INTEGRATED SAFEGUARDS DATA SHEET APPRAISAL STAGE Report No.: ISDSA3024 Public Disclosure Copy Date ISDS Prepared/Updated: 14-Nov-2013 Date ISDS Approved/Disclosed: 14-Nov-2013 I. BASIC INFORMATION 1. Basic Project Data Country: South Eastern Europe and P143921 Project ID: Balkans Project Name: Croatia & Bosnia & Herzegovina GEF Adriatic Sea Environmental Pollution Control Project (I) (P143921) Task Team Manuel G. Marino Leader: Estimated 24-Sep-2013 Estimated 12-Dec-2013 Appraisal Date: Board Date: Managing Unit: ECSUW Lending Specific Investment Loan Instrument: GEF Focal International waters Area: Sector(s): Wastewater Treatment and Disposal (45%), Solid waste management (35%), General water, sanitation and flood protection sector (20%) Theme(s): Pollution management and environmental health (60%), Environmental policies Public Disclosure Copy and institutions (40%) Is this project processed under OP 8.50 (Emergency Recovery) or OP No 8.00 (Rapid Response to Crises and Emergencies)? Financing (In USD Million) Total Project Cost: 29.97 Total Bank Financing: 0.00 Financing Gap: 0.00 Financing Source Amount Borrower 23.20 Global Environment Facility (GEF) 6.77 Municipalities of Borrowing Country 0.00 Total 29.97 Environmental B - Partial Assessment Category: Is this a No Repeater project? Page 1 of 10 2. Global Environmental Objective(s) The project’s development and global environmental objectives are: (a) to reduce the discharge of pollutants with transboundary importance, particularly Nitrogen, in selected hot-spots of the eastern Public Disclosure Copy Adriatic Sea; and (b) to improve the capacity in Croatia and Bosnia and Herzegovina to prepare pollution control projects in selected localities of Dalmatia and Herzegovina and to strengthen the capacity to monitor environmentally sensitive areas of the sea. 3. Project Description The proposed Project would be implemented as a pilot under the broader Adriatic Sea Environment Program, focusing on supporting preparation and implementation of priority pollution reduction measures and strengthening the institutional framework for protection of the ecological balance in target hotspots on the Eastern shore of the Adriatic, in this case mainly in Croatia. It would involve implementation of selected demonstrative priority pollution control investments and regional Technical Assistance, to address key issues affecting the environmental sustainability of the Adriatic Sea, including: municipal wastewater and solid waste treatment; protection of karstic groundwater; improvement of coastal water monitoring, and preparation of investments. The project has three main components. Component 1 – Demonstrative investments to reduce nutrient discharges and improve water quality monitoring capacity (USD 27.85 million, of which USD 5.05 million are GEF financing): This Component will finance works and equipment for: (i) Design, supply, and installation of equipment for the reduction of nutrient discharges, including, inter alia, upgrading the solid waste leachate treatment lagoon in Mostar’s landfill in BiH, (ii) Design, supply and installation of equipment for upgrading the solid waste leachate collection and treatment in Zadar’s landfill in Croatia, and (iii) Provision of equipment to monitor coastal water quality and strengthen regional capacity to protect sensitive areas from accidental pollution discharges. Public Disclosure Copy Component 2 – Technical Assistance, TA (USD 1.98 million, of which USD 1.60 million are GEF financing): This Component will finance consultant services to: (i) Prepare preliminary designs and project documentation, including preparation of complementary analysis and other studies required for EU review and compliance, as well as tender documentation, to access EU funds for investments in leachate and wastewater management to comply with EU requirements. The Government of BiH confirmed that Trebinje and Gacko in Eastern Herzegovina, Lise, Livno, Glamoc and Posusje in Western Herzegovina, and Neum, on the Adriatic coast, would be eligible for this project preparation facility, upon confirmation of availability of base documentation and compliance with eligibility criteria. For Croatia, the Government confirmed that Zadar, Split, Ploce and Dubrovnik landfills would be eligible for this project preparation facility. (ii) Carry out an assessment of sources of nutrients, including point and non-point sources in two sensitive areas/hot-spots; Northern Dalmatia (Zadarska County and northern part of the Sibensko- Kninska County) and Neretva Delta area, as well as to provide an analysis of the policy, legal and/or institutional reforms that are needed to address related water quality problems. Component 3 – Project Management and Dissemination (USD 0.14 million, of which USD 0.12 Page 2 of 10 million are GEF financing). This component will finance project coordination and management as well as monitoring and Public Disclosure Copy evaluation, including IWLearn related activities for the Project Management Team (PMT) in BiH. This component will also finance BiH’s PMT office expenses related to the project management, including translations, communications, local and abroad travels, banks fees, audit reports, office supplies and equipment as well as repair and maintenance of office equipment. 4. Project location and salient physical characteristics relevant to the safeguard analysis (if known) The project would impact all Eastern Adriatic Countries in the long run. However, direct implications would be seen through two demonstrations sub projects in Zadar (Croatia) and Mostar (BiH). In Zadar, a coastal city, it would finance upgrading the leachate treatment system for the current landfill. The landfill is located in the Karstic area. In Mostar, the project will finance the upgrading of the leachate treatment system for the landfill. Mostar is located on the river Neretva, the largest tributary of Eastern Adriatic Sea. The TA component would entail only project preparation documentation for leachate treatment systems or upgrades of the waste water treatment system, in selected localities in Dalmatia and Herzegovina. 5. Environmental and Social Safeguards Specialists Natasa Vetma (ECSEN) 6. Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/ Yes The potential impacts are likely to be site BP 4.01 specific, and typically focused on impacts of construction of investments under Component 1, relating to the upgrade of the landfill leachate Public Disclosure Copy treatment plants in Zadar, Croatia, and in Mostar, BiH. To successfully identify and manage potential adverse impacts on the environment from project funded activities such as those mentioned above, the borrowers has prepared two separate ESMFs and demonstration EMPs for Zadar and Mostar leachate treatment systems. These documents have been disclosed in-country and sent to the Banks Info shop prior to project appraisal. For Component 2 TA, the Bank would finance project preparation documentation mainly for EU financing. This project documentation would include EIAs. Natural Habitats OP/BP 4.04 No Forests OP/BP 4.36 No Pest Management OP 4.09 No Page 3 of 10 Physical Cultural Resources OP/ Yes The ESMF includes provisions on chance finds BP 4.11 as Adriatic coast is known to be area of frequent archaeological finds. Public Disclosure Copy Indigenous Peoples OP/BP 4.10 No Involuntary Resettlement OP/BP No 4.12 Safety of Dams OP/BP 4.37 No Projects on International Yes The Adriatic Sea and its tributaries, including Waterways OP/BP 7.50 the Neretva, Krka and Cetina Rivers are international waterways. The project therefore triggers the Bank’s Policy on International Waters. Projects in Disputed Areas OP/BP No 7.60 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 partial assessment environmental category B is applicable for the Project. The Project will focus on nutrient reduction to Adriatic sea, and aims to finance two demonstration upgrades of leachate treatment in landfills in Adriatic Sea basin for nutrient reduction. The preparation of technical documentation (intended for improving adsorption of EU funds) will focus on the same type of investments and include all supporting documentation (analysis, policy, SEAs, etc.) that Public Disclosure Copy will contribute to nutrient reduction. The project will also finance monitoring equipment in Croatia to improve sea water quality monitoring. The Recipients in Bosnia and Herzegovina and Croatia have prepared separate Environmental and Social Management Frameworks (ESMF). ESMFs define the environmental screening and assessment procedures for the project and sub projects. According to the ESMF, the municipal companies will be required to carry out adequate type of environmental assessment of the proposed investments according to the World Bank safeguards procedures and to obtain environmental permits as prescribed by the national legislation. The project triggers three safeguard policies: Environmental Assessment; Physical Cultural Resources and Projects in International Waters. Issues associated with triggered policies do not pose risks that are difficult to address, as they are, and will be, managed systematically, using local experience, local and EU standards and guidance from the Bank. All safeguard policies triggered by the project can be adequately dealt with given the established good practices and institutional enforcement capacities in both Croatia and BiH. OP/BP 4.01, (Environmental Assessment) is triggered. ESMFs have been prepared, following World Bank policies on consultation and disclosure, in advance of project appraisal, which includes Environmental Management Plans (EMP) for both demonstration investments. The Page 4 of 10 respective ESMFs along with an announcement of the public consultation workshop were disclosed on June 14, 2013 on the website of the implementing agencies and hard copies are available on solid waste municipal companies’ information boards in Mostar and Zadar (sites of Public Disclosure Copy the two demonstration investments to be financed by the project). Public consultations were held on June 27, 2013 in Sarajevo and Zagreb. Only EA Category B and C investments would be eligible for TA assistance, therefore investments having large scale environmental impacts (Category A) would be excluded as described in the ESMFs prepared for the Project. This implies that for both the demonstration investments and technical assistance documentation that will be prepared for future investments, only upgrades of the existing structures will be included. The environmental due diligence procedures identified in the ESMF comply with both national and WB environmental safeguards procedures. The ESMF calls for preparation of EAs or updates of existing ones for all financed wastewater or leachate treatment investments as well as for all TAs that will be prepared for EU financing. Specific site Environmental Impact Assessments (EAs) / EMP would be prepared for the category B investments for which TA would be financed. For other type of TA (analysis, reports, etc.), where environmental impacts are expected to be negligible, the Terms of Reference (ToRs) for each sub project would have strong emphasis on improving environmental quality and sustainability of the assignment. OP/BP 4.11 (Physical Cultural Resources) is triggered as the project recognizes that the historical richness of Croatia and Bosnia and Herzegovina creates a higher than usual likelihood of cultural “chance finds� in construction activities. All investments to be supported by the Project will comply with local legislation, including advance consultation with the Ministry of Culture and allowing the local permitting process, which have been reviewed and found adequate. The EMSF includes provisions on chance finds. OP/BP/GP 7.50 Projects on International Waterways is triggered since the Adriatic Sea and its Public Disclosure Copy tributaries, including the Neretva, Krka and Cetina Rivers are international waterways. Notification letters, describing the Project scope and the analysis made that confirmed its positive impact and lack of potential negative effects, were sent to the Mediterranean Action Plan (MAP) secretariat on April 11 and May 17, 2013 by Croatia and on June 10, 2013 by Bosnia and Herzegovina, for distribution to Adriatic countries according to MAP procedures. There have been no complaints or comments received by any country nor MAP within the period indicated in the notification, or after that. OP 17.50, (Disclosure Policy) is triggered with reference to the EMSF and EAs/EMPs for all investments to be financed or for which TA support will be provided. EMPs for both Mostar and Zadar leachate treatment plants have been disclosed as part of the ESMF. Safeguard Policies Restrictions Category A investments or technical assistance for category A projects will not be financed under the project. A proposed investment is classified in this category if it is likely to have highly significant, diverse, and/or long-term adverse impacts on human health and natural environment the magnitude of which is difficult to determine at the sub-project identification stage. These impacts may also affect an area broader than the investment sites. Page 5 of 10 OP/ BP 4.12 Involuntary Resettlement. The project would not trigger OP 4.12. For the two demonstration investments there is no land acquisition, no scavengers in the landfills, no residents, and the landfill areas are properly fenced. Also, during preparation the project team confirmed that Public Disclosure Copy the ownership of these areas has not been contested. Also, no potential beneficiaries of the TA Component can participate in the project if they do not comply with the ESMF requirements, particularly if land acquisition would be needed for the investments for which design and project documentation are requested to be supported under this Project, even if land is obtained before the project effectiveness for the specific purpose of the project. Rehabilitation and reconstruction (which could involve demolition of un-suitable structure and construction of a new one) of existing buildings within the same footprint would be permissible. If reconstruction would exceed the footprint of existing structure in any way, the respective Project Management Team (PMT) and municipalities must ascertain that any additional land used is unencumbered (i.e. no squatters or encroachers or not requiring the eviction of anyone resident in such property) and provide proof in form of pictures and ownership titles. The PMTs should verify for each TA proposal the unencumbered status of the property prior to approving any TA assistance which could raise such issues. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: The project is expected to generate significant environmental benefits by reducing nutrient load through two demonstration investments, and preparing technical documentation for investments to be financed by EU funds or different IFIs. By focusing on this region, the Project aims to have an important impact on preserving the environmental resources on which the growth of tourism and its capacity for employment generation is based, implying benefits beyond participating municipalities. No significant negative indirect or long term impacts are expected. No more than two proposed demonstration investments (Zadar and Mostar) would be financed Public Disclosure Copy under the Project and these would fall under category B as the impacts are expected to be beneficial for the environment and the adverse impacts are site-specific; few if any of them are irreversible; and in most cases mitigation measures can be designed easily. The investment for which project preparation will be financed under the TA component would only include leachate treatment or rehabilitation of existing wastewater treatment plants and should comply with all requirements established under the ESMF. As with the operation and construction of any wastewater treatment plant or leachate treatment plant, potential negative impacts include air, soil and water pollution associated with the following: (a) construction/rehabilitation; (b) treatment of leachate or wastewaters; (c) management of waste sludge from the treatment plants; (d) operations; and (e) decommissioning. The following impacts are to be especially considered: odors, noise, spreading of insects, and potential health hazards in the vicinity of discharge, exploitation of the sea and seacoast, potential changes in flora and fauna due to the discharge of treated waste waters, decline in land value, and disposal of sludge from the treatment plant. Preparation of mitigations plans are defined through the ESMF and, as such, will be part of EIAs and EMPs, mitigating the potential above mentioned impacts. Each EIA and EMP will include a monitoring program for the individual sites. Page 6 of 10 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. During Project preparation the scope of potential investments was widened to include leachate Public Disclosure Copy treatment systems as the whole Eastern Adriatic coast is Karstic, implying contribution of unregulated landfill on nutrient load. The EIAs for investments supported under the TA Component will include a chapter on project alternatives including “construct nothing� alternative in order to determine the environmental impact for a variant without the construction of wastewater treatment plant upgrade or leachate treatment system. Within the EIA, proposed variants should be evaluated according to the following criteria: • environmental impact, ecological acceptability of the proposed solution, • construction, operation and maintenance costs, and • adequateness of the system in relation to local circumstances, institutional and socio- economic. 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 Recipients in Croatia and Bosnia and Herzegovina have formed PMTs or are using existing PMTs. The PMT for implementation of the Croatian part of the Project was established in Environmental Protection and Energy Efficiency Fund (EPEEF). Staff in EPEEF has previous experience in implementation of WB projects thorough Energy Efficiency project and Inland Waters Project. For Bosnia and Herzegovina an existing PMT for several WB projects will be used. This PMT is based in the Ministry of Foreign Trade and Economic Relations (MoFTER). Each PMTs prepared individual ESMFs. Although two separate documents, there was a high level of cooperation between the two PMTs resulting in streamlined ESMF procedures. The ESMF Public Disclosure Copy serves as a tool to screen the investments and technical assistance and based on the screening guides the client on environmental due diligence. The mechanism of environmental screening, review, approval, and supervision of investments, including roles and responsibilities of all agencies involved in it, is described in the ESMF. According to the ESMF, the Environmental Screening will be carried out by EPEEF and MoFTER at an early stage in each investment to review and determine the appropriate environmental due-diligence documents required for the proposed investment. Based on the outcome of screening, the scope of an Environmental Assessment (EA) will be determined. The municipalities/municipal company will be responsible for preparing the required EA and for confirming that any clearances necessary for the proposed investment are obtained from the relevant authorities as prescribed by the national legislation and that is in line with the World Bank procedures as described in this document. The municipalities/municipal company will firstly comply with the national legislation and then based on the gap analysis update the documents to align with WB safeguards procedures described in this EMSF. Once the EA is performed, public consultation done and recommendations incorporated into the design, EPEEF and or MoFTER will appraise the proposed investment package and allow its financing. The EMPs will be implemented by the contractor and supervised directly by municipalities/municipal company supervising engineer. The implementation of the EMPs will also be monitored by EPEEF and/ or MoFTER which will be in charge for review, approval, and supervision process. Page 7 of 10 In the course of an investment implementation the municipalities are responsible for carrying out their daily activities in compliance with the recommendations of the environmental assessment Public Disclosure Copy reports and for applying mitigation measures as prescribed by EMPs. Municipalities will be expected to monitor compliance with EMPs and report to the EPEEF or MoFTER on the environmental performance as an integral part of their regular reporting. The Bank will assist EPEEF and MoFTER and municipalities/municipal companies in screening procedures. EPEEF and MoFTER will be responsible for overall quality of environmental due- diligence documents including ToRs, environmental analysis, EIAs, etc. and its compliance with the WB safeguards policies. EPEEF and MoFTER will inform the IBRD on the environmental due diligence applied through the general reporting on the Project progress. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Key stakeholders include from the Ministries of Finance, MoFTER, EPEEF, participating municipal companies and the municipalities, Ministries of Environmental Protection, local NGOs, cantons, and the population that will benefit from the project, both directly and indirectly. The ESMF in detail describes the disclosure procedures. In addition to one public consultation at least one public disclosure is required of the prepared EIAs. In cases where the EIAs are required by the national legislation, public consultation will be organized and overseen by the Ministries of Environment. In the cases where EIAs are not required by national legislation, the public disclosure and consultation will be organized by the PMTs or municipalities in question, in compliance with Bank requirements. The respective ESMFs along with an announcement of the public consultation workshop were Public Disclosure Copy disclosed on June 14, 2013 on the website of the EPEEF, MoFTER and hard copies are available on municipal companies’ info boards in Mostar and Zadar. The draft and final documents are as well disclosed on World Bank InfoShop. Both EPEEF and MoFTER called for written comments and have provided both postal and email address for sending comments and suggestions. All written comments and questions raised in the public consultation were addressed, then summarized and attached to EMSF as annex. Only then EMSFs were considered final. All documents prepared under project will as well follow the World Bank disclosure policy guidelines as well OP 4.01 guidelines on consultation and will be prepared and disclosed in Croatian language. ToRs, EMPs and EIA executive non technical summaries will be prepared in English as well. B. Disclosure Requirements Environmental Assessment/Audit/Management Plan/Other Date of receipt by the Bank 11-Jun-2013 Date of submission to InfoShop 27-Aug-2013 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors Page 8 of 10 "In country" Disclosure Bosnia and Herzegovina 14-Jun-2013 Comments: Public Disclosure Copy Croatia 14-Jun-2013 Comments: 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 4.11 - Physical Cultural Resources Does the EA include adequate measures related to cultural Yes [ ] No [ ] NA [ ] property? Does the credit/loan incorporate mechanisms to mitigate the Yes [ ] No [ ] NA [ ] potential adverse impacts on cultural property? OP 7.50 - Projects on International Waterways Public Disclosure Copy 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? Page 9 of 10 Does the Monitoring and Evaluation system of the project Yes [ ] No [ ] NA [ ] include the monitoring of safeguard impacts and measures Public Disclosure Copy 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: Manuel G. Marino Approved By Sector Manager: Name: Pier Francesco Mantovani (SM) Date: 14-Nov-2013 Public Disclosure Copy Page 10 of 10