Resettlement Planning Document

Land Acquisition and Resettlement Framework Document stage: Draft Project Number: TA-7216 March 2010 MON: Southeast Gobi Urban and Border Town Development Project The Land Acquisition and Resettlement Plan Framework is a document of the Borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature.

Southeast Gobi Urban and Border Town Development Project _________________________________________________________________________

Land Acquisition and Resettlement Framework

Ministry of Road, Transportation, Construction and Urban Development, Mongolia

March 2010

Abbreviations ADB Asian Development Bank

AP Affected person

AWG Aimag Working Group

CBO Community-based organization

DOR Department of Roads

EMA External monitoring agency

DMS Detailed measurement survey

GAF Grievance action form

GOM Government of Mongolia

LAD Land Administration Department

LAR Land Acquisition and Resettlement

LARF Land Acquisition and Resettlement Framework

LARP Land Acquisition and Resettlement Plan

M&E Monitoring and evaluation

MRTCUD Ministry of Road, Transport, Construction and Urban Development

NGO Nongovernment organization

PIU Project Implementation Unit

PMU Project Management Unit

PRA Property Relations Agency

PUSO Public urban services organization

ROW Right of way

RRP Report and Recommendation of the President (ADB)

SEGUBTDP Southeast Gobi Urban and Border Towns Development Project

SPS Safeguards Policy Statement (2009) of ADB

SR Safeguards Requirement

Notes Currency Unit Togrog (MNT)

MNT 1.00 = $ 0.0007031

$ 1.00 = MNT 1,422.24

Unofficial translation

Symbol

MINISTRY OF ROAD, TRANSPORTATION, CONSTRUCTION AND URBAN DEVELOPMENT OF MONGOLIA

15170 Barilgachdiin talbai 3, Chingeltei duureg, Ulaanbaatar, Mongolia

Tel: (976-11) 31-06-12, Fax: (976-11) 32-29-04 e-mail: webmaster@mrtcud.gov.mn

Date: 26 January 2010

Ref: 8/261

To: MR. ADRIAN RUTHENBERG, COUNTRY DIRECTOR, MNRM We have reviewed a revised Land Acquisition and Resettlement Framework (LARF) and a Land Acquisition and Resettlement Plan (LARP) for road construction subproject in Hanbogd soum under Southeast Gobi Urban and Border Town Development Project and in principle support and have no-objection. Thank you very much for your cooperation.

Sincerely, (signed and sealed) S. OCHIRBAT, DIRECTOR GENERAL, URBAN DEVELOPMENT AND LAND AFFAIRS POLICY DEPARTMENT

Definition of Terms Affected Household: All persons residing under one roof and eating from the same kitchen, who are adversely affected by the Project, or any of its components; may consist of a single nuclear family or an extended family group

Affected People: Any person affected by loss of assets or income due to Project-related changes in the use of land, water or other natural resources

Compensation: Cash or in-kind payment of the replacement cost of an asset lost due to Project-related impacts

Entitlement: Range of measures comprising compensation, income restoration, transfer assistance, income substitution, and relocation, which are due to affected people, depending on the nature of their losses, to restore their economic and social base to its pre-project condition

Host Population: Community residing near the area where the APs are relocated

Income Restoration: Reestablishment of income sources and livelihoods of APs

Involuntary Resettlement: Full or partial, permanent or temporary physical displacement (relocation, loss of residential land or shelter) and economic displacement (loss of land, assets, access to assets, income sources, or means of livelihoods) as a consequence of development projects, compelling APs to rebuild their lives, incomes and asset bases

Land Acquisition: The process whereby a person is compelled by a government agency to acquire all or part of the land a person owns or possesses to the ownership and possession of the government agency for public purpose in return for compensation

Rehabilitation: Compensatory measures provided under the ADB Policy Framework on Involuntary Resettlement other than payment of the replacement cost of acquired assets

Relocation: The physical resettlement of an AP from her/his pre-Project place of residence

Replacement Cost: The value determined to be fair compensation for various types of agricultural and residential land, crops, trees, and other commodities based on current market rates; the cost of rebuilding houses and structures at current market prices of building materials and labor, without depreciation or deductions for salvaged building material

Servitude (easement): A restriction or obligation attached to a property that entitles somebody other than the owner to a specific use of it such as the right to cross it or occupy it temporarily for maintenance of utility services.

Social Preparation: Process of consultation with APs undertaken before key resettlement decisions are made, to build their capacity to deal with resettlement

Temporary Land Use Impacts: When land outside the proposed ROW is required temporarily to carry out construction, persons may be affected in terms of temporary land loss, damage to attachments or disruption of living or business conditions, for which compensation or mitigation is required to offset such impacts

Usufruct: The right to use and profit from land belonging others or a larger social entity, such as a tribe, community of collective Vulnerable Groups: Distinct group of people (poor, elderly, disabled and female headed households) who may suffer disproportionately from resettlement effects

Hatgal

Hanh

Erdenet

Darhan

Baganuur

Nalayh

Altanbulag

Maanit

Tsogt-Ovoo

Bayan-OvooHanbogd

GurvantesTsogttsetsii

Gashuun Suhayt

ErdenetsagaanBichigt

Zamyn-Uud

TamsagbulagMatadMonhhaan

Batnorov

Bayan-Uul

Havirga

Ereentsav

Hutag-Ondor

Hishig Ondor

Harhorin

Nariynteel

BattsengelLun

Selenge

Sumber

Olgiy

Tsengel

Ulaanbayshint

Nogoonnuur

Dayan

Naranbulag

Manhan

Dariv

UyenchYarant

Togrog Buutsagaan

Burgastay

Tayshir

Tudevtey

Tsahir

Tsagaan-UulTes

Ulaangom

Olgiy

Hovd

Altay

Uliastay

Moron

Tsetserleg

BayanhongorArvayheer

Dalanzadgad

Zuunmod

BulganChoybalsan

Baruun-Urt

Ondorhaan

ULAANBAATAR

Mandalgovi

Choyr

Suhbaatar

Saynshand

GOVI-ALTAY

ZAVHAN

UVS

HOVD

BAYAN-OLGIY

BAYANHONGOR

OVORHANGAY

ARHANGAY

HOVSGOL

HENTIY

DORNOGOVI

SUHBAATAR

DORNOD

DUNDGOVI

GOVISUMBER

SELENGE

ORHON

BULGAN

DARHAN-UUL

TOV

OMNOGOVI

R U S S I A N F E D E R A T I O N

PEOPLE'S REPUBLICOF CHINA

Project Aimag

Project Town

National Capital

Aimag Capital

City/Town

Main Road

Provincial Road

Railway

River

Aimag Boundary

International Boundary

Boundaries are not necessarily authoritative.

MONGOLIA

PROPOSED SOUTHEAST GOBIURBAN AND BORDER TOWN DEVELOPMENT PROJECT

Kilometers

0 50 100 200 250150

N

09

-46

78

HR 111 00'Eo

111 00'Eo

96 00'Eo

96 00'Eo

42 00'No 42 00'No

50 00'No50 00'No

Cleared/Updated by :

Edited by :

A. RUTHENBERG, MNRMJAN HANSEN, EARD16 July 2009

RICARDO CHAN, OSEC16 July 2009

Note : First Proof, 5 December 2009Second Proof, 7 December 2009Third Proof, 7 December 2009Fourth Proof, 12 December 2009Fifth Proof, 14 December 2009Sixth Proof, 12 January 2010

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Contents Definition of Terms vi 

Project Location Map vii 

Contents viii 

Executive Summary ix 

A.  Introduction 1 

B.  Description of Project Components and Benefits 1 

C.  Scope of Land Acquisition and Resettlement Impacts 3 

D.  Policy and Legal Framework 4 

E.  Eligibility and Entitlements 11 

F.  Procedure for Preparation of Land Acquisition and Resettlement Plans 16 

G.  Implementation Arrangements 17 

H.  Consultation and Public Participation 18 

I.  Grievance Redress Mechanism 18 

J.  Monitoring and Evaluation 19 

K.  Implementation Schedule 23 

L.  LAR Budget, Finances and Disbursement 26 

M.  Annexure 27 

Annex 1: Letters by the Land Department of the Capital City of Ulaanbaatar and Administration of Land Affairs, Construction, Geodesy and Cartography 27 

Annex 2: Notification (Demand Letter) to Affected Persons by Chingeltei District Land Administration Department 33 

Annex 3: Cabinet Resolution 103 of 2003 on Land Valuation Tariff 35 

Annex 4: Terms of Reference for External Resettlement Monitor 38 

Annex 5: Grievance Action Form 42

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Executive Summary

This Land Acquisition and Resettlement Framework (LARF) is prepared for the Southeast Gobi Urban and Border Town Development Project (SEGUBTDP, the Project) in accordance with the Asian Development Bank's (ADB's) Safeguards Policy Statement (SPS) of 2010. While the proposed loan is for an investment project, this LARF is prepared in light of the rapid and unplanned growth of project towns which may mean land and resettlement issues emerge during project execution. This LARF is prepared for the loan as a whole and its provisions and stipulations are applicable to all its project components. This LARF is based on that developed for Loan 2301-MON, and agreed upon between the Government of Mongolia (GOM) and ADB which establishes a policy framework for compensation eligibility and entitlements for all types of affected persons (APs). It outlines the necessary steps to prepare satisfactory Land Acquisition and Resettlement Plans (LARPs) for project components that have land acquisition and resettlement (LAR) impacts and stipulates arrangements for consultation and public participation, grievance redress, and monitoring and evaluation. Project components and project component sites: The Project includes improvements to basic urban services involving water supply, sanitation, solid waste management, district heating, stormwater drainage and roads improvement in the aimag (provincial) centers of Dalanzadgad and Saynshand; and the soum centres of Hanbogd, Gurvantes, Tsogtsettsii, and Zamyn Uud. Currently LAR impact is anticipated to occur only in the road project component for Hanbogd.

Scope of LAR impact: The presently known land acquisition and resettlement impact is for a single project component in Hanbogd involving 7 affected households, of which 5 will experience partial and 2 full LAR impact. Engineering solutions were found during preliminary design to minimize permanent impact on land and structures. As the project component involves less than 200 persons who experience major impact, this project component is classified as impact category B.

Indigenous people, gender impact and vulnerable APs: Indigenous people, i.e. tribal communities existing outside the cultural and legal mainstream of Mongolian society, are not present in any of the project component sites. Therefore, the ADB's SPS, Safeguards Requirement 2 on Indigenous People will not be triggered by this Project. To ensure a clear understanding and due consideration of the specific needs and problems of female APs and to safeguard their livelihoods, a number of gender provisions will be adopted by the land acquisition and resettlement process of the Project. Vulnerable households and their special needs will be identified in any census or socio-economic survey undertaken in connection with LAR issues and will be specified in the LARPs.

Legal and policy framework: Land acquisition and resettlement by the government for local scale projects in urban areas is based on negotiation and contracts with affected persons according to the Civil Code of Mongolia. The ADB SPS recognizes negotiated land acquisition, as long as there are willing and free buyers and sellers and eligibility and entitlements are clearly defined and agreed. All APs are eligible for entitlements, as stipulated in the LARF for the Project, including owners, possessors, users, legalizable occupants, non-titled occupants and lessees. The eviction of unlicensed APs is a violation of the ADB SPS. All APs who are unlicensed occupants of land in ger areas designated for land allocation are treated as legalizable under the LARF for SEGUBTDP. The eligibility and entitlements for all specific types of losses are summarized in the Entitlement Matrix in Table 4 of this LARF.

Procedure for Preparation of LARP: For all SEGUBTDP project components with LAR impact, LARPs will be prepared. The LARF stipulates a detailed procedure for their preparation, including identification of the scope of LAR, field verification, notification of a cut-off date, census and socio-economic survey, contract negotiations with APs, as well as

x

LARP disclosure and consultation meetings with APs. The aimag and soum Governments are responsible for the preparation of project component LARPs, through their respective PIUs, which will prepare the required LARPs. All project component LARPs will meet ADB SPS requirements and closely follow the provisions of this LARF. The LARPs will be submitted to ADB for review and acceptance prior to commencement of related LAR or civil works activities.

Implementation Arrangements: The PIUs will be responsible for the implementation of the LARPs. In addition Aimag Working Groups (AWGs) will be formed within each aimag to guide and monitor project implementation, including ensuring land acquisition and resettlement safeguard compliance through implementation of the LARPs. The PIUs will ensure the submission of satisfactory LARPs to PMU and ADB. The AWG members will ensure close coordination between all Project stakeholders. The PIUs will conduct a series of training workshops to inform the members of the AWGs about the ADB’s SPS, this LARF and LARP implementation.

Consultation and Public Participation: Information, consultation and participation of APs is ensured through individual and public meetings throughout the LARP preparation and implementation process, during which their rights and entitlements, including grievance procedures, are fully explained and discussed. Drafts of the LARPs in Mongolian are disclosed, discussed and amended in the public consultation meetings and final LARPs are published on the ADB website and made publicly available to APs at the relevant Bagh offices.

Grievance Redress Mechanism: A Grievance Action Form (GAF) has been designed to cover the various aspects of LAR addressed by the LARPs and used in the grievance redress process to log and follow up any grievance. A four-step grievance mechanism with a 5 weeks timeline for each case will be set up, for which the AWGs, Aimag and Soum Governors, and LAD are responsible. Grievances that cannot be resolved by grievance redress mechanisms are referred to the courts.

Monitoring and Evaluation: Monitoring of compliance with the LARPs and the LARF during implementation is carried out by the project component PIUs together with the PMU, as well as by an external monitoring agency (EMA). Based on monthly LAR monitoring reports, the PIUs will report to the PMU, which prepares and submits quarterly reports to the ADB. The Project mid-term review will include an assessment of the progress of LARP implementation. Upon completion of LAR activities in the project components, the Government, through the project aimags will prepare resettlement completion reports for submission to ADB. The PMU will be responsible for engaging an EMA, which will investigate, monitor and evaluate LARP implementation in all project components over a three year period and report semi-annually to the PMU and ADB. Implementation Schedule: A tentative implementation schedule indicating a timeline for LARP design and implementation activities, including a winter period during which APs cannot be relocated and civil works cannot commence, as well as an indicative schedule for LARP preparation and implementation for the project component requiring a LARP are provided. The overall implementation schedule for the Project is from 2010 to 2014.

LAR Budget, Finances and Disbursement: The total LAR implementation cost including the cost of compensation, administration and monitoring is an integral part of the Project cost. Each sub-project LARP will include a compensation strategy and budget with a table of costs for all compensation and rehabilitation expenses including administration and contingencies. Unit rates for each compensated item and the methodology for their calculation must be indicated. To ensure the availability of sufficient funds for all LAR tasks, the MRTCUD and the aimag governments will allocate 100 percent of the cost of compensation at replacement cost and allowances anticipated and estimated in each LARP, plus 10 percent contingencies, before LARP implementation. The Land Administration Departments (LAD) of the respective administrative units (Aimag and Soum), with support from the PIUs and the PMU

xi

resettlement specialist1, will manage the process of formal contractual agreements with APs and of disbursement of compensation for LAR in each project component. No land will be acquired by the government or handed over to the PIUs for commencing construction works without full payment of due compensations to the APs.

1 Due to the very limited amount of resettlement anticipated, there would be a single resettlement specialist engaged at the PMU level.

1

A. Introduction 1. This Land Acquisition and Resettlement Framework (LARF) is prepared for the Southeast Gobi Urban and Border Town Development Project (SEGUBTDP, the Project) in accordance with the Asian Development Bank's (ADB's) Safeguard Policy Statement (SPS) 2009. For project loans with subprojects or components prepared after ABD Board approval a LARF is prepared for the entire Project and its provisions and stipulations are applicable to all its project components. The LARF provides the policy and operational guidelines for the implementation of land acquisition and resettlement tasks arising from related impacts of the project components under the Project, including (i) land acquisition, (ii) acquisition of physical structures and utilities, (iii) loss of livelihoods due to temporary or permanent loss of access to land or other productive assets, and (iv) loss of common/community property resources. A Land Acquisition and Resettlement Plan (LARP) is required as a condition of approval for each project component involving land acquisition and resettlement (LAR) impacts. The LARP will detail the compensation measures adopted and their costs, as well as administrative costs and an implementation schedule. The ADB will assist the Government of Mongolia to supervise the implementation of the Project and help ensure that any necessary land acquisition and resettlement is carried out according to ADB’s SPS and the agreed LARP(s).

2. The Project includes improvements to basic urban services involving water supply, sanitation, solid waste management, district heating, stormwater drainage and roads improvement in the aimag (provincial) centers of Dalanzadgad and Saynshand; and the soum centres of Hanbogd, Gurvantes, Tsogtsettsii, and Zamyn Uud. Currently LAR impact is anticipated to occur only in the road project component for Hanbogd. Although only a single project component has been identified which involved LAR impacts, this LARF is prepared in light of the rapid and unplanned growth of project towns which may mean land and resettlement issues emerge during project execution of other project components. The LARF is based on that prepared for Sector Loan 2301-MON which was endorsed by the GOM and ADB.

3. The LARF establishes a policy framework for compensation eligibility and entitlements for all types of affected persons (APs). It outlines the necessary steps to prepare satisfactory LARPs for project components that have LAR impacts, and thereby establishes comprehensive mechanisms and procedures for the fulfillment of the due diligence requirements for projects with negotiated land acquisition based on contractual agreements. The LARF stipulates arrangements for consultation and public participation, grievance redress, and monitoring and evaluation. LARPs will be prepared based on a detailed measurement survey (DMS), subsequent to the detailed engineering design and ground validation for each project component, or sub-component.

B. Description of Project Components and Benefits 4. The impact of the Project will be enhanced economic development and livability in aimag centers, mining and border towns in Southeast Gobi. The outcome of the Project will be improved urban governance, and expanded access to sustainable infrastructure and services in six towns in Southeast Gobi (refer to the Project Location Map). To achieve these outcomes, the Project will include two parts: Institutional and capacity development (Part A), and Priority infrastructure improvements (Part B).

5. Part A will finance: (i) technical assistance for infrastructure services reforms, (ii) institutional development and capacity building to strengthen urban planning and policy making, (iii) support for regional cooperation, and (iv) project management and project performance monitoring.

6. Part B will finance priority infrastructure improvements providing: (i) water source development, transmission, storage and distribution, allowing increased connections to piped water supply and reducing system leakage; (ii) increased wastewater collection

2

coverage and enhanced capacity for wastewater treatment and effluent reuse; (iii) improved efficiency and coverage of district heating services; (iv) extended power distribution – particularly to ger areas; (v) surfaced central road networks; (vi) development of controlled solid waste landfills and enhanced capacity for solid waste collection; and (in one town) (vii) improved stormwater drainage.

7. In the water supply sector the Project will support high priority proposals to upgrade existing bore wells and provide trunk transmission, distribution and water distribution points (water kiosks) for ger areas. In the three larger towns, the Project will augment the existing water supply systems. In the three small towns, wholly new piped water supply systems will be constructed. Offsite provision in all three small soums will be supplied from the adjacent mining companies which plan to deliver water to reservoir tanks outside the towns. Overall the service levels will provide in-house connections where possible. Thus apartment blocks, houses and all non-residential buildings will have multi-faucet piped water supplies. Where this is not possible or affordable, such as in the ger areas, the aim is to have water kiosks within 300 meters of any town dweller.

8. In the wastewater sector, the Project will rehabilitate and expand the existing sewerage systems in the three larger towns and provide new sewerage systems in the small towns. These sewerage systems will link currently unsewered permanent housing areas to the sewerage system. Wastewater treatment in all cases will use waste stabilization ponds which are simple to construct and manage and involve only modest power requirements. In Gurvantes there is a problem with run-off from the hills and an interceptor drain is included under Part B to protect the town from storm flash flooding.

9. In district heating, the Project will adopt a similar approach with augmentation and some rehabilitation of existing systems in the larger towns and new systems in most of the smaller soum centers. The project will provide new boilers, pumps, and boiler houses in some cases, combined with the replacement of inefficient pipes and exchangers to produce more efficient heating systems.

10. Road improvements are proposed for the two aimag centers and in Gurvantes, Hanbogd and Tsogttsetsii soums to provide better form and structure to the towns that will assist in guiding growth, and reduce dust from driving on existing dirt roads. By defining driving space, the roads will also reduce accidents. Since the cost of asphalt roads in this area would be similar as for concrete roads, and as concrete roads last longer and require less maintenance, it is proposed to use concrete for all roads.

11. The approach to solid waste management will support the ongoing initiatives recently commenced by most local governments. The Project aims to ensure that all waste is collected and transported to sites where it can be recycled or disposed of to sanitary landfill sites. This will entail capping of existing dumpsites, development of new landfill sites and provision of collection and landfill equipment.

12. Table 1 summarizes the physical works included under Part B of the project for each of the six project towns.

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Table 1: Physical Works Included under Part B of the Project

Town Dalanzadgad Tsogttsetsii Hanbogd Gurvantes Saynshand Zamyn-Uud Water Supply

No. of bores - 2 2 3 - 3 km of pipeline 2.0 9.8 9.2 5.9 16.3 32.1 No. of kiosks 6 3 2 3 - 3

Wastewater km of sewers 4.0 3.8 3.3 2.0 23.1 8.3 Treatment plants - New New New Rehab -

District heating No. of boilers - 2 2 2 4 - km of pipeline - 2.4 2.0 3.1 11.5 -

Roads km of roads 2.0 1.8 2.0 2.0 2.0 -

Solid Waste Landfill site 1 1 1 1 1 1 Tractor Trailers - 2 2 2 1 2

Stormwater Drainage km of drain - - - 2.0 - -

C. Scope of Land Acquisition and Resettlement Impacts

i. Types and Severity of Potential Impacts 13. The presently known2 land acquisition and resettlement impacts for project components under the urban service improvement project components are shown in Table 2. During field verification at this project component site by the PPTA team, anticipated LAR impacts were minimized by careful selection of the road alignment.

Table 2: Land Acquisition and Resettlement Impacts (Status November 2009) Project component

AP HH Temporary Impact

Permanent Impact

Partial land acquisition

Full land acquisition

Houses displaced

Loss of business or jobs

Urban Services Improvement Component Hanbogd Road 7 0 7 5 2 2 0 Total Project 7 0 7 5 2 2 0

14. There will be limited permanent impact on land and structures at the project component site, and the acquisition of entire plots of land or displacement of houses will occur only in a small number of cases. Engineering solutions were found during field verification to minimize impact on land and especially houses, by shifting of the road alignment where permitted by sufficient space along the construction corridor. As this project component does not involve more than 200 persons who experience major impact3, according to ADB requirements, this project component is classified as impact category B; a LARP has already been prepared and accepted by ADB.

ii. Indigenous People 15. The project component areas are largely inhabited by the majority ethnic group, the Khalkh. A few people of ethnic minority origin have migrated into the project towns, but they live within the cultural and legal mainstream of Mongolian urban society.4 Indigenous people, i.e. tribal communities existing outside the cultural and legal mainstream of Mongolian

2 At the time of writing of this LARF, a draft LARP has been completed for the Hanbogd Road component. 3 Physical displacement from housing or loss of 10 % or more of productive assets 4 The Khalkh comprise 81.5% of Mongolia’s population, the Buriad 1.7% and the Durvud 2.8%.

4

society, are not present in any of the project component sites. Therefore, the ADB's SPS, Safeguards Requirement 3 on Indigenous People, will not be triggered by this Project.

iii. Gender Impact 16. To ensure a clear understanding and due consideration of the specific needs and problems of female APs and to safeguard their livelihoods, a number of gender provisions will be adopted by the land acquisition and resettlement process of the Project:

• Women will receive compensation pertaining to their economic activities in their name.

• Female heads of households will be registered as the recipients of compensation and rehabilitation measures due to their households.

• Land titles for replacement land will be registered in the name of women, when land lost to the project was legally owned by women.5

• Women will be included in the participation process in all consultation meetings alongside male APs.

• Due consideration is to be given to complaints and grievances lodged by affected women in the LAR process.

• Access for women to project related employment opportunities and targeted needs based special assistance will be guaranteed in case of loss of livelihood.

iv. Vulnerable Households 17. Vulnerability indicators are established to identify vulnerable people and their households among APs. Vulnerable households are those with one or a combination of the following conditions:

• Poverty line or less per capita per month income6

• Female headed HH w/out children/others contributing income

• Elderly head of HH without children/others contributing income

• Disabled persons.

Vulnerable households and their special needs will be identified in the census and socio-economic survey and specified in the LARPs. Subsequent consultation and measures for the re-establishment and enhancement of their livelihoods will be taken to safeguard against impoverishment and to reduce their vulnerability.

D. Policy and Legal Framework 18. The main objective of this LARF is to provide a tool that will ensure that all APs at the proposed project component sites receive the appropriate assistance from the project in a timely manner to enable them to maintain a level of well-being, which is at least equivalent to or better than what it would have been without the project component. To achieve this, the APs must be fully informed, closely consulted, compensated for their losses, assisted to gain possession or ownership of replacement land and to reestablish their enterprises, and participate in any decision making pertinent to resettlement. Special measures will be provided for APs who do not hold licenses or certificates to posses or own land.

19. The key Mongolian laws regulating access to ownership or possession of land and thereby land acquisition are: 5 If, according to Article 126.2.4 of the Civil Code, a property is considered joint family property, land acquisition

will require the other spouse’s consent and notarized permission (see LARF section D, paragraphs 26 and 30). 6 Poverty lines for the project component locations are as follows: Omnogovi: MNT 90,600; Dornogovi: MNT

90,100.

5

• The Law of Mongolia on Land (Land Law), 2002, amendments 2003/04/05/06;

• The Law on Allocation of Land to Mongolian Citizens for Ownership (Land Allocation Law), 2003, amendments 2005/08; and

• The Civil Code of Mongolia, 2002.

According to Article 3 of the Law of Mongolia on Land there are 3 main ways to gain access to land, including possession, ownership and usage:

• Section 3.1.2: “to own land” means to be in legitimate control of land with the right to dispose of this land. This establishes private property of land for Mongolian citizens without time limits. Land allocation and the size of plots are tied to specific uses, including family needs and commercial use, and land or allocation must be included in land management plans of the respective administrative units. Family land is allocated once and for free; the size varies with the type administrative unit as well, being 0.07 hectare in Capital City and aimag urban areas and 0.35 hectares in aimag rural areas. Land for other uses may be allocated by sale or auction. Ownership rights must be registered in accordance with the Law on Registration of Property Ownership Rights and other related Rights.

• Section 3.1.3: “to possess land” means to be in legitimate control of the land in accordance with purpose of its use and terms and conditions specified in respective contracts (persons with this right can now apply for the right of ownership). In this case the State retains ownership of the land. Possession may be limited in time (15-60 years), but renewed for another 40 years. Households, government organizations and companies and organizations may possess land and size limits apply for specific contractually determined uses. Contracts for possession must be registered in the national registry.

• Section 3.1.4: “to use land” means to undertake a legitimate and concrete activity to make use of some of the land’s characteristics in accordance with contracts made with owners and possessors of land. Land use rights are given to Mongolian citizens or foreign countries, foreign legal entities, foreign citizens and stateless persons, diplomatic missions and consulates, as well as resident offices of international organizations for 5 years and are renewable for 5 years at a time.

20. The Law of Mongolia on Land indicates the authority of the various state institutions7 and officials8, fees, land management regulations, procedures for application for licenses, rights and privileges, duties, and sanctions, with respect to ownership, possession and use of land. The Law of on Allocation of Land to Mongolian Citizens for Ownership stipulates the specific regulations with respect to ownership of land.

21. Considering the comparatively recent institutionalization of the rights of possession and ownership in Mongolia in 2002 and 2003, respectively, some occupants of land are not yet legally recognized as possessors or owners, as they are not yet aware of the process of application, or are still financially unable of applying to become legal possessors or owners. It may also be that the land they are now occupying or possessing is not yet included the aimag’s Land Management Plans as eligible for ownership. Some occupants of land who have made applications have also yet to be granted ownership or possession rights. In principle, the law permits all of these occupants of land to apply for and be granted

7 State Ikh Khural (state legislative body of Mongolia), Cabinet, State Central Administrative Authority in Charge

of Land Issues (presently the Ministry of Roads, Transport, Construction and Urban Development), Citizen’s Representative Khurals (city/aimag and district legislative bodies), and Public Khurals (sub-district or Khoroo/Baghs legislative bodies).

8 Governors of Aimags (provinces), Governors of Soums (provincial districts), and Governors of Baghs (sub-districts of soums).

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possession or ownership of the land, provided the land is designated as land for allocation by the government.

22. Mongolia does not have a dedicated and comprehensive Land Acquisition Law as do other countries. Legal provisions regulating LAR must be derived mainly from the above mentioned laws, as well as from provisions in other specialized laws, such as the Law on Auto Roads or the Mongolian Law on Water Supply and Sewerage System Utilities of Cities and Settlements. The acquisition of land for use by the Project is constrained by the fact that in Mongolia the ability of the State to ‘take back land’ through invoking eminent domain is restricted to ‘land for special needs of the state’. 9 Article 16 of the Land Law does not include roads, water supply and sewage networks or solid waste landfill sites among the special needs. Article 32 of the Land Allocation Law includes among the special needs ‘to build roads, lines and networks and other objects of national scale’ (32.1.3).10 Article 13 of the Land Law defines land under roads and networks as ‘land outside cities, villages and other urban settlements’ (13.1). On the other hand, land of cities, villages and other urban settlements are defined in Article 12 of the Land Law to ‘include land under urban constructions and buildings … and urban common tenure land’. Common tenure land includes ‘urban streets, squares, roads … waste disposal and cleaning sites and other similar areas’ (12.1). Moreover, Article 3 of the Law on Auto Roads defines as national scale roads those which connect the capital city to aimag cities, aimag cities to aimag cities and aimag cities to border points and defines local scale roads as those which connect soums, districts, cities and urban settlements in the territory of the capital city and aimags (3.1.8). Consequently, urban roads, water supply and sewage facilities, district heating facilities and landfill sites such as are to be constructed under the Project, will come under land of cities, villages and other urban settlements and not under roads and networks located outside cities, villages and other urban settlements. Accordingly, the Project roads and other facilities are not of a national scale.

23. The matter of the applicability of the provisions for taking back land for special needs of the state in Articles 42 and 43 of the Land Law and Articles 32 and 37 of the Land Allocation Law has been subject to detailed discussions with the Director of the Construction, Housing and Public Utilities Policy Department of the Ministry of Road, Transport, Construction and Urban Development, the Deputy Director of the Administration of Land Affairs, Construction, Geodesy and Cartography (the highest government organization in charge of land management), the Director of the Land Department of the Capital City of Ulaanbaatar and the Directors and staff of the District Land Administration Departments (LAD) in the Chingeltei and Songino Khairkhan Districts of Ulaanbaatar, under Loan 2301-MON. The consensus among these government officers is that the provisions of the above mentioned articles sanctioning the power of eminent domain for national scale projects (and thus including a one year waiting period between an initial agreement with affected landowners and the taking back of land) do not apply to the Project’s local scale urban roads and other facilities. Instead, the acquisition of land needs to be achieved through agreements with affected land owners or possessors in accordance with civil law, i.e. the Civil Code of Mongolia. After consultation with their law departments, the Administration of Land Affairs, Construction, Geodesy and Cartography and the Land Department of the Capital City of Ulaanbaatar provided the 2301-MON Project with letters confirming this interpretation of the legal context of LAR for the Project (see Annex 1).

9 This updated LARF contrasts crucially with the 2006 LARF for loan 2031-MON in its assessment of the

applicability of Mongolian laws to LAR under the Project, which had erroneously assumed that involuntary land acquisition and resettlement under the Project was possible according to articles 32 and 37 of the Land Allocation Law. Thus a fundamental revision of the Policy and Legal Framework section of the LARF for 2301-MON became necessary.

10 All numbering of the articles of laws refers to the amended Land Law of 22 December 2006 and the amended Land Allocation Law of 22 May 2008.

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24. The provisions of the Civil Code of 2002 provide a legal framework for land acquisition which place LAR for local scale infrastructure facilities, including roads, unequivocally in the context of negotiated land acquisition and resettlement, as this implies that the state and affected persons engage with each other contractually as equal and autonomous legal persons and participants in a civil legal relationship (Article 1). Citizens and organizations, as well as aimags, the capital city, soums and districts are able to enter into civil legal relations with regard to objects of material and non-materials wealth and their acquisition and possession (Articles 6, 7 and 8). Chapter 10 of the Civil Code defines property and assets, including land and other immovable property. Chapter 11 details provisions for their possession by legal acquisition and Chapter 12 for property ownership by individuals and other legal persons. The Civil Code in Article 101 provides general terms for the possession, use and disposal of property (further elaborated in Articles 109 to 112), but refers to the subsequently enacted Land Law and Land Allocation Law with regard to land ownership and possession. A number of special provisions pertaining to common property ownership (Article 108), common property of family members (Articles 126 and 128) and easements (servitude) (Article 151) may be relevant to specific cases in the Project. Central to a negotiated agreement on transfer of land are the stipulations on contract in Chapter 15. The key provisions relevant to LAR under the Project will be detailed in Table 3 below.

25. In the Land Allocation Law the right of a landowner to dispose of owned land through sale ‘according to relevant procedures’ (notarized contract) is guaranteed in Article 27. Possessors, according to Articles 35 and 38 of the Land Law, are also entitled to transfer their possession licenses via a notarized contract, but need to seek the approval of the governor of the soum or district.

26. The actual local practice of LAR among District or Soum and Khoroo or Bagh level land administration officers, sanctioned by the Directors of the Capital City or Aimag Land Administration Departments, does to some extent reflect the legal framework of the Civil Law based on contracts between autonomous legal persons, but also maintains certain elements of involuntary land acquisition and resettlement. After identification of the required properties, affected persons are sent official notifications or ‘demand letters’ by the District Land Administration Departments (see Annex 2), often repeatedly, if no positive response to the government’s claim to land is forthcoming. Thereafter, negotiations about the terms of compensation take place with titled APs (owners and possessors) and eventually a written agreement is reached. The land administration officers generally follow the cabinet resolution 103 of 13 April 2003; see Annex 3), which determines land valuation tariffs (e.g., MNT 13,200 per m2 in the case of UB ger areas) but apparently need to use some flexibility in arriving at a final agreed rate with APs. Once 50 percent of the agreed compensation is paid, the land is acquired; when fences have been moved or land is vacated so construction works can commence, the remaining 50 percent is paid. Compensation for structures follows detailed assessment and application of unit rates based on market prices of construction and services, minus depreciation, as assessed by the local Property Relations Agency (PRA). Non-titled occupants of land are considered illegal land users and are evicted on the basis of Article 27.4 of the Land Law, which states that ‘possessing land without a valid license is prohibited’.

27. Although there is clearly no legal basis for eminent domain in local scale projects which do not fall under the special needs of the State, the land administration officers’ practice of sending demand letters with compulsory dates for the taking back of land and threats of sanctions (loss of the right to possess or own land in case of non-compliance) intimidates the APs.

28. Table 3 outlines the key provisions of Mongolian laws and practices relevant to LAR and indicates their compatibility or inconsistency with ADB’s SPS requirements.

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Table 3: Comparison of LAR related provisions in Mongolian Law and the ADB Safeguards Policy Statement

LAR issues Provisions of Mongolian law ADB policy requirements Involuntary LAR Invoking eminent domain is only legally

recognized when taking back land for special needs of the State including roads, lines and networks and other objects of national scale (Land Allocation Law, Articles 32 and 37; Land Law, Articles 42 and 43). This law does not apply to the Project. Current practice by government in local scale projects entails a demand letter with threat of sanctions and offer of payment of compensation.

Eminent domain is generally recognized and subject to policy provisions aiming at avoiding and minimizing LAR and replacement of lost assets and rehabilitation of livelihoods. APs to be at least as well-off as without project. (SPS, SR 2, para 5)

Negotiated LAR The Civil Code of Mongolia is the legal basis for contractual agreements on the transfer of land in the ROW from APs to the government (Chapter 15, Articles 1, 6, 7, 8, 109 and112, among others).

Recognition of negotiated contract based land acquisition (negotiated settlement), where there is a willing buyer and a willing seller, which is verified and documented by an independent third party (SPS, IR safeguards policy principle 6; SR 2, para. 25 states “A negotiated settlement will offer adequate and fair price for land and/or other assets. The borrower/client will ensure that any negotiations with displaced persons openly address the risks of asymmetry of information and bargaining power of the parties involved in such transactions. For this purpose, the borrower/client will engage an independent external party to document the negotiation and settlement processes”).

Eligible APs Licensed owners, possessors and users of land can transfer their titles to other legal persons recognized under the Land Law (Articles 35 and 38) and the Land Allocation Law (Article 27). Non-titled occupants of land as illegal possessors are not eligible to transfer the land occupied or receive compensation (Land Law, Article 27.4). The Civil Code recognizes the right of a long term non-owner occupant of ownerless immovable property (incl. land) to own it after 15 years, if registered in the State register (104.2).

Lack of formal legal title to land by any APs is not a bar to ADB policy entitlements. Titled, legalizable, i.e. persons who have claims to land that are recognizable under national laws, and non-titled APs are eligible to receive different entitlements. Titled and legalizable APs are entitled to compensation and rehabilitation. Non-titled APs are entitled to livelihood restoration, but may also receive replacement land. Non-titled APs are eligible for entitlements such that they are no worse off than before the project. All APs are entitled to compensation at replacement cost of non-land assets. (SPS, SR2, para 7-8) APs without possession or ownership license but occupying land in areas designated for land allocation or possession can be recognized as legalizable and thus are eligible for fair compensation and rehabilitation entitlements under the SPS. People who illegally occupy the designated project LAR sites after the cut-off are not eligible for compensation, and may be evicted at their own cost.

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LAR issues Provisions of Mongolian law ADB policy requirements Compensation for land

Contractually agreed payment for land transferred to the government. Local practice applies the government land valuation tariff (Cabinet Resolution 103, 2003), but negotiates with APs as well. Replacement land can be provided if AP’s entire land or large part thereof is acquired.

Land compensation at replacement cost based on land valuation at average market value, plus transaction costs, interest accrued, transition and restoration costs and other applicable payments. (SPS, SR2, para 10)

Compensation for structures

Contractually agreed payment for transfer of structures located on land acquired. The value of structures is determined at market rates, with depreciation deducted from gross value of the structure.

Valuation of structures is based on current market value, plus transaction costs, interest accrued, transition and restoration costs and other applicable payments, i.e. replacement cost of new construction of the structure without deduction of depreciation. APs can be permitted to salvage materials. (SPS, SR2, para 10)

Joint property ownership

The Civil Code recognizes common property ownership and family property rights (Articles 108, and 125-128). Common property ownership requires permission of other owners to dispose of part of the property (108.4). Family property includes ‘other properties accrued since the marriage, notwithstanding in which name of spouses or family members the property is registered’ (126.2.4). Disposal of immovable (incl. land) family property requires mutual agreement (128.1) and certified written permission from an adult family member (128.2).

No conflict with SPS. Joint signatures are encouraged.

Easement (property servitude)

Legal provision for easements or property servitude, allowing the use of another person’s property for specific public or private purposes is permitted under local law; mutual agreement and payment of a fee are required (Civil Code, Article 151, Land Law, Article 48 and Land Allocation Law, Article 33).

No conflict with SPS.

Rental of land or house

The Civil Code, Chapter 25 regulates the lease of property, including land and houses. If ownership is transferred the new owner incurs all rights and obligations of a lessor (Article 297). No provisions for lessee rights in case of land acquisition for a project, except that termination of a lease requires 3 months notice (Article 294.3)

Lessee is considered a non-titled AP and eligible to receive entitlements based on the type and degree of impacts.

Community and public resource losses

Affected community and public assets can be transferred through contractual agreement under the Civil Code. The cost of moving affected infrastructure is included in cost of civil works under the Project.

Common property resources or public structures and infrastructure affected by LAR are covered by the SPS provisions.

Income and livelihood rehabilitation

No provisions in contractual agreements for transfer of property.

Assistance for economic and social rehabilitation due to loss of jobs, incomes and livelihoods, including (i) income compensation or support for the period of interruption of business or employment, and (ii) priority employment in project civil works, especially to poor and vulnerable households. (SPS, SR 2, para. 12)

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LAR issues Provisions of Mongolian law ADB policy requirements Relocation and transaction costs

The Mongolian Law on State Registration of Property Allocation Rights and Other Related Rights requires payment of registration duties and service fees for the registration of immovable property with the State Administrative Authority in Charge of State Registration of Property Rights (Article 9). All registration and other fees, as well as cost of relocation, are responsibility of parties to a contract and can be included in a contract.

Relocation and transfer expenses, including fees for the registration of properties and other administrative charges, are part of the replacement cost of lost assets and included in compensation. SPS, SR2, para 10)

Grievance procedure The Land Law refers disputes over land to the governors of administrative units and eventually the courts (Article 60). The Civil Code and Land Allocation Law refer various types of disputes to the courts.

An adequate grievance redress mechanism for affected people is required. SPS, SR2, para 29)

LARP information disclosure and public consultation

No provision for public consultation and information disclosure. In practice, all cases involve a period of negotiation.

APs are to be fully informed and closely consulted on compensation and resettlement options. Draft, final and revised LARPs are to be disclosed and discussed, as well as published on ADB’s website. SPS, SR2, para 26-27)

Cut-off date Not applicable An eligibility cut-off date is to be set when the project is officially notified, the project area is delineated or the census of the AP population is taken, to prevent influx of non-eligible persons and land speculation. SPS, SR2, para 8)

Right of way Local area main streets require a 3.5m width for each lane as well as a sidewalk width of 1.5m for each side (Construction Standard and Procedure of Mongolia BNBD 30-01-04, paragraph 6.24); in addition the ROW of local main streets is determined by drainage works and other safety features. Water pipes up to 1000mm diameter require a safety zone of 10m (5m from center of pipe) in dry soil. It may be narrowed in built-up areas. (Mongolian Law on Water Supply and Sewerage System Utility of Cities and Settlements, Article12.6; Construction Standard and Procedure of Mongolia BNBD 40-02-06, paragraph 10.20).

No conflict with SPS.

Notification period for vacating property and commencement of civil works

Time period for vacating a property may be defined in contract. Civil works commence in parallel with acquisition of property, but without defined waiting period.

Cash compensation and/or replacement of assets must be completed before displacement; LAR procedures must be completed and rehabilitation measures in place before commencement of civil works on the affected project. SPS, SR2, para 14)

29. There are several significant policy gaps between the Mongolian legal framework and the ADB SPS with respect to LAR. According to Mongolian law or practice:

• Non-titled occupants of land (without ownership or possession license), including lessees of land and structures, are not eligible for compensation and rehabilitation entitlements.

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• Compensation for affected land is based on a government compensation tariff, not market rates, although there is room for negotiation with individual APs.

• A depreciation coefficient is applied in the valuation of affected structures.

• Income and livelihood rehabilitation is not normally considered in local LAR practice.

• Transaction costs are not included in compensation payments.

• There are no project internal grievance procedures preceding dispute resolution by governors and the courts.

• Public consultation and information disclosure is not practiced.

• An eligibility cut-off date is not declared.

• There is no limitation on commencement of civil works until after completion of all LAR procedures.

30. To bridge the gap between Mongolian Law and ADB SPS the following section E provides a policy framework and entitlement provisions, which integrate both, while ADB policy requirements prevail in cases of discrepancies.

E. Eligibility and Entitlements 31. To establish a land acquisition and resettlement policy framework with clear eligibility and entitlement provisions for the Project, which addresses the gaps between local laws or practice and the ADB SPS, the following measures will be adopted:

I. The Project will adopt a negotiated LAR practice involving contractual agreements negotiated between APs and the Land Administration Department on the basis of the Civil Code of Mongolia. The following safeguards will be observed:

a. All compensation and allowances will be determined and paid or provided as specified in the contractual agreements.11

b. The APs, regardless of whether they are titled or non-titled, will not be served notices or demand letters regarding claims by the government to their properties.

c. All LAR-related notification of APs and negotiation of agreements will be carried out by the Project staff and their government partners12 in individual as well as in public consultations with the APs. The process of notification and consultations is specified in sections F and H.

d. All agreements will be certified by a notary and registered with the State Administrative Authority in Charge of State Registration of Property Rights. The parties to the contracts will retain their own legal copies.

e. Adequate grievance redress mechanisms will be established.

f. Bagh governors and land administrators shall assist in identifying, consulting, and formulating with APs and the Project staff special measures such as allocation of new plots and income restoration schemes for affected vulnerable persons.

11 If feasible, the provision of employment in Project civil works to poor and vulnerable APs, if they desire so, will

be included in the contracts. 12 The key government partners are the officers of the Aimag and Soum Land Administration Department and of

the Property Relations Agency or other offices in charge of valuation of non-land immovable property.

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II. All APs will be eligible for compensation and rehabilitation entitlements irrespective of their property status, including unlicensed occupants of land, and of the type of use of their property (residential, commercial, public or community13).

III. Unlicensed occupants of land in areas designated by GOM for past, present or future land allocation will be treated as legalizable APs and given ownership licenses for the remainder of partially affected land or, in the case of full loss of a plot of land, provided with replacement land and a license of ownership within 3 months of conclusion of a contractual agreement between the government and the AP. They will be registered with the State Administrative Authority in Charge of State Registration of Property Rights.14

IV. Affected land will be compensated either at replacement cost based on market rates for comparable land or the applicable government compensation tariff, whichever is higher, or, in the case of full loss of a plot of land, with replacement land, including land preparation and restoration of utility services (electricity, water etc), as applicable. The District Land Administration Department will assist the APs to identify and approve the relocation plot. The loss of 50 percent or more of a plot is considered a full loss eligible for compensation for the entire plot, if the AP so desires.

V. Affected possessors, in case of partial loss of less than 50 percent of their land, will transfer their license for the affected plot to the GOM and retain the possessor license for the remaining plot. Their possessor licenses will not be cancelled or subject to automatic expiration. In case of a full loss of land they will be provided with a replacement plot and ownership licenses with state registration.

VI. Affected users of land with use licenses will be provided with replacement plots in similar locations suitable to business operations and new use licenses or, if possible and desired, with a license of ownership, within 3 months of conclusion of a contractual agreement between the government and the AP.

VII. All APs agreeing to receive replacement land or APs with pending license approval for ownership or possession or APs with possession licenses seeking ownership status, will be provided with ownership licenses within 3 months of conclusion of a contractual agreement between the government and the AP and will be registered with the State Administrative Authority in Charge of State Registration of Property Rights.

VIII. Affected structures15 will be compensated at replacement cost based on prevailing market rates for comparable types of structures without deduction of depreciation. Materials may also be salvaged by the APs.

IX. In cases of joint property ownership, the written notarized consent of the partners in a common property relationship or of an adult family member will be required.

X. Temporary impact outside the Right of Way (ROW) due to construction disturbances will be handled through establishment of temporary property servitude (easement) by the government over the temporarily affected land based on an agreement with the APs on the purpose (removal of fence, construction activity for laying of pipelines and restoration of the land and fences), duration (construction period at specific site) and compensation fee.

XI. Land lessees, including those living in gers, shall be compensated for their relocation costs, including assistance in transporting the ger, and allocated a plot for possession

13 Not applicable if the replacement of public structures (electricity, water supply lines, etc) is covered under civil

works contracts. 14 In the unlikely case of occupation of land by an AP in an area not designated for allocation of land, the AP will

be provided with ownership of a new plot in a designated area and given the necessary assistance. 15 Including houses, fences, sheds, latrines, garages and other immovable structures built on affected land.

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or ownership16, based on applicable laws or provided cash refund at rental fee rate and proportionate to duration of remaining lease period, if a plot isn’t required.

XII. Loss of income will be compensated through short-term financial compensation equivalent to the loss, i.e. for the period of interruption of business or employment. Vulnerable and poor households will also be provided with employment opportunities at commensurate skill levels by the Project as available.17

XIII. All relocation, transfer and transaction expenses (fees and duties) will either be waived by government or included in the contract price of the affected properties.

XIV. The Project will establish an accessible and responsive project internal grievance procedure, as indicated in section I.

XV. ADB SPS information disclosure and public consultation provisions will be observed, as indicated in section H.

XVI. An eligibility cut-off date will be set for each project component with LAR impact at the time of the AP census and detailed measurement of affected land and property.

XVII. The time periods between conclusion of a contractual agreement with 75 percent payment of compensation and the permanent acquisition of an affected asset will be determined as follows:

a. Affected plot involving only the moving back of fences and acquisition of a portion of land, without housing structures18 (residential or business): within 2 months.

b. Replacement plot with ownership license for full acquisition of entire plot, without housing structures: within 3 months.

c. Acquisition of a partial plot with a housing structure, where the structure is to be rebuilt on the remaining plot: within 5 months, and in any event before the APs are required to move.

d. Full acquisition of entire plot with housing structure, where the structure is to be rebuilt on a replacement plot: within 6 months, and in any event before the APs are required to move.

e. Temporarily affected plots will have fences removed and restored at the specific time of construction of pipelines at that location during the civil works period; 2 weeks notice will be given.

f. Lessees must be given 3 months notice of termination of their lease in accordance with the Civil Code.

XVIII. Civil works on the affected sections of the projects where LAR is required, shall not commence unless all compensation, relocation and construction activities under section XVII a – d have been completed and short-term financial assistance for loss of income has been paid.

XIX. In accordance with the SPS, the design and implementation of the project components under SEGUBTDP will make every effort to avoid and minimize land acquisition and resettlement impacts, including temporary impacts during construction.19

16 If an AP is not eligible for ownership or possession, a license for land use will be given. 17 If the required skills are not available, the contractor will provide basic training to the employed APs. 18 Small structures (other than houses) can be rebuilt within the time periods stipulated for partial acquisition of

otherwise empty land. 19 In case of, temporary disruption to services (local roads, water, electricity, telephone) these services will be

restored within 48 hours or temporary alternative solutions to provide these services for the time of construction impact will be provided.

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32. The application of policies, laws and regulations pertaining to LAR for this Project are summarized in the Entitlement Matrix in Table 4. Each AP may experience a combination of the losses indicated in the first column. Each case must be investigated and determined carefully so that all possible losses of the AP are covered.

Table 4: Entitlement Matrix Type of Loss Specification Eligibility Compensation entitlements

Owner, possessor20

• Cash compensation at market rates or the government compensation tariff, whichever is higher, based on contractual agreement

• All taxes, registration and transfer costs are waived or included in compensation price

Legalizable occupant of land

• Ownership license and State registration for remaining land will be provided by government21;

• All taxes, registration and transfer costs are waived or included in compensation price

User • Continuation of use license on remaining land

Partial loss of plot (<50%)

Lessee The AP may choose between the following alternatives: • Allocation of plot with ownership license and State

registration • All taxes, registration and transfer costs are waived or

included in compensation price OR

• Cash refund at rental fee rate and proportionate to duration of remaining lease period

Owner, possessor

The AP may choose between the following alternatives: • Land for land compensation through provision of

replacement plot of comparable value and location as lost plot;

• Ownership license and State registration; OR

• Cash compensation at market rates or the government compensation tariff, whichever is higher, based on contractual agreement

• All taxes, registration and transfer costs are waived or included in compensation price

Legalizable occupant of land

• Land for land compensation through provision of replacement plot of comparable value and location as lost plot22;

• Ownership license and State registration; • All taxes, registration and transfer costs are waived or

included in compensation price

LAND (residential/ commercial/public/ community)

Full loss of plot (=>50%)

User • Replacement plot with use license OR, if feasible and desired

• Ownership license and State registration; • All taxes, registration and transfer costs are waived or

included in compensation price

20 If the remaining land is smaller than 350m2, the AP may opt to receive a new replacement plot instead of cash

compensation and will give up the entire old plot. 21 If the unlicensed AP has occupied more than 700m2 of land (the legal allocation limit per person in urban

areas), the balance land, if any, may be either owned and registered in the name of a family member or bought from the government at the government land tariff. A landowner already owning 700m2 may acquire the balance land as additional possessed land.

22 See footnote 22.

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Type of Loss Specification Eligibility Compensation entitlements Lessee The AP may chose between the following alternatives:

• Allocation of plot with ownership license and State registration

• All taxes, registration and transfer costs are waived or included in compensation price OR

• Cash refund at rental fee rate and proportionate to duration of remaining lease period

Moving back of fences

Owner, possessor, legalizable occupant of land

The AP may choose between the following alternatives: • Cash compensation for relocation of fence at market

rate without deduction of depreciation, based on contractual agreement OR

• Replacement/reconstruction of the fence by the Project owner/contractor

Alteration to structure

Owner, possessor, legalizable occupant of land

• Cash compensation for lost part of structure and reconstruction of remaining structure at market rate without deduction of depreciation, based on contractual agreement

Full loss of structure and relocation

Owner, possessor, legalizable occupant of land

• Cash compensation for replacement of lost structure at market rate without deduction of depreciation, based on contractual agreement

STRUCTURES (residential/ commercial/public/ community)23

Moving or relocation of ger

Owner, possessor, legalizable occupant of land, lessee

• Cash compensation for cost of taking down and raising of ger and for transport, as applicable; to be included in contractual agreement

Temporary disturbance

Removal of fence, civil works on land outside ROW, restoration of land and fences

Owner, possessor, legalizable occupant of land

• Cash compensation fee stipulated in agreement on temporary servitude

• All taxes, registration and transfer costs are waived or included in compensation price

• Access to land and residences • Fences will be moved by civil works contractor

Businesses Any business loss due to LAR or construction activities by Project

All APs so affected

• Cash compensation equal to income during interruption period to be included in contractual agreement

Employment Any employment loss due to LAR or construction activities

All laid-off employees of affected businesses

• Cash compensation for lost wages for the period of interruption of employment; to be included in contractual agreement between employer and project24

Other provisions Specification Eligibility Compensation entitlements

Relocation Transport/ transition costs

All APs to be relocated

• Provision of allowances to cover transport costs on actual cost basis at current market rates; to be included in contractual agreement

• Assistance to find an alternative plot or to find comparable house to rent, as applicable

23 ‘Residential’ refers to any structure used as a private dwelling, including houses and gers. ‘Commercial’ refers

to any structure used for business and manufacturing activities, including small shops, factories, offices, workshops and garages.

24 The contract will stipulate the continuation of wage or salary payments by the employer to the employees. This will be monitored by the PIU and by external project monitors.

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Other provisions Specification Eligibility Compensation entitlements Permanent loss of livelihood

All vulnerable APs

• Preferential employment in project-related workforce • Short-term cash assistance up to a maximum of six

months at guaranteed lowest living level and assistance in reconstitution of business or employment

Loss of land All vulnerable APs

• Assistance with preparation of contracts and administrative process of land transfer

Loss of structure All vulnerable APs

• Assistance with house construction (minimum standard guaranteed), registration of property titles, relocation expenses, minimum housing guarantee

Vulnerable AP (refer to definition of terms)

Temporary disturbance

All vulnerable APs

• Preferential treatment to avoid or mitigate as quickly as possible

Unidentified Losses Unanticipated impacts

All APs • To be identified during project component implementation; measures will be formulated as appropriate according to ADB policy and reported to ADB prior to implementation

F. Procedure for Preparation of Land Acquisition and Resettlement Plans 33. For all SEGUBTDP project components with LAR impact, LARPs will need to be prepared. Responsibility for the preparation of project component LARPs lies with the aimag or soum Governments. The respective PIUs will prepare the required LARPs. The PMU will support, guide and, together with the PIUs, monitor the process of LARP preparation and implementation. All project component LARPs will meet ADB SPS requirements, closely follow the provisions of this LARF and observe the following procedure:

a) Identification of scope of LAR for every project component (impact category A, B or C).

b) Field verification and modification of design of infrastructure facility, as far as technically feasible, to avoid and minimize LAR impact.

c) Preparation of map of final design of infrastructure facility, ROW and LAR impacts, with design engineers.

d) Request of AP lists and cadastral maps, detailed measurement survey and land valuation, as well as valuation of affected non-land assets from LAD and PRA, respectively, on the basis of mapped LAR impact.

e) Census of all APs and inventory of affected land, property and income losses,

f) Notification of cut-off date and notification of APs with new notification form of Land Administration Department to be designed in cooperation with LAR Project staff.

g) Socio-economic sample 25 household survey and identification of vulnerable households/persons.

h) Preparation of draft LARP based on consultation with individual APs, including impact assessment, compensation standards, relocation and livelihood rehabilitation plans, itemized compensation and resettlement budget, institutional arrangements and grievance mechanism, implementation schedule and internal and external monitoring and evaluation procedure.

i) Disclosure of Draft LARP and formal consultation meetings with APs.

j) Negotiation of contracts with individual APs.

k) Finalization of LARP.

25 Survey of least 10% of affected people and 20% of seriously affected people

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l) MRTCUD endorsement and submission to ADB for review and approval.

m) Disclosure of approved LARP (locally and on ADB website).

n) Implementation of LARP.

G. Implementation Arrangements 34. The aimag-level PIU will be responsible for the implementation of the LARPs. An Aimag Working Group (AWG)26 will be formed within each project aimag to guide and assist the PIU, and ensure resettlement safeguard compliance. The AWG will also be responsible for grievance redress. Supported as necessary by the PMU, the local PIUs will submit satisfactory LARPs to PMU and ADB for review and acceptance prior to any land acquisition or resettlement, and the commencement of related civil works.

35. The PIUs will conduct training workshops to ensure the members of the AWGs will be fully informed about the ADB’s SPS, this LARF and the implementation of the LARPs.

36. The main activities of the PIU in respect of resettlement are as follows:

• Participate in public consultation meetings as indicated in Section H of this LARF.

• Inform and update APs on the implementation schedule and other LAR related activities requiring AP participation.

• Inform APs about the grievance procedure.

• Remind and assist the APs to prepare all the necessary documents pertaining to the preparation of contractual agreements and payment of compensation, i.e. licenses of possession or ownership and transfer agreements for land.

• Inform the APs about the schedule of payments, relocation arrangements, if any, and the commencement of civil works once the compensation and entitlement estimates have been completed for each AP.

• Validate the inventory of affected assets, and negotiate contractual agreements with the affected households.

• Once the AP agrees, contractual agreements indicating the negotiated terms for each AP will be prepared and signed by the concerned AP, and notarized by a registered notary. After completing all the necessary agreements, the PIU will inform the APs about the date, venue, and time of the payment of agreed property transfer prices and other compensation or entitlements.

• The PIU will work with APs and the Baghs and facilitate communication and monitoring the LAR process.

• Provide an updated land management map prepared by the Aimag LAD indicating all lands that are eligible for ownership to APs to be relocated and assist the process of allocation of land ownership to these APs.

• The aimag or soum Governor will review and resolve the applications within 3 months, as specified by law, and issue orders allocating lands to the APs.

• Facilitate the process of consolidation, review, approval and allocation of compensation for the project components’ APs by the aimag or soum land administrations and governors, as well as the MRTCUD.

26 Each project aimag and soum will establish a Working Group to ensure stakeholder participation. The

Chairman will be the Soum Governor, the Vice Chairman will be the Bagh Governor and other members will include the soum LAD Officer, the PIU Manager, the soum Social Worker, a representative of the APs (or local community where there are no directly impacted APs), a local NGO/CBO and possibly others as deemed appropriate.

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37. The PIUs will be responsible for implementation of the LARPs and adequate monitoring and supervision of the implementation of the LARPs and the resulting impacts on APs will be monitored by the AWG and PMU. The PMU will be responsible for reporting the progress in implementing the LARP to the MRTCUD and ADB.

H. Consultation and Public Participation 38. APs must be fully informed, closely consulted, and encouraged to participate in any decision making pertinent to land acquisition and resettlement, including the final design of infrastructure facilities, preparation of contractual agreements, determination of prices for assets to be transferred, selection of replacement plots and the restoration of livelihoods.

39. Disclosure of LAR information to and consultation with APs at an early stage ensures that they can express their opinions, apprehensions and objections. Project proponents, (MRTCUD, PMU the PIU and AWG), should address the issues raised and, upon careful consideration, incorporate them in the final design and LARP, in so far as they are compatible with applicable local law and the ADB SPS. Thereby, delays in implementation due to unforeseen conflict can be avoided.

40. During disclosure of the draft and final LARP, their rights and entitlements shall be fully explained to the APs. LARPs will be presented to APs in Mongolian, endorsed by the EAs, i.e. the respective Aimag Governments, and English versions submitted to ADB for review and acceptance. Each LARP will list the public consultations conducted and planned. Each LARP will be published on the ADB website (Mongolian and English versions).

41.The consultation and public disclosure process for each project component with LAR impact will at minimum involve the following steps:

• Individual consultations with APs during and after the census and socio-economic survey and notification of individual APs as well as cut-off date.

• Public consultation meeting with all APs to disclose the draft LARP, including eligibility and entitlements, grievance procedures and monitoring, and to discuss changes and other concerns of the APs and other stakeholders.

• Continued individual consultations to prepare contract negotiations and address individual concerns.

• Individual negotiations of contract terms with AP households.

• Public consultation meeting with all APs to disclose approved LARP and to announce the date, venue, and time of the payment of agreed property transfer prices and other compensation or entitlements.

• Additional individual and public consultation meetings will be held throughout the planning and implementation27 of the LARP as required by any issues arising.

• Attendance lists of all public consultations will be maintained by the PIU and made publicly available (to be verified by the EMA).

I. Grievance Redress Mechanism

i. Grievance Action Form (GAF) 42. A Grievance Action Form (GAF) has been designed which covers the various aspects of LAR addressed by the LARPs and used in the grievance redress process to log and follow up any grievance (see Annex 5). The GAF contains the following:

i. Basic information about APs (name, address, contact number) ii. Date of last disclosure meeting

27 Selection of plots, timing of construction, temporary impacts, etc

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iii. Category of grievance filed (legal, technical/engineering, social, financial) iv. Detailed description of grievance v. Type of action taken (resolved at the AWG level or referred to higher authorities)

vi. Any other pertinent facts or references.

The GAF will be filled out by the AWG Vice Chairman and signed by the AP and the Vice Chairman. The AP will receive a copy signed by both. 43. The project AWG will serve as the initial committee for handling grievances and will provide an open forum for raising objections and holding discussions to resolve conflicts. An aggrieved AP may submit grievances to any member of the AWG, who will log the complaint, pass to the Vice Chairman to complete and sign the GAF, and then request the Chairman to call a meeting, where the grievance will be presented, addressed and resolved within 1 week. The project AWG will record its deliberations and inform the concerned parties within the same week of its findings and recommendations, and then present these to the Soum Governor for action. If the grievance is not resolved within 2 weeks from its lodging, the grievance will be submitted to the Land Administration Department (LAD) by the AWG Chairman and its resolution is recommended to the Aimag Governor for approval and action within 1 more week. If still unresolved within another week, the Aimag Governor will seek to resolve the issue and initiate action within another week. If the preceding actors cannot resolve the grievance, it is referred to the court system. Mongolian law and the ADB SPS will guide all decisions. APs and any NGOs, CBOs or other civil society representative forming part of the AWG shall be actively involved in all stages of the grievance redress procedures. The grievance redress mechanism steps are summarized in Table 5.

Table 5: Grievance mechanism for all project components Steps Actors / actions Timing

AP lodges grievance with AWG member AWG Vice Chairman prepares and signs the GAF and initiates AWG meeting AWG addresses grievance, informs AP and proposes resolution to Soum Governor

1 week 1

Soum Governor initiates action for resolution 1 week If grievance is not resolved

AWG Chairman submits grievance to LAD LAD addresses grievance, informs AP and proposes resolution to Aimag Governor

1 week 2

Aimag Governor initiates action for resolution 1 week If grievance is not resolved

3 Aimag Governor addresses grievance and initiates action for resolution 1 week If grievance is not resolved

4 Grievance is referred to court system at the discretion of the concerned AP Open

J. Monitoring and Evaluation 44. Monitoring of compliance with the LARPs and the LARF during implementation will be carried out by the project component PIUs together with the PMU, as well as by an external monitoring agency (EMA) which may be a local consulting firm or NGO, or a qualified individual. Each LARP will include indicators for both internal and external monitoring as stipulated in the following sub-sections.

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i. Internal Monitoring 45. The PIUs will conduct their own internal monitoring of LARP implementation and submit monthly reports to the PMU. The PMU will include the results of internal LAR monitoring in its quarterly reports to the ADB.28 The Project mid-term review will include a separate section on the progress of LARP implementation. Upon completion of LAR activities in a project component, each IA (Aimag Government) will prepare a resettlement completion report for submission to ADB. Table 6 provides the format for the monthly LAR monitoring reports.

46. The objectives of internal monitoring will be to ensure:

i. Proper execution of responsibilities of key executing and implementing agencies;29

ii. Protection of the rights of APs under Mongolian laws, ADB SPS, LARF and LARPs;

iii. Adequate and prompt payment of compensation; and

iv. Timely grievance redress.

47. In addition, the Audit Department of the concerned aimag or soum Government will independently audit and monitor the agencies involved in the land acquisition and resettlement process, based on relevant laws and regulations. The PMU, through the PIUs, will periodically review audits, and report any irregularities to ADB, to allow early identification and resolution of problems encountered.

28 As and when necessary to report significant progress, implementation issues, or status of earlier identified

problems 29 Aimag Governments, Land Administration Department, Property Relations Agency, Citizens Representative

Khural of Aimags as well as of Districts and Soums, District/Soum Governor, Khoroo/Bagh Governor, PMU, and PIU.

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Table 6: Internal Monitoring Form

Project component site

Total no. of AP households (HH)

Quarter LAR Activities 1 2 3 4 5 6

Comments

Part A. Preparation/Procedural steps Identification of LAR scope ( )

Field verification and modification of technical design ( )

Approval of technical design ( )

Notification of individual APs and of cut-off date

Land and valuation surveys ( )

Census (no. AP HH) Socio-economic survey (no. AP HH)

Preparation of draft LARP ( )

AP consultation: disclosure of draft LARP (no. AP HH)

Finalization of LARP ( ) AP consultation: disclosure of final LARP (no. AP HH)

Endorsement by MRTCUD ( )

ADB review and approval ( )

Disclosure of approved LARP on ADB website and in AP community ( )

Part B. Implementation

Conclusion of contractual agreement (no. AP HH)

Payment of compensation price for assets (no. AP HH)

Provision of replacement land (no. AP HH)

Construction of new structures (no. AP HH)

Relocation to replacement land (no. AP HH)

Acquisition of land and other assets (no. AP HH)

Income restoration (no. AP HH)

Commencement of civil works ( )

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ii. External Monitoring and Evaluation 48. The main objective of external monitoring and evaluation is independent concurrent and ex-post evaluation of negotiated land acquisition in the Project as a whole to (i) assess the effectiveness, impact and sustainability of compensation and rehabilitation, (ii) determine whether safeguard compliance has been met, and (iii) learn strategic lessons for future policy formulation and planning. An external monitoring agent (EMA) will be engaged by the EA as an independent external party to document and asses the process of negotiated settlement, according to the requirements of the SPS. For this project the PMU will be responsible for engaging an EMA, which will investigate and assess LARP implementation in each project component over a three year period and report semi-annually to the PMU and ADB. The EMA will have a minimum of 5 inputs (Baseline, 6 months, 12 months, 24 months and 36 months) for some or all of the six project towns. The TOR are included in Annex 4.

49. External monitoring will be carried out semi-annually during the implementation of LARPs and its results will be reported to the PMU and ADB in semi-annual reports at the end of each input. The PMU resettlement specialist of the project implementation consultant’s team will review and confirm the external monitoring design with the EMA. The external monitoring process will include the following:

• Review and verification of the internal monitoring reports of PMU; • Review and augmentation30 of the socio-economic baseline surveys, if necessary; • Identification and selection of impact indicators; • Impact assessment through quantitative and qualitative surveys; • Consultation with local stakeholders; • Assessment of the effectiveness, efficiency, impact and sustainability of LAR; • Assessment of compliance with local laws, ADB's SPS and the LARP; • Recommendation of LAR process modification and adaptation measures; • Lessons learned for future resettlement policy formulation and planning; and • All data collection and analysis will be gender disaggregated, where possible.

50. Among the key indicators will be the following31:

i. Socio-economic post-resettlement conditions of APs; ii. Impact of LAR on women, children, elderly, the poor and other vulnerable groups; iii. Degree of support for and post LAR status of affected vulnerable households; iv. Perceptions of the APs regarding the LAR process implementation; v. Participation and involvement of APs in LARP implementation; vi. Effectiveness and fairness of valuation, compensation assessment and disbursement; vii. Implementation and effectiveness of income restoration measures; viii. Effectiveness and fairness of grievance redress mechanisms; ix. Level of satisfaction among APs in the post-resettlement period; and x. Adequacy of resettlement funds and results of financial audits.

51. The EMA will carry out post-implementation evaluation on the basis of the socio-economic baseline surveys 1 and 2 years after the completion of LAR activities in each

30 The external monitor will review the LARPs to ensure they contain adequate baseline data; otherwise, the

monitor should conduct further baseline investigations prior to commencement of resettlement. 31 The ADB ‘Safeguard Policy Statement: Safeguards Requirements 2: Involuntary Resettlement’; June

2009; ’Handbook on Resettlement, A Guide to Good Practice’ and ‘Handbook for Incorporation of Social Dimensions in Projects’ will be consulted.

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project component, to ascertain whether the project component was able to implement the objectives and provisions of the LARP. In case of a short-fall the EMA will recommend remedial measures. Annual evaluation reports will be submitted to the PMU, MRTCUD and ADB at the end of each input.

K. Implementation Schedule 52. A sample implementation schedule indicating a timeline for LARP design and implementation activities is shown in Table 7. It indicates a winter period during which APs cannot be relocated and thus civil works cannot commence. Table 8 provides a sample schedule for LAR activities which should be integrated with the related project component implementation schedule, which shows that project implementation will start in 2010 and be completed in 2014.

Table 7: Sample LAR Implementation Schedule for a Project Component

2010 2011 LARP ACTIVITIES 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 07

Identification of LAR scope

Field verification and modification of technical design

Formation and meetings of RPIC

Approval of technical design

Notification of individual APs and of cut-off date

Land and property measurements and valuation surveys

Census and socio-economic survey, and identification of vulnerable persons/HHs

Preparation of draft LARP

AP consultation: disclosure of draft LARP

Revision of draft LARP

AP consultation: disclosure of revised draft LARP

Endorsement by MRTCUD

ADB review and approval

Disclosure of approved LARP on ADB website and in AP community

Funding for LAR compensation

Conclusion of contractual agreements

AP consultation: modalities / timing

Disbursement of compensation

Acquisition of land and other assets

Provision of replacement land

Relocation to replacement land

Construction of new structures

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2010 2011 LARP ACTIVITIES 04 05 06 07 08 09 10 11 12 01 02 03 04 05 06 07

Income restoration

Commencement of civil works

Internal Monitoring

External monitoring and evaluation *Continued JUL 2012 & JUL 2013

Base line

1st M&E

2nd M&E

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Table 8: Sample Integrated Implementation Schedule for a Project Component Year 2010 2011 Project

component Activity 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 Finalize Design Prep of Final LARP Approval of Final LARP LARP implementation

Hanbogt Roads Component

Commencement of civil works Legend Project Activity

Winter period, no LAR implementation or civil works

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L. LAR Budget, Finances and Disbursement

i. Budget 53. The total LAR implementation cost including the cost of compensation, administration and monitoring is an integral part of the Project cost. Each sub-project LARP will include a budget section with a table of costs for all compensation expenses including administration and contingencies. Unit rates for each compensated item and the methodology for their calculation must be briefly indicated. The budget may be revised periodically if indicated by the experiences of the LAR process and changes in prevailing asset values.

ii. Financing 54. Finances for compensation, allowances and administration of LARP implementation will be provided by the MRTCUD or Aimag Governments as counterpart funds and can be augmented from project grant funds if the funds allocated in the Detailed Cost Estimate and Financing Plan of the RRP are insufficient. The cost of external monitoring, as well as income restoration, relocation, site development, and social preparation, can be financed under the loan. To ensure the availability of sufficient funds for all LAR tasks the MRTCUD and the Aimag Governments will allocate 100 percent of the cost of compensation at replacement cost and allowances anticipated and estimated in each LARP, plus 10 percent contingencies, before LARP implementation.

55. MRTCUD as the project executing agency and the respective aimags as the project implementing agencies are responsible for the timely allocation of the funds needed to implement the sub-project LARPs. Allocation will be reviewed semi-annually based on the budget requirements indicated in the LARPs.

iii. Disbursement 56. The Land Administration Departments (LAD) of the respective administrative units (aimag and soum), with support from the PIUs and PMU resettlement specialist, will manage the process of formal contractual agreements with APs and disbursement of compensation for LAR in each project component. After having concluded contractual agreements about the transfer of affected assets from the APs to the government, the soum level LAD will consolidate all contracts and their financial commitments and refer these to the Aimag LADs, who will prepare resolutions for the MRTCUD and the Aimag Governors. These will speedily approve and initiate transfer of funds to the LADs for disbursement to APs. Payment of 75 percent of compensation will be made within 1 month of the time of conclusion of contractual agreements about the transfer of affected assets from the APs to the government. The remaining 25 percent will be paid at the time of vacating of the affected assets. Disbursement will preferably be carried out in the project component communities or in the soum Governors’ offices. No land will be acquired by the government or handed over to the PIUs for commencing construction works without full payment of due compensations to the APs. However, in case of a dispute, the agreed amount of compensation will be pledged in the names of the concerned APs, pending a resolution through the grievance mechanism or decision by the courts.

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M. Annexure Annex 1: Letters by the Land Department of the Capital City of Ulaanbaatar and Administration of Land Affairs, Construction, Geodesy and Cartography

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National emblem

THE CITY GOVERNOR’S IMPLEMENTING AGENCY

THE CITY LAND ADMINISTRATION DEPARTMENT 210646 Ulaanbaatar city, Chingeltei District,

Baga toiruu 15, The City administration building III, Tel: 32-50-43, Fax: (976-11) 32-89-76

__28 April, 2009__ № __2/829____

TO B.ZUVTSETSEG, DIRECTOR

OF PROJECT IMPLEMENTATION

UNIT OF URBAN DEVELOPMENT

SECTOR PROJECT MON 2301

On submitting explanation

The national scale of road as specified in Article 3, Section 3.1.8 of the “Law on Auto

Road” refers to roads which connect the capital city to aimag cities, aimag cities to aimag

cities and aimag cities to border points.

Since the roads which will be constructed through the Khailaast, Baruun Salaa and

Orbit-Takhilt ger areas are not included in the classification of national scale of road, Article

32, Section 32.1.3 of the Law on Land Allocation to Mongolian Citizens for Ownership” do

not pertain to these.

When a new local scale of road is built in the territory of the Capital City, land is being

vacated by negotiating with the land owner, possessor or user.

(stamped) DEPUTY DIRECTOR (signed) M. BUYANDELGER

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30

31

National emblem

MONGOLIAN GOVERNMENT REGULATORY AGENCY

THE LAND AFFAIRS, GEODESY AND CARTOGRAPHY DEPARTMENT

211238 Ulaanbaatar city, Chingeltei district, Barilgachdiin talbai 3, Tel: 329 638, Fax: 322 683

__29 April, 2009__ № __1/253____

TO THE PROJECT IMPLEMENTATION

UNIT IN ULAANBAATAR CITY

URBAN DEVLEOPMENT SECTOR PROJECT MON 2301

On giving explanation

The following explanation is submitted in response to your official letter 29 dated April

22, 2009.

As specified in Article 10 of the Law on Land, it is stipulated that the land under roads

and networks pertains to the basic classification of the unified land territory. It is indicated

that the land under roads and networks shall include land outside cities, villages and other

urban settlements given for the needs of energy supply, heating supply, water supply,

transportation, communication and information [networks] as specified in Article 13 of the

said law.

In order to apply this stipulation of the law, the concept of “roads” needs to be

consistent to the “Law on Auto Road”.

As specified in Article 11 of the Law on Auto Road, the auto road is classified as

follows: international scale, national scale, local scale and local scale of business entitities

and organizations. As specified in Article 3 of the said law, the national scale of road refers

to roads which connect the capital city to aimag cities, aimag cities to aimag cities and aimag

cities to border points and the local scale of road refers to roads which connect soums,

districts, cities and urban settlements in the territory of the capital city and aimags.

Also, as specified in Article 42 of the Law on Land, the authority may take back the

land possessed by others only for special needs of the state in the relation of taking back

land possessed by others with compensation or with replacement before expiration of the

contract. This matter of special needs of the state relates closely to the concept of “lands for special needs of the state” and specifies in Article 16 of the Law on Land, that Mongolia

shall have lands for special needs of the state. However, the matter of building auto roads

does not pertain to this. Furthermore, the matter of replacing or taking back land owned by

citizens for special needs of the state is regulated by Article 32 of the “Law on Allocation of

Land to Mongolian Citizens for Ownership”.

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It is required to take into consideration that the concept of “special needs of the state” is more clearly reflected in Article 32 of the “Law on Allocation of Land to Mongolian

Citizens for Ownership”, which states “to build roads, lines and networks and other objects of

national scale”. “National scale of road” is reflected clearly in the Law of Auto Road as

indicated above and this is not a road, which connects districts and khoroos in the territory of

the capital city.

Since building ger area roads and other infrastructures within the framework of your

project will not pertain to the special needs of the state as specified in the Law on Land and

the Law on Allocation of Land to Mongolian Citizens for Ownership, the matter of acquiring

land, which is planned to build roads, infrastructure lines and networks, will be solved by

making an agreement with the land owner in accordance with “Civil Law” and other relevant

laws and legal acts.

(stamped) DIRECTOR (signed) SH.BATSUKH

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Annex 2: Notification (Demand Letter) to Affected Persons by Chingeltei District Land Administration Department

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NOTIFICATION Number ……year……month……date

Demanding...…………………………………………………………………………………

…………........................................................................................................................

........................................

…………………………………………………………………………………………………

………………..…………………………………………………………………………………

………………………….......

Notification received by…………………………………………………….(signature)

CHINGELTEI DISTRICT LAND ADMINISTRATION DEPARTMENT Number ………year…….month…….date

NOTIFICATION To………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

…………………………………………………………………………………………………

……………………………………………………………

You are being warned about and it is demanded …………………………………………

within………..days.

If this notification is ignored or being ignored repeatedly, in addition to measures taken in accordance with the Law on Land, the Law on Urban Development, the Law on Administrative Accountability and other relevant laws, the right of land ownership shall be cancelled.

TEL: 321224

(stamped) DIRECTOR OF THE CHINGELTEI DISTRICT

LAND ADMINISTRATION DEPARTMENT ……… (signed)…………………….(CH.

BATBILEG)

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Annex 3: Cabinet Resolution 103 of 2003 on Land Valuation Tariff

36

37

The Resolution of the Government 30 April 2003 N103 Ulaanbaatar city

On confirming methodology and valuation Pursuant the Articles 24.3, 58.8 of the Law of Mongolia on Land, an Article 9.1.3 of Law on Allocation of land to Mongolian Citizens for ownership, the Mongolian Government resolves:

1. To approve “Land Management Work Evaluation” by Appendix 1, “State Certification on Land Characteristics and Quality Work Evaluation” by Appendix 2, and “Valuation Methodology of Land Allocation to Citizens for Ownership” by Appendix 3.

2. In compliance with this Resolution, N119 Resolution of the Government of Mongolia from 15 July 1998 shall be considered as cancelled.

Prime Minister of Mongolia N. Enkhbayar Mongolian Minister, The Head of the Government Administration O. Enkhtuvshin

Translation of Sections 4.3 and 4.4

4.3 The Differences referred to in 4.2 of this Methodology shall be reflected in below mentioned coefficients which shall be reduced when land is more remote.

4.3.1 Capital and cities with state category 1.0-0.3

4.3.2 City with aimag category-1.0-0.5

4.3.3 Center of soums, other settlements-1.0-0.6

4.4 According to paragraph 3 of Article 6 of the Law on Land Fees, the Governor of a soum or district shall determine the costs of land based on the boundaries and borders of land, using the coefficients defined by Citizen’s Representative Khurals of Soums and Districts and the coefficients referred to in 4.3 of this methodology.

For example, assume that a citizen applies for ownership of 700 m2 land for family needs in an area at a distance from engineering networks and roads in UB city. In this case, 44,000 tugrugs, which is the base valuation for 1m2 land of UB City, is multiplied by a coefficient of 0.3 as referred to in 4.3.1 of this methodology, taking into consideration the distance from engineering network and roads, and then the respective area land cost for 1m2 would be 13,200 tugrugs.

In other words, the cost of 700m2 land in the respective area will be

13,200 x 700m2= 9 240 000 tugrugs

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Annex 4: Terms of Reference for External Resettlement Monitor A. Introduction 1. According to the requirements of the Asian Development Bank (ADB), for loan projects that result in land acquisition and resettlement, monitoring and evaluation as well as independent third party validation of negotiated settlement needs to be carried out. In order for the implementation of the land acquisition and resettlement activities of the Mongolian Southeast Gobi Urban and Border Town Development Project (SEGUBTDP) to comply with the provisions of the Land Acquisition and Resettlement Framework (LARF) of the Project, monitoring and evaluation of the implementation of Land Acquisition and Resettlement Plans (LARP) for 6 project sub-components in 6 towns of SEGUBTDP will be carried out during and after implementation. 2. An independent external monitoring agency (EMA) will be engaged through competitive tenders for the external monitoring and evaluation. The Consultant will have experience with land acquisition and resettlement as well as monitoring and evaluation in ADB or World Bank projects. 3. Monitoring and evaluation will include, but not be limited to:

• Monitoring the progress and effectiveness of LARP implementation; • Evaluation of income restoration and post-resettlement socio-economic conditions of

the APs and, where applicable, the affected communities. B. Objectives and Requirements of Monitoring and Evaluation 4. The objectives of monitoring and evaluation are to assess whether land acquisition and resettlement is implemented in accordance with the LARPs and whether the goals and principles of the LARPs are achieved. Specifically, monitoring and evaluation will focus on the following aspects of the APs’ situation and the resettlement process.

• Social and economic situation of APs prior to and after land acquisition and resettlement

• Timely disbursement of funds • Environmental conditions • Rehabilitation of vulnerable groups • Condition of land temporarily occupied by Project after being returned to the APs • Measures taken to restore affected livelihoods

5. Monitoring and evaluation will include (i) the establishment of socio-economic baselines of the APs prior to land acquisition, physical relocation, loss of assets or disruption of businesses; (ii) the semi-annual monitoring of their relocation or adjustment during Project implementation, and (iii) evaluation of their situation for a period of two years afterwards. Qualitative and quantitative methods will be used to evaluate the standard of living of the APs. Investigation will include interviews with IAs, local officials, village leaders and APs, as well as a survey of a representative sample of affected households. Focus group discussions will be conducted with male and female APs, including the poor and other vulnerable groups. C. Specific Tasks and Methodology 6. Specific tasks and methodology are:

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a) Review pre-project baseline data of the APs for the sub-project, which would include (i) HH income and expenditure; (ii) occupational and livelihood patterns; and (iii) accessibility of basic social services and infrastructure.

b) Identify an appropriate set of indicators for collecting and analyzing information on resettlement impacts; the indicators shall include but not be limited to (i) budget and time frame regarding land acquisition, relocation of APs, delivery of entitlement packages; (ii) restoration of income and living standards of the affected persons.

c) Review and verify results of internal monitoring and assess whether LARP objectives have been met and ascertain whether the resettlement entitlements were appropriate. Involve the APs in assessing the impact of resettlement and resettlement efficiency.

d) Conduct both individual and community level impact analyses through HH surveys, individual and key informant interviews to assess the impact of resettlement.

7. Identify the strengths and weakness of basic resettlement objective and approaches, implementation strategies, including institutional issues and provide recommendation for improvement in resettlement policy making and planning. D. Monitoring Indicators 8. The EMA will document the consultation of APs, the policy agreements established with the APs, the application of local laws, the actually applied mechanisms for calculating replacement cost of land and other assets, as well as the record keeping during contract negotiation. The following LAR actions and arrangements will be monitored, documented and evaluated in accordance with principles, entitlements and rehabilitation strategies set out in the LARPs. The EMA will also be guided by the policy framework established in the LARF for SEGUBTDP and its provisions for monitoring and evaluation.

• Provision of entitlements to APs and businesses: timeliness and adequacy of the provision of compensation, housing plots, relocation assistance, and income restoration as specified in the RPs.

• Development of economic productivity: restoration of affected businesses/shops. • Provision of alternative housing: the affected persons must move into their

alternative housing before demolition; the affected persons must receive their moving and transportation allowances on time.

• Restoration of civic infrastructure: all necessary infrastructure should be restored at the resettlement sites at least up to a standard equal to the standard at the original location.

• Level of satisfaction of APs: level of satisfaction of APs with various aspects of the resettlement program; the process for grievance redress and the timely resolution of problems.

• Standard of living: Throughout the implementation process, the trends in standards of living will be observed and the potential problems in the way of restoration of standards of living will be identified and reported. The Consultant will carry out consultation meetings, preferably through focused group discussions, and comprehensive socio-economic survey after the completion of resettlement implementation to document the standards of living and the conditions of the APs after resettlement. The survey will be conducted annually for at least two years, or until affected households have fully restored their living standards and income generation.

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• Participation of affected persons: Involvement of APs in measurements of impacts, negotiation of compensation, relocation decisions, income and standards of living restoration, and monitoring of progress.

• Support for vulnerable households: impacts on children, the elderly and other vulnerable groups and implementation of preferential policies, income restoration measures, and improvements in women’s status.

• Adequacy of resettlement funds: full and timely disbursement of resettlement budget, results of financial audits and increased in funding meet any shortfalls.

• Effectiveness and fairness of the valuation and compensation assessment. • Effectiveness and fairness of the grievance redress mechanism.

E. Special Considerations 9. Special attention will be paid to women, the poor and vulnerable groups during monitoring, including:

• The status and condition of women: Closely monitor any change in women’s status, condition and situations. At least 50 % of APs surveyed will be women.

• Care and attention to vulnerable groups: Closely monitor living conditions of elders, the handicapped, and other vulnerable groups after resettlement, to ensure that no hardship is experienced.

F. Reporting Requirements 10. Monitoring reports will include, among other things:

• A summary of findings and conclusions • The major problems identified (existing and potential) • Recommended mitigation or prevention measures • An assessment of previous follow-up actions

11. The EMA will provide ABD and the EA with monitoring reports every six months during the implementation of the LARPs. After the EA prepares their resettlement completion report, the EMA will conduct annual evaluations for two years. 12. All reports will be provided in English and Mongolian. The PIU shall ensure that information on the progress and status on all aspects of land acquisition and resettlement activities will be provided to the EMA for verification. The EMA will forward copies of the reports directly to ADB. G. Duration and Frequency of Visits 13. The M&E services will be required during a period of 3 years (2010 to 2012). During implementation of the LARP(s), monitoring by the EMA will be undertaken every six (6) months at all project component sites with LAR, as well as due diligence for other project component sites. The total inputs will be decided based on the project impacts and M&E requirements, as agreed by the EMA, PMU and ADB. After completion of LARP implementation, two annual evaluations will be conducted for each project component with LAR. The timing of these investigations may be staggered depending upon the progress of each project component. H. Indicative Monitoring Schedule

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14. Indicative monitoring schedule is:

Inputs / Tasks Timing Report Due 1. Baseline Surveys Before LARP

implementation 2. Monitoring of Implementation* Month 1 of LARP

implementation 3. Monitoring of Implementation Month 6 of LARP

implementation 4. Evaluation 1 year after completion of

LARP implementation 5. Evaluation 2 years after completion of

LARP implementation

Within 1 month of start of each investigation

* Since monitoring is required at least semi-annually, and due to long winters, it would be preferable to monitor in the spring and fall

I. Budget for the External Monitoring 15. The budget will be determined based on the scope of M&E works. The proposed budget will be submitted to ADB for concurrence prior to the PMU signing the contract with the EMA. 16. The following is the indicative budget: Professional fees (3 person/months@USD2,000) = USD6,000 Survey assistants (3 missions) = USD6,000 Per diem (2 person/months@USD45 per day) = USD2,400 Domestic travel (3 missions) = USD4,000 Reporting and Miscellaneous costs = USD1,000 TOTAL = USD19,400 J. Qualification 17. An independent specialist with social background and familiar with ADB policy and procedures can be appointed to evaluate and monitor the LARP implementation of the sub-project. The Specialist must have relevant experience in monitoring and evaluation of development programs and projects, knowledge in resettlement issues is preferable but not required.

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Annex 5: Grievance Action Form (GAF) Name: _______________________________________________________ Address: _____________________________________________________ Phone: ____________________________________ Date: ____________________ Project site: ________________________________ District: ____________________________________ Aimag/City/: ____________________________ Bagh: _____________________________ Name and position of recipient: ____________________________________________ Date of last disclosure meeting: ____________________________________________ Category of grievance:

Environment Legal Technical

Financial Social

Administrative Other

Item Description Name, position and signature of

person(s) responsible:

AP: Date:

Grievance

Recipient: Date:

Resolution Officer in charge: Date:

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Action taken Officer in charge: Date:

Follow up Officer in charge: Date:

Comments, observations

Officer in charge: Date: