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NACALA CORRIDOR RESETTLEMENT

STATUS REPORT FOR LENDERS

MA

R 2

016

This document was prepared by Synergia for:

CDN – Corredor de Desenvolvimento do Norte

CEAR- Central East African Railways

CLN – Corredor Logistico Integrado de Nacala

Vale Logistics Limited

Av. Ipiranga, 104 - 13º andar – República, CEP - 01046-010 – São Paulo – SP Brasil

TABLE OF CONTENTS

1 INTRODUCTION ......................................................................... 8

1.1 PURPOSE OF THE RESETTLEMENT STATUS REPORT ............................... 8

1.2 BRIEF PROJECT DESCRIPTION ............................................................... 9

1.3 PROJECT PROPONENT ........................................................................ 10

1.4 MAGNITUDE OF PHYSICAL AND ECONOMIC DISPLACEMENT ....... 10

1.5 RESETTLEMENT GOAL AND OBJECTIVES ............................................ 12

1.6 RESETTLEMENT PLANNING PROCEDURE ............................................ 13

1.7 IMPLEMENTATION ARRANGEMENTS .................................................. 14

1.8 SCHEDULE ............................................................................................. 15

1.9 CURRENT STATUS OF PROJECT RESETTLEMENT .................................. 15

1.10 OTHER RESETTLEMENT-RELATED MANAGEMENT PLANS AND

STUDIES .................................................................................................. 16

2 PROJECT DESCRIPTION .......................................................... 16

2.1 GENERAL .............................................................................................. 16

2.2 RAIL CORRIDOR ROUTE ...................................................................... 18

2.3 RIGHT OF WAY ..................................................................................... 18

2.4 TEMPORARY USES (CONSTRUCTION CAMPS, ACCESS ROADS) .... 19

2.5 MOBILITY AND CROSSINGS ................................................................ 20

2.6 PORT ...................................................................................................... 20

2.7 SPUR LINES ............................................................................................ 21

2.8 PROJECT SCHEDULE ............................................................................ 22

2.9 CONSIDERATION OF ALTERNATIVES .................................................. 23

2.10 MEASURES TAKEN TO MINIMIZE LAND ACQUISITION AND

RESETTLEMENT....................................................................................... 24

3 POLICY AND LEGAL FRAMEWORK ....................................... 25

3.1 GENERAL .............................................................................................. 25

3.2 MOZAMBICAN LEGISLATION .............................................................. 25

3.3 MALAWIAN LEGISLATION ................................................................... 26

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3.4 CONCESSION AGREEMENTS .............................................................. 27

3.5 APPROVED COMPENSATION AND RESETTLEMENT PLANS .............. 28

3.6 LENDER STANDARDS............................................................................ 29

3.7 PROJECT MEASURES TO ADDRESS LENDER STANDARDS ................. 31

4 SOCIO-ECONOMIC OVERVIEW OF AFFECTED

POPULATION ............................................................................ 35

4.1 INTRODUCTION .................................................................................... 35

4.2 CENSUS, SURVEYS AND DATA GATHERING ...................................... 35

4.3 OVERVIEW OF PROJECT AFFECTED POPULATION ........................... 35

4.4 VULNERABLE HOUSEHOLDS ................................................................ 40

4.5 CULTURAL PROPERTY........................................................................... 41

5 SUMMARY OF IMPACTS .......................................................... 42

5.1 SUMMARY OF IMPACTS ...................................................................... 42

5.2 DWELLINGS ........................................................................................... 42

5.3 ANCILLARY STRUCTURES ..................................................................... 43

5.4 CULTIVATED FIELDS (MACHAMBAS) .................................................. 43

5.5 LOSS OF ANNUAL CROPS ................................................................... 44

5.6 LOSS OF TREES AND PERENNIAL CROPS ........................................... 45

5.7 GRAVES AND SACRED SITES ............................................................... 46

5.8 SEVERANCE OF FIELDS ........................................................................ 46

5.9 SEVERANCE OF PATHS, ACCESS WAYS ............................................. 47

5.10 TEMPORARY USE OF LAND ................................................................. 47

5.11 TRANSITIONAL ACCOMMODATION .................................................. 47

5.12 IMPACTS ON STALLHOLDERS AND BUSINESS .................................... 47

5.13 LOSS OF ACCESS TO COASTAL GATHERING AREA ......................... 48

5.14 LOSS OF ACCESS TO FISHERIES........................................................... 49

6 COMPENSATION FRAMEWORK ............................................ 49

6.1 INTRODUCTION .................................................................................... 49

6.2 ELIGIBILITY FOR COMPENSATION AND RESETTLEMENT

ASSISTANCE .......................................................................................... 49

6.3 COMPENSATION ENTITLEMENTS ......................................................... 51

6.4 VALUATION METHODS AND CALCULATION OF COMPENSATION 53

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7 REPLACEMENT HOUSING AND INFRASTRUCTURE ............... 56

7.1 INTRODUCTION .................................................................................... 56

7.2 MOZAMBIQUE ...................................................................................... 56

7.3 MALAWI ................................................................................................ 65

8 LIVELIHOOD RESTORATION .................................................... 66

8.1 INTRODUCTION .................................................................................... 66

8.2 FACILITATING ACCESS TO REPLACEMENT LAND ............................. 66

8.3 LIVELIHOOD SUB-PROGRAMS ............................................................ 66

8.4 STALLHOLDERS ..................................................................................... 69

8.5 LIVELIHOOD PROGRAM MID-TERM REVIEWS AND EVALUATION ... 70

8.6 CURRENT STATUS AND PLAN GOING FORWARD ............................. 70

9 PUBLIC CONSULTATION AND DISCLOSURE ......................... 72

9.1 INTRODUCTION .................................................................................... 72

9.2 OBJECTIVES .......................................................................................... 72

9.3 STAKEHOLDER IDENTIFICATION .......................................................... 73

9.4 COMMUNITY REPRESENTATION AND ENGAGEMENT ...................... 74

9.5 SUMMARY OF CONSULTATION ACTIVITIES ........................................ 74

9.6 CONSULTATION WITH HOST COMMUNITIES ...................................... 75

9.7 ATTENTION TO VULNERABLE GROUPS ............................................... 75

9.8 SUMMARY OF DISCLOSURE ACTIVITIES ............................................. 76

10 IMPLEMENTING ROLES AND RESPONSABILITIES ................... 76

10.1 INTRODUCTION .................................................................................... 76

10.2 INSTITUTIONAL ROLES AND RESPONSIBILITIES .................................... 77

10.3 SOCIAL TEAM ORGANIZATION .......................................................... 78

10.4 SOCIAL TEAM RESOURCES ................................................................. 79

11 GRIEVANCE MANAGEMENT ................................................. 79

11.1 GENERAL .............................................................................................. 79

11.2 OBJECTIVES .......................................................................................... 80

11.3 GRIEVANCE PROCEDURE ................................................................... 80

11.4 AVENUES FOR PROJECT AFFECTED PEOPLE TO MAKE A

COMPLAINT .......................................................................................... 81

11.5 GRIEVANCE MANAGEMENT ROLES AND RESPONSIBILITIES ............ 82

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11.6 MONITORING OF GRIEVANCE OUTCOMES ..................................... 83

11.7 COURT CASES ...................................................................................... 83

11.8 SOURCE OF FUNDS .............................................................................. 84

12 MONITORING AND REPORTING ............................................ 85

12.1 GENERAL .............................................................................................. 85

12.2 OBJECTIVES .......................................................................................... 87

12.3 INTERNAL MONITORING ...................................................................... 87

12.4 EXTERNAL MONITORING ..................................................................... 87

12.5 MONITORING SCHEDULE .................................................................... 88

12.6 REPORTING ........................................................................................... 88

12.7 RESETTLEMENT COMPLETION AUDIT ................................................... 88

12.8 RESPONSIBILITIES FOR DISBURSEMENT ................................................ 89

13 RAP IMPLEMENTATION SCHEDULE ........................................ 90

ANNEX A ......................................................................................... 91

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ACRONYMS

AfDB African Development Bank

CCCV Concessionaires (CLN, CDN, CEAR, VLL)

CDN North Development Corridor

CEAR Central East African Railways

CFM Caminhos de Ferro de Moçambique (Mozambican Railway Authority)

CLN Integrated Logistic Corridor of Nacala

DUAT Right to Use and Land Utilization

EIA Environmental Impact Assessment

EMP Environmental Management Plan

HIV Human Immunodeficiency Virus

ICP Informed Consultation and Participation

IFC International Finance Corporation

LRP Livelihood Restoration Program

MICOA Ministry for Coordination of Environmental Action

MITADER Ministry of Land, Environment and Rural Development

MIREM Ministry of Mineral Resources

NGO Non Governmental Organization

NCP Nacala Corridor Project

PAP Project Affected People

PCS Social Compensation Plan

PDSO Displacement Plan for Operational Safety

PEC Executive Compensation Plan

PNUD United Nation Program for Development

PRO Operational Procedure

PS Performance Standard

RAP Resettlement Action Plan

ROW Right of Way

RSR Resettlement Status Report

SDCN Development Company of the Nacala Corridor, SA

TOT Training of Trainers

UN United Nations

VLL Vale Logistics Limited

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1 INTRODUCTION

1.1 PURPOSE OF THE RESETTLEMENT STATUS REPORT

The Concessionaires (CCCV) are seeking finance for the Nacala Corridor and Port Project (‘the Project’) from a group of international financing institutions. The purpose of the Resettlement Status Report is to describe the current status of the Project resettlement undertaken in accordance with the laws of Mozambique and Malawi and, in addition, to demonstrate Project measures taken to comply with specific lender standards. The Resettlement Status Report summarizes the policies, principles, procedures, roles and responsibilities for managing physical displacement impacts (loss of dwellings) and economic displacement impacts (loss of assets that leads to loss of income or other means of livelihood) caused by the construction and operation of the rail corridor. This report has been prepared to demonstrate the Project’s compliance with:

Mozambican legislation;

Malawian legislation;

Concession agreements;

International lender standards, specifically the International Finance Corporation (IFC) Performance Standard 5: Land Acquisition and Involuntary Resettlement (January 2012); and, African Development Bank Operational Safeguard 2 involuntary resettlement, land acquisition, population displacement and compensation.

IFC PS 5 is widely accepted as the international good practice standard for private sector projects involving land acquisition and involuntary resettlement. IFC PS 5 is one of the standards that prospective international lenders refer to when considering financing projects. All resettlement activities have been implemented with disclosure of information, consultation and the informed participation of affected communities and the Governments of Mozambique and Malawi. Civil society organizations have also been actively involved in Project resettlement planning and implementation. Consultation and engagement with affected and host communities, all levels of government and civil society is an ongoing and cross cutting process throughout resettlement implementation. Taking into consideration that the resettlement process is ongoing, it was necessary to establish a cutoff date for the data presented in this status report. For this reason, the main figures herein presented are dated as of 29 February 2016. CCCV is commited to provide updates on the status of the resettlement going forward, if requested.

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1.2 BRIEF PROJECT DESCRIPTION

Table 1. Nacala Corridor Project key statistics

RAILWAY PORT

Scope

Construction of 230 km of railway and 36 new bridges; Repair of 683 km of railway and 47 bridges; Construction of operation and maintenance facilities.

Construction of port facilities, with capacity of 18 Mtpa (thermal and metallurgical coal) 1 car dumper (4,800 tph) – 2 wagons simultaneously 2 stackers (4,800 tph) 2 reclaimers (5,100 tph) 2 shiploaders (5,100 tph) 13 Km of conveyor belts 3 stockyards (1 million ton) Causeway (550 m), access bridge (750 m), 1 berth (430 m) for ships up to 180,000 DWT

Capex US$ 3.4 billion US$ 1.0 billion

Duration 54 months 42 months

Project Approval

September 2011 September 2011

Project Completion

March 2016 July 2015

Manpower Peak

9,094 employees 5,175 employees

Permits All granted in 2011 All granted in 2011

Figure 1. Nacala Corridor overview

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1.3 PROJECT PROPONENT

A Framework Agreement was signed by Vale, “Caminhos de Ferro de Moçambique” (CFM) and four Concessionaires “Corredor de Desenvolvimento do Norte” (CDN), “Central East African Railways” (CEAR), “Vale Logistics Limited” (VLL) and “Corredor Logistico Nacala” (CLN), which provides for CLN to operate the entire Project on behalf of all Concessionaires. CEAR and CDN will operate: (i) general cargo and passenger trains within their sections; (ii) the Mchinji – Lilongwe – Nkaya – Limbe – Blantyre – Makhanga – Marka line (about 700 km in Malawi) and the Lichinga – Cuamba branch line (about 268 km in Mozambique); and, (iii) various stations and workshops (see Figure 2). Both lines require rehabilitation. The Lichinga – Cuamba line has been inactive since 2011 and is being rehabilitated by the Project as part of a regional development action agreed with the Government of Mozambique. CDN will operate the rail line terminal of the existing Nacala Port. Under the proposed financing scheme, the four Concessionaires would be the borrowers of record (the “Borrowers”). Vale has an 85% stake in “Sociedade de Desenvolvimento do Corredor do Norte” (SDCN) which in turn has 51% of both CEAR and CDN.

Figure 2. Nacala Corridor Concessionaires

1.4 MAGNITUDE OF PHYSICAL AND ECONOMIC DISPLACEMENT

1.4.1 PROJECT AFFECTED POPULATION

The Nacala Corridor and Port Project has physically displaced 1,817 households. Of these, 1,058 households have experienced both physical and economic displacement. A further 12,033 households have been economically displaced. Table 2 summarizes the number of affected households in each corridor section.

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Table 2. Number of Affected Households by Section

Displacement type NCP Section

S2 S3 S5 S6 S7 S8/ Port Total

Physically displaced only 10 0 0 96 625 28 759

Physically & economically displaced

0 177 52 110 692 27 1,058

Economically* displaced only

222 1,615 2,781 739 5,392 1,284 12,033

Outside urban areas, most physically displaced households were able to re-establish dwellings only a short distance from their original dwelling and, nearly always within the same community or settlement. *Economically displaced includes machambas and other economic activities such as market, stalls and trees.

1.4.2 PROJECT IMPACTS ON LAND

Project impacts on land are summarized in Table 3. Railway S5, S6 and S7 are a brownfield project, which is to say there was a pre-existing railway and right of way, acquired for the most as part by a previous concessionaire. In general, affected households own at least one machamba (field/agricultural plot). The average total area of a household’s machambas is less than 0.5 ha, ranging from 0.1 ha to 1.1 ha. The affected agricultural land is largely arable, and is used to cultivate a range of crops mainly for subsistence. Loss of machambas represents a direct loss of a key part of a rural household’s agricultural production base and livelihood.

Table 3. Affected machambas and landowners

Loss of fields for

cultivation

Farmlands (Machambas)


Number of machambas (active)

215 1,101 1,326 853 5,303 1,574 10,372

Number of machambas (fallow)

0 870 1,477 0 0 0 2,347

Total area (ha) 60 1,199 173 168 1,203 297 3,100

No. of unique affected landowners

198 1,613 2,717 800 5,022 1,311 11,661

1.4.3 IMPACTS ON STALLHOLDERS AND BUSINESSES

Some 1,171 stallholders had 1,225 stalls displaced by rail construction or establishment of safety zones around the railway line (see Section 2.3). Most stalls were informal, arranged either linearly along the railway line in rural villages or settlements, or more densely as part of markets in Nacala, Cuamba and in other regional agricultural service centers.

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Table 4. Affected stall and stallholders

Type of Loss Number of Stalls


Loss of rail side stall 0 1 64 51 435 0 551

Loss of market stall 0 0 0 0 674 0 674

Total of stalls 0 1 64 51 1,109 0 1,225

No. of unique affected stallholders

0 1 59 49 1,062 0 1,171

1.5 RESETTLEMENT GOAL AND OBJECTIVES

This Resettlement Status Report has been prepared on behalf of the Concessionaires (CCCV) for a group of international financing institutions (“Lenders”) in order to describe the current status of resettlement for the Nacala Corridor Project and to:

summarize the actions undertaken in accordance with laws of Mozambique and Malawi;

demonstrate Project measures taken to comply with specific lender standards;

indicate the measures taken to avoid or minimize the need for resettlement and reduce impacts caused by the construction, rehabilitation and operation of the rail corridor;

describe the policies, principles, procedures, roles and responsibilities for managing physical displacement (loss of dwellings) and economic displacements (full or partial loss of income sources or other means of livelihood) caused by the construction and operation of the rail corridor.

The overall goal for Project land acquisition and resettlement is to ensure that Project affected people (PAP) are compensated through a negotiated process, and have the opportunity to restore or improve their livelihoods and standards of living, complying with legal requirements, environmental and social commitments, commitments to lenders' standards and good international practice. In order to achieve this goal, the following objectives were established:

avoid or minimize displacement;

implement mechanisms for communication, consultation and participation, involving the different groups related to the Project (central, regional and district government, community leaders and households), in accordance with the Stakeholder Engagement Plan;

implement a Grievance Management System;

ensure fair compensation, in accordance with the national legal frameworks and international standards;

implement livelihood restoration projects and social development actions focused on local solutions and alternatives to give PAP the opportunity to restore their living standards and livelihoods to at least pre-project levels;

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develop and maintain a database that supports the planning, implementation, monitoring and evaluation of the proposed programs and actions; and,

develop and implement a monitoring and evaluation program to assess the effectiveness of resettlement programs and livelihood measures in achieving outcomes consistent with the RSR objectives.

1.6 RESETTLEMENT PLANNING PROCEDURE

The Table 5 shows the main steps and activities for each resettlement phase.

Table 5. Resettlement phases and main activities

RESETTLEMENT PLANNING RAP and

compensation framework preparation

- Preparation of RAP and compensation framework

- Internal review and approval of RAP

- Government approval of RAP

Database

- Community mobilization

- Undertake the census and inventory of all household assets

- Witness the data collection

- Data processing and database management

Complaints and grievance

management

- Complaints and grievance report and registration

- Complaints and grievance analysis and response formulation

- Complaints and grievance response communication

- Complaints and grievance closeout

RESETTLEMENT IMPLEMENTATION

Compensation disbursement

- Formal valuation of housing, plots and other assets for cash compensation

- Review and approve valuations

- Prepare payment schedule and request money to be made available by the finance department

- Mobilize beneficiaries to be available at Government administration building for payment

- Actual payment in the field

- Witness the compensation payment in the field

- Sign the payment receipts

Physical relocation to temporary

housing

- Undertake a monitoring process to ensure compensated families leave the construction area

- Provide support to the displaced families, where required

Database

- Preparation of data collection tools

- Update existing database during transition phase

- Data processing and database management

Host area selection and

approval

- Consult with affected families to identify their preferences and requirements

- For special cases (vulnerable groups), where needed, develop measures to support them

- Define requirements for the host area site selection

- Identify and evaluate potential host area options

- Consult with any host or receiving communities

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- Approval of selected host areas

- Communicate approved host areas to construction companies

- Develop housing designs in consultation with affected families

- Approval of housing designs

- Develop a host area plan that defines the area layout

- Develop architectural and engineering designs for tender of house construction

Support during transition

- Payment of quarterly house rental subsidy for rental

- Provision of transitional support, particularly to vulnerable groups, where required

- On-going information sharing with affected families

Participative construction of

the houses

- Issuance of construction licenses

- Replacement site preparation and construction of the replacement houses

- Identification of family members to participate in the construction of houses

- Provision of training to the selected family members

- Regular monitoring of the construction process

Hand-over of constructed

houses

- Conduct traditional ceremonies

- Hand-over of houses

- Ensure hand-over documents are signed by the required parties

Complaints and grievance

management

- Complaints and grievance report and registration

- Complaints and grievance analysis and response formulation

- Complaints and grievance response communication

- Complaints and grievance closeout

Documentation to the affected

families

- Preparation of plans for issue of land (DUATs) and house (ownership) titles

- Issuance of DUATs and house titles

LIVELIHOOD RESTORATION

Livelihood restoration

projects

- Development of database of families that lost machambas

- Provide support to the economically displaced families in finding new machambas

- Develop and implement projects to improve production and income

Community Investment programs

- Implementation of community investment projects/actions

- Monitoring and evaluation

MONITORING AND EVALUATION

Monitoring and Evaluation

- Monitoring of before vs. after for all displaced households

- Any defects under house construction guarantees, if required

1.7 IMPLEMENTATION ARRANGEMENTS

In Malawi, the Government was responsible for the implementation of the resettlement process. It was supported by the Concessionaires. Cash compensation was paid directly by the Government to PAPs losing buildings, agricultural land, seasonal and perennial crops, businesses and other community assets. In Mozambique, the Government is responsible for the resettlement process and the Concessionaires facilitate its implementation. Replacement residential land and assistance for finding replacement agricultural land was provided by the Government. Replacement housing and cash compensation for ancillary structures was provided by the Concessionaires.

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1.8 SCHEDULE

The schedule below refers to the main resettlement tasks of Nacala Corridor Project implementation.

Table 6. NCP implementation overall schedule with main resettlement steps

Program for

NCPImplementation

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

1s 2s 1s 2s 1s 2s 1s 2s 1s 2s 1s 2s 1s 2s 1s 2s 1s 2s 1s 2s

Environmental Impact Assessment

Formal Public Participation/Disclosure

Environmental Licenses obtained

Stakeholders Engagement

Resettlement Planning

Resettlement Implementation

Community investment program

Livelihood Restoration Program

Resettlement Completion Audit

Projectec basic design

Projectec detailed design

Campsites and temporay construction

Port Construction

Railway construction

Port test and commissioning

Railway test and commissioning

Operations

1.9 CURRENT STATUS OF PROJECT RESETTLEMENT

The table below provides the current status of the Project’s resettlement implementation.

Table 7. Resettlement implementation status by Section, as of 29 February 2016

Task (examples only) % Complete


Notification 100 100 100 100 100 100 100

Census 100 100 100 100 100 100 100

Socio-economic survey 100 100 100 100 100 100 100

Land and asset survey 100 100 100 100 100 100 100

Compensation/ resettlement agreement signed

100 100 100 100 100 100 100

Land vacated 100 100 100 100 100 100 100

Dwellings vacated 100 100 100 100 100 100 100

Replacement housing constructed

100 NA NA 24 21 100 25

Replacement land accessed 100 100 100 100 100 100 100

Completion audit 0 0 0 0 0 0 0

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Since 2012 the Project has been implementing a Livelihood Restoration Program (LRP), consisting of agricultural engagement services, vocational training and inclusive business. Up until now, LRP actions have reached about 75% of affected families across the corridor. Over 50% of PAP participation was in agriculture. Nampula and Niassa recorded increased PAP cultivated area after 12 months of agricultural sub-program implementation. In Nacala-a-Velha District, approximately 5% of farmers have increased their cultivated areas from 0.25 ha to 0.50 ha, due to the introduction of the agricultural income LRP component.

1.10 OTHER RESETTLEMENT-RELATED MANAGEMENT PLANS AND STUDIES

Between 2011 and 2015, resettlement/compensation plans for each rail section or administrative district were prepared and approved by the Governments of Mozambique and Malawi prior to resettlement implementation. According to each Project section, these plans were variously named as “Plano Executivo de Compensação” – PEC (Executive Compensation Plan) or “Plano de Desocupação para Segurança Operacional”- PDSO (Displacement Plan for Operational Safety). Others relevant plans and documents (e.g. Stakeholder Engagement Plan, Mobility Study, Rail and Port Environmental and Social Management Plan (ESMP)) are listed in the Annex A.

2 PROJECT DESCRIPTION

2.1 GENERAL

The Nacala rail corridor will connect the minerals and coal-rich Tete region (where the Moatize coal mine is located) in Northwestern Mozambique to Nacala Port through Malawi. The Project will provide (i) much needed connectivity for people and cargo to the under-developed and isolated northern regions of Mozambique, as well as to land-locked Malawi; and, (ii) will enable export of coal, iron ore and other minerals from the mineral-rich Tete region which will have a significant impact on Mozambique’s GDP. The Nacala rail corridor will transport up to 22 million tons per annum (“mtpa”) of coking (metallurgical grade) and thermal coal, various minerals (mainly iron ore), general freight and passengers. Vale will use 18 mtpa of this capacity. The Project has the following components:

230 km of new railway construction (‘greenfield’) single narrow gauge rail track (201 km of S2 and S3, out of which 62.5 km is in Mozambique and 138.5 km is in Malawi, and, 29.3 km in S8, Mozambique);

682 km of rehabilitation of existing narrow gauge rail track (98.6 km in Malawi and 583.3 km in Mozambique); and,

construction of a new coal handling terminal at Nacala-a-Velha.

The Nacala Corridor will follow a multi-cargo approach, with a combination of coal transport contracts (7.2 pairs of trains per day, one each way), general freight/cargo (2 pairs per day)

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and passengers (1 pair per day, transporting a projected million or more passengers per annum by 2017). Each coal train will comprise 120 wagons hauled by 4 locomotives. Train control and maintenance will be carried out from Nacala-a-Velha. Nacala, with a natural water depth of 20 m, is regarded as the best deep water port in Eastern Africa. The new port terminal is located at Namuaxi Point on the eastern shore of Nacala Bay, approximately 5 km from the main town of Nacala and to the north-west of the existing Nacala port. The new terminal will have a stockyard capacity of about 1.45 million tons and will manage the arrival of trains, their offloading, the conveyance and storage of coal and its loading onto ships. The new terminal will receive Capesize and Panamax ships. The construction phase started in 2011, funded by a bridging loan from Vale Emirates and Vale International. Pre-operational start was in 2015. Full operation will be achieved in 2017. The key off-taker for the Project is Vale Moçambique (the Mozambican subsidiary of Vale SA), for the transport of coal from the Moatize mine, an open-cut metallurgical coal mine located in the Tete Province. Vale was awarded rights to develop the Moatize mine by the Government of Mozambique as the outcome of an international competitive tender held in 2004. A 25-year Concession Agreement was signed in 2007. Vale’s proposal included the development of associated railway and port infrastructure. The Nacala Corridor is essential to make the mine a viable and successful operation. Currently, coal production from the Moatize mine is transported by the Sena railway line to the Port of Beira, which is about 1,000 km further South and which has a capacity of 4.5 mtpa allocated to Vale Moçambique. Vale Moçambique plans to continue having an ongoing operation of 4 mtpa transported on the Sena-Beira line, in parallel with the Nacala Corridor.

Figure 3. Nacala Railway main figures

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2.2 RAIL CORRIDOR ROUTE

Figure 4. Nacala Corridor sections length

Figure 5. CEAR and CDN rail lines

2.3 RIGHT OF WAY

In Mozambique, the right of way for the railways extends 50 m either side of the centerline of the rail, as defined by legislation and the Railway Concession. In Malawi, legislation does not define any particular width requirements for a rail right of way, but the Railway Concession Agreement prescribes 30 m on either side of the centerline of the rail, or 45 m where needed.

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With the objective of minimizing displacement, the Project decided not to clear the whole right of way. To define the width that the Project would use in each part of the corridor, several steps were followed. Firstly, the right of way width prescribed by the legislation or concession agreements in each country were mapped and then, based on aerial photographs, the total number of existing household structures and area of land used within the right of way were estimated. Secondly, the minimum safety zone required for community safety during construction and rehabilitation activities was established. For most areas, the safety zone was set at 10 m to 15 m from the center line of the rail. This was the minimum area required during construction for activities such as earthworks (cut and fill), access roads, campsites, maneuvering of heavy equipment and to accommodate auxiliary structures. The safety zone is also necessary for the safe operation and maintenance of the railway. In some special cases, for example where the railway passes through densely populated areas in Nampula City, the safety zone was set at 6 m either side of the rail track. With this reduced safety zone, additional safety measures such as brick walls and fences were also introduced. Environmental studies conducted in 2010, were also referred to by the project engineering team for siting construction laydowns, crossings yards, detours and other works areas so as to avoid displacement of dwellings and productive land. A similar approach was adopted for permanent facilities such as bridges, level crossings, fences, walkways and the like. Even during implementation, the Project team continued to evaluate and refine siting, alignments and engineering design to prevent or minimize the displacement of dwellings, fixed assets, social facilities and culturally significant features such as sacred sites and cemeteries.

2.4 TEMPORARY USES (CONSTRUCTION CAMPS, ACCESS ROADS)

There are 5 main types of temporary facilities used to support railway construction: campsites, construction laydown areas, quarries, borrow pits and temporary access roads. In all cases, land for temporary uses was acquired using one of two approaches: The first approach involved the Concessionaires directly compensating the landholder (usually the district government) for temporary use of the land and any lost assets followed by its hand-over to the Contractor. The Contractor was then responsible for the proper environmental management of the area and its restoration prior to handback to the district government or land user. In a second approach, the Contractor paid the temporary land compensation, adopting the same market rates established by the Concessionaires. For this approach, there was a constant interaction between the Concessionaires´ social team and Contractor’s team in order to align the method of compensation. As in the first approach, the Contractor was fully responsible for complying with environmental and social regulations until handback to the district government or original land user.

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2.5 MOBILITY AND CROSSINGS

The most populated Project areas were in the brownfield sections, mainly in urban and suburban areas, such as Nampula City. In brownfield areas, the railway had been in existence since the colonial period. This meant that the majority of PAPs living in these areas were already accustomed to the severance impacts caused by the railway. In 2015, a corridor-wide mobility study was undertaken to identify and prioritize the main community crossing points, including high traffic areas, crossings used by school children or crossings adjacent to critical community infrastructure such as schools and hospitals. The Mobility Plan identified 88 high priority crossings. The Project is progressively constructing solutions for each of the high priority locations. These include pedestrian overpasses, vehicle level crossings, traffic barriers, viaducts and signals tailored to local crossing needs. The target date for completion of the 88 high priority crossings is December 2017.

2.6 PORT

The Nacala-a-Velha Coal Terminal is located at the eastern end of the Nacala rail corridor. It will manage the arrival of trains, their offloading, the conveyance and storage of coal, coal handling and its loading onto ships. The Port Marine Terminal (extending into the sea to the west of the site as shown in Figure 6) will receive the Capesize and Panamax ships.

Figure 6. Nacala-a-Velha Coal Terminal overview

The process of receiving, storing and loading coal can be summarized in six phases:

1. Wagon Tipper;

2. Primary Sampling;

3. Stacking and Storing;

4. Reclaiming;

5. Secondary Sampling;

6. Ship Loading.

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Figure 7. Nacala-a-Velha Coal Terminal details

The port construction works started in 2011 and were concluded in 2015.

2.7 SPUR LINES

Cuamba – Lichinga

As part of regional development actions agreed with the Government of Mozambique, the Concessionaires will rehabilitate the Lichinga – Cuamba spur line that connects to the Nacala Corridor. The Lichinga – Cuamba line has been inactive since 2011. The rehabilitation will cover 268.2 km of line including crossing loops and yards. The scope of works includes track rehabilitation, renewal of rail lines on bridges, and drainage works. The first phase of the rehabilitation covered Cuamba to Metande (110 km) and was completed in May 2015. The second phase will cover Metande to Lichinga (158 km). The target date for completion is June 2016. Rehabilitation progress as of October 2015 was 49% complete. Preliminary assessment indicates that no displacement will be required.

Nkaya – Limbe

As part of the Nacala Corridor Project, the Project is also undertaking the rehabilitation of the existing Nkaya - Limbe railway in Malawi. The rehabilitation will cover 96 km of line, including crossing loops. The first phase, Lirangwe-Limbe (47 km), is presently being rehabilitated. The second phase, Nkaya-Lirangwe (49 km) is presently being assessed. Rehabilitation works are scheduled to commence during 2016. Scope of works will include track rehabilitation, renewal of track on bridges and drainage works. In October 2015, rehabilitation progress on phase 1 was 39% with completion scheduled for January 2016. The second phase was still being procured with works yet to commence.

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Rehabilitation of both spur lines can be completed without any physical or economic displacement because works were confined to the existing line and accesses tracks. For the operational phase, dependent on the traffic along the railway line and safety risk assessments, safety zones might need to be created. In the event that clearing for safety zones proves necessary, an appropriate Resettlement Action Plan will be developed, meeting Lenders requirements. For the Nkaya-Limbe spur line, preliminary assessment indicates that no displacement will be required.

2.8 PROJECT SCHEDULE

In 2010, Environmental Impact Assessments (EIAs) were undertaken in both Mozambique and Malawi in order to define the corridor route and minimize impacts. Based on the EIAs, Environmental Licenses were granted in 2011 in both countries. An Environmental Management Plan (EMP) was also prepared. A public consultation process has taken place in relation to the EIAs. A grievance mechanism has also been established. The Concessionaires have committed to applying good international industry practice, including compliance with the environmental and social standards of the Lenders and with the Equator Principles as a standard reference for Commercial Banks. Construction of the Corridor started in 2011. The pre-operational start date was 2015. Full operation is expected to be achieved in 2017. As of November 2015, construction progress was as follows:

Coal trains had started delivering coal to the Nacala-a-Velha Port;

Construction was complete except for some work remaining on S6 and S7 where overall construction progress was 94% and 85% complete respectively, including facilities;

Spur line rehabilitation was underway;

The Nacala-a-Velha port was operational.

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Table 7. NCP implementation schedule

2.9 CONSIDERATION OF ALTERNATIVES

During the Feasibility Study phase, the following technical and environmental data was considered for sites and route selection:

areas with production activity and urban areas with high population density - avoidance/minimization of physical and economic displacement;

relief and topography – minimization of ‘cut and fill’ in areas of gentler slopes;

natural, physical barriers – avoidance of rivers, mountains, marshes, flood-plains and low-lying areas;

geology – prevention of interference with fissures in tectonic plates;

pedology – preference for ground with higher density or made up of rocks, in order to reclaim rocks for ballast;

areas of importance for water production – bypassing of dams, rivers, water-supply points, springs and drainage systems;

parks and reserves – avoidance of such areas;

heritage/archaeological sites – avoidance of known areas of significance;

use of existing infrastructure – use existing roads for maintenance.

A detailed route selection investigation was undertaken (prior to the EIA), where various options were considered. Initially, 17 possible route options were identified. From these, following evaluation, four potential routes were selected for detailed investigation (viz. AO1 to AO4). The final alignment selected was designated AO1. Its main advantages were avoidance of a National Park in Malawi and minimization of resettlement impact.

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Figure 8. Alternative routes considered

2.10 MEASURES TAKEN TO MINIMIZE LAND ACQUISITION AND

RESETTLEMENT

According to the Lenders´ standards, wherever feasible, involuntary resettlement should be avoided or minimized. The following measures were adopted by the Nacala Corridor Project to avoid physical relocation of people and reduce impacts on the livelihoods of affected populations:

Careful route selection, based on up-to-date aerial photography and GIS data during the feasibility study phase and basic project design phase.

Extensive fieldwork to adjust routing around existing houses, structures, public infrastructure and productive land uses, during the detailed design phase.

Adoption of the principle that, to the extent possible, all land utilized for temporary use during the construction phase would be restored to its previous use upon construction completion.

Thorough consultation with local authorities and affected communities to avoid lands or other areas of local significance.

Adoption of a narrower construction right of way along the railway corridor than allowed by law or concession agreements.

Using the minimum required area for construction works and operational safety (for example, adoption of 6 m safety zones in in densely populated urban areas) to reduce physical and economic displacement.

Careful siting of access roads to place them wherever possible on state or municipal land rather than on privately owned land or arable land.

Alternative Alignments Considered

Moatize

Nkaya

Junction

Lirangwe

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Use of existing roads as construction access, wherever feasible, to limit the length of temporary access roads and taking the opportunity to improve the community paths.

3 POLICY AND LEGAL FRAMEWORK

3.1 GENERAL

The Concessionaires’ obligations concerning land acquisition and involuntary resettlement are defined by the following:

National legislation and regulations prevailing in Mozambique and Malawi;

Concession Agreements;

Government approved Compensation and Resettlement Plans; and,

Lenders Environmental and Social Standards.

The Project Concession Agreement and Project approvals in Mozambique preceded Mozambique’s introduction of a “Regulation on the Process of Resettlement resulting from economic activities” (Decree No. 31/2012 of 8 August). While not obliged to do so, the Concessionaires took into consideration the standards prescribed in the new Decree when designing household compensation packages and replacement houses.

3.2 MOZAMBICAN LEGISLATION

3.2.1 KEY LAWS AND REGULATIONS

In Mozambique, the key legislative instruments governing Project acquisition of rights to land and resettlement are as follows:

Law 19/97, October 1 – Land law, defines the terms of use of land and Decree 66/98, December 8, is the land law regulations.

Decree 24/2012, July 13 – Approved the Rail Concession as well as the special license for use of land.

Decree 25/2012, July 13 – Approved the Port Concession as well as the special license for use of land.

Decree 31/2012, August 8 – Approved the Resettlement regulation due to economic activities.

Law 19/2007, July 18 – Spatial planning law that regulates the relation between the various levels of the public administration, the relationship of public administration with public entities and private sector, representatives of the various economic, social and cultural interests including local communities.

Decree 23/2008, July 1 – Is the Spatial Planning Law Regulations.

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3.2.2 RIGHTS OF LANDHOLDERS PRIOR TO DISPLACEMENT

The Project impacted both occupants with DUATs (titles to use and benefit from the land – the highest form of land right in Mozambique), as well as people occupying the land following customary rules.

3.2.3 PROJECT RIGHTS TO LAND AND OBLIGATIONS REGARDING

COMPENSATION AND RESETTLEMENT

Decree 24/2012, July 13 - Approved the Rail Concession as well as the special license for use of land

Decree 25/2012, July 13 - Approved the Port Concession as well as the special license for use of land

The Concession Contracts provide clear rules on resettlement including the requirement for establishment of an entity with a mixed composition (public and private) to deal with resettlement-related issues.

3.2.4 POWER OF EXPROPRIATION

In Mozambique, both Project concessions (Port and Rail) are considered of ‘public interest’. As such, the Project had recourse to expropriation of land and assets, as long as ‘fair’ compensation was paid by the Concessionaire for the assets being expropriated. The Spatial Planning Law has similar provisions. The Project completed land acquisition in Mozambique without recourse to expropriation.

3.2.5 DISPUTE RESOLUTION

The settlement of complaints and grievances resulting from resettlement activities followed a negotiation process until the achievement of a satisfactory solution for both parties or referral to the court. To date in Mozambique, no case has been submitted for arbitration.

3.3 MALAWIAN LEGISLATION

3.3.1 KEY LAWS AND REGULATIONS

The key laws and regulations regarding land use rights, compensations and resettlement of Malawi include the following:

Land Act (cap. 57:01 of the Laws of Malawi)

Lands Acquisition Act (Cap.58:04 of the Laws of Malawi)

Malawi National Land Policy, 17th January, 2002.

Railways Act (cap 69:03 of the Laws of Malawi) Land Act (cap. 57:01 of the Laws of Malawi)

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The Concession was granted by the Minister of Transport and Public Infrastructure acting under the Railways Act, and subject to the approval of the Minister responsible for Lands. The Land Rights granted to the Concessionaire are granted under the Land Act.

3.3.2 RIGHTS OF LANDHOLDERS PRIOR TO DISPLACEMENT

The Landholders in the Project Affected Areas fell into three categories: those who held freehold rights; those who held leasehold rights; and, those with customary rights. The majority of the Project affected persons had customary rights and used their affected land for dwellings or subsistence farming.

3.3.3 PROJECT RIGHTS TO LAND AND OBLIGATIONS REGARDING

COMPENSATION AND RESETTLEMENT

For this Concession, the Malawi Government has granted the Concessionaire the land rights required for the implementation of the Project. The Concession Agreement bound (i) the Concessionaire to implement a Resettlement and Compensation Plan approved by the Government; and, (ii) the Government to secure vacant land for the exclusive use of each Project Site. The Concessionaire was responsible for the compensation. to be paid to the affected households. The Government was responsible for negotiating with land owners, traditional authorities and occupiers of lands to secure the Land Rights required for the implementation of the Project. The Project affected persons were compensated by the Government. The Concessionaire financed the compensation by transferring the required funds to the Government who was responsible for payment of the actual compensation to the affected households. This process was completed in 2014.

3.3.4 POWER OF EXPROPRIATION

Although the Project met the criteria for in the ‘public interest’ in Malawi, the Government acquired the land with the consent of the affected people through payment of agreed compensation. Despite the Government having powers under the Lands Acquisition Act to enforce land expropriation in the public interest, it has not been necessary for the purposes of the Project.

3.4 CONCESSION AGREEMENTS

Key provisions of the Mozambican Concession Agreements for the Railway and for the Port pertaining to land acquisition, resettlement and compensation are as follows:

Public Utilities Declaration and Land Use.

The activities authorized under the Railway Concession Agreement were considered of ‘public interest, utility and need’. Thus, the Project has recourse to expropriation of

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assets and properties as a last resort. Even where expropriation is used, the Concession Contracts oblige the Concessionaire to pay ‘fair compensation’.

Resettlement, social development programs and support to the communities:

The Concession Contracts provide clear rules on resettlement including the requirement for the establishment of an entity with a mixed public and private sector composition to deal with issues related to resettlement and social development. The Concessionaire must also develop social programs.

On the Malawian Concession Agreement for the Railway, the key provisions related to land acquisition, resettlement, compensation and related responsibilities are as follows:

Grant of Land Rights to the Concessionaire and Securing Land Rights in respect of Project sites.

Through the Concession Agreement, the Malawi Government granted the Concessionaire the Land Rights required for the implementation of the Project. The Concession Agreement bound the Concessionaire to implementing a ‘Resettlement and Compensation Plan’ approved by the Government.

Delivery of the Project Sites Constituting the Corridor.

The Concession Agreement bound the Government to secure vacant and exclusive possession and grant exclusive use of each Project Site to the Concessionaire. The Concessionaire was responsible for the compensation costs.

The Government was responsible for negotiating with land owners, customary authorities and occupiers of lands to secure the Land Rights required for the implementation of the Project.

The Concessionaire has no freehold interest in the Land comprising Project Sites.

3.5 APPROVED COMPENSATION AND RESETTLEMENT PLANS

Table 8 lists all the resettlement and compensation plans prepared by the Concessionaires and approved by the Governments of Mozambique and Malawi prior to resettlement implementation. The plans, “Plano Executivo de Compensação” – PEC (Executive Compensation Plan) and “Plano de Desocupação para Segurança Operacional”- PDSO (Displacement Plan for Operational Safety) were approved between 2011 and 2015. They variously cover rail sections or administrative districts.

Table 8. NCP resettlement plans

SECTION TERRITORY CONCESSIONAIRE REFERENCE

DOCUMENT YEAR

2 Moatize CLN PEC 2013

3 Malawi (Greenfield) VLL RAP 2011

5 Malawi (Brownfield) CEAR RAP 2015

6 and 7

Mecanhelas CDN PDSO 2013

Cuamba CDN PDSO 2013

Malema CDN PDSO 2013

Ribáuè CDN PDSO 2013

Mecuburi CDN PDSO 2013

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SECTION TERRITORY CONCESSIONAIRE REFERENCE

DOCUMENT YEAR

District of Nampula CDN PDSO 2013

City of Nampula CDN PDSO 2013

Meconta CDN PDSO 2013

Monapo CDN PDSO 2013

Mossuril CDN PDSO 2013

8 and Port Nacala-a-Velha CLN PEC 2013

Mossuril CLN PEC 2013

3.6 LENDER STANDARDS

Table 9. Summary of Lenders standards

Theme/issue Summary of Lender standards1

1. Project design

Wherever feasible, alternative Project designs to avoid or minimize physical and/or economic displacement while balancing environmental, social and financial costs and benefits, will be considered by the Project (IFC PS5 2012, paragraph 2; AfDB IRP 2003, paragraph 3.2).

2. Resettlement Action Plan (RAP) and Livelihood Restoration Program (LRP)

In the event that involuntary resettlement is unavoidable, the Project will develop a RAP that covers compensation of displaced people at full replacement costs for loss of lands and other assets. (IFC PS5 2012, paragraph 9; AfDB IRP 2003, paragraph 3.3). The RAP will be designed to mitigate the negative impacts of displacement, identify development opportunities, establish the entitlements of all categories of affected persons (including any host communities), and include a resettlement budget and schedule, etc. (IFC PS5 2012, paragraph 19; AfDB IRP 2003, paragraph 3.3).

3. Census and Asset Inventory

A census and asset inventory should be carried out in order to collect appropriate socio-economic baseline data, to identify the persons who will be displaced by the Project, determine who is eligible for compensation and/or assistance, and prevent ineligible persons, such as opportunistic settlers, from claiming Project benefits. (IFC PS5 2012, paragraph 12 and 17; AfDB IRP 2003, paragraph 6).

4. Vulnerable Groups

The Project shall pay particular attention to the needs of any vulnerable groups amongst those being displaced – especially those beneath the poverty line, the landless, the elderly, women and children, indigenous peoples, ethnic minorities, or other displaced persons who may not be adequately protected through host country land / resettlement / compensation legislation. (IFC PS5 2012, paragraph 19; AfDB IRP 2003, paragraph 3.2).

5. Consultation and Participation

The Project should ensure that resettlement activities are implemented with appropriate disclosure of information, stakeholder consultation, and the informed participation of those people affected by the Project. (IFC PS5 2012, paragraph 10; AfDB IRP 2003, paragraph 3.3 and 4).

1 IFC PS 5 (2012 version), AfDB Involuntary Resettlement Policy (IRP/2003) & AfDB´ s Integrated Safeguards System – Operational

Safeguard 2 Involuntary Resettlement (ISS OS2/2013)

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6. Compensation – Full Replacement Cost, In-kind Provisions and Security of Tenure

The rate of compensation for lost assets should be calculated at full replacement cost – i.e. the current market value of the assets plus transaction costs at the time of expropriation. In applying this method of valuation, depreciation of structures and assets should not be taken into account. (IFC PS5 2012, paragraph 9; AfDB IRP 2003, paragraph 8). Compensation in-kind should be offered in lieu of cash compensation when feasible, and particularly for poor and affected persons. (IFC PS5 2012, paragraph 21; AfDB IRP 2003, paragraph 3.4.2). Security of tenure should be provided to all those persons displaced by the Project (IFC PS5 2012, paragraph 22; AfDB IRP 2003, paragraph 11).

7. Eligibility and Entitlements

The Project shall develop a procedure for establishing the criteria by which displaced persons will be deemed eligible for compensation for their lost assets as well as income and other resettlement assistance including development benefits. (i) who have formal legal rights to the land or assets they occupy or use; (ii) who do not have formal legal rights to land or assets, but have a claim to land that is recognized or recognizable under national law; or (iii) who have no recognizable legal right or claim to the land or assets they occupy or use (IFC PS5 2012, paragraph 17,21,22,27; AfDB IRP 2003, Section 4.1).

8. Cut-off Date

In the absence of any host Government procedures, a cut-off date for eligibility should be established. Information regarding the cut-off date should be clearly documented and disseminated throughout the Project area. The Project is not required to compensate or assist those who encroach upon the Project area after the cut-off date for eligibility, provided the cut-off date has been clearly established and communicated to the public (IFC PS5 2012, paragraph 12; AfDB IRP 2003, Section 3.4.3, 4.1.4).

9. Timing

The Project should ensure that displacement or restriction of access does not occur before the necessary measures for resettlement are in place. These measures include the provision of compensation and of other assistance required for relocation, and the preparation and provision of resettlement sites with adequate facilities, where required. The removal of land and related assets may only take place following payment of compensation and, where applicable, resettlement sites and relocation allowances have been provided to displaced persons (IFC PS5 2012, paragraph 2; AfDB IRP 2003, Section 3.3).

10. Resettlement Assistance and Transition Allowances

The Project shall provide appropriate resettlement assistance and transitional support based upon reasonable estimates of the time required to restore income earning capacity, productivity levels and associated livelihoods and standards of living (IFC PS5 2012, paragraph 29; AfDB IRP 2003, Section 4.1.1).

11. Livelihood Restoration

Displaced persons should receive assistance for improving their livelihoods and living standards, or at least to restore them, in real terms, to pre-displacement levels or to levels prevailing prior to the beginning of Project implementation, whichever is the higher (IFC PS5 2012, paragraph 12; AfDB IRP 2003, Section 4.1.1).

12. Grievance Redressing Mechanism

Appropriate and accessible grievance mechanisms should be established. Some displaced persons will have complaints about aspects of their change in circumstances. Prior to the initiation of displacement, the Project should ensure that its procedures for recording and processing grievances is in place and has been communicated to all potentially affected persons (IFC PS5 2012, paragraph 11; AfDB IRP 2003, Section 4.1.6).

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13. Monitoring and Evaluation

The Project shall be responsible for adequate monitoring and evaluation of the activities set forth in the RAP. Upon completion of the activities set out in the RAP, the Project is required to undertake an assessment (audit) to determine whether the objectives of theRAP have been achieved. This assessment should take account of the baseline conditions and the results of the RAP/ LRP. If the assessment reveals the objectives of the RAP have not been realized, the Project should propose suitable and sufficient follow-up measures (IFC PS5 2012, paragraph 14; AfDB IRP 2003, Section 4.1.11).

14. Access to natural/common resources and public services

For persons whose livelihoods are natural resource-based and where project-related restrictions on access to land and/or natural resources apply, implementation of measures will be made to either allow continued access to affected resources or provide access to alternative resources with equivalent livelihood-earning potential and accessibility. Where appropriate, benefits and compensation associated with natural resource usage may be collective in nature rather than directly oriented towards individuals or households (IFC PS5 2012, paragraph 28; AfDB IRP 2003, Section 2.1.8).

15. Sharing project benefits

The project will provide opportunities to displaced communities and persons to derive appropriate development benefits (IFC PS5 2012, paragraph 9; AfDB IRP 2003, Section 4.1.5).

16. Institutional Roles and Responsibilities

An institutional framework delineating the arrangements and the tasks needs to be established for the implementation of the RAP. When necessary, the project owner should consider providing support to the local institutional structures necessary to implement resettlement. (IFC PS5 Guiding Notes 2012, GN39; AfDB IRP 2003, Section 4.1.8).

3.7 PROJECT MEASURES TO ADDRESS LENDER STANDARDS

Table 10. NCP actions taken/to be taken in line with Lenders standards

Theme Project actions taken to date Further actions to be

taken

1. Project design

During the Feasibility Study phase, a number of route and project design alternatives were assessed in order to minimize the impacts (see Sect. 6.9). A safety zone was adopted for construction that avoided the need to clear the rail right of way. A reduced-width safety zone (6 m either side of the rail) was used in dense urban areas such as Nampula City to avoid further resettlement impact.

No further action applicable.

2. RAP and Livelihood Restoration Program

Compensation Sub-programs were included as part of each EIA/EMP. Specific Operational Plans (PEC, PDSO or SRAP) were developed and submitted for district level approval. The RSR was prepared to in order to describe the ongoing resettlement process and program including the livelihood restoration activities and projects.

The Project is currently assessing effectiveness of the LRP (through a rapid assessment) and any supplemental actions arising from the assessment will be implemented to meet lender requirements with respect to the LRP.

3. Census and Asset Inventory

Socio-economic census and asset inventory were completed. Specific baseline surveys were undertaken for the Livelihood Restoration Projects.


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taken

4. Vulnerable Groups

The Project defined criteria to identify vulnerable people based on socio-economic surveys conducted for the PAP census. An operational procedure was prepared to identify, monitor and deliver particular assistance to vulnerable people to ensure that they will be better-off after the Project.

To implement the specific operational procedure (PRO-CCCV-0020). The rapid assessment will identify any supplemental actions required and will be specifically tailored for vulnerable groups.

5. Consultation and Participation

Consultation and participation of affected and host communities, all levels of government and civil society were ongoing throughout resettlement planning and implementation. All consultation has been documented and shared with those involved.

Continuous implementation of the Stakeholder Engagement Plan and documentation of the engagement activities.

6. Compensation at – Full Replacement Cost, In-kind Provisions and Security of Tenure

Malawi: Cash compensations paid by the Government to the identified asset owners for building, agricultural land, replacement land for business premises and replacement sapling. Mozambique: - New residential land and replacement house; cash compensation for ancillary structures; assistance with finding replacement agricultural land via the Government or the Project; toolkit and start-up materials including seeds; 1-year follow-up supervision by agricultural agent and refresher training; and, assistance in forming associations.

The Project has been developing actions to assist people in restoring their livelihoods. The PAP´s level of restoration has been the focus of the monitoring and evaluation actions. The Project is coordinating with the Government to issue residential land title (DUAT) for each household. Planned future monitoring requirements will identify any supplemental actions required A completion audit will be conducted once the resettlement program is completed.

7. Eligibility and Entitlements

The surveys identified all losses incurred by PAP, regardless of their rights to land or assets. Within the context of specific compensation plans (PEC, PDSO or SRAP), the eligibility criteria and proposed entitlements were consulted with PAP representatives and other stakeholders for finalization.


8. Cut-off Date

The cut-off date for entitlements and eligibility was the date when specific compensation plans were approved by the district or municipal level governments. In the brownfield sections (S5, S6&7) the ROW was established before the Concession Agreement and, according to the law, there is no customary right and land titles cannot be issued. Regardless of their legal ownership status and/or time of living in the Project area, all PAP identified during the census were considered eligible for the compensation. In order to avoid opportunistic claims and to control encroachment, the Project provided aerial photography and a GIS database. During the awareness campaign this subject was included.


9. Timing of resettlement

Because of the length of the Project which runs across remote areas and communities sparsely

Monitoring of the households during the transitional phase

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taken

distributed as well as the requirement of sequential implementation over an extended period, there was a need for sequencing the implementation of the compensation and resettlement to ensure that displacement does not take place until required. As such, the compensation payment and resettlement started in Sept/2013, massively scaled up in Sept/2014 to meet demands from construction schedule and to be finished in February 2017. Households were mobilized for asset inventory for compensation purposes after consultation on the on the results of the inventory and the proposed compensation amounts was undertaken. Following agreements signed by the households and witnessed by their community leaders and government representatives, the payment of compensation for affected assets took place before displacement, generally within 30 days of signing. The households were then given 10 days to vacate the area after the payment. However, to allow for the timely implementation of the Project and guarantee the rights and interests of the impacted households, the Government approved the temporary resettlement program, whereby the households would remain in transitional accommodation for a period generally up to 12 months until the replacement house has been delivered. While in transitional accommodation, households were engaged for site selection, house typology selection, etc.

providing assistance where needed and post relocation as part of the Project’s monitoring program.

10. Resettlement Assistance and Transition Allowances

Mozambique: A one-time cash allowance of 4.000Mts was provided for incurred transportation, transition and disturbance costs to all households. A monthly housing allowance (of MZN3.500 in Nampula City and MZN2.000 elsewhere) is paid monthly to each household to provide them with temporary housing until their permanent housing is secured. Malawi: Cash cost of renting oxcarts for displacement or truck transport for household effects if desired in place of oxcart. Inclusion of 20% bonus to release the buildings 15 days after the payment of compensation. The households were allowed to get their building materials (roofs, bricks, doors and others) before demolition. The valuation formula for the cash compensation related to economic displacement included the timing to re-establish the previous productivity levels and associated livelihoods and standards of living. Additionally, LRPs were also implemented.


11. Livelihood Restoration

The Project identified adequate livelihood restoration measures taking into consideration the

Implementation of the LR Program will continue as per

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taken

specific context of each region/section, such as geography, local culture and socio-economic aspects. Measures were defined in consultation with PAPs. The approach was to coordinate and integrate mitigation measures with community development initiatives, aiming to reach the restoration levels. LR programs included income generation alternatives and new agriculture technologies to improve productivity.

the schedule that has been defined in this document. Monitoring of the households during the transitional phase, implementation of the programs and post-compensation.

12. Grievance Mechanism

The Grievance Mechanism for the Project was designed to comprise different channels: community and traditional leaders, CR team members, social monitors, contractors and partners. The Project established a Call Center, including a call free number, in order to offer additional channel to address PAP´s complains and concerns. The Call Center was tested in a pilot phase in 2015 for scaling up for the operational phase in 2016. In order to support the grievance management, as IT based system called Stakeholders, Demands and Issues (SDI) was developed. The grievance assessment and redress flow includes senior managers of the Project and operation.

Continuous implementation of the Grievance Mechanisms.

13. Monitoring and Evaluation

A monitoring system forms part of the CCCV HSEC system. This RSR includes the description of the resettlement monitoring and reporting activities (see Sect. 12), including arrangements for internal monitoring, monitoring by an independent specialist, and a completion audit which will be undertaken once the resettlement program is complete.

Full implementation of the resettlement monitoring and evaluation activities, including Key Performance Indicators (KPIs) related to outcomes and impacts, to assess the level of restoration of PAP´s livelihood.

14. Access to natural/common resources and public services

The EMP and LRP included mitigatory measures to address loss of access to common resources.

Continue the implementation of EMP and LRP.

15. Sharing project benefits

Main benefits: (i) Project provides much needed connectivity, for people and cargo, to the under-developed and isolated northern regions of Mozambique, as well as to land-locked Malawi; and, (ii) other activities are implemented as part of the Community Development Program and Social Investments, such as professional skills courses and capacity building for local employment for the PAP.

Keep the implementation of the LRP and Community Development Program.

16. Institutional Roles and Responsibilities

The organizational chart was strengthening in 2015, with the appointment of a manager to provide strategic direction as well as management of the resettlement schedule and budget. In November 2015, anew institutional arrangement and transition strategy was defined in order to integrate project and operations social teams. Roles and responsibilities were also reviewed to reflect this integration.

Conclude the integration of the project resettlement team/officer with the operations social team.

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4 SOCIO-ECONOMIC OVERVIEW OF AFFECTED

POPULATION

4.1 INTRODUCTION

Project affected households fall into two broad categories, rural and urban. The majority (more than 70%), are rural households, characterized by widespread poverty, low levels of education, poor access to basic services, houses made of traditional materials (mud, rock, sticks and grass) and livelihoods highly dependent on subsistence farming. PAPs in Nampula City and semi-urban area of Cuamba Town live in clay brick structures with iron sheet roofing. Urban dwellers also enjoy relatively better access to services, and more diversified livelihoods through formal employment and informal businesses. This section draws upon the data collected through the Project census, asset survey, socio-economic survey and focus group discussions to provide a quick overview of PAP´s socio-economic characteristics

4.2 CENSUS, SURVEYS AND DATA GATHERING

In both Malawi and Mozambique, baseline socio-economic information about PAPs and assessment of impacts was undertaken by the consulting company, Diagonal. Most data collection for the corridor took place during 2012, with the exception of Section 6 and 7 which took place during 2013 and 2014. Multiple data gathering techniques were used including a census, an inventory of affected land, trees, crops and assets, household socio-economic surveys, key informant interviews and focus group discussions. This information was used to (i) describe pre-Project socio-economic conditions; (ii) determine compensation entitlements and eligibility; (iii) develop replacement housing strategies; (iv) assist in the definition of livelihood restoration and mitigation measures; and, (v) prepare resettlement and compensation plans.

4.3 OVERVIEW OF PROJECT AFFECTED POPULATION

4.3.1 LOCAL ADMINISTRATION

The local government administration in Mozambique consists of both formal and traditional authorities. Below province level, districts are headed by District Administrators who supervise a number of Chiefs of Administrative Posts. Administrative Posts are further sub-divided into localities, headed by a Chief of Locality. Below the locality level, officially there are no formal state institutions, but power is exercised by community leaders, which include both traditional leaders, selected according to traditional rules, and elected leaders. Figure 9 below shows the local government administrative structure in Mozambique.

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Figure 9. Local government organization in Mozambique

Malawi is divided into regions and each region into districts. Each district is further divided into villages which are ruled by traditional authorities. The highest level of traditional authority is the Paramount Chief, known as the Traditional Authority (TA). Within the TA´s structure, a Group Village Headman, selected by the TA, is responsible for five or more villages. Each village is then administrated by the Village Headman Figure 10 shows the local administrative structure of Malawi, including the hierarchy of TAs, GVH and Village Headmen.

Figure 10. Local government organization in Malawi

REGIONAL COUNCILIORS

DISTRICT COMMISSIONER

TRADICIONAL AUTHORITY

GROUP VILLAGE HEADMAN

VILLAGE HEADMAN

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In both Mozambique and Malawi, traditional leadership remains a strong and respected parallel administrative structure. Important from a Project perspective is the legitimacy that traditional leaders retain within the community for allocating land, as advisers and “helpers”, in perpetuating traditional ceremonies, beliefs, traditions and customs, and maintaining social cohesion at community level. Engagements with PAPs are mostly managed through the community leaders. Community leaders also act as witnesses during socio-economic surveys and payment of compensation.

4.3.2 HOUSEHOLD CHARACTERISTICS

Table 11 below summarizes salient socio-economic characteristics of the Project affected households and highlights key regional variations.

Table 11. Key household characteristics per Project section

Section Key household characteristics

S2

The majority of members of affected households are young with an average age of 22 years. Most households are headed by men (69%) and have an average size of 5. All households are from ethno-linguistic group Nhúnguè and a majority of households (69%) practice Christianity; Less than 50% of the households are literate. The highest education level achieved by the household heads is typically primary education. School attendance by children under the age of 15 at the time of the census (2012) was 56%. As in most rural areas, levels of school attendance and educational attainment are much lower for females; The affected population’s health profile is characterized by high incidence of malaria (41%) and respiratory diseases/coughing (24%); Most of the affected houses are dispersed, of rectangular shape and have walls made of stick and daub, floors of mud and earth, and a thatch roof; Affected households have poor access to services and utilities. The majority of households’ access water from hand-dug wells and rivers or streams (69%). Formal sanitation is uncommon (households use bushes and fields) and there is no electricity. Households use firewood for cooking and kerosene for lighting.

S3 and S5

PAP in S3 and S5 share similar socio-economic traits which are characteristic of rural households in Malawi (and Mozambique); Households are predominantly young (with more than 50% of the household members below the age of 18), male-headed (82% in S3 and 88% in S5) and have an average size of 5; More than 90% of impacted households are from ethno-linguistic group Chichewa and the majority of households practice Christianity; Literacy in the affected population is low (with 54% of households heads having completed grade 8). Similar to most rural areas, the levels of school attendance and educational attainment are much lower for females; Most of the affected settlements are dispersed, with houses generally built in a rectangular shape with traditional materials; Access to services and utilities is very poor and there is lack of sanitation, although a few households use pit latrines with manure deposited directly in the soil in shallow holes. Access to water is also problematic, with the majority of households accessing water from collective boreholes. Although some villages are connected to the grid, most households have no access to electricity because they cannot afford it. Households use firewood for cooking and kerosene for lighting.

S6 and7 Households are predominantly young (with more than 55% of the household members below the age of 15), male-headed (85%) and have an average size of 5. In the urban area of Nampula City, the average number of household members is

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slightly higher (6 members) due to the higher prevalence of extended families taking advantage of the greater access to social services, goods and employment opportunities afforded by city living; The majority of households (95%) are from the ethno-linguistic group Emakua/Lomwe. In Nampula City, 26% of the PAPs speak Portuguese. 59% of the households are Christian, but christianity becomes less common towards the coast; The illiteracy levels in the affected population are relatively low (29% of PAP are illiterate). The districts of Mecanhelas and Monapo have the highest illiteracy rates (42% and 40% respectively). 25% of the household heads have primary education only. Only 1% complete tertiary education, with this group mainly in Nampula City; The affected population’s health profile is characterized by high incidence of malaria (49%), followed by diarrhea (23%) and coughing (14%); Most of the affected houses are dispersed, of rectangular shape and have walls made of sticks and daub, floors of mud and earth, and a thatch roof. Houses with walls made of burned clay bricks and a thatch roof are found mainly in districts of Niassa province. In the urban centers mainly Nampula City, there are few houses constructed from burned clay bricks and covered with corrugated iron sheet. Affected households have poor access to services and utilities. Secondary education is more accessible in the district headquarters or in the urban centers. The majority of households (51%) accesses water from boreholes or collective pumps. 81% of the households use pit latrines as a form of sanitary infrastructure. Access to electricity is high in Nampula City (51%) with households using firewood for cooking purposes and petrol for lighting in the rest of the section.

S8/Port

Households are predominantly young (below the age of 18), male-headed (83%) and have an average size of 7 persons, the highest in the Nacala corridor. Almost all impacted households are from ethno-linguistic group, Emakua, and the majority (70%) practice the Muslim faith; The illiteracy level in the affected population is relatively low (39% of PAP are illiterate), with the highest education level achieved by the household heads typically being primary education. School attendance by children under the age of 15 at the time of the census was very high. As in most rural areas of Mozambique, levels of school attendance and levels of education are much lower for females than males; The affected population’s health profile is characterized by high incidence of malaria (49%), diarrhea (23%) and coughing (14%); Houses in Nacala-a-Velha are generally built in a rectangular shape with materials available from the surrounding environment (mud, rock, shell, palm leaves, etc.). They follow the design that is commonly found in coastal areas with a hip roof. With the increased availability of cash, corrugated iron for roofing is becoming more common; The majority of households (78%) access water from boreholes or collective pumps. Only 21% of the households use pit latrines. Access to electricity is very low with households using firewood for cooking purposes and petrol for lighting.

4.3.3 HOUSEHOLD LANDHOLDING AND USE

In Mozambique, most households own multiple agricultural plots (machambas), except in S2 where most households (69%)have only one machamba. It is normal for some of the plots belonging to a household to be fallow in order to recover their fertility after being farmed for a number of years. Average sizes of machambas in the Project area tend to be fairly small – up to one hectare. A small number of households hold farmland up to 3 hectares. In Malawi, in general, machambas are inherited or cultivated by the female family member and it is through her that access to land for farming is secured. As many households affected by the Project (Chichewa and Emakua) are matrilineal, men marry and move to their wives’

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families where they secure use and ownership rights for machambas. The other source of customary acquisition of plots is through allocation by community leaders, often with a symbolic monetary payment. Few households borrow land, a practice that is most common in Neno and Balaka districts in Malawi. When a household borrows land there is typically no pre-agreed price or share of the crop to be paid, but it is expected that something will be provided to the landholder as a show of gratitude. For many households, farming activities take place at some distance from their homes. The machambas are often more than 30 minutes’ walk from houses. In addition to crops, some households also have fruit trees which belong to an individual household, rather than being communally owned. The most common fruit trees are banana followed by cashew (both very common in S7) and mangos.

4.3.4 HOUSEHOLD LIVELIHOODS, INCOME AND EXPENDITURE

Livelihood characteristics of households

The affected population is largely rural with few urban settlements. Livelihoods in the rural areas are characterized by a predominantly subsistence based economy with each family producing mainly for self-consumption. Household activities tend to center around agriculture, livestock keeping and fisheries, with small numbers involved in local trade. Most households use machambas to grow crops and fruit trees. The type of crops and fruit trees depends on the four broad geographic zones covered by the Nacala corridor: semi-arid, Tete (S2); hilly, Malawi (S3/5); arable soils, Niassa and Nampula (S6/7 and 8); and, the coastal area of Nacala-a-Velha (the Port). Farming practices are characterized by the use of traditional methods of oxen plough and hoe cultivation. The major food crops grown include maize, sorghum, and root crops such as sweet potato, cassava and peanuts. Raising livestock is another activity undertaken to supplement agriculture although it plays a reduced role in livelihoods. Almost all households keep cattle and poultry which, in situations of necessity, some households may sell in order to meet their needs. Fisheries livelihoods, including intertidal collection, are more common amongst the coastal residents of Nacala-a-Velha. Economic activity outside of farming and fisheries is limited along the corridor. The main sources of income are related to trading of products from agriculture and fisheries or use of natural resources accessible in farming areas such as selling of firewood (46%), casual employment on other people´s farms (46%), and charcoal (39%). Intertidal collection of crab mollusks and shellfish provides an important alternative subsistence income to households of Nacala-a-Velha especially for women and children. Since almost all PAPs are subsistence farmers who make their living through traditional method of farming, it is difficult to determine their income. Households use the bulk of their production for household consumption. This means that there is very little produce marketed for cash. Based on interviews conducted with a sample of the affected population, the average monthly cash income for households was less than USD40 at the time of the Project census. From the survey, it can be inferred that income levels for the Project area are very low, indicating the possibility of correspondingly high levels of poverty.

In semi-urban and urban areas such as Cuamba Town and Nampula City, the displaced households are substantially more dependent on formal employment and informal trade activities. Informal trade is operated through a system of stalls that sell basic goods to local

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community members as well as travelers passing through the area. For a considerable number of households, this informal activity is an alternative for overcoming the lack of formal employment, and a way to increase the family income.

Expenditure patterns

Food, personal items and health are the most common expenses incurred by households, followed by clothing and transport fees. The reason for high expenditure on food reflects the weak diversification of products produced by the households themselves. A high proportion of household expenditure on food is also an indication of poverty. The low expenditure on other items indicates household economies are predominantly subsistence in nature with limited cash for purchase of goods.

4.3.5 BUSINESSES AND SMALL ENTERPRISES

There is no major business enterprise affected by the Nacala Corridor Project. Most of the corridor is rural and dependent on agriculture. It is only in the semi-urban and urban centers of Ribáuè and Nampula City respectively that small scale businesses enterprises are located. These form a link in the marketing chain, between the formal traders and small producers. These business enterprises are operated through a system of stalls concentrated in the following markets of Nampula City: Descida, Waresta and Gorongoza. The market in Cuamba is dominated mainly by agriculture produce which is sold off the ground rather than from stalls or commercial shelters. Whether owners, operators or tenants, the Project affected stall holders are relatively poor, with an average monthly income of less than 5,000 Meticais (about USD 80). The average size of a business structure is estimated to be 4m2. The majority of stalls are highly mobile, made of sticks with thatch roof and function as a business shelter, selling basic manufactured goods and used clothes. Stalls have proliferated since the Project started, many with the expectation that the owners will receive compensation. Project compensation paid for these structures is relatively high.

4.4 VULNERABLE HOUSEHOLDS

The implementation of projects like the Nacala Corridor Project can cause hardship and place undue pressures on vulnerable groups. The Project has undertaken a thorough assessment to identify those that are vulnerable and whom may need particular assistance during the resettlement process. The Project used the following 04 indicators for screening and identifying vulnerable individuals and households:

(a) Female-headed households without assets (or in matrilineal areas, such as where the Chichewa and Emakua prevail, the potentially vulnerable group was ‘male-headed households without assets’)

(b) Child-headed households;

(c) Households headed by elderly persons above the age of 60 without their own assets; and,

(d) Households with chronically sick or persons with disability.

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A summary of vulnerable households in each section of the Nacala Corridor is presented in Table 12. In total, some 685 households were categorized as vulnerable. Some households were observed to be vulnerable against more than one indicator.

Table 12. Summary of Project Affected Vulnerable Households by NCP Section

Number of vulnerability indicators per households

Number of households per Section


Households with 1 indicator of vulnerability

0 59 11 60 393 19 542

Households with 2 indicators of vulnerability

2 17 1 14 91 9 134

Households with 3 indicators

0 4 1 0 3 1 9

Total 2 80 13 74 487 29 685

Note: In S5 only Machinga district is included. Balaka district is counted in S3. See text above for

‘indicators’ used in the vulnerability assessment.

Vulnerable households require special support during the implementation of the RAP depending on the level of impact they experience and their vulnerability. Vulnerable households have been prioritized for resettlement assistance such as receiving replacement houses, support with transport and provision of moving allowances. Vulnerable households have also been given priority for receiving replacement land as close as possible to their dwelling or village.

4.5 CULTURAL PROPERTY

The Project resulted in the loss or disturbance of some 906 family graveyards, cemeteries and sacred sites. An inventory of graves, cemeteries and sacred sites was carried out. Results are summarized in the table below. Further details on impacts and mitigations can be found in Section 5.7.

Table 13. Number of affected graves, cemeteries and sacred sites per NCP Section

Type of Loss Sites by Section


Individual grave 213 1 0 2 99 387 702

Cemeteries 6 3 0 2 9 55 75

Sacred sites 2 1 0 0 105 21 129

Total 221 5 0 4 213 463 906

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5 SUMMARY OF IMPACTS

This section summarizes the displacement impacts caused by construction and operation of the Nacala Railway Corridor and Port Project.

5.1 SUMMARY OF IMPACTS

Table 14 summarizes the number of households that were physically displaced (experienced loss of a dwelling) and economically displaced (experienced loss of assets or access to assets, including land that led to loss of income or livelihood).

Table 14. Households displaced by the Project per section

Type of

displacement

Number of households


Physical only 10 0 0 96 625 28 759

Physical cum economic

0 177 52 110 692 27 1,058

Economic only* 222 1,615 2,781 739 5,392 1,284 12,033

* Note: Economic displacement is measured by summing the number of households losing a field or a business.

As mentioned in Chapter 4, most people in rural areas of Mozambique and Malawi hold more than one machamba. Since the rail corridor is a linear project, land take from any one plot was usually limited to a small portion of that plot, typically less than 20% of its total area. As a result, many Project affected households could continue their livelihoods on their remaining unaffected land.

5.2 DWELLINGS

The asset survey identified 1,817 dwellings that required to be relocated. The majority of these are in S7, Nampula and suburbs, as summarized in Table 15.

Table 15. Dwellings displaced by the Project by section

Loss of

dwellings

Number


Loss of dwellings

10 177 52 206 1,317 55 1,817

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5.3 ANCILLARY STRUCTURES

In addition to dwellings, displaced households also lost other ancillary structures such as latrines or external bathrooms. Table 16 provides an overview of the types and number of ancillary structures that were lost. Most of these ancillary structures were located within the railway safety zone.

Table 16. Ancillary structures lost per section

Type of fixed

asset

Number


Standalone rooms

71 25 211 650

957

Porch

95 863 14 972

Agricultural shelter 15 12 10 3 180

220

Chicken coop

65 10 13 37 1 126

External bathroom

135 59 260 2,592 22 3,068

Latrine

247 2,535

2,782

Granary

22 102

124

External kitchen

57 46 73 251 4 431

Drying hanger

75 304

379

Septic tank

3 94

97

Livestock pen 1 165 30 9 49 9 263

Well 4

1 47

52

Fence

10 39 180 522 10 761

Brick ovens 2

2

Total 22 515 219 1,192 8,226 60 10,234

5.4 CULTIVATED FIELDS (MACHAMBAS)

In general, affected households own at least one machamba. The average area of a household’s machambas is less than 0.5 ha. Affected agricultural lands were largely arable, used to cultivate a range of subsistence crops. Loss of all or part of a machamba had a direct impact on a household’s agricultural production and livelihood. Since this is a linear project, the impact was mainly concentrated within the width of the rail right of way which ranged from 12 m in Nampula City to 100 m in Tete. Some households lost only a narrow strip of farmland (which was generally less than 20% of their total land holding) and as such they were able to continue their livelihood on the remaining plot of land. Other households, lost a much larger proportion of their land plot, rendering their remaining land insufficient to meet household needs. This latter group needed assistance to access replacement agricultural area outside of the rail corridor.

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Table 17. Cultivation fields per section

Loss of fields for

cultivation

Number


Number of machambas (active)

222 1,101 1,326 853 5,303 1,574 10,379

Number of machambas (fallow)

0 870 1,477 0 0 0 2,347

Total area (ha) 60 1,199 173 168 1,203 297 3,100

No. of unique affected landowners

198 1,613 2,717 800 5,022 1,311 11,661

In Mozambique, monitoring of access to replacement machambas is being conducted as part of the LRP which is currently underway. As shown in Table 18, about 69% of households that lost agricultural land have now accessed replacement land. Some affected households used their agricultural compensation to invest in small businesses, and have elected to discontinue their agricultural activities. This tendency was most common amongst households in urban or peri-urban areas such as Nampula City and Nacala Porto. It partly explains the more limited uptake in agricultural land in S7 and in S8/Port. Table 18 will be regularly updated based on ongoing monitoring.

Table 18. Access to replacement fields in Mozambique

Status of access to replacement land

Number

S2 S6 S7 S8/ Port Total

Number of households that lost fields

198 800 5,022 1,311 7,331

Number of households who have accessed replacement land

198 782 3,338 713 5,031

In Malawi, the findings of regular engagement with Traditional Authorities and affected households indicate that all affected households have managed to secure replacement fields and continue their land-based livelihoods. The Concessionaires have commenced an assessment of economically displaced households’ to verify the engagement team’s findings as part of the process of improving the socio-economic knowledge base. The assessment will be completed in November 2016.

5.5 LOSS OF ANNUAL CROPS

Project affected people were generally allowed to harvest their annual crops prior to their land being taken by the Project. Also, so far as feasible, household land was taken during fallow periods i.e. between harvest and the next planting when there were none or few in-ground crops. This enabled households to harvest their usual food supplies and collect seeds for their next sowing, minimizing impact on household food sufficiency and farm income. An inventory of annual crops is summarized in the table below.

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Table 19. Annual crops lost per section (in ha)

Type of

Loss

Ha


Cotton

6.42 56.65

63.07

Peanuts 3.70 2.85 1.21 3.58 58.44 15.00 84.78

Rice 0.03

6.35 11.57 29.54 5.00 52.49

Sweet potatoes

1.8

7.15 6.40

15.35

Sugar cane

6.32 0.52 0.42 5.29 1 13.55

Beans 10.00 2.10 0.12 30.17 211.08 45 298.45

Sesame 2.1

2.13 38.28 0.5 43.00

Sunflower

0.03 0.03 0.42

0.49

Horticulture

5.40 50.41

55.82

Jatrofa

0.42 0.04

0.46

Cassava 0.5 10.62 0.62 10.77 336.68 185.00 544.19

Millet

2.17 0.20 20.28 151.06 6.00 179.71

Sorghum 7.1 1.93 0.99 3.74 7.46

21.21

Maize 16.5 107.92 51.32 42.61 218.74 30.00 467.09

Tobacco

0.15 23.72 23.77

47.64

Cotton

83.60 9.27

92.87

Cabbage

0.06 0.07

0.13

Cow peas

22.52 0.81

23.33

Pigeon Peas

41.18 8.93

50.11

Sweet potatoes

3.97 0.54

4.51

Total 41.73 133.89 61.51 168.42 1,194.26 287.5 1,887.30

5.6 LOSS OF TREES AND PERENNIAL CROPS

For some households, fruit trees and perennial crops such as bananas and pineapples are an important supplementary source of food and income. Households typically have fruit trees (e.g. mango, cashew and papaya) growing around their homesteads as well as in their machambas. Table 20 provides a summary of the numbers and types of crops and trees lost due to the Project.

Table 20. Perennial crops and fruit trees lost per section

Type of

tree

Number


Custard apple

7

119 585 58 769

Banana 20 4,110 320 7,242 82,882 5,011 99,585

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Type of

tree Number

Cashew

6

28 6,691 7,044 13,769

Citrus

55 3,445 15 3,515

Coconut

1 197 363 561

Guava

471 46 71 460 29 1,077

Mango 49 2,713 205 856 5,087 313 9,223

Pawpaw

244 61 183 2,005 35 2,528

Avocado

82 75 157

Apple

315 127

442

(Masuku) Uapaca kirkiana

46 85

131

Tangerine

389 3

392

Total 76 8,294 847 8,556 101,443 12,943 132,159

5.7 GRAVES AND SACRED SITES

A further impact of the Project is the loss or disturbance of graveyards. An inventory of graves and cemeteries was carried out and is summarized in the Table 21.

Table 21. Graves, cemeteries and sacred sites lost per section

Type of Loss Number


Individual graves 213 1 2 99 387 702

Cemeteries 6 3 2 9 55 75

Sacred sites 2 1 0 105 21 129

Total 221 5 4 213 463 906

It was reported that households rarely visit the graves of their deceased relatives, so the loss of access to graves or cemeteries was not a major concern. Communities were more concerned about ensuring that the appropriate cultural and spiritual ceremonies were performed in undertaking the grave relocation. Accordingly, the timing and arrangements for the exhumation and reburial of the deceased were negotiated and agreed with each affected family, or in their absence, with the villager leader. Provision was made for a relocation ceremony to be conducted by the family itself and/or the traditional leader.

5.8 SEVERANCE OF FIELDS

The Project made provisions to compensate for situations where a field was left too fragmented or too small to be viable for continued economic use. Compensation was calculated upwards to the nearest 0.25 ha. For example, if a household lost 0.3 ha then it

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would be compensated for losing 0.5 ha, and if it were losing 0.75 ha of a field, it would receive compensation for 1.0 ha.

5.9 SEVERANCE OF PATHS, ACCESS WAYS

See Section 2.5.

5.10 TEMPORARY USE OF LAND

See Section 2.4.

5.11 TRANSITIONAL ACCOMMODATION

In Mozambique, the Project provided rental allowance for temporary housing to about 1,600 households. This arrangement will continue until replacement houses are completed and delivered. The average duration of Project affected households in transitional accommodation has been 12 months. But, 193 households (including 20 households in Nacala-a-Velha) have spent extended periods (up to 24 months) in transitional accommodation (December 2015). As of 29 February 2016, there were 1,221 households in S6 and S7 remaining in transitional accommodation while waiting to receive their replacement house. The schedule for completing and delivering all replacement houses is presented in Section 7.2.8 below. The allowance for transitional accommodation and the amount of rental allowance was based on a market survey done by the consulting company Diagonal and was approved by the Government. The housing allowance is paid every six-months to affected households. It is more than adequate to secure acceptable rental accommodation in the greater Nampula area. A number of households (81) in Namialo refused to accept the rental allowance because they were unwilling to move until their permanent replacement houses were complete. The Project prioritized construction of permanent houses for this group in Namialo.

5.12 IMPACTS ON STALLHOLDERS AND BUSINESS

Petty trade is practiced along the railway line mostly informal in individual stalls or small markets. Stalls are most numerous in the densely populated urban and semi-urban areas such as Nampula City and Ribáuè respectively. These two areas account for 90% of all stallholders impacted by the Project.

Table 22. Stalls lost and impacted stallholders per section

Type of Loss

Number

S2 S3 S5 S6 S7 S8/ Port

Total

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Type of Loss Number

Loss of railway side stalls 0 1 64 51 435 0 551

Loss of market stalls 0 0 0 0 674 0 674

Total of stalls 0 1 64 51 1,109 0 1,225

No. of affected stallholders with only one stall

0 1 59 49 1,062 0 1,171

Note: Some stallholders own or operate more than one stall.

In general, business owners operate their own stalls. Main activities are selling manufactured household goods and used clothes. In Nampula City, 70% of the 537 impacted stalls are located in the 3 main markets of the city, namely Descida and Gorongoza markets in the central city, and Waresta market on the outskirts. Stalls are typically 4 m2 in area of basic construction – pole frames with thatch roofing.

Table 23. Stalls lost and impacted stallholders in Nampula City

Name of market KM No. of stalls lost No. of stallholders

n/a 707-712 31 30

Waresta 713 67 62

n/a 714 15 14

Trim-Trim 715 26 22

Gorongoza 716 50 44

Descida 717 216 212

Descida 718 43 43

Padaria Nampula 719 36 33

n/a 720-730 53 52

TOTAL

537 512

In addition to cash compensation for the structure at full replacement cost, the Project, in partnership with the Nampula Municipality, is funding the construction of a new market place where displaced stallholders will be relocated and given a new stall.

5.13 LOSS OF ACCESS TO COASTAL GATHERING AREA

Women and children from Naxiropa village are engaged in intertidal gathering in the immediate coastal shallows along the Nacala-a-Velha coastline. A total of 132 intertidal coastal collectors from Nachiropa and Massingirine villages have been registered by the Project, as shown in Table 24.

Table 24. Total intertidal costal collectors registered

District Village Registered no. of gatherers

Nacala-a-Velha Nachiropa 61

Massingirine 71

Total 132

This group is concentrated in the Napazo area up to the bend of Namuaxi Point in Nachiropa. They collect mostly crab, mollusks and shellfish, which are sold locally. These sales provide a

49

cash income source for participating families.. With the construction of the Project jetty, access of collectors from Massingirine village to some areas has been restricted and only in very low tide are they able to pass underneath the jetty structure.

5.14 LOSS OF ACCESS TO FISHERIES

The Project has registered a total of 100 fishermen in Nacala-a-Velha. Of these, 40 use motorized vessels 5 to 10m long and 60 use canoes. Fishing techniques differ depending on the type of vessel. Those using boats (5 to 10 m) fish or trawl from the beach. The canoe users fish at the Bay using hand nets. Neither group has appropriate equipment to be able to fish in open water so nearly all activities are confined to Nacala Bay. Motorized vessels are able to range further than canoes. As a result of the construction of the Port and the establishment of a marine safety zone, fishermen experience some minor restrictions on where they can fish. The establishment of the Port will not have any impact on landing areas, fish processing locations, boat storage, or the reefs or structures that are most commonly used for fishing. The Project is assessing options for mitigation of the impacts resulting from establishment of the safety zone on the fishermen.

6 COMPENSATION FRAMEWORK

6.1 INTRODUCTION

Compensation as a result of the Project’s land acquisition process is based on the national legislation of Mozambique and Malawi, and international standards. For the Nacala Corridor Project, the absence of legal title to land or other assets was not an impediment to eligibility to compensation for lost assets or relocation assistance. All cash compensation payments were made prior to displacement. Physical transfer to permanent, replacement housing has been completed in S2, S3, S5 and S8/Port. As of February 2016, in S6 and S7, 10% of 1, 523 households had received their replacement houses. In S6 and S7, 90% of households were still in transitional accommodation. This section provides an overview of PAPs’ eligibility and entitlements for compensation and resettlement assistance. Valuation methods are also presented.

6.2 ELIGIBILITY FOR COMPENSATION AND RESETTLEMENT ASSISTANCE

6.2.1 DETERMING CRITERIA

For the Nacala Corridor Project, any person affected by involuntary land take is eligible for compensation and resettlement assistance. The types of impact experienced by Project affected households and enterprises include the following:

loss of dwellings;

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loss of immovable assets or access to assets; and

loss of income sources or means of livelihood, whether or not the affected persons must move to another location.

The following criteria were used to determine who was eligible for compensation and resettlement assistance:

Households, individuals or stall holders residing within, or owning trees, crops or immovable assets within the Project affected area at the cut-off date;

Households or individuals with verifiable ownership of dwellings, trees, crops immovable assets within the Project affected area, but whom were absent a the time of enumeration, and

Verifiable registration during enumeration.

The means of verification include:

Enumeration card given to each enumerated PAP;

Validation by the community leader;

Updated maps of the affected project areas; and

Database with completed enumeration form and photos of the affected PAPs.

6.2.2 CATEGORIES OF PAPS

Based on the socio-economic survey, seven categories of PAP were identified:

House owner

Tenant, house renter

Individuals with customary right of land occupancy and use.

Crop / Tree Cultivator

Stall/Small business owner

Coastal gatherer

Fishermen

Each of these categories is described below. It is typically the case that an individual or household falls into more than one category. For instance, a household may lose a dwelling, customary right of occupancy over agricultural land as well as trees, crops and assets. In coastal areas, some members of the household might also be coastal gathers.

House Owner

Members of this group own a dwelling within the right of way of the railway or port area.

Tenant, house renter

Members of this group were living on a dwelling within the right of way of the railway or port area, but don’t own it.

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Individuals with Customary Right of Land Occupancy

Members of this group are formally recognized as holding a customary right to occupy and use land

Crop / Tree Cultivator

Members of this group cultivate crops / trees on the plot. They are either farmers who cultivate the land over which they hold a customary right of occupancy, or they are sharecroppers who cultivate the land over which another individual has the customary right of occupancy.

Stall/ Small Business Owner

Members of this group are recognized as owning a business. Typical businesses on the right of way tend to be owner-run stalls.

Coastal gatherer

Members of this group main activity is to gather clams and mussels on the sea shore near the port area.

Fishermen

Members of this group fish on the bay near the port area.

6.3 COMPENSATION ENTITLEMENTS

The Entitlement Matrix describes compensation and related assistance for each category of loss both in Mozambique and Malawi. It is presented in the Table below.

Table 25. Entitlement Matrix

Type of Loss Mozambique Malawi

Loss of house/ house plot

Min. 72 m2 replacement house with

corrugated steel roof, cement block walls and concrete floor. Separate pit latrine + ablution structure. Separate kitchen structure. 650 m2 residential plot with DUAT. A one-time cash allowance of 4,000Mts to cover transportation, transition and disturbance costs. Opportunity for household member/s to receive training and employment during their house construction. A monthly housing allowance of MZN3.500 in Nampula City; and, MZN2.000 elsewhere) for the period until replacement housing is

Cash compensation equivalent to full replacement cost of house lost. Self-build replacement housing. Cash cost of renting oxcarts for transportation or truck transport for HH effects if desired in place of oxcart. Village head assistance to locate replacement house plot – tenure recognized by TA. Inclusion of 20% bonus for early release of the property within a 2 week time frame.

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delivered.

Loss of fixed assets, incl. buildings under construction/Empty buildings/Seasonal buildings

Cash compensation equivalent to full replacement cost of asset lost. A one-time cash allowance of 4,000Mts for transportation, transition and disturbance costs.

Cash compensation equivalent to full replacement cost of asset lost. Cost of renting oxcarts for displacement or truck transport for HH effects if desired in place of oxcart.

Loss of machambas

Cash compensation equal to replacement value of crops + cost of preparing the replacement field for cultivation in the next agricultural season. For in-ground annual crops at the time of Project occupation, 2 x replacement value of crop (i.e. to cover loss of in-ground crop + next season’s crop). Assistance for finding replacement land available via government or village leader. Toolkit and start-up materials including seeds. 1-year follow-up supervision by an agriculturalist + refresher training. Assistance in forming associations.

Cash compensation based on government rate for the field. Cash compensation equal to replacement value of crops + cost of preparing the replacement field for cultivation for next agricultural season. Village head assistance to identify and secure replacement farmland plot – tenure recognized by TA. 1-year follow-up supervision by an agricultural agent + refresher training. Assistance in forming associations.

Loss of fallow n/a Cash compensation based on government rate for the field.

Lost accommodation for tenants

A one-time cash allowance of 4,000Mts will be provided for incurred transportation, transition and disturbance costs. Payment of 3 months’ rent.

A one-time cash allowance of MWK62,500 will be provided for incurred transportation, transition and disturbance costs. Payment of MWK15,000 for 3 months’ accommodation rental.

Individually owned economically productive, domestic tree

Cash compensation equal to value of yields lost up until the re-establishment of the tree to its previous production level + cost of replacement sapling.

Cash compensation equal to value of yields lost up until the re-establishment of the tree to its previous production level + cost of replacement sapling.

Losses of stallholders or business

Cash compensation for loss of assets/structures. Cash compensation for lost net income during the period of transition. Where applicable, cash allowance for costs of relocating/setting up again. New stall in a new market.

Cash compensation for loss of assets/structures. Cash compensation for lost net income during the period of transition. Where applicable, cash allowance for costs of relocating/setting up again

Reduced access to coastal gathering areas

Provision for alternative accesses. Livelihood restoration programs aiming to diversify livelihood sources and increase household income such as poultry production, Horticulture and Micro-credit.

n/a

Reduced access to fishing grounds

Livelihood restoration programs such as the establishment of community marine sanctuary, and other programs

n/a

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aiming to diversify livelihood sources and increase household income such as poultry production and Horticulture.

Loss of cemeteries/individual graves/sacred sites

Replacement sites to be identified by the government in consultation with the families. Cash allowance for relocation ceremony. The company covers all costs for the exhumation, transport and reburial of the deceased

Replacement sites to be indicated by the government in consultation with the families. Cash allowance for relocation ceremony. The company covers all costs for the exhumation, transport and reburial of the deceased

Vulnerable household support

Priority for replacement housing Monitoring by FUNDE Logistical support to receive compensation payments

Logistical support to receive compensation payments Support provided by village leaders in allocating replacement land Assistance by company personal to find replacement housing Vocational training provided

6.4 VALUATION METHODS AND CALCULATION OF COMPENSATION

6.4.1 MOZAMBIQUE

The valuation process was conducted by the consulting company Diagonal. Diagonal staff were accompanied by representatives from the affected community and one or more government representatives who observed and monitored the field activities. As part of the field-based valuation process, the valuation experts had one-on-one discussions with each affected household, to clearly explain the valuation method. Key steps of the field valuation process were as follows:

With regards to trees, individual trees were counted and classified by type, condition and maturity.

With regards to crops and land plot sizes, tape measurements were used to determine the area to be valued.

With regards to buildings and other ancillary facilities, tape measurements were taken, building details were recorded, together with state of repair and level of completion. The collected information is part of the evaluation report.

Photographs were taken of the one affected household headand key assets.

GPS coordinates of each asset were recorded.

Data was recorded in individual Assessment / Field Inspection Sheets.

Each Assessment Sheet was then signed by a representative of the affected household and the assessment officer, and witnessed by the community leader and a government representative.

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Valuation of non-residential structures

These included a range of household structures such as latrines, dish racks, kitchens, fences, animal enclosures, wells, seasonal shelters, amongst others. The total value of each structure was determined by taking into account the construction materials used, floor area, location of building or property and the cost per unit area of construction. Except for pit latrines and wells, most of these structures were moveable, and materials salvageable, thus the actual loss was limited. The owner receives full replacement cost for the structure plus the right to salvage and re-use any materials.

Valuation of annual crops

Compensation for loss of annual crops is determined by the Government Services of Economic Activities (Serviços Distritais de Actividades Economicas – SDAE) for each district. The calculation of compensation for annual crops was based on the following formula:

VC = [(Prod/ha x Pr/kg) – CI] x At x S, where VC = compensation for annual crops Prod/ha = average yield per ha Pr/kg = market price per Kg CI = cost of inputs including material, agro-technical services, transportation, taxes, etc. At = impacted area S = number of lost cropping season

The average yield per hectare for each crop in each district is provided by SDAE based on statistics collected on a regular basis by the Ministry of Agriculture. According to SDAE , the data used for the calculation of average crop yield is based on “good harvests.” The market price per kg is also collected on regular basis by SDAE at local markets. To minimize impacts on households, land acquisition took place between harvest and the next planting season, when there were few in-ground crops. This minimized the loss of crops, retained seed, food supplies and farm income. The payment of annual crop compensation was considered to be for the coming season (S = 1). This recognized the fact that, due to resettlement, or locating new fields, the farmer might not have time to fully prepare and plant for the next harvest period. In situations where the farmer could not be given sufficient notice to harvest his/her crop, or the land was required before harvest season, compensation was paid based on the market value of the non-perennial crop for existing in-ground crops and the forthcoming season (S = 2). The cost of inputs CI, i.e., the cost of establishing the field, was not subtracted from compensation values. These led to rates that were favorably high to the impacted households.

Valuation of fruit trees

The calculation of the value of fruit trees for compensation is also determined by the Government Services of Economic Activities (Serviços Distritais de Actividades Economicas – SDAE) at each district and is based on the market rates and includes the type of trees, the age, size and area in which the perennial crops are grown. The compensation amounts are calculated by the Government on a per tree basis using the following formula:

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VP = [VU – (I-X)] x Pm x PV + C, where:

VP = compensation for one tree VU = life of the tree, in years I = Age of the tree, in years X = Average period of time required to re-establish the tree to an adult production level, in years Pm = Average annual produce PV = market price of produce C = Costs incurred to re-establish the tree to its previous production level

Compensation rates per tree provided by the government factor the following stages of tree development:

Young, not productive,

Young productive,

Old, not productive.

The final compensation value of fruit trees was approved by local authorities.

Valuation of small business structures

Business structures in the Project corridor, mostly stalls, were valued on case-by-case basis using the replacement cost method. Replacement costs were calculated based on actual cost of construction/re-establishment of a structure of at least equal quality as the affected structure. The stall owner receives an estimated cost for the business downtime loss, full replacement cost for the structure plus the right to salvage and re-use any materials.

Valuation for Temporary Displacement from Agricultural Land and other assets

Compensation for temporary use of land such as temporary access roads, laydown areas, etc., was calculated on a similar basis to loss of assets described above and included:

Loss of annual crops

Loss of any perennial crops or fruit trees

Loss of production seasons

Loss of non-residential assets

Upon construction completion, the temporarily used land was reinstated to its pre-project condition (without trees and crops) and returned to the user.

6.4.2 MALAWI

In Malawi, the National Property Advisory Services2 was requested by the Project to assess the value of land taken and building structures for compensation purposes. Details of the valuation process can be found in the Specific RAPs for each district. Here is a summary.

2 Malawian Government entity responsible for country-wide independent valuations.

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The land assessed is under customary law and the assessment was based on the provisions of the Railway Act (1907), The Malawi National Land Policy (2002) CHAP 4:16, The Land Act (CAP 57:01) and The World Bank Safeguard Policy OP4:12. Other case law was consulted. Project affected people were identified through surveys conducted by valuation staff from the Lands Department and by a social survey conducted by Diagonal staff. These surveys established the number of affected persons and the nature of the potential displacement. They further established land sizes and crops which helped to calculate the final value for compensation. Market research conducted by the Lands Department formed the basis for calculation of values for building structures and for land to be acquired. The land value per hectare was K250, 000.00 in 2011. For crops assessment, the type of crop, its potential yield per hectare and market prices were used to calculate the crop values. 15% was added to account for inflation and align 2010 prices with current (2011) market prices. To each crop value were added land preparation costs. For forest trees, the number of trees was multiplied by the price per cubic meter, as stipulated by the Forestry Gazette of 2010, to obtain the values of the trees. Similarly, for fruit trees, the yield per tree per year, the number of trees, the expected productive life and the estimated market price were multiplied to get the values. 15% in each case was added to align 2010 prices with current (2011) market prices. A disturbance allowance equivalent to 30% of the building value and 15% of the land value was added to the compensation amount to meet the costs of transportation of salvaged materials and identification of replacement land.

7 REPLACEMENT HOUSING AND INFRASTRUCTURE

7.1 INTRODUCTION

This section summarizes arrangements for providing replacement housing in Mozambique and Malawi.

7.2 MOZAMBIQUE

7.2.1 APPROACH

All households experiencing physical displacement will be provided with replacement housing of improved standard, preferably in the same village or community as their original dwelling, whenever possible. This minimizes severing of ties with extended families and social networks.

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7.2.2 TRANSITIONAL ACCOMMODATION

Following consultation with affected families, the Mozambican Government approved the transitional accommodation program to allow the timely completion of the Project and simultaneously protect the rights and interests of affected families. The Project provided a rental allowance to affected households for temporary housing to cover the time until their replacement houses were delivered. The amount of the rental allowance was based on a market survey and subsequently approved by the Government. The rental allowance is paid every six-months to households in transitional accommodation. The allowance is sufficient to secure acceptable rental housing.

7.2.3 RESETTLEMENT SITE SELECTION PRINCIPLES

The following principles were applied for replacement housing sites selection:

the resettlement site should be acceptable to affected households and any host community;

the distance between the area of origin and the resettlement site should be less than 3km;

the site should be suitable for construction, with inclination no steeper than 10% and without high water level;

the house plot area should not be less than 600m2;

the site should be free of significant environmental risks, such erosion or flooding;

Government validation should be sought to avoid overlaps with other land titles or future plans;

resettlement sites should not be within Protected Areas such as full or partial protection zone for roads, railways or power transmission lines.host communities are consulted.

The process for selecting the resettlement site is summarized in Figure 11.

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Figure 11. Process of site selection

7.2.4 REPLACEMENT HOUSE DESIGN

The conceptual house design was based on a residential plot of 600 m2 (20 m by 30 m) and a house with a minimum size of 70 m2 consisting of 3 bedrooms and a living room. Each house is also provided with an external kitchen and an external combined bathroom/latrine. The replacement houses, kitchens and latrines are constructed from cement blocks with corrugated iron roofing. The floors are finished in cement and the walls are rendered. The combined bathroom/latrine consists of two areas – one for bathing and the other, a toilet with a pit latrine. Three different house layouts options were discussed with the physically displaced households. These took into account house design characteristics specific to regions traversed by the rail corridor. House layout options included roof type (double pitched or hip), room layout and the number of doors (1 or 2 doors). The consultation process on house design concluded with a formal selection of a house layout for each railway section by the affected families. Preferences boiled down to roof type with households in the S8/Port area choosing hip roofs which are common in coastal areas. Affected households from inland areas preferred the double pitched roof. House layouts in each section are shown below.

Step 1

•Developmente of criteria to select site options by the Project

•Validation of the criteria with Government

Step 2

•Request Govenrnment to identify potential sites

•Request families to communicate site preferences including individually identified resettlement sites

Step 3

•Consultation with affected households to present proposed sites and site screeening methdology

•Households visit proposed sites and may present alternatives

•Households identify a prefered site and sign a form to demonstrate acceptance

Step 4 •The Project present the prefered community site to the Government for appoval

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Figure 12. House layout for Sections 2, 6 and 7

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Figure 13. House layout for sections 8/Port

7.2.5 SERVICES AND INFRASTRUCTURES

As affected households are relocated preferentially in the same village and community as their original dwelling, they will be able to use the same services and infrastructure that were in use at their original area of residence. However, hand pumps will be constructed in large housing sites or where water resources are distant or inadequate.

7.2.6 URBAN RESETTLEMENT – NAMPULA CITY

In the case of Nampula City, with features of an urban resettlement, the selected site is in the communal unit of Namalate, within the neighborhood of Namutequeliua, in the Administrative Post of Muhala. The site is within the urban area of Nampula City about 8km from the central area of the city accessible from the main road from Nampula to Nacala.

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Figure 14. Selected host areas for resettlement in Nampula City

The site was selected by the families themselves and approved by the Government following the process described above. Pictures of this process are shown below:

Figure 15. Process of selection and approval of host areas

The resettlement site is suitable for 221 plots of 600m2 each, and it has been allocated to the 5 contracted construction companies as shown in site plan below. The expected house delivery schedule is provided below.

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Figure 16: Allocation of plots to construction companies

The proposed house layout is illustrated below and was designed in consultation and with inputs from the affected families. Each house consists of 3 bedrooms and a living room with a total area of 80m2. Unlike the rest of the corridor, the bathroom, toilet and the kitchen are attached to the main house. The toilet and kitchen unit have the main entrance protected by a wall. Validation of this design layout is currently underway with the families and the Government. If approved, each resettled family will sign an acceptance form.

Figure 17. Nampula house layout

FD

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18 17 16 15 14 13

11 12

Construtec : 56 plots

70

149

150

FD : 40 talhões

Consmoz : 40 plots

Hugs : 30 plots

151

7273

110

111

27

51

26

52

25

53

67 68 69Sobreiros : 40 plots

33

45

32

46

31

47

30

48

29

49

28

50

6

19

5

20

47 8 9

10

112

ConstrutecSobreirosConsmoz

88

57

87

58

86

59

122

100

121

101

126

96

125

97

124

98

82

63

85

60

84

61

83

62

91

54

90

55

89

56

123

9992

129

93

128

94

127

95

130

159 158

140 141 142

157

143

120

102

119

103

118

104

131

207 208

194

177

193

178

192

179

137

162

138

161

139

160

191

180

190

181

203 204 205 206

195 187

184

186

185

76 75 74

210

153

147

152

148

154

146

114

108

113

109

116

106

115

107

156

144

155

145

169

182

168

183

78 77

40

38

39

209

79

66

117

105

174 175 176

166 165 164 163

132 133 134 135 136

43

35

42

36

41

37

81 80

64 65

44

201 200 199

169 168 167

202

24

1

23

2

22

3

21

198 197 196

170 171 172

34

173

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7.2.7 ARRANGEMENTS WITH HOST COMMUNITIES

Consultation with the surrounding families was undertaken to meet legal requirements for the provision of DUATs to the resettled families. Given that the PAPs have been relocated in the vicinity of their original dwellings, their ties and social network have been maintained and as such the surrounding families were already known to the resettled families. The new resettlement area is within the same community and, in principle, should not create increased demand on existing water and public services. However, hand pumps will be constructed in sites with more concentration of people or where existence of key services was already constrained.

7.2.8 CURRENT STATUS AND SCHEDULE GOING FORWARD

Graph 1 shows the schedule for completion of construction and the actual number of houses constructed up to the end of February 2016. Note, however, that the figures refer to houses fully constructed and ready for delivery. It does not include houses at different stages of construction such as masonry or roofing phases. For instance, at the end of February 2016, about 50% of all replacement houses to be constructed had the masonry phase completed. Note, in addition, the graph shows replacement house construction for S6 and S7 only. For S2 (10 houses) and S8 and the Port (55 houses) all replacement houses have already been delivered to the affected families. The process for Malawi is described in the following section of the report.

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Graph 1. House construction schedule in Sections 6 and 7, as of 29 February 2016

nov/16 dec/16 jan/17 feb/17

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As per the Graph 1, there is some deviations between planned and executed house construction. These deviations from the plan are related to the impact caused by the rainy season (October to March) in the northern region of Mozambique (where S6 and S7 are located) characterized by heavy rain during December and January; logistical difficulties in accessing remote areas traversed by the railway; local traditional process of validating the resettlement areas, the house typology; and, the traditional ceremonies required prior the start of construction. With the rainy season coming to an end as well as the learnings captured, it is expected that the construction will be completed by February of 2017. The delivery of the houses to the beneficiary households is usually achieved several weeks after the completion of construction. This requires traditional ceremonies to be performed according to local practices and customs, the timing of which depends on the availability of spiritual leaders and other influential personalities, as well as Government formalities. Given such specific requirements it is expected the final hand-over will be by June of 2017.

7.2.9 SECURITY OF TENURE

Tenure will be secured through provision of DUATs for house plots. FUNDE is responsible for preparing and submitting the request to the Government for issuance of DUATs. It is to be noted, however, that the acceptance of the resettlement site by the Government and the consultation with neighbors are the pre-requirements for the issuance of DUATs by the Government. The issuance of DUATs for house plots will start immediately after each house is delivered.

7.3 MALAWI

7.3.1 APPROACH

In Malawi, households were provided cash compensation at full replacement cost. Households received cash for self-relocation and for building their own houses. This approach was approved by the Government after consultation with the displaced households who expressed a strong preference for receiving their compensation in cash.

7.3.2 STATUS OF REPLACEMENT HOUSING IN MALAWI

Based on a monitoring exercise conducted by the Project´s community relations team in 2015, all households have been able to build or acquire replacement housing. In general, it can be concluded from the monitoring results that the majority of households built improved houses made of brick walls with corrugated iron roofing.

7.3.3 ARRANGEMENTS WITH HOST COMMUNITIES

Similar to Mozambique, most households managed to relocate within the same village or community. Arrangements with the host communities were made through community leaders.

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7.3.4 SECURITY OF TENURE

The local leader assists the households to locate replacement house plot, confirms the ownership of the land, and provides the security of the tenure, which is recognized by the Traditional Authority.

8 LIVELIHOOD RESTORATION

8.1 INTRODUCTION

To ensure restoration of livelihoods, the Nacala Corridor Project seeks to facilitate full and timely access to replacement land. The Project has developed a cross-sectional LRP, which was based on an assessment of local and regional community initiatives, feasibility and socio-economic baseline studies and information on the land release negotiation process. The LRP is integrated within the social and environmental impact management programs. These are part of the broader Project community relations strategy encompassing two other components, namely stakeholder engagement and community investment. By doing this, synergies are sought to achieve a broader livelihood restoration approach including: (i) capacity building initiatives, such as agricultural advisory services like dissemination of agrarian technologies, awareness raising on health and nutrition and environment; (ii) resources, improved seeds and farming techniques and; (iii) food production and diversification of income sources.

8.2 FACILITATING ACCESS TO REPLACEMENT LAND

Mozambique and Malawi are predominantly rural countries and securing access to replacement land for farming is a critical part of livelihood restoration. The Project is seeking, therefore, to facilitate access to replacement land through the existing traditional systems of land allocation where tenure is recognized by village heads. In addition, the agricultural LRP currently implemented by agricultural specialist partner organizations provides support to households in identifying, where necessary, replacement land for agriculture, with special attention to vulnerable groups. Regular monitoring and evaluation of the program will be used as a tool to understand where further assistance is required.

8.3 LIVELIHOOD SUB-PROGRAMS

The LRPs were designed and are being implemented in partnership with local enterprises and NGOs with extensive experience and knowledge of the Northern Mozambican context and land-based livelihoods. In addition, to the initiatives described in the table below, existing and planned Government social development programs were considered for potential partnerships and synergies. The roles and responsibilities of the different parties and entities involved in LRPs are described in Section 10.3.

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Several livelihood restoration initiatives are being implemented by the Project and these will continue during operational phase in accordance with the Environmental and Social Management Plans and LRPs. The LRPs will be deemed when the resettlement monitoring report confirms that the livelihood of the PAPs is restored. The table below provides summary information on livelihood restoration initiatives currently implemented by the Project. The focus of these initiatives has been on restoring agriculture for food production through diversification of crops, by improving yields of common crops, and introducing alternative cash generating activities such as poultry and horticulture. Additional programs aim at capacity building such as agricultural extension services, environmental management and preservation, vocational training and community micro-credit. Special attention has been given to gender perspectives in overall programs design and implementation. Specific programs are also being implemented targeting the fishermen and intertidal gathers in Nacala-a-Velha. These are directed towards promoting alternative livelihood sources given the declining trend in fishery catches, as is being experienced by most fishery communities in Mozambique.

Table 26. Summary of livelihood sub-programs

Mozambique

Sub-program Scope Objectives

Targeted

Outcomes

Targeted

Beneficiaries

Delivery

Partners Duration

Agriculture

To assist mainly affected farmers that lost more than 20% of land to restore subsistence farming.

Improvement of crop productivity for food security and promotion of commercial crops

75% of affected farmers engaged in Mozambique

7500 farmers

SNV (Niassa and Nampula) DAPP in Malawi

18 months (renewable for 12 months)

Poultry

To promote the construction of aviaries by the beneficiaries and supply of start-up materials

Diversify livelihood sources and increase household income

30 aviaries in Mozambique

70 farmers

SNV (Niassa and Nampula) BONIMAR (Tete)


Horticulture

To promote the horticulture practice prioritizing women, on gender perspective

Improve income generation

Horticulture market identified, including creation of linkages between producers and buyers

700 farmers

SNV (Niassa and Nampula) ACEAGRARIOS (Tete)

12 months

Vocational Training

To implement short term training courses prioritizing women, on gender perspective

Build local capacity to meet market needs and employability

Increase capacity and employability of those affected households within direct impacted area

500 members of affected communities

Escolas técnicas de Carapira, OAS, Santa Maria, TECNICOL, ADPP, HUGHs construction

From 4 to 12 weeks

Local employment opportunities

Engagement of members of physically

To improve technical skills in construction,

1600 household in Mozambique

1600 PAPs (1 to 3 jobs per family)

HUGHS, COSMOZ, MN,

18 months

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Mozambique

Sub-program Scope Objectives

Targeted

Outcomes

Targeted

Beneficiaries

Delivery

Partners Duration

and skills development

displaced households on housing construction

income generation and preparedness for market demand

COMPOMOZ, FD, SOBREIROS, CONSTRUTEC, ASA

Canteens

To grant initial capital and entrepreneurship prioritizing women

Development of alternative sources of income and encourage creation of community associations

5 canteens in Nacala-a-Velha

Women from intertidal gathering group

SNV 12 months

Poultry (as an alternative to fishery and coastal gathering)

To promote the construction of aviaries by the beneficiaries and supply of start-up materials

Diversify livelihood sources and increase household income

12 aviaries 150 intertidal gathers

SNV


Horticulture (as an alternative to fishery and coastal gathering)

To promote the horticulture practice

Improve income generation

Creation of local trade

50 fishermen SNV


Environmental management and preservation

To create a marine sanctuary in Nacala Bay

Facilitated access to alternative fishery zones and environmental related behavior change

01 marine sanctuary established

1000 fishermen of Nacala Bay

SNV

18 months (renewable 12 months)

Micro-credit

To promote formation of entrepreneurs group amongst PAPs prioritizing women, on gender perspective

To promote the creation of community associations and invest in alternative livelihood sources

Formation of micro-credit groups

60 women of intertidal gathering group

SNV 12 months

Malawi Sub-

program Scope Objectives

Targeted

Outcomes

Targeted

Beneficiaries

Delivery

Partners Duration

Youth Agriculture Program

Development of agricultural skills

Improve livelihood standard by engaging youth in food security and income generation

1,000 youth

participating

1,000 young farmers in each of the five affected districts, 200 per district

Development Aid from People to People (DAPP)

8 months

Bee Keeping

To encourage PAPs to engage in bee keeping activities through technical support

Improvement of income generation, preservation of forests and promote alternative income sources

Increased average of income of 100 affected households

100 bee farmers

African Parks (Majete)

4 months

Reforestation To ensure PAP’s have a secure wood supply

Rehabilitation of

degraded areas

To raise environmental awareness

Two villages of Chikapa and Chikwekwe in

NAYAODE COVISODE

4 months

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Malawi Sub-

program Scope Objectives

Targeted

Outcomes

Targeted

Beneficiaries

Delivery

Partners Duration

close to their homes and opportunities for income from plantation of woodlots.

and promotion of sustainable alternatives for forest-based business within Project directed affected zones

Neno District 10 GVHs in TA Chapananga, Chikwawa District Michiru Forest Reserve Liwonde Forest

Reserve

TYIASODE

Development of Environmental Committees

Creation and management of social network between stakeholders

To safeguard sustainable trading, environmental protection and recovery.

4 committees formed

04 Natural Reserves

NAYAODE COVISODE TYIASODE

4 months

Jacaranda Vocational Training Center

To improve local skills for vulnerable groups

Provide additional alternatives of income

01 VCT implemented

2,000 PAPs Jacaranda 6 months

Environmental management and preservation

To develop Forestry activities in Malawi

Engagement on alternatives to reduce deforestation and promotion of employment through eco-tourism and lodges

01 National Reserve supported in Malawi

1000 PAPs DAPP 12 months

8.4 STALLHOLDERS

Most of the stallholders impacted were located in Nampula City (Mozambique) and have been cash-compensated at replacement cost. In addition, a Memorandum of Understanding (MoU) has been signed between the Project and the Nampula Municipality to support the construction of a market to accommodate the stallholders displaced by the Project. The market will have the capacity to accommodate about 400 stallholders. Other facilities built within the market include a parking area, a cinema and a restaurant. The target completion date for construction is September 2016. The layout of the market is given below.

Figure 18. New Nampula market layout

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8.5 LIVELIHOOD PROGRAM MID-TERM REVIEWS AND EVALUATION

An evaluation of LRPs implemented to date is underway. This evaluation is being undertaken by both internal teams and by an independent external party. Also,underway is a new socioeconomic evaluation to improve the existing knowledge base andcapture household total landholding and magnitude of loss, and improve the socio-economic information available on livelihoods. The outcome of these two evaluations will be a revised livelihood restoration strategy and plan for the Nacala Corridor Project. The revised LRP will be completed by the end of April 2017.

8.6 CURRENT STATUS AND PLAN GOING FORWARD

Taking into consideration that livelihood restoration implies a multi-year perspective, the proposed approach for the LRP is based on a multiphase implementation strategy . For this reason, all the sub-programs presented in section 8.3, and summarized in Table 26, mostly already concluded in the case of Malawi, are under review for the next phase of implementation. For Mozambique, the projects still under implementation up to September 2016, are presented in the following table:

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Table 28. LRP phase 1 under implementation

Mar Apr May Jun Jul Aug Sep

In-field monitoring (gaps and adoption rate data collection)

Routine GAP trainings/Training of Trainers (TOT) (including

harvesting and post harvest technology)

Field days for farmer learning and project publicity

Lead farmers equipment procurement

In-field staff supervision

Farmers trainings and assistance

Commercialization and market linkage facillitation

Component sensitization, consultation and targeting of stakeholders

(including market)

Seed procurrement

Irrigation consultant engagement

Identification of sites suitable for horticulture production (water

availability, soil type, access)

TOT (general horticulture production)

Farmers trainings

Seedbeds establishment (collective establishment)

Land preparation of production blocks

Irrigation systems installation in appropriate locations

Field monitoring visits and supervision

Transplanting and production

Market Assessment and Market Linkages

Sensitization, consultation and targeting (criteria for selection)

Mobilisation of beneficiaries for poultry houses construction

Consultant hiring (for poultry trainings)

Procurement of poultry starter kits

TOT (general poutry production)

Poultry production and monitoring

Commercilization and market linkage facillitation

Site identification for abattoir construction; sorting out legal issues

and institutionalized poultry groups into cooperatives

Contractor hiring for abattoir construction

Enganging one local base poultry agent/formation of an association

to run the abattoir

Abattoir construction

Abattoir equipment procurement

Markets Assessment and Development

Sensitization of beneficiary families

Savings group awareness and women savings groups formation

Contracting a consultant for saving group training

Training of saving groups

Presentation of seed capital to established and trained saving groups

Monitoring and evaluation of the process

Secure approval from district administrator for the santuary

establishment in Nachiropa

Contract consultant for santuary establishment

Assessment of marine species

Sanctuary establishment

Training for monitors of the sanctuary

Finalisation of the 2 canteens in Nacala-a-Velha

Training of the micro-entrepreneurs

Start kits presentations

Monitoring and evaluation of the businesses

Contracting of consultants (1 for HIV/AIDS mainstreaming; 1 for

Nutrition)

Public material / documentaries, etc

Trainings and awareness provided to target group

Activity

Health and

Nutrition

2016

Agriculture

Fishery

Canteens

Poultry

Savings

groups

Horticulture

Component

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Going forward, the Concessionaires will review the livelihood restoration strategy by re-designing the existing programs and developing new ones based on the lessons learned/recommendation from the evaluation exercise.

9 PUBLIC CONSULTATION AND DISCLOSURE

9.1 INTRODUCTION

The Concessionaires undertook an extensive process for public consultation and participation. Consultation with the affected population and with officials of local government, civil society and other representatives of the affected population has been essential for gaining a comprehensive understanding of the types and degrees of adverse effects, mitigation measures proposed and related implementation status of the Project. Preparation of Project resettlement plans and their implementation in each country was based on the following:

Identifying stakeholders and ensuring there are adequate mechanisms for stakeholder feedback and information sharing.

Informing and consulting with representatives of the affected people – local government, village leaders and local community organizations – about the Project plans and asking them to inform their constituents and Project affected populations.

Sharing knowledge on the Project and its impacts to manage expectations and reduce tensions with the stakeholders.

Briefing all Project line managers and staff who will interact with affected people on the anticipated effects of the Project and measures to mitigate its impacts.

Sensitizing and providing tools for employees to act as disseminators of information about the enterprise with a clear position in interactions with the other stakeholders.

Aligned with IFC Performance Standards (2012) and AfDB’ s Integrated Safeguards System (ISS, 2013); and Operational Safeguard 2 Involuntary Resettlement: land acquisition, population displacement and compensation, the Project ensured that resettlement activities were implemented with appropriate disclosure of information, stakeholder consultation, and the informed participation of those people affected by the Project.

The community engagement process begun in 2010 and was undertaken according to the legal framework in each country.

9.2 OBJECTIVES

The Project has implemented actions as part of its Stakeholder Engagement Plan to ensure that:

All stakeholders have access to Project information;

The information provided can be understood by all Project affected persons;

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The locations for consultation are well publicized and accessible to all who want to attend;

Measures are put in place, which ensure that vulnerable or minority groups are consulted; and

Communication channels, listening and response to demands are effective.

9.3 STAKEHOLDER IDENTIFICATION

At the beginning of the EIA process, the stakeholders were identified using extensive knowledge from within each country, ensuring inputs from the community, traditional authorities, district, municipal and governmental parties. Detailed attendance registers were maintained. Most notably attention was given to:

Districts Authorities;

Traditional Authorities;

Government authorities;

Community members;

Group Village Headmen and Village Headmen (Chiefs who, as representatives of their people, speak on behalf of their people) in Malawi;

District Executive Committee in Malawi;

To start the engagement in the areas, it was necessary to talk to the communities about the goals and objectives of the Project. The following themes were addressed:

Nacala Corridor Project: purpose and benefits;

Presentation of the work plan, and the field staff.

Table 29. Summary of stakeholder groups

Stakeholder Type Stakeholder Groups

Mozambique Malawi

Primary – directly affected people, businesses, government entities responsible for land access, resettlement and supervision – those who have most to gain or lose

Project affected households Project affected businesses Host communities NGOs, Civil Society Groups

Village leadership District Governments

Village heads, traditional authorities, district government

NGOs, civil society – Centro Terra Viva, CSC, etc.

NGOs, civil society – FOCADE, DAPP, etc.

Secondary – direct or indirect interest, but who only loose or gain a little

MICOA/MITADER; Ministry of Transport, Provincial Government Departments and Directorates, District

EAD, Ministry of Transport, Government Departments and Directorate at district level

External – indirect interest, nothing to lose or gain

Human Rights Watch Human Rights Watch

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9.4 COMMUNITY REPRESENTATION AND ENGAGEMENT

The mobilization and sensitization of communities were conducted through the following:

Project established Social Committees;

Community leaders and traditional authorities;

Partner NGOs such as FUNDE, SNV and DAPP; and,

Contractors such as Diagonal during the census, surveys and payment of compensation.

The sensitization process included creating community awareness of the potential impacts and risks of residing in the Project safety zone. It explained the factors contributing to the need for displacement and elicited participation in resettlement planning, compensation package design, replacement site selection, housing design and livelihood preferences. The Project facilitated the formation of the district level Social Committees in 3 key locations, namely Moatize, Nampula City and Nacala-a-Velha. In the rest of the corridor, the communities were mobilized and engaged through community leaders or other existing structures. Nacala-a-Velha is different from the rest of the corridor and the establishment of the SC was justified by the construction of a Greenfield Port and the existence of a variety of stakeholders including fishermen and intertidal gathers. Nampula City is the only urban area. In Tete, the platform had already been established by the Moatize mine. Each committee was made up of representatives of the community, government and the Project. Local NGOs or community-based organization were invited, as required, to participate in the committees to discuss issues raised by such NGOs to the Government or to the Project. Representatives of the community included members of each affected stakeholder group within the community, such as: landowners, stallholders, resettled families, fishermen, intertidal collectors, community leaders and other influential personalities, elderly and some vulnerable groups. Gender balance was a requirement. The selection of community representatives was entirely up to the community and they have the right to change their representatives as they require. The general purpose of the Social Committee is to provide a forum for organized and regular dialogue between community representatives, the government and the Project on issues and concerns associated with the Project as well as to find solutions and consensus together in order to establish good relations. The role of the community representatives in the SC is to represent community preferences to the Project and Government and transmit project-related information to communities.

9.5 SUMMARY OF CONSULTATION ACTIVITIES

The record of key consultation activities is presented in the EIAs and Resettlement Documents (PDSO, PEC and SRAP). The meetings, forums, public hearings and other activities aiming to consult the PAP and other relevant stakeholders are presented in the Stakeholders Engagement Plan.

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9.6 CONSULTATION WITH HOST COMMUNITIES

Consultation activities, mainly meeting with community representatives, have been conducted with host communities. Special attention has been given where larger resettlement housing settlements are located. During the meeting with host communities, the following themes were addressed:

Nacala Corridor Project: purpose and benefits;

Presentation of the work plan, and the field staff;

Purpose, nature, and scale of the resettlement; particularly the main information about the proposed replacement housing for the PAPs;

Impacts on such communities and relevant mitigation measures; and

The grievance mechanism.

9.7 ATTENTION TO VULNERABLE GROUPS

In total, some 685 households were categorized as vulnerable. Some households were observed to be vulnerable against more than one indicator. The Project used the following 04 indicators for screening and identifying vulnerable individuals and households:

(a) Female-headed households without assets (or in matrilineal areas, such as where the Chichewa and Emakua prevail, the potentially vulnerable group was ‘male-headed households without assets’)

(b) Child-headed households;

(c) Households headed by elderly persons above the age of 60 without their own assets; and,

(d) Households with chronically sick or persons with disability.

Particular measures have been implemented to facilitate participation of vulnerable groups, through customary networks, home visits and special monitoring. Vulnerable groups also have access to information by signed agreement with all households. Vulnerable households required special support during the implementation of the RAP depending on the level of impact they experience and their vulnerability. Vulnerable households have been prioritized for resettlement assistance such as receiving replacement houses, support with transport and provision of moving allowances. Vulnerable households have also been given priority for receiving replacement land as close as possible to their dwelling or village. Where transitional accommodation was required, provision of transitional support, particularly to vulnerable groups, is provided.

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9.8 SUMMARY OF DISCLOSURE ACTIVITIES

Table 30. Summary of disclosure activities

Disclosure

Type

In-Country International

Mozambique Malawi

In-Country RAP Disclosure

Documents (total)

(i) EIA/EMP (3) (ii) PCS (3) (iii) PDSO (13) and PEC (3)

(i) EIA/EMP (1) (ii) RPF (1) (iii) General RAP (1) (iv) Specific RAPs per district (6)

Not applicable Location

(i) MICOA (ii) MICOA (iii) All Districts,

municipalities and villages along the Nacala corridor

(i) Department of Environmental Affairs (EAD)

(ii) Ministry of Lands and EAD (iii) EAD (iv) Ministry of Lands

Timing (i) 2010 (ii) 2011 (iii) 2012 - 2014

(i) 2010 (ii) 2011 (iii) 2012 (iv) 2013-2015

This Resettlement Status Report will be disclosed nationally and internationally to all relevant stakeholders. The document will be available at the Nacala Corridor Lenders websites, and at the concessionaire’s facilities. Electronic copies of the document will be sent by e-mail to any stakeholder by request.

10 IMPLEMENTING ROLES AND RESPONSABILITIES

10.1 INTRODUCTION

This chapter describes roles and responsibilities for resettlement implementation. It also describes how resettlement functions will be managed as the Concessionaires transition their organizations from the construction phase to operations. Ongoing resettlement activities that will be maintained until completion of a satisfactory Resettlement Completion Audit include:

Development of a PAP socio-economic knowledge base

Completion of replacement housing delivery and defects management

Coordination of house plot DUAT applications (Mozambique) and follow-up

Management and delivery of livelihood programs

Encroachment management along the NCP right of way

Operations phase stakeholder engagement and information dissemination

Monitoring and reporting

Grievance management

In the event a safety zone is required for the Cuamba-Lichinga line:

Preparation of a RAP or LRP for the Cuamba-Lichinga rehabilitation

77

10.2 INSTITUTIONAL ROLES AND RESPONSIBILITIES

Figure 19. Institutional arrangement

Key functions of the team are described in the Table 31.

Table 31. Key functions and main responsibilities

Compensation and

resettlement

Livelihood

restoration

Community

Engagement and

relationship building

Community

investment

Surveys and inventories Database Management Payment of compensation

- Consultation with community

- Negotiations

- Physical payment of compensation

Relocation of graves and sacred sites Compliance Management of temporary resettlement Identification of resettlement areas Community participation during construction Management of construction companies

Restoring agricultural livelihoods Income-generating projects Monitoring of socio-economic indicators

Management of encroachment in the safety zone Cultural heritage Grievance management Health, environment and community safety

- Awareness campaigns

- Environment and sanitation

- Health programs (malaria and HIV, mobile clinic)

Implementation of other mechanisms of relationship building

Implementation of the community investment plan

Senior Maneger (1)

Manager (1) S2 & Malawi

Manager (1) S2 & S7

Manager (1) S8 & Port

Manager (1) Construction

Construction Supervising (3)

Construction Companies (12)

Executive Office (1)

SOCIAL STAFF (59) – KEY FUNCTIONS

Compensation and resettlement

Livelihood Restoration

Community Engagement

Community Investment

Monitoring Contracts

Local NGOs Social Monitors

(190)

SNV DAPP

AC Agrários

LEGEND: OWNER TEAM

CONTRATORS/ PARTNERS

78

10.3 SOCIAL TEAM ORGANIZATION

Table 32. Resettlement institutional roles and responsibilities (Malawi and

Mozambique)

Task/Activity Purpose Period Responsible

Entity Implementation

Prepare RAP

Define activities, roles & responsibilities, budget and schedule for delivery of resettlement and livelihood programs.

Planning Project Resettlement team

Project Resettlement team under oversight of the Technical Committee

Review & approve RAP

Government approval of RAP.

Pre-construction

District Government

District Government, based on technical opinions from the Technical Committee & the sector responsible for the Territorial Planning issues.

Allocate replacement agricultural land

Make available to displaced households suitable replacement agricultural land.

Planning

Village leader/

District Government

Affected household with assistance from village head (Malawi) or District Administration (Mozambique)

Announce cut-off date

Identify those eligible to receive compensation/ discourage opportunist settlement.

Planning District Government

District Government with support from the national and provincial Technical Committees

Census and socio-economic surveys

Define those eligible for compensation/ assistance and record their baseline socio-economic conditions.

Planning Project land & resettlement teams

Project resettlement team

House Compensation

Cash compensation for houses owners and for homestead.

Construction Resettlement team

Malawian Government after bank deposit done by Project

Houses Replacement

New replacement houses and cash compensation for ancillary structures.


Project team with Mozambican Government support

Economic displacement

Cash compensation for crops, trees and small business e.g. stalls, etc.


Malawian Government after bank deposit done by Project.

Project team with Mozambican Government support

Livelihood restoration

Assure to improve or maintain livelihood.

Construction until Operations to RAP completion

Resettlement team

Construction team and operational team

Grievance Mechanism

Implement mechanism to manage grievances

Pre-Construction

Social team Social team

79

Task/Activity Purpose Period Responsible

Entity Implementation

received to resolution/feedback.

until Operation

Social Investments

Implement mitigation and compensations actions.

Construction to Operation

Social team Social team

Internal Monitoring

Implement system and report activities.

Operation to RAP completion

HSEC team HSEC team

10.4 SOCIAL TEAM RESOURCES

Due to the size and complexities of the Project, both permanent staff and several contractors mobilized. The social team has been integrated with members from all concessionaires and has the primary responsibility for implementing the compensation and resettlement activities and maintaining the relationship with the communities along the corridor. The table below summarizes current numbers of staff and contractors in Mozambique and Malawi, broken down by Project section:

Table 33. Numbers of staff and contractors in Mozambique and Malawi

Project Sections

S2 S3+S5 S6+S7 S8+Port Total

Owner Team

Senior Manager 1 1

Manager – Construction

1 1

Managers 1 1 1 3

Social Staff 10 10 25 11 56

Social Monitors 16 20 120 34 190

Communication Dept.

1 1 1 1 4

Contractors

Diagonal 8 16 120 15 159

FUNDE n/a n/a 50 n/a 50

SNV n/a n/a 18 12 30

NGOs 3 2 6 3 14

Construction Companies

1 n/a 10 1 12

11 GRIEVANCE MANAGEMENT

11.1 GENERAL

The Concessionaires have a developed and operated a grievance and redress mechanism to receive and address and resolve affected people’s grievances and concerns related to the environmental

80

and social performance of the Project. It includes a Call Center, with toll free numbers accessible in both Mozambique and Malawi (in Malawi to be implemented in 2017) to facilitate the logging of complaints. In order to support grievance management, an IT based system called SDI (Stakeholders, Demands and Issues) was developed. All responses to grievances are recorded and included in project supervision reports. The grievance assessment process includes E&S Territorial Committees.

11.2 OBJECTIVES

The grievance mechanism for the Project was designed to meet the following objectives:

be accessible to the stakeholders at all times during the Project cycle;

provide affected people with straightforward and accessible avenues for making a complaint or resolving any dispute that may arise during the course of the Project;

ensure that appropriate and mutually acceptable corrective actions are identified and implemented to address complaints; and,

facilitate the follow-up and evaluation of the outcomes of complaints and concerns about the Project.

11.3 GRIEVANCE PROCEDURE

Figure 20 presents the flow diagram for processing complaints. There are seven main steps:

Analysis and recording – Social Issues database records;

Grievance response communication – considering Social Committee;

Discussion – including Territorial, National and Executive Committee;

Solution Established – Final strategy about which response will be considered.

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Figure 20. Grievance Mechanism in the Nacala Corridor

The Concessionaires maintain a complaints and grievance tracking system to ensure that complaints are systematically addressed and closed out in a timely manner. Records are kept and grievance numbers and patterns are regularly analyzed to determine whether there is need for any changes in systems and procedures.

11.4 AVENUES FOR PROJECT AFFECTED PEOPLE TO MAKE A COMPLAINT

Based on the Grievance Procedure there are several ways for a complainant to make a complaint. All the complaints will be passed to the Project.

Village head – can receive every complaint and the grievance is passed on to the Project;

FUNDE – this organization has been instructed about how to register complaints from stakeholders and manage them in accordance with the Grievance Mechanism;

Community Relations team – all social monitors have received training on how to deal with complaints;

Contractors – all contractors receive training on the grievance management process and are responsible for handling complaints in a manner consistent with the Project’s Grievance Mechanism; and,

Call Centers – toll free numbers are available which any complainant can use to log a grievance.

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Figure 21. Call Center flowchart

11.5 GRIEVANCE MANAGEMENT ROLES AND RESPONSIBILITIES

Roles and responsibilities for completing the various tasks associated with grievance redress are summarized in the following matrix.

Table 34. Summary of grievance management roles and responsibilities

Legend: R – Responsible; A – Accountable; C – Consulted; I – Informed.

Pro

ject

lead

ersh

ipC

om

mu

nit

y

rela

tio

ns

Co

nst

ruct

ion

dep

artm

ent

Exte

rnal

Aff

airs

Tran

spo

rt

Lan

d

Pu

blic

wo

rks

Dis

tric

t

Co

mm

un

ity

lead

ers

Aff

ecte

d

fam

ilies

Ho

st

com

mu

nit

yB

road

er

com

mu

nit

y

Complaints and grievance management

- Complaints and grievance report and registration A R R I R R R R R

- Complaints and grievance analysis and response formulation A R C C

- Complaints and grievance response communication A R C C I

- Complaints and grievance closeout A R I I I

Project Government Community

Role

Resettlement Phaseand Activity

83

11.6 MONITORING OF GRIEVANCE OUTCOMES

A total of 2,736 claims and grievances have been received to date in Malawi and Mozambique. The majority of the claims and grievances are in S3/S5, S6/S7. At this stage in the Project most complaints are related to compensation. The table below shows the break-down by Project section:

Table 35. Summary of Grievances by Section

Type of grievance S2 S3/5 S6/7 S8/Port Total

Not satisfied with the compensation

248 55

303

Impact of construction works

311

311

Partial compensation of assets

16

16

Not assessed/Review of compensation amount

355 127

482

Delay in compensation payment

28

28

Not compensated

638 664 41 1,343

Renewal of rental allowance

135

135

Suspicion of corruption

5

5

Change of beneficiary

7

7

Mobility 19 0 28 47

Others

59

59

Total 19 1,300 1,348 69 2,736

Most of the grievances across all sections have been successfully closed out. About 68% of grievance have been closed out within 30 days. Table 36 below summarizes grievances that are closed out and ongoing:

Table 36. Summary of grievance per status (close out or ongoing)

S2 S3/5 S6/7 S8/Port

Closed out 18 1,235 1,038 67

Ongoing 1 6 310 2

11.7 COURT CASES

A small number of PAP in Malawi have taken legal action against the Concessionaire and/or its contractors. Some of the cases have been resolved through negotiation. Some have been dismissed for failure to prosecute and others, however, are still to be resolved. As of November 2015, a total of 9 court cases had been filed. One of these is a group case filed by 89 people from Neno district. The 9 cases still to be resolved are summarized in Table 37. Most of the people with pending court cases (91 out of 97) claim dissatisfaction with the compensation amount paid. The Government has produced a report explaining the methodology used to calculate the compensation amounts, including the additions and extra

84

cap provided by the Project. Although dates for the hearing are set by the court, it is expected that all cases be settled by mid-2016. Table 37. Summary of ongoing court cases

Case Claim PAP (no.)

Status

1 Dust by Contractor during construction reduced crop yield.

1 Mediation failed and case will proceed for trial.

2 Dust by Contractor during construction reduced crop yield.

1 Mediation failed and case will proceed for trial.

3 Compensation paid to wrong land owner. 1 Waiting for mediation date.

4 Dissatisfied with the compensation amount paid. 1 Awaiting judgment ruling on 2016/02/23.

5 Land dispute related to of compensation. Payments 1 To schedule land dispute resolution meeting.

6 Dissatisfied with the compensation amount paid. 99 Mediation failed and case will proceed for trial.

7 Dissatisfied with the compensation amount paid. 1

Awaiting feedback from the PAPs legal counsel following the decision made by RLOS that the compensation amount was correct.

8

PAP demanding to be paid for damages to crops that is being claimed to have been affected by the water that was channeled to the land in question from a railway drainage. The PAP is demanding the Project to extend the drainage away from the field so that the water does not damage crops in future.

1 Court hearing has been set forth for 2016/03/01.

Total 106

11.7.1 DISPUTE RESOLUTION

Disputes related to land acquisition were, in the majority of cases, resolved through negotiation between Government officers and Project affected complainants based on the existing administrative grievance resolution channels. Some disputes were escalated to the courts.

11.8 SOURCE OF FUNDS

The Concessionaires has provided the funds necessary for resettlement, comprising the mitigation and compensation costs for the physical and economical displacement impacts related to the construction and rehabilitation works for the Nacala Corridor Project. It also includes housing replacement, livelihood restoration measures, social investments in the affected communities, monitoring and evaluation. The Project has also provided funds for cash compensation of crops, fruit trees, households assets and any infrastructure affected by the construction and rehabilitation works out of the

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Right of Way, e.g. construction of temporary infrastructures such as campsites or temporary roads.

12 MONITORING AND REPORTING

12.1 GENERAL

Monitoring and Evaluation are key components of the resettlement and compensation process. The monitoring and evaluation process examines what worked and why, what did not and why it did not, and what adjustments or changes need to be made to resettlement programs.

There are two components of the monitoring framework for the Nacala Corridor and Port Project:

Internal monitoring by CCCV

Monitoring by an independent specialist

To assist with the monitoring and evaluation process, a set of indicators are used by the Concessionaires. These indicators were defined as part of the monitoring and evaluation framework. They consist of input, output and outcome or impact indicators as defined and listed in Table 39. Input monitoring indicators measure whether inputs are delivered in accordance with the plan. Inputs include goods, services, resources both human and financial that contribute to achieving outputs and consequently the desired outcomes. The input monitoring is done internally on an on-going basis by the community relations team, often as part of standard Project management and internal reporting mechanisms. Output monitoring indicators measure the direct results of the inputs employed. Indicators of these sort include ‘the number of households that have received compensation’, ‘the number of replacement houses constructed and handed over to Project affected households’, ‘the number of households who have participated in livelihood programs’. Output monitoring is also done internally by the community relations team. Outcome/impact monitoring indicators measure the extent to which the inputs and outputs are achieving or are likely to achieve the objectives of a resettlement and compensation program. The monitoring of outcomes will be done internally by the community relations team, an independent specialist and ultimately by the completion audit.

Table 39. Key Performance Indicators

Input indicators Source of Information Frequency Overall spending Financial records Quarterly

Distribution of spending by:

Cash compensation

Rehabilitation - livelihood restoration

Spend on replacement house construction

Social development

Financial records Monthly

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Number of full time staff dedicated to resettlement & compensation, with distribution of in-house and outsourced

PMO Annually

Output indicators Source of Information Frequency Number of PAPs by categories, construction front and district

Data Management System Monthly

Number of individual compensation agreements signed in the period


Number of PAPs that received cash compensation in the period with distribution by compensation type and amounts


Number of resettlement areas identified, distributed by locality

Data Management System Weekly

Acceptance of resettlement areas by households and approval by Government

Data Management System Weekly

Number of PAPs receiving payment of rent allowance for temporary accommodation


Number of houses constructed, by construction phases

Inspection reports Weekly

Number of households engaged in livelihood restoration programs


Number of trainings in improved agricultural techniques


Number of families of fishing communities engaged in new economic activities


Number of intertidal gathers engaged in new economic activities


Number of physically displaced household members employed for construction of replacement houses

Data Management System Quarterly

Outcome (or impact) indicators Source of Information Frequency Number of community blockades Data Management System Monthly

% of grievance resolution actions closed within the month


Number of grievances opened, on-going and closed in the period, with indication of status of satisfaction by the grievant


Physically displaced households receiving or acquiring improved housing

Households have better houses than before? Survey of houses over a sample of households and comparison with baseline

Yearly and at Completion

Audit

Business re-establishment

Have affected businesses been successfully reestablished? Survey of activities and sales over a sample of businesses and comparison with baseline


Audit

% Increase in economic output in the agricultural sector compared to the average yield in the control group

Survey of production over a sample of engaged farmers and comparison with control group


Audit

Number of PAPs who increased their income Survey of income over a stratified sample of PAPs and comparison with control group


Audit

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12.2 OBJECTIVES

The purpose of resettlement monitoring will be to verify that:

Actions and commitments described in the resettlement documents are fully and timely implemented and, if not, that corrective action measures are formulated and implemented.

Eligible affected people receive their compensation and entitlements in full and within agreed timeframes.

Resettlement actions and compensation measures are effective in sustainably enhancing (or at least restoring) affected peoples’ living standards and income levels.

Complaints and grievances lodged by PAPs are followed up and where necessary, appropriate corrective actions are implemented.

Progress reports are prepared to be shared with appropriate stakeholders.

12.3 INTERNAL MONITORING

Internal monitoring focus on measuring progress against the schedule of actions defined in the Resettlement Documents and regular internal reports. Activities to be undertaken by the Project will include:

verification that compensation and entitlements are being delivered in accordance with the resettlement documents;

verification that agreed measures to restore or enhance living standards and livelihood are being implemented;

identification of any problems, issues, or cases of hardship resulting from the resettlement process;

assessment of PAPs’ satisfaction with resettlement outcomes;

following-up on the implementation of appropriate corrective actions and satisfactory outcomes; and,

preparation of brief monthly internal routine update reports.

12.4 EXTERNAL MONITORING

The Concessionaires will engage a specialist to undertake external reviews of Project resettlement with frequency to be agreed with the Lenders, in order to:

Assess the overall compliance with the Resettlement Documents.

Verify that measures to restore or enhance PAPs’ quality of life and livelihood are being implemented and gauge their effectiveness.

Assess the extent to which the quality of life and livelihoods of affected communities have been restored.

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Activities that will be undertaken by the consultants include:

review of internal monitoring procedures and reporting to ascertain whether these are being undertaken in compliance with the Resettlement Documents;

review of internal monitoring records as a basis for identifying any areas of non-compliance, any recurrent problems, or potentially disadvantaged groups or households;

review of grievance records for evidence of significant non-compliance or recurrent poor performance in resettlement implementation;

survey of PAPs to gauge the extent to which standards of living and livelihood have been restored or enhanced as a result of the Project;

preparing a summary compliance report as part of the ESMP monitoring of resettlement progress for any issues arising and any necessary corrective actions.

12.5 MONITORING SCHEDULE

The timing for monitoring activities will be agreed with the Lenders. Both internal and external monitoring will continue until the Resettlement Completion Audit is finished.

12.6 REPORTING

Table 40. Summary of monitoring reports

Monitoring

Report Type Frequency Prepared by For

Internal Update Report 2 months E&S CCCV Team CCCV Steering Committee

ESMP Update Report Six Months E&S CCCV Team MITADER

ESMP Update Report Quarterly E&S CCCV Team EAD

Internal Audit Report Annually HSEC Vale Corporate CCCV Steering Committee

External Audit Report Bi-Annually Independent Specialist Lenders

12.7 RESETTLEMENT COMPLETION AUDIT

A key objective of the resettlement process is that actions and mitigations lead to the sustainable improvement or at least restoration of affected households’ living standards and livelihoods. At some point, when the living standards and livelihoods of the affected people are sustainably restored, the resettlement program can be declared “complete”. The Resettlement Completion Audit will assess whether the activities and outcomes committed to in the Resettlement Plans and Compensation Plans have been delivered, or whether there is a need for any corrective actions. This audit will be conducted by a suitably experienced, independent third party, mutually acceptable to Concessionaires and Lenders, not less than 24 months following completion of physical relocation, taking into consideration that the implementation of the LRP started in 2013. Terms of reference will be developed by

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Concessionaires and agreed upon with Lenders 6 months prior to the Resettlement Completion Audit commencing. Upon completion of the audit and any resulting corrective actions, the resettlement program will be deemed complete. At this point, the Project will close its resettlement monitoring program.

12.8 RESPONSIBILITIES FOR DISBURSEMENT

The compensation payment in Mozambique is done by the Concessionaires, guided and monitored by the Government. Local government representatives and community leaders witnessed each payment of compensation and allowances made directly to affected households or stallholders in the field. In Malawi, according to the Concession Agreement, Concessionaires are responsible for funding RAP implementation. The market land assessment and valuation, as well as the cash compensation payment were made directly by the Government. Based on the reports provided by the Government, Concessionaires transferred the requisite amounts to the responsible District Authority’s bank account. In both countries, one-time cash compensation payments were made to each eligible Project affected person or household, based on the preferences expressed by them and consideration of personal security.

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13 RAP IMPLEMENTATION SCHEDULE

The table below presents the resettlement activities schedule:

Table 41. Resettlement Activities Schedule

(1) PEC or PDSO (Mozambique) and Specific RAP per District (Malawi)

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ANNEX A

OTHER RESETTLEMENT-RELATED MANAGEMENT PLANS AND PROCEDURES

PTP-0001-CCCV – Integrated Environmental and Social Management Plan of the Railways – This plan is divided up into specific programs with the aim of minimizing, mitigating and/or monitoring the impacts relating to railway operations by CCCV Concessionaires.

- Air Quality Management Program;

- Noise and Vibration Management Program;

- Rehabilitation and Degraded Areas Program;

- Water Resources Management Program;

- Waste Management Program;

- Biotic Environment Management Program;

- Relationship with Communities and Stakeholders Engagement Program;

- Environmental Education and Community Safety Program;

- Community Health Program;

- Recovery of Means of Subsistence and Social Development Program;

- Monitoring Socio-economic Indicators Program. (Monitoring of resettled families).

PTP-0002-CCCV – Environmental and Social Management Plan of the Port Terminal of Nacala-a-Velha – This plan is divided up into specific programs with the aim of minimizing, mitigating and/or monitoring the impacts relating to railway operations of the Port Terminal of Nacala-a-Velha.

- Air Quality Management Program;

- Noise and Vibration Management Program;

- Rehabilitation and Degraded Areas Program;

- Water Resources Management Program;

- Waste Management Program;

- Biotic Environment Management Program;

- Environmental Compensation Program;

- Relationship with Communities and Stakeholder Engagement;

- Environmental Education and Community Safety Program;

- Community Health Program;

- Recovery of Means of Subsistence and Social Development Program;

- Monitoring Socio-economic Indicators Program. (Monitoring of resettled families).

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PTP-0005-CCCV – CCCV Railway Mobility Plan – This plan aims to map, identify, prioritize and define intervention points on the railway line to ensure an operation with acceptable risks from a community safety perspective, and to avoid or minimize social impacts on community's mobility along the line.

PTP-0006-CCCV – Property Security Plan – This plan aims to define the corporate safety procedures on railway lines and the port to ensure the integrity of the assets of the Concessionaires and the physical integrity of their employees, striving for the maintenance of human rights, ensuring protection of human rights as per CCCV’s policy.

PTP–0008-CCCV – Emergency Response Plan and Crisis Management – This plan establishes the communication flows and use of resources in cases of emergency and crisis based on the Preliminary Analyses of Risks to Health, Safety, the Environment and Community (PAR). This document presents the Quantitative and Mitigating Risk Analyses of the Corridor and as annexes the Intolerable Risk Prevention Plan / Action Plan.

PTP-0009-CCCV – Stakeholder Engagement Plan – This procedure establishes the methodology for internal communication and external dissemination of information as well as receipt and analysis and response to requests from interested parties.

PRO-0009-CCCV – Prevention and Treatment of Reoccupation of the Areas Adjacent to the Railway Track – Indicates the strategy, actions and control instruments to keep the areas of operational safety free, in addition to the applicable measures in cases of reoccupation.

PRO-0019-CCCV – Community Grievances Management – Establishes the methodology for identifying, registering, analysing and managing information regarding demands, suggestions and claims by interested and affected parties. Includes the flow and system for processing and responding to community demands.

PRO-0020-CCCV – Addressing special issues from vulnerable groups – Establishes the guidelines and criteria for the characterization of special situations as well as the treatment of vulnerable group.