and best practices of integrated river basin planning, taking the Nam Ou river as a case study, will enhance MEM’s (and partners’) understanding of various options to better balance the water resources uses while ensuring minimum flows and minimizing the cumulative impacts of cascaded hydropower dams. Third , on-the-job training for MEM staff will be provided as part of the technical assistance, and consultants will be hired. Under subcomponent 2 (b),TA will be provided for development of model provisions in the CA for social and environmental safeguards as well as compliance monitoring. Under the subcomponent 2 (c),the clarification of internal MEM regulations and technical standards will enhance MEM’s capacity toimplement and monitor safeguards, and at the same time support effective implementation of NPSH.Training in environmental and social safeguard management, mitigation and inspection will target provincial staff in Vientiane, Borikhamxay, and Attapeu provinces considering the clustering of large dams in these provinces,. 13. In terms of performance indicators, it is expected that GOL will have achieved the following targets by the end of the project: (a) effective coordination and cooperation mechanisms for NPSH implementation will be in place; (b) MEM and the priority PDEMs will have adequate capacity to guide and monitor the development of hydropower projects and regulate their operations; and (c) provincial information centers will be operational. Table 2highlights the project activities and their impacts on the safeguard capacity building. Page 13 12 Table 2: Safeguard activities in hydropower sector component (Component 2) Objective/ Subcomponent Project Activities Project input & type /number of beneficiaries Positive impact on safeguard capacity building Estimated costs for safeguards activities Component 2: Hydropower Sector Development (a) Hydropower Development Planning (a) Updating Least- Cost Development Plan for the Hydropower Sector (b) Capacity building in basin- wide hydropower development planning, including set up computerized database and processing system to support information management and decision making (a) Consultancy services to support preparation of LCDP with explicit consideration of environmental and social impacts and benefits of individual project . (b) Consultancy services for capacity building in cascaded hydropower development planning , with explicit consideration of minimum flow and cumulative environmental and social imp acts,with a case study at Nam Ou river, (a+ b) Collaboration and on- the -job training will build capacity among 20 officers at DOE plus in provincial departments Institutionalize measures for consideration of environmental and social benefits and impacts in hydropower development planning process USD 110,000 USD 550,000 (b) Hydropower Concession Management (a) Technical assistance and capacity building to MEM in supervision of hydropower projects to ensure compliance with CAs (a) Consultancy service s to support DE PD, DOE/MEM and WREA in (i) preparation of detailed rules and administrative procedures for supervision and reporting; (ii) preparation of model provisions on environmental and social safeguards management and monitoring for incorporation in to future CAs; and (iii) inspection a nd supervision of on -going hydropower projects against CAs. Collaboration and on -the-job training will build capacity among 50 officers at DEPD, Model contractual requirements / templates in CAs to ensure sound environmental and social safeguard management and monitoring; Enhanced site inspection an monitoring of on-going hydropower projects / CAs; Enhanced knowledge and experience of government officials at both central and USD 375,000 Page 14 13 DOE /MEM, WREA plus in provincial departments provincial levels for environmental and social safeguard management and monitoring through execution of CAs (c)Hydropower Management and Implementation of the NPSH (a) Update NPSH and develop operational regulations and procedures for implementation of NPSH (b) Improving MEM internal regulations, technical standards and administrative procedures for enforcement and monitoring (c) Safeguard capacity building at DOE and 3-4 provincial MEM Departments ( a) Consulting services to upda te NPSH and associated operational regulations and procedures (b) Consulting services to improve / develop DOE’s international regulations, standards and procedures (c) Consulting services to assist DOE and provincial authorities inspect compliance of selected hydropower projects through site visits, interviews and consultation On-the-job training to 20 officials at DOE/MEM and provincial authorities for NPSH implementation Operational regulations and procedures in place to facilitateimplementation and monitoring of the NPSH, which is to ensure environmental and social sustainability in hydropower development Improved internal regulations, standards and administrative procedures to enable MEM in leading the implementation of NPSH Enhanced staff capacity for implementation and monitoring of NPSH; Support and resources made available to improve safeguard performance of selected on-going projects in line with HPSH. USD 140,000 USD 530,000 USD 806,000 Safeguard activities in mining sector 14. The mining sector component of the project is designed to strengthen government capacity in areas where gaps and deficiencies were identified by previous studies and in light of the current legal and institutional arrangements. The project will provide support selectively to the needs that require urgent attention, while acknowledging that capacity building on safeguard practices will continue over a longer timeframe than the present project execution of five years. As such, emphasis will be given to enhancing Page 15 14 regulation on environmental standards, occupational health and safety and practices for public outreach. The project will also be geographically selective, with emphasis on three to four provinces with the largest existing operations or potential for mineral development in the short term. The table below highlights the project activities and its contribution to the capacity building of the mining sector. Table 3. Safeguard activities in mining sector component (Component 3) Objective/ Subcomponent Project Activities Project input & type /number of beneficiaries Positive impact on safeguard capacity building Estimated costsfor safeguards activities Subcomponents of Component C: Mining Sector Development (a)Regulatory strengthening (a) Drafting of key regulations and guidelines for:Impact assessment; Monitoring; Approval; Inspection (b) Legal and contractual agreements with investors (a) Legal consultants to prepare regulations, occupational health and safety rules, and environmental standards; (b) Legal consultants to assist preparation of model investment agreement, community benefit sharing provisions, and environmental/social protection provisions Safeguard requirements will be considered during the drafting of the revised regulations, guidelines, sector policy, and CA USD 180,000 USD 80,000 (b)Strengthening of inspection capacities (a) Capacity building within the mines inspections department, specifically on environmental and social issues; (b) capacity building in implementation of the Monitoring and Evaluation Framework; Acquisition of critical testing equipment (a+b) Consultancy services to provide training in mines inspection techniques and measures at the central and provincial levels; a total of 5 0 – 100 government officers at provincial and central will be trained; in addition, training will be provided to the NUOL and polytechniques; On-the-job training will also be provided through collaborative programs with private sector companies Environmental and social safeguard inspection will be part of the effort; MEM staff will acquire hands-on experience on M&E ofphysical environmental impacts (air, water, soil pollution) as well as best practice mitigation measures USD 400,000 over life of project (c) Disclosure and consultation (a) Public awareness (a) Advisory service on external relations strategy These efforts will facilitate information disclosure on USD 250,000 over life of j Page 16 15 practices programs (b) Training of national and provincial staff (c) Principles of community-driven planning and benefit-sharing and work plan (b) Training advisors (c) Tool-kits for community consultation disclosure on safeguard and encourage active participation of local communities in a ddressing the issues. project