E744March 2003

Additional Annex 11: Summary of Project Environmental and Social Safeguards ProcessINDONESIA: Private Provision of Infrastructure Technical Assistance Loan

The Indonesia Private Provision of Infrastructure Technical Assistance (PPITA) Project focuseson institutional capacity building, policy and regulatory initiatives, training and projectmanagement unit support for the objective of assisting GOI in promoting and facilitating efficientand sustainable large-scale private investment in infrastructure. According the project design,none of the four project components will directly produce social or environmental impacts, norresettlement issues. These changes in policy, law and regulations could improve or detract fromthe ability of GOI to enforce the existing environmental and social safeguards requirements(generally adequate) in projects implemented by private parties. The Project will include anevaluation of the impact upon safeguards effectiveness of all new legal and regulatory measuresassessed by the project advisory team and consultants.

Additionally, the project will support the preparation of a limited number of demonstrationprojects designed to be feasible and attractive for private investment. These pilot projects wouldgenerally be small and medium scale schemes targeting sectors such as telecommunication andtransportation. These demonstration projects could produce environmental and social issueswhen physical works, for example telecommunication towers or public transport schemes, arecarried out by selected private investors who are contracted as the results of this project. Underthe PPITA project, the Bank support to be provided would extend through the tendering, awardand contract negotiation stages for such demonstration projects, as well as evaluating thereplicability of such projects. During PPITA project preparation, however, no attempt wasappropriate to finalize the selection of such demonstration schemes. It is therefore necessary todevelop a safeguards procedure and screening requirements for environmental and social issues.This procedure and its environmental and social requirements are based on the existing GOIregulations and World Bank policies, and should be applied in all demonstration projectpreparation and integrated into the tendering and implementing documents for each selectedscheme.

1. Environmental assessment

1.1 Project screening

The EA screening should be based on the environmental screening of the PPITA pilot projectswhich would utilize Prosedur Penyaringan Amdal and UKL/UPL (Prosedur Kerja No. 1.1) todetermine whether Amdal or UKL/UPL is required. This process was an output of theInstitutional Strengthening in Enviromental Management (ISEM) project and has been adoptedby Kimpraswil (Ministry of Settlements and Regional Infrastructure) as the recommendedscreening procedure for all projects. The two-stage screening process consists of:

* Initial screening to determine whether any environmental examination is required; and

* Second stage screening to determine the extent of further environmental examination(Andal or UKL/UPL).

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The initial screening should be used to determine the classification of EA requirement equivalentto Category A, B and C under the World Bank safeguard policies. As a general rule, pro jectsdeterminied in the screening to require ANDAL will be considered as falling into the Bank'sCategorv A; such schemes will be included for preparation support from PPITA only it anadequate EA/Andal study is already prepared at the time it is proposed for PPITA support (i.e.PPITA %vill not devote significant resources to funding EA/Andal preparation, but could reviewsuch studies prepared previously). Projects determined to require UKL/UPL for less intensivetreatmlent will be considered as falling into Category B and potentially acceptable for inclusion inPPITA Any exceptions to this rule for A and B decisions can be dealt with as special cases inconsultation with the World Bank environmental specialists.

As part of the preparation of demonstration projects designed to be feasible and attractive forprivate investment, each project will have clear environmental requirements resulting from theEA screening available when the government invites private investors for bidding on the project.During the initial screening stage, the government can utilize existing data and maps alreadyavailable during project preparation. If such data and information are not available, site visits orother means of data and information collection will be undertaken by the PPITA PMU toestablish the data needed for screening (PMU budget are available for limited field work only).An approval from the World Bank for the EA classification and proposed safeguard measures foreach of the demonstration projects is a condition before the government invites investors forbidding the proposed projects.

The second stage screening (equivalent to scoping in EA) requires a more detailed assessment ofthe characteristics of the projects, available from existing project preparation data, and moredetailed assessment of the characteristics of the area to be developed or occupied. Keyenvironmental concerns such as the scope of impacts, assessment boundaries, sensitive factorssuch as nature conservation, biodiversity, etc., should be considered. It will be necessary toundertake field studies during this second stage of screening in order to fully understand thepotential environmental impacts caused by the proposed project. When the proposal for a pilotproject is initially accepted and agreed between the government and private investor(s), thegovernment should provide at least partial financing (to be negotiated case-by-case) for thepotential investor to conduct the second stage EA screening and prepare the draft environmentaldocumentation.

1.2 EA preparation

It is the developer's responsibility to carry out an environmental assessment although the localgovernments and institutions can provide policy guidance and technical support. In themeantime, seeking advice from the World Bank environmental staff is always encouraged. Theenvironmental assessment should be carried out at project feasibility stage and the results ofwhich should be, to the largest extent, reflected in project feasibility study and design. Forprojects tinder the Bank's Category A and B equivalent, a formal EA is required and the contentsof the EA statement should be in consistent with the GOI and Bank requirements. For projectsunder Category C, an environmental analysis should be carried out and an environmental reviewchecklist be filled as part of the project feasibility study for appraisal (see the attached checklist).

1 .3 Project EA/analysis approval

For demlonistration projects under the PPITA project, both the EA report and enviroli-nental

review clhecklist will be subject to the review and approval by relevant local environmentalauthority and the World Bank.

1.4 PLublic participation, consultation and information disclosure

During the course of project EA screening to approval, the public should at least have two formalopportunities to be consulted and to participate in project EA activities. The first opportunityshould be at the screening stage and EA preparation when NGOs, local communities, and projectaffected people should be fully informed of the project and consulted in the forms of meetings,surveys, publicity through handouts, and local media. Their experience and considerations inregard to the potential environmental impacts should be fully included in screening and EApreparation. The second opportunity should be after an EA report or environmental analysisreport is completed and before the approval by the government authority and the Bank Duringthis period, the EA report or analysis should be made available in the local community such aslocal library, project development office and other venues. NGOs, local communities and projectaffected people should be informed of such availability through local media and public meetingsor gatherings. The time for the EA report/analysis report to be displayed for comments should beno less than three weeks.

1.5 Environmental management plan (EMP) implementation and monitoring

For Category A and B equivalent projects, an environmental management plan (EMP) should bedeveloped in the EA. The EMP should include the major environmental impacts caused by theproject during construction and operation stages, the proposed mitigation measures, andmonitoring and reporting requirements (see format samples attached) to ensure theimplementation of such measures. The activities proposed in EMP should be integrated intocontract tendering documents as part of the bill of quantities, which would allow the properbudget for implementing such mitigation and monitoring measures. The contractor shouldimplement all the mitigation measures as required in project contracts and the supervisionengineers have the responsibility to supervise the implementation of such measures and report tothe private investor. The private investor should report the results to the local environmnentalauthorities, who would forward these to the project management office (PPITA PMU).

The local environmental authority should carry out periodic monitoring for the implementation ofEMP. The results of which should be reported to the project management office, and the PMUshould inform the World Bank of such results and EMP implementation progress.

2. Social assessment

Social assessment, land acquisition and resettlement for pilot projects are the responsibility of thegovermllent. Land acquisition and resettlement must be finished and land be ready for project

implemiienitation before the government signs contracts with private investors for respective

projects For demonstration projects which need considerable land acquisition and resettlement, a

resettlement action plan (RAP) should be prepared under the pdlicy frameworks developed for

the relevant sectors (such as that in East Indonesia Transport Project). However, SuChI prOjeCtS

would generally not fit the above-stated criteria for a PPITA pilot project. For projects wvitlh

limited land acquisition and resettlement, the attached Environmental/Social Review Cliecklist

will be used. For both projects with either considerable or minor land acquisition and

resettlemiient, the implementation of a RAP or Checklist should be strictly in compliance with the

policy framework developed in the Institutional Strengthening in Environmental Management

(ISEM) project.

2.1 Land acquisition and compensation

ISEM prepared a set of procedures, processes and guidelines connected with land acquisition and

compensation. They incorporate the requirements of both the GOI and the World Bank and were

accepted by both parties as the future approach for consultation. The key features of land and

building acquisition and compensation will be as follows:

* All affected stakeholders with legal title will receive compensation for all land and

buildings based on replacement value. The replacement value for land will be determined

by the open market value of that land. The replacement value of buildings will be based

on standard building costs obtainable from the Public Works Department.

* Consultation with all affected stakeholders will take place during all phases of acquisition

and compensation process.* Consultation with all affected stakeholders will include information on all laws and

regulations concerning valuation and compensation.

* Stakeholders with traditional or other title will be compensated to an agreed and

published process.

2.2 Resettlement

ISEM prepared a set of procedures, processes and guidelines connected with resettlement. They

incorporated the requirements of both GOI and the World Bank and were accepted by both

parties as the future approach for consultation. The key elements of the ISEM requirements for

resettlement include:

* There will be extensive consultation throughout the resettlement process with all affected

stakeholders (and by its very nature, land acquisition also).

* The consultation will include surveys of all affected stakeholders to determine their needs

and present conditions, and monitoring of resettled stakeholders.

* NGOs will be actively involved in all consultations.

* A land aquisition and resettlement action plan (or LARAP) will be prepared where more

than 100 households are to be resettled.* All affected stakeholders will be given choices in terms of cash or resettlement.

* Compensation for land, buildings and other assets acquired will be at real replacement

cost. Host communities will be involved in consultation process.

2.3 Isolated vulnerable people

ISEM prepared a set of procedures, processes and guidelines connected with isolated people.They incorporated the requirements of both the GOI and the World Bank and were accepted byboth parties as the future approach for consultation. The main features of ISEM approach inregard to isolated people include:

* There will be extensive consultation with all affected isolated people through theplanning, feasibility, design and construction process.

* Thle consultation will include an assessment of how to balance the benefits that willaccrue to the project and of maintaining the special cultural and other characteristics ofthe isolate peoples.

* The consultation process will involve close liaison with NGOs particularly where theisolated peoples do not speak Bahasa Indonesia.

* As needed, an indigenous peoples' action plan would be developed and cleared by theBank before the bidding documents can be released to the contractors for bidding.

2.4 Other possible social impacts

The PPITA project has selected telecommunication, water supply, urban services and transport asthe key target sectors to attract the private investment. One of the other potential social impactsin addition to land acquisition, resettlement and indigenous people is the effects on isolatedcomrtmuities and culture caused, for example, by wireless communication which can reach everycorner of the islands in Indonesia. It is suggested that the PMU seek a grant-based fund to studythis issue through the analysis of the completed and on-going projects in telecommunications andother relevant projects which accessed to such isolated communities.

Table Annex I l-l. Environmental/Social Review Checklist forProposed Pilot Projects

Name of pilot projectName of province (region)Proposed (late of start of workBrief clescription of pilot project:

A) Envir-onimental effects related to the pilot prpjectlocation/designType of environmental resources Predicted effects/impacts

Minor Moderate MajorNatural lhabitat and wild lifeErosion and soil controlDrainage pattern

Water qualityLand use and settlementHistorical and cultural sitesVisual effects and aesthetics

Relocation of people/livestockLand acquisitionReduction of access to roads/water/publicservices/pastureB) EnvironimntaL effec-s=relat dtop prijoctUconstructiorii/'6p"e'Fkon,,7 ~`; ~""'vT: ___________________________

Type of environmental resources Predicted effects/impactsMinor Moderate Major

Natural vegetation and wildlifeLand use and settlementHealth and safetyErosion and silt controlNoise and dustHazardous materials

,C) Enviromnerital J elated toiObllutioniType of pollution Predicted effects/impacts

Minor Moderate Major

Atmospheric pollutionNoise pollution

Heat pollutionSolid waste pollutionLiquid waste pollutionOtlher pollution.D) Impacts .'-EnvironmentDoes the pilot project require large volume of Yes, details: No

constrIuction materials to be taken from local sources(e.g Gravel, stones, water, timber, firewood)?

Does the pilot project require, or lead to, the disposal Yes, details: No

of wastewater or any other solids or liquids intostreams, rivers and lakes?Does the pilot project have human health and safety Yes, details: No

risks, durinig construction or later?Will the pilot project produce solid wastes (includinig Yes, details: No

packagin. oils, or discarded machinery parts)?

ResettlementWill the pilot project involve any land acquisition? Yes, details: No

Will tile pilot project affect buildings, crops, trees, Yes, details. No

business and other assets?Will the pilot project cause involuntary resettlement? Yes, details: No

Indigenous peopleAre tlhere indigenous peoples communities in the are Yes, details: Noof the pilot project?Will the pilot project affect the rights, traditional land Yes, details: Noand water rights of indigenous peoples?

How will indigenlous people participate in the Details: No

environmental and social assessment activitiesWhat mitigation measures will be put in place to Details: No

ensure that IPs do not lose access to resources andland righlts?

Attachment 3 Sample Format of Environment Management PlanENVIRONMENTAL MANAGEMENT PLAN FORMAT

MITIGATION PLANCost Institutional Responsibility Comments

Phase Issue Mitigation Install Operate Install Operate (e.g.,Measure secondary

impacts)ConstrUctio*X

Operation

Decom0-nissioilingDecomm issioning

B. MONITORING PLAN

Cost ResponsibilityPhase What Where is How is the When is the Why is the Install Operate Install Operate

parameter the parameter to parameter to parameteris to be parameter be monitored be monitored - to be

mnonitored? to be / type of frequency of monitored2

monitored2 monitoring measurement (optional)equipment2 or continuous?

Baseline (usuallyfor Category Aprojects only)

Construct

Operate

Decommission