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- EE543World Bank/TACIS Joint EnvironmentProgramme

Natural Resource Management andPoverty Reduction Project, Armenia:Draft Environmental Assessment Report

January 2002

Environmental Resources Management1730 K Street, NW, Suite 1300

Washington DC, 20006Telephone +1 202 466 9090Facsimile +1 202 466 9191Email [email protected]:/ / www.erm.com

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World Bank/TACIS Joint EnvironmentProgramme

Natural Resource Management andPoverty Reduction Project, Armenia:Draft Environmental Assessment Report

January 2002

Reference 6536.13

For and on behalf ofEnvironmental Resources Management

Approved by:

Signed:

Position:

Date:

This report has been prepared by Environmental ResourcesManagement the trading name of Environmental ResourcesManagement Limited, with all reasonable skill, care and diligencewithin the terms of the Contract with the client, incorporating ourGeneral Terms and Conditions of Business and taking account of theresources devoted to it by agreement with the client.

We disclaim any responsibility to the client and others in respect ofany matters outside the scope of the above.

This report is confidential to the client and we accept noresponsibility of whatsoever nature to third parties to whom thisreport, or any part thereof, is made known. Any such party relies onthe report at their own risk.

CONTENTS

I INTRODUCTION I

1.1 INTRODUCTION 1

1.2 PROJECT BACKGROUND I

1.3 SCOPE AND OBJECTIVES OF THE EA 3

1.4 STUDY APPROACH AND METHODOLOGY 3

1.5 CONTENTS OF THIS REPORT 4

2 INSTITUTIONAL, REGULATORYAND POLICY FRAMEWORK 6

2.1 INTRODUCTION 6

2.2 POLIcY FRAMEWORK 6

2.3 LEGAL AND REGULATORY FRAMEWORK 8

2.4 INSTITUTIONAL SETTING 10

2.5 INSTITUTIONAL STRUCTURE FOR PROJECT IMPLEMENTATION 14

3 BASELINE ENVIRONMENT 18

3.1 INTRODUCTION 183.2 OVERVIEW 18

3.3 PHYSICAL AND BIOLOGICAL ENVIRONMENT 19

3.4 SOCIO-ECONOMIC ENVIRONMENT 23

4 PROJECT ALTERNATIVES 25

4.1 INTRODUCTION 25

4.2 BACKGROUND 25

4.3 WITH THE PROJECT 25

4.4 No PROJECT SCENARIO 26

5 PUBLIC CONSULTATION AND DISCLOSURE 27

5.1 INTRODUCTION AND GENERAL APPROACH 27

5.2 CONSULTATION METHODOLOGY 27

5.3 PHASE I - INITIAL CONSULTATION 28

5.4 PHASE 2 - FORMAL DISCLOSURE 29

6 COMMUNITY BASED NATURAL RESOURCE MANAGEMENTCOMPONENT 31

6.1 INTRODUCTION 31

6.2 COMPONENT DESCRIPTION 31

6.3 IMPLEMENTATION PROCESS 33

6.4 IDENTIFICATION OF ENVIRONMENTAL AND SOCIAL IMPACTS 35

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6.5 ENVIRONMENTAL MANAGEMENT PLAN 406.6 IMPLEMENTATION RISK ASSESSMENT 55

7 STATE FOREST MANAGEMENT COMPONENT 58

7.1 INTRODUCTION 58

7.2 BACKGROUND 58

7.3 COMPONENT DESCRIPTION 597.4 SITE IDENTIFICATION AND IMPLEMENTATION PROCESS 617.5 IDENTIFICATION OF ENVIRONMENTAL AND SOCIAL IMPACTS 637.6 ENVIRONMENTAL MANAGEMENT PLAN 677.7 IMPLEMENTATION RISK ASSESSMENT 78

8 PROTECTED AREAS MANAGEMENT AND BIODIVERSITY

CONSERVATION 81

8.1 INTRODUCTION 81

8.2 COMPONENT DESCRIPTION 818.3 INTENDED IMPACTS OF THIS COMPONENT 838.4 IMPLEMENTATION PROCESS 85

8.5 IDENTIFICATION OF ENVIRONMENTAL AND SOCIAL IMPACTS 858.6 ENVIRONMENTAL MANAGEMENT PLAN 908.7 IMPLEMENTATION RISK ASSESSMENT 94

9 ADDITIONAL RECOMMENDATIONS FOR PROJECTIMPLEMENTATION RISK MANAGEMENT 96

9.1 INTRODUCTION 969.2 INTEGRATION AND CO-ORDINATION OF PROJECTMANAGEMENT 969.3 ENSURING EFFECTIVE INVOLVEMENT AT THE LOCAL LEVEL IN PROJECT

IMPLEMENTATION 96

ANNEXES

ANNEX A MEMBERS OF THE EA TEAM

ANNEX B LEGAL AND REGULATORY FRAMEWORK

ANNEX C STRUCTURE OF KEY ORGANIZATIONS

ANNEX D PUBLIC CONSULTATION AND DISCLOSURE MINUTES

ANNEX E ENVIRONMENTAL MANAGEMENT GUIDELINES FOR CONTRACTORS

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EXECUTIVE SUMMARY

BACKGROUND

This Category B environmental assessment (EA) report zoas commissioned by theWorld Bankfor the Natural Resources Managemenit and Poverty Reduction Project inArmenia (the NRMPR project) with supportfronz the Tacis Joint Environmental, r,;-r,i,,i (JEP). The EA report was prepared by Environmental ResourcesManagement (ERM).

PROJECT OBJECTIVES

The project's development objective is to alleviate rural poverty and promotesustainable natural resource management practices in degraded hilly andmountainous areas of Northern Armenia in Gegharkunik and Tavoush Marzas. Theproject will help preventfurther deterioration of the natural resource base (soil, water,grasslands, forest and biodiversity) and stabilize the local economy. Key performanceindicators or measures of project effectiveness will include:* Increased community participation in natural resource nmanagement decisions;* Increased crop and livestock productivity;* Increased extent and quality offorest and rangeland vegetative cover;* Increased household incomes in participating communities;

* Implementation of protected area management plansfor Dilijan Nature Reservedand Lake Sevan National Park; and

* Itmproved biodiversity conservation of globally significant species.

Performnance indicators measuring progress towards achieving the biodiversityconservation objective include: (i) implementation of landscape-level watershedmanagement plans linking protected areas and critical ecosystems; (ii) conversion of atleast tulo protected areas (Dilijan Nature Reserve and Lake Sevan National Park) toeffectively managed protected areas; and (iii) stabilization of key tlhreatened ecosystemlsand critical habitats in the project area.

PROJECT COMPONENTS

The project includes three main components which were addressed in thisenvironmental assessment:* Community Based Natural Resources Management;

* State Forest Managemtient, and* Protected Areas Management and Biodiversity.

PROJECT IMPACTS

The NRMPR project objectives are to achieve a range of positive environmental andsocial impacts, and thze components of the project have been designed to enhance thle

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positive outcomes and to also include mitigation measures for possible adverse ornegative impacts. Hence, the EA process involved a secondary assessment of possibleimpacts, both positive and negative, as well as an assessment of the proposedenhancement and mitigation measures. When possible, further enhancement measureswere identified.

The major, expected positive and potential negative impacts identified in the EA aresummarized in the boxes below. The primary major impacts are not individuallysignificant but have the potential to be cumulatively significant. The main mitigationmeasures are increased institutional and management capacity, and the projectcomponents incorporate these miitigation measures.

Box 1 Intended Positive Impacts

Comm Bi" SNa.ftza . -l

1 Community forest managementIncreased understanding of forest conservation needs.

Biodiversity conservation of forest buffer zones, pastures and arable land.* Establish multi purpose indigenous species in forest buffer zone.* Reduction of pressure on pasture land.* Provide sustainable wood and non-wood products, and alternative energy sources to

wood leading to conservation of forest habitats.* Provide short and long-term income generating opportunities.

Promote sustainable management practices and raise environmental awareness2 Community pasture management

* Increased food security* Long-term income generation.

Provide short and long-term income generating opportunities.

* Stop further degradation of soil resources (forest, arable and grazing lands) leading toincreased soil fertility and a reduction in watershed sediment yield/erosion.Promote sustainable management practices and raise environmental awareness.

3 Sustainable agricultural practices

* Increased food security* Increased opportunities for cash or barter income.

Improved productivity will reduce pressure on marginal areas.Halt decline in soil fertility

4 Community infrastructure and income generationIncrease cash surplus available for re-investment in sustainable agriculture practicesIncreased productivity will reduce pressure on marginal areasIncrease food securityHelp to realize non-timber forest valuesReduction in erosion caused by poor management of water resourcesPasture improvement leading to reduced erosion, increased fertility, increasedcarrying capacity, biodiversity preservation.

5 Development of community institutionsEstablishment of resource user groups and village watershed management boardStrengthening the capacity of exiting community and marz level organizations

Community awareness

State Fortst Magaemqnt.1 Sustainable forest management practiced in selected pilot areas on state forest land

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Avoid cumulative environmental impacts of forest production and rehabilitation

activities (e.g. soil erosion, sedimentation of watercourses, biodiversitv loss).Enhance biodiversity conservation and sustainable ecosystem management in forest

and grazing lands.Employment opportunities in road construction, workforce programs, rehabilitation

activities etc.Alleviate the rapid degradation of forest resources.Reduction in environmental impacts of existing road construction practices.

Carbon sequestration.Increase contribution of forests to the state budget.Reduction in illegal activities related to forests.Recreational and amenity value of land increased.

2 Legal, institutional, policy and human capacities for sustainable forest management,biodiversity conservation and poverty reduction established in Hyantar, FREC,Ministry of Nature Protection and village councils

Legal and institutional framework for sustainable forest management established.

Institutional capacity strengthened in key institutions.

Establishment of effective monitoring systems for forest management and planning.Legislation reformed to enable community and private sector ownership andmanagement of forest resources.Alleviation of corruptive practices.

Forest products markets and prices reformed.Forest extension services for non-state forest owners and community members

created.

Protected Areas Management and Biodiversity Conservation1 Strengthen institutional capacity at the national level

Improved legal and regulatory framework for protected area management.Strategic planning and integration of biodiversity into sectoral policies.

Strengthened stakeholders' institutional capacity.Sustainable management practices developed.Monitoring unit established and monitoring improved.Better communication equipment and transport provided.Environmental education implemented and environmental awareness raised.Transboundary co-operation on protected areas with Georgia improved.

2 Strengthen the management of Dilijan State Reserve and Lake Sevan National ParkProtected areas at Lake Sevan National Park and Dilijan Nature Reserve withmanagement plans and new zoning under implementation.Enhanced management of protected areas through public-private partnerships.Equitable sharing of financial benefits with local communities.Revenues for sustainable management and conservation program s generated.Stabilization of key threatened ecosystems and critical habitats in the project area.In -situ conservation of biological resources improved.Monitoring of key endangered species as indicators for ecosystem regeneration.Illegal hunting and logging decreased.Public awareness raised and community involved in biodiversitv conservation.Increased protection of cultural and biodiversity values.Short- and long-term income generation provided.

3 Establish basic infrastructure for park managementShort and long-term income generating opportunities provided.Facilities for visitors, education and management improved.In -situ conservation of biological resources improved.Strictly protected areas better protected to reduced access.Roads and trails improved.Cultural heritage sites upgraded.

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4 Community grant program (small grants program for community based activities inthe protected areas and their buffer zones)* Short and long-term income generating opportunities provided.* Equitable sharing of financial benefits with local communities.

Increase awareness of biodiversity values and involvement of communities in

biodiversity conservation.* Further degradation of resources (forest, arable and grazing lands) mitigated.

Box 2 Primary Potential Negative Impacts

Camau Dauled N* hu1- --;p* u_t'*u-4* Environmental impacts of construction (field track rehabilitation and gully control)

* Increased grazing pressures on pasture from livestock herd increases due to access to creditor other sources of funds

* Environmental impacts related to overuse of chemical fertilizers

* Environmental impacts of increased irrigation

* Increased pressure on and pollution of water resourcessta* a3nt>' - . . '''L'.

* Environmental impacts of road construction, rehabilitation and maintenance

* Environmental impacts of felling activities (thinning, sanitary cuttings, etc)* Environmental activities of illegal forest activities

P r o . .; .

* Environmental impacts of facility construction - likely minor and manageable through

improved institutional and staff capacity, monitoring and other component elements* Impacts of increased visitation and usage on protected area resources - long term

possibility and manageable through implementation of new protected area managementplans and improved institutional and staff capacity and monitoring

* Environmental impacts of road and trail rehabilitation and construction - likely minor andmanageable through improved institutional and staff capacity and monitoring

Environmental impacts associated with increased economic activities - long termpossibility and manageable through implementation of new protected areamanagement plans and improved institutional and staff capacity and monitoring

PUBLIC CONSULTATION AND DISCLOSURE

The World Bank held an extensive series of public meetings during the projectidentification and design process. The dates and locations of the meetings are listed inthe table below. In addition, a series offormal Public Consultation and Disclosuremeetings which presented the mainfindings of the EA of the NRMPR project wereheld in Armenia after completion of the draft EA report. These PCD meetings are alsolisted in the table below. The meetings are listed in chronological order.


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Table 1 Public meetings held during project identification and design and the EA Public Consultation and Disclosure process.

Date Event/Purpose Location ParticipantsCommunity / Marz

WVait r,hed hii3nagement Cornp.Rapid Rural Appraisal -Within the project preparation Selected Villages Project Preparation Team (community development

19Feb - framework the main goals of application of Rapid Rural specialist, social specialist, natural resources specialist,16March/2001 Appraisal method were agricultural/grazing specialist), community leaders,

reveal the potential capacities of participant communities community members - meetings were held in schoolsfind out the environmental problems of the communities and other public buildings and residences.find out the watersheds' main problems and the ways toresolve themmake micro-watersheds natural resource appraisal andinventoryevaluate selection criteria for each community

19-23/Feb/2001 See above Vardadzor, Yeranos / See aboveGegharkunik,

27Feb- See above Khachardzan / Tavoush See aboveOlMarch/ 200127Feb- See above Gosh / Tavoush Seeabove02March/ 200127Feb- See above Dprabak / Gegharkunik See above02March/20015-8 March/ See above Berdavan / Tavoush See above20015-9 March/ See above Koghb / Tavoush See above20016-7 March See above Antaramej / Gegharkunik See above/20017-8 March / See above Kalavan / Gegharkunik See above

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Date Event/Purpose Location ParticipantsCommunity/ Marz

20018-9 March / See above Aygut / Gegharkunik See above20018-9 March / See above Aghavnavank / Tavoush See above200113/Feb/2001 See above Dzoravank / Dzoravank See above13-16 / See above Tsakkar,Dzoragyukh, See aboveMarch/2001 Gegharkunik / Gegharkunik14-15 / March/ See above Paravakar / Tavoush See above2001

Lanjaghbyur / Gegharkunik15-16 /March/200115-16/March / See above Varagavan / Tavoush See above200117-18 / March See above Tsaghkavan/ Tavoush See above/200118Apr- Participatory Planning Workshops - In selected villages PP Team / Participation specialist from PIU,25May/2001 Hold the meeting in each community to: Com.Dev.Specialist, Social Specialist, Nature resources

Carry out a complete and ranked census of the problems for Specialist, Agricultural/ Grazing Specialist/, Allindividual households and the village as a whole, community members, in some case representative fromCarry out census of the community's proposed solutions marz administration(relevant activities) of these problems,Present options menu (was prepared by PP team)Identify relationship (overlap) between communities' prioritiesand project activities proposed by PP team, and define rankedlist of activities of common interest,Discuss in detail each solution or set of solutions forpreparation of draft management plan for given villages,Identify those community proposals which being outside the

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project mandate, are eligible for other on-going projects for

further consideration and discussion with those projects.

Study and submit proposals related to implementation of pilot

demonstration activities, as well as issues related to funding of

those activities.

18/April/2001 See above Khachardzan, Axavnavanq / See above

Tavoush

19/April/2001 Sec above Gosh / Tavoush See above

24/April/2001 See above Aygut /Gegharkunik See above

25/April/2001 See above Dzoravank, Kalavan / See above

Gegharkunik

26/April/2001 See above Antaramej /Gegharkunik See above

27/April/2001 See above Dprabak /Gegharkunik See above

02/May/2001 See above Dzoragyugh, Vardadzor / See above

Gegharkunik03/May/2001 See above Tsakkar, Yeranos / Gegharkunik See above

15/May/2001 See above Paravakar /Tavoush See above

16/May/2001 See above Varagavan, Tsakhkavan / See above

Tavoush

17/May/2001 See above Koghb / Tavoush See above

18/May/2001 See above Berdavan / Tavoush See above

25/Mav/2001 See above Lanjaghbyur, Gegharkunik / See above

Gegharkunik

02/June/2001 Presentation of main findinigs by WMC Team: Ycrevan, Ministry of nature WB Pre-appraisal Mission Team, PPU, Arcadis Team,

The main goal: presentation and discussion of project progress P'rotection Representatives of the Central Staff of the Ministry of

Presentation of RRA's, PPW's results and selection criteria Nature Protection, including Deputy Minister, head of

Presentation of menu of options/activity budget, watershed Staff, heads of department / bioresources, normative-

management plans methodology, economic, international cooperation etc./,

Presentation of legal, institutional aspects, and stakeholders State Environmental Inspection, FREC, VISTAA expert

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Presentation of the credit scheme center, SHEN NGO, Tavoush Agricultural SupportCenter, and some International organizations andprojects / ARD Inc., USDA, IFAD, Marketing AssistanceProject /,

Forestry Management Component.27-28/Feb/2001 Training on Project Preparation: Was carry out for Yerevan, Ministry of Nature PPU, Independent consultants, Staff from the Ministry

The study team and some stakeholders' representatives Protection of Nature Protection, NGO, "Hayantar" CJSC, FREC,expected to be involved in the project. WB and Tacis offices in YerevanThe objective of the training was:To give the opportunities for better understanding of the Worldbank activitiesTo explain the context and scope of workTo provide high quality of research jobTo provide preparedness of consultants from the beginning ofthe projectTo give opportunities for asking questions

EA Publii4$onsultaUtn and DisLosure .-.26/Nov/2001 Consultation and disclosure to the public regarding the main Village Gosh / Tavoush Interested local stakeholders (see Annex D of EA report

findings of the EA for listing of participants and questions and answers)26/Nov/2001 " Village Dprabak / Gegharkunik26/Dec/2001 " Village Koghb / TavoushPending: " To be added after completiondelayed bywinter weather

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I INTRODUCTION

1.1 INTRODUCTION

This Category B environmental assessment (EA) report was commissioned by theWorld Bank for the Natural Resources Management and Poverty ReductionProject in Armenia (the NRMPR project) with support from the Tacis JointEnvironmental Program (JEP). The EA report was prepared by EnvironmentalResources Management (ERM).

1.2 PROJECT BACKGROUND

The NRMPR project's development objective is to alleviate rural poverty andpromote sustainable natural resource management practices in degraded hillyand mountainous areas of Northern Armenia (see Figutre 1). The project will helpprevent further deterioration of the natural resource base (soil, water, pasture,forest, fisheries and biodiversity) and will stabilize local incomes. The projectoffers incentives for adoption of sustainable practices which are expected toreduce pressures on environmentally sensitive areas in selected watershedslocated in Gegharkunik and Tavoush Marzas. Watershed in the context of thisproject is the geographical landscape that feeds the water to a drainage line andfrom which area communities within the watershed make their living, dependenton the local natural resources. Watersheds are also referred to as river basins orcatchments. The watershed management approach is a strong, functional tool forintegrating natural resource management with the livelihoods of the residents ofa river catchment or sub-catchment.

More specifically, the project will: (a) develop and implement participatory micro-catchment plans in selected local communities; (b) support implementation of on-site technical packages that would promote sustainable management andconservation of biodiversity and natural resources while generating economicbenefits for local communities; and (c) strengthen the capacity of local institutionsresponsible for natural resource management and moderate conflicts betweenvarious resource users.

The project components are inextricably linked with one another in as much thatthey have the same overall objective and are based on an integrated watershedapproach. Sustainable farming and grazing practices resulting in increased cropand livestock productivity, together with income generating opportunities andimproved forest management, will result in alleviation of rural poverty in projectlocations and eventually lead to enhancement and preservation of the naturalresource base and to improved biodiversity. Forest management and biodiversityare part and parcel of watershed management and as such are contributing to theintegrated ecosystems approach taken by the project.

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r E-1C-E @ *' ~~~~ ;X--W ' 's ,* r

I *SIE I F ;|ll ~~~~~~~~~~AZERBAIJAN._

NATIONAiL ENV-OMMEWTAL ACnoN PROGRAM

ALE,'AN - - ----- ,' ISLAMC~~~~~~~~| r 87 | ,,! -B IC ________________,___

| -@_ - X ~~REFt,tUC . --.. e I

| * . ,., ( OF IRAN ~~~~~~~~~FI T, T

Figure 1. Physical and political map of Annenia (from NEAP, 1999).

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1.3 SCOPE AND OBJECTIVES OF THE EA

The scope of the EA encompasses an environmental assessment and anenvironmental mitigation and monitoring plan as required by the Bankoperational policies. Given that the project is a natural resource managementproject, the EA was based on the project preparation reports for each of the threecomponents (Participatory Watershed management, Forest Management, andProtected Areas Management and Biodiversity Conservation) which were in thefinal stages of preparation during the EA process.

The EA tasks as presented in the terms of reference (TOR) are presented in thebox below.

Box 1.1 EA Tasksfrom the Terms of Reference

1. Description of the Proposed Project2. Description of the Environment3. Legislative and Regulatory Considerations4. Deterinitationt of thte Potential impacts of the Proposed Project5. Pesticide lUse and Management under the Proposed Project6. Analysis of Alternatives to the Proposed Project7. Development of Environmental Management Plan8. Assist in Inter-Agency Co-ordination and Public/Noni Governmental Organizationt Participation

1.4 STUDYAPPROACH AND METHODOLOGY

The EA study followed the terms of reference and standard practice. The generalapproach is described below followed by the methodology employed.

1.4.1 Approach

The NRMPR project objectives are to achieve a range of positive environmentaland social impacts, and the components of the project have been designed toenhance the positive outcomes and to also include mitigation measures forpossible adverse or negative impacts. Hence, the EA process involved asecondary assessment of possible impacts, both positive and negative, as well asan assessment of the proposed enhancement and mitigation measures. We havealso, where possible, identified further enhancement measures.

Also, under each component we have included a section on potential risks tosuccessful project implementation and delivery of the project's stated social andenvironmental objectives. The risks identified are mainly process management orinstitutional in nature, but unless addressed within the projectdesign/implementation framework in a timely manner have the potential to a)compromise the achievement of the project's stated objectives, and/or b)compromise the relevance and efficacy of the proposed mitigation andenhancement measures. These project or management risks are identified in the

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last section of the three project component chapters (Chapters 6, 7, and 8).Chapter 9, Additional Recommendations for Project Risk Management,summarizes the risks and also presents recommended measures for institutionalmanagement of the project in Armenia.

1.4.2 Methodology

The methodology follows the World Bank's policies on environmental assessment(OP 4.01 and related policies and guidance documents).

Available project background information including aide memoirs and draftproject preparation reports, as well as related information, such as, the NationalEnvironmental Action Program (NEAP 1999) for Armenia, were collected andreviewed. Several meetings were held with World Bank staff in Washington, D.C.who were involved in the project to discuss background and potential issues. Ascoping mission to Armenia was carried out by the EA project manager and theforestry specialist in mid August, 2001. During this mission there were extensiveliaisons with the project preparation unit (PPU) as well as a series of field trips tothe project areas with specialists involved in project preparation. In addition,informal meetings were held with a number of stakeholders including nationalministries and villagers in the project area. Last, local consultants to support theEA preparation were identified and interviewed and four local consultants wereselected.

Subsequently, a series of missions over a 6 week period in September and earlyOctober 2001 by international EA specialists were carried out to Armenia. Thesemissions were used to conduct further fieldwork to the various sites involved inthe project, collect additional information, work with the local consultants, and toliase with the various stakeholders including the government ministries. Inaddition, the EA team were able to liase with the international consultantsworking on both the watershed management and protected areas managementand biodiversity conservation components.

During the above missions, the Public Consultation and Disclosure Plan fordisseminating the results of the draft EA was developed with the localconsultants.

The ERM Team was comprised of four international and four local experts.Annex A lists the members of the EA team.

1.5 CONTENTS OF THIS REPORT

The content and structure of the MRMPR project EA is presented herein. Theorganization reflects the structure of the NRMPR project which consists of threeseparate components with different specific objectives and prepared by differentproject preparation consultants. The structure of the report is listed below:

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* Chapter 1 presents an introduction to the EA and the NRMPR project;

* Clapter 2 presents the background institutional, regulatory and policyframework;

* Chapter 3 presents the general baseline environment in Armenia;

* Chlapter 4 presents project alternatives;

* Chapter 5 presents a summary of the public consultations which took placeduring project preparation and the Public Consultation and Disclosure of theEA;

* Chapter 6 presents the Community Based Natural Resources ManagementComponent of the NRMPR project including component description, positiveand negative impacts, enhancement and mitigation measures, theenvironmental management plan for the component, and potential risksrelated to implementation of the component;

* Chapter 7 presents the State Forest Management Component of the NRMPRproject including component description, positive and negative impacts,enhancement and mitigation measures, the environmental management planfor the component, and potential risks related to implementation of thecomponent;

* Clhapter 8 presents the Protected Areas Management and BiodiversityConservation Component including component description, issues andimpacts, enhancement and mitigation measures, the environmentalmanagement plan for the component, and potential risks related toimplementation of the component;

* Chapter 9, Additional Recommendations for Project ImplementationManagement, presents a summary of implementation risks for each of thethree components and makes recommendations for improving institutionalmanagement of the project during implementation; and

* Chapter 10 presents a summary of conclusions and findings including asummary of the environmental management plan for the project.

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2 INSTITUTIONAL, REGULATORY AND POLICY FRAMEWORK

2.1 INTRODUCTION

This chapter addresses the current institutional, regulatory and policy frameworkfor environmental management in Armenia, with a particular focus on therelevant framework for this EA. The chapter is organized as follows:

* Policy framework* Legal and Regulatory framework* Institutional framework* Institutional setting for project implementation

Each section provides an overview of the current situation and lists the mainissues concerning the different frameworks. The activities defined in the threecomponents project descriptions are designed to address these issues. They arehighlighted here to provide a better understanding of the project background.

Additional recommendations for project risk management and improvinginstitutional management of the project during implementation are provided inChapter 9.

2.2 POLICY FRAMEWORK

2.2.1 Overview

NEAP and Lake Sevan Action Program

With financial assistance from the World Bank's Institutional Development Fund,the Government of Armenia prepared the National Environmental Action Planand the Lake Sevan Action Program, adopted by the Cabinet of Ministers in 1999.The NEAP identified Armenia's environmental goals, objectives and priorityactivities to prevent further degradation of its natural resources. Key areas ofaction include policy and program development, legal and regulatory reforms,institutional strengthening and capacity building, environmental awareness andeducation, ensuring effective implementation of the Action Program andfinancing and co-operation with other organizations.

The Lake Sevan Action Program identifies four phases to implement a sustainablemanagement of the lake to provide opportunities for development for tourismand recreation, to protect and enhance biodiversity, to improve fisheries in asustainable manner, to control and minimize pollution discharges, to improveinstitutional arrangements to more effectively integrate all user groups within thewatershed and to restore the strategic value of Lake Sevan.

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Biodiversity Strategy and Action Program

Armenia's strategy for biodiversity conservation, as identified in the NEAP andBiodiversity Strategy and Action Plan (BSAP), focuses on sustainabledevelopment of landscapes, building human capital and increasing financialinvestments to achieve improvements in four key areas: (i) institutional andcommunity know-how in sustainable development and its enabling legalframework; (ii) public awareness and participation; (iii) protected area networkplanning and management; and (iv) safeguard flora and fauna by mainstreamingbiodiversity conservation into agriculture, forestry and other economic sectors.

Forestry Policy

The GOA declared the 21st century as "the century of Armenia's forestation". AForest Policy was developed in 1996 and aims to satisfy objectives related toenvironmental protection, economic and rural development, and land use. Acorresponding forest strategy to meet the declared policy objectives in the mediumand long run is to make the Armenian forestry sector self-reliant, in both financialand economic senses, thus justifying future capital investments and also relievingoffsetting the shortfalls in government support for recurrent budgets.

There are four major and interrelated strategic objectives:* the integration of Armenian forests into the national economy;* afforestation, regeneration and rural forestry;* improvement of the effectiveness of the management of the forests;* conservation and protection of the environment.

Agricultural Policy

The GoA has taken actions to liberalize the country's agriculture and to arrest thedeterioration of agricultural infrastructure. A Government Strategy forSustainable Agricultural Development is currently being prepared by theMinistry of Agriculture and will be presented to the Cabinet discussion in thebeginning of 2002. Specific objectives of the strategy are to: (i) provide foodsecurity in the country; (ii) improve social conditions in the country, reducepoverty; (iii) establish an agricultural system smoothly functioning under marketeconomy conditions and principles; (iv) support the development of productionand marketing of Armenian agricultural production, which will ensure theentrance into the international market and competitiveness; and (v) increaseprofits and improve livelihood of rural population. The strategy will focus on thefollowing: (i) agricultural policy and macroeconomics; (ii) crop production; (iii)livestock breeding; (iv) processing and marketing of agricultural products; (iv)financing of agriculture; (v) rural infrastructure and management.

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2.2.2 Main Issues

Although many relevant policies have been and are being developed over thelast 5 years, many of these are overlapping and were developed withoutsufficient co-ordination between the involved agencies. In addition,implementation of the policies is problematic due to unrealistic goal settingand inadequate costing. Most strategies are fully dependent on availability ofinternational funding. The general lack of co-ordination between agenciesdrafting policies could create a risk to the current project. It is important thatnew policies or management plans which will be prepared under eachcomponent will be developed in an integrated manner to prevent overlap orcontradiction.

2.3 LEGAL AND REGULATORY FRAMEWORK

2.3.1 Overview

The main legislative framework for environmental management relevant to thecurrent project is contained in the following laws:* Law on Principles of Environmental Protection (1991)* Law on Specially Protected Areas (1991)* Water Code (1992)* Forest Code (1994)* Law on Environmental Expertise (1995)* Law on Payments for Nature Protection and Use of Natural Resources (1998)* Law on Flora (1998) and Fauna (draft)* Law on the Protection and Use of Fixed Cultural and Historic Monuments

and Environment (1998)* Law on Lake Sevan

The table in Annex B sets out the main provisions of the laws mentioned above aswell as other relevant regulatory instruments.

Armenia is also a party to the following multilateral environmental agreements:* Convention on Biological Diversity (1993)* Ramsar Convention on Wetlands of International Importance (1993)

* United Nations Framework Convention on Climate Change (1993)* Convention on the Protection of World Cultural and Natural Heritage (1993)* Convention on Combating Desertification (1997)* Convention on Environmental Impact Assessment in a Transboundary

Context (signed in 1997 not ratified yet)* Basel Convention on the Control of Transboundary Movement and Disposal

of Hazardous Wastes (1999)* Convention on the Transboundary Effects of Industrial Accidents (1996)


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2.3.2 Main Issues

* The "Law on Environmental Expertise" is not properly implemented and doesnot reflect the actual procedure which is followed. Contribution ofindependent experts and NGOs is minimal and public hearings are never held.Apart from lack of implementation, the Expertise law is also incomplete.Assessment criteria, requirements for preliminary environmental studies andthe procedures for public hearings still have to be developed.

* The "Law on Protected Areas' does not account for the changing socio-

economic and political situation, particularly with regard to land privatizationand the establishment of the private sector. The implementing regulationsneeded for each protected area are non-existent (except for Sevan NationalPark for which regulations were passed this year). Clear plans for boundariesand zoning, conservation regimes and opportunities for sustainable use are notincluded, and the precise definition of what constitutes the allowed activitiesin each area has not been considered. The current system is restrictive andmight benefit from a broader range of types of protected areas beingrecognized.

* There are no regulations for registration and cadastre maintenance ofbiodiversity, which should govern the conservation of biodiversity and ensurethe guarantee for setting up quotas for utilization of natural resources.

* Legal constraints for community level developments include lack of orinadequate regulations for land tenure, pasture renting, taxation of non-profitand agricultural organizations, status of farms and rehabilitation of irrigationand other water facilities. A law on agricultural co-operatives is lacking. Theset up of water management boards which are in charge of all naturalresources under the watershed is not possible under the current legislation.Tax exemptions, for non-for profit organizations are not regulated.

* In the Forest Code, all forests have a protecting, sanitary and health role,therefore forest cannot be used for production. The forest may be cut only forsanitary and care purposes. The code neglects the actual situation and theproductive role of forests in the country. Amendments to the Forest Code arebadly needed. It is necessary to have implementing legislation on forest useadopted under Forest Code which grants the use of forests for leasing, grazing,etc. Furthermore, the present Forest Code does not provide for private forestland ownership or community management (providing opportunities for cashflowing back to e.g. forest user associations). Procedures for forest preservationservices and monitoring are lacking as well. With regard to implementation ofthe forestry component activities forest regulations supporting SFM activitiessuch as correct felling techniques, road construction, sustainable planning etc.have to be developed before any logging activities take place.

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* The Law on Rental and Regulations on Utilization of Natural Pastures, HayMeadows and Other Land Types has a number of problems. The leasing termsprovided are too short for sustainable pasture management, possibilities forprivatization of pastures and most of the hay meadows is not provided andthere is no pasture use control. The law should provide for an obligation forimprovement of land and its protection. Rent fees should be used for pasturerehabilitation and improvement.

2.4 INSTITUTIONAL SETTING

2.4.1 National Level

Ministry of Nature Protection

The protection, sustainable use and regeneration of natural resources and theimprovement of the environment is the formal responsibility of the Ministry ofNature Protection (MONP). The following departments have responsibilities ofparticular importance to the project:

* Department of Flora and Fauna Protection and Specially Protected Areas* Land Protection Department* Water Resources Protection Department* Environmental Policy and Scientific Education Strategy Department* Normative Methodological Department Hazardous Substances and Waste

Management Department

The MoNP is responsible for environmental policy preparation, implementationof nature protection policy and supervision over natural resources utilization,development of environmental standards and norms, environmentalenforcement, monitoring the state of the environment, providing publicinformation and co-ordination of environmental research and public education.

In terms of biodiversity and natural resource use, the MoNP implements Statepolicy relating to biodiversity conservation, sustainable use and speciesregeneration, and oversees environmental regulations, the development ofprinciples for and monitoring of biological resource use. The MoNP hasresponsibility for a number of protected areas, and oversees and supervisesactivities of other government agencies in relation to biological resource use. TheMoNP issues licenses for hunting and collection of medicinal plants, and there areplans to extend the licensing system for other forms of natural resource use,involving further regulations relating to data, appropriate collection methods andfees. The Ministry is also responsible for inter-ministerial co-ordination andinternational collaboration on this issue.

The Department of Flora and Fauna Conservation and Protected Areas of theMoNP is the main department responsible for activities on biodiversityconservation. The Department oversees and co-ordinates the activity of a number


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of protected areas, such as Sevan National Park, Dilijan, Khosrov, Sev Lich,Erebuni and Shikahogh State Reserves. Other responsibilities include the grantingof permits for the utilization, import and export of bio-resources, as well as forfishing and hunting, maintenance of the Red Books, drafting of plans for thespecial protected areas and co-ordination of monitoring in the bio-resourcessector.

Relevant sub-divisions of the MONP include:

* The State Environmental Inspectorate and its 11 Regional EnvironmentalInspectorates who perform the enforcement of the laws and regulations on airand water pollution, land use, biodiversity conservation and forest protection;

* State Environmental Expertise, body responsible for EIA;* Environmental Monitoring Center, responsible for air and surface water

quality monitoring;* Hydromet, responsible for monitoring of water flow, water balance and water

level fluctuations, organization of research in the field of environmentalpollution and weather forecasting;

* Hyantar, Closed Joint Stock Corporation with its State Forest Enterprises;* Forest Research and Experimental Center (FREC) is responsible for

conducting scientific research and information collecting on forest inventoryand classification, forestry extension as well as development ofmethodological guidance on forest conservation and use; focused ontraditional forestry

* Lake Sevan National Park;

* Dilijan State Reserve.

Hyantar

Hyantar is responsible for conservation, protection, reproduction and utilizationof all forests outside the protected areas. It manages the relationships between thestate and the forest utilizes and is both regulator and enforcer. A StateProcurement Agency was recently established to be responsible for wood sales.

Ministry of Agriculture

The Ministry of Agriculture (MoA) is responsible for implementation ofagricultural policy and realization of agricultural production objectives,management of state agricultural lands and development of land use schemes,overseeing agro-processing procurement and food policy and supporting farmersof privatized land. In addition, the MoA oversees management of agro-biodiversity, seed-production, fish breeding farms, veterinary and plantprotection services.

State Committee on Water Managemlent

The State Committee on Water Management manages irrigation, drinking,mineral water resources and the sewage system, registries all artesian sources and

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owns all available water infrastructures. It develops the water use fee policy,usage quotas for all main water users and implements investment projects in allsubordinated agencies. It is divided in a Water Supply Agency and a Drainage,Irrigation and Management Agency who are both established as state closed jointstock companies.

The tables in Annex C set out the full structures of the above mentionedinstitutions.

2.4.2 Marz and Local Level

Armenia has 10 counties or provinces, known as Marzas, which are subdividedinto communities, Hamainks. The city of Yerevan constitutes an additionalpolitical entity in itself. General marz administration functions includesupervising the constitutionality and legality of decisions taken by local self-governing bodies, assuring the implementation of decrees, implementing regionaleconomic and social development programs, coordinating the activities of stateagencies, overall planning, organizing and providing infrastructure services, andsecuring protection of state property, natural resources, and cultural heritage.

In the field of the environment the marzas:

* participate in development of national environmental programs and makeprovisions for their implementation in the marz areas

* are responsible for enforcement of legislation in the marz,

* support specially protected areas, natural resource utilization, and executingmeasures against illegal hunting, fishing and logging,

* co-operate with environmental NGOs,

Agricultural Support Centers have been established in all marzas under adifferent World Bank project. The Centers work in close co-operation with theMoA are provide extension services to farmers, manage information data baseson agricultural issues, develop nurseries and distribute seeds and promote publicawareness.

The Hamainks are in charge of managing the property in their district andresolving problems of local significance. They have significant authorities in landmanagement and water management. It is their responsibility for instance tomaintain the irrigation systems and assist to prevent crop and livestock diseases.

2.4.3 Main Issues

* Human capacity and financial constraints limit the environmental authority'sability to fulfil its role, especially at the local level. The functions as well as the

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prevailing attitudes of the management are based on one-way administrationand implementation from central to local level. There is a considerable need forfurther training and improved management skills at all levels. Knowledge andunderstanding of the market economy, modern management principles,community participation in natural resources management and humanresources development are poor. Budget limitations and general lack offinancing is a continuous constraint to build adequate technical andmanagement capacity. Capacity in key areas such as environmental planning,management and law drafting within the MoNP are weak.

* Co-operation among relevant sectoral agencies is weak, with several agenciessharing overlapping responsibilities of resource use. Institutional co-ordinationand collaboration for sustainable natural resources management needs to beimproved and the enabling framework should be provided through legislationand institutional set up.

* The monitoring capacity of the relevant agencies is inadequate. Monitoringequipment is obsolete and sampling is conducted according to guidelines fromthe Soviet era. Monitoring for forestry and biodiversity is performed in an adhoc manner and is very weak. Scientific studies within protected areas are notwell integrated into park management decisions. There is no propermonitoring of the utilization of non-wood forest resources. Reference data isneeded to support the environmental authorities technical functions.Management planning and zoning can not be carried out without properinformation. There are no basic rules for information management and theexisting monitoring agencies or academic institutions lack co-operation. Aninformation network is needed to ensure the regular exchange of informationbetween the management authorities and the users of the natural resources

* Generally the public awareness on the importance of biodiversity and naturalresources conservation is weak. Mistrust of government agencies, combinedwith often conflicting regulations and unclear property rights have furtherweakened the ability of local communities to manage their resource base on asustainable basis.

* The Structure of MoNP is outdated and unclear. A strategic planning processleading to a mission statement should be carried out as suggested by thecurrent project. The present institutional set up for forestry management doesnot provide for transparency and opportunities for change. One of the mainproblems is that enforcement and utilization are the responsibility of the sameorganization. Such functions should be separated. Although Hyantar is part ofthe structure of the MoNP, real integration has not been accomplished so far.In addition, the current legal status of Hvantar is not optimal forimplementation of a number of the project objectives. For example, theproposed changes envisaging Hyantar as a purely state funded entity withlimited responsibilities for wood sales would hamper the development of a

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successful state enterprise managing state forest land. Hyantar's commitmentto new management attitudes and restructuring would be a pre-requisite forsuccessful implementation of the project. The role of the State ProcurementAgency, with respect to Hyantar has yet to be defined and might addadditional institutional problems. Last, higher management of Hyantar is veryunstable. For example, the head of Hyantar was changed at least 4 times overthe past two years.

* The Agricultural Support Centers are currently fully dependent oninternational funding. The NRMPRP could provide an opportunity toguaranteeing their sustainability after the project that currently supports themfinishes.

* The present status of Dilijan Nature Reserve, which prohibits all economicactivities within the Reserve, does not reflect the actual situation of theprotected area. Activities occurring within the limits of the existing protectedareas are not consistent with the site management objectives. A major townwith many economic activities, as well as numerous villages and major roadare currently comprised in the Reserve. A proposal for the change of its status,possibly to a national park, is currently under discussion in parliament. Moststakeholders support the change in status. However, the new draft zoning,with economic, recreational and protected zones, has been proposed for thearea is based on very old maps and data. Definitions of what constitutes aneconomic or recreational zone and what specific types of economic activitieswould be allowed in the protected area have not been developed.

* Lake Sevan National Park suffers from a weak legal framework, lack offinancial and human resources for management, lack of co-ordination withother regional agencies and an impoverished local population which uses thenatural resources in violation of regulations.

* Low salaries and non-payment of salaries over the last two years for forest andprotected areas staff is a serious problem leading to corruption and illegallogging. Corruption has to be addressed through stricter law enforcement,adoption of an efficient monitoring system which allows public involvement,transparent and accountable administration, clear allocation of responsibilitiesand access to information.

2.5 INSTITUTIONAL STRUCTURE FOR PROJECT IMPLEMENTATION

2.5.1 Overall structure

The Ministry of Nature Protection (MoNP) will be the leading agency responsiblefor project oversight and implementation the project activities in close co-ordination with the Ministry of Agriculture (MOA) and other stakeholderagencies and beneficiary groups. Forest management and protected areas


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activities will be the responsibility of the Department of Forestry (Hyantar) andthe Department of Protected Areas, respectively within the MoNP. A ProjectImplementation Unit (PIU) will be established in the MoNP with core technicalunits which will supervise and provide technical advice for the implementation ofthe project.

MOA will be directly involved in implementation of sustainable crop andlivestock production activities at the watershed level through their existingnetwork of Agricultural Support Centers, who will have a critical role indissemination of technical packages through establishing demonstrationactivities, farmers training and extension. The mechanisms for coordinating theactivities of the two ministries and the two departments within MONP will bedeveloped during preparation. Partnerships between locally based NGOs andsociety groups, research organizations and community groups would be used inplanning and implementation of community-level activities. The implementationof the project will build on NGO experience and existing communityarrangements.

2.5.2 Project Implementation Unit

The Project Preparation Unit would be expanded and strengthened to take overproject management and implementation responsibilities. The PIU will be headedby a full time director and will include technical and administrative staff. Itsresponsibilities would include: (i) through the Project Management Board, ensurethe co-ordination and timely support of the main project stakeholders inimplementing the project; (ii) preparation of annual work plans and budget; (iii)recruitment and management of foreign and national consultants; (iv) approvedisbursements of project funds for various activities; (v) prepare and submit tothe Bank progress reports, consolidated withdrawal applications, detailed projectaccount and audits; (vi) arrange procurement; (vii) undertake project monitoringof physical and financial progress and evaluation of project impact. The PIU staffwill consist of technical and administrative staff. Organizational and functionalstructure and responsibilities will be developed in detail during appraisal.

The PIU will procure services for implementation support to communities fromlocal NGOs which have good track records and experience in communitydevelopment. The project implementation consultant will be responsible forproviding technical support and supervise the implementation of annualcommunity programs at the field. In particular this will involve the supervision offield work undertaken by contractors, technical supervision, quality control,liaison with local governments and institutions, handling complaints, publicrelations, assistance with planning and budgeting. The contracted local NGOswill bc authorized to make limited decisions, beyond which they will seek thePIU's clearance. This interim level of project management is justified given thecomplexity of project implementation and the need for local beneficiaries,stakeholders and contractors to accumulate experience with the project and have

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a local point of contact. Stronger involvement of local NGOs would be valuable toachieve desired results through building on local knowledge and capacity andwider involvement of civil society. It would also have the effect of establishing aproject presence at local level.

Delivery of project inputs will mainly be through established institutions workingeither under direct contractual terms or in formal collaboration with the project.Inter alia these would include rural credit providers, local NGOs and societygroups involved in community development, other donor projects, and specialistagencies.

2.5.3 Project Management Board

The Project Management Board (PMB) established for the preparation of theproject will continue functioning during project implementation. The Minister ofNature Protection will be the Chairman of the Board. According to Armenianregulations, the representatives of the Ministry of Finance and Economy, as wellas the Staff of the Government should be represented there. However, taking intoconsideration the multi-sectoral nature of the project, Ministry of Agriculture,Ministry of Social Welfare, State Department of Cadastre will also be representedin the Board. Representatives of Tavoush and Gegharkunik marzas will have adeliberative voice in the Board.

The PMB will have the following functions and responsibilities: (i) supervisionof the PIU activities; (ii) supervision of the use of financial resources; (iii) afterthe approval of the Credit/Grant Agreement by the National Assembly,discussion and approval of the annual work schedule and budget of theproject; (iv) endorsement of the project reports; (v) approval of the results ofwork, services and goods procurement tenders; (vi) presentation of theproposals to the Government of Armenia on the use of saved financialresources (upon discussion and agreement with funding institutions); (vii)identification of shortcomings in the reports presented by PIU anddevelopment of measures for rectifying them, as well supervision and controlover the implementation of those measures; (viii) meeting and discussionswith the representatives of project funding institutions, and presentation ofthe results of those consultation to the Government of Armenia; (ix) wrap-upof the results of the project upon completion of the project, and presentation ofthe results to the Government of Armenia.

2.5.4 Specific Implementation Structuresfor the Three Components

Community Based Natural Resource Management Component

The project implementation arrangements for planning and activityimplementation at the local level for the Community Based Natural ResourceManagement Component are set out in the Guidelines for ParticipatoryWatershed Management, developed during preparation. The establishment ofcommunity level institutions will be contracted out. Resources User Associations


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(for water, grazing and forestry use) and Watershed Management Boards havebeen planned.

Establishment of a Management Board is proposed to co-ordinate theGovernment functions and project implementation. This would be a forum,where stakeholders from all levels of administration and project managementmeet four times annually in order to change views and experiences of projectimplementation. The Ministries of Natural Resources Protection, Agriculture andFinance & Economy as well as marz level contracted management units, marzadministration, Watershed Management Boards and Village Councils shouldnominate their representatives to this Forum. The role of Management Forumwould be to convey feedback from local levels to central administration and viceversa. The PIU would function as organizer of the meetings and prepare agendaand minutes for distribution among the stakeholders.

State Forest Management Component

For the management of this component, a State Forest Management ComponentImplementation Support Team (SFMCIST) is suggested within the PIU. This teamwould co-ordinate project activities with the executing agencies Hyantar, FRECand the MONP Department for Protected Areas as well as with their sub-unitsand the communities, existing village structures, NGOs and the proposed ForestUsers Associations.

Protected Areas Management and Biodiversity Conservation Component

Detailed implementation structures were not yet developed for this component atthe time of preparation of this EA.

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3 BASELINE ENVIRONMENT

3.1 INTRODUCTION

This chapter provides an overview of the general environmental conditions inArmenia relevant to this EA. The main source for the information presented inthis section was the National Environmental Action Program for Armenia,published by the World Bank in 1999 and NEAP Working Group reports 6, LandResources Management, 7, Forestry and 8, Biodiversity. Additional sourcesincluded NRMPR project preparation studies and reports.

As the working group reports and the various project preparation reports containextensive and detailed baseline information, we have only summarized the keyaspects relevant to the project and the project area herein. Where relevant,additional, component specific environmental baseline information is provided inthe following chapters devoted to those components.

3.2 O VER VIEW

The Republic of Armenia is a mountainous and landlocked country with aterritory of 29,000 sq. km and a population of 3,740,000 people. More than 50% ofthe population is rural and the majority of these live in poverty.Geologically, Armenia is part of the Alpine-Himalayan fold mountain system,and the country is predominately mountain highlands. Seventy two percent ofthe country is above 1,500 m elevation, and only 24% of the land has slopesaveraging less than 3%. Armenia has a sub-tropical, continental climatecharacterized by hot dry summers and cold winters. Annual precipitation rangesfrom 1,000 mm in the mountains to less than 300mm in the lowlands of the AraratValley. Most of the precipitation falls during April and May. Given the semi aridclimate, water is a limiting resource.

The Republic of Armenia has a total area of 29,740 km2 (2.97 million hectares),making it the smallest of the former Soviet republics. The country is dominantlymountainous with 72% of land above 1500 m, a maximum altitude of 4,095 m onMount Aragats, and only 24% of land with slopes of 30 or less. Approximately47% of the total area is under agricultural use or grazing, and the cultivated landis located between 600 and 2,500 m.

In spite of the relatively small size of Armenia, a diverse geology combined withthe large amplitude of relief and climatic variation associated with mountainousterrain has given rise to a wide variety of soil types. The combination of landform,climate and soil conditions has, in turn, given rise to a number of naturalecosystems and a to variety of conditions which determine the use of land forcultivation, grazing, forestry or other uses. In some cases, improper use of landfor human activities has led to environmental degradation, in the form of soil

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erosion, soil compaction, salinization, or contamination with industrial ordomestic waste. In the project area, the main forms of environmental degradationare soil erosion, overgrazing, and deforestation.

3.3 PHYSICAL AND BIOLOGICAL ENVIRONMENT

3.3.1 Land use/Land Cover

Armenia is an ancient land which has long been inhabited by man. As a result theland cover is very much a result of anthropogenic influences. Furthermore, thecombination of rugged terrain and semi-arid climate, with rainfall tending tooccur in intense storms of short duration, creates landscape conditions highlysusceptible to erosion.

Agriculture and Land Resources

Agriculture is the dominant land use in Armenia, and approximately 47% of theland area (1,391,000 ha) is devoted to agricultural usage. Agricultural land use isdistributed among the following categories:

* Pasture (694,000 ha);* Arable or cultivated land (494,300 ha);* Hayfields (138,900 ha);

* Fruit orchards and vineyards (63,800 ha); and* Fallow land (800 ha).

Arable land is typically located between 600 m to 2,500 m in elevation. Above2,500 m, agricultural usage is limited to grazing and/or hay production.

Both agricultural productivity and yield have declined in Armenia sinceindependence, and this is in spite of Armenia's aggressive privatization program(NEAP 1999). Reduced agricultural efficiency and sustainability may have been adirect result of the rapid privatization in conjunction with the difficult postindependence economic transition period and resultant decline in institutionalresources and agricultural extension services. Also, since independence,agricultural production has shifted to a subsistence bias versus the former Sovietera export market orientation.

The NEAP identified the main land use and policy problems and issues which arepresented in the box below.

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Box 3.1 Main land use and land management related problems and issues

Main Issues* Land degradation (soil erosion and compaction, fertility decline, salinization,

alkalinization)

* Land contamination (less relevant in project area)

* Landslides, soil creep, rockslides, etc.

* Limited extension services for farmersMain Policy Issues* Weak land administration and regulation

* Lack of clear policy planning framework on land use

* Inadequate legislation

* Limited awareness of rights and responsibilities by land users* Poorly defined institutional responsibilities

These problems are further compounded by the background rates soil erosion. Anestimated 60% of the country's agricultural lands are affected by soil erosionresulting from deforestation and poor agricultural practices includingovergrazing. Pastures proximal to villages are often under pressure fromovergrazing while more remote summer pastures in alpine meadows remainunderused. Tracks and roads into the high pastures are often poorly sited leadingto severe erosion. The farmers and herders abandon the severely degraded roads,which continue to degrade further, and establish new tracks adjacent to the old.Integrated land and range management is absent.

These circumstances are particularly acute in Gegharkunik and Tavoush marzaswhich are the most mountainous areas of Armenia and where land resources areunder extreme pressure. These background problems have become more acute inrecent years due to the transitional economy and the war with Azerbaijan whichhas resulted in a large influx of refugees to the two marzas, putting furtherpressures on the resource base.

Forests

Armenia has approximately 485,000 ha of forests and woodlands, mainly in thenorth (62%) and northeast (26%) of the country (NEAP 1999). About 70% is trueforests dominated by beech, oak and hornbeam. The remaining woodlandcomponent consists of coppice forests and shrub forest, which are poorly stockedand degraded, and pine plantations. Rates of natural regeneration and the successof reforestation efforts have been poor, mainly due to grazing pressure.

Armenia's forests have been in decline throughout history as result of the semi-arid climate and slow growth rate, unsustainable rates of timber harvest,agricultural clearance and grazing pressure. The long term trend estimate is thattotal forest cover declined from 25% to 10% over the last several hundred years.In the last 10 years alone, the total forest area has declined by 10%. An importantcontributing factor to the most recent deforestation was the reliance on fuel woodas a principal source of heating and cooking during the last five years as a result


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of the energy crisis. Illegal logging for timber and fuelwood remains a major issuein the forest sector. In addition to losses of timber, wildlife, and other non-timberforest products, deforestation and overgrazing has exacerbated the alreadyserious soil erosion problem. Deforestation has also resulted in a reduction in thenatural, beneficial watershed/water resource functions associated with forestcover including reduced runoff and erosion, increased infiltration, and reduceddownstream flood frequency, especially in the mountain areas. This functionrepresents a non-quantified contribution to soil conservation and the security ofnational water resources as well as hydro- electric generated power, particularlyin the case of Lake Sevan.

Sustainable management of forests is constrained by a poorly equipped andtrained forest administration (Hayantar). Improper forest road planning, siting,design and maintenance has resulted in severely degraded roads and in placesslope failures of entire road sections. Poor skidding and extraction practices alsoadversely impact forest quality and regeneration as well as contributing toerosion. Management, record keeping and monitoring, and regulatoryenforcement are poor, which contributes to the serious illegal logging problem.Furthermore, the legal and policy framework for forest management isincomplete, and by-laws to operationalize the forest management functions ofHyanatar are still missing.

The NEAP identified the following main forestry related problems and issues.

Box 3.2 Main forestry related problems and issues

Main Issues* Large areas in need of reforestation* Potential of fruit and nut trees is underutilized* No extension service to farmers* Degradation of forests* Forestry machines and equipment are worn out and outdated• Improper road planning and construction* Low success rate of natural regeneration and reforestation programsPolicy Issues* Weak forest management and enforcement capacity* Lack of policy for management of privately owned or managed forests* Inadequate forests resource data* Forestry managers carry out both protection and production (conflict of interest)* Little awareness of the need for forest conservation* No proper monitoring of the utilization of non-wood forest resources* Inadequately trained staff

Biodiversity

Armenia is located in the Caucasus eco-region, one of the Global 200 Eco-regions,which is located at the crossroads of three biogeographic provinces or biomes:European, Central Asian, and Middle Eastern. As a result and despite its smallsize, the country is characterized by a remarkable diversity in landscapes, habitat,

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flora and wildlife. Armenia also lies in the heart of one of the principal centers oforigin of domestic crops and forage plants in Southern Caucasus, and while itcovers only 5% of the Caucasus region in area, it contains nearly all plantcommunities found in the southern Caucasus and 50% of the region's floraldiversity. Armenia's agrodiversity, particularly of cereals and forage legumes isof global significance. It hosts significant population of fauna species of highinternational conservation importance (350 species of birds, 83 mammals, 53reptiles, 8 amphibian, and 30 fish). Twelve percent of the flora and 19% of thevertebrate fauna are included in Armenian Red Data Books. The threatenedvertebrates include mouflon (Ovis orientalis gmelinii), wild goat (Capra aegagrus),marbled polecat (Vormela peregusna), European otter (Lutra lutra), brown bear(Ursus arctos), manul (Felis manul), lammergeier (Gypaetus barbatus), imperial eagle(Aquila heliaca), great bustard (Otis tarda), little bustard (Tetrax tetrax), andCaucasian black grouse (Tetrao mlokosiwiczi). The territory of Armenia is alsolocated in the crossways of migratory ways of birds.

The project area includes a variety of mountain, forest, meadow and steppeecosystems in Gegharkunik and Tavoush marzas, which host a significant shareof the country's biodiversity resources. Specifically, forests in these districts havea significant role in fauna conservation and creation of the transboundary wildlifecorridor between Armenia and Georgia. Two main protected areas in thegeographic area of the project are the Sevan National Park (1,500 sq.km) andDilijan State Preserve (280 sq.km). Lake Sevan National Park harbors a uniquealpine lake ecosystem and its littoral habitats. Dilijan National Reserve is a uniqueforest ecosystem which hosts some 900 species, some of which are consideredendangered species in the southern Caucasus. The area also has significantcultural heritage resources. Hence, it is believed that there is significant potentialfor developing eco- and natural heritage tourism.

The protected area network in Armenia is fragmented and the managementeffectiveness poor. There is little or no planning for conservation programs inprotected areas and neither parks or reserves are required to develop andimplement management plans. Scientific studies within protected areas are notwell integrated into park management decisions. Infrastructure maintenance ispoor due to insufficient funding. Staff wages and salaries are often lower than thesubsistence level and staff are often unpaid for extended periods lack of funds.

The degradation of globally significant biodiversity has also been caused byincreasing pressures on critical rangelands and forest habitats, which have furtherisolated the existing protected areas, making the movement of wildlifeincreasingly difficult. Alpine meadows in Armenia often have biodiversity ofglobal significance. Their conservation requires intensive management andintervention because of the background interaction with traditional agriculturepractices (grazing and hay mowing). Forest biodiversity is subject to heavypressures through deforestation and overgrazing. Illegal felling threatens forestflora and fauna as it often leads to complete removal of dominant trees which


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alters the forest habitat qualities. As noted above in the section on forests,silvicultural management is of poor quality and contributes to forest degradationand loss of biodiversity. Finally, the population is largely unaware of theprotected areas system and communities in the vicinity often feel alienated by theprotected area program.

The NEAP identified the following main biodiversity conservation relatedproblems and issues.

Box 3.3 Main biodiversity conservation related problemns and issues

Main Issues* Degradation of internationally significant biodiversity of domesticated and wild species* Pressure on range of habitats including forests, rangelands and wetlands* Key habitats, especially wetlands, under-represented in existing protected areas* Pressures on relatives of domestic crops, fruit trees and medicinal plants

.Non-point sources of pollution from fertilizers and organic and inorganic chemicals onagricultural and forestlands

* Point source pollution from mining plants, metal and chemical service industriesPolicy Issues* Lack of adequate legal framework* Lack of adequate and updated information data bases

Lack of planning and operational capacity* Lack of financial resources* Inadequate organizational structure* Fragmented system of protected areas* Lack of political will to co-ordinate regional biodiversity conservation activities* Lack of clear management guidelines for protected areas

3.4 SocIo-ECONOMIC ENVIRONMENT

In common with many of the FSU countries in transition, but exacerbated byspecial factors including the aftermath of the 1988 earthquake and the midnineties energy crisis, the economy of Armenia contracted in real terms by 86.5%in the six years from 1990 to 1996. The reported per capita income for 1995-1996was only $420-440. In 1996 Armenia's total imports were$861.5 million, andexports were only $290.3 million. As a consequence of the economic situation, thegovernment's ability to adequately fund its recurrent and development activitieswas dramatically curtailed compared to the soviet era, when subsidized activitieswere prevalent. Although the economy has begun to recover, the governmentremains critically short of financial resources.

Some 55% of the Armenian population is classified as poor. Rural poverty isparticularly evident among those living in high altitude areas such as Tavoushand Gegharkunik. The rural economy has provided a "safety net" during the crisisyears, by absorbing the excess labor (employment in agriculture almost doubledbetween 1991 and 1996). Rural communities have been able to buffer themselvesthrough their access to natural resources.

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The primary activity of approximately 70 percent of rural households in theproject area is subsistence farming with small amounts of agricultural surplusbartered in local markets. The most important source of income (including self-consumption, cash, barter and processing) is crop agriculture and only about 10%of the population engage in cash sale of their agricultural production.Remittances, pensions and day labor (other income) provide primary source ofcash to buy goods and services. The majority of farmers are cash constrained andare unable to invests in their land and pasture. This situation is likely to lead to agradual decent into poverty once productive natural assets are over-exploited.


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4 PROJECT ALTERNATIVES

4.1 INTRODUCTION

The NRMPR project has been designed to improve natural resource managementand reduce rural poverty in Armenia. A natural resource management project ofthis type does not lend itself to conventional alternative analysis given its threecomponents and the multifaceted nature of each. Hence, this alternative analysisaddresses only two possibilities, with the project or without the project.

4.2 BACKGROUND

Since the collapse and dissolution of the Former Soviet Union, Armenia hassuffered a number of serious setbacks which have led to the impoverishment ofmany rural communities, especially the remoter of these as in the project areas.Not least of these setbacks has been the collapse of industries which providedemployment together with the collapse of market infrastructure, ruralinfrastructure and reduced overall purchasing power of the population.

Thrust into such a situation, rural populations have had little choice but to resortto exploiting their natural resource base for their survival and subsistence as,generally, it is available at little or no cost: in other words, a virtually free good.This is manifested in extensive low-input/low-output crop and animalproduction leading to inappropriate cultivation practices, and overgrazing ofpastures, especially those closer to the viUage or homestead. Use of hardwoodtrees for fuel, due either to the cost or unavailability of alternatives, is alsoexerting pressure on forests resulting in reduced ground cover and waterabsorption. Generally speaking, the poorer the population, the more dependentthey are on the natural resources, a situation which demonstrates a direct linkbetween poverty and environmental degradation.

Land use regulations are still embryonic in Armenia and the capacity to enforcethem is extremely limited. Thus, rural communities have had almost unlimitedaccess to natural resources, i.e. private use of common resources, which has led invery many instances to severe degradation of forests, pastures and soil erosionwith the consequent loss of habitat for indigenous flora and fauna. It can,therefore, be seen that this process is an accelerating downward spiral ofincreasing poverty resulting in increasing resource degradation resulting inincreased poverty etc. etc. If this continues unchecked, the time will come whenthe natural resource is unable to sustain any form of life, including humans.

4.3 WITH THE PROJECT

In order to reverse the degradation of Armenia's rural natural resource base, itwould appear imperative that the problems of poverty are addressed which in

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turn will lead to a steady reduction in pressure on the natural resources until thesituation is reached where exploitation and regeneration are in balance. In thiscontext, the aims and objectives of the project, alleviating poverty through theimproved and sustainable use of natural resources, provides a pilot program tobegin to reverse the current trend.

4.4 NO PROJECT SCENARIO

Without the project it would appear likely that the existing negative trends incritical natural resources, agricultural productivity, and rural poverty wouldcontinue and worsen as the resource base is further degraded. In the extremecase, the natural resource base may be degraded to such a degree thatdesertification is triggered, resulting in abandonment of the rural areas andmigration of people to urban areas such as Yerevan, creating problems of evengreater magnitude. If such a point is reached, very costly interventions will berequired to reverse the trend.


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5 PUBLIC CONSULTATION AND DISCLOSURE

5.1 INTRODUCTIONAND GENERAL APPROACH

According to the World Bank's Operational Directive on EnvironmentalAssessment (OD 4.01), affected groups and NGOs must be consulted as part of

the environmental assessment process, and the draft EIA must be disclosed to thepublic for review and comment prior to finalizing the report. In order to ensurethat this is carried out in a systematic way and that that the views and interests ofall project stakeholders are taken into account, a Public Consultation andDisclosure Plan (PCDP) was prepared for the project (outlined below).

The objective of the PCDP was to ensure that all stakeholders and interestedparties were fully informed of the environmental assessment process and thatthey had the opportunity to voice their concerns and opinions on environmentalissues and management during the EIA preparation process.

Consultation has been carried out at two levels:

* At the national level: interested government bodies, NGOs, and otherinterested members of civil society were consulted during the EIA preparationprocess. Additionally, the draft EIA and non-technical summary was disclosedsuch that the above stakeholders could obtain the document and submitcomments.

* At the local level: government authorities, water users associations, potentiallyaffected nearby villagers, and other interested stakeholders were consulted insome depth during the EIA preparation phase. Public hearings were held atthe local level in the second phase of consultation when the draft EIA reportwas disclosed and discussed.

5.2 CONSULTATION METHODOLOGY

Public consultation took place in two phases. Firstly, consultation during the EIApreparation process helped to identify key environmental issues and provideinformation on stakeholders' concerns about and views of potentialenvironmental impacts. Secondly, consultation at the draft EIA stage allowedstakeholders to review findings and comment on proposed mitigation andmanagement options.

Plase One - EA Preparation: As discussed in the introduction, the main objectivesof this project are environmental and social in nature, and the project wasdesigned in response to needs identified during comprehensive publicconsultation conducted at the inception of project design. As a result, the EA teamdid not visit all of the villages. Furthermore, consultation was carried out with

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local and regional government authorities and NGOs active in the relevant localareas.

Therefore, within the context of the EA preparation no further formal village levelconsultation took place, however, meetings were held with local governmentofficials and village representatives in five villages.

At the national level, consultation took place on both a technical level and ageneral project input level in Yerevan. Technical staff working on the EA hadmeetings with government personnel, NGOs, academia, international programrepresentatives and other experts. At the same time, consultation with a widerinterested audience was undertaken as a method of disclosing information aboutthe project and the EA, and to gather feedback on either the process or specificaspects of the project.

Phase Two - Disclosure and Discussion of Draft EA Report: After the draft EIA wascompleted, incorporating World Bank comments, the non-technical summary wastranslated into Armenian and with the assistance of the World Bank/PIC, wasmade widely available through government and non-government networks at thenational and local level. Full copies of the EIA text, in English, were circulatedalong with the translated non-technical summary to key stakeholders.Additionally, a series of public meetings (in the two Marza) were held, andadvertised to the public at large in order to disclose the draft EA and theproposed environmental management plan. The minutes of the public meetingsheld are summarized in Annex D. Last, the Final EA report was translated intoArmenian to allow review by the Department of Ecological Expertise within theMoNP as required under Armenian EA regulations.

5.3 PHASE 1 - INITIAL CONSULTATION

5.3.1 Identification of Key Stakeholders

Key stakeholders were identified at the international, national and local levelsand are shown in Box 5.1.

Box 5.1 Key Stakeholders

NationalDepartment of Nature Protection

Ministry of Agriculture

Ministry of Health

NGOsUnited States Department for Agriculture

HyantarRegional

Village CouncilsNGOs


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5.3.2 Local Level Issues: Derivedfrom Local Attitudes and Opinion

In addition to the public consultation carried out as part of EA preparationmeetings, interviews were held with representatives of Hyantar and members ofseveral village councils. In addition, some informal conversations took placebetween the EA team and local villagers.

* Expectations. Many villages have received multiple groups of consultants andproject representatives; this combined with the extensive consultation processhas produced very high levels of expectations.

* Misunderstanding of project impacts. The changes in project concept, particularlyin the Community Based Natural Resources Management component, sincethe last round of formal consultation created the potential formisunderstanding of this project amongst the village beneficiaries. The projectdevelopment processes (RRAs and PPWs) at the village level gave rise to anunderstanding that this project would be principally centered around theprovision of credit.

* Need for training and demonstration. Villagers expressed a strong desireprimarily for credit to fund agricultural inputs but in addition for assistancewith market development and irrigation scheme construction. No villagesidentified training or demonstration as a need during the project consultation,and therefore there may be a lack of support for interventions based aroundthese activities.

* Different levels of need. There are radically different levels of need fordemonstration in the different project areas. Whereas certain populations whorecently arrived from Azerbaijan were are not formerly farmers, the majorityof the local populations were involved in Soviet Style farming and thereforehave a more sophisticated understanding of farming practices. Furthermore,there are high numbers of university educated scientists and agronomists inmost of the villages.

5.4 PHASE 2 - FORMAL DISCLOSURE

5.4.1 Disclosure of the EIA and Non-Technical Summary

As stated above, the non-technical summary of the draft EA report (in Armenian)was disclosed in full to an identified number of key stakeholders, includingrelevant government agencies and departments, NGOs, and representatives ofrelated projects. Copies of the full draft EA report, in English, was also availablefor review at the PIU and Hyantar offices in Yerevan and the local marz offices ofthe Ministry of Nature Protection. In addition, copies of the non-technicalsummary in Armenian, was made available at all of the aforementioned locationsas well as village council offices and schools in all villages included in the project.

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The non-technical summary was made available for two weeks prior to the publicdisclosure meetings and remained available for a period of not less than 45 days.

5.4.2 Organization of Public Hearings

Based on what was learned during the first phase of consultation, publicdisclosure meetings were held with two meetings in each marza. The villageswere Gosh and Koghb in Tavoush, and Dprabak and Dzoragugh (1) inGegharkunik.

The villages were selected for the following reasons:

* firstly, to provide a geographical spread over the two Marza and thus toreduce travel difficulties; and

* secondly, to include a range of villages in terms of the number of componentsof the project which will affect them.

The public disclosure meetings were advertised in the newspaper and on radio,and notices were posted at government offices, schools and libraries. Transport tothe meeting locations was arranged for those without transport. The mainobjectives of the meetings were to disclose the findings of the EA and the keyelements of the EMP as required under World Bank policy. The minutes of themeetings held (including persons in attendance, questions and answers) arepresented in Annex D.

(1) At the time of the release of this 30 January edition of the Final EA Report. the PCD meeting in Dzoragugh had been delayed

due to heavy snows; this meeting will be carried out as soon as conditions permit and results will be added to a final edition.


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6 COMMUNITY BASED NATURAL RESOURCE MANAGEMENT COMPONENT

6.1 INTRODUCTION

This chapter comprises the EA of the Community Based Natural ResourceManagement Component of the NRMPR project in Armenia. The chapter isorganized as follows:

* Section 6.2 Component description;

* Section 6.3 Implementation process;* Section 6.4 Identification of Environmental and Social Impacts;* Section 6.5 Environmental Management Plan (for component); and

* Section 6.6 Implementation Risk Assessment (for component).

6.2 COMPONENT DESCRIPTION

The Community Based Natural Resource Management Component of the projectaims to introduce new agricultural methods to ensure the sustainable use of soiland pasture resources for both crop and livestock production. In addition, theproject aims to assist farmers to access credit and markets in order to generatecash income and reduce poverty.

The intervention unit for this component will be the micro-watershed: Micro-watershed management plans will be developed by participating communities,these plans will them dictate which activities are selected from a menul of optionsthat covers the following activity groups:

* community forest management;* community pasture management;* sustainable agricultural practices; and* community infrastructure and income generation.

In addition, an activity group entitled development of community institutions will beimplemented in each micro-watershed in order to provide the local levelinstitutional framework for project implementation.

For each of the five activity groups, a set of activities have been developed (seeBox 6.1). However, the precise activities selected for each micro-catchment willdepend upon the outcome of the participatory development of the micro-watershed management plans.

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Box 6.1 Menu of Options

Sub-Components

1, ' !,'4un -vL.a Plantation of multi-purpose bush and trees

L.b Enrichment planting & sustainable use of non-wood forest productsl.c Improvement and rehabilitation of forest pasturesL.d Sustainable pig-beech-oak silvo agro forestry systeml.e Demonstration of biogas production systems

-2 Coa ndjjsw sgm ; -. :. - ; T_ - 4

2.a Construction of stock watering points in high summer pastures

2.b Sustainable management of high summer pastures2.c Improvement and rehabilitation of village hay meadows

2.d Re-introduction of forage legumes into crop rotations

3.a Demonstration and training for sustainable production of winter wheat and spring barley3.b Demonstration and training for sustainable production of food and seed potato3.c Demonstration and training in orchard management and establishment3.d Demonstration and training for sustainable production of vegetables3.e Demonstration and training for sustainable cattle and sheep production

4.a Demonstration and training in sustainable irrigation management4.b Restoration of existing field tracks4.c Stabilization of areas at risk from land slides and rehabilitation of gully erosion4.d Demonstration and training in milk handling for processing4.e Demonstration and training in fruit and non-timber forest products processing and drying

5p --------- - - - - 'I- . g~.5.a Establishment of resource user groups5.b Strengthening the capacity of existing community and marz level organizations5.c Community awareness

While the activities within each of the four categories vary, their primaryobjectives in terms of positive environmental and social impacts are similar. Theseobjectives are summarized in Box 6.2.

Box 6.2 Summary of intended positive environmental and social impacts

1 Cam alt7 foresjni3U .l i FBIncreased understanding of forest conservation needs.

Biodiversity conservation of forest buffer zones, pastures and arable land.Establish multi purpose indigenous species in forest buffer zone.Reduction of pressure on pasture land.Provide sustainable wood and non-wood products, and alternative energy sources towood leading to conservation of forest habitats.Provide short and long-term income generating opportunities.Promote sustainable management practices and raise environmental awareness

2 Commiidty pasture nunagement -s-:-,

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* Increased food security* Long-term income generation.* Provide short and long-term income generating opportunities.* Stop further degradation of soil resources (forest, arable and grazing lands) leading to

increased soil fertility and a reduction in watershed sediment yield/erosion.* Promote sustainable management practices and raise environmental awareness.

3 Sustainable agricultunl practices* Increased food security* Increased opportunities for cash or barter income.

* Improved productivity will reduce pressure on marginal areas.* Halt decline in soil fertility

4 Community infrastructture and income generation* Increase cash surplus available for re-investment in sustainable agriculture practices

Increased productivity will reduce pressure on marginal areas

* Increase food security* Help to realize non-timber forest values

Reduction in erosion caused by poor management of water resources* Pasture improvement leading to reduced erosion, increased fertility, increased carrying

capacity, biodiversity preservation.5 Development of community institutions

Establishment of resource user groups

* Strengthening the capacity of exiting community and marz level organizations

* Community awareness

The project will also support a workfare (1) program, which will pay poorcommunity members in cash, for the labor necessary to support investments incommunity infrastructure, nature protection and conservation.

Eight micro watersheds (2) have been selected for the pilot phase of this project; itis currently envisaged that this will be expanded to 40 during the project'slifetime.

6.3 IMPLEMENTATION PROCESS

In each of the forty micro-watersheds the same project process will be followed(3 ).The main attributes of this process are depicted in Figure 6.1 and outlinedsubsequently.

(1) The precise details of this program, relating to the mechanisms of payment and institutional responsibilities had yet to be

worked out at the time ot writing.

(2) The micro-watershed concept within the confines of this project reflects the fact that all of the eight pilot project sites share

common water resources, rather than strictly concurring to the theoretical hydrological delineation watershed definition.

(3) In the eight pilot watersheds the process has reached the end of the second stage: selection of activities from Menu of Optioas.

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Figure 6.1 Watershed Component Project Process

ParticipatoryPlanning Workshops

Selection ofActivities from Menu

of Options

Implementation of Development of Environmental Project MonitoringMenu of Options User Associations Education and and Review

activities Training

Project Evaluation

Participatory Planning Workshops (Completed for the 8 pilot micro-watersheds)

Workshops are held in each of the villages pre-selected by the project team. Theaim of these workshops is to assist the villagers to identify needs within their ownmicro-watershed.

Selection of Activities from Menu of Options (Completedfor the 8 pilot micro-watersheds)

Using the combined assessment of need from each village in the micro-watershed,the project preparation consultants then selects the most appropriate set ofactivities from the menu of options (See figure 6.1, above).

Implementation of Menu of Options activities

The menu of options activities will be implemented principally by the followingactors:* the PIU - the PIU will set up two Marz level PIUs to deal with the

implementation of the project, these will either be newly formed entities orcontracted local NGOs;


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* other international program s - several of the activities, particularly those relatingto irrigation and marketing, will be implemented by other internationalprograms. In the case of irrigation it is anticipated that IFAD will carry out theimplementation, while in the case of the marketing activities USAID andUSDA are highlighted as potential implementation partners;

* credit institutions - while the project will not be providing credit directly, it willbe assisting farmers to access credit sources available from both internationaland national institutions; and

* private sub-contractors - the construction and/or repair of communityinfrastructure will be carried out by private sub-contractors after a competitivebidding process.

Development of User Associations

During the implementation period, a key objective is to assist villagers to formuser associations, primarily for water and grazing management. These usergroups shall hold resource property rights, and in return will be responsible forassociated maintenance activities. In general village activities will be coordinatedby, the Village Council.

Environmental Education and Training

All villagers involved in this component will take part in environmentalawareness raising courses.

Project Monitoring and Review

Both environmental and social indicator monitoring will be carried out during theproject lifecycle. In addition, mid-term and final reviews will be carried out.

Five categories of indicators have been selected: social, environmental,sustainability, input and output. A draft list of indicators has been drawn up inthe interim report, however, the exact timetable and assignation of theresponsibility for this monitoring has not yet been devised

6.4 IDENTIFICATION OF ENVIRONMENTAL AND SOCIAL IMPACTS

The primary objectives and intended beneficial impacts of this component areenvironmental and social in nature, and have been summarized above in Box 6.2.The objective of this environmental assessment is not to re-identify or analyzethose impacts, but to identify issues within the main project activities which maylead to negative environmental or social impacts, or instances where identifiedpositive impacts could be enhanced.

This section has been divided into several sub-sections: firstly, an outline ofpotential negative impacts is given (these in turn have been divided into two

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categories: primary and secondary); and secondly, those positive impacts, forwhich enhancement measures will subsequently be recommended, are outlined.

6.4.1 Primary Potential Negative Impacts

Impacts are classed as being primary for one of the following reasons:

* individually of primary concern - these are impacts which are of concern aspotential one-off significance; and

* cumulatively of primary concern - these are impacts which present concern interms of the cumulative impact of many actions.

In the context of the Community Based Natural Resource ManagementComponent all of the eight impacts identified fall into the later cumulativecategory.

Each of these eight impacts are outlined below, in addition to an overview of theimpact a table is included covering the following information:

* contributing sub-components - these are the sub-component activities (asoutlined in Box 6.1: Menu of Options) which, to some extent, contribute to theimpact identified.

* mitigating sub-components - the project has been designed in such a way thatsome sub-components already aim to mitigate the impact identified(1 ), thesesub-components are also identified.

Inipact 1: Eniriror,mental imnpacts of -0ostruction

Potential key environmental impacts of construction include: erosion andsedimentation, water quality impacts and soil pollution, noise, dust and airpollution, damage to existing installations, worker injuries, disruption to localresidents and disruption of agricultural activities. Where construction activitiesnecessitate the setting-up of temporary construction yards, there is a slight risk ofpermanent alteration of land caused by improper management of fuels or, topsoilcompaction from vehicles.

Contributing Sub-Components Mitigating Sub-Components4.b Restoration of existing field tracks None4.c Stabilization of areas at risk from

land slides and rehabilitation ofgully erosion control.

(1) These impacts have been included in this assessment because the ERM team believes that further measures, over and above

the mitigating sub-components, are necessary to further ensure that the potential negative impacts do not occur.

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Impact 2 lntreti7edo :rLin1S prrtsnrt oni pa,i tires

Despite the significantly lower livestock numbers currently seen in the 2 marzacompared with the levels present in the Soviet era, the current condition ofpastures is poor. Therefore increased access to credit, provided as part of theactivity 4.d Demonstration and training in milk iandlingfor processing, has thepotential to increase the number of animals in the watershed, which would leadto an increase in pressure on land, particularly pastures. While the sustainablepractices to be demonstrated, and the conservative estimates of pastureproduction (to minimize the risk of overgrazing), will mitigate this impact, it isessential that the pasture management plans (included as part of the overallmicro-watershed management plans) are developed successfully to ensure thatthe increased pressure does not exacerbate the situation prior to the increase inpasture quality expected after the replication of the demonstration activities.Additionally, it is critical that the pasture user-associations, designed to reducethe risk of common property degradation, are established and operational.

It is important to note that the maximum carrying capacities calculated in thewatershed management plans produced as part of the final interim report for thiscomponent, use yields that are 2 or 3 times greater than the yields currently beingproduced. Any carrying capacities calculated are therefore gross overestimates ofthe current carrying capacity of the watersheds.

Contributing Sub-Components Mitigating Sub-Components4.d Demonstration and training in 3.e Demonstration and training for sustainable

milk handling for processing cattle and sheep production

Izjimpact 3: Enz',ron,en'lrIZ tmpait-; v0 1rtrllur u I.t

Many of the demonstration activities promote the use of chemical fertilizers. Thisis advocated on the grounds that the soils in participating villages have hadlimited nitrogen fertilizer and no phosphate fertilizer during the past 10 years andthus phosphorus deficiencies are starting to appear as the soil reserve is minedand fully depleted. However, the application of chemical fertilizers, combinedwith an increase in access to credit, leads to the conclusion that the level ofapplication will increase during the course of the project. Since there is littlerecent history of expertise with fertilizer usage, this could lead to over-applicationand subsequent pollution of receiving surface waters (possibly leading toeutrophication problems downstream) and/or groundwater bodies (for example,nitrate pollution of groundwater supplies is a common problem in agriculturalareas in Western Europe). Moreover, where the water table is close to the surfacethere is the potential issue of contamination of local wells used for domesticsupply.

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Contributing Sub-Components Mitigating Sub-Components

2.c Improvement and rehabilitation of 3.a Demonstration and training for sustainablevillage hay meadows production of winter wheat and spring

barley.2.b Sustainable management of high 3.b Demonstration and training for sustainable

summer pastures production of food and seed potato.

Impact 4: Environmnental inipac;t of increased irrigatiokn

The increased irrigation included in this project refers solely to tertiary drainagesystems. As a result, the principal environmental impacts relate to the poormanagement of water application leading to nutrient leaching, waterlogging andsalinization. Where schemes are built near housing, there is also a potential forlocalized increases in water-borne and water-related diseases. Other impactsrelate to the increased need for fertilizers, See Impact 3. It is therefore essential thatthe demonstration projects and promotion of best management practices providethe appropriate training before IFAD sponsored construction commences.


4.a Agreement with IFAD regarding 4.a Demonstration and training in sustainableirigation rehabilitation irrigation management

Impact 5: Increased pressure oen andl pollition of water resoiurces

The menu of options includes sub-components that risk impact upon waterresources both in terms of quantity (e.g. increased irrigation) and quality (e.g.increased use of fertilizers). While other sub-components should mitigate theseimpacts (e.g. promotion of best management practice, demonstration and trainingin sustainable irrigation management), it is recommended that further measuresare necessary to respond to the potential negative, cumulative impacts of thesesub-components.


All sub-components including some 4.a Demonstration and training in sustainableagricultural activity. irrigation management

6.4.2 Secondary Potential Negative Impacts

The secondary potential negative impacts are those that are not of primaryconcem either individually or cumulatively, but for which it is recommendedcertain mitigation measures are carried out to prevent their occurrence.

The secondary impacts are outlined in Box 6.3 and have been categorizedaccording to the menu of options sub-component to which they are relevant.

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Box 6.3 Secondary potential negative imnpacts

Negative Impact

1. Conmnunity forest managementI ai Plant.atln o:1 rmnirri-pUirpose bud,h and trees

* Increased pressure on localized water resource as a result of tree water demand

I b Enrichnicnt planming & 4ustainabltr use of non-t,occd torest products

o Further encroachment into forest areas, potentially encouraging non-sustainableharvesting of non-wood forest products

I d Sustainable pig beecho03k siR o-ps-toral agroforestrv s% stem

* Further encroachment into forest areas, potentially encouraging non-sustainable

harvesting of non-wood forest productsI.e Demon,tration ot bio--gas production s% stvrns

* Increasing economic disparity* Impacts arising from potential gas explosions, including health and economic loss.

* Liquid manure spillages, leading to water course pollution.2 Community pasture management,.a Construction cf stock wvaterng points in high summer pasruxes

* Localized waterlogging at watering point, others may occur as a result of deliberate

breaking of the pipes to access the water supply on-route.

* Localized increase grazing pressure on those areas provided with watering points

2.b Sustainable nianagrement of high uunimer pasturesIncreased economic disparity as the very poor may not have enough stock to warrantthe journey to the high pastures or they may not be able to make use of privatelyowned high pastures owing to the cost of rental.

2.c lmpro% enient and rehabilaUtiu'n ot village hasr meadokw s* Negative impacts associated with over or incorrect use of fertilizers.

2 d Reintroduchon cI tlorige legumles into crop rotations* Initial economic impact as a result of the lower market value of alfalfa, in comparison

to potatoes.3. Sustainable agricultural practices3a Demonetrabon & traming tor suztuimnblo product;onot ci inter % heat and spnng barley

* Reduces pressure on pasture biodiversity and establishes management for sustainableuse.

3.b Demon;tran,'n & iTainnlg tor -u,tainabli prc.du.:non of tood and seed potato

* Persistence of potato diseases as a result of local seed potato production and use ofpesticides and negative health and environmental impacts as a result of increasedneed for pesticides.

4. Commnunity infTastructure and income generation4 c Stabilization ot areas at risk from land shdes and rehabilttat,on ct gull erosi.on control

* Increased erosion due to over-topping of Gabon's

* Increased on-farm land erosion at point of gully discharge (1)

(1) The budget for the construction of culverts to rehabilitate the tracks covers a Sm pipe, which will only bridge the width of the

track itself. Where the tracks directly border agricultural land there is a risk that at the point of discharge new points of

incre.ased erosion are created

ENVIRONNIENTAL RESOURCEs MAN ACENIENT WORLD BANK / TACISJOINT ENVIRONMENrAL PRECXRAM

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6.4.3 Positive Impacts

There are two positive impacts of the project, outlined below, which should behighlighted as the ERM team believe that there is significant scope to enhancethem.

ProvisionL ofuvod ad tree products

Trees are to be planted both to provide environmental objectives and socio-economic objectives. In order to ensure that the environmental benefits are notjeopardized for the socio-economic benefits, recommendations regardingsustainable management will be made.

Corlnninitw Forest Management

The transfer of former Kolchoz and Sovchoz forest land to villages along with thepreparation of participatory community forest and pasture management planswill provide an opportunity for communities to realize to a greater extent the fullvalue of the forest resource through forestry and agro-forestry activities.Furthermore, the villages will ultimately benefit from the indirect environmentaland watershed protection benefits that forests provide. In order to ensure that themaximum benefits can be realized, a community forest management plan will bedeveloped but further recommendations have also been made in the CommunityManagement Plan below.

Incomtie genera tion

Many of the sub-components contain activities to be included in the work fareprogram; it is recommended that these opportunities should be expanded toinclude many of the activities required for environmental monitoring andmanagement.

6.5 ENVIRONMENTAL MANAGEMENT PLAN

The environmental management plan can be found in Table 6.1. For all impactsthe management plan incorporates:

* institutional roles and responsibilities in relation to each of the mitigation andmonitoring measures;

• any additional training which will be required to successfully undertake themeasures described;

* timing in relation to the project process; and* provisional cost estimates (including any required training).

For each of the menu of options sub-components, both key and secondary negativeimpacts are listed, and, where appropriate, the positive impacts to be enhanced.


40

In order for the reader to be able to quickly identify the type of impacts referredto, the key negative impacts are indicated by an N, the secondary negativeimpacts by an n and positive impacts with enhancement measures by a P.

In the case of the primary negative impacts and the positive impacts, individualmanagement plans have been worked out in detail for each issue. These arereferenced in the body of the table and described in detail in a series of stand-alone boxes located at the end of the table.

In the case of the secondary impacts, the mitigation measures are described in thebody of the table.

ENVIRONMENTAL RESoURCESMANAGPEOENT WORLD BANK/ TAUIS1OINTENVIRONMENIALPRCXRAMI

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Table 6.1 Community based natural resources management component environmental management plan

Impact Mitigation/ Best Practice Institutional Monitoring Training Timing Total Cost'Responsibility

IT' C ibjmmpulttafarm6 - nmut, Mt N.v -'__ "I T ,," N pit_ '1 a Plantation of multipurpose bush and trees

Increased pressure on n Water resources management plan: See Section Marz level PILU Water quality N/A on-going lowlocalized water resource as a 6.5.7 and WMBs and quantityresult of tree water demand monitoring.

Loss of area for cultivation n Area encircled by tree borders should be Marz level PIU N/A N/A design nonemaximized.

Provide wood and non- P Production of wood and non-wood products Marz level PIU Annual Farmers to on-going mediumwood products should be in line with the Community Forest monitoring of receive

Management plans, see Section 6.5.9. harvest levels sustainableSustainable agroforestry harvesting limits: See by village forestry andSection 6.5.10. inspectors. agroforestry

training

I b Enrichnlent planting & sustainable use oi non-%vood torest producLsFurther encroachment into n In protected areas this activity should only take Marz level PIU N/A Forest design lowforest areas, potentially place in forest buffer zones. conservationencouraging non- trainingsustainable harvesting of should benon-wood forest products given to all

villagerstaking part.

Income generation. P Planting and care of these products should be PIU none none design noneincluded in the workfare program: See Section6.5.11

1.d Sustainable pig-beech-oak sih o-pastoral agrolorestrn sstern

(I) Costs unider $1,00D, for the five year project, are classified as low, costs between $1,000 and $10,000 for the five year project period are classified as medium and costs over $10,000, for the five year period, are classified ashigh,

ENVIRON:MVNVAi RvlSuRcvsMANAGLMENT WORLDBANK/ TACISIOINrENVIRONMENTALPROGRAM

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Impact Mitigation / Best Practice Institutional Monitoring Training Timing Total Cost,Responsibility

Further encroachment into n In protected areas this activity should only take Marz level PIU N/A Forest design lowforest areas, potentially place in forest buffer zones. conservationencouraging non- trainingsustainable harvesting of should benon-wood forest products given to all

villagers

taking part.

i.e DenIons1IatIon .f FLO*ga. prod uctlor ; stemsImpacts arising from n Systems should be constructed and maintained Marz level PIU Safety Safety design / on- lowpotential gas explosions, to avoid the potential risks. inspections (to training to be goingincluding health and be carried out given to alleconomic loss. by National Gas householders

Authority) involved.

Liquid manure spillages, n Systems should not be constructed within 50 Marz level PIU N/A N/A design noneleading to water course meters of a water course. Secondary containmentpollution. should be provided, at least double the volume

of the primary storage.

2 Communit) pasture management2 a C.:1irus uinlt cOI 9tOck v.atelrnig pomnri in high Sumnletr paL'ureA

Environmental impacts N Construction management plan: See Section 6.5.1. Construction Spot checks none construction lowarising from construction Construction works will be supervised and/or Sub-Contractors during duration

carried out by licensed contractors under the construction byexisting Marx permitting regulations. Marz level PIU.

Localized waterlogging at n The size of the trough should provide for the PIU Marz level PIU N/A design nonewatering point, others may maximum grazing load of cattle, as calculated by /WMB tooccur as a result of a grazing management plan: See Section 6.5.2 monitor plansdeliberate breaking of the in concordancepipes to access the water with grazingsupply on-route. management

plan.

ENVIUON\?o \ IAL XEr¶)1RCVSM.\AGNAILXIJ WORLD BA\K / TACIO JOIN I ENIRONMEN I Al PROCGRAM

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Impact Mitigation / Best Practice Institutional Monitoring Training Timing Total Cost'Responsibility

Need for water points along the route PIU or sub- Marz level PIU None design noneconstructed for the watering point should be contractors, /WMB toanalyzed, and where appropriate taps should be whoever is monitor plansincluded in the design, in concordance with responsible for in concordancewater resources management plan See Section design. with water6.5.7. resources

managementplan.

Increase pressure on grazing n Ensure that enough watering points are provided Marz level PIU N/A N/A design noneon those areas provided to support the grazing management plan: See / WMBswith watering points Section 6,5.2

2 b Sustainable mnanagement ol high cummer pa,turesEnvironmental impacts of N Fertilizer management plan: See Section 6.5.3 Marz level PIU Water quality Training in on-going mediumfertilizers. / WMBs monitoring, as the

part of water applicationresources and use ofmanagement fertilizers forplan: See Section all villagers2.17. seeking credit

for fertilizers.Increased economic n A post of stock minder should be included as N/A N/A N/A on-going mediumdisparity as the very poor part of the workfare program (See Section 6.5.11)may not have enough stock to take groups of stock to the high pastures,to warrant the journey to the when low pastures have been identified as unfithigh pastures or they may for grazing in the grazing management plan (Seenot be able to make use Section 6.5.2)privately owned highpastures.

I.t Improvemenn andl rehat'ifiLition of illage hay meadOWS

ENVIRONCMENTAL RESOURCES MANAGEMENF WORLD BANIC / TACEISjOIr ENVIRO.\XfE.\ IAL PROGRAM

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Impact Mitigation/ Best Practice Institutional Monitoring Training Timing Total Cost'Responsibility

Environmental impacts of N Fertilizer management plan: See Section 6.5.3 Marz level PIU Water quality Training in on-going mediumfertilizers. / WMBs monitoring, as the

part of water applicationresources and use of

management fertilizers forplan: See Sectiou all villagers2.17. seeking credit

for fertilizers.2.d R intiod ucti,-n of fvragt: ]Eunie, jint - rop rolatioin.


part of water applicationresources and use ofmanagement fertilizers for

plan: See Sectiorr all villagers2.17. seeking credit

for fertilizers.Initial economic impact as a n Crop rotation using higher value legumes should Marz level PFU N/A N/A design / on- noneresult of the lower market be investigated on a watershed bv watershed goingvalue of alfalfa, in basis.comparison to potatoes.

3. Sustainable agricultural practices3 a Deno.rtr.atioii & trainijng for -uttaui.ible pr,duation ol :. inter u lie.lt and spring barlek

Environmental impacts of N Fertilizer management plan: See Sectioni 6.5.3 Marz level PIU Water quality Training in on-going mediumfertilizers. / WMBs monitoring, as the

part of water applicationresources and use of

management fertilizers forplan: See Section all villagers2.17. seeking credit

for fertilizers.3.b VEnlon tratircr & nIa lIliig t.-r uLat.mnailt prodtic ton ol I ccd anJd .,l PtahIL

ENrsIRONMErNAI REsouRcEsNMANAGCFIEN WORLDBANK/ TACIsJoINi. EVIlRONMENFPALPROcGRAM

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Impact Mitigation /Best Practice Institutional Monitoring Training Timing Total Cost'Responsibility


part of water applicationresources and use ofmanagement fertilizers forplan: See Section all villagers2.17. seeking credit

for fertilizers.3 c Demonstration and training in orchard managenment & establishment

Increased pressure on and N Water resources management plan: See Section Marz level PIU N/A on-going nonepollution of water resources 6.5.7 and WMBsIncome generation. P Demonstration plots should be managed by PIU N/A N/A design none

those who are landless or who have fallow lands,focus should be made on the benefits ofconsolidation of lands.

3.e Demnontration and training tor su,tainahle cattle and sheep productionIncreased pressure on N Grazing management plan: See Section 6.5.2 Marz level PIU Village WMBs and on-going nonegrazing. / WMBs Inspectors village

grazingmanagementinspectors toreceiverangelandmanagementtraining.

4 ; <,. 4 Zr : ,IL -X m .t' yt .t.*i 2.e.gjL .

4.a Demonstration and trainLng in sustainable iMg3tion management (including credit facliltation through [FA:I for irrigation rehabilitation)Increase in impacts N Demonstration & training in sustainable N/A N/A N/A N/A lowassociated with irrigation irrigation management - Sub-Component4.4.

Initial environmental scoping of any new IFAD PIU N/A design noneirrigation sites.Water resources management plan: See Section Marz level PIU N/A on-going none6.5.7 and WMBs

ENVIRONMENTAL RESOURCESMANAGEMENr WORLDBANK/ TACISJOINI ENVIRONMENIAL PROGRAM

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Impact Mitigation/Best Practice Institutional Monitoring Training Timing Total CostlResponsibility

Fertilizer management plan: See Sectionf 6.5.3 and Marz level PIU Water quality Training in on-going mediumImplementation of integrated pest management / WMBs monitoring, as IPM and

practices: See Sectionz 6.5.4 part of water fertilizer useresources for allmanagement villagersplan: See Section involved in2.1.7 the activity or

seeking creditto financesimilaractivities.

4.b I-t-toraiti.n F n-ruin huLl track;Environmental impacts N Construction management plan: See Sectiicn 6.5.7 Construction Spot checks none construction lowarising from construction Sub-Contractors during duration

construction byMarz level PIU.

Increased on-farm land n Discharge from gullies should not be directly PIU none N/A design noneerosion at point of gully onto agricultural land; design should ensuredischarge. culverts discharge into natural or irrigation

channels.

4.c Stitilization oI are.4 3i rnik c0i lanrdclidet :chabiititiono oh guhlI ero'ionEnvironmental impacts N Construction management plan: See Sectioni 6.5.1 Construction Spot checks None construction lowarising from construction Sub-Contractors during duration

construction byMarz level PIU.

Increased erosion due to n Cabions should be filled with rocks, not concrete. PIU N/A N/A design noneover-topping of gabions

i.d D.r.iei.,i4tratlon and tr3inig In milk handling ior procc.;Iiig4 .z Ijem.rrisnrrati-n and training in Iruil N Wl- ' dr% ing

Health impacts of sulfur n Training for operators should include Marz level PIU N/A N/A design lowdioxide inhalation. management of sulfur dioxide to minimize

potential for adverse health impacts.

ENVIRON\MLN IAL RESOURcEES MANAENAEMr WORLD BANK/ TACISjfIXU E\xIRU IA\ I PROGRA.M

47

6.5.1 Construction Management Plan

Issue/ !inpaci .Analwsis

Environmental impacts of construction

Best Practice /lMigahtonAll sub-contractors should be subject to contractual clauses to manage the environmental impacts,as outlined in Annex E. In addition, clauses should be entered into the contract to allow the PIU torespond to the results of monitoring activities, as outlined below. All construction works should be

supervised and/or carried out by licensed contractors under existing Marz permitting regulations.

Inhstutional RerpernsibEldh,The PIU should, depending upon individual construction contractors' scope of work, incorporate anappropriate set of clauses into each contract given.

AloniforingThe Marz level PIU should monitor the construction activities through random spot-checks (at leastmonthly during long construction periods, or at least once during shorter construction activities).

Where violations of the contractual agreements are noted the central PIU should be notified. ThePIU should formally notify the contractors of the violations, outline the necessary correctivemeasures and set a period for correction. Where this is not adhered to, it is recommended thatcontractors be subject to contractual penalties (i.e. payment with held) or in severe cases thecontracts should be terminated.

It is also recommended that a final site inspection should be carried out before final payment ismade, in cases where the sites have not been properly cleared or remediated where necessary, finalpayment should be withheld until such time that this has been carried out.

TraiiiyingIn order to avoid the need for further training it is recommended that the Marz level PIU include anindividual with experience in environmental management and auditing as part of the team, or as anexternal contracted for a fixed term to undertake the activities required to monitor sub-contractors.

6.5.2 Grazing Management Plan

ssue/ IpnpacIncreased pressure on grazing.

Btst Practicel/ AitIgatwonGrazing management plans for each watershed are identified project activities. However it is worthmentioning here some best practices and mitigation measure which could be included in thedevelopment of such plans. These plans, updated annually prior to the grazing season, shouldidentify all of those areas that must be allowed to rest immediately to prevent irreversibledegradation. In addition, the watershed should be zoned according to the maximum carryingcapacity. This plan should include both private and public lands.

Those farmers whose lands are identified as needing rest need to be provided with access to statelands or provided with assistance to rent alternative lands. Where farmers can demonstrate thatthey need credit to let pastures rest, improve them or to rent other lands they should be able to

access credit with better terms and conditions.

The ERM team found that a pilot project has been started upon these lines in one of the villagesincluded in the project, a scheme such as this could be used as a demonstration.

Local high forage value species should be used to improve pastures.

ENVIRONMENTAL REsouRCEs MANAGEMENT WoRLDs BANK / TACISJOINT ENVIRONMENTAL PRoGRAM

48

In order to ensure the long-term viabilitv of a grazing plan, it is necessary that the plan bedeveloped in a wholly participatory manner. It should be presented as the response to theidentification of reduction in productivity of pasture and increase in agricultural land erosion. Theshort-termn individual benefits (financial or otheTwise) for those forced to rest pasture land shouldbe clearly presented to the cornmunities involved,

Once support has been garnered for the scheme, the ,.' I,.. .. ; 1 i the village mayor and other kevindividuals should, with technical assistance from the PIU, develop the initial grazing zones andselect grazing plan inspectors (2 n. n . II T'he inspectors should receive payment from theproject as part of the workfare programn

It is envisaged that this activity will initially be carried out on a village by village basis. However,the need for r ,r. .- renting of lands will demonstrate the benefits of a watershed approach,and therefore the village schemes could be developed into a watershed wide grazing managementprogramn once the watershed management board has been established.

It is recommended that grazing plan inspectors be appointed for a fixed term. Their responsibilitieswould include annual assessment of the pastures, on-going monitoring, and identification of thoseviolating the plan.

'I[he grazing inspectors would also be responsible for monitoring of the land which would takeplace monthly throughout the grazing season Penalties should be imposed upon those who violatethe grazing plan. Where those fotnd to be violating the plan have loans, this penalty could involvethe:;., n c. of preferential tenns and conditions. The imposition of penalties should initially liewith the 1 ! : mayors and subsequently the watershed management board,

In order to monitor the impact of the grazing management plan, the annual assignation of grazingzones should be monitored, which will by default monitor the changes in pasture quality over thewatershed.

The concepts above outline the basic structure of rangeland :r. . nr rr . . implenmented inmany countries. It is recommended that key village personnel and the inspectors should be giventraining in rangeland management: approxinmatelv a total of 6 persons per village. This could becarried out on a watershed by watershed basis which will also assist develop the understanding ofthe benefits of watershed management as opposed to village level management.

6.5.3 Fertilizer Managemnent

IssueinmpactEnviromnental impacts of fertilizer use

MitigationThe first requirement to ensure that proper application rates of chemical fertilizers are observed isto ensure that the correct dosage is known. The national Unit for Agrochemical Management wasestablished during the Soviet Union and was responsible for analyzing a soil sample from every 4hectares of land on a 4 yearly basis. From this the precise nutritional requirement of the soil wascalculated.

It is recommended that this unit is once again used to carry out similar analysis for each watershedarea. It is reconmmended that the information outlining the nutritional need of the soil he provided

l."\,RONrAFN, AL RE'-'usc FSMANA(AMrFNf WOSRLD IAN: / TACI 101NT ENYIRONENTO LPRCtRAM

49

to all farmers. At the beginning of the project a complete survey of the entire watershed area couldbe carried out, and the information made freely available to farmers.

In order to ensure that this information is utilized, when farmers apply for credit to purchasefertilizers they should receive more favorable loan conditions if they prove that this data have beenused for their calculations of how much fertilizer they require. Once the data are no longer valid(after four years) farmers would be responsible for updating this analysis and would have toprovide such proof in order to be granted further loans. In addition, it would be recommendablethat loans are not granted unless farmers can also demonstrate adequate storage facilities for thefertilizer concerned.

In addition, it is recommended that training courses in the proper management of chemicals are

provided. Once again, it is recommended that in order to get credit for fertilizers, farmers mustdemonstrate that they have attended such a course, which it is suggested should be held on a yearlybasis. A suggested outline for such a course would include:

* soil productivity - practical methods to determine soil productivity;

* different methods to improve productivity - advantages and disadvantages of traditional andalternative methods including; physical methods, chemical fertilizers, manure, bio-humus anddomestic wastes;

* chemical fertilizer - calculation of dose and analysis of application methods; determination ofnutritive sufficiency and need for fertilization during vegetation (grow) period; anddetermination and limits of nitrate content in agricultural products.

* manure - methods to maximize efficacy including assessment of manure readiness; and

* negative environmental and health risks offertilizers

MlontonuigSurface water and groundwater quality should be sampled as outlined in Section 6.5.7.

TrainingIt is recommended that the local PIU have the capacity to undertake the required training courses,or extension services already available could also be utilized to avoid the need for training oftrainers to undertake this activity.

6.5.4 Environmental management of irrigation

I 5Me,J1mpac I AnalysisEnvironmental impacts of irrigation

Alitigahon / iBesl PracticeThe training should emphasis the link the environmental issues and the impact upon agriculturalyield sustainability, at a minimum the following topics should be included:

* Use minimization through precise application (the project incorporates irrigation best management

practices)* Waterlogging and salinization;* Erosion;

* Eutrophication (soil and water); and

* Water pollution.

In the case that the scheme does move to the construction of primary or secondary schemes, or

increases the amount of water released from any rivers, it would also be recommended thatenvironmental flows be calculated. In the case where these levels are contravened it would berecommended that the increased irrigation is not included as part of the project.


50

Althcugh the credit is to be 5upplied by IFAD), for the sake ol projectcontintity it is advise d that all

trainig courses be lead by the Marz level Pls sith techrical assistance fronrt IFAD, where

appropriate.

Calculation ot rnviTrnmental flows, in the fort's outlined above, is not A5 requirervent of Armcnmanlaw Therefore it is recommended that calculatiorin of enrJfonmenitV1 flow be unidertken by th,

:cntralt pTjJ before the inclusion of any irrigation development which may sigrificantly reduce river

flovss below the rniniroal flowss which support environmentaf functions.

he Marz level PiU should undertake'spot checksc(i newly irrigated land at least twice during the

irrit;aiin season. The objective sthuld be to identify plaaces where ovec-wvakrting or wasteful

managesmetit of water is ccurring. Where this occurs, farniers shoruld ind-ividuialv be advisied of the

lically observable negative impactsk Where the probletim results trot's poor inteastru,tere

aintenlasrwe the project should movc, to carry out the Comvtrirclion wssirks necessary as part of the

workfiae pyogram.

in order to avoid th e need fur further tr.rinrig it is reconuriended that the hIatt levsl MI iculude an

individual with expeienrce in agricultural water management as part of the trAna, or as an extiersa

contracted tlw a lixed term to undettase the acbvities required.

6.5.5 Wfater retSfrcts mttatrgemrent ptan

Issur/lmpvcf

Neg,tive insparts upon walter esourcesv such as increased pilution and sedinsent

Waster sesoorrese manatgement plans for ach wateshed are identified pto1ect actiitixes. hinweseritis worth metlitnniog hefe omen beat practi Žs and mitigation measure whihe ould tle inclded ins'uch plansr litiii?zjg the data coilected for the watershed managensent plans cricci tring the

qeantih ot wearer rcsources availabe, . water balaice' shoauld bh caiceutated ifr each rsic-o

catchoreot. In aldditiorn a water quality sutrvey should be earned out to provide a baseline for

subsequent monitoroig.

The impacts upon thhis water balance of plans forifuture increased ise on water for iorigation,

domestic water supply, industrial water suply arnd stock nuutibeis ,nould he assessed using this

water balance. Nhis activity should provide the basis for subsequent decisions taken by the

It iS suggested that this information be cCompiled into an annual resiew of the status ot the water

resources within the nmiro-catchinent. This w ould then be diisiriboted to all hous,hiolds in the

cachlrment to itcrrtase awareness of the crmslartiv impact of their actions upon their eater

hoe mceiatbets of eavh village should be assisted technically by the Pill to develop the seater budget

for theit catchnient. Tli,s ould be conhbitred with the gracing plan aned the as'essment uf areas atrisk of erosion hi proside an analysis of poitits of umtec-coonectin between the eneirimnentalpr,oblcms i:tn-tifid bi the villag,er during the participatory planningtsorkshops.

Water quattly samples should be taken at the noairl mutflow of each ti-catchtnenn, and at an'vother key points of l,aer qudlity or quatity transtformnation iparticularIY where drinking water

supplies uligifi'ste,. At a ibnimuill analysis if pff, DO,. tIOD Coiifrtmms/Fcoli, Aumonia, Tota ) ))

Nitrates and Pesticides. While some water quality analysis requires laboratory equipment basicanalysis could be done by villagers as part of the work fare program.

Where the flow is not measured at the point of exit from the micro-catchment this should beimplemented by the project. It is recommended that flow be measured each month, using basic flowmeasuring techniques which could be undertaken by the same villagers as those responsible for

water quality monitoring.

Members of villages should be selected, based on both academic and practical experience, as part ofthe workfare program, to carry out these activities and produce the annual bulletin. and report themonitoring activities to the other inhabitants of the watershed and the local PIU.

AltmitontigThe Marz level PIU would need to monitor the activities of the villagers involved in this activity,who would probably need significant support during the first year.

Where the results of water quality monitoring indicate that drinking water exceeds nationalstandards the PIU should notify the Ministry of Nature Protection, who will then stop the supply.

6.5.6 Enhancement of Community Forest Management Plan

Isiue/7rnpacr

Ownership, access, utilization and income generation resulting from community forestmanagement plans.

Miti gation

The first stage of the Community Forest Management component is to transfer the former Kolchozand Sovchoz forest land to villages and prepare participatory community forest and pasturemanagement plans. It was felt appropriate to draw attention to some key issues and mitigationmeasures that may be enhanced.

With the supportive legislation, communities can be involved in forest management activities suchas small scale logging, collection of fuel wood, planting of fruit trees, collection of non-wood forestproducts. With a revised market structure and monitoring and evaluation, training etc, insustainable forest management techniques, incomes from forest resources can be greatly enhanced.The real value of the forest resource can be realized to the communities who live and use the forest,and can then be used as capital for other development activities in the community. By empoweringthe local communities and providing a degree of ownership of the resource to the communities,there is a greater incentive for the local population to assist with the control of illegal logging anduse of the forest resource for grazing.

Community forestry activities are beginning to be developed. For example, the EA team wereshown a site where community forest and agro-forestry activities were introduced in Spring 2001and were continuing with enthusiasm. The community members were undertaking planting offruit trees and other trees. However, the land for these activities was assigned to the communitiesby the Forest Enterprise (as it falls within the forest enterprise land) by a verbal agreement. Thecomnmunities have no legal agreement that would enable them to have long-term guaranteed accessto the land. The one request by the community members was for a legal agreement.

The following actions are recommended:

* ensure the legislation for land tenure, forest resource use and sale etc is developed and adopted

prior to the initiation of community forest and agro-forest activities* develop of local markets for wood and non-wood products


52

* transportation to markets is developed

* transparent and gender equality involvement/employment

* adequate training in agro-forestry and forestry provided

* full participation of communities in the decision making processes and planning made by keyforest stakeholders and institutions, such as Hyantar, Forest Enterprises, Forest Reserve staff etc.

* ensure close co-ordination across project components, especially for grazing activities.

Monitoring of the forest activities should be undertaken at least annually. Communities should berequired to provide annual managenment plans, as with the forest enterprise operations - sirnilarmonitoring should be undertaken.

In addition, the PIU should monitor the relationship of the forest enterprises, Hyantar and MoNPwith the communities.

TraIIlIlJ4

Training in sustainable forest management practices, adapted to the meet the needs of thecommunity forestry plan should be provided prior to the implementation of the communitymanagement plans.

6.5.7 Sustainable agroforestry harvesting

Issue/Impact AnalysisSustainable provision of wood and tree products

Best Pra.:tr.x .A i A gh hI,For all trees planted sustainable harvesting rates should be calculated and observed: For treesplanted to protect agricultural land and to stabilize areas at risk of landslides, limits should beexpressed as trees per meter.

'znL .tilri.,.'n. is . rt''i ,litWhere trees are planted on private land the responsibility should lie with the individual farmer orgroups of farmers concerned. Where trees are planted on state or community land the responsibilityfor the management of trees planted should be clearly defined: it is recommended that theresponsibility for managing these trees form part of the workfare program.

It is recornmended that monitoring of the number of trees and cubic metro produced/harvestedshould take place twice per year: at the beginning and the end of the winter season. The

responsibility for this should fall with the watershed management board; however, until theexistence of this institution it is recommended that monitoring be the responsibility of the local PIU.

Where it is found that the harvesting limits, or any other required sustainable management

practices, are not being observed, it is recommended that initially a period of grace should be givenfor those persons to respond to the corrective action identified as appropriate, if at the end of thistime period corrective action has not occurred one of the following courses of action should befollowed:

* -where trees have been purchased by individualfanrers usinig credit: the terms of the environmentalcredit should be returned to standard credit terms and conditions.

ENVIRONM1ENTAL RESTLRcEs MANAGEMENT WORLD BANK/ TACISJOINT ENVIRONMENTAL PR(CKRAMA

53

* where trees have been given to individualfarmers in theform of a grant: that farmer should not besupplied with any further trees under the project, until such time as the project recognizes thatappropriate corrective action has taken place.

* where trees have been given to communities in theform of a grant: the community should be subject toa penalty, this could either be monetary, or it could be suspension of other beneficial actionsimplemented as part of this project. In the case where responsibility for the management wasassigned as part of the workfare program this person should be given a period of warningbefore being relieved of their responsibilities.

Monitoring of non-wood forest products should also be included in this plan.

Trra:iniigWhen trees are provided, whether free of charge or in the form of credit, the basis for the harvestinglimits should be explained to those who will be responsible for the management of those trees. This

explanation should be provided at the point of delivery of the trees:

* Trees provided to individualfarmers: in order for farmers to either receive trees paid for by a grantor to receive credit to buy trees they should be required to take part in a short training course (2hours) outlining the sustainable management practices required to ensure environmentalobjectives are met.

* Trees provided to the village or watershed: the person or persons assigned to this task should takepart in the same course as that given to the farmers.

It is suggested that courses be provided once a year prior to the planting season.

6.5.8 Expansion of workfare program

lscue ,'lmpactIncrease direct income generation.

Besl Practhce/MlngahbonThe high level of professional capability identified in all the villages by the rapid rural appraisals,indicates that persons with the capacity necessary to undertake these tasks exist in each of thewatersheds.

tnvshutisonal Rn-ponsibilitv

It is recommended that these posts be created and advertised within each watershed. Applicantsshould be short-listed and interviewed, following standard procedures by the central PIU. Once thewatershed management board exists these people should be included in its staff.

MonfalonnigAll persons employed should be reviewed by the PIU initially after 3 months, then after 6 monthsand then on an annual basis. Where it is found that the work is either not being carried out or is notof a sufficient standard, then the persons involved should be subject to disciplinary proceedingsultimately leading to the withdrawal of their contract. This appraisal process should be theresponsibility of the head of the watershed management board once that institution exists.

Training

Once the best candidates have been identified, an assessment of their individual training needshould be made by the PIU.

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6.6 IMPLEMENTATION RISK ASSESSMENT

As outlined in Section 6.4, the objective of this environmental assessment is not tore-identify or analyze the positive environmental and social impacts of theproject, which form the project's overall objectives, but to identify issues withinthe main project activities which may lead to negative environmental or socialimpacts, or instances where identified positive impacts could be enhanced.

It is, however, felt that within the contexts of this project it is important toadditionally identify and mitigate a set of process based risks which, in theopinion of the ERM team, have the potential to seriously jeopardize thecomponent's overall effectiveness.

These are outlined individually below, with proposed mitigation measures. Toease the reader's appraisal of these recommendations, they have been provided inthe same format as the stand-alone management plans in Section 6.5.

6.6.1 Demonstration activities are not replicated quickly enough to mitigate theimpact of the increase of animals purchased arisingfrom improved access tocredit

I1 ,,C liuii cAll demonstration activities have a time lag between implementation and benefit realization;therefore, it is necessary to examine strategies to demonstrate benefits in the shortest time possible.In addition, the benefits of the demonstration plots themselves should be targeted upon those mostin need to maximize the poverty reduction potential.

S.- t Pa,L. t litI r 'iOciii

Prior to the implementation of any new demonstration activities, a survey of activities alreadyimplemented in the watershed should be carried out. Where instances of the activity to bedemonstrated already exists, these should be utilized as the demonstration plot.

Use of other demonstration activities, both in terms of agricultural techniques and collectiveorganization, already implemented within Armenia should also be investigated. Where these havebeen successfully established, arrangements should be made for inhabitants of the watersheds tovisit them. For example, the "Sermnabuyts" collective farm, Vardablur, Lory Marz.

Where new demonstration plots are implemented, the labor for these should be selected from thepoorest villagers, especially those without land or those who have been unable to maintain theirown land in production.

In cases where activities to be demonstrated are identical to those carried out on Soviet Kolkhos andSovkhos, the focus should be on demonstrating the benefits of collective action as opposed tosimply the techniques involved.

The Marz level PIU should carry out a survey focusing on the identification of examples ofagricultural best practice for each watershed prior to project implementation. In all new projects,this should be a principal objective of the rapid rural appraisals.

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The central PIU should identify examples of best practice within Armenia, and develop relations toallow key members of villages, or those responsible for the implementation of demonstrationactivities to visit.

Where demonstration plots are implemented the local PIU should identify those members of thecommunity who do not have lands or whose lands are not productive to take part in thedemonstration activity.

6.6.2 Farmers are not able to access credit in order tofinance the inputs necessary toimprove their livelihoods, and therefore no cash surplus is createdfor replicationof demonstration projects

Issue linpactThe key issue for all of the communities concerned is access to credit. From the participatoryworkshops that have taken place to date the communities all believe that credit will be provided aspart of this project. Without an increased access to credit, farmers, firstly, will not be able to fundany replication of demonstration projects, and, secondly, in the pilot projects are likely to lose faithin the project as a result of such a major failure to meet expectations.

During the field visits for this project, the ERM team identified several key barriers to currentlyexisting credit sources in Armenia. If the project is not to provide credit, these are some of thebarriers which will have to be bridged in order to improve farmer's access to credit.

Best Practice/lltigation

a financial management understanding -farmers do not understand the credit system, while they dowant credit, many do not understand how to budget future cash flows. Capacity buildingdealing holistically with personal financial management would be beneficial.

* project preparation - in the case of large scale projects or initiatives, the farmers do not understandthe various sorts of assistance e.g. the difference between commercial banks and donor agencies,and how to prepare their ideas in order to apply to those organizations involved. Capacitybuilding in project preparation is thus required, especially for the more senior members of thevillages who would be in the position to access small-scale donor funds.

loan collateral - in many instances credit organizations do go to the villages, or the villages haveinformation regarding the requirements to access the credit. However, villagers either cannotafford the collateral or do not feel confident enough to manage their future finances to put upcollateral. Therefore, it will often be necessary for the farmers to organize themselves into co-operatives to jointly put up the collateral necessary. Unfortunately, in many cases the structureof these organizations currently demanded by the co-operative banks is considered to beunworkable by the farmers. There has been some work in Armenia evaluating collective projectsthat have tried and failed (1), and it is suggested that a closer inspection of these could provideassistance. In addition, it is suggested that the demonstration projects actually focus on pilotingschemes of organization with added assistance and security provided by the project as incentivefor initial involvement.

hWituhtl,71,71 ReNp.n7sibilrtyThe PIU should investigate these barriers within the context of project preparation, and prior to anyfurther contact with the communities involved. This includes the disclosure of this environmentalassessment.

(1) For example, by Dr Naruba Kurkchiyan, Center for Socio-Legal Studies, University of Oxford.


56

6.6.3 Fanners do not choose to access credit to support environmentally sustainablepractices, instead opting to use the increased access to support acceleratedinvestment in environmentally endangering activities.

In the case farmers do gain access to credit, there is a further risk that not only do they not replicatethe sustainable practices included in the demonstration projects, but they also choose to invest infertilizers, pesticides, stock and agri-processing, without any regard for the environmentalimplications of their activities.

In some ways the provision of credit as part of this project provided a final control, whereby,replication of activities, or meeting certain environmental requirements would have allowedfarmers to access credit with more beneficial terms and conditions. Without this final safeguard, it iseven more imperative to examine mechanisms to ensure that the increased credit is used in anenvironmentally sustainable manner.

St I PrAt,a t. A In lAs is outlined in the environmental management plan in Table 6.1, several instances where it wouldbe effective to have a some control over the credit sources have been identified. It is thereforerecommended that in removing the barriers to credit access, the project analyses ways that projectfinances could be used to provide farmers with financial incentives to carry out the actionsdeveloped in the environmental management plan. For example, would it be possible to pay for anenvironmental officer to be included in the main banks offering credit, or to part finance loan fundswith lower interest rates, providing certain environmental criteria have been met?

1?;Itl1titroetal Fe±- lI,I ,bl;rtv

The PIU should investigate mechanisms to provide farmers with financial incentives to implementenvironmentally sustainable practices.

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7 STATE FOREST MANAGEMENT COMPONENT

7.1 INTRODUCTION

This chapter comprises the EA of the State Forest Management component of theNRMPR project in Armenia. The chapter is organized as follows:

* Section 7.2 Background;* Section 7.3 Component description;* Section 7.4 Site Identification and Implementation Process;* Section 7.5 Identification of Environmental and Social Impacts;* Section 7.6 Environmental Management Plan (for component); and* Section 7.7 Implementation Risk Assessment (for component).

7.2 BACKGROUND

One of the key objectives of the project is to realize the potential value of theforest resources, so as to provide much needed revenue to the Govemment ofArmenia (MoNP) and to the communities within the identified watersheds. Inaddition, this project address one of the priority investment activities identified inthe NEAP (1999) - to invest in forestry and biodiversity management programsand the construction of forest roads.

As discussed in the introductory sections, the forests of Armenia are beingrapidly degraded, primarily from legal and illegal forest activities and extensivegrazing in community lands. The State Forest Management Component (FMC) isdesigned to address these issues, however, the EA has highlighted two primarypotential key negative impacts of the FMC. These are:

* increased access to the forest (new and improved access); and* construction and maintenance of forest roads.

While the FMC incorporates mitigation measures for both of these potentialimpacts, it is suggested that certain mitigation measures be further enhanced. Thetwo most important mitigation measures proposed in this EA are:

* development of a Best Practice Manual for Forest Road Construction andMaintenance, and

* provision for independent review (with possible certification, usinginternationally defined criteria and indicators) by national or internationalcertifying bodies, such as the Forest Stewardship Council.

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The Environmental Management Plan (EMP) in Table 7.1 and complementarymanagement plans discuss in detail these and other recommended mitigationmeasures.

The FMC is linked with the other two project components (i.e., CommunityNatural Resource Management, and Protected Areas Management andBiodiversity Conservation), and where possible areas of overlap are addressedwithin the project design and in the discussion of institutional framework andproject implementation in Section 2.

7.3 COMfPONENTDESCRIPTION

The FMC component of the project aims to deliver social, economic,environmental and global biodiversity benefits through sustainably managing thepressures that threaten forest resources in Armenia . The component aims toaddress these issues by building local capacity, rehabilitating degraded forests,applying sustainable forest management and biodiversity practices.

The project activities to be undertaken within the component have been designedto meet the two specified outputs in the Aide Memoire (October/November2001):

* sustainable forest management (SFM) practiced in selected pilot areas on Stateforest land;

* establishment of legal, institutional, policy and human capacities forsustainable forest management, biodiversity conservation and povertyreduction in Hyantar, FREC, Ministry of Nature Protection (MONP) andvillage councils.

The activities used in this EA have been taken from the Second Draft Final Reportfor the FMC (Logical Framework), August 2001, along with the Aide Memoire.The set of activities under the fourth component, "Forest Biodiversity Conservationim7proved and Protected7 Areas efficiently mtianaged" is removed from the 3rd draft ofthe FMC report and from the Armenia Natural Resources Management Brief(September 2001). Therefore, the EA has not included activities listed under thisOutput in the second draft of the FMC. The activities and issues are now dealtwith by the Protected Areas Component. However, biodiversity remains fullyincorporated across all forestry activities.

Furthermore, the activities have been modified in response to the version of theAide Memoire dated October/November 2001. In this version of the AideMemoire the community forestry activities relating to the rehabilitation of over-grazed and /or over-logged stands in the vicinity of villages (former Kolchoz andSovchoz lands) have been incorporated into the Community Based NaturalResources Management Component (Sectiont 6). Thus all activities originally in

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this component relating to community forestry are now incorporated into Section6.

The set of activities particular to each output are listed in Box 7.1.

Box 7.1 Forest Management Activities

Sub-ComponentsX- Susutinable fard unag-ien practiced In oeectd pilot as on statieieut land1.1 Preparation of state forest management plans1.2 Reforestation of over-logged, scarcely stocked stands and afforestation of blanks1.3 Pre-commercial thinnings and thinning of pole stands in naturally regenerated stands1.4 Regeneration of over-mature, partially disintegrated stands through group selection

fellings and application of low impact harvesting methods for the purpose of SFMdemonstration

1.5 Rehabilitation of degraded and construction of new, forest roads, for implementation offorest management plans

1.6 Independent certification and auditing of the Zikatar experimental and demonstrationforest

1.7 Application of innovative methods of biodiversity conservation in forest managementactivities, on State, community, private and reserved forest land

1.8 Restore and strengthen operational capacities of the forest service (Hyantar), Ministry ofNature Protection and villages involved in project operations

2 upwtliqMpaMa

Mfl2- of h2.1 Reform and adapt legal framework for sustainable forest management, biodiversity

conservation and communal involvement2.2 Develop a national forest policy, strategy and program2.3 Restructure the forest administration, including separation of, administrative and

commercial functions2.4 Introduce innovative marketing and pricing methods2.5 Launch program against illegal logging and corruption including strengthening of

inspection services2.6 Develop and implement training program for key forest stakeholders including

participatory management of planning methods2.7 Develop Zikatar center for demonstration and dissemination of environmental education

for foresters and students

Note: FREC standsfor Forest Research and Experimental Center

While the activities within each of the four output categories vary, their primaryobjectives in terms of positive environmental and social impacts are similar. Theseobjectives are summarized in Box 7.2.

Box 7.2 Summary of intended positive environmental and social impacts

I-;Sutahble for,t mana4ennt practiced in selected pilot areas an state forest land

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* Avoid cumulative environmental impacts of forest production and rehabilitationactivities (e.g. soil erosion, sedimentation of watercourses, biodiversity loss).

* Enhance biodiversity conservation and sustainable ecosystem management in forestand grazing lands.

* Employment opportunities in road construction, workforce program s, rehabilitation

activities etc.

* Alleviate the rapid degradation of forest resources.

* Reduction in environmental impacts of existing road construction practices.

* Carbon sequestration.Increase contribution of forests to the state budget.

Reduction in illegal activities related to forests.

* Recreational and amenity value of land increased.2 Legal, institutional, policy and human capacities for sustainable forest management,

biodiversity conservation and poverty reduction established in Hyantar, FRtC, Mtinistof Nature Protection and village councils

Legal and institutional framework for sustainable forest management established.

Institutional capacity strengthened in key institutions.

Establishment of effective monitoring systems for forest management and planning.

Legislation reformed to enable community and private sector ownership andmanagement of forest resources.

* Alleviation of corruptive practices.

Forest products markets and prices reformed.

* Forest extension services for non-state forest owners and conmmunity members created.

Many of the project activities assist in the alleviation of poverty throughproviding employment opportunities. The Community Based Natural ResourceManagement Component refers to a workfare program where the project relatedemployment opportunities will be used to provide the much needed cashresources to community members for use in investments in communityinfrastructure, nature protection and conservation. Forestry related employmentopportunities are further discussed in Section 7.6.4.

7.4 SITE IDENTIFICATION AND IMPLEMENTATION PROCESS

7.4.1 Site Identification

Forest sites for FMC activities have already been identified. The sites are locatedeither within, or adjacent to, watersheds for community forest activities, or insuitable forest areas on State land for the sustainable forest managementactivities. The site selection process should take into consideration the issues ofensuring sufficient (%) areas of forest land set aside for the conservation ofbiodiversity and address the tension of old-growth forests versus regeneration ofdecaying beech forests. In summary the sites chosen are,

* four sites currently on community and private lands (between 70 and 110hectares in size) in both Marzas, with current problems of erosion andunsustainable land use, are identified for the implementation of activities toarrest soil erosion and improve the hydrological regime;

* four sites currently under Hyantar Ownership that were former Kolkhoz andSovkhoz lands, ranging in size from 200 to 500 hectares, are identified for the

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enlargement of the community capacity to promote environmentally friendlynatural resource community management, to assist in the arresting ofunsustainable land uses, illegal logging and intensive grazing;

* five sites on Hyantar and MoNP lands (between 500 and 3000 hectares),currently used by the Forest Enterprises but with problems of illegal cuttings,lack of pre-commercial thinnings and poor regeneration of dominant woodspecies )oak, beech) are identified for the promotion of SFM practices andforest rehabilitation; and

* six sites within Protected Areas varying from 5 to 500 hectares, with keyproblems of erosion, rare species under threat, illegal cuttings and poor naturalregeneration of key species (e.g. yew and pine), are identified for activities toimprove the forest biodiversity via the Community Biodiversity StewardshipPlan.

7.4.2 Implementation of FMC activities

The FMC will be implemented over the five years of the NRMPRP. However, thetiming of the individual activities is critical to the successful implementation ofthe project, with, for example, the need to develop and adopt a forest code thatsupports the application and enforcement of SFM practices, prior to any SFMactivities being initiated. With these issues in mind, the following timing foractivities is planned.

* Years 1 - 2: development and adoption of all necessary legislation and enablingframeworks, the development of markets and pricing mechanisms and theprovision of training to key stakeholders and implementing bodies.

* Years 2-5: begin implementation of forest based activities.

7.4.3 Main executing bodies

For the management of the forestry component, a Forestry ManagementComponent Implementation Support Team (FMCIST) is suggested within thePIU. This team of forest professionals will co-ordinate the project activities withexecuting agencies Hyantar, FREC and the MONP, MONP's Department forProtected Areas as well as with their sub-units and the communities, existingvillage structures, NGOs and the proposed forest user associations. The FMCISTwill also be the technical coordinator for possible donor activities supporting theBank's FMC.

In summary, the following actors are involved in implementing the activitiesunder the FMC:* the PIU - the PIU will set up two Marz level PIUs to deal with the

implementation of the project; these will either be newly formed entities orcontracted local NGOs;


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* CJSC Hyantar/including State Forest Enterprises will be responsible for theimplementation of sustainable forest management plans, monitoring andevaluation;

* FREC, Forest Researc)h and Experimental Center including Zikatar ExperimentalEniterprise will provide demonstration plots, research, forest managementplans, training etc.;

* MoNP, Departmient of Protected Areas, including Lake Sevan National Park,Dilijan State Reserve and the Reservations;

* private enterprises will be involved in the implementation of sustainable forestmanagement and rehabilitation activities, utilization of forest areas;

* local user groups, single persons, entire villages will be able to obtain long termlease agreements, and paid labor, enabling the traditional use of the forest andthe introduction of small-scale forest operations. This will require theprofessional support of the above mentioned agencies;

* NGOs - actors in the proposed field activities, but also for monitoring ofspecific project activities

If the proposed institutional state reform to allocate wood sales from state foreststo the State Procurement Agency is implemented, then this agency will beincluded into the FMC of the project.

7.4.4 Project Monitoring and Review

The FMC has identified key performance indicators, such as, job creation,increased contribution of forests to the State budget, and a defined area undersustainable forest management plans, as specified in the logical framework, formonitoring during the project lifecycle. The project design also contains anadditional set of indicators against which to measure technical, ecological, legaland economic progress. In addition, mid-term and final reviews will be carriedout.

The FMC has begun to identify groups of stakeholders who will assist in themonitoring. For example, local NGOs will assist with monitoring social andenvironmental impacts of the FMC and MoNP will monitor Hyantar activities.The monitoring responsibilities are further addressed in the EMP.


By the very nature of the design of the FMC, to assist in the arrest of forestdegradation and alleviation of rural poverty, potential negative environmentaland social impacts are limited. Where activities in the FMC will result inenvironmental and social negative impacts, mitigation measures are suggested.

7.5.1 Primary Potential Negative Impacts

The objective of this environmental assessment therefore, is not to re-identify oranalyze the environmental and social impacts already identified (above and in the

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FMC document), but to highlight the main project activities which may lead tonegative environmental and social impacts, or to instances where positive impactscould be enhanced.

This section follows the same format as the Watershed Component in Chapter 6.Again, the section is divided into several sub-sections: firstly, an outline of thepotential negative impacts is given (these in turn have been divided into twocategories: primary and secondary); and secondly, those positive impacts, forwhich enhancement measures will subsequently be recommended, are outlined.

Impacts are classified as being primary for one of the following reasons:

* individually of primary concern- these are impacts which are of concern aspotential one-off significance; and

* cumulatively of primary concern - these are impacts which present concernin terms of the cumulative impact of many actions.

For the FMC the impacts of individual primary concern are related to roadconstruction and maintenance. The other impacts outlined below fall into thelater category.

Below, in addition to an overview of the 3 key impacts identified, a table isincluded for each impact, covering the following information:

* contributing sub-components - these are the sub-component activities (asoutlined in Box 7.1: Forest Management Activities) which, to some extent,contribute to the impact identified,

* mitigating sub- components- the project has been designed in such a waythat some sub-components already aim to mitigate the impactidentified (1), these sub-components are also identified.

Impact 1: Env'ironmental inmpacts of road con,lructiion, reltabilitation and maintenance

Potential key environmental impacts of forest road construction and operationinclude: erosion and sedimentation, water quality impacts, noise, dust and airpollution, soil compaction, potential risk of fuel spills, disruption to localresidents and of agricultural activities. As a result of new road construction andrehabilitation of existing roads, there is a risk of secondary impacts from theadvancement of illegal logging activities and development of settlements (e.g. forupper pastures). The impact of illegal logging is discussed in Impact 3.


(1) These impacts have been included in this assessment because the ERM team believes that further measures, over and above

the mitigating sub-components, are necessary to further ensure that the potential negative impacts do not occur.


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1.5 Rehabilitation of degraded and 1.1 Preparation of sustainable forestconstruction of new forest road for management plansimplementation of forestmanagement plans

2.1 Reform and adapt legal framework forsustainable forest management,biodiversity conservation and communalinvolvement

2.3 Restructure forest administration, includingseparation of administrative andcommercial functions

2.5 Launch program against illegal logging andcorruption including strengthening ofinspection services

2.6 Develop and implement training program

for key forest stakeholders includingparticipatory management and planning

methods2.7 Develop Zikatar center for demonstration

and dissemination of environmentaleducation for foresters and students

The FMC project activities include, the preparation of sustainable managementplans and reform and modifications to the legal framework, restructuring of keyforest administrations, anti-corruption programs and the implementation oftraining programs, which are all designed to ensure the minimization of anynegative environmental impacts that may arise from road rehabilitation andconstruction within forest areas. However the ERM EA team feel that thesemitigation measures can be strengthened through the development of a BestPractice Manual (BPM) for forest road construction, as outlined in Section 7.6.1.

Itnpact 2: EnZi;'i0,1t t,enIzI ill1i,Uptt offelling L?CtiZ'itit'; (0t1Iilil S. 'n[Miinln ClIttil,z' etc)

Potential key impacts of felling activities include: damage of neighboring treesand plants due to poor directional felling; felling of hollow trees; felling treesbelow the required dbh (l) as stated in the sustainable forest management plan;and over-extraction per hectare (i.e. extraction rate greater than Annual AllowableCut (AAC)).


1.3 Pre-commercial thinnings and 1.1 Preparation of sustainable forestthinning of pole stands in management plansnaturally regenerated stands

1.4 Regeneration of over-mature, 2.1 Reform and adapt legal framework forpartially disintegrating stands sustainable forest management,through group selection fellings biodiversity conservation and communaland in applying low impact involvement.harvesting methods for thepurpose of demonstrating SFM

(1) dbh stands for diameter at breast height and is the method used to measure the size of a tree and to set minimum cutting

sizes for SFM

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2.3 Restructure forest administration,including separation of administrative and

commercial functions2.6 Develop and implement training program

for key forest stakeholders includingparticipatory management and planning

methods2.7 Develop Zikatar center for demonstration

and dissemination of environmentaleducation for foresters and students

The project aims to minimize these negative impacts through mitigation measuressuch as: development of sustainable management plans, restructuring of keyforest institutions and the rehabilitation of the Zikatar training and demonstrationcenter.

Impact 3: Environmental impacts of illegal forest activities

A key potential risk identified as a negative impact under road construction andrehabilitation activities would be the new or improved access to forest areas,potentially resulting in increased illegal logging activities. Additionally, theintroduction of innovative marketing and pricing methods may also encourageillegal forest activities. The Project, however, intends to launch a program againstillegal logging and corruption. This issue is further discussed in Section 7.7.1.


1.5 Rehabilitation of degraded and 2.5 Launch program against illegal loggingconstruction of new forest roads and corruption including strengthening offor implementation of forest inspection servicesmanagement plans

2.4 Introduce innovative marketing

and pricing methods

7.5.2 Secondary Negative Impacts

In addition to the key potential negative impacts outlined above, several othersecondary negative impacts have been identified. These are outlined in Box 7.3.

Box 7.3 Secondary negative impacts

Negative Impact1 , ,Sitainableforest ne t cdin suected pilet a L stte forest land - --1 2 Reforestation of over-logged, scarcely stocked stands and afforestation of blanks"

Reduction in total grazing lands, leading to increased pressure on remaining pastures1.3 Pre-comrnercial thinnmngs and thinning of pole stands in naturally regenerated stbnds

Over-extraction of timber in the upper timber-line area1.4 Regenerabon of over-mature. partallv disintegrating stands through group select3on

fellings and in applying low impact harvesting methods for the purpose of demonstratingSFMLoss of biodiversity and wildlife habitat

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Negative Impact2. Legal, institutional, policy and human capacities for sustainable forest management,

biodiversity conservation and poverty redaction established in Hyantar, FREC,Ministry of Nature Protection and village councils

2 4 Introduce inrno'ah%e niarketing and pricing niethcds2 7 De. elop Zikatar center for dernon,trahon and disseminatin ol en' irorarnental educanotn

[or tE'rec.tcrs and srudcnts

Construction impacts (air, water, noise, solid and liquid waste)

7.5.3 Positive Impacts

As outlined in the component description, the main objectives of the project are toimprove environmental and social conditions. However, there are two positiveimpacts that are highlighted here below, as there is significant scope to enhancethese benefits.

hicorneQnet( tr.ationF

Many of the activities in the forest management component provide opportunitiesfor employment of local village residents. For long term sustainability, it isrecommended that, where possible, community members be given long-termemployment through, for example, forest enterprises, instead of "cash forplanting trees". Additionally, it is essential that the employment procedure istransparent and adequately addresses gender equality issues. As with theWatershed Component, it is also recommended that employment opportunitiesbe expanded to include many of the activities required for environmentalmonitoring and management.

Increased revenue to Ilie Stiet

The removal of market restrictions, for example price setting by and sale of forestproducts, by Hyantar (and possibly the State Procurement Agency in the nearfuture), will provide an opportunity for the State to generate increased revenues.The development of, for example, an effective taxation system to capture thestumpage value of timber will greatly enhance the income received by the Statefrom forest production activities.

Additionally, the launching of a program to assist in the curtailment of illegalforest activities provides an opportunity for the State to collect more revenuesfrom forest activity taxes that are currently being avoided.


The environmental management plan (EMP) can be found in Table 7.1. For allimpacts the management plan incorporates:

* institutional roles and responsibilities in relation to each of the mitigation andmonitoring measures;

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* provisional cost estimates and timing in relation to the main rehabilitationschemes; and

* any additional training which will be required to successfully undertake themeasures described.

For the activities under each sub-component, both key and secondary negativeimpacts are listed, and, where appropriate, the positive impacts to be enhancedare also listed.

In order for the reader to be able to quickly identify the type of impacts referredto, the key negative impacts are indicated by an N, the secondary negativeimpacts by an n and positive impacts with enhancement measures by a P.

In the case of key environmental impacts and positive impacts, individualmanagement plans have been worked out in detail for each issue. These arereferenced in the body of the table and described in detail in the Notes sectionfound at the end of the table. In the case of secondary environmental impacts,simple mitigation measures are described in the body of the table.


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#lTable 7.1 Forestry Comnponent Environmnental Management Plan

Impact Mitigation / Best Practice Institutional Monitoring Training Timing CostResponsibility

I Sustainable foresl management (SFMI) practiced in selected pilot areas on state forest land

1.1 Preparation of sustainable forest management plansN/A

1.2 Reforestation of over-logged, scarcely stocked stands and afforestation of blanksIncreased pressure on n Through collaboration with the Marz level PIU Water quality and N/A Design/ Low

localized water resource WMC, apply the water resources Forest Enterprises quantity monitoring Ongoing

as a result of tree water management plan, see Sectioni 6.5.7. WMBs

demandReduction in total n Selection of sites for rehabilitation Marz level PIU N/A N/A Design / None

grazing lands, leading should be carried out in concordance ongoing

to increased pressure on with the grazing management plan,remaining pastures see Sectiont 6.5.2.

1.3 Pre-commercial thinnings and thinning of pole stands in naturally regenerated standsEnvironmental impacts N lImplement SFM plan, see Activity 1.1 I lyantar, Forest Number of trees, Training in Design / Low

of felling activities Enterprises wastage, felling SFM techniques Ongoingdamage by FREC

Over extraction of n Implement SFM plan, see Activity 1.1 Hyantar, Forest Location and number Training in Ongoing Low

timber in upper timber Enterprises of felling activities, SFM techniques

line area. thinnings etc byFREC, Marz levelPIU

1.4 Regeneration of over-mature, partially disintegrating stands through group selection fellings and in applying low impact

harvesting methods for the purpose of demonstrating SFMEnvironmental impacts N Implement SFM plan, see Activity 1.1 Ilyantar, Forest FREC monitoring, Training in Design / Low

of felling activities Enterprises Marz level PIU, SFM Ongoingexternal auditor/ techniques.certifying bodies(national orinternational)

Loss of biodiversity and n Implement SFM plan, see Activity Hyantar, Forest Biodiversity Training in Design / Low

wildlife habitats 1.1. Enterprises inventory by FREC biodiversitv ongoingconservationand awareness.

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Income generation: P Ensure transparent recruitment, with Hyantar, Forest Number of N/A Ongoing Noneemployment gender equality, where possible Enterprises, Marz employees of

ensure long-term jobs provided. level PIU Hyantar/ ForestEnterprise fromcommunityUnemploymentstatistics atcommunity

Increased revenue to P Remove market distortions see PIU Annual State revenue N/A Ongoing None

State Activity 2.4 under Output 3. Ministry of from forest taxes.Implement innovative market and Nature Protection Export revenues.pricing schemes. Hyantar

State ProcurementAgency

1.5 Rehabilitation of degraded and construction of new forest roads for implementation of forest management plansEnvironmental and social impacts of road construction and rehabilitation, includes thefollowing specific impacts:

Increased erosion N Implement Best Practice Manual for Forest Water and soil Forest Construction See Noteresulting from poor Forest Road Construction, see Section Enterprises/ quality monitoring managers, road Duration below forsiting and construction 7.5.1. 1-lyantar by WMBs, FREC, construction costs ofof forest roads leading Undertake an EA prior to new road Marz level PIU planners and implementinto siltation of water construction. laborers to g BPMcourses receive training Medium

in applicationof the BestPracticeManual

Increased soil N Implement Best Practice Manual for Forest Water and soil As above Construction Mediumcompaction, from Forest Road Construction Enterprises/ quality, run-off, re- Durationtemporary road Hyantar growth of vegetationactivitiesDisturbance to wildlife, N Implement Best Practice Manual for Forest Biodiversity As above Construction Mediumdue to construction Forest Road Construction, which Enterprises/ monitoring/ Duration /noise and dust, includes wild life corridors in road Ilyantar inventories by FREC, ongoing

potential damage to areas and logging activities Marz level PIU

wildlife habitat

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Impact Mitigation/ Best Practice Institutional Monitoring Training Timing CostResponsibility

Increased pressure on N Develop and implement a hunting Forest Enterprises Biodiversity As above Ongoing Mediumbiodiversity resulting license and quota system. / Hyantar monitoring by FREC,from increased access Marz level PIUand tourism (e.g.hunting)Increased development N Ensure co-ordination between forest Forest Enterprises Monitoring of new N/A Ongoing Mediumalong access roads, e.g. activities and watershed with WMBs, Marz settlements andupper pasture management plans/activities for level PIU population by Marztemporary housing. upper pasture management level PIU

Pollution due to N Implement Best Practice Manual for Forest Water and soil Forest Construction Mediuminadequate Forest Road Construction. Enterprises/ quality monitoring managers, road Durationmanagement and Hyantar constructiondisposal of solid and planners andliquid wastes from road laborers toconstruction receive training

in applicationof the BestPracticeManual

Alteration of N Implement Best Practice Manual for Forest Enterprises Water course Training in Best Construction Mediumdrainage/natural Forest Road Construction. / Hyantar alterations monitored Practice Duration /hydrological regime Watershed Component activities?? by WMBs Manual ongoing

Watertraining??

Slope instability and N Implement Best Practice Manual for Forest Enterprises Visual evidence, Training in Best Construction Mediumlandslides Forest Road Construction, e.g., / I lyantar erosion, Practice Duration /

regulation for construction on steep sedimentation Manual Ongoingslopes.

Increased noise, N Assessment of cumulative impacts of Forest Noise pollution, Driving skills Construction Mediumdisturbance and roads on surrounding areas, Enterprises, number of accidents training Duration /accidents from forestry especially populated sites. Hyantar Ongoingtraffic on village Consultation with local communitiesroads/public roads for siting of roads.

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Visual impacts N Good site management. Forest N/A N/A Ongoing Medium

Implement Best Practice Manual, e.g. Enterprise/not to build roads less than X meters Hayantarfrom main road, buffer zones aroundwater courses and lakes etc

Increased risk of illegal N Enforce anti-illegal logging activities, Marz level PIU Continual monitoring N/A Ongoing Mediumharvesting of wood and empowerment of local forest staff IIyantar by spot checks,non-wood forest etc, see activities under Section 7.7.1. enforcement of fines,products from increased revenue collectedaccess. from finesIncome generation: P Employment of local population Forest Enterprise Number employed, Specific Ongoing Lowemployment should be maximized, where / Hlyantar community training

possible providing long-term jobs Marx level PIU unemployment provided towith training. statistics employees

1.6 Independent certification and auditing of the Zikatar experimental and demonstration forestN/A

1.7 Innovative methods of biodiversity conservation applied in forest management on state, community, private and reserved forestlandN/A

1.8 Restore and strengthen operational capacities of forest service (Hyantar), Ministry of Nature Protection and villages involved in projectoperationsN/A

2. toies jr susu.i bLe fare* i, eablsedln'hy d n ff y n 3r b E F, i iE, A ' -:

1 Retorm and adapt legal trnior k for sumta inble tore t manigement, brodiversit) con.er ation and conmmunal inol emenntN/A

2.2 Develop national forest policy, strategy and programN/A

2.3 Restructure forest administration, including separation of administrative and commercial functionsN/A

2.4 Introduce innovative marketing and pricing methodsFreeing-up the market n Ensure enforcement procedures in Hyantar, Marz Quantity of wood N/A Design / Lowmay result in an place, legislation for private and level PIU products gathered ongoingincrease in felling communal ownership from the forest.activities in the shortterm.

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Impact Mitigation/ Best Practice Institutional Monitoring Training Timing CostResponsibility

Income generation: P Implement innovative market and PIU, Ministry of Annual State revenue N/A Design / Nonerevenue to pricing schemes, enhancement Nature from forest taxes. Ongoingcommunities, private measures outlined below. Protection, Export revenues.sector and to State Hyantar,

2.5 Launch program against illegal logging and corruption including strengthening of inspection servicesIncrease revenue to the P Empowerment of I lyantar, State PIU Annual State revenue N/A Design / LowState budget Reserve staff and local communities. I lyantar from forest taxes and Ongoing

Link with the anti-corruption project. activities.2.6 Develop and implement training program for key forest stakeholders including participatory management and planning methods

N/A2.7 Develop Zikatar center for demonstration and dissemination of environmental education for foresters and students

Construction impacts n See Construction Management Plan, FREC, Marz level Soil, air and water Training in best Construction Medium(air, water, noise, solid in Watershed Component, Section PIU quality practice for Durationand liquid waste) 6.5.1. construction.Income generation: P Ensure transparent recruitment, with FREC, Marz level Number employed, N/A Design / Noneemployment gender equality, where possible PIU community Ongoing

ensure long-term jobs provided. unemploymentstatistics

Note: the cost of implementation of the Best Practice for Forest Road Construction, may have higher short-term costs comparedwith current practices, but in the long term will reduce costs through efficient planning, lower maintenance costs etc.

Glossary:

Hayantar is the state-owned Closed Joint Stock Comiipany (ARMFOREST) currently responsiblefor the core part of tieforestfilnd land inArmenia.

Kolkhoz is the nn7ame given to co-operativefarnms operating on conmmunity owned land during the Soviet era.Marz is thie term usedfor a region of Arnmenia. Project is focusing on7 Tavoush and GegharkuniikSovklioz is the name given to statefarrms during the Soviet era. Thley were even operating on non-state owned lands.

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7.6.1 Best Practice Manualfor Forest Road Construction, Rehabilitation andMaintenance

issue/' nIpact Analksis

Environmental impacts of forest road construction and maintenance.

Best Practice, MitigationThe FMC project description outlines mitigation measures, such as the undertaking of anEA prior to road construction and the use of the EA Sourcebook Update on Biodiversityand EA, and of the World Bank's web-based toolkit for the treatment of biodiversity in EA.

However, in addition to these mitigation measures, the ERM EA team recommend thedevelopment and application of a Best Practice Manual (BPM) for Forest RoadConstruction. The BPM can be developed based on the existing Road Construction manualthat exists for general road construction in Armenia available from Central Administrationand incorporate other BPMs developed in Europe and North America, for example theBPM for Forest Roads in Romania (currently being devised for another World Bankproject), adjusted to reflect the situation in Armenia. The BPM will consider theconstruction of roads in the following stages:

* planing and siting, and design (for example, review terrain, water courses, inventory oftree extraction, soil type, rainfall, alternative routes, buffer zones, biodiversity andwildlife corridors);

* construction (e.g. culverts, bridges, surface run-off, worker health and safety, cost);* use and maintenance (number and size of vehicles, vehicle maintenance to minimize

fuel or oil spills, cost of and equipment/materials for maintenance); and* closure (especially for skid trails, secondary forest roads, how to revert back -replanting

of trees etc).

One of the primary tasks in developing the BPM for forest road construction is to actuallydefine what constitutes a forest road, e.g. a primary road, secondary road and skid trail.

The implementation of the BPM will also take account of the long-term maintenance (cost,procedures etc) of the roads constructed and rehabilitated.

In4Stuticnzal Responsiiility

The BPM should be devised by FREC with Hyantar and the Forest Enterprises. The PIUshould ensure, in close collaboration with the Ministry of Nature Protection, that the BPMis recognized in the Forest Code.

MoLnitoring

Monitoring should be responsibility of the MoNP and Hyantar with the assistance of FREC.Under SFM, the forest enterprises (state and private) will be required to producemanagement plans, both long-term (5 to 10 years) and annual. It is recommended that noforest activities be permitted to take place prior to the approval by MoNP/Hyantar, of aSFM plan. The annual plans should only be approved if road construction in the currentyear have been done in line with the BPM.

Incentive schemes can also be used whereby forest enterprises pay an annual bond which isrefundable if the SFM annual plan is achieved with minimal environmental and socialimpacts.

Training

MoNP/Hyanatar staff need to be trained in best practice manual and monitoring.

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7.6.2 Independent certification and auditing of suistainableforest managementactivities

I/ir, 7rl a I .- nali 1 I

Environmental impacts of felling activities and unsustainable forest management practices

through illegal cutting activities.

Mitigation, Ft PraicI,;c

All State Forest Enterprises and private companies, should be subject to independentcertification and auditing by either national or international certifying bodies, such as theForest Stewardship Council (FSC).

The international certification process has a set of criteria and indicators used forassessment and monitoring. These criteria and indicators can be adapted to the Armenian

conditions and applied.

An advantage of advocating the use of international criteria is that it enables the Armenianindustry to use the certification qualification in European markets, which are increasinglydemanding certified products. Certification requires the clarification and monitoring ofthe chain of custody and can therefore be used to assist in curtailing and monitoring illegal

cutting activities.

Institutional RC-,p"sit'llt,J

The MoNP/Hyantar can encourage the application of certification and independentauditing through the assessment of the annual SFM plans. The PIU can assist the forestenterprises with accessing national and international certifying bodies.

Monitoring should be the responsibility of MoNP/ Hyantar in conjunction with the nationaland international certifying bodies.

Training

National certifying bodies (if exist) can be trained in the international standards and staff of

Hyantar and MoNP can be trained in the international criteria and indicators used in the

certification process. These criteria and indicators can also be used in the design andmonitoring of SFM plans.

The following two management plans outline recommendations forenhancing the positive impacts of the FMC.

7.6.3 Income Generation

I f 41, , ; ?I'JmI ;: \I,lhll ,:.

Income generation through employment, access to non-wood and wood products etc.

Aa-,1'ahooltl S,,t P raail,,

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Many of the activities in the forest management component provide opportunities for

r . I .-A 1. A X1'. -J i Lr I Forlongtermsustainability, it is recormended that,

where possible, cemmornity mnembers be given tong-teri eznplovmnent through. for

example, forest enterprises, instead of 'cash for planting trees'. Additionally, it is essential

th,at the ernploymnet prtcedure i, transparent and adequately addresses genider equality

issues. As with thle Watetshed Component, it is also reeormnertded that employment

opportunities be expanded to include many of the activities required for environmental

rnonitoring and mastagernent,

To ensure that the poorest of the community tnembers are reached, employment

opportunities should he targeted towarts this group of the population.

Marz level PIU sholid monitor the employmerint procedures and number of jobs created.

It is recommended that the.se employment opporturities be created and advertised within

each watershed. Applicants should be short-listed and iiterviewed, following standard

procedures bv the central PIU.

All persons employed should be reviewed by the PIU initially afteY 3 rtonths, thert after 6

miionths and then on an annual basis, in conjunction with Ifyantar and the Forest Enterprise

management where appropriate. Where it is found that the work is etther not being carried

out or Is tiot of a sufficient standard, then the persons involved should be subject to

disciplinary proceedings ultimately leading to the withdrawal of their contract.

At the employerlevel, the employmentprocedures should be reviewed on a sirialar basis.

Incentives to provide local employment should be a zionditiooatity in thte annual SFPM pian.

Once the bestcandidate has been identified, an assessment of their individual training

needsi should be made by the PIU and forest enterprise (state anid privaite).

Training should also be provided to the employer orgariiation orn issues such as

employnient law atid conditions.

7f6.4 Increased Revenue to the State

I *w -I! l

Currently the State forgoes revenue from loss of reveute from illegal forest activitiee,

ineffective taxation system etc.

The removal of market restriction!s, for example price setting by and sale of forest prodiucts,

by Hfyantar (anid possibly the State Procurement Agency in the near future). will provide

an opportunity for the State to generate increased tevenuers. The developnment of, for

enhance the income received bg the State from forest production activities.

Other incomze increasing measures include:

* auctioning of forest entezrprises

* forest charges ased on sturnpage value

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77

* market and price innovations

* taxation payments from private logging companies

* curtailment of illegal logginglegislation and enforcement of tax payments

The MoNP/Hyantar, working with the Ministry of Finance and Economy and the Forest

Economist in the PIU should work to implement the above recommendations. The key to

success will be the revision and enforcement of the legislation.

The State budget contribution by the forest sector will be the obvious source to see if the

revenue generation measures are being successfully implemented. Continual domestic

market analysis, monitoring of prices and production levels will provide an overview ofthe market and price innovation measures introduced.

Training

The training requirements will vary depending on what measures are introduced.


In addition to highlighting the environmental and social impacts of the

project, it is however, felt that within the contexts of this project it isimportant to additionally identify and mitigate a set of process based riskswhich, in the opinion of the ERM team, have the potential to seriouslyjeopardize the component's overall effectiveness. The FMC project designhas highlighted some key risks to the project, however, further processbased risks are discussed here below, with proposed mitigation measures.To ease the reader's appraisal of these recommendations, they have beenprovided in the same format as the stand-alone management plans inSection 7.6.

7.7.1 Illegal cutting activities are not curtailed

I -imO "J,11%;iL I

Rapid depletion of Armenia's forest resources accelerated by extensive illegal cuttingactivities.

Best I 'r,;L,C / l iLi\ 1zat.,/.

Activity 2.5 in the FMC project design involves the launching of a program against illegallogging and corruption, which includes the strengthening of the inspection services. This

issue is critical to the successful implementation of the Project. Some recommendations formitigation measures are:

* Anti-corruption program s

* Statement of support from the Government

* Raise public sector salaries and benefits

* Monitoring and enforcement

* Empowerment of Hyantar and Forest Reserve Staff

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Community ownership of resource will assist in controlling illegal activities as thecommunities will have a greater willingness to protect their forest resources.

In,ttiitio,nall Respontisibity

The responsibility for the resolution of the problem lies ultimately with the Government of

Armenia, who need to make a clear statement of support to the whole country.

Additionally, empowerment of Hyantar and the MoNP is essential.

7.7.2 Forest activities, e.g. thinnings and introduction of new technologies suchas cable cranes, takes place prior to the development & introduction ofSFM guidelines, training, appropriate legislation and market development

IF.,Ue /IMip7ct

The FMC project design discusses the introduction of logging operations into currentlyunlogged areas and of new technologies such as cable cranes. There is a risk that these newactivities and practices will be introduced before adequate training, legislative and marketsupport exists. This will result in areas being logged by inadequately skilled personnel andwith limited legislative support and market opportunities.

Besl Prachce,'AMitl..dhon

Whilst the FMC is designed to enable the legislation, market development and training tooccur in the first one to two years, the ERM team feel that some recommendations for theimplementation of the project should be made. These are:* develop and adopt forest code with supporting regulations;* develop effective market and pricing system;* improve through training and enforcement current forest production activities;• ensure implementation of sustainable forest management techniques, especially the

requirement to undertake a forest inventory before determining extraction rates(AACs);

* ensure the full involvement of communities and private companies; and* if unable to meet demand, then introduce logging in new areas using low impact

technologies such as cable cranes.

Where possible it is suggested that conditionalities be placed on the procurement of newtechnologies such as cable cranes. For example, procurement should only occur afterdemonstrable improvements in the practice of sustainable forest management, reduction incorruption and black market activities, innovative market and pricing initiatives have beenintroduced and the necessary legislation (forest code) and regulations have been devisedand enforced.

Intisttuhtioial Re:-on4bihlity

The PIU should ensure that the implementation of various activities is coordinated and willeffectively support sustainable forest management and not lead to an acceleration in forestresource degradation.

7.7.3 Markets and prices are not established prior to the introduction of newand expansion offorest activities - loggingfor the sake of logging and notto meet a demand

1;iie/ Impact

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At present Hyantar determine the prices for all forest products, such as fuel wood andsawn wood. If introduced, the State Procurement Agency may become the sole buyer of allforest products produced, which will introduce a monopoly situation in the market. Thiswill result in a more rigid market structure and counteracts the Project activity to develop

new and innovative pricing and marketing systems. As highlighted in the FMC projectdesign, the wood processing industry is weak and poorly developed, thus providing a

limited market for forest product producers and there is a recognized need for a market-orientated sustainable management of State forests.

FE t Practice/ A fir ,t,riol

For successful development of the Armenian forest industry there is a need to develop anew and innovative marketing and pricing system before the introduction of new and

expansion of existing forest activities and especially before the introduction of new

technologies such as cable cranes.

It is essential that forests are logged not just for the sake of logging, but to supply a realdemand (i.e., not "if we don't log then the forest will rot").

Alongside the development of the market and pricing systems, it is essential to develop thetaxation systems to ensure that the Government of Armenia receives a fair share of the

value of the forest resource.

There is a systematic risk which results from weak and inadequate pricing policies at thenational level. Therefore fixing wood pricing regimes is an issue across the board whichhas to be addressed at the macro structural level.

Within the constraint of the need for macro-level structural change, the PIU should beresponsible as far as possible, for ensuring that the market and pricing innovation schemesare developed and implemented prior to enhanced logging activities, especially the in newareas. The MoNP and Hyantar should work in close co-operation with the PIU indeveloping appropriate taxation schemes (based on stumpage value) and auctioning

procedures for forest enterprises.

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8 PROTECTED AREAS MANAGEMENT AND BIODIVERSITY

CONSERVATION

8.1 INTRODUCTION

This chapter comprises the EA of the Protected Areas Management andBiodiversity Conservation component of the NRMPR project in Armenia.The chapter is organized as follows:

* Section 8.2 Component Description;

* Section 8.3 Intended Impacts of this Component;* Section 8.4 Implementation Process;

* Section 8.5 Identification of Environmental and Social Impacts;

* Section 8.6 Environmental Management Plan (for component); and* Section 8.7 Implementation Risk Assessment (for component).

8.2 COMPONENT DESCRIPTION

The protected areas management component proposes to:

* improve the role of two key protected areas (Lake Sevan National Park,1,500 sq. km, and Dilijan State Reserve, 290 sq. km) in conserving theregion's rich biodiversity and in generating revenue for localcommunities and park maintenance; and

* ensure effective linkages are achieved with the investments under theCommunity Based Natural Resources Management Component andthe State Forest Management Component.

Implementation of modem park management programs for the twoprotected areas was defined as a priority in both the Biodiversity Strategyand Action Plan (1998) and National Environmental Action Plan (1999). Inaddition, the project aims to establish basic eco-tourism infrastructure,including cultural heritage sites, in the protected areas and buffer zones.

The component activities have been divided into four categories:

* Strengthening of institutional capacity at the national level toadminister the system of protected areas and public awareness forbiodiversity conservation;

* Strengthening the management of Dilijan State Reserve and Lake

Sevan National Park;* Establish basic infrastructure for park management;

• Establish a small grants program for community based activities in theprotected areas and their buffer zones.

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At the time of the development of this Environmental Assessment, thepreparation of the protected areas management component was ongoing.

Therefore, the activities to be implemented under each category were notyet fully defined. The preliminary set of activities listed below is based

upon the component description in the November 1 Draft ProjectAppraisal Document (PAD), and consultations in Armenia with theconsultants preparing the component. This set of activities is referred to asthe Suib-components and Elements (See Box 8.1). The final set of activities willdepend on the results of the finalized protected areas componentdescription and the protected areas management plans to be developedduring project implementation.

Box 8.1 Sub-coinponents and Elemnents

Sub-Components

I Strengthen institutional capacity at the national level1.1 Strengthening of institutional and human resources capacity of the MoNP including:

* Improved capacity of the MoNP to implement project activities specifically andnational biodiversity conservation programs and policies in general;

* Improved thematic mapping and monitoring capacity for national biodiversityconservation and specific protected areas; and

* Implementation of a nation wide public awareness campaign to build awareness andsupport for protected areas management and to mainstream biodiversityconservation goals into the GOA national policy planning process.

1.2 Improving the national legal, policy and regulatory framework for protected areas andbiodiversity conservation including:* Clarification of policy and regulatory roles and responsibilities of the MoNP over

protected areas and biodiversity conservation relative to other national bodies;* Changes in existing policy, legal and institutional framework that would contribute

to more efficient protection of Lake Sevan National Park and Dilijan State Reserveand other protected areas in the country;

* Changes in the existing legal framework to capture the relevant use and non-usevalues of biodiversity in protected areas and retain a portion of revenues to sustainlong-term biodiversity conservation programs and enhanced capacities; and

* Improved legal and regulatory flexibility to change protected area boundaries andzoning, consistent with evolving protected area management goals.

1.3 Grant funding for applied research to support implementation of protected areasmanagement. Eligible topics will include:* Species and ecosystem research to support more effective management planning,

zoning and monitoring consistent with protecting globally important biodiversity;* Studies to quantify the total economic value of biodiversity in the protected areas,

and to foster socio-economic development and poverty reduction through carefullymanaged and low-impact uses of local natural resources;

* Studies to facilitate local resource allocation and access, develop more efficientpolicies for benefit-sharing to local communities, and increase revenues forsustainable financing of protected areas.

1.4 Strengthening of regional transboundary co-operation with Georgia in protected areasmanagement

2 Strengthen the management of Dilijan State Reserve and Lake Sevan National Park

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Sub-Components

2.1 Preparation and implementation of new protected area management plans including:

* Implementation of new management plans in consultation with local and national

stakeholders

* Rationalized land zoning plan to accommodate multiple uses in protected areas

* Development and implementation of carefully managed and low-impact economic

activities (i.e., eco-tourism) in certain zones within protected areas

* Implementation of appropriate management interventions at the site level, in

consultation with local and national stakeholders2.2 Improving protected areas management capacity including:

* Improved law enforcement and resource use monitoring within the protected area;

* Improved scientific research and biodiversity monitoring carried out by the

protected area staff; and

* Improved communication with communities living within and adjacent to protected

areas.

2.3 Environmental education and public awareness including:

* Development of appropriate approaches and education materials for community

participation and outreach and general awareness raising; and

* Implementation of local environmental awareness programs.43- Eb tfor. . -. .! 4'rj

3.1 Rehabilitation of protected area/park administration offices at Dilijan and Lake Sevan3.2 Rehabilitation of suitable structures at Dilijan and Lake Sevan to serve as modern visitor,

education and training centers3.3 Provision of suitable infrastructure to facilitate low-impact tourism development in

appropriate zones in each protected area (e.g., kiosks, signage, recreation sites, toilets, etc)3.4 Upgrading of roads associated with high value cultural heritage and low-impact

recreation sites

3.5 Construct and upgrade hiking trails in areas suitable for low-impact recreation3.6 Provide fencing and gates to manage access to highly sensitive areas

The community projects financed by the grant program will be developed andimplemented by local communities, NGOs and individuals living around the two

protected areas. The program would finance model projects or provide seed funding forsustainable activities that can develop an alternative income stream for local communitieswhile mitigating pressures in the natural resources base.

8.3 INTENDED IMPACTS OF THIS COMPONENT

The Protected Areas Management and Biodiversity Conservationcomponent is the most "environmental" component of the project and isintended to create positive environmental and social impacts. In addition,the majority of activities defined within the sub-components are eitherinstitutional/regulatory or management planning related. Therefore, mostof the activities are conceived and being designed to have entirely positiveor neutral environmental and social impacts. Furthermore, the activitiesincorporate mitigation measures for any anticipated potential minorenvironmental or social impacts that some of the activities may cause.

In this sense, this component is quite different than the two previouscomponents. We have therefore chosen a different structure for thischapter. After a listing of the intended positive impacts, we have identifieda number of potential minor environmental and social impacts which to alarge extent will be mitigated by the project design itself. Where necessary

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we have developed extra management plans and mitigating measures toenhance this process. An EMP table for this component was not preparedas potential negative or cumulative impacts of the activities defined in thiscomponent should be inconsequential to non-existent.

The intended positive environmental and social impacts of the sub-component activities are summarized in Box 8.2.

Box 8.2 Summnary of intended positive environmental and social impacts

I Strengthen institutional capacity at the national levelImproved legal and regulatory framework for protected area management.

Strategic planning and integration of biodiversity into sectoral policies.

Strengthened stakeholders institutional capacity.Sustainable management practices developed.

Monitoring unit established and monitoring improved.

Better communication equipment and transport provided.

Environmental education implemented and environmental awareness raised.Transboundary co-operation on protected areas with Georgia improved.

2 Strengthen the management of Dilijan State Reserve and Lake Sevan National ParkProtected areas at Lake Sevan National Park and Dilijan Nature Reserve with

management plans and new zoning under implementation.Enhanced management of protected areas through public-private partnerships.Equitable sharing of financial benefits with local communities.

Revenues for sustainable management and conservation program s generated.Stabilization of key threatened ecosystems and critical habitats in the project area.

In -situ conservation of biological resources improved.Monitoring of key endangered species as indicators for ecosystems regeneration.Illegal hunting and logging decreased.Public awareness raised and community involved in biodiversity conservation.

Increased protection of cultural and biodiversity values.Short- and long-term income generation provided.

3 Establish basic infrastructure for park managementShort and long-term income generating opportunities provided.Facilities for visitors, education and management improved.

In -situ conservation of biological resources improved.

Strictly protected areas better protected to reduced access.Roads and trails improved.Cultural heritage sites upgraded.

4 Community grant program (small grants program for community based activities in theprotected areas and their buffer zones)

Short and long-term income generating opportunities provided.Equitable sharing of financial benefits with local comrnmunities.Increase awareness of biodiversity values and involvement of communities in

biodiversity conservation.Further degradation of resources (forest, arable and grazing lands) mitigated.

The project will also support a work fare program, which will pay poorcommunity members in cash for the labor necessary to supportinvestments in protected areas infrastructure, nature protection andconservation.

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All the work under this component is planned to be carried out in DilijanState Reserve and Sevan National Park. However, there might beopportunities to extend the eco-tourism activities to certain areas outsidethe protected areas during project implementation. In addition, the twoother project components also address biodiversity conservation issuesand aim to implement biodiversity related activities outside as well asinside the protected areas.

8.4 IMPLEMENTATION PROCESS

8.4.1 General Implementation of the Component

A particular implementation process for the protected areas managementcomponent has not been designed yet. However, it is clear that the firsttwo years of project implementation will mainly focus on development ofthe protected areas management plans, zoning, necessary legal andinstitutional changes, development of a screening process for potentialeconomic activities and mitigation measures for any potential negativeenvironmental impacts, and extensive training to build implementationcapacity at all levels.

Implementation of economic activities is not expected to be started untilthe zoning and management plans are in place.

8.4.2 Community Grants Program

The potential activities to be carried out under the Community GrantsProgram sub-component will be defined during the first year of projectimplementation working in close collaboration with NGOs and localcommunities. It is expected that activities will include sustainable activitiesthat have the potential to develop an alternative income stream for localcommunities and at the same time mitigate pressures on their naturalresources base. Examples are activities such as the development of modelor pilot projects for sustainable grazing and forestry practices with directincremental biodiversity benefits, or the provision of seed funding foractivities that have the potential to develop alternative livelihoods whichreduce pressure on protected areas and their biological resources. Theprogram will also finance biodiversity conservation initiatives (birdcounts, training hunters to avoid rare species etc).


8.5.1 Potential Impacts

As mentioned above, the proposed activities in this component are allintended to create positive environmental and social impacts. However,some minor potential negative environmental and social impacts whichthe project design will aim to address can be identified and are listedbelow. These concern mainly minor potential impacts from increased

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usage and related economic activities, including eco-tourism, and theconstruction and rehabilitation of buildings, roads and trails. Thecumulative effects of these activities can expected to be very low.

Furthermore, many of the project activities proposed will providemitigating measures for these potential impacts. In some cases theseactivities provide opportunities to be enhanced by management plansdeveloped specifically for this component or by referring to managementplans developed for the other components (c.g., construction, road andtrail rehabilitation). These management plans are presented in Section 8.6.

The tables below list the component elements which might potentiallycause impacts. Other component elements which comprise effectivemitigation measures are listed in the right column of the tables.

Eiw;ironenlal X llfll 111',7 0S.fcon4ractrionDi

Contributing Elements Mitigating Elements3.1 Rehabilitation of protected Strengthen the management of Dilijan State

area/park administration offices at Reserve and Lake Sevan National ParkDilijan and Lake Sevan

3.2 Rehabilitation of suitable structuresat Dilijan and Lake Sevan to serveas modern visitor, education andtraining centers

3.3 Provision of suitable infrastructureto facilitate low-impact tourismdevelopment in appropriate zonesin each protected area (e.g., kiosks,signage, recreation sites, toilets,etc)

3.4 Upgrading of roads associatedwith high value cultural heritageand low-impact recreation sites

3.5 Construct and upgrade hikingtrails in areas suitable for low-impact recreation

3.6 Provide fencing and gates tomanage access to highly sensitiveareas

Potential environmental impacts of construction include: erosion andsedimentation, water quality impacts, noise, dust and air pollution,damage to existing installations, worker health and safety effects,disruption of local residents, disruption of agricultural activities, andwildlife disturbance. Where construction activities necessitate the setting-up of temporary construction yards, there is risk of permanent alteration ofland caused by fuel spills and topsoil compaction from heavy vehicles. In

addition, construction may cause damage to biodiversity and causedisruption of habitats of protected species where sites for new structuresare poorly chosen.

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Inimpacts of increased presslLre onr environmental anZd cultural touirism sites and

services

Contributing Elements Mitigating Elements

2.1 Preparation and implementation 1.1 Strengthening of institutional and human

of new protected area resources capacity of the MoNP

management plans

3.1 Rehabilitation of protected 1.2 Improving the national legal, policy and

area/park administration offices at regulatory framework for protected areasDilijan and Lake Sevan and biodiversity conservation

3.2 Rehabilitation of suitable 1.3 Grant funding of applied research to

structures at Dilijan and Lake support implementation of protected areas

Sevan to serve as modern visitor, management

education and training centers

Construct Sevan visitor and

education facilities

3.3 Provision of suitable infrastructure 2.1 Preparation and implementation of newto facilitate low-impact tourism protected area management plans

development in appropriate zonesin each protected area (e.g., kiosks,

signage, recreation sites, toilets,

etc)3.4 Upgrading of roads associated 2.2 Improving protected areas management

with high value cultural heritage capacity

and low-impact recreation sites3.5 Construct and upgrade hiking 2.3 Environmental education and public

trails in areas suitable for low- awarenessimpact recreation

3.6 Provide fencing and gates to 3.1 Establish basic infrastructure for park

manage access to highly sensitive to managementareas 3.6

4 Community grant program (for 4 Community grant program (for communitycommunity based activities in the based activities in theprotected area and their buffer protected area and their bufferzones) zones)

Environmental impacts

The assistance provided with marketing, combined with increased accessto environmental and cultural tourism sites will potentially lead to anincreased number of visitors to these sites. The main negative impactslikely to result from such increased pressure result from improper disposalof solid wastes and sewage, changes in land use and damage to thecultural sites. Improper disposal of waste can lead to spread of diseases,affecting flora and fauna as well as the adjacent communities. The pressureon habitats of wildlife will be increased and the improved access to remotesites may increase the level of illegal activities in these areas (poaching,logging etc.).

Social impacts

The generation of economic benefits to local communities may be limited ifthe people employed in the tourism industry are employed are not fromthe local community. There could also be an economic impact if the goods

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used to service the tourists trade are entirely sourced from outside of thelocal community.

There can be a degradation of the local cultural heritage and a loss of asense of cultural identity if there is undue commercialization andmodification of local arts, crafts and traditions. Tourism areas may becomeunattractive because of inappropriate design of tourist facilities, garishadvertising signs and littering by tourists.

Mitigation

The sub-components also provide many activities providing mitigatingmeasures for the above listed potential negative impacts. When properlyimplemented, the new protected areas management plans, stakeholderconsultation, improved human capacity etc. should all ensure that theabove listed impacts do not occur. In addition, an eco-tourismmanagement plan is suggested to enhance mitigation in Section 8.6.2.

EnviirOnlirtell i,7tnLacts of road rl'/rabllialbnl in andfieldI tradil dezvloplzirnt

Contributing Elements Mitigating Elements3.4 Upgrading of roads associated 2.1 Preparation, implementation and

with high value cultural heritage monitoring of new protected areaand low-impact recreation sites management plans

3.5 Construct and upgrade hiking 2.2 Improved protected areas managementtrails in areas suitable for low- capacityimpact recreation

Newly constructed trails may cause erosion and the increased humanpressure may effect water quality. In addition, improvement of existingroads and trails and creation of new trails cause the potential risk foreasing the access to previously inaccessible areas for illegal uses (e.g.cuttings, livestock pasturing, unsustainable collection of wild plants andanimal poaching). Soil erosion may occur through heavier use of the trailsand roads or through poor siting. New and rehabilitated field tracks maycause disturbance to wildlife and an increased pressure on biodiversity ingeneral. Rural life may be disturbed by the increased visitation.

The proper design and implementation of the new protected areamanagement plan will provide mitigating measures and ensure propersiting. To enhance this, further mitigating measures for road and trailconstruction are described in Section 8.6.3.

En;'iroitueltnal i,n'pac5 o.f incrnaseel COLIOnIIC a17tiCiZ1L-

Contributing Elements Mitigating Elements2.1 Preparation and implementation 1.1 Strengthening of institutional and human

of new protected area resources capacity of the MoNPmanagement plans

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4 Community grant program 1.2 Improving the national legal, policy and

regulatory framework for protected areasand biodiversity conservation

1.3 Grant funding of applied research to

support implementation of protected areas

management2.1. Preparation and implementation of new

protected area management plans

2.2 Improving protected areas management

capacity

2.3 Environmental education and public

awareness3.3 Provision of suitable infrastructure to

facilitate low-impact tourism development

in appropriate zones in each protected area

(e.g., kiosks, signage, recreation sites,

toilets, etc)3.6 Provide fencing and gates to manage

access to highly sensitive areas

Environmental impacts

Increased economic activities to be developed in the protected areas maycause a number of potential negative environmental impacts. Thesepotentially include increased: grazing, harvesting of wood and non-woodforest products, soil erosion and reduction of productive capacity, pressureon and destruction of biodiversity, disturbance of wildlife, environmentaland human health impacts through use of fertilizers and pesticides,adverse impacts due to bad siting etc. In general, increasing humanpressure on natural resources poses a continuous threat to biologicalresources.

Mitigation

A large number of the activities proposed in the protected area componentshould serve to mitigate the minor, potential negative impacts listedabove. Mitigating activities include the implementation of the new zoningand protected areas management plans, enhanced capacity and publicawareness, community participation and studies which should definewhich activities would provide the least impact. We suggest however, thatwhen and where impacts may occur from increased grazing or communityforestry activities etc., that best practices as defined in the other twocomponents and the additional best practices with a particular focus oneconomic activities in protected areas, as listed in Section 8.6.4 will beapplied.

8.5.2 Positive Impacts to be Enhanced

As explained above, the main objectives of the protected areasmanagement component are environmental and social in nature. Therelated intended positive impacts are listed in Section 8.5.1 above.


89

However, the positive income generating impact has the potential to be

further developed as outlined below.

As in the two other components, the protected areas component offersmany activities which can be included in the workfare program. It isrecommended that these opportunities should be expanded to include notonly low-skilled labor for construction but also environmental monitoring

and management activities.


8.6.1 Construction Management Plan

Environmental impacts of construction

B,o Pra i te !i c ' tro;i

All sub-contractors should be subject to contractual clauses to manage the environmental

impacts. In addition, clauses should be entered into the contract to allow the PIU to

respond to the results of monitoring activities, as outlined below.

n-it -i,tl i.nal Rt pon;r PibiluThe PIU should, depending upon individual construction contractors' scope of work,incorporate an appropriate set of clauses into each contract let.

The Marz level PIU should monitor the construction activities through random spot-checks

(at least monthly during long construction periods, or at least once during shorter

construction activities). Where violations of the contractual agreements are noted the

central PIU should be notified. The PIU should formally notify the contractors of theviolations, outline the necessary corrective measures and set a period for correction. Where

this is not adhered to, it is recommended that contractors be subject to contractual penalties

(i.e., payment with held) or in severe cases the contracts should be terminated.

It is also recommended that a final site inspection should be carried out before final

payment is made, and in cases where the sites have not been properly cleaned up and or

restored, final payment should be withheld until such time that this has been carried out

satisfactorily.

TrainingIn order to avoid the need for further training it is recommended that the Marz level PIU

include an individual with experience in environmental management and auditing as part

of the team, or engage an external contracted for a fixed term to undertake the activities

required to monitor construction contractors.

8.6.2 Eco-tourism Management Plan

l 'SiC IiUiti.v

Increased pressure on protected areas.

Best Prja itl A I,e,i,n

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An eco-tourism management plan should be developed for each area where eco-tourism is

planned. Developments can only take place in the especially identified recreational zones in

the protected area management plans. The eco-tourism management plan should identify

all of those areas in the recreation zones of the protected areas which are closed for tourists

because of their particular importance as wildlife habitats or biodiversity value. Inaddition, the areas that are available for development should be zoned according to the

maximum carrying capacity. Siting for construction of kiosk, camp sites, interpretation

boards, the Sevan visitor center and any other possible construction should be done aiming

at the lowest possible environmental impacts possible. Proper plans should be developed

for waste and sewage disposal.

The plan should include measures for the maintenance and up-keep of the eco-tourism

zones and assign responsibilities to park rangers for ensuring that the maintenance

measures are carried out.

Legal and institutional arrangements will need to be made for charging fees (multiplepricing schemes for foreigners and nationals) for entrance to the parks, eco-tourism zones

and cultural sites. A fair percentage of the revenues should flow back to the protected areamanagement to cover operational costs as well as further investment for enhancement and

future development of the sites. Cash flow back to the protected areas management iscritical for the sustainability of the project. The level of the percentage that should flow

back is a policy decision. Ideally it should range from 50-80%.

A hub-system can be used linking the various sites with a central point/visitor center

where tourists can acquire information about acconmmodation, the sites themselves, hikingroutes, etc. The plan should build on already existing cultural sites and link these withtrails which aim to optimize the overall experience for the visitor. Any construction ofcampsites or picnic places, etc. should be carried out by using natural materials andenvironmentally friendly and aesthetically attractive designs.

There is a key need for marketing activities. The impediments for market access wouldinclude:

* Local community awareness and market information

* Competition.

The project would facilitate market access activities through training. Comprehensive andclear printed materials, guidebooks and maps should be developed. A professional websiteshould be developed and Armenian tourist officials and local tour operators shouldparticipate in international tourist fairs.

In h tu thonal Respons;ibihtl'tThe development of the plan will be organized through the PIU. In order to ensure the

long-term viability of an eco-tourism management plan, it is necessary that the plan bedeveloped in a wholly participatory manner. It should be presented as the response to theincreased poverty, under-developed tourism opportunities and lack of financial resourcesfor protected area management. The short- and long-term individual benefits (financial orotherwise) should be clearly presented to the communities and park management. By

involving communities, they will understand tourism, be better able to cope with this

development and participate in its benefits.

Once support has been obtained for the scheme amongst tour operators and local

communities and the protected areas management, the protected areas management andother key individuals should, with technical assistance from the PIU, develop the eco-

tourism management plan and appoint responsibilities to inspectors/park rangers.

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The necessary legislation and institutional framework will have to be put into place at

central government level to ensure possibilities of flow back of revenues into parkmanagement.

The park rangers would be responsible for monitoring of the tourism areas which should

take place monthly throughout the tourism season. Penalties should be imposed uponthose who violate the eco-tourism management plan. Violations include improper wastedisposal, destruction of sites, non-payment of park fees, etc.

Tren, nIt is recommended that all stakeholders including tour operators, park management localcommunities, and key village personnel should be given extensive training in eco-tourismmanagement. Training topics would include marketing, training of guides, interpretation,

hospitality services, etc.

8.6.3 Road and Trail Rehabilitation and Construction Management Plan

f-. 1,,e /1 ./cf

Environmental impacts from trail and road construction.

% fit :ili.nl,

Section 7 of the EA which addresses the State Forest Management component proposes thata key mitigation measure should be the development of a forest road construction and

maintenance best practice manual tailored to the Armenian conditions. Where roads andtrails in the protected areas will be rehabilitated or where new trails will be developed, theworks should be done according to the standards proposed in this manual. Siting of newtrails should be done on the basis of protected areas management plans and eco-tourismmanagement plans and should ensure the lowest possible impact on the protected areas.This includes building on the network of existing trails and avoiding critical habitats of keyprotected species. Siting should be based on a sound assessment of the biodiversity in theareas identified. In addition, mitigation measures such as safeguards against illegallogging, illegal pasture use and corruption are required to ensure that the increased accesscaused by new trails or improved roads does not cause new problems or impacts.Activities would include improvement of governance, awareness building amongst thelocal population and strict law enforcement.

The protected areas management should oversee the rehabilitation of the roads and trailsand carry out the siting and supervision of new trail development in co-operation with the

PIU taking the road construction and maintenance best practice manual into account.

% 1t'i I , t ri',.^The Marz level PIU should monitor the road and trail building activities and confirm thatsiting is in accordance with the management plans. Where violations of the managementplans and road construction best practice manual are noted, the central PIU should be

notified.

Traininc

Protected areas management should receive training on implementation of the roadconstruction and maintenance best practice manual and sustainable trail development.

8.6.4 Econo,nic Activities Management Plan in Protected Areas

I/.,,, JhtbI Lt .1 tt,1114;S

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Environmental impacts from economic activities

AlitigahonThe economic activities to be developed under the protected areas component will all be

aimed at small-scale local initiatives related to biodiversity conservation aiming to reduce

pressure on the protected areas and biological resources while at the same time improvinglocal livelihoods and enhancing socio-economic development. Therefore, the project designin itself will provide mitigating measures for any potential negative impacts.

Economic activities to be introduced under the protected areas component, through theCommunity Grants Program or otherwise should only be carried out in the designated

economic zones, laid out in the zoning and protected area management plans that will be

developed under the project.

In addition, we recommend the development of a screening process to select the economic

activities which will have the least negative environmental impacts. A number of factors

should be considered in this screening process. Proposed activities should, inter alia:- be small scale and benefit local communities;

- promote sustainable solutions to income generation;- not include the wide scale use of pesticides and fertilizers; and- not include any major construction.

Where they are related to eco-tourism, the eco-tourism management plan should beapplied.

If and where the economic activities to be developed in the economic zones or the activities

supported by the Small Grants Program lead to the sustainable provision of wood and treeproducts or to increased grazing, there are potential negative environmental impacts on theprotected areas. These will have to be managed in accordance with the sustainable

community forestry, and grazing management plans designed in Section 6.5.

Instiffhon1 l responszInlity

The protected areas management in co-operation with the MoNP and the PIU will have theresponsibility for development of the new zoning and protected areas management plans.

The Community Grants Program and the screening process for eligible economic activities

should be developed by the Marz level PIU in co-operation with NGOs and localcommunities.

.blonrJornng

The PIU should monitor the development of the screening process and in co-operation withthe Marz level PIU monitor the implementation of economic activities.

TrainingTraining for protected areas management and local communities on sustainabledevelopment of economic activities.

8.6.5 Expansion of workfare program

Isue l'n paclIncrease direct income generation.

Best Practicel/MitigationImplementation of the protected areas management plans, the eco-tourism managementplan and the improved infrastructure development should make use of the local

communities living within the protected areas. This will improve the local community'sunderstanding of biodiversity and community values and will improve implementation

and enforcement of the plans and activities. In fact implementation of the protected areas

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management plan, the eco-tourism management plan and the Community Grant Program

offers wide opportunities to involve local communities in direct biodiversity conservation

activities (monitoring, guiding, up-keeping of sites, control etc.).

hi,littit/ .ioral Pczp,on;*ibJt. ,The protected areas management will have to establish close links with local communities

and involve them in biodiversity conservation activities where possible. It is recommended

that certain posts will be created and advertised within each protected area. Applicantsshould be short-listed and interviewed, following standard procedures by the central PIU.

All persons employed should be reviewed by the PIU initially after 3 months, then after 6

months and then on an annual basis. Where it is found that the work is either not beingcarried out or is not of a sufficient standard, then the persons involved should be subject to

disciplinary proceedings ultimately leading to the withdrawal of their contract.

Traitivlll,

Once the best candidates have been identified, an assessment of their individual training

need should be made by the PIU.


As in the other component chapters, process based risks andaccompanying mitigation measures can be identified for the ProtectedArea Management and Biodiversity Conservation component. These arelisted below.

8.7.1 Zoning and developmnent of the protected areas management plans are notfinalized prior to new construction or new economic activities whichmight impact the protected areas.

Under the protected areas management component, a new zoning and development of

protected area management plans are foreseen. This process could take up to two years

before being ready for implementation. However, the project proposes a set of activitieswhiclh might impact the protected areas before the zoning has been finalized and beforeprecise definitions have been developed of what type of activities can be developed, to

which extent and in which areas.

Best Practice/ A. lm,r,at.cl iNo new economic activities or construction planned within the protected area component

(eco-tourism, community grants program) should be initiated prior to finalization of thenew zoning and protected areas management plans. Activities planned in villages within

the protected areas under the Community Based Natural Resource ManagementComponent should be carried out in full consultation with protected areas management

and the people involved in development of the new zoning and protected areasmanagement plans.

The protected areas management plans themselves should be developed in fullconsultation and with participation of all stakeholders. They should take account ofwatershed management plans and forestry management plans to be developed under the

other components.

IThe new zoning plans should be based on new mapping, monitoring, data and scientificinformation gathering to be supported through the project. The protected area management

plans should define all activities allowed or prohibited to be undertaken in certain zones

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including economic activities, road and trail construction, construction in general, use of

fertilizers and pesticides or other harmful substances, hunting and fishing, etc. The plansshould distribute responsibilities for implementation and enforcement, including options

for community management, as well as costing of necessary activities (training, equipment,

human resources development etc.). A system for funding of the implementation of theplan will have to be developed as well with all necessary institutional or legal changes.

When the plans are ready, a broad public awareness raising exercise will have to be carried

out and, where possible, local communities should be involved in its implementation.

Jn4ibitunal ResponsibilityThe central PIU in co-operation with the MoNP, and especially its Department of Protected

Areas and its regional departments, scientific institutions and all other stakeholders areresponsible for the development, implementation and monitoring of the protected area

management plans.

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9 ADDITIONAL RECOMMENDATIONS FOR PROJECTIMPLEMENTATION RISK MANA GEMENT

9.1 INTRODUCTION

In addition to the specific project implementation risks listed under the

three components in chapters 6, 7 and 8, two more general projectimplementation risks have been identified. This chapter proposesrecommendations to effectively manage these risks and ensure a successfulproject implementation.

9.2 INTEGRATION AND CO-ORDINATION OF PROJECT MANAGEMENT

Successfully integrating the management structures of the three project

components and their relationships with the relevant agencies andstakeholders at all levels will be a major challenge. A strong andcommitted coordinating structure between all relevant agencies will need

to be developed.

In this respect, it is of great importance that besides the MoNP, otherministries and agencies, especially the Ministry of Agriculture andHyantar, develop a sense of ownership of the project. The importance ofthe agricultural and forestry authorities becomes evident through thepotential involvement of Agricultural Support Centers, FREC and Hyantaritself in the implementation of the project. Also, legislative andinstitutional changes will be required by the project for which theirsupport is needed. Strong day-to-day co-operation between the agenciesand the PIU has to be established to ensure sustainability of the project.

Box 9.1 Recommnendation

Currently the relevant agencies are represented in the PMB which will meet only 4 times a year.To ensure a better day to day integration and co-ordination, a technical advisory board to thePIU, consisting of representatives from all relevant ministries and agencies, should be

established.

In addition, a co-operation structure to ensure co-ordination between the different project

implementation support groups for each component should be established and could take the

form of bi-weekly meetings.

9.3 ENSURING EFFECTIVE INVOLVEMENTAT THE LOCAL LEVEL IN PROJECT

IMPLEMENTATION

The project aims to introduce community based management of commonnatural resources by community organizations representing users andauthorities charged with these functions. Involvement of localcommunities is essential in the planning and management process.However, the level of public awareness and experience in community

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involvement in natural resources management as well as technical andimplementation capacity at the community level is currently limited.

In addition, a number of different governing structures are already activeat the local level at present (village councils, village elders, mayors) andseveral new additional structures have been planned (user groupassociations, water management boards). There is a concern that theproject would introduce these new structures without building on what isalready in place and a concern that the different existing structures havenot all been involved to the same extent in project preparation process,thereby creating opportunities for misunderstanding, lack of commitmentand missing valuable capacity. In general, it can be said that institutional

development proposals should be based on the principle to capitalize onwhat has already been achieved in institutional development and furtherstrengthen these existing institutions, enabling them to become self-reliantdevelopment agencies.

Last, there is a general poor feedback from the local to central level andlittle respect for and trust in the central government. There is also somemisunderstanding at the local community level as to the project activitiesthat will be implemented and a possible lack of interest on their side. Thecurrent institutional structure for project implementation does not addressthis properly. There are no direct linkages between the central PIU and thelocal level, neither is the local level represented in the PMB. This creates arisk of local level priorities and issues not being reflected at the centrallevel. However, having 19 communities represented in the PMB would notbe feasible. The Marz level PIUs will be the institutional unit with the mostdirect linkages with the local level and could possibly fulfil this role.

Box 9.2 Recommendations

Before any new institutional structures at the local level are set up, a clear analysis of existinginstitutions and capacity should be carried out in each village. New structures should build onwhat is already there and should aim at involving and integrating the capacity at hand(possibly coming from both village councils and village elders) to maximize efficiency andensure a successful implementation at the local level. In addition, training, awareness raisingand demonstration projects at the local level will be key for successful implementation andshould be carried out before any new institutional structures at local level are set up.

Marz level PIU representation within the PMB, in addition to the Marzpetaran governors,should be proposed to ensure better linkages between local and central levels of projectimplementation.

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Annex A

Members of the EA Team

Al INTERNATIONAL AND ARMENIAN TEAM MEMBERS

International Experts

Eamonn Barrett Category I: Study Manager/EA SpecialistReed Huppman Category I: Study Manager (Scoping Mission only)

Emily Fripp Category II: Forestry SpecialistSabine Hoefnagel Category II: Institutional SpecialistJoanna Cochrane Category II: EA Expert

Sara Browning Category III: Watershed Specialist / Engineer

Arnenian Local Experts

Karen Ter-Chazaryan ForesterJulietta Glichyan Institutional SpecialistVardges Kurkchyan Agricultural Specialist / EngineerLusine Tadevosyan EA Specialist / CoordinatorRuzanna Martirosyan Administrator / CoordinatorAnahit Maryanyan Interpreter, Translator

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Annex B

Legal and RegulatoryFramework forEnvironmentalManagement in Armenia

LAWS AND Promu Main provisions and issuesREGULATIONS Igation

dates

FRAMEWORKLAW

1991 Establishes obligation of State to care for environment, prescribes institutional framework for environmental management, and

lays down principles, approaches and instruments for environmental protection. The Law has a minimum normative value - it

Law on has been used as an environmental policy document.

Environmental

Principles, the The aims of nature protection are:

Green Constitution . ensure a right to a clean environment

protection of the natural resources, support to improving flora and fauna

protection of ecological balance of the natural systems and land diversity

protection and effective use of natural minerals recourses

protection of special natural ecosystems and national properties etc.

article 25Protection of updated The article ainms to protect the plants and animals which are includes in Red Book.

uncommon and 02.04.199

disappearing flora 6

and fauna

CODES, LAWS

Land Code 1991 Divides land of Armenia into categories based on planned use. Presents the conditions for ownerslhip or lease of land of land in these

updated categories, how these rights may be transferred, end stipulates the requirements to conserve land and protect it from degradation or

in 2000 contamination.

Deprivation of ownership if an owner fails to protect the land, is far too strict. Lack of developed land sale mechanisms and absence of aninformation base prevents the establishment of a proper land market. The centrally driven land categorization system is often in conflict

with the system of land master plans executed by regional and local govemments.

Water Code 1992 The Water Code aims at (I ) guaranteeing the water supply for the residential and industrial needs; (2) preventing contamination and

exhaustion of the water resources; (3) improving water facilities; (4) protecting the rights of local self-governing authorities and citizen; (5)strengthening legal protection of water. The water legal framework is struggling with the same difficulties as the rest of environmentallegislation: unrealistic policy goals, obsolete standards, insufficient economic instruments, legislative failure to consider capacity of theadministrative structure and difficulties with enforcement.

Law on Specially 1991 The Law distinguishes three types of zones -protected, recreational and economic ones, and four types of specially protected areas: "state

Protected Areas reserves" (no economic activities allowed), "national parks" (an area which comprises natural systems and units of special ecological,

cultural or scientific significance), "state reservations" (no economic activities allowed which can threaten or damage ecosystems) and"natural monuments". Currently protected areas suffer from illegal economic activities, weak institutional capacity and inefficientmanagement of the related governmental agencies, as well as undeveloped legislation and lack of enforcement.

The following tasks are listed:* protection and reproduction of the ecosystems

. protection of natural monuments

* preservation of the biodiversity

* scientific research of natural phenomena

. regulation of the state of the environment

* ecological education

* etc.

Forest Code 1994 The Code guarantees protection of forests. The objectives of forestry protection are threefold: (1) to protect forest naturalresources, (2) to increase forest regeneration rates, and (3) to define the role of the state in forest protection. The Forestry Codeis based on the presumption that forests in Armenia do not have a productive function, thus it ignores the reality of timberharvesting and fuelwood collection. Besides, the Code does not address the compatibility of forests' land use and grazing.

Law on 1995 Establishes a framework to define impacts of intended activities on environment, assess feasible altematives, minimize negativeEnvironmental consequences and ensure public involvement. Contains a list of activities subjected to the expertise process. The State Agency forExpertise Environmental Expertise, subordinate to the Ministry of Nature Protection, is responsible for carrying out the relevant procedures.

The main aim of the expertise is foresee, prevent and minimize the negative impacts of plannin-g activity to human health,

environment, economic and social normal development.The tasks of the expertise are:

o Analysis of the alternatives and usefulness of the planning activityo Assessment of environmental impacts of planning activity or that's alternativeso Checking of the possible consequences of the planning activity, and what activities they planning to do for

mitigation of negative impacts, are those realistic or noto Ensure the effective use of natural resourceso Stop activities which have negative environmental impactso ensure public participation and information on expertise.

The list of activities which require expertise include:. Wood and paper production,(if the production exceeds certain limits)

* Community (city) building (construction)

* Buildings, constructions and complexes which exceed certain limits

. Waste water stations* Improving and restoring of natural eco-systems, which are damaged by anthropogenic affect

* Introduction of new sorts of flora and fauna

. Agricultural* Land improving, construction of irrigation or drainage networks (systems), land protection from erosion and

other affects, these activities are beyond to expertise, if are exceed the limits

* Restoring of forest and improving of quality of the forest

* Construction of water tanks and other constructions

* Extraction of underground water

* Substructure* Roads, tunnel, bridge, underground, railway, airport construction exceeding certain limits

* Services. markets and supermarkets, which volume more than limit

* hotels and tourist complexes -more than limit (MTL)

* every petrol station. restaurants, cafes, etc MTL

* railway and car stations* morgues and cemeteries.

The expertise must forecast, describe and assess the:

* direct and indirect impacts of planning activity

* alternative variants, including the zero-impact variant, and choose which one is more effective

* the mitigating activities for the negative environmental impacts

* the assessment of environmental impacts of socio-economic development when zero-impact variant is chosen

. the local properties of each area during the expertise (cultural, socio-economic and environmental )

However, in reality, the legal procedure is not being followed. Especially public hearings are not being carried out.

Regulation on the 30.03.199 Sets out the limits to decide whether activities need to be expertised.limits of the activities 9which must beexpertisedLaw on Under Will pursue such principles as general protection of all species and commercial utilization of nature based on licensing. It should be said that

Conservation and parliame nature protection legislation fails to comply with declared goals.

Use of the Fauna nt

hearings

Law on Protection 1998 The Law on Flora outlines the GOA's policies for the conservation, protection, use, regeneration and management of natural

of Flora populations of plants and for regulating the human impacts on biodiversity. The law on Flora and Draft Law on Fauna aim to

ensure sustainable conservation of plants and animals, natural habitats and biodiversity, to develop scientific assessments of

levels for sustainable use of natural populations, and to protect the rights of those involved in conservationi and management,

The implementation of this law will be overseen by the Ministry of Nature Protection, and by local government and other

agencies. The law provides for: inventory, study and monitoring of flora and fauna populations; development of their State

listing and their use; further elaboration of the Red Data Book; investigation of issues relating to flora amd fauna conservation;

conservation of rare and threatened species; use of plants and animals; measures for dealing with disputes over use of plants

and animals; and international agreements relating to conservation issues.

Code on mineral 1992, Establishes rights and conditions of exploitation of underground resources, defines terms of contract, licensing responsibility,

resources, 93,94,97 and schedule of fines for infringements.

amended byCabinet decisions374 (1993) and 504

(1993), 221 (1997)

sub-act on naturalresource extraction.

Law on Land tax 1994 Describes the principles on which land taxation is based, the rates of taxation, privileges and exemptions, and procedures for

(draft collection and payment.

revision

Sept.1997)

Law on Real Estate Jan. 1996 Establishes rights to possess, use, alter, exclude access to, dispose of, and mortgage land and immovable property, the

of the Republic of eligibility to such rights and the conditions under which they may be applied. Specifies that court proceedings are required for

Armenia the State to alienate land against wishes of right holder. Establishes registration and cadastre system.

Law on the 1998 This law provides the basis for the protection and use of monuments in Armenia and regulates the relations among protection

Protection and Use and use activities. Article 15 of the Law describes procedures for the discovery and state registration of monuments, the

of Fixed Cultural assessment of protection zones around them, and the creation of historic-cultural reserves. Article 22 requires the approval of

and Historic the authorized body before land can be allocated for construction, agricultural and other types of activities in areas containing

Monuments and monuments.

Environment

Presidential Decree May 1997 Defines the powers of the provincial government (marzpet)

on Provincial(Marz)Government.

Law on Local Self July, 1996 Defines conditions for appointment, service and dismissal of the Chief of Community and the Community Council, and

Government describes their powers and responsibilities.

DECREES,RESOLUTIONSand DECISIONS

Decree on the rate 1995???

of fines for illegallogging

The Resolution of Adopted stipulates that the term of lease should be agreed between the lessor and the lessee and confirmed by the relevant authorities.the Government on on April The Regulation also states the right of the lessor to demand from the lessee implementation of nature protection activities on

Provision and 12, 2001 the leased land.

Alienation of State-owned Lands

Cabinet Decision on June 1997 Establishes RPSUCD and defines responsibilities for land cadastre and registration.

the Creation of aReal Property StateUnified Cadastral

Department(RPSUCD) of theRepublic ofArmenia.

OTHERRELEVANTLEGISLATION

Civil Code 1998 All legislation, adopted prior to 1999, should be revised in conformity with the Civil Code by the end of 2001. However, nothing seems to

have been done so far.

The situation changed with the introduction of a new Civil Code and a complementary Civil Code Enforcement Act. According to that Actfarms and collective farms registered prior to January 1, 2001 are subject to reorganization and re-registration. However, up to now these

organizations have neither reorganized nor re-registered. Villagers are reluctant to register. Consequently, the legal status of farms is not

clear, which appears to be an impediment for farms to participate in civil and legal activities, e.g. signing contracts and receiving loans.

The new Civil Code does not envisage any legal status for farms. According to the Code the only legal entities in the sphere of

agriculture are agricultural co-operatives. However, there is no legislation on agricultural co-operatives. Creation of co-

operatives is also hampered by tax legislation, as Acts on Profit Tax, Income Tax and Value Added Tax have incentives for

stand-alone farms, which are not liable to pay either profit or value added taxes. Co-operatives as legal entities will have to pay

those taxes.

Law on Rental 2000 The Law on Rental Payment and Regulations on Utilization of Natural Pastures, Hay Meadows and Other Land Types, and the

Payment Resolution on Renting State Pastures Placed out of Administrative Borders of a Community regulate renting of remote

pastures on a short-term (up to 3 years) and on a medium-term (from 3 to 10 years).

Privatization Law 1990 Lays down conditions for transfer of state assets to private individuals and groups

Law on Farms and 1991 Establishes conditions for ownership of farms by individuals, and lays downi principles for management of farms by individuals and

Collective Farms collectives. detemiines the economic, organizational and social conditions and legal framework of farms and collective farms. According to

that Law and the Law on Enterprises and Entrepreneurial Activities the farms have not had a status of a legal body, however, they have

enjoyed all the rights and respective responsibilities assigned to a legal body. A collective farm is considered to have a status of a lcgal body

from the moment of its registration.

OTHER

SECTORALLEGISLATION

1992

Law on Sanitary-EpidemiologicalSafety

Law on Energy 1997

Law on State 1997

Statistics

Law on 1998Standartization and

Certification

Code on 1999AdministrativeInfrimgements

Law on Lake Sevan 2001 This law includes all the buffer zones within the national park area. Special measures for the short and long term have beenidentified. Different regimes are proposed for a strictly protected zone, immediate impact zone and an indirect impact zone.

Law on Protection 1999 "Law on protection of selection achievements" regulates relationships related to the creation of new plant breeds, their legal protection andof Selection use. The Law is consistent with the requirements of UPOV, as presented at the 1997 intemational Geneva conference on the protection ofAchievements new breeds of plants. The law regulates questions connected with the rights of the patent holder, the rights of the author of the new plant

breed and entitlement to use of the new plant breed. However, Armenia does not have a National system of intellectual property rightprotection.

Law on Plant 2001 "Law on plant protection and plant quarantine" addresses issues of diagnosis and prevention of virus-caused and parasiteProtection and Plant diseases of plants as well as defines the stakeholder institution responsible for control of norms of quarantine.Quarantine

Annex C

Structure of KeyOrganisations

ORGANIZATION CHART OF THE CENTRAL STAFF

OF THE MINISTRY OF NATURE PROTECTION

M I N I S T E R

MINISTER'S OFFICECOLLEGIUM

I____ _ DEPUTI { DEPUTY DEPUTYI

PUBLIC RELATIONS NMINISTER MINISTER NMINISTERDEPARTMENT ei

DEPARTMENT - ~~~~--------------------~----~ -------------------- r--------------- ----- ~------------------------.

LEGAL FLORA and FAUNA UNEGOUDPOTCINATMOSPHERE PROTECTIONDEPARTMENYT i PROTECTION AND SPECIAL UNDERGROUND PROTECTION

__ __ iPROTECTED NATURAL AREAS DEPARTMENT DEPARTMENT

_ _ _ _ _ _DEPARTMENT i -

ECONOMICSDEPARTMENT f i i ji MINERAL RESOURCES WATER RESOURCES

__________________ENVIRONMENTAL POLICY AND DEPARTMENT PROTECTION

INTERNATIONAL CO- g | SCIENTIFIC EDUCATIONAL | _____DEPARTMENT_ i_ i DEPARTMENTSTRATEGY DEPARTMENT DPRMN

OPERATION DEPARTMENT

I REPUBLICAN________________ I ~~NORMATIVE-METODO-

SPECIAL DIVISION LAND PROTECTION LOGYGEOLOGICAL FUND L DOCUMENTS|___ DEPARTMENT DEPARTMENT

ACCOUNTING DEPARTMENTMAINTENANCE DEPARTMENT

HAZARDOUS SUBSTANCESAND WASTES MANAGEMENT

DEPARTMENTPERSONNEL

DEPARTMENT ____ __|

-- - - - -- - - - - -- .- - -- - - - -- - - - -- - I- -

VlNgW'dV JO NOIJD3,LO'dd 3qNLVN AO A'diSININ ]HI JO I'dVHD NOIIVZINVD'd0

Structure of "Hayantar" State Closed Joint-Stock Company(Central staff)

I~~~~~~

I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

ORGANIZATION CHART OF THE MINISTRY OF AGRICULTURE

MINISTRY OF AGRICULTURE

l~N STER Legzal Department

FrstDeprtnent |~

First Deputy Minist Deputy Minister Deputy |inister

Science and Education Agrarian Policy Financial and BudgetingNo Department 00 Departnient 10 Department

External Relations Licensing and Qualit) Agricultural Ser icesDepartment t Control Department Department

Ground Construction Agricultural Products Agrobusiness SupportDepartment Development Principal Department

Directorate

Slale.4grarnnl Invpec lio__on .4gric illiala Equipm&"al State .4grian Inspection Srate Vereninary

on A,d,rnedrr / Inspec"ion

Food and Processing IndustryDe%elopment Pnncipal

Directorate

STATE WATER COMMITTEE

ENCY 1DRAINA&GE, IRRIGATIONMANAGEMENT AGENCY (DIMA), -

.te r R =a i _

g Stadolu (160)~- |Pumping Siations niiw,tetgiytaIEiziked for-

....... '.- -...t..

ORGANIZATION CHART OF THE MINISTRY OF NATURE PROTECTION

MARZ ADMINISTRATION

Staff of the Marzpet (Govemor) Chancellery

Legal Division B k eingz

Department of Finance .nd Econi.iro ] Department it Lithrn Dtvelopment

De0paftme"t of Coocundon ofAcivides oaRegionalAgencies wider Div-sirjr, of Information and PublcNadb*7a1JDrmt#vv Aughontes and *0 *|RelationsLocalselfGvmneAutbodes.

Department of Educaumon, Culture and Departrmnc no Public Hcialth and SocalSport ecurity

Departnent of Transport and Road Gener Service Di. isicnDevelopment * *

r Deparwwieni of.4griculture. and Nature Pcr%.ir,ncl Di'.1,itrn

Protection No

Annex D

NRMPR EA PublicConsultation and DisclosureMinutes

INTRODUCTION

This annex presents the results of the public consultation and disclosure

program (PCDP) undertaken for the Natural Resource Management andPoverty Reduction environmental assessment (EA) process. For each public

meeting, the persons in attendance and the questions and answers areprovided. The draft Executive Summary, translated into Armenian, served asthe basis for each meeting, though the presenters were also able to add

additional detail based on their in depth knowledge of the project. The PCDPis described in greater detail in Section 5 of the EA report.

Four meetings were scheduled to take place during November and December2001. However, due to first the Christmas holidays and then winter weatherconditions, only three of the four meetings had taken place as of 30 Januarywhen the final EA report had to be submitted. The fourth meeting will becarried out as soon as conditions permit, and the results will be included in arevised annex to be attached to the EA report.


Dl

PCD MEETING 3

26.12.2001 Tavoush Marz, Village Koghb

Natural Resources Management and Poverty Reduction ProjectEnvironmental Impact Assessment Public Consultations

Participants

Delegation members

Georgi Arzumanyan PIU participation expertLusine Tedevosyan Environmental impact assessment expert

Community representatives1. Abovyan Aramayis (head of village)2. Abovyan Pavel ("Verelk"(Uprise) NGO)3. Ananyan Sedrak (peasant)

Karapet (village council, head of agricultural4. Aghababyan deprtmntdepartment)5. Abovyan Jemma (village council, accountant)6. Khasikyan Armik (village council, utilities engineer)7. Yerknapeshyan Albert (unemployed)8. Ghulijanyan Armen (member of the village council)9. Gharagiozyan Marine (teacher)10. Hairapetyan Lida (director of kindergarten)11. Barseghyan Emma (school headmaster)12. Khasikyan Armen (unemployed)13. Khasikyan Haik (head of village, secretary)14. Gharakhanyan Vahram (teacher)15. Abovyan Suren (director of the museum)16. Ghulijanyan Andranik (Director of the forest research

experimental center /FREC/)

Agenda items

1. Introduction of the list of the project goals and measures (GeorgiArzumanyan)

2. Introduction of the environmental impacts (Lusine Tedevosyan)

The opening of the meeting was announced by Georgi Arzumanyan whointroduced the members of the delegation to the community population. Heintroduced the purpose of the meeting convened to the community members,i.e. the introduction of several changes made in the list of actions. The detaileddescription of the changes in the list of the actions of the program waspresented in detail, and particularly it was emphasized what would those


Dl

actions give to the communities, what global benefits they would gain, whatopportunities would be opened for them...

Lusine Tadevosyan introduced the environmental impact assessment results

to the community representatives, referring to the negative and positiveimpacts, by presenting the contents of the "Non-technical executive

summary" in the brief provided to the locals prior to the meeting.

A possibility was provided to the participants after the presentations forquestions and answers.

The matters of concern to tile commnuinity members were:

V Emma Barseghyan, a headmaster of one of the schools, raised the

question on if the school that was currently in hard financial conditions wouldhave a possibility to construct a drying facility and bee-hive in the area under

the scopes of the project. In the opinion of the headmaster the incomesgenerated from the activity would significantly improve the financial status of

the school.

Answering to the question, Georgi Arzumanyan stated that this or thatsolution of the mentioned question would mostly depend on the decision ofthe community representatives. Once found to be a rational solution, it wouldbe possible to undertake that action.

V Mrs. Barseghyan was also interested whether the global nature ofthe project is actually realistic.

Georgi Arzumanyan answered that the resolution of most of the problemsdepended on the community members, and on the fact to what extent theywould collaborate, and how conscientiously they would undertake themeasures planned under the project. The PIU would be in charge of thepreparation of the project, but the main implementation activities of theproject would be the duty of the community representatives.

V Pavel Abovyan ("Verelk" NGO) was interested in how muchwould the daily remuneration rate for each worker would be.

Mr. Arzumanyan clarified the matter by stating that the pay per day wouldamount to US$2 equivalent drams.

V After the clarification Pavel Abovyan asked if the social security

payments and income tax would be deducted from that salary and whetherthere are certain tax privileges planned for the local population.

That question was followed by an answer that the details were not clear yet(Georgi Arzumanyan), however, in any case, that would be within theframework of the RoA legislation.

V Khasikyan Haik (village council, secretary) was interested inwhether it would be possible to start the project implementation in 2002.ENVIRONMENTAL RE50URCES MANAGEMENT WORLD BANK / TAC15 JOINT ENVIRONMENTAL PROGRAM

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The implementation process would most probably start from March 2002(Georgi Arzumanyan).

V Mr. Pavel Abovyan a representative of "Verelk" NGO was

interested in who would carry out the conservation of the field protectionforest cover.

Mr. Arzumanyan answered that, according to the project, thoseresponsibilities will fall on the community representatives.

V Pavel Abovyan asked what resources would be available after thecompletion of the project, to protect the trees planted.

As explained by Mr. Arzumanyan, as a result of the project actions therewould be additional incomes generated for the community, e.g. from the useof those newly established tree nurseries, at the expense of which it would bepossible to conserve them in the future.

v Mr. Haik Khasikyan was interested in what the project budgetwas and how many communities it would be shared between and what wasthe procedure for distribution.

Georgi Arzumanyan answered that the overall project budget would amountto about US$16 million and roughly US$5 million would be planned for thiscomponent for 6 years of duration, and the total number of the communitiesinvolved will be 100. An important factor for the selection of the communitiesand the distribution of the funds would be the willingness of the communitiesto participate in the project implementation process.

V Mr. Khasikyan asked what was the responsibility of thecommunity representatives in the current stage of the project preparation.

In this stage the community representatives should present theirrecommendations and comments on the package introduced to them, andshould actively participate in the meetings held (Georgi Arzumanyan).

V Haik Khasikyan was interested in what the role of theMarzpetaran would be in the project implementation process.

Georgi Arzumanyan clarified the matter that the Marzpetaran's objective wasto coordinate and to some extent to also monitor the actions implemented inthe Marz area within the scopes of the project, to participate in the drafting ofthe management plans and in the selection process of the new communitiesetc.

V The next problem that was a matter of concern for Mr. Khasikyan,

was whether the monitoring planned under the project would be undertakenby the Marzpetaran or not.


D3

The Marzpetaran would naturally on its part, ndertake a monitoring of theproject. That obligation is mostly set on the PIU (Georgi Arumnanyan).

There were opinions stated that:* In reality this project is a well-developed and mature project and

that the population of the neighboring Koti and other villages would alsobenefit from this project (Andranik Ghulijanyan).

* Even if one hundred jobs are planned to be opened within the

scopes of the project, the community population would be highly satisfied("Verelk" NGO, PavelAbovyan).

At the end of the meeting the head of the village (Aramayis Abovyan)

expressed his appreciation to the delegation members and the communityrepresentatives. In his speech he also emphasized the significant importanceof this project and stressed that the community is ready to support andparticipate in its implementation.

Words of gratitude were also stated on behalf of the delegation by GeorgiArzumnanyan.

ENNIRONMEN-rAL RETOURCES MANAGEMENT WORLD BAN1K / TACISJOINT ENVIRONMENTAL PROC.RAM

D4

PCD MEETING 2

26.11.2001 Gegharkunik Marz, village Dprabak

Natural Resources Management and Poverty Reduction ProjectEnvironmental Impact AssessmentResults of Public Consultation and Disclosure Meeting

Participants

Delegation members

Gayane Minasyan The World Bank, Armenia Resident MissionGohar Ghazinyan PIU DirectorGeorgi Arzumanyan PIU participation expertLusine Tedevosyan Environmental impact assessment expert

Community representativesLast Name First Name Last Name First Name1. Mkrtumyan Vova 13. Zakharyan Kamo2. Hovsepyan Aramayis 14. Lazaryan Hambartsum3. Arzumanyan Viktor 15. Safaryan Hrachik4. Hovsepyan Sergo 16. Aghajanyan Nikolay5. Vardanyan Aghavard 17. Nazlukhanyan Hovhannes (head

of the village)6. Vardanyan Gurgen 18. Aghasaryan Piotr7. Hovsepyan Makich 19. Khondrakyan Makich8. Shahnazaryan Valer 20. Poghosyan Iurik9. Yeritsyan Jora 21.Dallakyan Aram10. Tavartsyan Viktor 22. Balayan Ararat (deputy

head of village)11. Poghosyan Shushanik 23. Nazlukhanyan Vasil12. Mnatsakanyan Elmira 24. Julhakyan Tolla

Agenda items were:

1. Introduction of the list of the project goals and measures (GeorgiArzumanyan)

2. Introduction of the environmental impacts (Georgi Arzumanyan)

Georgi Arzumanyan announced the opening of the session by theintroduction of the delegation members to the community representatives.They mentioned that the main goal of the session convened, was to introducethe community members several changes made in the list of the projectmeasures and the Project environmental impact assessment outcomes, withthe reference to the negative and positive factors. The changes made in the listof the project measures were presented in detail and emphasizing in particularwhat those actions will give to the communities, what would their universalbenefits be, and what possibilities will be opened in front of them. Also, the

ENVIRONMENTAL RESOuRCES MANAGEMENT WORLD BANK / TACIS JOINT ENVIRONMENTAL PROGRAM

D5

possible environmental impacts of the actions planned in the program werepresented.

After Mr. Arzumanyan's speech, there was a question and discussion period.

The questionsfrorn the communiity members were:

V When will the project implementation start?

In answering to this question Mr. Georgi Arzurnanyan stated, that the projectimplementation will possibly start in spring of the next year and will continue

for 5-6 years. The community representatives were interested in which of thelisted actions planned would start first. Gayane Minsayan clarified the issue,stating that for the implementation of any action, a corresponding institutionalground should be prepared. For example, to undertake the action related withthe livestock production sector development, it is first of all necessary to

improve the pastures, for the necessary feed base to be provided prior toincreasing the number of the livestock in the future.

However, the peasants objected to that sequence, stating the fact that theircommunity, at present, utilizes only 1/4 of the total pastures, and the pasturesthat are left idle are mostly a major cause of the fire outbreaks in the summermonths. Also there was an opinion stated that if the number of the livestockincreases in the first priority manner, then the unused 3/4 of pastures could beused to meet the feed requirements of those additional heads of livestock, andthe utilization of those pastures will have another positive impact (e.g., if theanimals graze in those pastures in spring months, then in the summer monthsthe incidence for the fire outbreaks will decrease).

V Gohar Ghazinyan asked, whether they would like to get joinedinto collective farms.

There was an answer following this question, that the locals are not favoringthe recovery of the collective farms of the Soviet period, while as far as thecollective organization of the agricultural practices is concerned, then there isalready such experience applied in the following way: the individualprivatized land parcels are cultivated with joint efforts, and the yield isdistributed among the members at the amount of each one's contribution.

V The concerns of the peasants were mnostly relating to thefollowing:

* The corresponding markets for the sale of the agricultural products by thepeasants themselves are inaccessible, as a result of which they tend toproduce less than the potential that they have, while if they had access tothe markets, then they could produce more agricultural products with thesame resources.

* Under the development of the milk processing activities in thecommunity, the resulting whey from that activity may serve as a feed for

the pigs. The availability of such additional feed resources also will createconditions for the reduction of the pressures on the forests.

ENV'IRONMENTAL RESOURCES MANAGEMENT WORLD BANK / TACIS JOINT ENVIRONMENTAL PROGRAM

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* In the event the livestock numbers grow, the animals in the grazing periodwill not return home every day from the pasture, they will instead stay inthe remote pastures during the whole grazing period, which will alsoleave comprehensive positive impacts on that.

* There was a recommendation made to increase the numbers of thelivestock in the coming years, based on the existing natural pastures, afterwhich only to think about the creation of planted grasslands, and their

crop rotations.

* One part of the community houses is located in the land-sliding zone.

* One of the priority objectives of the peasants is, that the generation of cashrevenues locally is very insignificant and the community representatives

in the priority manner require implementation of such actions, that willallow them create ways for the generation of cash revenues.

* The main livestock product at the moment is the meat, and in the event

there are possibilities for milk processing and corresponding storage andtransportation, dairy products production could add value to the livestock

farmers.* One of the issues of concerns to the peasants is also what financial

mechanisms will be applied and when will their specific forms andconditions become clear?

* One of the wishes was, that the timings for the preparation activities wereto the possible extent reduced, and immediate actions for theimplementation of the core activities launched.

* Of course, there was the desire of the community representatives toresolve all the matters of their concern within the scopes of this singleproject, however, Gayane Minasyan clarified that it is not possible toresolve all the matters of concern to the peasants within this singleenvironmental project, but this project will create prerequisites for thefuture resolution of those unresolved issues: linkages will be established,information exchange will be provided, demonstration of new experience

will be undertaken.* The community population has some mistrust towards this project, which

is attributed to the results of the former projects they have experienced.

ENVIRONMFNTAL RESOURCES MANAGEMENT WORLD BANK / TACIS JOINT ENVIRONMENTAL PROGRAM

D7

PCD MEETING 1

26.11.2001 Tavotushl Marz, Village Gosh

Natural Resources Management and Poverty Reduction ProjectEnvironmental Impact AssessmentPublic Consultations

Participants

Delegation members

Gayane Minasyan The World Bank Armenia Resident MissionGohar Ghlazinyan PIlU DirectorGeorgi Arzumanyan PIU participation expertLusine Tedevosyan Environmental impact assessment expert

Community representatives

1. Sargsvan Norair 12. Grigoryan Manvel2. Grigoryan Levon 13. Grigoryan Shushanik3. Zakaryan Robert 14. Ghazaryan Liza4. Amirkhanyan Martik 15. Grigoryan Khandut5. Amiryan Aramayis 16. Zakaryan Rafael6. Grigoryan Aghamayis 17. Davtyan Derenik7. Sargsyan Misha 18. Arzumanyan Lena

8. Grigoryan Suren 19. Amirkhanyan Sanasar9. Amirkhanyan Serioja 20. Arzumanyan Nver (head of village)10. Arzumanyan Movses 21. Arzumanyan Garnik11. Grigoryan Vardan

Agenda items

1. Introduction of the list of the project goals and measures (Georgi Arzumnnyan)2. Introduction of tlze environmental impacts (Georgi Arzumanyan)

The opening of the meeting was announced by Gayane Minasyan. Shepresented the purpose of the meeting and introduced the members of thedelegation to the community population. Afterwards, the floor was given toGeorgi Arzumanyan. The latter introduced the participants to several changesmade in the list of the Project measures and the Project environmental impactassessment outcomes, with the reference to the negative and positive factors.

During and after the presentation, the peasants expressed the followingopinions, recommendations and issues:

ENVIRONMIENTAL RESOURCFS MANAGEMENT WORLD BANK / TACISJOINT ENVIRONMENTAL PROGRAM

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/ The only road for taking the livestock to the pasture passesthrough the forest. When talking about the establishment of certain protectionhedges around the paths for the animals not to cause any damages when

passing through the forest, there was a recommendation made to establishthose hedges by planting dewberry bushes, which could also be used by the

population.

/ When speaking about the fuel, some of the people expressed theiropinion on the fact that they would prefer to have some other type of fuel foruse, e.g. liquid fuel. Today there are significant difficulties to procurefirewood, since the only source is the area of the state reserve, and in mostcases, the acquisition of the wood in legal manner is impossible. Recognizingthat fact, the population when having excess cash, will be able to buy otherfuel, thus also facilitating their problems in acquiring fuel, meanwhile

avoiding causing any damages to the forest.

V/ There are serious problemns in relation to the access to pastures. The

peasants unintentionally are forced to violate the border of the State Reserveon their way of taking the livestock to the pasture (since there are no otherroads available), for which they are penalized.

/ Gayane Minasyan asked the community representatives whetherthere had ever been any irrigation system in the village. The locals answeredthat they never had such a system in place while under the availability of thelatter the process of erosion would have been significantly prevented.

/ There was a robust reaction by the peasants to the question raisedabout the sanitary cuttings of the forest.

vz To Gayane Minasyan's question on what would the communitymembers do, if the forest area of their village belonging to the Dilijan SR isgiven on some conditions to the community, the peasants answered, that (1)first of all, the money generating from the wood procurement of that forestmay address numerous problems faced by the community, (2) as well as, it ismost likely that the forest will be cut with more care, by undertaking sanitarycuttings.

v To Georgy Arzumanyan's question on whether they knew whattechniques should be applied when undertaking sanitary cuttings, thepeasants gave a positive feedback. However, they found it difficult tospecifically explain how would the selection of the trees, subject to cutting, bemade.

V/ When during his speech Mr. Arzumanyan mentioned about theagricultural machinery, the community representatives stated that the villageneeded new agricultural machinery. The existing ones are obsolete and theydo not meet the present needs of the village.

ENVIRONMENTAL RESOURCES MANAGEMENT WORLD BANK / TAGISJOINT ENVIRONMENTAL PROGRAM

D9

V At the end of his presentation Mr. Arzumanyan spoke about thesmall grants that planned to be provided, within the scopes of the project. In

this regard, the community members raised a question about how, whom andhow much would these grants be provided. Gayane Minasyan, replied that

these questions could be more specifically answered in late winter-earlyspring. But at this point, we can state that those grants will be provided for theperformance of those actions, which are primarily targeted at the reduction ofany type of pressure on the biodiversity, and its conservation.

ENVIRONMENTAL RESOURCES MANAGEMENT WORLD BANK / TACISIOINT ENVIRONMIENTAL PROGRAM

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Annex E

EnvironmentalManagement Guidelines forContractors

PREFACE

The recommendations that are presented in this annex are fully

comprehensive having been designed to cover all possible constructionconsiderations. It is recognised that not all of these recommendations will berelevant to individual construction contracts. It is, however, suggested that

these guidelines be supplied in their entirety to contractors who will then beresponsible for devising appropriate environmental management plans in

accordance with the scope of their individual contracts.

ENVIRONMENTAL MANAGEMENT GUIDELINES FOR CONTRACTORS

Introduction

Pu rposeThe purpose of these environmental management guidelines (EMG) forcontractors are to define minimum standards of construction practiceacceptable to the Project Implementation Unit (PIU).

Applicable Codes, Standards and LegislationThere are various environmental regulations and standards which coverenvironmental and related matters and these are referred to as applicable inthis EMG. Notwithstanding those references, compliance with them shall notdischarge the Contractor from complying with any other legislativerequirements applicable at the time of construction activities.

Thle SiteThe Site, for the purposes of these EMG, is defined is any land which has beenincluded in the construction area, as defined on the PIU plans which will beprovided to the contractor.

Site Environmnental Managemnent Plan (SEMP)Prior to the start of construction activities, the Contractor should, on the basisof these guidelines, draw up a Site Environmental Management Plan (SEMP),which must be approved by the PIU before construction or rehabilitationactivities can commence. This plan should include or address all thecomponents of these guidelines, with the caveat that the SEMP must justify orexplain if and when certain guideline components are not relevant to aspecific, individual project and any variance(s) agreed with the PIU.

When the SEMP has been prepared, the Contractor should also undertakeappropriate training of their workforce to ensure that every member of the

ENNIRONMENTAL RESOURCES MANAGEMENT WORLD BANK / TACISJOINT ENVIRONMENTAL PROGRAMME

El

workforce is aware of the SEMP prior to going on site, and will adhere to theSEMP at all times. The PIU will advise and assist the contractor as necessary.

Roads and Footpaths

Temporary and Permanent Closures and DiversionsIn order to carry out some works, it may be necessary to close or divert certainspecified highways and footpaths, either permanently or temporarily duringthe construction period. It is the Contractor's responsibility to finalise thearrangements for these closures and diversions with the PIU.

After breaking up, closing or otherwise interfering with any street or footpathto which the public has access, the Contractor shall make such arrangementswith the PIU as may be reasonably necessary so as to cause as littleinterference with the traffic in that street or footpath during construction ofthe Works as shall be reasonably practicable. This includes consideration ofthe agricultural timetables (e.g., livestock movements, access to fields fortilling or harvest).

Wherever the works interfere with existing public or private roads or otherways over which there is a public or private right of way for any traffic, theContractor shall construct diversion ways wherever possible. The standard ofconstruction and lighting shall be suitable in all respects for the class or classesof traffic using the existing ways, and the widths of the diversions shall not beless than that of the existing way unless otherwise agreed with the PIU.

Diversion ways shall be constructed in advance of any interference with theexisting ways and shall be maintained to provide adequately for the trafficflows.

The Contractor shall be responsible for supplying, erecting and maintainingfor the requisite periods all statutory and public information notices. Thenature and location of such notices shall also comply with the requirements ofthe PIU.

The provisions of this Clause shall not apply to any temporary access oraccommodation works, which the Contractor may construct for his sole use inthe execution of the works.

Pedestrian RoutesThe Contractor shall ensure that reasonable pedestrian routes are providedthroughout the construction period, where those routes are interrupted by theworks.

Maintenance and Repair of the HighwayThe Contractor shall take every possible precaution to prevent its operations,whether by carting or otherwise, from damaging the roads and footpaths inthe vicinity of works.

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The Contractor shall carry out all such maintenance works as are necessary tomaintain the roads and footpaths in the vicinity of the works in a serviceable

condition to the approval of the PIU.

Lorry MovementsThe Contractor, its sub-contractors and suppliers moving large and/or heavyloads, construction plant, materials and spoil (including vehicles used forcarrying such when running empty) shall limit the use of public highways as

far as is reasonably practicable.

Routes will be agreed with the PIU in advance. Vehicles arriving or leavingthe Site shall do so during normal working hours, unless otherwise agreedwith the PIU.

The Contractor shall take all reasonable measures to ensure that deliveryvehicles do not park on the highways prior to entering the Site.

The Contractor when entering into any sub-contract for the execution of anypart of the works or the supply or transport of heavy loads, construction plant,materials or spoil shall incorporate in any such sub-contract provisionsrequiring the sub-contractor or supplier to comply with the requirements ofthis Clause.

Mud on RoadsThe Contractor shall take strict measures to minimise the spillage of mud onroads arising from excavation works.

These may include, but not necessarily be limited to:

1. The provision of wheel washing facilities.2. Regular cleaning to remove any mud or debris deposited by site vehicles

on roads, footpaths, gullies or drains in the vicinity of the site.3. The complete sheeting of the sides and tops of all vehicles carrying mud or

debris.4. The Contractor shall ensure that vehicles are loaded in such a manner as to

prevent spoil falling off during their journey.

The Contractor shall also comply with the requirements regarding dustoutlined in this EMG.

Traffic Safety and Control (Traffic Safety Measures)The Contractor shall provide, erect and maintain such traffic signs, roadmarkings, lamps, barriers and traffic control signals and such other measuresas may be necessitated by the construction of the Works to the approval of thePIU.

The Contractor shall not commence any work that affects the public highwayuntil all traffic safety measures necessitated by the work are fully operational.

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The Contractor shall keep clean and legible at all times all traffic signs, roadmarkings, lamps, barriers and traffic control signals and he shall position,reposition, cover or remove them as required by the progress of the works andto the approval of the PIU.

Site AccessAll access from the Site onto the highway shall be of sufficient width toaccommodate two-way traffic wherever practicable. Traffic signs shall beprovided for each access as follows:

1. As advance warning of the approach.2. "Give Way" signs for control of traffic leaving the Site.

The precise location of each sign shall be determined by the Contractor to thesatisfaction of the PIU.

Access Across Site and to FrontagesIn carrying out the Works, the Contractor shall take all reasonable precautionsto prevent or reduce any disturbance or inconvenience to the owners, tenantsor occupiers of adjacent properties, and to the public generally.

Subject to the provisions of these guidelines, the Contractor shall maintain anyexisting right of way across the whole or part of the Site and public andprivate access to adjoining frontages in a safe condition and to a standard notless than that pertaining at the commencement of the contract.

Alternatively, the Contractor shall provide acceptable alternative means ofpassage or access to the satisfaction of the persons affected. The Contractorshall provide and maintain any guard rails, fences, gates, lights, bridges,pavings, steps etc. needed and they shall be of such size, strength andconstruction as will be adequate for their purpose.

In carrying out the work immediately adjacent to occupied premises outsidethe Site, the Contractor shall proceed with minimum inconvenience anddisturbance to occupiers and users. Access to and from such premises shall bemaintained at all times, except as may be essential.

The Contractor shall render every assistance to occupiers of premises affectedby the works to enable them to get materials or goods into or out of theirpremises.

Access to Agricultural LandsThe Contractor must liaise with local farmers to ensure that construction plansare scheduled to minimise disturbance (eg through reducing access orinterrupting irrigation water supply) to existing agricultural lands during keyperiods in the crop timetable, such as sewing and harvest. These schedulesmust be agreed with the PIU as part of the SEMP before constructioncommences.

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Water and Soil Protection

Waste Water and GroundwaterProvisions for construction site drainage along the route of the Works will beachieved via the development and implementation of an appropriate sitedrainage plan. The plan will include measures to ensure that surface waterrunoff is contained and managed appropriately, as described below. Suchprovisions will also prevent washout from temporary construction laydownand storage areas into local watercourses.

All waste water and site discharges shall only be permitted where the effluentquality and discharge location is acceptable to the PIU. Any effluent producedwill pass through treatment facilities such as sediment traps and/orsettlement lagoons, as appropriate, before being discharged. The Contractorwill ensure that all treatment facilities are regularly inspected and maintained.

The Contractor shall make provisions to ensure that oil drums and containersor other potential contaminants stored on the Site are properly isolated andbunded and that no oil or other contaminants are allowed to reachwatercourses or groundwater, including aquifers. In particular, soil bundsshould be constructed around fuel or chemical storage areas to isolatespillages (110% volume of stored chemicals); covers should be used to preventerosion from exposed heaps, which should themselves be positioned awayfrom watercourses; and adequate sanitation facilities (eg latrines) should be inplace for the workforce. In addition, an appropriate fuel and chemicalhandling protocol and contingency planning to prevent and limit impact fromspills should be in place prior to any construction taking place.

The Contractor will also have due regard for underlying aquifers, andwherever appropriate, measures to prevent groundwater contamination willbe agreed with the PIU.

Control and Managemnent of Foul DrainageAny foul water and sewage effluents produced by the construction workforcewill be contained by temporary foul drainage facilities to be installed. All foulwater will be disposed of properly in accordance with local regulations andoff-site.

Water Supply ConflictsThe Contractor must ensure that the workforce have adequate access to a safewater supply, which is not provided to the detriment of services to the localpopulation. If there is a risk of competition for limited water resources, thenthe Contractor must ensure that the local supply is not affected, and thatworkforce is provided with an alternative source if necessary (eg tankered andstored water).

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Soil ProtectionThe Contractor must also take every precaution to avoid unnecessary soilcompaction, (e.g., by minimising the use of heavy equipment, use of woodenmatting to spread weight in soft soils).

Noise and Working Hours

Working HoursThe normal working hours shall be 0700 - 1900.

These hours of work do not apply to equipment which is required to operatecontinuously (e.g. for safety reasons).

At certain sites, different working hours shall apply. These will be as agreedbetween the Contractor and the PIU.

In general, night-time working shall be kept to a minimum. However, forsome sites where night-time working is required it shall be agreed with thePIU.

Additional or alternative working hours needed for emergency reasons shallbe advised to the PIU.

Noise ControlThe Contractor shall have a general duty to take all practicable measures tominimise nuisance from noise. This includes:

1. Respecting normal working hours in or close to residential areas.2. Maintaining equipment in good working order so that extraneous noises

from mechanical vibration, creaking and squeaking are reduced to aminimum.

3. Shutting down equipment when it is not directly in use (except where theequipment is required to run continuously).

Dust and Air Pollution

DustThe Contractor shall take all necessary measures to avoid creating a dustnuisance during both construction and demolition works.

Measurers to prevent dust shall include the following practices:

1. The enclosure of material stockpiles at all times and damping down ofdusty materials using water sprays during dry weather.

2. Control of cutting or grinding of materials on site.3. The complete sheeting of the sides and top of all vehicles carrying spoil and

other dusty materials.4. Watering of unpaved surfaces and roads.

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5. Limit vehicle speeds on unpaved surfaces to 35 kph.

Air PollutionThe Contractor shall take precautions to prevent the occurrence of smoke

emissions or fumes from site plant or stored fuel oils. Plant shall be wellmaintained and measures shall be taken to ensure that it is not left running forlong periods when not directly in use.

Disposal of Waste and Contaminated Materials

Waste

As part of the SEMP, the Contractor will develop a management plan whichwill identify:

* the waste category and quantities of materials generated;

* opportunities for recycling and/or re-use; and* disposal routes and licensing requirements.

Spoil arising from the works which is classed as "acceptable fill" willwherever practicable be used in construction works.

Disposal sites will be identified by the Contractor in consultation with thePIU.

Ecology

Encroaclhment into Wildlife AreasThe Contractor shall comply with the provisions of relevant natureconservation legislation. The following general principles will be appliedwhere practicable:1. Standards of dust, noise and air pollution control, as set out in previous

sections shall be applied to protect adjacent wildlife habitats.2. Habitat loss will be minimised by restricting the working width to a

necessary minimum.3. Suitable precautions shall be taken to prevent the entry of pollutants into

any bodies of water - adjacent habitat will be fenced off and staff givenawareness training, where appropriate.

4. Any unauthorised felling or trees, clearance of fauna, or trapping or killingof any wildlife (excepting vermin) in the vicinity of the Site by members ofthe workforce is strictly prohibited, and could lead to termination ofcontract if not controlled. The Contractor must make sure that theworkforce have adequate resources and fuel supplies on site at all times toprevent such an occurrence

Protection of Mature TreesLoss of trees will be avoided wherever possible. Adverse effects on all treeswithin or in the vicinity of the Site shall be minimised by the adoption of

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suitable mitigation measures, including, but not limited to the following(where appropriate):1. selective removal of lower branches in an approved manner, to reduce

mechanical damage by construction equipment;2. the use of matting around the root zone to prevent excess soil compaction;3. the use of paling around the trunk to prevent damage; and4. notwithstanding (ii) above, construction activities shall be controlled in the

vicinity of all trees so as to minimise excessive compaction of the groundbeneath the entire canopy of the tree. No heavy materials or plant shall bestored, and construction traffic movements shall be controlled, within theareas.

Tree Replacement

Any tree that is damaged or cut down without approval or dies as aconsequence of the construction shall be treated or be replaced by a suitablysized transplant to the approval of the PIU.

Site Boundaries/HoardingsThe Contractor shall liaise with the PIU to decide upon which (if any) areas ofthe site should be fenced from public ingress.

Site Activities

Good HousekeepingThe Contractor shall follow a "good housekeeping" policy at all times. Thisshall include, but not necessarily be limited to, the following requirements:

* Open fires will be prohibited at all times;

* Rubbish will be removed at frequent intervals and the site kept clean andtidy;

* Hoardings shall be frequently inspected, repaired and re-painted asnecessary;

* Adequate toilet facilities shall be provided for all site staff. Toilets shall bekept clean;

* Food waste shall be removed frequently;* The wheel washing facilities area shall be brushed clean frequently.* Lorries shall enter and exit the Site in a forward direction.

* All loading and unloading of vehicles shall take place off the publichighway wherever this is practicable

Living AccommodationNo living accommodation will be permitted on the Site except with theapproval of the PIU.

Clearance of Site on CompletionThe Contractor shall clear up all working areas both within and outside theSite and accesses as work proceeds and when no longer required for thecarrying out of the Works.

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All surplus soil and materials, temporary roads, plant, sheds, offices and

temporary fencing shall be removed, post holes filled and the surface of theground restored as near as practicable to its original condition.

Pest ControlThe Contractor shall ensure that the risk of infestation by pests or vermin isminimised by adequate arrangements for the disposal of food waste or othermaterial attractive to pests. If infestation occurs he shall take the necessaryaction to deal with it.

Use of Existing StructutresThe Contractor shall not locate stockpiles for materials, stores, plant ortemporary works upon or adjacent to or under existing structures such asbridges, viaducts, towpaths, walls and embankments in such a way as toendanger these structures.

Safety

Emergency Contacts and ProceduresThe Contractor shall prepare and maintain an Emergency Contacts Set ofProcedures for each work site which shall be displayed prominently at eachsite. These Procedures shall be followed in any site emergency.

They shall contain emergency phone numbers and the method of notifyinglocal authorities/services for action by the Contractor and the PIU. Copies ofthe Procedures will be issued to the PIU and the Police.

Emergency telephone numbers for the Contractor's key personnel shall also beincluded for the PIU's use in an emergency.

Use of ExplosivesThe use of explosives shall not be permitted except in exceptionalcircumstances. Prior approval from the PIU shall be obtained.

Protection of Existing Installations

InformnationThe Contractor will be required to make his own investigations and to take allappropriate actions concerning existing foundations, buildings, structures,walls, roadways, sewers cables and other services, apparatus and installations.

SafeguardingThe Contractor shall properly safeguard all buildings, structures, works,services or installations from harm, disturbance or deterioration during theconcession period. The Contractor shall take all necessary measures requiredfor the support and protection of all buildings, structures, pipes, cables,sewers, railways and other apparatus during the concession period.

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