INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Public Disclosure Copy Report No.: ISDSC6206 Date ISDS Prepared/Updated: 22-Nov-2013 Date ISDS Approved/Disclosed: 29-Jan-2014 I. BASIC INFORMATION A. Basic Project Data Country: Ecuador Project ID: P147951 Project Name: EC National Water and Sanitation Program - PROSANEAMIENTO Project (P147951) Task Team Oscar E. Alvarado Leader: Estimated 24-Mar-2014 Estimated 22-May-2014 Appraisal Date: Board Date: Managing Unit: LCSWS Lending Investment Project Financing Instrument: Sector(s): General water, sanitation and flood protection sector (100%) 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%) Financing (In USD Million) Public Disclosure Copy Total Project Cost: 220.00 Total Bank Financing: 170.00 Financing Gap: 0.00 Financing Source Amount Borrower 50.00 International Bank for Reconstruction and Development 170.00 Total 220.00 Environmental B - Partial Assessment Category: Is this a No Repeater project? B. Project Objectives 13. The PROSANEAMIENTO Program objective, as designed by the Government of Ecuador, is to focus public investment in environmental sanitation in order to improve the quality of life of the population. As an outcome target, PROSANEAMIENTO Program aims to increase the coverage index for water supply, sanitation and solid waste management services to 95% nationwide. In line with this target, the Project Development Objective (PDO) for the proposed PROSANEAMIENTO Project is to increase equitable and sustainable coverage of water supply and sanitation services in participating municipalities. This objective will be achieved by (i) increasing the availability of water Public Disclosure Copy supply and sanitation services; (ii) enhancing the technical capacity of GADs for preparing and implementing investments, operating and maintaining water and sanitation systems and managing the services through technical assistance programs. C. Project Description The Project would have the following three components. Component 1: Municipal Water Supply and Sewerage Infrastructure ( US$ 140 million of loan financing) to finance investments in the construction and rehabilitation of primary and secondary water and sewerage networks, water treatment plants, pumping stations and main collectors, and wastewater treatment infrastructure, including treatment plants and discharge infrastructure, amongst others. Investments would be financed with a combination of direct grants from the National Government through BEDE to each participating GAD, credit resources from loans from BEDE to the GAD, and in some cases municipal and water and sanitation (WSS) utilities own-sources. The large subsidy amounts that will be financed under PROSANEAMIENTO Program (around US$ 3 billion) reflect the priority of achieving universal access to both services for the Government. The program has designed screening procedures and approval criteria to focus Government grants exclusively on viable and technically sound subprojects . Component 2: Technical Assistance, Institutional Strengthening and Capacity Building for Autonomous Decentralized Government Municipalities (US$ 20 million of loan financing). This component would comprise two sub-components: • Technical Assistance for Pre-investment Activities and Works Supervision to finance the preparation of feasibility studies and designs for specific subprojects/investments, including associated environmental and social assessments (also known as “pre-investment” activities), and Public Disclosure Copy the supervision of construction activities at the municipal level through the contracting of independent specialized consultants (“fiscalizadores”). This subcomponent will also include capacity building for the management of environmental and social aspects during the construction of the works. • Technical Assistance for WSS Institutional Strengthening and Capacity Building to finance activities 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 municipal water utilities would be provided through BEDE's existing Technical Assistance Program, the PATGES (Programa de Gestión de Servicios). This Program comprises five phases: (i) Diagnostic and Assessment of Capabilities; (ii) Preparation of an Action Plan (AP); (iii) Implementation of the AP; (iv) Follow up and Monitoring; and (v) Knowledge Management. It finances technical assistance in three main different modalities: (i) Specialized advisory services from different sources, such as de-concentrated BEDE staff at the regional level, consultants hired by BEDE, or the contracting of specialized services and collaboration arrangements with highly performing public such as ETAPA-EP de Cuenca and EPMAPS- Quito; (ii) institutional strengthening events for municipal authorities and water and sanitation services related management and staff; and (iii) knowledge management activities on different topics (water supply sustainability and use, wastewater disposal, management of environmental and social issues, and others). Activities will include the identification of good practices, preparation of manuals and tools, establishment of communities of practice, and others. Public Disclosure Copy Component 3: Project Management and Administration (US$ 10 million of loan financing). This component will finance activities associated with overall Project management by BEDE, including Impact Evaluation, project-related audits, monitoring, equipment and training to strengthen implementing entities, as well as individual consultants. It will include support to BEDE related to the management of environmental and social issues and safeguards. D. 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. E. Borrowers Institutional Capacity for Safeguard Policies The Banco de Estado (BEDE), with its established in-house implementation and supervision capacity will be responsible for the overall and day-to-day Project management, including fiduciary and safeguard aspects, disbursements and financial reporting. At the local or 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. BEDE will be responsible for ensuring implementation of environmental and social management aspects in the project. They have developed some procedures and systems for use in other financial programs implemented by them, and environmental instruments associated with financing in other projects/ programs provided by the IDB and also CAF. BEDE has reported that they have an environmental specialist in each of the 6 regional offices. BEDE has established an agreement with the Ministry of Environment, who is responsible for issuing the environmental permits for the projects financed under PROSANAMIENTO, which includes provision of resources for the Ministry to hire staff to provide the review of sub-project applications for environmental permits. Public Disclosure Copy The BEDE does not have experience in applying World Bank Operational Policies on Involuntary Resettlement and Indigenous People, and does not have dedicated staff for dealing with these issues. Many municipal governments have community development / citizen participation units who have the potential to support the implementation of these policies, but capacity will vary depending on the size of the municipality. As part of the Bank’s review of the project (project preparation), the institutional capacity related to environmental and social aspects needs will be assessed, including the staff /resource availability to meet the project requirements. F. Environmental and Social Safeguards Specialists on the Team Jose Vicente Zevallos (LCSSO) Martin Henry Lenihan (LCSSO) Robert H. Montgomery (LCSEN) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/ Yes The project team proposes an environmental BP 4.01 category of B per OP/BP 4.01, as the sub- projects (approximately 40 to 50) involve relatively standard works with no likely significant or long-term environmental or social impacts and that can be readily prevented or mitigated with standard measures. The potential Public Disclosure Copy negative environmental and social impacts associated with the construction works could include erosion or sedimentation due to earth works, operation of work campsites, noise and dust from equipment and earthworks, 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 and Social Framework (ESMF) will be developed. The ESMF will be based upon the existing Banco de Estado procedures related to environmental and social issues and instruments and procedures developed in conjunction with financing by IDB and CAF for similar types of projects/works. The ESMF will include a screening 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. Natural Habitats OP/BP 4.04 TBD Since the sub-projects are within urban areas and given the type of works to be performed, there should be no significant conversion or Public Disclosure Copy 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 needed assessment or mitigation measures will be considered within OP/BP 4.01 and the specific ESMF. -While based on existing information it appears that this policy would not be triggered, this will be confirmed during project preparation. Forests OP/BP 4.36 No Given the sub-projects will be developed in urban areas, there should be no forests that will be affected. However, any potential impacts on forests will be evaluated under the ESMF. 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 BP 4.11 known but will be in urban environments. Given the type of works to be performed, no Public Disclosure Copy anticipated significant impacts on physical cultural resources are anticipated. However, there will be the need for sub-projects to assess for potential physical cultural resource impacts and for work contracts to include, as a minimum, chance find procedures. The needed measures will be considered within 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, and more likely a higher percentage of the poor. An Indigenous Peoples Planning Framework (IPPF) will be prepared and consulted at a national level (with representative Indigenous organizations) and disclosed prior to appraisal. The IPPF will outline the screening criteria to identify subprojects 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 Public Disclosure Copy practices around water collection, use, and sanitation that vary greatly from non-indigenous peoples. Adequately designed WSS infrastructure have 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 adequately designed to address specific customs and needs. This Policy has the potential to add value to Client’s system for working with Indigenous peoples by providing procedures and tools to ensure more effective engagement and project design with Indigenous Peoples. Involuntary Resettlement OP/BP Yes Because the project will involve the 4.12 construction 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) should be prepared Public Disclosure Copy and disclosed prior to appraisal that focuses specifically on the types of impacts typical to this type of project. Given the range of donors and potential variances in definitions and understanding around resettlement and voluntary vs. involuntary, it will be important to fully assess the impacts and requirements under OP/BP 4.12. Also, robust screening criteria for voluntary land donations should included within the ESMF to ensure that land acquisition through “donations” meets the Bank’s policy definition for “voluntary”. If it is the case that the Project will be supporting the protection of water sources, which may imply the creation or enforcement of protected areas, then it may be necessary to prepare a Process Framework for potential restrictions in access. The necessity for such a framework will be assessed during preparation. Safety of Dams OP/BP 4.37 TBD The Project will not support the construction or rehabilitation of dams. The potential for sub- projects or project investments to rely on the services of existing dams will be assessed during project preparation. Projects on International No Project activities will not affect international Public Disclosure Copy Waterways OP/BP 7.50 waterways. Projects in Disputed Areas OP/BP No The Project will not be implemented in areas 7.60 known to involve disputed areas. III. SAFEGUARD PREPARATION PLAN A. Tentative target date for preparing the PAD Stage ISDS: 17-Jan-2014 B. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing1 should be specified in the PAD-stage ISDS: B. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing should be specified in the PAD-stage ISDS. The Bank will review the existing procedures and systems that are used by the project (BEDE) on environmental and social management for the PROSANAMIENTO program. An Environmental and Social Framework will be developed prior to appraisal of the Project. The client will also be responsible for preparing a Resettlement Policy Framework and an Indigenous Peoples Planning Framework. Because the exact locations of the sub-projects will not be known at the time of appraisal the preparation of frameworks (as opposed to site specific plans) is appropriate. 1 Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons. Associated with Component 2, institutional strengthening of the GADs related to environmental and social management will be included. Similarity, support to BEDE related to environmental and social management will be included in Component 3. Public Disclosure Copy IV. APPROVALS Task Team Leader: Name: Oscar E. Alvarado Approved By: Regional Safeguards Name: Glenn S. Morgan (RSA) Date: 24-Jan-2014 Coordinator: Sector Manager: Name: Wambui G. Gichuri (SM) Date: 29-Jan-2014 Public Disclosure Copy