Resettlement Planning Document

Resettlement Framework Document Stage: Final Project Number: 37749-01 February 2008

PHI: AGRARIAN REFORM COMMUNITIES PROJECT II

Prepared by the Department of Agrarian Reform, Government of the Philippines.

The resettlement framework is a document of the borrower. The views expressed herein do not express those of ADB’s Board of Directors, Management, or staff, and may be considered preliminary in nature.

A. Project Rationale 1. The lack of equitable access to the means of production, including land, capital, technology, information and markets, leads to poverty among large sections of the rural population of the Philippines. Rural poverty is widespread in the Philippines. Around three quarters of the poor living in rural areas are to be found in southern Luzon, Mindanao, and Visayas. 2. In 1988, in response to the problems of widespread inequity in land distribution, and consequent peasant unrest, the Government introduced legislation for the Comprehensive Agrarian Reform Program (CARP). The Department of Agrarian Reform (DAR) is the designated agency responsible for the implementation of CARP. CARP has had positive impacts wherever it has been implemented in a holistic manner, including the award of clear land titles, rural infrastructure support, and community mobilization and organization of agrarian reform beneficiaries (ARBs) into organizations. However, this wholistic approach has been limited in its application to agrarian reform communities1 (ARCs), mainly on account of limited availability of budgetary resources. A large number of ARCs (almost 50%), and large numbers of ARBs living outside ARCs, still lack clear individual land titles, and access to basic infrastructure, new and improved technology, institutional credit, markets, and well developed peoples’ organizations. Besides, past approaches have tended to ignore the non ARB populations in the ARCs and their vicinity. A fundamental change in the outlook as well as concepts of rural development will be required and an agri-business approach to be adopted for poverty reduction in rural areas. An inclusive approach to rural development will be needed to underpin an enlarged concept of agrarian reform communities. Such an approach can include larger areas contiguous to ARCs, as well as non ARB populations located there, within the ambit of interventions aimed at stimulating commercialization of the rural economy. This is expected to bring about increased efficiency and economies of scale, in commercialized production and marketing, create employment opportunities, and improvement in access to services. 3. Under the Agrarian Reform Communities Project, (ARCP) , ADB has assisted the coverage of 165 ARCs in 35 provinces, with provision of rural infrastructure, land survey and titling, development support including agricultural development, community and institutional development, rural credit, and project management support. ARCP has been successful in achieving its targets with high rates of utilization of project financing. Targets for most of the components have been more than achieved, especially for rural infrastructure. The role of improved communication linkages of ARCs with markets and social services, in improving livelihoods, is well demonstrated by the project. Development support for improving livelihoods through greater commercialization, improved technology and management inputs, has surpassed its targets and has contributed significantly to the overall performance of ARCP, and towards the orientation of ARCPII. Strengthening of ARC organizations through institutional development, is demonstrating results, in terms of increased sustainability of livelihoods, and project investments. Technology transfer for improving productivity and rural enterprise development, has shown results in terms of sustainable increases in incomes for ARBs and other farmers. The participatory approach to ARC planning has brought out the potential therein for achieving greater community commitment to the project and improved sustainability of

1 In 1993 the Department of Agrarian Reform (DAR) designated barangays in which ARBs constitute at least 50% of

the population, and which fulfilled criteria including at least 75% of all land tenure improvement work as being completed, as ARCs. This was done in order to improve the convergence of resources in these areas for developmental impacts to be felt.

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outputs and impacts. Some LGUs have started to utilize the participatory demand driven approach for planning in non ARC barangays as well. ARCP has also clearly underlined the need for ensuring regularity of budgetary releases for project implementation. ARCP suffered serious delays during certain periods of implementation owing to delayed releases of counterpart funds. ARCP has also brought home to both ADB and the Government, the need for mainstreaming project management, and for ensuring higher standards of governance and fiduciary responsibility all around. The Executing Agency of ARCP, DAR has implemented the land acquisition and compensation procedures under the Project in conformity with the ADB’s Involuntary Resettlement Policy. 4. Building on lessons learned from ARCP, as well as the lessons emerging from the CARP impact assessment done in 2003, as well as the recent study on the impact of CARP on Poverty Reduction and long term growth2 the ARCP and other externally assisted projects, and in support of the priorities of the Government, the Agrarian Reform Communities Project II (ARCPII) will cover approximately 152 ARCs in 19 provinces3. It will provide targeted support in precisely those areas where it is necessary to bring about fundamental change, in order to enable the transformation of CARP lands into agri-business lands. It will thus contribute to pro poor economic growth, and lead to equitable sharing of the benefits of growth across regions and rural poor communities. B. Description of the Project 5. The long term impact of the Project is to enable ARBs in approximately 152 selected ARCs and ARC Clusters4 in 19 provinces5 to reduce poverty, and have sustained improvements in incomes and quality of life. In order to achieve these impacts, the Project is expected to bring about long lasting improvements in the capabilities and well being of poor and marginalized groups in the target communities. C. Project Outputs

6. In order to achieve the above outcomes of poverty reduction and sustainable livelihoods, the Project will support the following outputs: (i) strong participation of local communities in the development process by the (a) enhancement of social capital among target communities through the use of a CDD approach, (b) detailed participatory ARC planning based on participation by the rural poor, as well as (c) improved capacity of ARC organizations and LGUs, for better governance and convergence in the provision of support services to target communities; (ii) agri-enterprise development (AED)including (a) transfer of technology, (b) greater entrepreneurship among ARC organizations, (c) linkages between the private sector and corporate entities and ARC organizations, for increased investments into rural areas for growth, (d) wider prevalence of community based savings and lending groups for setting up sustainable micro-finance services among communities, (e) Land Tenure Improvement (LTI) to improve security of land titles, enable investments into productivity enhancements, (iii)

2 Asia Pacific Policy Center. Manila. Comprehensive Agrarian Reform Program Impact Assessment: study on Impact

of CARP on Poverty Reduction and Prospects for Long term Growth, Executive Summary. September 2007 (mimeo).

3 DAR has a list of over 400 ARCs of which 152 have been selected as the likely target ARCs. Some of these may still change during the course of implementation depending upon their current situation, and selection by LGUs and DARPOs/DARROs. Others may be added during the course of Project implementation.

4 For an explanation of the ARC Cluster concept refer to footnote 9. 5 The provinces to be covered include Romblon, Marinduque, Camarines Norte, Camarines Sur, Sorsogon, Negros

Occidental, Leyte, Eastern Samar, Northern Samar, Western Samar, Zamboanga del Norte, Zamboanga del Sur, Zamboanga Sibugay, Maguindanao, Lanao Del Sur, Tawi Tawi, Shariff Kabusuan, Basilan, and Sulu.

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improved access to rural infrastructure, designed to provide a boost to improved production and productivity, and crop intensification; and (iv) improved project management.

1. Social Capital Formation, Participatory ARC Planning and Implementation

7. The objective of this output is to mobilize, organize, and strengthen communities and local institutions, by implementing the CDD approach throughout the Project, in order to prepare local communities and people's organizations (POs), for their active participation in the design of priority poverty reduction activities supported by the Project. The component will support social mobilization at community level, organization of inclusive membership based groups, including the rural poor, and strengthening community participation in governance. 8. The output will consist of the following sub components: (i) support to social capital formation; (ii) participatory detailed ARC planning; (iii) organizational development; and (iv) support for local governance.

a. Support to Social Capital Formation

9. The objective of this sub-component is to prepare and strengthen communities and local institutions for their informed participation throughout the Project, in order to improve the sustainability of Project investments. A CDD approach will be used to facilitate the engagement of the poor in the target ARCs and ARC Clusters, for the identification of urgent needs, opportunities, and constraints, as well as priority sub projects that can address these. The Project will provide support through NGOs/civil society organizations (CSOs),who will deploy trained community organizers (COs),backstopped by expert NGO staff, to work in all target barangays. Socially inclusive approaches will ensure that all ARC plans reflect the priorities of the poor. This sub-component will also help to identify the training needs of ARC organizations, and draw up training and development plans for such.

b. Participatory ARC Planning

10. The second set of activities to support CDD will include detailed ARC planning. The first step after start up of the Project implementation will be the training of provincial planning teams by consultants/NGOs with appropriate qualifications and experience of implementing participatory approaches. This will be followed at grassroots level by information dissemination to all sections, particularly the vulnerable groups, on the process of the comprehensive ARC planning, and the importance of peoples’ participation therein. Thereafter, the plans will be prepared by the communities, with technical support from the DAR Provincial Planning officer, the municipal LGU Local Project Office (LPO), the municipal agrarian reform officer (MARO) and local staff, who together will constitute the local planning team. 11. The planning process will also be assisted by the NGOs who are to be contracted for social capital development. The Project will facilitate LGU participation in ARC planning along with synchronizing the planning process and timelines of ARCs with LGU planning cycles. This component will also cover the ARC Cluster approach in developing plans for larger areas which are contiguous to the target ARCs.

c. ARC and LGU Organizational Development

12. This sub component will work to strengthen ARC organizations, and local government agencies working with them under the Project, to be more effective in planning, implementing, monitoring and sustaining activities within their own communities. This sub-component will

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support the other Project components by strengthening cooperatives, microfinance and farmer associations, barangay water and sanitation associations (BAWASAs), irrigation user Associations (IUAs), women’s groups, barangay sub committees on Safeguards and Grievances (CSGS), among others.

d. Support for Improved Governance at Local Level

13. This sub component will improve local governance and accountability of LGUs by providing training6 on fiduciary policies and management, as well as safeguard policies, among other areas of capacity development.

2. Agri-Enterprise Development (AED) 14. The purpose of the AED output is to provide strategic support services to participating ARCs, and ARC Clusters, aimed at (a) generating sustained increases in agricultural production and productivity; (b) increasing economic activities and value addition in the target areas; (c) facilitating the entry of the private sector, and (c) piloting ARC connectivity strategies. This is critical in facilitating the development of agribusiness lands on a large scale in the country as a whole. This output is expected to lead to improved livelihoods through better market orientation of ARBs and greater value addition by them. The output consists of four sub-components: (i) agricultural productivity improvement, (ii) enterprise development, (iii) LTI, and (iv) development of community based rural financial services.

a. Agricultural Productivity Improvement

15. This sub-component will facilitate the transformation of farming operations by ARBs and non ARB small and marginal farmers, from mere subsistence production, to increased productivity geared to the market. This is expected to contribute to achieving both improved food security and better incomes among food deficient households, ,through the production of higher marketable surpluses, arising out of the adoption of improved technology, and better farm and enterprise management practices.

b. Agri-Enterprise and Market Development

16. Considerations of the market need to be much better integrated into DAR supported projects, and hence, market focus and market development will receive increased attention in ARCPII. All proposals that are put up during the ARC detailed planning process will need to include a market assessment and marketing plans. Only those proposed sub-projects, which have indicative positive market feasibility outcomes, would be supported for further feasibility studies. Training and technical assistance on entrepreneurship, market research and feasibility studies will be included under the Project. Business management advisory services will be provided to ARC organizations. Business Advisory Units (BAUs) will be established at the provincial level, initially within the DAR provincial office, to be eventually turned over to the LGUs. Information and guidance will be provided with respect to opportunities to link up with private sector entities interested to invest in these areas for agri enterprise development. Study tours will be organized by DAR in cooperation with the LPO and ARCs, for local leaders and ARC representatives to visit existing enterprises, for learning and replication.

6 Training will include linkages between LTI and AED, CDD approaches, environment, and other social safeguard

policies, ADB and GOP policies on procurement, financial management, safeguard policies and anticorruption, among other areas.

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17. In order to facilitate the development of larger acreage of agri-business lands, the Project will support the intensification of the ARC Cluster development. The target ARCs will be used as the starting point to initiate Cluster activities in surrounding barangays, and focus on a clear activity that can strengthen the backward and forward linkages for target area producers. Approximately 10 ARC Clusters are likely to be included under ARCPII. However, detailed planning with full market assessments, identification of partners, detailed costing with phased budgets, will need to be done prior to start up of implementation.

c. Land Tenure Improvement

18. In order to improve security of land rights and investments by ARBs, the Project will support clearer delineation of land rights and individual shares in agrarian reform lands within the target ARCs and ARC Clusters. The land area covered by collective certificates of land ownership awards (CLOAs) amounts to approximately 59% of the total area distributed in the selected ARCs (outside of ARMM). Only 22,618.09 ha have been covered by surveys preparatory to individual titling. This leaves a balance of at least 54,108.98 ha for sub division survey. Thus, for the lands already acquired and distributed, DAR needs to ensure the clear delineation of the area owned by the beneficiary, or identify a determinate percentage of the land commonly owned. This should result in a sense of ownership, and a defined amortization schedule of payments due to government.

d. Sustainable Rural Financial Services

19. This sub-component is based on the need to address the pressing need for sustainable financial services for ARBs and non ARB farming populations in the target areas. It will also reduce the deleterious effects on the productivity and incomes of small farmers, of the high levels of their credit related dependence on traders and moneylenders.7 The Project will provide support services aimed at developing community based financial services and facilitating improved access to institutional financing. The Project will contract suitable NGOs/CSOs/microfinance institutions (MFIs), in order to work with interested ARCs, to set up peoples’ self selected, socially homogenous groups, in order to develop savings and other microfinance activities

3. Rural Infrastructure

20. Rural infrastructure (RI) is critical to ARCs and ARC Clusters being able to participate in market oriented agriculture and agribusiness promotion. Lack of connectivity leads to isolation from markets and social services, and makes it difficult for private enterprise to make investments into developing commercial agriculture in these areas. In order to enhance ARC connectivity, and promote the development of agri-business lands, the RI output will aim to (i) reduce transportation time, and transport costs of rural produce; (ii) reduce cost of farm inputs; (iii) increase availability of irrigation and enhance crop productivity and diversification(iv) increase cropping intensity and improve yields and productivity; (v) reduce post-harvest losses and transport damage, thereby improving quality of products; (vi) reduce incidence of water borne disease; (vii) generate time savings for more productive use; (viii) reduce health related expenses; (ix) improve community hygiene and public health; and (x) reduce the vulnerability of the rural poor to crisis situations by improving access to emergency services. 7 The CARP Impact Assessment in 2003 found that the dependence of the peasantry on landlords was replaced

after the implementation of CARP, by the growing dependence on traders and moneylenders. This has led to reduced incomes, low prices as compared to open market rates for produce, and perpetuated poverty.

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21. The Project will adopt a participatory, demand driven approach, to rural infrastructure prioritization, in order to ensure that interventions provided by the Project realistically address the actual needs of the ARC communities. There is a however a need for the Project to develop suitable conditionalities to guide communities engaged in planning, in order to ensure that “demands” are within the limits of what is essential to trigger development in ARCs. 22. Priorities identified during participatory research conducted during the PPTA include access infrastructure (rural roads and connecting bridges), small scale community irrigation schemes, and potable water supply schemes (PWS), and other priorities in particular circumstances. The specific outputs of the component will include the following under four major classifications:

(i) Rural Access Infrastructure – to include rehabilitation and selective construction of critically needed barangay or farm to market (FMR) roads and their appurtenant structures, single lane concrete bridges and low-level crossings, access trails, footpaths and hanging foot bridges in upland areas;

(ii) Small Scale Irrigation – to include construction and rehabilitation of small flow communal irrigation schemes (CIP and CIS), and drip irrigation schemes for high value crops;

(iii) Post-harvest facilities – to include provision of warehouses and solar driers; and (iv) Social Infrastructure Facilities – to include Potable Water Supply (PWS - levels I

and II), rainwater collectors where critically needed, as well as culturally appropriate facilities including multi purpose buildings, school classrooms, health centers , where required in support of indigenous peoples (IP) participation, and in severely disadvantaged areas. These are in the nature of public goods with O&M requirements. The LGUs would be responsible for implementation of these schemes in close partnership with organized groups at ARC/barangay level. These would be responsible for O&M once the sub projects would be completed and turned over.

23. The general conditions in which proposed rural infrastructure sub-projects will qualify for ARCP II assistance include among others, (i) identification and prioritization by poor rural communities through the CDD approach; (ii) concurrence by the LGU; (iii) written commitments regarding the willingness on the part of both ARCs and LGUs to put up the required equity, and operate and maintain the facilities; (iv) LGU willingness to carry out detailed planning, and preparation of detailed engineering plans, including all required clearances; (v) willingness of LGUs and ARCs to abide by ADB and Government procurement guidelines, ADB's Safeguard and Anti Corruption policies, and enforce proper financial and fiduciary management; (vi) absence of any social or environmental problems; (vi) written undertakings by the communities regarding their willingness to organize themselves for operation and maintenance (O&M) of the facilities; (vii) availability of Project resources, and (viii) proposed sub projects should not be financed from any other foreign or local projects. 24. For subproject approval, formulation and submission of an annual O&M plan specifying responsibility centers and sources of maintenance funds, and signing of a Sub-Project Agreement (SPA) and Memorandum of Agreement (MOA) specifying the details in carrying out the O&M provisions of the completed facilities would be required.

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4. Project Management

25. The fourth output will ensure efficient project implementation and management, by providing resources to support the management structure which will be fully mainstreamed, at national, regional, provincial, and local levels. To the extent possible, all project implementation and management structures will be established within existing national and provincial government institutions. Regular DAR staff will be redeployed to undertake Project implementation. The output will also include consultant services in advisory capacity related to project management, CDD, fiduciary responsibility, agri-enterprise development, microfinance and rural credit promotion, infrastructure development, monitoring and evaluation, extension training, gender and development, indigenous peoples’ development, environment management, among others. D. Involuntary Resettlement: The Involuntary Resettlement Planning Framework

1. Scope

26. The IR policy applies to all ADB projects and project components, regardless of whether the source of financing is ADB, its cofinanciers, or the government. It also covers actions conducted in anticipation of ADB operations. The Project itself does not envisage any land acquisition as most of the rural infrastructure sub projects are small scale ones consisting of rehabilitation/upgrading of existing infrastructure and these are on public lands. The rural roads sub component will include rehabilitation/upgrading of existing roads, and the bridge construction will be in existing crossing sites. No land acquisition is expected here. At present, potential sites for the daycare, health and tribal centers have provisionally been identified for lands that have already been donated to the LGUs. However, wherever such land donations may have already occurred prior to Project implementation, the DAR provincial office in conjunction with the LPO and Barangay CSGS will prepare reports on the Summary Discussions on Land Acquisition and Resettlement ,which will act as due diligence reports, to establish the free and fair nature of such land donations. These documents will be reviewed by ADB.8 27. During detailed planning of RI sub projects, if there are indications that these sites are not feasible, then alternatives may need to be considered and safeguard processes will be duly followed. For all rural infrastructure sub-projects, the Municipal Agrarian Reform Officer (MARO) and concerned municipal LGU officials of the LPO will prepare land acquisition and resettlement plans (LARPs) according to the Involuntary Resettlement Planning Framework (IRPF) based on ADB’s Policy on Involuntary Resettlement. DAR is already implementing a similar process in the ADB assisted ARCP. The IRPF for the Project is based on the requirements of ADB’s Policy on Involuntary Resettlement.9 For all instances wherever land acquisition may be required, the 8 For projects that directly benefit communities and involve community decision-making and management, such as

smallscale health, education, water or transport facilities, safeguards may be built into the community decision-making process to deal with any losses that arise. Such safeguards include (i) full consultation with landowners and any nontitled affected people on site selection; (ii) ensuring that voluntary donations do not severely affect the living standards of affected people, and are linked directly to benefits for the affected people, with community sanctioned measures to replace any losses that are agreed to through verbal and written record by affected people; (iii) any voluntary “donation” will be confirmed through verbal and written record and verified by an independent third party such as a designated nongovernment organization or legal authority; and (iv) having adequate grievance redress mechanisms in place. All such arrangements will be set out in a resettlement framework that is prepared before the first management review meeting or private sector credit committee meeting and covenanted.

9 ADB. Involuntary Resettlement. 1995. Manila. The IRF is included in Appendix 11.

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Project’s Land Acquisition and Resettlement Framework (LARP) will provide the overarching framework. For all sub projects that involve land acquisition, a Land Acquisition and Resettlement Plan will be prepared and implemented.

2. Participatory Process based Document

28. The Involuntary Resettlement Planning Framework (IRPF) has been developed through a social assessment and planning process. The initial poverty and social assessment (IPSA) for ARCPII which was done in June 2004 under the technical assistance fact-finding covered an analysis of the potential Project area in order to identify areas of the country which presented the highest levels of poverty for targeting under the Project. Furthermore, it reviewed sample ARCS within the proposed 152 ARCs that were identified as potential projects sites. During the project preparation technical assistance (PPTA) phase, between 15 August-10 September 2005, field assessments were carried out in five sample feasibility sites in different potential project areas including the provinces of Zamboanga Sibugay (Municipality of Titay), Camarines Norte (municipality of St. Helena) Marinduque, (municipality of Boac), Eastern Samar (Taft Municipality), Negros Occidental, (municipality Talisay) . Participants included regional and provincial Department of Agrarian Reform (DAR) officials, LGU representatives including mayors, vice mayors, staff of municipal offices, and CARP implementing agencies. At barangay level, meetings were held with officials, ARBs, IPs wherever present as part of the population, cooperatives, farmer groups women’s groups. During loan fact finding, the mission had meetings with IP communities and LGUs at municipal level between 23 April - 29 June 2007 with ARCs in Camarines Norte, Zamboanga Sibugay, Maguindanao province, and Shariff Kabunsuan province in ARMM. The Pre appraisal mission (August 31-September 24, 2007) had discussions with ARCs in Negros Occidental, ARMM provinces of Lanao del Sur, Zamboanga, and Maguindanao among others10.The social assessment report and project design is based on the outcomes of these discussions. The findings from each stage of the initial social assessment contributed directly to the identification of the project area, the determination of project components and activities and contributed to the development of the following IRPF.

3. Involuntary Resettlement Planning Framework

a. Background

29. ARCP II is considered a low risk category for resettlement as most of the sub-projects are community-identified small scale sub-projects. However, in keeping with the IR policy which is applicable to all ADB projects and project components, irrespective of whether the source of financing is ADB, government or co financiers. It covers all actions done in anticipation of ADB operations. The policy also seeks to turn affected persons into project beneficiaries by turning involuntary resettlement into a development opportunity. 30. The ARCPII IRPF has been developed based on the current ADB Resettlement Guidelines and a review of resettlement guidelines in other relevant projects. Different elements of the framework were also reviewed during the feasibility study process for five sample sites for the ARCPII. The findings were indicative as the detailed engineering designs will be prepared at a later stage during implementation, and hence, the actual location of the infrastructure had not yet been determined. Nevertheless, discussions were held with LGUs, community leaders and potentially affected persons, in order to assess potential effectiveness of the proposed Guidelines.

10 A list of meetings is attached, and minutes of the meetings provided to RSES.

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b. Rationale

31. The design of the ARCPII envisages financing of priority rural infrastructure projects in support of ARCs and ARC Clusters. A framework for land acquisition and resettlement (IRPF) is required that meets ADB guidelines on involuntary resettlement, and includes practical procedures for compensation of adversely affected individuals and communities during subproject implementation. The preparation of this IRPF is intended to guide ARCPII implementation by DAR and Project staff, stakeholder agencies, LGUs and communities. 32. The principal objective of the ARCPII safeguards procedures are to:

(i) identify potential adverse impacts of sub-projects at an early stage of implementation;

(ii) ensure that project adverse impacts are avoided wherever feasible; (iii) minimize adverse impacts, as far as possible when unavoidable; (iv) minimize any need for resettlement of people as a result of sub-projects; (v) effectively manage compensation processes so that affected persons are fairly

compensated for current and potential future loss; (vi) ensure effective negotiation processes that: (vii) fully inform project affected persons of their rights and responsibilities and involve

them in sub-project processes; (viii) identify source of compensation; (ix) ensure smooth processes of appropriate compensation; (x) minimize conflicts during the process; (xi) avoid any inappropriate access to undue compensation; and, (xii) ensure full documentation of the planning and implementation of safeguards

compliance. 4. Legal Framework

33. Land acquisition and resettlement procedural guidelines for the project must be in accordance with the relevant laws of the Republic of the Philippines and the policies of the Asian Development Bank. There are various National Laws in the Philippines that have a bearing on the need for just compensation for people affected be rural infrastructure sub-projects. 34. The 1987 Philippine Constitution sets the basic policy for ownership of property and requires just compensation for expropriation of private property by the State. The Bill of Rights guarantees that: 35. Article III. Section 1: "No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws." 36. Article II. Section 9: "Private property shall not be taken for public use without just compensation." 37. MO 65, Series of 1983 lists various modes for the acquisition and payment of compensation for ROW, such as easement of ROW where the owner is paid the land value to use the land but the owner still retains ownership over the same.

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38. Executive Order 1035 (1985) provides for the procedures and guidelines for the expeditious acquisition of properties and rights by the Philippine Government for infrastructure and other government projects. 39. The Comprehensive Agrarian Reform Law Republic Act 6657 (1988) provides for in Section 28 that landowner shall retain his share of any standing crop un-harvested at the time the DAR shall take possession of the land under Section 16 of this Act, and shall be given a reasonable time to harvest. 40. The "Local Government Code" Chapter 2, Section 19 of Republic Act 7160 (1991) grants the local government units the power of eminent domain subject to existing government rules and regulations (Chapter 1, Sec. 19); the power to closure and opening of roads (Chapter 1, Section 21); the authority to negotiate and secure grants (Chapter 1, Sect 23) including donation of land in furtherance of its mandate to provide basic services and facilities (i.e., roads, irrigation system, potable water supply, etc.) to its constituents (Chapter 1, Section 17); 41. The "Agriculture and Fisheries Modernization Act, Rule 9.5.2.5 of DA DAO 6 (1998)” which is the IRR of Republic Act 8435 (1997) states that “sufficient disturbance compensation shall be given to the farmers whose livelihoods are negatively affected by the land use conversion..." 42. The scope of disturbance to be considered is provided for in ADB resettlement policies, where a full Land Acquisition and Resettlement Plan (LARP) is required whenever 200 or more affected persons are involved, or a short LARP if the number of AP's is less than 200. 43. The Philippine Government does not have a Compensation policy for land acquisition and resettlement. Existing legislations and guidelines that address various aspects of LAR include Executive Order 1035, RA 6657, RA 7160, RA 7279, RA 8435, and RA 8974. There are guidelines for compensation which that are based on market prices and recognition of “reasonable disturbance compensation for the removal and/or demolition of certain improvements on the land and for the value of said improvements”. 44. Despite the promotion of these laws and their respective implementing rules and regulation (IRR), there are LGUs and communities who are not yet conversant with the requirements for effective LAR procedures. Therefore the Project will support the holding of training workshops for LGUs, ARC officials and representatives of communities at provincial and municipal level. The workshops will be organized by the regional and provincial DAR teams and they will be run by the Project Safeguards Specialists. Information dissemination campaigns will be organized at provincial and municipal levels for LGUs, target communities to generate greater awareness of the IR policy and ensure transparency in its application. 45. ADB Involuntary Resettlement Policy. The Asian Development Bank Involuntary Resettlement Policy (1995) is to be used as a guide by borrowing developing member countries and Bank staff to address involuntary resettlement. The policy advocates avoidance of resettlement whenever possible, followed by minimization of these adverse social impacts, and resorting only to mitigation as a last resort. Mitigation in the context of the guidelines calls for the restoration of Affected Persons capacity to a level that approximates pre-project conditions. 46. The objectives and Principles of ADB Involuntary Resettlement Policy include:

(i) Involuntary resettlement should be avoided where feasible;

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(ii) Where population displacement is unavoidable, it should be minimized by exploring all viable project options;

(iii) People unavoidably displaced should be compensated and assisted, so that their economic and social future would be generally as favorable as it would have been in the absence of the project;

(iv) People affected should be informed fully and consulted on resettlement and compensation options;

(v) Existing social and cultural institutions or resettlers and their hosts should be supported and used to the greatest extent possible, and resettlers should be integrated economically and socially into host communities;

(vi) The absence of a formal land title to land by some affected groups should not be a bar to compensation

47. Particular attention should be paid to households headed by women and other vulnerable groups, such as indigenous peoples and ethnic minorities, and appropriate assistance provided to help them improve their status. 48. As far as possible, involuntary resettlement should be conceived and executed as part of the project; and the full cost of resettlement and compensation should be included in the presentation of project costs and benefits. 49. The process mandated under Philippine laws for land acquisition and resettlement is different from the ADB guidelines. The Philippine government recognizes several modes of land acquisition which includes donation, land swapping, negotiated sale, and expropriation among others (Section 3, RA 8974 and Section 10, RA 7279). The general practice is for community members who benefit from a sub-project to donate lands for government projects. If right of way (ROW) acquisition is necessary, then the stakeholders are “first allowed to donate the affected land and improvements, followed by negotiated sale if no donation was consummated, and only resorting to expropriation if there is a failure in negotiations” (RA 8974).The existing Philippine government guidelines provides for compensation to affected persons for damages that will be caused by land acquisition, but it does not ensure that those affected will be restored to their pre-project conditions. Compensation for loss of land and assets are based on Bureau of Inland Revenue- assessed values and are subject to transaction cost. 50. ADB guidelines recognize voluntary land donation by well informed beneficiaries of social infrastructures such as CIS, potable water supply, schools and hospitals (ADB Handbook on Resettlement: A Guide to Good Practice). However, the ADB policy recognizes that there can be undue pressure on project affected persons to donate land, which can lead to them being unfairly disadvantaged in comparison to other project beneficiaries. 51. ARCPII will conform to the ADB guidelines, which considers the full impact of the sub-project on the affected persons in terms of potential loss of income as well as the value of the assets involved. It should be noted that ARCPII will also pay particular attention to the identification of particularly vulnerable groups within the communities, such as Indigenous People and single-headed households. E. PROJECT APPROACH

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1. Overview of Approach

52. ARCPII has been designed as a participatory community driven investment program that addresses the specific development needs of the targeted communities. Each ARC, with the Local Government Unit (LGU) involvement, will generate a comprehensive development plan. The plan includes a participatory community-based planning process that assists the community to identify the main barriers to poverty reduction, and develop clear strategies for development. 53. While the aim of the process is to build consensus on the most critical development subprojects for the ARC, care must be taken that political agendas do not over-ride good planning as this is where risk to potential affected persons may originate. Consequently, the validity of the planning process, ensuring that as many people in the community as possible are aware of the project process and engage with the prioritization process. 54. The ADB assisted ongoing ARCP had a partnership with the then FAO- Support to Agrarian Reform Communities program which provided direct assistance to ARCs and LGUs in a comprehensive ARC Development Plan process. This process has now largely been mainstreamed to trained DAR staff, but still with support from the now AusAID funded program (now called Philippines- Australian Technical Support to Agrarian Reform and Rural Development (PATSARRD). PATSARRD has already worked with the Second World Bank Agrarian Reform Communities Development Project (ARCDP2) which has a greater focus on safeguards during the planning processes. 55. One aspect of participatory planning undertaken with PATSAARD has been the early identification of the more vulnerable groups within the community, and establishment of a Barangay Implementing Team (BIT), including a Committee on Safeguards to address potential land acquisition and resettlement issues and any project-related complaints. This has proven to be a successful model with potential issues with project affected persons identified at an early stage. 56. Similarly, the sub project approval process now requires that all necessary clearances related to land acquisition such as sale contract, deed of donation and certification from the National Commission on Indigenous People (NCIP) are completed before the sub project is approved. Other World Bank Projects, such as the Kalahi Community Infrastructure Development Support Project also follow the same process.

2. Implementation Arrangements

57. The project will use a participatory approach to developing ARC plans, identify sub projects and related dimensions of land acquisition, outcomes and impacts on communities and households, vulnerable groups and their concerns. In the same spirit of the CDD approach, the specific barangay community will be centrally involved from the commencement of the ARC planning process.. This will occur through establishment of a Barangay CARP Implementing Team (BCIT). The BCIT will be chaired by the Barangay Chairperson, but it will draw in other key community members such as the Chairpersons of the Cooperative, Irrigation Association, Rural Improvement Club and purok leaders, etc. A specific Community Safeguards and Grievance Sub-Committee (CSGS) will be formed to work on safeguard issues as they pertain to the barangay in implementation of sub-projects. At the same time, a CSGS will be formed in the Municipal CARP Implementing Team (MCIT) to oversee all the activities of the BCIT CSGS’s, as well as address any broader concerns of the ARCs and ARC Clusters within the Municipality. Any concerns raised to the MCIT, should also be raised to the level of the

13

Municipal Development Council (MDC), or the Provincial CARP Implementing Team (PCIT) and the Provincial Development Council (PDC) as appropriate. The BCIT and CSGS representatives will be trained through provincial and municipal level workshops to be organized prior to the start up of ARC planning. The training will be provided by the Project Safeguard Specialists at the Regional and National level, who will be responsible for orienting and training the various CSGS at municipal and barangay level. Refresher trainings will be provided at the ARC level to include localized issues that the BCIT/CSGS representatives need to be aware of and address during the detailed planning process. A specific training and implementation timetable with budget will be drawn up by the LPO and MARO for each municipality, and these plans will be submitted to the DAR Regional Director (DARRO) through the Provincial Agrarian Reform Officer (PARO). The DARRO will approve such plans and budgets and their implementation will be monitored by the LPO and DARPO. 58. The CSGS will be responsible for initiating the ARC planning process including all target groups, vulnerable sections. They will be aided and supervised by the MARO and Development Facilitator (DF) along with the technical staff of the LGU, and CARP implementing partner agency representatives. The community based plan documents will be duly signed by the representatives of all the participating groups, and vetted by the Project Safeguard Specialists. In the process of preparing draft sub project plans, the CSGS will assist the Project Safeguards Specialists, the Municipal Engineer, in obtaining accurate information on land and other asset ownership in cases where land acquisition might become essential to deliver the project benefits. The CSGS will thus be responsible for collecting information through participatory approaches, regarding persons likely to be affected by such acquisition, nature of impacts, compensation based on the principles and procedures embodied in the IRPF. All these activities will be financed by the LGU (Government counterpart contribution) as part of its equity contribution to the project. The documentation arising through the CSGS will be incorporated into the sub-project proposal documents, and will be submitted with the relevant other sub-project documents to the PCIT and the Regional and National Project Review Coordinating Committees as required. A diagram of the Project Structure is included in Figure 1. 59. As far as possible, management will be decentralized to the municipality, supported by the DAR provincial and regional offices so that the knowledge of the local situation will be harnessed in the process and the safeguard processes will lead to improved capacity at the local level. The local capacity building will assist in the early identification of potential safeguard issues, smoother and more rapid implementation of safeguard processes and contribute to improved governance processes for future developments in the municipality. However, oversight of the safeguards activities will be managed from the National Project Coordinator’s Office (NPCO) in collaboration with a regional project review coordinating committee. All documents prepared under the IRPF will be submitted to ADB through the NCPO for review and approval prior to any detailed appraisal and approval of the sub projects.

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Figure 1. Project Structure.

3. Implementation Process

a. Identification of Project Affected Persons

60. In the context of ARCPII Safeguards Policies, a community generally refers to the participating ARCs and barangays in ARC Clusters. An ARC is a cluster of barangays comprising, on average four to five (4.7) barangays and 1,325 households. However, the size can range from two to thirty barangays and the population from 100 households in remote areas to 20,000 households in peri-urban areas. 61. Nevertheless, it is recognized that ARCs and ARC Clusters are large communities often comprising many “spatially related communities”. These communities are generally related by distinguishable areas and members live in proximity to each other. These may be barangays, or in larger barangays, a more natural definition of a cohesive sub-community would be at the purok level. There are also spatially related communities across barangays e.g. those living along a river, or the coast where government designated boundaries is less important than the spatial relationship to natural features.

Provincial CARP Implementing Team (PCIT)

Municipal Agrarian Reform Office (MARO)

Municipal CARP Implementing Team

(MCIT)

Local Government Units (LGUs)

Local Project Office (LPO)

Agrarian Reform Communities People’s Organizations Development Facilitator

Barangay CARP Implementing Team

Barangay CARP Implementing Team

Provincial Project

Implementation Office (PPIO) Provincial Project Managers

Regional Project Management

Office (RPMO) Regional Project Manager

National Project Management

Office (NPCO) Provincial Project Manager

And ARC ClusterCoordinator

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62. There are also “communities of interest” comprising people living within the area of influence of a certain community focus e.g. a school, a church, sports-fields etc. The community links are formed through common interests, drawing people together from many different locations but leading to a distinct leadership, membership and community cohesion. 63. For the purpose of safeguards, the “community of interest” definition is most appropriate. It is recognized that there may also be overlap of the spatial and ARC definitions. For instance, a farm to market road may have a major influence on both barangays in a two barangay ARC because it connects the barangays into a circumferential route that all community members will use. However, more commonly, an infrastructure sub-project will only affect a certain part of an ARC, and even only part of a barangay, therefore a distinct community of interest needs to be identified. Generally the community of interest will be defined by the potential users of infrastructure. Often those affected by the installation of the infrastructure are also likely to be users and beneficiaries need not necessarily be related to the locality of the infrastructure e.g. traders from urban centres will access improved farm to market roads. 64. Nevertheless, it must be clearly recognized that there may in exceptional situations be those that affected by installation of the sub-project who will not be beneficiaries of the specific sub-project. E.g. those downstream of a water supply scheme who do not benefit from the scheme but who are affected by reduced water flows. Consequently, the definition of the community of interest related to a infrastructure sub-project must be carefully considered, including all those who will both benefit or be negatively affected by the development. 65. In addition to identification of the specific community of interest, there is a need to identify the individual positive and negative impacts expected for the sub-project. It is this process that identifies the likely affected persons that require special attention in safeguard processes. For each sub-project there will be those within the community of interest who directly benefit from the sub-project e.g. users of irrigation water within their own farms, and those who benefit,indirectly e.g. local suppliers of agricultural inputs as the cropping intensity increases. Similarly, there will be those who may directly be negatively affected by the development e.g. those whose land will be required for construction of a farm to market road, and those who may be indirectly affected, for example, boat owners/drivers whose clients will reduce with the installation of alternative transport routes. 66. The term affected persons (APs) includes any persons, households, firms, or private institutions who, on account of changes that result from the Project will have their (i) standard of living adversely affected; (ii) right, title, or interest in any house, land (including residential, commercial, agricultural, forest, and/or grazing land), water resources, or any other moveable or fixed assets acquired, possessed, restricted, or otherwise adversely affected, in full or in part, permanently or temporarily; and/or (iii) business, occupation, place of work or residence, or habitat adversely affected, with or without displacement. For all affected persons (APs) the safeguard processes must be carefully applied and documented. The same safeguard processes will apply to all categories of APs. Early notification of potential impacts will allow the APs to make the relevant decisions as to how to address the potential impacts on their livelihoods. (Refer to Entitlement Framework attached).

b. Potential Adverse Impact of Sub-projects

67. Given the understanding that ARCPII poses low risks in terms of involuntary resettlement impacts, if in exceptional circumstances, there are any instances where individual members or particular groups of the community may be adversely affected, by the subproject

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requiring the acquisition or clearing of land for the improvement or construction of the facilities, that will lead to loss of useable assets and land, (and no design changes may be possible to educe the impacts) adverse impactis may occur on the socio-economic wellbeing, or other income-generating opportunities of the affected persons. 68. For ARCPII, the Safeguard Specialists at regional and provincial levels will be responsible for working with the Local Project Office set up by the municipal LGU, and the Barangay CARP Implementation Team (BCIT), and in particular the CSGS, which is made up of representatives of ARB and non ARB households, in order to identify the potential impacts under the guidance of the MCIT. Target ACs and ARC cluster communities will need to select the community representatives on the BCIT and the CSGS.The MCIT will work under the supervision of the Safeguard Specialists at provincial level to do the following in a transparent and accountable manner: As stated earlier, these committees will be trained in the application of the IR policy, and the preparation of the LARP prior to any detailed ARC planning. 69. Development of a Land Acquisition and Resettlement Plan. This is essential for each sub-project. This will cover:

(i) identification of potentially affected persons; (ii) identification of kinds and extent of impacts including land and other physical

assets, non land assets, livelihoods, community assets including infrastructure, common property and resources

(iii) mechanisms for deciding on compensation based on the principles of replacement cost of land and non land assets, relocation and transition assistance, compensation for lost business and livelihoods, reestablishment of business and livelihoods, assistance for starting new livelihoods, assistance to rebuild social capital, social services, common property resources, and infrastructure

(iv) processes for communication; (v) procedures for valuation of relevant land and other assets; (vi) negotiation processes for sale and compensation (vii) documentation of processes (viii) monitoring of the process through the MCIT and Safeguard Specialists (ix) Generation and implementation of a communication plan to inform, both initially

and on a continuous basis, potentially affected persons of the possible project impacts and their rights and responsibilities in relation to compensation;

(x) Grievance redress mechanisms being available to the community to put across to the ARCP Project LPO, municipal LGU, related complaints and concerns, addressing each in a manner that is transparent and equitable, recording in detail all complaints and the actions taken.

70. Furthermore, the process of valuation of the extent of impact to project affected persons shall be calculated on a replacement cost basis in the case of loss of land and other physical assets. In case of loss of land, land for land will be attempted to be provided. For other non land physical assets cash compensation based on replacement values will be provided. In case of livelihoods/businesses lost the compensation will be based on tax declaration for formal businesses and the provincial daily wage rate for informal businesses. It is not the purpose of the safeguard processes to stimulate conflict through comparison of contribution but rather build robust processes of community action, recognition of contribution and avoidance of unfair practices that lead to imbalance in contribution that results in negative impact on any community member. In some cases, project affected persons may prefer privacy

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and be uncomfortable with open discussion of their financial circumstances. In such cases, privacy should be protected, but the principles of valuation should be openly discussed so that the basis of calculation is clear to the rest of the community. 71. Communities can also explore options for fund raising and cost-recovery in relation to their contributions. This could include fund raising events, road user's charges, marginal/incremental community charges to reflect the improved services, etc. An agreement could be made through the SGS processes for those who donate to be gradually compensated as funds are raised, or by preferential access to infrastructure e.g. increased water allowance, etc.

c. LARP Formulation

72. The Land Acquisition and Resettlement Plan (LARP) is a plan that identifies and addresses any adverse social and economic impacts of the ARC and ARC Cluster sub-Projects. In summary, the LARP will:

(i) Provide an assessment of the impacts that each sub-project component may have on the local communities;

(ii) Quantify in monetary terms the private and public assets that will be impacted and acquired for each sub-project component;

(iii) Provide a safeguard mechanism by which voluntary donation of land and/or land improvements are not abused;

(iv) Present a plan that will ensure the timely acquisition of assets, payment of compensation and delivery of other benefits to APs, including measures that will ensure the orderly and timely relocation of severely affected households when warranted;

(v) Provide a plan on how the APs shall be involved in each stage of the Sub-Project, including the implementation of the LARP; and

(vi) Determine the required resources needed to implement the LARP, and cost sharing arrangements among the implementing agencies and Subproject beneficiaries.

73. There are two basic formats for the Land Acquisition and Resettlement Plan (LARP) namely the detailed and the overview versions, depending on the scale and magnitude of the adverse social impacts of a subproject component. The full-length LARP is required if more than 200 people will experience resettlement effects. In addition, the following conditions will likewise require the preparation of a long form resettlement plan:

(i) 100 affected persons or more are indigenous people or in some way vulnerable, e.g. households headed by women, persons without legal title; or

(ii) 50 affected persons or more are particularly vulnerable, e.g. hunter-gatherers. 74. The short version of the LARP will be required if the number of affected persons do not reach the above level. In the ARCP II it is expected that the shorter version would be required in cases where involuntary resettlement impacts are likely to occur. In the event that there are no resettlement issues, then a Summary Discussion on Land Acquisition and Resettlement (SDLAR) will only be required to be annexed to the Subproject Feasibility Study. The process for preparing the LARP is shown in Figure 2. The recommended outline for the LARP (detailed and short versions) and SDLAR are found in Attachment 1.

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Figure 2. Process for Preparing the LARP

75. The training of LGUs, community representatives, DAR staff in the Safeguard policies and the IR policy in particular will commence soon after the recruitment of consultants and their positioning at all levels. Workshops for training in the IR policy, participatory planning, will be organized, and followed by supervised ARC planning exercises. The LARP process will commence through this comprehensive ARC planning process that will be the initial stage of the ARCPII, as it was with ARCP. The process will include identification of different sub-communities within the ARC, particularly identification of vulnerable groups such as IP households, displaced persons and single-headed households. It will include data gathering on rural infrastructure related priorities that are identified as being the common interest of the community. Once these are finalized, the tentative sites may be determined with the help of the community, and technical staff of the LGU and DAR. Based on this information, extensive data collection will be done by the active community members. Data collected at this stage will include among others (i)the status of the site, (ii) any land acquisition that may be required if at all, (iii) design changes that may negate any such requirements, (iv)where land acquisition becomes unavoidable, data on land ownership, (v) households likely to be affected by different

ARC Planning Process

Operation of BCIT

SGS

Detailed Socio-economic

Survey

Sub-project Feasibility

Study

Short LARP

process

Determine no. of affected

persons

ARC Community manages, maintains

and monitors rural

Production of SDLAR

Detailed LARP

process Sub-project Approval or additional processes required

Submission of

LARP to ADB for approval

Submission with

> 200 affected persons or affected vulnerable groups

< 200 affected persons

Revise and improve LARP Outputs

Training of BCIT and

MCIT

Technical Operations and supervision of LPO and MCIT and Safeguards Specialists

Consultation and negotiation with affected persons related to the compensation

Consultation and negotiation with community of interest related to the sub-project on contribution

Community feedback and participation

No project affected persons

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kinds of impacts, particularly vulnerable groups/households, (vi) process of acquisition and requisite legal requirements, (vii) compensation arrangements, (viii) grievance procedures. This information will provide a first step in engaging the community in participation for sub-project planning, preparation, implementation, maintenance and monitoring. 76. This planning process is critical as it would be the first opportunity for potentially affected persons to have the knowledge of what is being proposed,, the understanding of what may be involved, and a clear communication channel for contacting the CSGS to raise any concerns.. The information collected by the CSGS pertaining to priority sub projects, the likely sites, and any land acquisition and involuntary resettlement impacts, and households likely to be affected, will be available at the barangay office. All information will be displayed on notice boards at the barangay office, including the names of members of the CSGS who are to be contacted by affected persons in case of any grievance, or any other issue pertaining to these aspects. 77. The CSGS will develop a communication plan that begins with advocacy and information campaigns within the barangays, and continues with clear information about when the CSGS meets and how its members may be contacted. CSGS members must be aware of the need for documenting all contact with project affected persons, the communication involved and any actions taken. A Grievance procedure will be documented and agreed including standard for responding to any concerns, grievances of feedback from community members. Responses should not take more than 15 days and all contact from community members should be fully documented with date and persons present. Any decisions related to SGS operations at the barangay level can only be implemented once recommended to, and approved by the MCIT CSGS. 78. The municipal and barangay CSGS will adopt the participatory approach that includes participatory social assessment and planning techniques modeled through the PATSARRD planning process, and reinforced through the Project based trainings on participation, in order to ensure active participation and involvement in the identified subproject. The approach provides for consultation with key stakeholders to determine the extent of benefits as well as identify potential impacts that may have land acquisition and resettlement implications. 79. The LARP will be prepared simultaneously with the Subproject Feasibility Study once the BCIT CSGS has been established and a Chairperson has been elected. The LARP study will be undertaken by the trained Barangay CARP Implementing Team, and CSGS, with the assistance of the Local Project Office (LPO) and ARCPII Safeguard specialists. The LPO is chaired jointly by the Mayor and the Municipal Agrarian Reform Officer (MARO) and also comprises relevant technical officers from the LGU and representatives from NGOs/POs. The LPO reports to the Municipal CARP Implementing Team which includes members from other agencies such as the DSWD, NCIP and DPWH. 80. The LARP would involve more detailed data gathering work in relation to the detailed identification and collection of basic socio-economic data of sub-project, direct and indirect beneficiaries of the sub project, and persons potentially affected by the sub project. The information will be used to assess the potential social impact that a proposed sub-project will create in a community. If no negative impact is identified, the CSGS will work with the Safeguard Specialists to produce a brief SDR and pass this to the LPO for inclusion in the detailed sub-project FS. If there is any doubt about whether adverse impact may be incurred, a detailed socio-economic survey is required. This must be developed by the Safeguard specialists and carried out by trained teams with the participation of the CSGS. A detailed investigation will require significant time to contact all relevant affected persons and to give

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sufficient time for negotiation processes. A rushed process can be declared as invalid and decisions made void11. The survey entails interviewing each affected person both individually and in groups, in order to assess the level of impact e.g. loss of land, productive assets, crops etc. and to determine estimates of value. The process undertaken will follow the recommendations of the ADB Handbook on Resettlement: A Guide to Good Practice, which will be reproduced and provided to each MCIT, BCIT and CSGS. 81. All meetings shall be formally documented and the communities provided with copies of documents and information concerning the ARCPII and the proposed sub-project. The GOP and ADB Policies and Guidelines shall be fully explained. The rights to compensation in its various forms shall be provided to the community in full and the different options explored with potentially affected persons. The affected persons shall be informed of the role of the MCIT CSGS and the Project Review Coordinating Committee with information on how to contact the organizations if they are not satisfied with the performance of the BCIT SGS or wish further information. 82. Feedback from the whole community, those are adversely affected, those who will benefit and those general community members, will be apparent from the spirit of collaboration and engagement with the sub-project. If objections are raised, it is an indication that the processes may need to be reviewed. High levels of participation in the sub-project will reinforce the level of priority given to the sub-project by the community, and the way that any potential adverse effects have been properly addressed. 83. A registry of all community households in the subproject area of influence shall be prepared and information on land ownership status and related socio-economic data collected. This will be done by the BCIt and CSGS once trained, under the close supervision of the LPO and Safeguard Specialists. The identified subprojects and components shall be considered by the LGU through its consultative procedures, that will include the council where in the evaluation of each subproject and component is undertaken resulting in the identification of the most appropriate subproject. It is possible that there will be several design options for the sub-project that need to be considered as the likelihood of contesting the sub-project by potentially affected persons, versus an alternative option which is not considered as having any adverse impacts by other potentially affected persons, can have a bearing on which design option to choose. Consideration will also reflect the ability of the community and the LGU to support the investment and provide effective Operation and Maintenence for the sub-project. 84. The final LARP supporting documentation will be submitted to the MCIT for consideration, and from there on to the Regional Project Approval Committee. The LARP shall be submitted to ADB for approval by the NCPO. After approval of the LARP, the full feasibility study will be submitted to the National or Regional Project Review Coordinating Committee (depending upon its cost) for approval. Any issues with the documentation shall be notified to the BCIT and MCIT SGS and appropriate action taken. 85. In line with ADB Disclosure Policy, for all sub projects, all documents pertaining to the IR policy and the IRPF will be made available to the public in a variety of ways. The Project will develop a communication plan for the IRPF and individual sub project related documents (SDLAR or LARP) which will include translations of the documents into the local language, use of leaflets, brochures, radio information campaigns, local media utilization among others. Such

11 This has been experienced in the World Bank ARCDP1 processes where landowners consented to donate land without first

having time to consult with prospective heirs of the land and the deed of donation was overturned.

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communication plans will also include the use of civil society organizations for the spread of information. the LARP shall be available at all levels of the project and the communication plan of the individual BCIT CSGS will include a plan for making community members aware of the contents of the LARP. As the likely sub-projects for ARCPII are very small rural infrastructure subprojects, formal publication at provincial level or wider is not considered necessary and the focus of disclosure will be at the community level where there is greater likelihood of eliciting further comment from potentially affected persons who have not been identified through the process. A summary of the LARP providing an overview of the sub-project design and area of influence, and the proposed compensation schedule will be circulated throughout the barangay in the most appropriate way. In some barangays, this may be on a bulletin board, others by distribution in affected puroks, and others by calling a general assembly and distributing the information both verbally and by written information sheets in the local dialect. The MCIT and BCIT CSGSs will be responsible for ensuring wide promotion of the information. However, the LARP will be freely available on demand for any person interested through Municipal, Provincial, Regional and National Project Management Offices.

d. Sub-project Implementation

86. Once the LARP has been completed and approved by the Regional Project Approval Committee it will be submitted to the NCPO and ADB for review and approval. After ADB approval is obtained, it will be submitted with the detailed project proposal and feasibility study to the ARCPII Regional or National Project Review Coordinating Committee for approval. The cost for land acquisition and resettlement will be part of the Subproject budget to be supported by the LGU as part of its equity contribution. The LARP will include detailed cost estimates of compensation and other entitlements, including relocation of affected persons if warranted, with a breakdown of the cost items. The BCIT CSGS shall formally submit requirements for compensation to the BCIT, the LPO to be considered by the MCIT, so that funds can be allocated for the compensation package. The cost items eligible for funding under the LARP budget, and eligible for consideration as LGU equity contribution to the sub-project includes:

(i) Cost for LARP Preparation (ii) Compensation for Acquired Assets (iii) Financial Assistance, Income Restoration and Other Entitlements (iv) Relocation Site and Substitute Plots (v) Monitoring and Evaluation, Administration and Contingency

87. All valuation of assets for affected persons and agreement of compensation must occur prior to submission of the sub-project for approval. The acquisition of assets needed for the project and all resettlement activities including full compensation will be completed at least one month prior to expected start-up date of works at the project site. 88. Care must be taken during implementation that damage or other loss of assets beyond that identified in the LARP does not occur. If such damage does occur, the affected persons may approach the BCIT SGS to demand further compensation. In such cases the MCIT and ARCPII Safeguards Specialists must be informed to ensure that compensation claims are adequately handled.

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4. Entitlement Policy

a. Entitlement Principles

89. While all adverse impacts of ARCPII sub-projects will be avoided where possible, any persons that are deemed to be adversely affected as a result of sub-project implementation are entitled to be fully compensated or rehabilitated for losses and which are persons inventoried during the impact assessment. 90. Affected persons include any person, household, a firm, or institution who, as a result of sub-project activities is likely to experience loss of assets, jobs, incomes or livelihoods, in terms of their right, title or interest in land, house/structures, crops, trees, income or any assets in whole or in part adversely impacted on as a consequence of the project. 91. Potentially affected persons who are titled holders of property, or those who do not have legal rights but could potentially claim such rights under the law of the Philippines, or those who do not own land or property but occupy such lands at the time of the cut off date, such as sharecroppers, farm workers, tenants and squatters, all non land asset owners with title, legalizable or non titled status, all affected persons whose jobs, incomes or livelihoods are ikely to be affected in the sub project areas will be inventoried through the LARP process. All inventoried persons will receive direct notification of the sub-project and the implications for their assets by the BCIT CSGS, with information on how the valuation of assets and the rights and responsibilities of a potential compensation process. 92. The compensation process will require full disclosure of sub-project details and of the options open to an asset holder e.g. full remuneration, valuation in lieu of contribution of community equity, donation, and of the process of asset valuation. All disclosure will be according to the ADB Public Communications Policy, and the IR Policy. The potentially affected persons will also be notified of the time schedule for the process, including a "cut-off date" after which any additional improvements to the land and any new claimants found there after the cut off date, will not be considered for compensation. Once the cut-off date has been agreed upon, the municipal/city LGU will not issue new permits, licenses, tax declarations and similar patents for the use and development of land and structures within the sub-project and any new structures developed without permits will also not be eligible for compensation. This is to guard against potentially affected persons aiming to secure additional compensation that is not warranted given the level of assets at the time of valuation. 93. Entitlement policies for ARCPII will include the following:

(i) Potentially affected persons will have rights of access to information on any plans related to the sub-project;

(ii) The absence of formal legal title to land will not bar the affected persons

entitlement to compensation or assistance; (iii) If relocation is necessary, rehabilitation measures will be provided: i.e.

compensation for lost assets and income; transfer and relocation assistance; and income restoration programs;

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(iv) Plans for acquisition of land and other assets will be implemented in consultation with the affected persons in order to minimize disruption to their lifestyle;

(v) Financial and physical resources for compensation will be made available in a

timely manner to ensure that affected persons are not further inconvenienced.

(vi) All involuntary resettlement procedures will be satisfactorily completed prior to any implementation of the sub project.

b. Valuation of Affected Assets

94. Valuation information will be recorded on a Valuation Form (See Attachment 2) for each individual affected person/household. The summary valuation form and the individual valuations will be a critical component of the LARP and will be submitted to the MCIT CSGS for review and approval before passing to the LPO and MCIT for inclusion with the sub-project proposal and feasibility study. 95. Land valuation will be conducted by the local Land Bank of the Philippines (LBP) offices based on a statistical analysis of land transactions in the last 6 months preceding the social impact assessment. House replacement cost will be estimated by the BCIT and MCIT SGS based on the cost of new materials and labor rates prevailing in the locality. The LBP has the latest information on comparable land and asset prices in the area, and will be responsible for ensuring that the replacement cost of land and non land assets being lost by affected persons is fairly calculated and provided. The EA will be fully responsible for ensuring the validity of the process and the timely and full payment of compensation to all affected persons. 96. Affected persons may apply for compensation of affected assets at replacement costs, meaning either the amount in cash needed to replace an asset at prevailing market rates (in case of where recent land transactions have occurred); or where no recent land transactions have occurred, the Land Bank valuation of the land at time of land transfer during agrarian reform processes. Alternatively, they may apply for purchase or land swap of replacement land with equal value and productivity to the affected land. Replacement land will be of similar or better tenurial status. Taxes and fees on the affected and replacement plot will be paid or waived by the LGU. 97. For affected persons losing 10% or less of their agricultural lands, all acquired land will be compensated through land for land or at replacement cost. Cash compensation will paid for standing crops and trees based on current market values to be calculated by the Municipal Agriculture Officer (MARO). However, if more than 10% is affected and the viability of the land is affected, then an affected person/household can apply for resettlement on land of equal or higher value and potential productivity. 98. To address loss of livelihood, loss of productive assets and sources of income need to be considered. Valuation for crops and trees on the other hand will be done by the mARO where crop values are based on the average annual harvest of the affected area for 3 consecutive years preceding the social impact; while tree values will be based on species, age and productivity. 99. When an enterprise experiences a temporary business loss, cash compensation shall be provided covering the period of business interruption based on the tax declaration or if this is not

24

available, then the minimum labor wage. If the whole enterprise is lost, cash compensation equivalent to one year's income based on their tax declaration or the equivalent of the minimum labor wage income will be provided. Further guidelines on developing appropriate livelihood restoration activities are available in the ADB Resettlement Handbook, A guide to good practice. 100. Affected persons may elect to provide land and assets through voluntary donations if the affected person signs a Deed of Donation and a signed statement that certifies that the following processes have been followed:

(i) Ownership of land/assets is confirmed with no encumbrances (e.g. squatters, leasehold permits, etc)

(ii) Owners have been fully informed of the potential impact of the sub-project (iii) Fair compensation has already been offered; and (iv) The donation does not severely affect owners’ livelihood. All such voluntary donations of land and assets will have to be verified as being truly voluntary in nature by an independent third party, such as NGOs working in the area. All such voluntary donations will be fully documented and included in the draft LARP for submission to ADB through the NPCO and after approval of the LARP, the full sub project proposal will include all such legal documents as stated above.

c. Expropriation

101. In the event the affected person rejects the entitlement offered, negotiations for other acceptable modes of compensation fail, and there are no viable alternative subproject alignment/location, then the LGU can exercise its power of eminent domain by initiating expropriation proceedings through the court of law as provided under the Local Government Code (Republic Act 7160). The mayor shall cause the provincial/city/municipal attorney concerned to file expropriation proceedings in the proper court. 102. Upon filing of the complaint, and after notifying in writing the property owner, the LGU will immediately pay the owner of the property the amount equivalent to one hundred percent (100%) of the replacement cost for the affected assets. Once this is complied, the court shall immediately issue to the concerned LGU an order to take possession of the property and start the implementation of the sub-project. 103. In the event the landowner contests the value offered by the LGU for property acquired, the court shall determine the just compensation to be paid to the landowner within sixty (60) days from the filing of the expropriation case. The affected persons will receive the amount that the court will decide as just compensation for his/her property within one (1) month following the promulgation of the court's decision. Project authorities shall endeavor to have an expropriation case resolved and adjudicated within 60 days.

d. Grievance

104. Any grievances should be filed by the affected persons with the BCIT CSGS and must be recorded and raised to the MCIT CSGS. If independent adjudication is required, e.g. in cases of complaint of misconduct by SGS members, the DAR Provincial Office must be informed and necessary procedures taken to ensure independent consideration of complaints as per the BCIT Communication Plan.

25

105. Where major grievances are apparent, an external review will be contracted through the National Project Coordination Office. This may be conducted by an appropriately qualified non-government organization, academic institution or independent consultancy organization that is acceptable to the community members expressing the grievance.

5. Monitoring and Evaluation

a. Project Monitoring

106. The Provincial Project Implementation Office will be responsible for reporting on all safeguards procedures. This will be achieved through regular reporting by the MARO on the status of safeguard processes of the MCIT and BCIT CSGS. Regular status reports will be provided by the NPCO to DAR and ADB through the regular Project Review Missions. The internal monitoring activities will include the following: 107. Monitoring parameters will include:

(i) Status of LARPs (ii) No. and profile of affected persons per sub-project (iii) Status of processing for compensation claims (iv) Confirmation that deeds of donation are properly documented (v) No. of appropriation orders in process (vi) Comment on valuation processes and capability of communities and LGUs to

cover equity requirements (vii) Record of grievances received and resolution processes.

108. In addition, the LARP implementation will also be monitored and evaluated by an appointed external reviewer that can be incorporated as part of the regular ADB review missions. This may be conducted by an appropriately qualified non-government organizations, academic institutions or independent consultant. 109. An independent review of the safeguards operations will be commissioned by the Bank as part of the Project Completion to assess whether affected persons have regained or improved their livelihoods and standards of living. To ensure that there is effective representation, a sample of at least 20% of affected persons will be surveyed. The sample will be stratified to ensure that while at least 10% will be randomly selected, affected persons from sub-projects where grievances arose are fully covered to ensure that grievances have been addressed.

6. Financing of Preparation of LARP

110. The costs of preparing the LARP for proposed sub projects and the provision of compensation payments will be borne by the government counterpart contribution to the Project. It will form part of the minimum equity contribution which has to be at least 50% of the sub project cost, to be borne by the LGU proponent of the sub project, and the beneficiary ARC community. The cost sharing arrangements for rural infrastructure are based on the Department of Finance, Resolution No. 03-11-29 series of 2002 “Adopting a Set of Guiding Principles and Cost-Sharing Formulas in the Evaluation and Processing of Projects Involving Devolved Activities”.

26

111. These guidelines which became effective 01 January 2003 provide for the loan-grant-equity (LGE) mix for projects and subprojects involving foreign assisted projects with national government counterpart contribution and the equity share of the participating LGUs. Under the guidelines, the approved LGE mix for ARCPII would be a minimum of 50% equity payment by 4th and 5th class municipalities towards rural infrastructure sub projects. 112. The LGU is responsible for ensuring the required level of equity has been allocated prior to submission of the sub-project proposal. In kind contributions related to the preparation of the LARP will include the training of LGU and barangay staff in the IRPF, participatory planning process and its outcomes, the technical and financial assessment and planning, preparation of technical, social and financial documents in terms of feasibility study preparation costs, payment of compensation as per the IRPF, use of LGU equipment and reasonable initial maintenance costs. 113. All LARPs will be completed and certified as accurate by the MARO, and submitted through the MCIT to the Regional Project Approval Committee for submission to the NCPO to ADB for final approval. Thereafter the sub project proposals will be submitted to the Regional/ national Project Approval Committees for review and approval, after which implementation can begin.

Attachment 1 27

LAND ACQUISITION AND RESETTLEMENT PLAN (LARP) OUTLINES SUMMARY DISCUSSION ON LAND ACQUISITION AND RESETTLEMENT (SDLAR) I. Background II. Site Description III. Sub-project design IV. Number of people in sub-project influence area V. Safeguards Review process VI. Rationale for not requiring a LARP VII. Annexes VIII. Membership of BCIT and MCIT SGS IX. Process Documentation

DETAILED LAND ACQUISITION AND RESETTLEMENT PLAN (Note: the short version covers same requirements but in less detail) I. Introduction II. Policy Framework

A. Objective of the LARP B. Key Principles C. Eligibility and Entitlements

III. Legal Framework (Relevant Philippine Laws, ADB Guidelines and Local By-laws, any previous relevant legal background e.g. ownership disputes)

IV. Subproject Background A. Brief Sub-project Description B. LARP Activities (rationale, processes, highlights of meeting and agreements made) C. Activities to Avoid or Minimize Social and Economic Impacts

V. Socio-Economic Information of Affected Persons A. Inventory of AP's B. Demographic background C. Income Sources –current and prospective D. Assets (capital and productive) E. Access to social infrastructures/utilities

VI. Socio-cultural Impact of Subproject A. Scope of LAR (Magnitude and Severity of Impact) B. Detailed assessment of impact (social, economic, environmental) C. Compensation entitlements – (and Other Social Mitigation/ Enhancement, where

relevant) D. Entitlements E. Rehabilitation/Displacement/Restoration of livelihood F. Other Mitigation/Enhancement Measures G. Social Integration of APs in Host Communities (if relevant)

Attachment 1

28

VII. Implementation Schedule VIII. Budget

A. LARP preparation B. Compensation (i.e. land, structures, relocation, and income restoration) C. Administrative Cost

IX. Organizational Framework A. BCIT SGS B. LARP Implementation C. Monitoring and Evaluation Arrangements D. Grievance Mechanism

Annexes A. Subproject Location Map B. Impact Survey Questionnaire C. Master List of APs D. Master List of affected Assets E. Highlights of Consultation Meetings

Appendix 2

29

ARCP II VALUATION FORM

Summary of Affected Persons, Affected Area and Valuation Quantity Number of affected persons Amount, area and value of all affected residential land

……………………………………………………………………………………………………. Amount, type, and value of all affected agricultural land

……………………………………………………………………………………………………. Quantity, Quality and value of affected crops and trees

……………………………………………………………………………………………………. Quantity/category of all other fixed assets and improvements

……………………………………………………………………………………………………. Other impacts and value …………………………………………………………………………………………………… Permanent and temporary business impacts Major Minor Severity of impact to APs, land and houses/ structures Major Minor TOTAL COMPENSATION VALUE REQUIRED ………………………………… ARCP II PERSONAL VALUATION FORM Name…………………………………………………………………………………………….. Address …………………………………………………………………………………………….. Land Ownership Area …………………………………………………………………………….. Number of persons in household Name…………………………………………………………………Age…………………… Name…………………………………………………………………Age……………………

Attachment 2

30

Name…………………………………………………………………Age............................ Name…………………………………………………………………Age…………………… Name…………………………………………………………………Age……………………

Amount, type, area and value of all affected agricultural land

……………………………………………………………………………………………………. Amount, type, area and value of all affected residential land

……………………………………………………………………………………………………. Quantity, Quality and value of affected crops and trees ……………………………………………………………………………………………………. Quantity/category and value of all other fixed assets and improvements ……………………………………………………………………………………………………. Major Minor Temporary land impacts Permanent and temporary business impacts Severity of impact to APs, land and houses/ structures Estimated compensation value …………………………

Attachm

ent 3 31

ENTITLEMENT FRAMEWORK

Type of Activity Application Definition of Affected Person

Compensation Policy

Implementation Issues

Responsible Agency

Involuntary land acquisition

Rural Infrastructure • Land located in

proposed sites of social infrastructure (commercial buildings, PWS etc.)

• Land located within proposed site of farm to market rural widening, bridge construction communal irrigation schemes etc.

Affected Persons (APs) include: • Those

individual/households/ firms/private or public institutions with formal legal inputs to land including customary or traditional rights

• Those who do not have formal legal rights to land including customary or traditional rights

• Informal settlers who satisfy the requirement of the cut off date.

• Equivalent land nearby

• If land is not available compensation for land based on replacement cost

• Rehabilitation assistance

• If land is donated through voluntary contributions, there must be a signed Deed of Donation by the affected persons and by a signed statement that they are aware of the above condition. The voluntary nature of the donation must be verified by an independent third party,e.g. NGOs working in the area.

• If an AP stands to lose 10% or less of land or other assets, compensation will be paid in terms of land for land, or cash

• Participatory ARC planning

• List of lands in ARC barangay

• LARP development

• Construction process

• Grievance mechanism

• Monitoring of LARP implementation

• Impact assessment

• DAR PO, MARO, LGU and CARP partner agencies

• MARO, DAR PO • DAR PO, DAR

RO, MARO LGU • MARO, DF,

CSOs • Barangay SGS ,

LGU DAR RO DAR PO, CSOS/LPO POs/NGOs

• Safeguard specialists, DAR RO, DAR CO

• M&E specialist • Impact

assessment institution

32 Attachm

ent 3

Type of Activity Application Definition of Affected Person

Compensation Policy

Implementation Issues

Responsible Agency

compensation at actual replacement cost

• If an AP stands to lose more than 10% of their land, and if the remaining land is still viable, land for land or cash compensation at actual replacement cost to be provided.

• If the land to be acquired is more than 10% of a lot or if the remaining area is unviable for livelihood, the AP will have the right to ask the Project to acquire the entire lot and provide to the AP equivalent land for land nearby or cash compensation at replacement cost

Temporary land borrow during construction

• Compensation for loss of income during the period of temporary land borrowed, crops, cost of soil restoration and

…….do….. ….do……

Appendix 3 33

Type of Activity Application Definition of Affected Person

Compensation Policy

Implementation Issues

Responsible Agency

damaged infrastructure

Loss of standing crops/fruit or industrial trees

• Farmers will have the right to harvest their standing crops

• Compensation for loss of standing crops

• Compensation for trees

• Valuation of standing crops, trees

DAR PO staff, MARO, DF, LPO

Residential land (house site and garden)

• • Owners of such residential land,

• Tenants, lessees of such residential land

• Equivalent land for land satisfactory to the APs

• Cash compensation at actual replacement cost

• APs shall have right to all salvaged materials

• Transport assistance

• Rehabilitation assistance based on minimum wage for 3 months

• Tenants/lessees will be provided a cash grant for 3 months rental at the prevailing market rate in the area, and assistance in

• Valuation of residential land based on current prevailing market prices in the area

• Grievance redressal mechanism

LPO, MARO, DF, DARPO, Social Safeguard specialists, M&E specialist, Barangay SGS

34 Attachm

ent 3

Type of Activity Application Definition of Affected Person

Compensation Policy

Implementation Issues

Responsible Agency

identifying alternative sites, and 3 months household restoration assistance based on the minimum wage

Community assets • ARCs/barangays

affected by loss of community assets (tanks, water wells etc.) during construction or through land acquisition

• Compensation to be made to the affected community in the form of alternative sites and development of similar infrastructure at no cost to the community

• In cases where communities make voluntary land contributions these must be recorded in the signed Deed of Donation by the APs and a signed statement that they are aware of the above condition. All such donations are to be verified by an independent third party and recorded as such.

• Involuntary acquisition will necessitate compensation

…do…

Structures • Structure partially affected but remaining structure remains viable for

• Owner

• Cash compensation for affected structure and other fixtures

Valuation procedures in keeping with ADB policy

…do…

Appendix 3 35

Type of Activity Application Definition of Affected Person

Compensation Policy

Implementation Issues

Responsible Agency

continued use • Entire structure

affected or structure more than 10% affected but remaining structure in not viable for continued use

• Rental/leesee • Owner • Rental • Lessee

• Cash compensation for affected assets based on prevailing market rentals of similar assets

• Cash

compensation for entire structure or other assets

• Transfer/resettlem

ent allowance • Disturbance

compensation equivalent to 3 months of rental

• Assistance in

finding alternative rental arrangements

Business/Employment

• Temporary/Permanent loss of business or employment

Rental Lessee

• Cash compensation equal to one year income, if loss is permanent based on tax declaration or local minimum wage rate

• Cash compensation for period of interruption of business, if loss is

36 Attachm

ent 3

Type of Activity Application Definition of Affected Person

Compensation Policy

Implementation Issues

Responsible Agency

temporary based on minimum wage rate in the area