Mozambique - Market-Led Smallholder Development in the Zambezi Valley Project : environmental assessment

E1 380 GOVERNMENT OF THE REPUBLIC OF MOZAMBIQUE MINISTRY OF PLANNING AND DEVELOPMENT 1d(AR[eY1ET LEiD DLLHO:LDE1 DEVELOPMENT IN THE ZAMBEZI VALLEY PROJET EBn*omeatal d 8ot I4naemeat FmelorDk FflIAL JUNE 2006  i i  ABBREVIATIONS ANE Roads Administration Authority ARA Regional Water Administration CATEF Community Agricultural and Environmental Investment Fund CBD Convention on Biological Diversity CBNRM Community Based Natural Resource Management CBO Community Based Organization CDD Community Demand Driven DDA District Agricultural Directorate DDPOPH District Directorate of Public Works and Housing DF District Facilitator DINA National Directorate of Agriculture DINAGECA National Directorate of Geography and Mapping DNA Department of Water Affairs DNAIA National Directorate for Environmental Impact Assessment DNPDR National Directorate for the Promotion of Rural Development DNS National Directorate of Health DPCOA Provincial Directorate the Coordination of Environmental Affairs DPFP Decentralized Planning and Finance Project DPOPH Provincial Directorate of Public Works and Housing DTT District Technical Team EIA Environmental Impact Assessment EMP Environmental Management Plan ESMF Environmental and Social Management Framework FAO Food and Agricultural Organization FMA Field Management Advisor GEF Global Environment Facility GIS Geographical Information System GOM Government of Mozambique GPZ Zambezi Valley Development Authority IDA International Development Association IFAD International Fund for Agricultural Development INIVE National Institute for Veterinary Investigations INNOQ National Institute for Standardization LIG Local Investment Grant M&E Monitoring and Evaluation MICOA Ministry for the Coordination of Environmental Affairs MINAG Ministry of Agriculture MISAU Ministry of Health MITUR Ministry of Tourism MOPH Ministry of Public Works and Housing MPD Ministry of Planning and Development MPWH Ministry of Public Works and Housing NAP Nation Action Program NBSAP National Biodiversity Strategy and Action Plan NCB National Competitive Bidding NEMP National Environmental Management Program  NEPAD New Partnership for African Development NGO Non-Government Organization OP Operational Policy PARPA Action Plan for the Reduction of Absolute Poverty PFM Public Financial Management PMP Pest Management Plan PPC Provincial Project Coordinator PRSP Poverty Reduction Strategy Paper QCBS Quality and Cost Based Selection RAP Resettlement Action Plan RPF Resettlement Policy Framework SLGs Savings and Loans Groups SLM Sustainable Land Management SPFFB Provincial Services for Forestry and Wildlife TA Technical Assistance UASMA Social Affairs and Environmental Unit (of ANE) UNDP United Nations Development Program UNEP United Nations Environment Program WHO World Health Organization  Quadro de Gest&o Ambiental e Social (Sumario Executivo)-Projecto de Desenvolvimento de Pequenos Produtores Orientado pelo Mercado do Vale do Zambeze SUMARIO EXECUTIVO IntrodusAo O Govemo de Mocambique pediu ao Banco Mundial um financiamento para o Projecto de Desenvolvimento de Pequenos Produtores Orientado pelo Mercado do Vale do Zambeze. A responsabilidade de implementar o Projecto cabe a Direc,ao Nacional de Promo,co do Desenvolvimento Rural, do Minist6rio de Planificacao e Desenvolvimento. O projecto sera implementado durante um periodo de 6 anos, em duas fases, em 5 distritos da regiao do Vale do Zambeze. 0 objectivo do projecto 6 aumentar os rendimentos de agricultores de pequena escala dentro da area do projecto. Alguns dos sub-projectos podem resultar em potenciais impactos adversos no ambiente biofisico e socio-econ6mico, e, de acordo com as politicas do Banco Mundial, um Quadro de Gestao Ambiental e Social (QGAS) foi elaborado (o presente documento) e sera alvo de apreciacao pelo Banco Mundial para um possivel financiamento. O prop6sito do Quadro de Gestao Ambiental e Social 6 de: * Estabelecer procedimentos claros para o planeamento ambiental e social, revisao, aprova,ao e implementa,co de investimentos a serem financiados pelo projecto; * Definir claramente pap6is e responsabilidades para a gestao e monitoramento de questoes ambientais e sociais relacionadas aos investimentos do Projecto; * Determinar o treinamento, a capacitacao e assistencia t6cnica necessaria a implementar com exito a previsoes do Quadro de Gestao Ambiental e Social; * Estabelecer os fundos do projecto necessarios para implementar os requisitos do Quadro de Gestao Ambiental e Social. Descri,co do Projecto Componentes do Projecto O Projecto comecara a operar em 2 distritos adjacentes: Mutarara, na Provincia de Tete e Morrumbala, na Provincia da Zamb6zia. Outros 3 distritos estao propostos para inclusao durante o segundo fase de implementa,ao: Mopeia, na Provincia da Zambezia e Maringue e Chemba na Provincia de Sofala. O Projecto de Desenvolvimento de Pequenos Produtores Orientado pelo Mercado do Vale do Zambeze 6 um Empr6stimo de Investimento ao Sector constituido por um Cr6dito da IDA de US$20 milhoes e um donativo do GEF de cerca de US$ 6.8 milhoes e engloba 4 componentes: Componente 1: Organiza,ao dos Grupos Comunitarios e Fortalecimento Institucional a Nivel Local Componente 2: Desenvolvimento da Producao e da Comercializacao Agricola Componente 3: Fundo de Investimento da Comunidade para a Agricultura e Ambiente (FICAA) Componente 4: Gestao, Coordenacao e Monitoria e Avalia,co do Projecto i  Quadro de Gestao Ambiental e Social (Sumario Executivo)-Projecto de Desenvolvirnento de Peqtienos Produtores Orientado pelo Mercado do Vale do Zambeze Os tipos de sub-projectos que podem ter um impacto adverso no ambiente sao: constru,ao de pequenas barragens, reabilita,co de estradas rurais, sistemas de irrigac>o de pequena escala, aquacultura de pequena escala, constru,co de tanques carracicidas para gado, celeiros comunitarios, facilidades de agro-processamento e construg5o de mercados. Area-alvo A principal cobertura de terra na area do projecto 6 composto por mata, mata aberta e graminal. Grandes areas de agricultura de sequeiro ocorrem no vale do Rio Chire, especialmente no distrito de Mutarara. Tres areas protegidas ocorrem nos distritos alvo, incluindo a Reserva Florestal de Derre, no distrito de Morrumbala. Apesar do Parque Nacional da Gorongosa estar fora dos distritos alvo, a sua ecologia 6 dependente das praticas de uso da terra fora do Parque. Especial aten,ao deve ser tamb6m dada a Montanha de Morrumbala que 6 caracterizada por apresentar uma floresta hiumida de montanha com uma grande biodiversidade. Implementacao e Coordenacao do Projecto A responsabilidade geral pela implementa,ao do Projecto recai sobre a Direc,co Nacional de Promo,co de Desenvolvimento Rural (DNPDR), do Minist6rio de Planifica,co e Desenvolvimento. 0 foco de todas as actividades do Projecto sera a nivel do Distrito e a implementacao do Projecto sera integrado no processo de planeamento do Distrito. Os Conselhos Consultivos Distritais, auxiliados pela Equipe Tecnica Distrital, terao entao um papel chave. Um Facilitador Distrital sera contratado para assegurar que as actividades financiadas pelo projecto sao totalmente integradas no processo participativo de planificacao distrital. Comit6s de Direcc,o Provinciais e Nacionais ja estabelecidos irao supervisionar a coordena,co do projecto a nivel provincial e nacional. Requisitos para Gestao Ambiental e Social As Politicas Operacionais do Banco Mundial, OP4.01 (Habitates Naturais), OP4.09 (Gestao de Pragas e Doen,as) OP 4.12 (Reassentamento Involuntario) e OP 7.50 (Cursos de Agua Internacionais) estao directamente relevantes ao Projecto proposto. 0 Quadro de Gestao Ambiental e Social, fornece instrumentos praticos para a prepara,co de Planos de Gestao Ambiental (PGAs), Planos de Gestao de Pragas e Doen,as (PGPDs) e Planos de Ac,ao para Reassentamento (PARs). A prepara,co do Plano de Reassentamento esta descrita num documento separado, o Quadro de Politica para Reassentamento. 0 Banco Mundial ira apoiar o Governo de Mo,ambique no sentido de respeitar a necessaria notifica,cao para os paises localizados a montante tal como e requerido pela Politica Operacional OP 7.50. Quadro Legal, Institucional e Regulador para a Gestao Ambiental em Mocambique A legisla,ao relevante em Mo,cambique inclui: A Lei do Ambiente . .  Quadro de Gestao Ambiental e Social (Sumnario Executivo)-Projecto de Desenvolvimento de Pequenos Produtores Orientado pelo Mercado do Vale do Zambeze * 0 Regulamento de AIA * Os Padroes de Qualidade Ambiental e Regulamentos de Emissoes e Efluentes * 0 Regulamento de Pesticidas * A Lei de Terras Em Julho de 2004 foi aprovado o novo regulamento de AIA. Tres categorias foram aqui definidas: Categoria A (e necessario realizar um Estudo de Impacto Ambiental -EIA- completo), Categoria B (e necessario apenas um Estudo Ambiental Simplificado -EAS) e Categoria C (isen,co de EIA e EAS). Estas estao, de um modo geral, em concordancia com as categorias do Banco Mundial. O Regulamento de Pesticidas foi aprovado em Setembro de 2002 e regulamenta o uso de Pesticidas em Moarambique. Este regulamento deve ser considerado para qualquer sub-projecto que envolva o uso e gestao de pesticidas. O Ministerio para a Coordena,co da Ac,co Ambiental (MICOA) e responsavel pela gestao ambiental inter-sectorial. As Direc,oes Provinciais Para a Coordena,co Ambiental (DPCA) terao um papel chave na aprecia,ao e aprova,ao dos sub-projectos, para assegurar concordancia com a Legisla,co Ambiental Mo,cambicana e com as salvaguardas delineadas no Quadro de Gestao Ambiental e Social. Prepara,cao, Aprova,cao e Implementa,cao dos Sub Projectos O Projecto proposto e direccionado as comunidades. Assim serao as proprias comunidades a identificar sub-projectos a serem implementados em conjunto com organiza,ces baseadas nas comunidades. Trabalhadores extensionistas treinados irao apoiar as comunidades na identifica,ao de projectos e a preencher a fichas de aplica,ao necessarias. Serao preenchidos checklists ambientais, para determinar a necessidade de medidas adicionais de gestao ambiental (PGAs, PGPDs or PARs). A chave para este processo sera o treinamento e a capacita,co de trabalhadores extensionistas e comunidades. O "checklist" preenchido do QGAS, em conjunto com o Plano de Gestao Adicional (seja ele na forma de um PGA, um PGPD ou um PAR) serao encaminhadas com uma ficha aplica,co geral a autoridade de revisao (O Conselho Consultivo Distrital) para aprova,co. A DPCA ira apoiar neste processo. Para a maioria dos sub-projectos de infraestruturas dentro da Componente 3 (Fundo de Investimento da Comunidade para a Agricultura e Ambiente) a aprova,ao final e tomada a nivel provincial pelo Comite de Direc,cao Provincial, do qual a DPCAO e membro. De acordo com a Politica do Banco Mundial sobre Divulga,ao de Informa9Ao, relat6rios adicionais (tais como Planos de Gestao Ambiental, Planos de Gestao de Pragas e Doen,as e Planos de Ac,ao para Reassentamento) serao tomados publicos para revisao e colocados em lugares acessiveis A popula,ao local. Autonrdades distritais irao tambem preparar relat6rios anuais que incluem informna,o sobre a implementa,co do Quadro de Gestao Ambiental e Social. iii  Quadro de Gestdo Ambiental e Social (Sumario Executivo)-Projecto de Desenvolvimnento de Pequenos Produtores Orientado pelo Mercado do Vale do Zambeze Serao feitas revisoes anuais da implementa,co do Quadro e Gestao Ambiental e Social, por um consultor local independente, ONG ou outro provedor de servi,os que nao esteja envolvido no Projecto. Gestao Ambiental As ac,ces de gestao adicionais podem incluir a prepara,co de Planos de Gestao Ambientais, Planos de Gestao de Pragas e Doen,as e Planos de Ac,co para Reassentamento. Directivas para elabora,co dos PGAs e PGPDs sao providenciadas. Um Quadro Politico de Reassentamento foi preparado em separado para uso em conjunto com o Quadro de Gestao Ambiental e Social, providenciando directivas para a elabora,co do PARs. Assistencia tecnica especializadas e financiamento serao providenciados para a prepara,ao dos relat6rios tecnicos. Capacitac,ao, treinamento e assistencia tecnica A chave para uma implementa,co bem sucedida do Quadro de Gestao Ambiental e Social, e do Quadro Politico de Reassentamento e o treinamento e a capacita,ao. O objectivo do treinamento e de: * Treinar ONG locais e equipas extensionistas para providenciar assistencia tecnica as comunidades na elabora,cao dos seus sub projectos. * Treinar grupos comunitarios para identificar, preparar, implementar e gerir as questoes ambientais e sociais dos seus sub-projectos. Organiza,ces Nao Govemarnmentais treinadas e trabalhadores extensionistas estarao envolvidos neste exercicio de treinamento. * Assegurar que oficiais a nivel distrital, provincial e nacional, tem capacidade para apreciar, aprovar e supervisionar a implementa,ao dos sub projectos. O treinamento sera executado atrav6s de workshops e cursos de actualiza,ao. 0 treinamento incluira estudos de caso de sub projectos actuais utilizando as "checklists" ambientais. 0 foco do treinamento sera basicamente trabalhadores de ONGs, e oficiais extensionistas que irao, por sua vez, treinar os membros das comunidades a implementar as componentes do Quadro de Gestao Ambiental e Social a nivel comunitario. Treinamento apropriado sera tamb6m fomecido para agencias a nivel distrital, provincial e nacional. Assistencia tecnica sera fornecida a oficiais governamentais, equipas de extensao e comunidades de modo a implementarem o Quadro de Gestao Ambiental e Social, incluindo a prepara,ao de PGAs, PGPs e PARs. Or,amento para implementac,o do Quadro de Gestao Ambiental e Social O oracamento inclui fundos para: * Desenvolvimento institucional; * Programa de treinamento para comunidades, equipas de extensao e autoridades locais para implementar as suas responsabilidades no ESMF; * Assistencias tecnica as autoridades distritais e provinciais e equipas de extensao; iv  Quadro de Gestdo Ambiental e Social (Sumario Executivo)-Projecto de Desenvolvimento de Pequenos Produtores Orientado pelo Mercado do Vale do Zambeze * Subsidio para elabora,co de sub-projectos, PGAs, PGPs, PRs, etc; * Revisoes anuais. O orgamento total para a implementagAo do QGAS e estimado em US$ 564 000. v  Quadro de Gestao Ambiental e Social (Sumario Executivo)-Projecto de Desenvolvimento de Pequenos Produtores Orientado pelo Mercado do Vale do Zambeze EXECUTIVE SUMMARY Introduction The Government of Mozambique has requested World Bank financing for the Market Led Smallholder Development in the Zambezi Valley Project. Overall responsibility for the implementation of the Project will lie with the National Directorate for the Promotion of Rural Development of the Ministry of Planning and Development. The project will be implemented over a six year period in two phases across five districts within the Zambezi Valley region. The aim of the project is to increase the incomes of smallholder farmers within the project area. Certain subprojects may result in potential adverse impacts on the biophysical and socio-economic environments and, in accordance with Bank policies, an Environmental and Social Management Framework (ESMF) has been prepared (this document) which the World Bank will appraise for possible financing. The purpose of the ESMF is to: * To establish clear procedures for the environmental and social planning, review, approval and implementation of investments to be financed under the Project; * To clearly define roles and responsibilities for managing and monitoring environmental and social concerns related to Project investments; * To determine the training, capacity building and technical assistance needed to successfully implement the provisions of the ESMF; * To establish the Project funding required to implement the ESMF requirements. Project Description Project Components. The project will start operations in two adjacent districts: Mutarara, Tete Province and Morrumbala, Zambezia Province. A further three districts are proposed for inclusion during the second year of implementation: Mopeia in Zambezia Province and Maringue and Chemba in Sofala Province. The Market Led Smallholder Development in the Zambezi Valley Project is a Sector Investment Loan comprising an IDA Credit of US$20 million and a GEF grant of about US$6.5 million and comprises four components: Component 1: Community Group Organization and Local Institutional Strengthening Component 2: Agricultural Production and Marketing Component 3: Community Agricultural and Environmental Investment Component 4: Project Management, Coordination and Monitoring and Evaluation The types of Subprojects that may have an adverse impact on the environment include: construction of small dams, rehabilitation of rural roads, small-scale irrigation systems, small- vi  Quadro de Gestao Ambiental e Social (Sumario Executivo)-Projecto de Desenvolvimento de Pequenos Produtores Orientado pelo Mercado do Vale do Zambeze scale aquaculture, cattle dips, community granaries, agro-processing facilities and construction of markets. Target Area The main land cover of the project is woodland, open woodland and grassland. Extensive areas of rainfed agriculture occur in the Chire River Valley especially Mutarara District. Three gazetted protected areas occur in the target districts are including Derre Forest Reserve in Morrumbala District. Although Gorongosa National Park falls outside the target districts it's ecology is dependent on land use practices outside of the Park. Note should also be taken of Morrumbala Mountain which is characterized by the presence of high biodiversity moist montane forests. The hydrology of the project area is dominated by the Zambezi and Chire Rivers. The catchment of the Zambezi River encompasses eight countries viz,.Angola, Botswana, Namibia, Malawi, Mozambique, Tanzania, Zambia, and Zimbabwe. Tanzania and Malawi are part of the Zambezi basin via the Lake Niassa/Chire River sub-basin. Project Coordination and Inplementation The National Directorate for the Promotion of Rural Development (Ministry of Planning and Development) will have overall responsibility for the implementation of the Project. The focus of all project activities will be at the district and project implementation will be integrated into the district planning process. The District Consultative Councils (DCCs), supported by District Technical Team, will thus have a key role. A District Facilitator will be contracted to ensure that activities funded under the project are fully integrated into the district planning processes. Already established Provincial and National Steering Committees will oversee project coordination and implementation at the provincial and national levels. Environmental and Social Management Requirements Bank OP4.01 (Natural Habitats), OP4.09 (Pest Management) OP 4.12 (Involuntary Resettlement) and OP 7.50 (International Waterways) are triggered by the proposed Project. The ESMF provides practical tools for preparing Environmental Management Plans (EMPs), Pest Management Plans (PMPs) and Resettlement Action Plans (RAPs). Preparation of the latter is described in a separate document the Resettlement Policy Framework. The Bank will support the Government of Mozambique in taking care of the required notification with upstream user countries as required by OP 7.50. Legal, Regulatory and Institutional Framework for Environmental Management in Mozambique Relevant legislation in Mozambique includes the following: * The Environmental Law * EIA Regulations vii  Quadro de Gestao Ambiental e Social (Sumario Executivo)-Projecto de Desenvolvimento de Pequenos Produtores Orientado pelo Mercado do Vale do Zambeze * Environmental Quality Standards and of Emissions and Effluents Regulations * Pesticide Regulations * The Land Law New Environmental Impact Assessment Regulations were passed in July 2004. Three EIA Categories are defined: Category A (full EIA required), Category B (Simplified Environmental Assessment (SEA) and Category C (exempt from an EIA and SEA). These are broadly in agreement with World Bank categories. Pesticides Regulations were passed September 2002 and regulate the use of pesticides in Mozambique. These should be closely adhered to for any subproject that contemplates pest management. The Ministry for the Coordination of Environmental Affairs is responsible for cross-sectoral environmental management. Provincial Directorates for the Coordination of Environmental Affairs (DPCOA) will have a key role in the appraisal and approval of subprojects to ensure compliance with Mozambican environmental legislation and the safeguards outlined in the ESMF. Subproject Preparation, Approval and Implementation The proposed project is community driven so it will be the communities themselves who will identify subprojects for implementation together with community based organizations. Trained extension workers will assist communities in identifying projects and in completing the necessary application forms. Applicants will fill in an easy to use environmental checklist to determine if any additional environmental management measures are required (EMPs, PMPs or RAPs). Key to this process will be training and capacity building for extension workers and communities. The completed ESMF checklist and along with any additional planning reports (e.g. EMP, RAP, PMP) will be forwarded together with the overall application to the review authority (the District Consultative Committee) for approval. The DPCOA will assist in this process. For most of the subprojects for infrastructure under the CAEIF final approval will be taken at the provincial level by the Provincial Steering Committee of which the DPCOA is a member. In accordance with the Bank's Policy on Disclosure of Information, additional reports such as EMPs, RAPs and PMPs will be made available for public review at a place accessible to local people. District authorities will also prepare annual reports that include information on the implementation of the ESMF. Annual reviews of the implementation of the ESMF will be carried out by an independent local consultant, NGO or other service provider that is not involved in the Project. viii  Quadro de Gestao Ambiental e Social (Sumario Executivo)-Projecto de Desenvolvimento de Pequenos Produtores Orientado pelo Mercado do Vale do Zambeze Environmental Management The additional management actions may include the preparation of Environmental Management Plans (EMPs), Pesticide Management Plans (PMPs) and Resettlement Action Plans (RAPs). Guidelines for the preparations of EMPs and PMPs are provided. A separate Resettlement Policy Framework (RPF) has been prepared for use in conjunction with the ESMF and this provides guidelines for the preparations of RAPs. Technical expertise and funds will be provided for the preparation of specialist reports as required. Capacity Building, Training and Technical Assistance Training and capacity building is the key to the successful implementation of the ESMF and the RPF. The objective of the training is to: * Train local NGOs and extension teams to provide technical assistance to communities in preparing their subprojects. * Train community groups to identify, prepare, implement and manage the environmental and social aspects of their subprojects. Trained NGO and extension workers will be involved in this training exercise. * Ensure that district, provincial and national level officials have the capacity to appraise, approve and supervise the implementation of subprojects. Training will mostly be through the holding workshops and refresher courses. The training will include case studies of actual subproject interventions using the environmental checklist. The focus of the training will mainly be NGO workers and extension officers who will in turn train community members to implement components of the ESMF at the community level. Appropriate training will also be provided for district, provincial and national level agencies. Technical assistance will be provided for government officials, extension teams and communities in order to implement the ESMF including the preparation of EMPs, PMPs, and RAPs ESMF Implementation Budget The budget includes funds for: * Institutional development; * The training program for communities, extension teams and local authorities to implement their ESMF responsibilities; * Technical assistance to district and provincial authorities and extension teams; * Allowances for the preparation of subproject EMPs, RAPs, PDPs, etc.; * Annual reviews. The overall budget for implementation of the ESMF is estimated at US$ 564 000. ix   ESMF - Market Led Smallholder Developmenit in the Zambezi Valley Project TABLE OF CONTENTS 1. INTRODUCTION ........................ 3 2. PROJECT DESCRIPTION ........................ 5 2.1. BACKGROUND AND PURPOSE ........................5...................................................... ............5 2.2. COMPONENTS OF THE PROJECT .6 2.3. ANTICIPATED SUB-PROJECT TYPES ........................................................................................ 8 2.4. SUBPROJECT ACTIVITIES INELIGIBLE FOR FUNDING ..................................................................... ....9 2.5. PROJECT TARGET AREAS ...................................................................................................................9 2.5.1. Location ....................................9 2.5.2. Climate .................................... 10 2.5.3 Land Use and Cover .................................... 11 2.5.4 Protected Areas .................................... 12 2.5.5 Hydrology .................................... 15 2.5.6 Vegetation and Flora .................................... 17 2.5.7 Biologically Important Areas ................................... . 18 2.6 PROJECT COORDINATION AND IMPLEMENTATION ................................................................................... 20 2.6.1 Overall District Level Implementation ..................................... 20 2.6.2 Subproject Identification, Approval and Appraisal under CAEIF - District Level . .21 2.6.3 Provincial Level Implementation ..25 2. 6.4 National..26 3. ENVIRONMENTAL AND SOCIAL MANAGEMENT REQUIREMENTS ............ ............... 27 4. LEGAL, REGULATORY AND INSTITUTIONAL FRAMEWORK FOR ENVIRONMENTAL MANAGEMENT IN MOZAMBIQUE ................................. 34 4.1 LEGAL AND REGULATORY FRAMEWORK .................................................. 34 4.2 INSTITUTIONAL FRAMEWORK .....................4 .........5.....................5..... .......... . 45 5. SUBPROJECT PREPARATION, APPROVAL AND IMPLEMENTATION ......................... 57 6. ENVIRONMENTAL MANAGEMENT ............................................................ 65 7. CAPACITY BUILDING, TRAINING AND TECHNICAL ASSISTANCE ............................. 69 8. ESMF IMPLEMENTATION BUDGET ............................................................ 73 1  ESMF - Market Led Smallholder Development in the Zambezi Valley Project LIST OF FIGURES FIGURE 1. TARGET DISTRICTS IN THE CONTEXT OF MOZAMBIQUE ............................................. 10 FIGURE 2. MEAN MONTHLY TEMPERATURE AND RAINFALL FOR MORRUMBALA (BASED ON 30 YEARS DATA SET) .......................................... 11 FIGURE 3. LAND COVER AND LAND USE ........................... 12 FIGURE 4. PROTECTED AREAS ........................... 13 FIGuRE 5: MAIN TOPOGRAPHIC AND DRAINAGE FEATURES IN RELATION TO GNP ..................... 14 FIGURE 6: CATCHMENTS OF THE REGION .......................................................... 15 FIGURE 7: HYDROLOGY OF THE REGION ......................................................... 16 FIGURE 8.: LOCATION OF THE BRIDGE (BLUE CIRCLE) ......................................................... 19 FIGURE 9. CENTRAL LEVEL MICOA ORGANIZATIONAL STRUCTURE .......................................... 47 LIST OF TABLES TABLE 1: POTENTIAL SUB PROJECTS .........................................................8 TABLE 2. TABLE OF PROTECTED AREAS IN THE TARGET DISTRICTS ........................................... 13 TABLE 3. SAFEGUARD POLICIES TRIGGERED BY THE PROPOSED PROJECT ................................... 33 TABLE 4: CRITERIA FOR REQUIRING A FIELD APPRAISAL .......................................................... 59 TABLE 5. GOVERNMENT AGENCIES TO BE INVOLVED ON A CASE BY CASE BASIS .......... ............ 64 TABLE 6: ESMF IMPLEMENTATION BUDGET OVER A SLX YEAR PERIOD ................. .................... 74 2  ESMF - Market Led Smallholder Development in the Zambezi Valley Project 1. INTRODUCTION The Government of Mozambique has requested World Bank financing for the Market Led Smallholder Development in the Zambezi Valley Project. The proposed project would be a Sector Investment Loan comprising an IDA Credit of US$20 million and a GEF grant of about US$5.5 million. Overall responsibility for the implementation of the Project will lie with the National Directorate for the Promotion of Rural Development (DNPDR) of the Ministry of Planning and Development (MPD). This project corresponds with the central features of the Government's Five-Year Program 2005- 2009 and in its Plan to Reduce Absolute Poverty (Plano de Redu,ao da Pobreza Absoluta, PARPA1). Agriculture and rural development, as well as improvements in natural resources management, are considered key in achieving economic growth and poverty reduction in Mozambique. The project will be implemented over a six year period in two phases across five districts within the Zambezi Valley region of Central Mozambique. The project aims to increase the incomes of smallholder farmers within the project area through three technical components, with a fourth component dedicated to management, coordination and monitoring. These are: Component 1: Community Group Organization and Local Institutional Strengthening comprising: (a) community based organization capacity development; (b) rural financial services, and; (c) district capacity development. Component 2: Agricultural Production and Marketing Development comprising: (a) production (rainfed and irrigated) and post-harvest extension services; (b) agribusiness and market development, and; (c) studies, applied research and training. Component 3: Community Agricultural and Environmental Investment Fund comprising: (a) agriculturally related infrastructure; (b) small-scale agricultural investment, and; (c) consultancy services and matching grants. Component 4: Project Management, Coordination and Monitoring and Evaluation comprising technical supervision and coordination, reporting and district, provincial and national levels. It is envisaged that only subprojects under Components 3 (CAEIF) may have potential impacts on the biophysical and socio-economic environments including agriculturally related infrastructure such as markets, rural access roads, bridges at strategic points, agro-processing plants, aquaculture, irrigation systems (e.g., small gravity irrigation schemes), cattle dip tanks, and crop storage facilities. In addition, improved crop and livestock production may involve expansion especially into marginal lands as well as pest management. This document provides an Environmental and Social Management Framework for the proposed Project which the World Bank will appraise for possible financing. 'PARPA-I will soon to be followed by PARPA-II. 3  ESMF - Market Led Smallholder Development in the Zambezi Valley Project The purpose of the ESMF is to: * To establish clear procedures and methodologies for the environmental and social planning, review, approval and implementation of investments to be financed under the Project; * To specify appropriate roles and responsibilities, and outline the necessary reporting procedures, for managing and monitoring environmental and social concerns related to Project investments; * To determine the training, capacity building and technical assistance needed to successfully implement the provisions of the ESMF; * To establish the Project funding required to implement the ESMF requirements; and * To provide practical information resources for implementing the ESMF 4  ESMF - Market Led Smallholder Development in the Zambezi Valley Project 2. PROJECT DESCRIPTION 2.1. Background and Purpose The development objective of the Project is to increase the income of smallholder farmers in selected districts of the Zambezi Valley region of central Mozambique. Increased incomes will be achieved not only by direct support to smallholder groups and other supply chain participants, but also through the strengthening of local level capacity to undertake and manage service delivery within the context of the GoM's decentralization policy. The Global Environment Objective is to limit land degradation and to improve the ecosystem's resilience towards climate change. Key outcome indicators reflecting achievement of the Project development objective will be: the creation of social, physical and investment capital as well as associated market and support systems, which will facilitate an increase in average incomes of farmer groups. Increased incomes would arise from improved yields and reduced losses, increased labor productivity; the diversification of farming systems and improved market linkages, while the achievement of the global environment objective will be measured by: i) an increase of at least 20,000 ha under improved SLM or natural resource management practices in Project area by Project end; ii) a measurable increase in biodiversity or carbon sequestration in targeted Project sites vs. control sites through one or more of the following: (a) reappearance of native species, (b) increased carbon stocks, (c) reduced soil erosion, (d) reduced incidences of wild fires; iii) at least 3 predictive and basin specific hydrology-land cover-climate change scenarios for land use-land cover change impacts on hydrology under changing rainfall and evapotranspiration regimes; and (iv) increased use of drought-tolerant crops, fodder species and varieties, crop rotations to increase soil organic matter, reduce weeds, and conserve soil moisture by local land users. Progress in achieving environmental targets will be measured by remote sensing and field surveys in Project and control areas. An initial baseline beneficiary survey of almost 1,000 geo- referenced households, which will include control areas, will be completed prior to Project effectiveness. A second impact evaluation survey will be carried out prior to the mid-term review and a final impact survey prior to the completion of the Project. Similarly, remote sensing with appropriate ground truth surveys and a GIS system will be used to establish the baselines for the national agricultural and natural resource and the global environment indicators and outcomes. The Project will maintain both internal and external monitoring systems and conduct mid term and end of the Project evaluations. The Project will be implemented over a six year period in two phases across five districts within the Zambezi Valley region of Central Mozambique. The Project will start operations in the two adjacent districts; Mutarara, Tete Province and Morrumbala, Zambezia Province. Further three districts are proposed for inclusion during the second year of implementation. Preliminary selection of the remaining three districts has identified Mopeia in Zambezia province and Maringue and Chemba in Sofala Province, although these could be modified during the initial stage of implementation. The selection of districts- five over three provinces and under two phases are based on the following; (i) GOM selected the districts in the Project area and suggested working over two phases; (ii) working across provincial boundaries provides a wider variety of socio-economic and natural resource contexts in which to assess the Project approach; (iii) Project activities will be able to benefit from complementarity and potential synergies with other programs, already operating in the selected districts. 5  ESMF - Market Led Smallholder Development in the Zambezi Valley Project 2.2. Components of the Project The Market Led Smallholder Development in the Zambezi Valley Project is a Sector Investment Loan comprising an IDA Credit of US$20 million and a GEF grant of about US$5.5 million. The project objectives will be achieved through the implementation of three technical components and a fourth component dedicated to management, coordination and monitoring. The four components of the Project are: Component 1: Community Group Organization and Local Institutional Strengthening (Total: US$8.6 million; IDA: US$7.6 million; GEF: US$0.9 million) comprising: (a) community based organization capacity development; (b) rural financial services, and; (c) district capacity development. Expenditures under this component include consultancy services, training, goods and equipment and modest amount of civil works. Activities under this component lay the basic foundation for the sustainability of project intervention. Primary objective is to empower and build the social capital of the farmer groups, women's groups and supply chain participants in areas such as marketing, agribusiness development, and district agricultural staff. The empowerment of groups will ensure that district planning process has the participation of key stakeholders in the rural community. The vision for the farmer and savings and loans groups is that from small groups of 15-20 individuals, they will grow into apex organizations of community based organizations such as rural producer organizations and village savings groups. A group-based approach to smallholder farmer and supply chain participant outreach is dictated by the current lack of outreach capacity for the target group at district level, rendering the support of development activities through individual farmers unfeasible. Furthermore, the lengthy civil conflict which was at its most intense in the project area, and the major dislocation of population and abandonment of settlements which occurred as a result, have resulted in low levels of social coherence and collaboration. Given the low resource endowments of the vast majority of the target group, collaborative responses to development constraints and priorities is considered essential, and will require a significant increase in social capital. The component therefore will focus on 'empowerment', through support for the mobilization and strengthening of common interest groups, as well as on building capacity of local government and non- government organizations to sustain and contribute to the needs of such groups. NGOs (international and national) or other private sector providers will be contracted for assisting in mobilization of communities. GEF funds will be used to undertake and integrate participatory land use planning from the community to the district level in the five districts. This process will not only reinforce the institutional strengthening and capacity development at the district level funded under IDA, but also enhance the on-going participatory district planning process. This process will also contribute to establish the baseline for the rational sustainable land management (SLM) interventions and contribute to the project monitoring and evaluation (M&E). The establishment of savings and loans groups (SLGs) will be supported, with NGO intervention. SLGs, may evolve from the initial focus group activity or as part of other common interest groups. These groups are expected to eventually develop into local savings unions, or apex institutions. In addition, the project will promote and facilitate the expansion of financial institutions (that have adequate liquidity) into the project area, through the provision of technical 6  ESMvlF - Market Led Smallholder Development in the Zambezi Valley Project assistance and start up costs. The latter service will be provided so as to encourage financial institutions into the high risk rural areas. Other inputs will also include training and support services to providers, district level government agencies and financial institutions. The key output will be functioning smallholder farmer groups, SLGs which are able to define their own needs and priorities and participate effectively in district planning process and capacity among local institutions to support such groups. Component 2: Agricultural Production and Marketing Development (Total: US$6.4 million; IDA: US$3.9 million; GEF: US$2.5 million) comprising: (a) production (rainfed and irrigated) and post-harvest extension services; (b) agribusiness and market development, and; (c) studies, applied research and training. Expenditures under this component include minimal civil works, equipment, and incremental operating costs This component provides technical support for broad-based sustainable agricultural development. Technical assistance would be provided to agribusiness stakeholders involved in marketing and input supplies, traders and processors. Extensive awareness campaigns would be made available on sustainable land management issues, adaptive research, market information etc. It is recognized that group formation can not occur in isolation, and would need to be closely tied to common needs and priorities set by group members. It is recognized that the response to these needs and priorities will require technical validation. This would be provided both by the public and private sectors. Public extension staff will work with community based groups to improve production of crops and livestock. Demonstrations, applied research, awareness campaigns and outreach campaigns will provide impetus for the adoption of market driven technologies and practices. Additionally they will ensure that infrastructure needs are taken into account by influencing the district planning process. The private sector will be provided with technical assistance to improve input and output markets. Additionally, an enabling environment will be created to encourage private sector to participate actively in the rural areas. Additionally, technical support will be provided to facilitate the sustainable management of land and water resources through the adaptation of available "best bet" agroforestry, soil conservation and alternate energy sources. GEF incremental funding will be used to address and remove barriers for SLM and to assure that efficient and effective opportunities address global environmental benefits are available at the local level. Special attention will be given to improving and diversifying cropping systems to ensure resilience to climate variability, integrating agroforestry technologies, improving the efficiency of energy production and use, promoting the cultivation and economic use of native species and high value exotic cash crops. The key inputs under this component will be, education campaigns for rural stakeholders, demonstrations, farmer training, and applied research on marketing, active participation of private sector in agribusiness, and agroforestry techniques and natural resources management aspects. The key output will be groups actively engaged in the validation and adoption of improved technologies and entering into close links with other non-agricultural supply chain participants. Component 3: Community Agricultural and Environmental Investment Fund (Total: US$8.5 million; IDA: US$5.9 million; GEF: US$1.7 million; Beneficiaries: US$0.9) comprising the following windows: (a) agriculturally related infrastructure; (b) small-scale agricultural 7  ESMF - Market Led Smallholder Development in the Zambezi Valley Project investment, and; (c) sustainable land management. Expenditures under this component include civil works, consultancy services and matching grants. The Fund will operate under a demand driven approach linked with the participatory district planning process and would provide resources for identified priorities in agriculturally related infrastructure, small scale investment and improved land management. There are no formal financial institutions operating in the project area, and very few informal financial associations. In addition, district administrations have limited resources to develop and maintain infrastructure, especially those related for the support of agricultural production. Resources have been made available to districts in 2006 under the current decentralization efforts of GoM ($300,000 per annum), as well as through the Bank financed DPFP program. Given the limited infrastructure investment in recent decades and the lack of commercially-based financing, demand is high and existing resources are not expected to meet all needs. Current financing has been directed primarily to the reconstruction of public administration buildings, schools, health clinics and main roads - which do not necessarily provide direct support for agriculture. The key inputs under this component will be financial resources and associated technical assistance for appraising and implementing sub-projects. Key outputs will comprise of markets, roads leading to markets, agro-processing plants, aquaculture, irrigation systems, cattle dip tanks, etc. Component 4: Project Management, Coordination and Monitoring and Evaluation (Total: US$2.6 million; IDA: US$2.0 million; GEF: US$0.4 million; Govemrnment. US$0.2 million). Expenditures include consultancy and training and goods and equipment. This component will include technical supervision and coordination, work plan and reporting functions at district, provincial and national levels. The component will be congruent with the government's decentralization initiatives and will utilize existing public sector arrangements as far as possible. Additionally the existing inter-ministerial national and provincial steering committees established under DPFP will be also utilized for the project. In addition, two key technical positions staff will be established and filled; a District Facilitator for each district and a Field Management Advisor who will work across all five districts. Funds will be provided for intensive monitoring of the project. 2.3.Anticipated Sub-Project Types The types of Subprojects that may be financed by the Project are shown in Table I below. Table 1: Potential Sub projects Sector Sub-projects with potential Sub-projects with positive negative environmental impacts environmental impacts Water Supply * Construction of small dams or weirs * Small- scale irrigation systems 8  ESMF - Market Led Smallholder Development in the Zambezi Valley Project Transportation, * Rehabilitation of tertiary and secondary level roads * Rehabilitation/construction of tertiary and secondary level culverts and bridges Agriculture anzd * Small-Scale animal husbandry Markets * Small-scale aquaculture * Cattle dips * Community granaries * Agro-processingfacilities * Construction of markets Natural Resource * Planting of fast-growing * Anti-erosion interventions and Management woodlots for charcoal soilfertility restoration * Stream and river bank protection * Rangeland improvements 2.4. Subproject Activities Ineligible for Funding The following types of subprojects are not eligible for funding: * Subprojects that involve the significant conversion or degradation of critical natural habitats; * Subprojects in locations that are ecologically sensitive such as forests, wetlands, and other unique habitats; * Subprojects located in gazetted national parks, wildlife reserves or forest reserves; * Large dams as defined in OP 4.37 Safety of Dams; * Any Project that is classified as a Category A project by Mozambican Regulations (see Section 4) or by WB guidelines; * Religious infrastructure; * Acquisition of equipment for government services; * Administrative buildings; * Activities already covered by other sources of financing or are already included in other national, regional public development programs and where financing has been secured; * Purchase of mechanical equipment (e.g. trucks, tractors, etc.); * Growing or purchase of tobacco or drugs; and * Investment in bars or establishments serving alcohol. 2.5. Project Target Areas 2.5.1. Location The project will be implemented over a six year period in two phases across five districts and three provinces within the Zambezi Valley region of Central Mozambique. The project will start operations in the two adjacent districts; Mutarara, Tete Province and Morrumbala, Zambezia Province. A further three districts are proposed for inclusion during the second year of implementation. Preliminary selection of the remaining three districts has identified Mopeia in Zambezia province and Maringue and Chemba in Sofala Province, although these could be 9  ESMF - Market Led Smallholder Development in the Zambezi Valley Project modified during the initial stage of implementation (Figure 1). Project districts were identified based on agriculture potential and within the context. 1 Tote 4 Zan4dzIg.... L~~~~~rt 4. ' ;Z' "A~~~---- ) iSofalI '~-_ 'S.,', aorgel Distficis s ~ ~ ~ ~~ $' -t A Figure 1. Target districts in the onte of Mozambique The two Phase 1 districts of Mutarara (Tete Province) and Morrumbala (Zaimbezia Province) have a total population of almost 500,000 spread over 8 administrative posts and 21 localities (the latter being the smallest territorial division utilized by GOM). Population density is approximately 25 persons/kmi2, considerably higher than in the proposed Phase 2 districts of Mopeia (Zamnbezia) and Maringue and Chemba (both in Sofala Province). These districts have a total population of less than 250,000 and a population density of around 12 persons! km2. Overall, poverty rates throughout the project area vary from a high of 66% in Mutarara to a low of 45% in the two Sofala districts. Literacy rates are low, averaging only' 13% across the project area, while female headed households account for an average of 16% of all households, reaching a high of 28% in the Sofala districts. 2.5.2. Climate There are two distinct climatic seasons in the Project area: a hot rainy season from December to March and a cooler drier season from April to November (however rainfall is recorded in all 10  ESMF - Market Led Smallholder Development in the Zambezi Valley Project months of the year). Mean annual rainfall at Morrumbala town is 927 mm (see climate diagram Figure 2). Morrumbala - _ C Mean annual rainfall 927 mm Mean annual temperature 24.5'C 350 35 300 - 30 250 - 25 b200 - 20 e