INTEGRATED SAFEGUARDS DATA SHEET APPRAISAL STAGE Report No.: ISDSA7727 Public Disclosure Copy Date ISDS Prepared/Updated: 23-Apr-2014 Date ISDS Approved/Disclosed: 25-Apr-2014 I. BASIC INFORMATION 1. Basic Project Data Country: Ecuador Project ID: P147951 Project Name: EC Prosaneamiento Program Support Project (P147951) Task Team Oscar E. Alvarado Leader: Estimated 31-Mar-2014 Estimated 04-Jun-2014 Appraisal Date: Board Date: Managing Unit: LCSWS Lending Investment Project Financing Instrument: Sector(s): Public administration- Water, sanitation and flood protection (20%), General water, sanitation and flood protection sector (80%) Theme(s): City-wide Infrastructure and Service Delivery (60%), Pollution management and environmental health (20%), Rural services and infrast ructure (10%), Water resource management (10%) Is this project processed under OP 8.50 (Emergency Recovery) or OP No 8.00 (Rapid Response to Crises and Emergencies)? Public Disclosure Copy Financing (In USD Million) Total Project Cost: 350.00 Total Bank Financing: 244.00 Financing Gap: 0.00 Financing Source Amount Borrower 106.00 International Bank for Reconstruction and Development 244.00 Total 350.00 Environmental B - Partial Assessment Category: Is this a No Repeater project? 2. Project Development Objective(s) The Project Development Objectives (PDO) for the proposed Project are to increase sustainable access to water supply and sanitation services in participating GADs (Gobierno Autónomo Page 1 of 10 Descentralizados) and to strengthen institutional capacity for improved management and delivery of these services at the national and local level. 3. Project Description Public Disclosure Copy Component 1: Pre-investment (US$20 million): This Component will finance the preparation of studies for investment sub-projects, which includes, inter alia, technical studies, pre-feasibility studies, feasibility studies and environmental and social assessments. The component will also finance the specialized independent supervision of such studies (“fiscalización de estudios’). The GoE has recently decided to undertake a massive effort to generate the required pre-investment studies for sub-projects at the local level if the PROSANEAMIENTO Program is to meet its ambitious goals and has requested Bank’s support to advise and finance the preparation of investment sub-projects. It is expected that the pre-investment studies will be undertaken by specialized national and international consulting firms. BdE would be in charge of coordinating with the local GADs for the preparation of the studies and their contracting, duly assembled in groups attending to hydrological and geographic variables. Annex 2 provides further detail on the current strategy for the implementation of this component. Component 2: Municipal Water Supply and Sewerage Infrastructure (US$ 311.2 million): This Component will finance the carrying out of subprojects for the construction and rehabilitation of primary and secondary water and sewerage systems, including, inter alia, transmission, distribution and collection networks, water treatment plants, pumping stations and main collectors, wastewater treatment plants and discharge infrastructure, and household water and sewerage household connections and meters. This component will also finance the specialized independent supervision of construction activities (“fiscalización de obra”). Works will be financed through a combination of direct grants from the National Government through BdE to each participating GAD, credit resources from loans from BdE to the GAD, and in some cases municipal and water and sanitation (WSS) utilities’ own sources. Component 3: Technical Assistance, Institutional Strengthening and Capacity Building for Public Disclosure Copy Autonomous Decentralized Government Municipalities and Service Providers (US$ 10 million): This component will finance consultancy services, studies, equipment and capacity building activities to BdE and GADs and/or their municipal utilities to strengthen the existing administrative, technical, financial, commercial, and operational capabilities at the GAD level and bring service providers to reasonable levels of management, operational efficiency and financial viability. Technical assistance for the strengthening of GADs and /or their municipal water utilities will be provided through BEDE's existing Technical Assistance Program, the PATGES (Programa de Gestión de Servicios). This Component includes the following subcomponents: (a) Design of Tools for Technical Assistance and Institutional Capacity Building: the development of conceptual models and tools to facilitate the implementation of the institutional strengthening programs of GADs and/or their utilities, comprising operational, commercial, administrative and financial efficiency activities and technical assistance to carry out assessments to identify main managerial issues in the water and sanitation services and consequently prepare institutional strengthening programs (ISP) at GAD and/or utility level; (b) Strengthening of technical capacity for the provision of potable water and sewerage services within participating municipalities and service providers: capacity building and training activities for BdE and the GAD and/or their utilities in the implementation of models and other tools designed for management improvement; (c) Institutional strengthening sub-projects (for participating municipalities and service providers): technical assistance, goods and equipment for the GAD and/or their utilities for the Page 2 of 10 implementation of their institutional strengthening programs for water and sanitation services. Component 4: Project Management and Administration within BdE (US$ 7 million): This component Public Disclosure Copy will finance activities associated with overall Project management by BdE, including project-related audits, monitoring and evaluation activities, equipment and training to strengthen implementing entities, as well as individual consultants. It will include support to BdE related to the management of environmental and social issues and safeguards and fiduciary aspects. Component 5: Technical Assistance, Institutional Strengthening and Capacity Building for SENAGUA (US$1.8 million): This component would finance technical assistance and systems required to strengthen SENAGUA and the WSS Sub-secretary’s capacity to carry out its functions with regards to the water supply and sanitation sector. The component will be directly executed by SENAGUA. In particular, it will focus on four lines of action: (i) Accompanying the launching of the regulatory function; (ii) WSS policies and norms and technical assistance to GAD/service providers; iii) Information Systems; and iv) Administrative Costs (audits, reporting, operating costs of a small Project Management Unit within SENAGUA). 4. Project location and salient physical characteristics relevant to the safeguard analysis (if known) The Project will involve various sub-projects (works) to be implemented in various municipalities in Ecuador. The specific sub-projects and municipalities are not known at this time. 5. Environmental and Social Safeguards Specialists Jose Vicente Zevallos (LCSSO) Martin Henry Lenihan (LCSSO) Carlos Vargas Bejarano (LCSEN) Robert H. Montgomery (LCSEN) 6. Safeguard Policies Triggered? Explanation (Optional) Public Disclosure Copy Environmental Assessment OP/ Yes The project is classified as environmental BP 4.01 category B per OP/BP 4.01, as the infrastructure sub-projects (approximately 40 to 50) involve relatively standard water-related works with no likely significant or long-term environmental or social impacts and that cannot be readily prevented or mitigated with standard measures. The primary anticipated potential negative environmental and social impacts associated with the construction works could include erosion or sedimentation due to earth works, temporary small-scale construction work sites, noise and dust from equipment and earthworks, potential spills of petroleum based products, worker health and safety, storm water runoff into water courses, and traffic risks and nuisances. Since the specific sub-projects are not known, an Environmental Management Framework (EMF) Page 3 of 10 has been developed. The EMF is based upon the existing Banco del Estado (BdE) procedures related to environmental and social issues and Public Disclosure Copy instruments and procedures developed in conjunction with previous financing by IDB and CAF for similar types of projects/works. The EMF includes a mechanism to screen out sub- projects that would be classified as Category A under OP/BP 4.01 or could involve significant conversion or degradation of critical natural habitats or forests. The EMF also includes procedures for development of appropriate environmental instruments (e.g., environmental analysis/assessment, environmental management plans, etc.), incorporation of environmental aspects into construction contracts, environmental supervision of works, reporting, and public consultation/participation. For Component 2, the EMF includes the consideration of environmental and social aspects as part of sub-project feasibility and design studies. This will help these studies better incorporate environmental and social considerations and thus the Bank to support the Client in integrating sustainability principles. The EMF includes development of standard TORs for EIAs for potential Category A studies (note: no Public Disclosure Copy Category works are to be financed) and such TORs and EIAs should be reviewed by approved by BdE and No Objection provided by the Bank. The EMF also includes responsibilities related to environmental management, approach for review/ evaluation of potential projects for financing, environmental aspects in contracts, supervision of environmental aspects during construction, and training for relevant project actors (BdE staff, GAD, and contractors). Natural Habitats OP/BP 4.04 Yes Given the type of works to be performed under the anticipated subprojects, there should be no significant conversion or degradation of critical natural habitat and it is unlikely that there will be any significant protected areas in the direct area of influence of the sub-projects. There may be some limited trees or vegetation to be removed and either replanted or new ones planted. Any Page 4 of 10 needed assessment or mitigation measures will be considered within OP/BP 4.01 and the specific EMF. Public Disclosure Copy Forests OP/BP 4.36 No Given the nature and characteristics of the sub- projects to be financed, it is not anticipated that any forests will be affected. Pest Management OP 4.09 No The project does not involve the purchase or use of significant quantities of pesticides. Physical Cultural Resources OP/ Yes The exact locations of the projects are not known BP 4.11 at this stage. Given the type of works to be performed, no anticipated significant impacts on physical cultural resources are anticipated. However, work contracts will include, as a minimum, chance find procedures and sub-project screening will include an assessment of any potential impacts on physical cultural resources. The needed measures will be considered within the EMF under OP/BP 4.01 and the specific EA instruments (e.g., EMP with chance finds procedures). Indigenous Peoples OP/BP 4.10 Yes This policy will be triggered given the Project’s national scope and potential to benefit Indigenous peoples, which according to the last census, make up at least 7% of the population (maybe up to 40% depending on the definition applied), and more likely a higher percentage of the poor. An Indigenous Peoples Planning Framework (IPPF) Public Disclosure Copy has been prepared and distributed to indigenous peoples groups at a national level, disclosed prior to appraisal and presented in a consultation meeting with indigenous peoples and civil society organizations. The IPPF outlines the screening criteria to identify sub- projects where specific social assessments and Indigenous Peoples Plans (IPPs) should be prepared to ensure that WSS investments are designed to effectively serve these populations needs and practices. Indigenous peoples often have customs and practices around water collection, use, and sanitation that vary greatly from non-indigenous peoples. Adequately designed WSS infrastructure has important health, subsistence, and economic benefits. Experience demonstrates the risk of wasted resources and conflict (where WSS infrastructure goes unused, poorly maintained or destroyed by communities) when WSS investments are not Page 5 of 10 adequately designed to address specific customs and needs. Involuntary Resettlement OP/BP Yes Because the project will involve the construction Public Disclosure Copy 4.12 of new infrastructure, as well as the rehabilitation of existing networks it is possible that expropriation may be necessary and that informal users occupying municipal land or the right of way may be displaced. A Resettlement Policy Framework (RPF) has been prepared and disclosed prior to appraisal that focuses specifically on the types of impacts typical to this type of project. This framework includes an analysis of the possible impacts of the type of sub-projects supported, procedures for screening for these impacts, a comparison of the legal and institutional framework in Ecuador with the provisions of OP 4.12, a comprehensive list of entitlements for project affected people, steps for the preparation of resettlement action plans, as well as procedures for grievance redress and monitoring and evaluation. Safety of Dams OP/BP 4.37 Yes The Project will not support the construction or significant rehabilitation of large dams. There is some potential for individual sub-project to rely on the services of existing dams and/or construction/rehabilitation works with small dams. Any needed assessment or mitigation measures is included as part of the EMF Public Disclosure Copy developed associated with OP/BP 4.01. Projects on International Yes Notification to riparian countries will be done Waterways OP/BP 7.50 before Negotiations. Projects in Disputed Areas OP/BP No The Project will not be implemented in areas 7.60 known to involve disputed areas. II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: The project does not contemplate any large scale, significant and/or irreversible environmental impacts. The sub-projects involve relatively standard water-related works that can be readily prevented or mitigated with standard measures. Because the project will finance the construction of water and sanitation infrastructure, it is possible that sub-projects to be financed will require the acquisition of land, or the removal of land affixed assets. Therefore, the World Bank policy on involuntary resettlement applies. Also, due to the national scope of the program, and the fact that over 7% (rising up to 40% depending on the definition applied) of Ecuador’s population are indigenous, the indigenous peoples policy of the World Bank is triggered. However, because the Page 6 of 10 works will be small scale in nature, there will not be any large scale, significant or reversible impacts, either in terms of resettlement, or negative impacts on indigenous communities. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities Public Disclosure Copy in the project area: The long term and indirect impacts of this project are considered positive and beneficial, which include benefits to public health, improved wellbeing and quality of life of targeted communities, and improvement of environmental conditions due to proposed development of adequate water supply, sewerage and wastewater treatment infrastructure. Given the type of municipal water- related sub-projects that will be financed, there are presently no identified potential indirect and/or long term significant negative environmental or social impacts. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. Associated with the EA instruments (and/or feasibility studies) to be developed for each sub- project as required by the Project EMF, potential alternatives will be evaluated to help avoid or minimize adverse environmental and social impacts. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. The Banco del Estado (BdE) will be responsible for the overall EMF implementation. At the sub- project level, participating GADs and municipal utilities/service providers will be responsible for contracting the pre-investment, construction of the works, and the independent supervision. BdE has experience with similar procedures to the EMF associated with previous projects/programs financed the IDB and CAF. BdE has an environmental specialist in each of the 6 regional offices. BdE has established an agreement with the Ministry of Environment, which is responsible for issuing the environmental permits for the projects financed under PROSANEAMIENTO, which includes provision of resources for the Ministry to hire staff to provide the review of sub-project applications for environmental permits. The EMF includes various activities to improve capacity related to environmental management, including training of BdE staff, GADs, and consultants and Public Disclosure Copy contractors that could be hired by the GADs. The implementing agency has prepared a draft resettlement policy framework, designed to minimize potential land acquisition and resettlement impacts, and ensure affected people are properly compensated and assisted in the land acquisition or resettlement process. An Indigenous Peoples Planning Framework has also been prepared, to ensure indigenous peoples communities affected by the project will benefit from free, prior, and informed consultation, that social assessments and indigenous peoples plans will be prepared as required, and that indigenous communities will receive culturally appropriate benefits under the project. Both resettlement policy and indigenous peoples planning frameworks were considered appropriate because the project will finance multiple sub-projects that have yet to be identified by the implementing agency. Capacity in BdE to implement both the resettlement policy and indigenous peoples planning framework is limited. Currently, there is only one social development specialist working on these issues, and a range of other activities within the institution. The capacity of individual municipalities to address both these issues is very mixed. Some of the larger municipalities have significant capacity including experienced citizen participation, planning and valuation-cadaster teams. However, smaller municipalities are unlikely to have the necessary human resources to prepare resettlement and indigenous peoples plans without intensive support. Therefore, the Bank task team will work intensively with both BdE and individual municipalities to provide timely and intensive implementation support for the completion of these instruments. Part of the Project Page 7 of 10 Component 1 will be used to enhance the capacity of GADs and contractors/consultants related to sub-project environmental and social assessments, as well as environmental and social construction management and supervision. Part of Project Component 4 will include support to Public Disclosure Copy BdE related to the management of environmental and social issues and safeguards and fiduciary aspects 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The draft EMF was disclosed and consulted on. Changes that were received and incorporated related to clarifying BdE environmental specialist roles and responsibilities, clarification on training programs, and clarification on BdE loan application process related to environmental aspects. As applicable to the specific sub-project, the EMF establishes mechanisms for consultation and disclosure. For social safeguards, key stakeholders include indigenous peoples groups, as well as the municipalities responsible for implementing the resettlement policy and indigenous peoples planning framework. The RPF was disclosed by the client prior to appraisal and includes procedures for consultation during the preparation and finalization of site-specific resettlement action plans. The IPPF was distributed to national level and specialized organizations representing indigenous peoples issues, and a consultation meeting was attended by representatives of a range of different indigenous and civil society organizations in the offices of BdE (April 11 2014) . Overall, the IPPF and RPF were well received by the consultation meeting participants. Comments provided and incorporated into the frameworks related to the need to empower indigenous communities to manage their own systems, to recognize the role of indigenous people in managing water resources, and to update the legislative framework. B. Disclosure Requirements Environmental Assessment/Audit/Management Plan/Other Date of receipt by the Bank 31-Mar-2014 Date of submission to InfoShop 16-Apr-2014 For category A projects, date of distributing the Executive 04-Apr-2014 Public Disclosure Copy Summary of the EA to the Executive Directors "In country" Disclosure Comments: Resettlement Action Plan/Framework/Policy Process Date of receipt by the Bank 24-Mar-2014 Date of submission to InfoShop 31-Mar-2014 "In country" Disclosure Ecuador 04-Apr-2014 Comments: Indigenous Peoples Development Plan/Framework Date of receipt by the Bank 24-Mar-2014 Date of submission to InfoShop 31-Mar-2014 Page 8 of 10 "In country" Disclosure Ecuador 04-Apr-2014 Comments: Subsequent to disclosure on BdE website, the framework was discussed during a Public Disclosure Copy Civil Society Stakeholder meeting held on April 11 2014. If the project triggers the Pest Management and/or Physical Cultural Resources policies, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/ Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: C. Compliance Monitoring Indicators at the Corporate Level OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) Yes [ ] No [ ] NA [ ] report? If yes, then did the Regional Environment Unit or Sector Yes [ ] No [ ] NA [ ] Manager (SM) review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated Yes [ ] No [ ] NA [ ] in the credit/loan? OP/BP 4.04 - Natural Habitats Would the project result in any significant conversion or Yes [ ] No [ ] NA [ ] degradation of critical natural habitats? If the project would result in significant conversion or Yes [ ] No [ ] NA [ ] degradation of other (non-critical) natural habitats, does the project include mitigation measures acceptable to the Bank? OP/BP 4.11 - Physical Cultural Resources Does the EA include adequate measures related to cultural Yes [ ] No [ ] NA [ ] Public Disclosure Copy property? Does the credit/loan incorporate mechanisms to mitigate the Yes [ ] No [ ] NA [ ] potential adverse impacts on cultural property? OP/BP 4.10 - Indigenous Peoples Has a separate Indigenous Peoples Plan/Planning Framework Yes [ ] No [ ] NA [ ] (as appropriate) been prepared in consultation with affected Indigenous Peoples? If yes, then did the Regional unit responsible for safeguards or Yes [ ] No [ ] NA [ ] Sector Manager review the plan? If the whole project is designed to benefit IP, has the design Yes [ ] No [ ] NA [ ] been reviewed and approved by the Regional Social Development Unit or Sector Manager? OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/ Yes [ ] No [ ] NA [ ] process framework (as appropriate) been prepared? If yes, then did the Regional unit responsible for safeguards or Yes [ ] No [ ] NA [ ] Sector Manager review the plan? Page 9 of 10 OP/BP 4.37 - Safety of Dams Have dam safety plans been prepared? Yes [ ] No [ ] NA [ ] Have the TORs as well as composition for the independent Yes [ ] No [ ] NA [ ] Public Disclosure Copy Panel of Experts (POE) been reviewed and approved by the Bank? Has an Emergency Preparedness Plan (EPP) been prepared and Yes [ ] No [ ] NA [ ] arrangements been made for public awareness and training? OP 7.50 - Projects on International Waterways Have the other riparians been notified of the project? Yes [ ] No [ ] NA [ ] If the project falls under one of the exceptions to the Yes [ ] No [ ] NA [ ] notification requirement, has this been cleared with the Legal Department, and the memo to the RVP prepared and sent? Has the RVP approved such an exception? Yes [ ] No [ ] NA [ ] The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the Yes [ ] No [ ] NA [ ] World Bank's Infoshop? Have relevant documents been disclosed in-country in a public Yes [ ] No [ ] NA [ ] place in a form and language that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional Yes [ ] No [ ] NA [ ] responsibilities been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included Yes [ ] No [ ] NA [ ] in the project cost? Public Disclosure Copy Does the Monitoring and Evaluation system of the project Yes [ ] No [ ] NA [ ] include the monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed Yes [ ] No [ ] NA [ ] with the borrower and the same been adequately reflected in the project legal documents? III. APPROVALS Task Team Leader: Name: Oscar E. Alvarado Approved By Regional Safeguards Name: Glenn S. Morgan (RSA) Date: 25-Apr-2014 Advisor: Sector Manager: Name: Wambui G. Gichuri (SM) Date: 25-Apr-2014 Page 10 of 10