Nepal - Power Development Project : environmental assessment (Vol. 3 of 7) : Nepal - Power Development Project : sectoral environmental assessment

E176 SA.'E:iD f.L.'-: C'Y Volume 3 ~F P N | 6E + t4 Le- _ :*-sson;L COC I _- FILE jCo'a1pnzJPnarre or x, LnuZr GR.QF ELW C.'Rg Aam P1c N P - PIE - z7531-)) NEPAL POW'ER DEVELOPMENT PROJECT POLICY FRAMEWORK FOR ENVIRONMENTAL IMPACT ASSESSMENT FOR PROJECTS UNDER THE POWER DEVELOPMENT FUND (including Process Guidance) Prepared by HIS MAJESTY'S GOVERNMENT OF NEPAL MINISTRY OF WA TER RESOURCES November 1999 FILE COPY  POLICY FRAMEWORK FOR ENVIRONMENTAL IMPACT ASSESSMENT FOR PROJECTS UNDER THE POWER DEVELOPMENT FUND (including Process Guidance) Table of Contents List of Abbreviations ii The Definition of Terrms iii Introduction - 1 Nepal's Legal Framework 2 W'orld Bank Requirements 3 Compatibility of HMGN and WN'orld Bank Requirements 4 PDF Process 5 The Five Steps of EIA Process 5 ATTACHMENT I Part A Generic Terrms of Reference for EIA 8 Part B ToR for Environmental reviews for Planninz, Construction and maintenance of Transmission Lines 14 ATTACHMENT II Socio-economic and Cultural Components of The EIA Process 18 ANINEX I Resettlement and Rehabilitation Policv Framework 22 (Principles and Objectives) ANNEX 2 Resetnlement and Rehabilitation Policy Framework 24 (Entitlement Policy) ANNEX 3 : Outline of Resettlement Action Plan (RAP) 27 ANNIEX 4 : Outline of Vulnerable Communities Development Plan (VCDP) 32 ANNEX 5 Tools for public infornation and consultation 35 C WEM"DF'Fmba99.doc  List of Abbreviations ACRP Acquisition, Compensation and Rehabilitation Plan BP Bank Policy (W'orld Bank) EDC Electri9ity Development Centre EIA Envi onffiental Impact Assessment EMP Environmental Management Plan GP Good Practices (WVorld Bank-) HMGN His Majesty's Govemment of Nepal IPDP Indigenous Peoples Development Plan (see VCDP) IEE Initial Environmental Examination MOPE - Ministry of Pop6lation and Environment MOWR Mlinistry of W ater Resources NEA Nepal Electricity AuLhoritv NEIAG93 National Environmental Impact Assessment Guidelines 1993 NGO Non Governmental Oreanization OD Operational Directives OP Operational Policy (WN'orld Bank) PAF Project Affected Familv PCP Public Consultation Process PDF Power Development Fund R& R Resettlement and Rehabilitation RAP Resettlement Action Plan ROW Right-of-Way S&R Screening and Rank}ing SD Social Development SPAF Seriously Project Affected Family ToR Terms of Reference VCDP Vulnerable Communities Development Plan WECS Water and Energy Commission Secretariat WRS Water Resources Sector ii ~~~~~C:\1PDF wtb99doc  The Definition of Terms a. Compensation means payment in cash or in kind of the replacement value of the acquired property. b. Compensation Fixation Commitfte means the committee established under Land Acquisition Ad, 1977 to determine the replacement value and the compensation rates for property acquired under the Act. c. Grievance Redress Committee means the committee established by HM1GN and/or the sub-project to hear tISe complaints or the grievances of PAFs or PAPs regarding resettlement, including acquisition of land, houses and other assets, and loss of livelihoods caused by the project. d. Land Acquisition means the process whereby a person is compelled by a public agency to alienate all or part of the land he/she owns or possesses, to the ownership and possession of that agency, for public purpose in return for a consideration. e. PAF means Project Affected Family, and consists of the members of a household, including elderly dependents and minor children (under 18 years of aoe) residing under one roof and operating as a single economic unit. who are adversely affected by the Project. or any of its components. M'ajor children. over 18 vears of age. shall be separately entitled to rehabilitation benefits. even if thev live "ith their parents but will not be eligible for separate housing or compensation for properties held by other members of their shared household. f. PAP means Project Affected Person, and includes any person or persons wvho, oD account of the execution of the project. or any of its components or sub-projects or parts thercof, would have their: (i) right or title in any house, land (including residential. agricultural and grazing land) or any other fixed or movable assets acquired or possessed. in full or in part, permanently or temporarily: or (ii) business, occupation, work, place of residence or habitat adversely affected; or (iii) standard of living adversely affected. g. Policy Framework refers to the overall Policy Framework for Environmental Impact Assessment, and Resettlement and Rehabilitation of Project Affected Families for all pow er ceneration, as well as transmission and distribution systems falling under the Powver Development Fund (PDF) Project. The Policy Framework describes the process and methods for assessing the environmental and social impacts including adverse impacts on, benefits to, and role of local com-munities in the Project, and the compensation, relocation and rehabilitation of people who have been adversely affected by the Project. h. RAP means the detailed resettlement action plans prepared for sub-projects,where the number SPAFs exceeds 25. i. Rehabilitation means the compensatory measures provided under the Policy Framework other than payment of the replacement value of acquired property. iii CA\ThM1'DF_nownba99.doc  j. Relocation means the physical relocation of PAFs from their pre-Project place of residence. k. Replacement Cost or Replacement Value (i) For agricultural land: It is the pre project market value of land of equal productive potential or use located in the vicinity of the affected land, plus the cost of land preparation to levels similar to those of the affected land, plus the cost of,any registratfon and transfer taxes; (ii) For land in urban areas: It is the pre-project market v'alue of land of equal size and use, with similar or improved public infrastructure facilities and services and located in the vicinity of the affected land, plus the cost of registration and transfer.a.xes; (iii) For houses and other structures: It is the market cost of the materials to build.a replacement strutture wvith an area and quality similar to or better than those of the affected structure, or to repair a partially affected structure, plus the cost of transporting building materials to the construction site . plus the cost of any labor and contractor's fees, plus the cost of an! recistration and transfer taxes. In determining the replacement cost, depreciation of the asset and the value of salvace materials are not taken into account, nor is the value of benefits to be derived from the project deducted from the valuation of an affected asset. 1. Resettlement means all the measures tak-en to mitigate any and all adverse' impacts of the Project on PAF's property and.or livelihoods, including compensation, relocation (where relevant), and rehabilitation. m. Right of Way Easement or ROW easement means the process whereby the owner or possessor of land is compelled to permit the continued use of a part of his land as a means of transit of persons or services. in return for a consideration. but where the ownership of the land remains unchanged. n. SPAF is a family who looses over 25 % of its total landholding or wvhose land is reduced to an uneconomic holding (less than 5.0 Katha). or wvho is being relocated. For determining the number of SPAF's acquisition of houses shall be treated separately. each house acquired being equivalent to one SPAF. o. Sub-project means each of the power generation or transmission and distribution schemes to be financed, wholly or in part, by the PDF. p. VCDP means the V'ulnerable Communities Development Plan for vulnerable groups including ethnic minorities and tribal groups. as wyell as other groups living below the poverty line, in the project impact area. iv C XMPDFPnav=ba"99Adoc  NEPAL POWER DEVELOPMENT PROJECT Policy Framework for Environmental Impact Assessment for Projects under the Power Development Fund (including Process Guidance) 1.1 Introduction: Projects eligible Aor funding from the Power Development Fund should be either: (i) a getration project in the range of 10 to 300 MW identified through the screening and ran;king exercise under the Medium Hydropowver Study' or b) NEA or private promoters using screening criteria acceptable to IDA or (ii) a generation project below 10 MW identified by NEA or private promoters using screening criteria acceptable to IDA; or (iii) an isolated rural pJower system sub-project or, (iv) a transmission and distribution project. Bach project will undergo an Environmental Impact Assessment (EIA) in compliance with NepaPs licensing requirements in accordance wvith the prevailing Environment Protection Act, 2053 (1997) and Environmental Protections Rules, 2054(1997) and if the (sub) project is to be funded from IDA resources it should also meet \W'orld Bank requirements2 as stated in this process guidance. Transmission projects will be subject to similar EIA requirements. The purpose of the EIA is to identify environmental and social consequences of the proposed sub-projects. in order to a) ensure the identification of potential environmental issues and social concerns early in the implementation of a proposed facility to incorporate necessary safeguards in project design, and determine appropriate mitigation and compensation measures: b) minimize risk-s to the proponent, c) avoid delays and extra costs wvhich may subsequentlI arise due to unanticipated environmental and social problems; d) ensure that the concems of residents and affected communities are addressed. and if required. plans are made for the resettlement and rehabilitation (R&:R) of those residinc in the selected sites for development; and e) identify the potential for maximizing environmental resources management and socio-economic benefits to local communities silthin the scope of the sub- project. 1.2 Coverage of EIA: The EIA should cover physical. biological, socio-economic and cultural issues that are likelv to arise during construction and operation activities as appropriate and wvill include, but not be limited to, an assessment of the environmental impacts relating to the: a) Physical, geological stability and geographical suitability, and public acceptability of the proposed facility and associated supporting infrastructure; b) construction activities: 1The Process carried out by the Medium Hydropower Study Project, implemented by the Nepal Electricity Authority under the World Bank financed Power Sector Efficiency Project It covers the hydropower projects of capacity ranging from 10 to 300 MW nation-wide. 2Projects funded by other donors will be expected to comply with their respective requirements, as well as Nepal's. I C C\TPDF rxvcwnb=9.doC  c) design, mitigation and compensation options to be employed; d) management control and operational practices to be employed; e) potential for accidents and failures to be foreseen and mitigated; f) monitoring and ensuring long term sustainability of sub-project; g) the socio-economic status of conmmunities residing in the project affected area; h) land use and land tenure in the project affected area, including the barrage/ dam site, reservoir, power s,ation, access road, transmission and distribution network, and ,ociated supporting infrastructure, as applicable; i) the human setteements in the project affected area; j) the livelihoods of persons affected by land acquisition and by the economic impact of the project on the surrounding area; k) mitigation measures to,,be employed to minimize losses and compensate, resettle and rehabilitate affected communities and restore livelihoods; l) the adverse social effects of a large influx of labor on local comnmunities, particularly on woomen and disadvantaged people; m) the positive benefits which wvould accrue to local communities from the proposed development: n) the possible role of the local community participating in. and contributing to project sustainability; and o) Decommissioning and rehabilitation activities. The Temis of Reference (ToR) for EIA. in accordance with the Environment Protection Regulations. 2054 (EPR97) will cover but not be limited to, the above listed concems depending upon the nature of the project. Additional concern or issues may be added as appropriate. 1.2.1 The EIA report wvill contain an Environmental MIanagement Plan (EN4P) which wvill incorporate Acquisition Compensation Rehabilitation Plan (ACRP) as wvell as Resettlement Action Plan (RAXP) or Vulnerable Community Development Plan (VCDP), where applicable. Nepal's Legal Framework 1.3 Leg-al Framework for EIA: An umbrella national-level Environment Act, viz. Environment Protection Act, 2053 (EPA97), received parliamentarv approval in September 1996 and was brought into force on June 24, 1997. The Act is under enforcement along wvith the Environment Protection Rules, 2054 (1997), which prescribe various legal measures against all potential sources of air, -water and land degradation adversely impacting the natural and social environments. A legally mandatory Initial Environmental Examination (IEE) or Environmental Impact Assessment (EIA) of development proposals in all sectors including that of water resources is one of the highlights of this legislation. The Regulation also prescribes a schedule of development proposals, for all relevant sectors, under two categories, one clearly requiring an IEE and another requiring a full scale EIA. The legislation clearly mentions that any proposal may undergo the EIA process in case the IEE study reconimends to do so. In addition, the legislation ensures public participation in different stages of the environmental assessment process. In view of these provision in the Regulation, the Ministry of Population and 2 CAThM?3PDF_ "bd99 doc  Environment has started a process of setting up a Task Force to build upon the recently revised National EIA Guidelines 1993 (NEIAG93) and thereby to formulate in- accord with the EPA97 and EPR97 a common guideline, which will basically cover the procedural aspects of carrying out an IEE or EIA. Once this common guidelines is approved by HMG/Nepal, it will supercede and replace all the sectoral EIA Guidelines, currently effective or under preparation. The scope of EIA as made ntandatory by the legislation, also covers socio- economic and cultural a;4ot, as one of the major environmental components to address the pertinent social concems on case by case approach. 1.4 Other provisions for environmental management of power projects in Nepal are currently set out in the following Afts and Regulations for the power sector: * HodropoweT Development Policy (1992) * WV ater. Resources Act (1992) * Electricity Act (1992) * Electricity Regulation (1993) * Land Acquisition Act (1977) Experience shows that the proposal to be operated in the forest and protected areas should duly consider the Forests Act. 1993 and the National Parks and Wildlife Conservation Act. 1973. World Bank Requirements 1.5 Requirements for EIA: Projects financed with IDA resources normallv need to comply wNith \World Bank Operational Policies. W'orld Bank OP 4.01 provides an indication of projects normally considered A and B. Thermal and Hydropower development and Danis and Reservoir projects are normally considered as Category "A" projects and as such require a full EA (EIA). Transmission projects can be Category A or B, depending on the anticipated severity of their impact. As an "A". transmission projects will require a full EIA. As a "B", they will only require a more moderate environmental analysis. The World Bank's OP and BP 17.5 mandates public information and consultation for such projects. 1.6 Other World Bankl Policies and Guidelines that need to be specially considered for the EIA of projects under the PDF are: * OP/BP/GP 4.01, Environmental Assessment3 * OP/BP/GP 4.02, Enviromental Action Plans * OP/BP/GP 4.04, Natural Habitats * OP 4.07, 'Water Resource Management * OP 4.37, Safety of Dams * Operational policies on Involuntary Resettlement ) 3 In general HMGN will follow the Bank's policies and procedures mentioned above. But in case of the Intemational Water Ways where bilateral agreements and understandings exist HMGN will deal this matter accordingly. 3 C:\ITPDF rvumbCs99.doc  1.7 Requirements for Social Impact Assessment (SIA): Each sub-project financed with IDA resources under the PDF will undergo a EIA, comprised of a Social Baseline and detailed Social Impact Studies including a census of affected persons and inventory of affected properties. WN'here an Acquisition, Compensation and Rehabilitation Plan (ACRP) is required, specific provisions will be made for mitigating losses and restoring livelihoods, and for ensuring the establishment of an independent grievance mechanisms. Should the total numberi4$PAFs for a (sub) project be 25 or greaterthe ACRP (which the W'orld Bank; refer to as RAP) will need to be cleared by the World Bank. Should the number of SPAFs be lesser than the above threshold, the ACRP (RAP) may be cleared by the borrower following the principles laid down in the policy frarnework. In either event, the borrowver shall be responsible -t ensure that resettlement outcomes, i.e. satisfactory relocation and restorati,on of livelihoods. are attained. In all cases if vulnerable people are affected by the sub-project (including ethnic minorities, tribals, or other particularly vulnerable croups). a \'ulnerable Communities Development Plan (VCDP) will need to be prepared and cleared by the Bank. in addition to the ACRP. The World Bank Policies and Guidelines that need to be complied with for the EIA of sub-projects under the PDF are O GD 4.20 Indigcnous Peoples * OD 4.30 Involuntary Resettlement Compatibility of HNIMGN and W 'orld Bank Requirements 1.8 EIA: The screening criteria in EPR97 has made it mandatory for electricity generating schemes above 5 MW (thermal projects above I MNW to undergo a full E1A, whereas, the lesser capacity projects require an IEE only. Therefore, when these lesser capacity projects are submitted for PDF financing. these would need to undergo a full EIA only if the IEE identifies serious adverse impacts and recommends for EIA study. In addition to land utilized for project construction activities, The Electricity Regulation 2033 B.S. (1993) prescribes a buffer zone around the transmission towers and transmission,distribution lines. The width of the buffer zone varies with the voltage but there being a prohibition on house construction and land utilization with in the buffer zone, this land also has be acquired for each sub project. 1.9 SIA: World Bank; OD 4.30 is generally consistent xvith the basic objectives of Nepal's Land Acquisition Act, 2053 (1977). Several gaps in Nepal's overall policy framework for resettlement and rehabilitation however need to be addressed.. The ToR for EIA, as provided by the EPR97, will accomrnmodate specific socio-cconomic issues in order to address the afore-mentioned gaps. The ToR wNill be based on the project location and the impacts on those local social, cultural and economic characteristics. 1.10 The IDA requirements will be covered under the EMP section of the ELA report following the format prescribed by the EPR97 and will incorporate, where necessary, a VCDP and an acceptable Resettlement and Rehabilitation Action Plan where involuntary resettlement of 25 or more families occurs. 4 CA\TNPDF ocweber99 doc  PDF Process 1.11 EIA Process: The following process mentioned herein would meet both Nepal and IDA requirements. EDC is the licensing agency on behalf of HMGN's Ministry of Water Resources (MOWR). The project proponent is responsible for preparing the EIA and submitting it to EDC. The EDC througk MOWR will forward EIA report to the Ministry of Population and Enyionment (MOPE), who on the basis of the EPA97 has responsibility for overseeing the EIA report including the process. The MOPE will provide both general and specific TOR and final clearances for the EIA reports with IDA approval if so required. Although measures ma) vary between projects, the five-step EIA process outlined below presuppose, that the projects have undergone the Screening and Rank-ing (S&BR) process to avoid projects with the most undesirable impacts. The Five Steps of the EIA Process Step 1: Scoping and Produiction of Terms of Reference As per the provisions of the EPR 1997, and on information obtained through various sources including the Screening and Ranking process. the proponent shall translate the generic ToR for the EIA (see Attachment I) into a site specific one. A non- technical v ersion. in Nepali and'or local language. should be disseminated and discussed with the local communitv representatives, including NGOs. and other relevant members of civil society. The proponent should conduct an assessment of environmental and social impacts using rapid appraisal techniques in consultation with them. Consultations with communities shall be guided by the Public Consultation Process outlined in paragraph 1.12 below. Followvinr these discussions the proponent should revise the terms