People's Republic of China: Inner Mongolia Sustainable Cross-Border

Draft Initial Environmental Examination

September 2020

People’s Republic of China: Inner Mongolia Sustainable Cross-Border Development Investment Program

Prepared by the Inner Mongolia Autonomous Regional Government for the Asian Development Bank

CURRENCY EQUIVALENTS (as of 25 August 2020)

Currency unit – yuan (CNY) CNY1.00 = $6.9196 $1.00 = €0.8483 €1.00 = $1.1788

ABBREVIATIONS

ADB – Asian Development Bank AP – Affected person AQG – Air quality guideline BCP – Border crossing point BOD5 – 5-day biochemical oxygen demand CAREC – Central Asian Regional Economic Cooperation CNY – Chinese Yuan COD – Chemical oxygen demand CRVA – Climate risk and vulnerability assessment CSC – Construction Supervision Company DRC – Development and Reform Commission DO – Dissolved oxygen EA – Executing agency EARF – Environmental Assessment Review Framework ECZ – Economic cooperation zone EHS – Environment, health and safety EIA – Environmental impact assessment EIR – Environmental impact report EIRF – Environmental impact registration form EIT – Environmental impact table EMP – Environmental management plan EMR – Environmental monitoring report EMA – Environmental Monitoring Agency EMU – Environmental Monitoring Unit EEB – Ecology and Environment Bureau EED – Ecology and Environment Department ESE – Environmental supervision engineer ESMS – Environmental and social management system arrangement FIL – Financial intermediation loan FI – Financial intermediary FSR – Feasibility study report GDP – Gross domestic product GRM – Grievance redress mechanism IMAR – Inner Mongolia Autonomous Region IA – Implementing agency IDOF – Inner Mongolia Autonomous Region Department of Finance IDRC – Inner Mongolia Autonomous Region Development and Reform Commission IEE – initial environmental examination IMARG – Inner Mongolia Autonomous Region Government IPMO – Inner Mongolia Autonomous Region project management office LAR – Land acquisition and resettlement

PIC-ES – Project implementation consultant - environment specialist LPMO – Local project management office MEE – Ministry of Ecology and Environment MEP – Ministry of Environmental Protection MFF – multi-tranche financing facility MOF – Ministry of Finance MPMO – municipal project management office MSW – Municipal solid waste MU – Chinese land unit (1 ha = 15 mu) N – Nitrogen NH3-N – Ammonia nitrogen NO2 – Nitrogen dioxide NOx – Nitrogen oxides O&M – Operation and maintenance P – Phosphorus PAM – Polyacrylamide PCR – Project completion report pH – A measure of acidity and alkalinity PIC – project implementation consultant PIE – Project implementation entity PIU – Project implementing unit PLG – Project leading group PM2.5 – Particulate matter with diameter ≤ 2.5 micrometers PM10 – Particulate matter with diameter ≤ 10 micrometers PMO – Project management office PPE – Personal protective equipment PPMS – project performance management system PRC – People’s Republic of China RCI – Regional cooperation and integration REA – Rapid environmental assessment RP – Resettlement plan SME – Small and medium-sized enterprise SO2 – Sulfur dioxide SPS – Safeguard policy statement SS – Suspended solid TOR – Terms of reference TP – Total phosphorus TRTA – Project Transaction Technical Assistance TSP – Total suspended particulate VOC – Volatile organic compounds WBG – World Bank Group WHO – World Health Organization WWTP – Wastewater treatment plant

WEIGHTS AND MEASURES As – Arsenic Cd – Cadmium cm – Centimeter CO2 – Carbon Dioxide Cl- Chloride dB(A) – A-weighted sound pressure level in decibels

DO – Dissolved Oxygen F- – Fluoride kg – Kilogram km – Kilometer kWh – Kilowatt Hour Leq – Equivalent Continuous Noise Level m – Meter m/s – Meters per Second m2 – Square Meters m³ – Cubic Meters mg/l – Milligrams per Liter mg/m3 – Milligrams per Cubic Meter µg/m3 – Micrograms per Cubic Meter NOx – Nitrogen Oxides oC – Degrees Celsius O3 – Ozone pH – A measure of the acidity or alkalinity of a solution PM – Particulate Matter PM10 – Particulate Matter smaller than 10 micrometers PM2.5 – Particulate Matter smaller than 2.5 micrometers SO2 – Sulfur Dioxide TN – Total Nitrogen TSP – Total Suspended Particulate TP – Total Phosphorus

NOTE In this report, “€” refers to Euros.

This initial environmental examination is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “terms of use” section of the ADB website. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

TABLE OF CONTENTS EXECUTIVE SUMMARY ...... 1 A. Introduction ...... 1 B. Project Description ...... 1 C. Potential Environmental Impacts and Mitigation Measures ...... 4 D. Environmental Management Plan ...... 10 E. Information Disclosure and Public Consultation ...... 11 F. Grievance Redress Mechanism...... 12 G. Alternative Analysis ...... 12 H. Project Risks and Key Assurances ...... 13 I. Overall Conclusion ...... 13 I. INTRODUCTION...... 14 II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK ...... 15 A. Legal Framework of the PRC ...... 15 B. Applicable ADB Polices and World Bank’s EHS Guidelines ...... 18 C. International Agreements ...... 19 D. Comparison between the PRC and International Standards ...... 20 E. Assessment Standards for Project Construction and Operation ...... 22 F. Project Environmental Administrative Framework...... 28 G. Relevant Environmental Laws and Standards of Mongolia ...... 29 III. DESCRIPTION OF THE PROJECT ...... 36 A. Introduction ...... 36 B. Project Impact and Outcome ...... 36 C. Project Scope ...... 37 D. Due Diligence for Associated and Existing Facilities...... 47 IV. DESCRIPTION OF THE ENVIRONMENT ...... 53 A. Location and Physical Setting ...... 53 B. Environmental Quality ...... 64 C. ECOLOGICAL RESOURCES AND ENVIRONMENT ...... 74 D. SOCIO- ECONOMIC CONDITIONS ...... 76 E. PHYSICAL CULTURAL RESOURCES (PCRs) ...... 77 V. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES ...... 79 A. Project Area of Influence and Sensitive Receptors ...... 79 B. Impacts and mitigation measures during Pre-construction Phase ...... 86 C. Construction Phase - Impact and Mitigation Measures ...... 88 D. Operational Phase - Impact and Mitigation Measures ...... 101 E. Cumulative, Indirect and Induce Impacts ...... 116 VI. ANALYSIS OF ALTERNATIVES ...... 117 A. No Project Alternative ...... 117 B. Alternatives Considered ...... 118 C. Overall Alternative Analysis ...... 119 VII. INFORMATION DISCLOSURE AND CONSULTATIONS...... 120 A. PRC and ADB Requirements for Information Disclosure and Public Consultation 120

B. Information Disclosure ...... 121 C. Questionnaire Survey ...... 125 D. Future Plans for Public Participation ...... 131 VIII. GRIEVANCE REDRESS MECHANISM ...... 133 A. Current Practice ...... 133 B. Proposed Grievance Redress Mechanism ...... 134 C. Types of Grievances Expected ...... 135 D. GRM Steps and Timeframe ...... 135 E. Disclosure of the Grievance Process ...... 136 IX. ENVIRONMENTAL MANAGEMENT PLAN ...... 137 A. Objectives ...... 137 B. Institutional Arrangements and Responsibilities for EMP Implementation ..... 137 C. Inspection, Monitoring and Reporting ...... 139 X. CONCLUSION AND RECOMMENDATIONS ...... 140 A. Risks and Assurances ...... 140 B. Overall Conclusion ...... 140 Appendix 1 Environmental Management Plan (EMP) ...... 1 CONTENTS ...... 2 A. Introduction ...... 3 B. Institutional Arrangements and Responsibilities for EMP Implementation ...... 3 C. Summary of Potential Impacts and Mitigation Measures ...... 9 D. Environmental Monitoring, Inspection and Reporting ...... 21 E. Institutional Capacity Building and Training ...... 26 F. Consultation, Participation and Information Disclosure ...... 28 G. Grievance Redress Mechanism...... 29 H. Cost Estimates ...... 32 I. Mechanisms for Feedback and Adjustment ...... 33 J. Environmental Contract Clauses for Inclusion into Tender Documents and Civil Works Contracts ...... 33

EXECUTIVE SUMMARY

A. Introduction

1 This is an initial environmental examination (IEE) prepared for Tranche 1 of the proposed Multitranche Financing Facility (the MFF) for Inners Mongolia Sustainable Cross-Border Development Investment Program (Investment Program) in Inner Mongolia Autonomous Region (IMAR) of the People’s Republic of China (PRC). The IEE was prepared in accordance with Asian Development Bank’s (ADB’s) Safeguard Policy Statement (SPS, 2009).

2 The Investment Program is designed to support the participation of IMAR in regional cooperation and integration (RCI), especially the Central Asia Regional Economic Cooperation (CAREC) Program, with a focus on economic corridor development. The geographical areas to be covered by the whole Investment Program include: (1) Erenhot Municipality; (2) Darhan Muminggan United Banner (Damaoqi County) and Qingshan District in Baotou Municipality, (3) Arxan City in Xing’an League (Xing’an Municipality); (4) Alxa Left Banner (Azuoqi County) in Alxa League (Alxa Municipality); (5) Bayannur Municipality; and (6) small and medium-sized enterprises (SMEs)1 located in IMAR through financial intermediaries (FIs).

3 This IEE assessed the investment loan subprojects under Tranche 1, which are geographically located in two municipalities of:

i. Erenhot Municipality; and ii. Baotou Municipality (with project components in Mandula Port, Damaoqi County and Qingshan District of Baotou Municipality).

B. Project Description

4 Tranche 1 of the Investment Program covers the following subprojects:

⚫ Subproject 1: Inner Mongolia Sustainable Cross-Border Development Investment Program in Erenhot Municipality. ⚫ Subproject 2: Inner Mongolia Sustainable Cross-Border Development Investment Program in Mandula Port of Baotou Municipality ⚫ Subproject 3: Establishment of Quarantine Station in Mandula Port, Expansion of Stud Sheep Breeding Bases and Sheep Industry Comprehensive Development in Baotou Municipality. ⚫ Subproject 4: SMEs in Cross Border Businesses Expansion in IMAR. ⚫ Subproject 5: Project Management and Institutional Capacity Strengthening

5 More details of project information on each subproject are provided as follows:

Subproject 1: Inner Mongolia Sustainable Cross-Border Development Investment Program in Erenhot.

6 Erenhot is a county-level city of the Xilin Gol League in Inner Mongolia Autonomous Region (IMAR). It is located in the Gobi Desert along the PRC-Mongolian border, across from the Mongolian town of Zamyn-Uud. The Erenhot highway towards the port at the border has

1 The classification of SMEs is defined in Statistical Methods on Classification of Micro, Small, Medium, and Large-Sized Enterprises, which was enclosed by National Bureau of Statistics, PRC on 28 December 2017.

been operated since 1992, but it has been used for both passenger and goods transport. The infrastructure and inspection conditions of the port area have been outdated since then. To modernize the Erenhot highway port, the IMAR government carried out expansion works on the highway in July 2000, which greatly improved the efficiency of custom clearance in the port. An agreement was signed on 4 June 2019 between the PRC and Mongolia for constructing the Erenhot-Zamyn Uud Economic Cooperation Zone (ECZ) near the border. 2 Based on the agreement, both sides will further (i) promote the economic cooperations between the PRC and Mongolia; (ii) facilitate the trade, investment and personnel exchanges; (iii) push ahead industrial cooperation between the two countries; (iv) accelerate the regional development of border areas of the two countries; and (v) enhance the economic and social benefits to the border areas and people of the two countries.

7 The purpose of Subproject 1 is to establish an inspection area in the PRC-Mongolian Erenhot-Zamyn Uud ECZ, and improve the living conditions of residents in local port areas and in towns on the Mongolian side of the border. This subproject includes the following five components:

i. Component 1: Inspection Area Construction for the PRC-Mongolian Erenhot- Zamyn Uud ECZ, including (1) construction of the inspection area; and (2) establishment of a smart port management platform; (3) construction of a cross border economic cooperation center; (4) establishment of a fencing, alarming and monitoring system in the ECZ; and (5) construction of a heating pipeline network using clean energy in the ECZ; ii. Component 2: Ecological Restoration for the PRC-Mongolian Erenhot-Zamyn Uud ECZ, including (1) construction of a ecological protection greenbelt along the central axis, which includes reclaimed water storage, irrigation facilities and landscape lighting; and (2) construction of a ecological protection greenbelt along roadsides, including reclaimed water storage and irrigation facilities; iii. Component 3: Waste Collection and Transfer Stations, and Sanitation Intelligent Cloud Platform for the ECZ, including (1) construction of one waste collection and transfer station; (2) procurement of supporting facilities/equipment; and (3) establishment of a sanitation intelligent cloud platform; iv. Component 4: Upgrading Medical Equipment for the Erenhot International Traditional Chinese and Mongolia Medicine Hospital (PRC-Mongolia International Hospital in Erenhot), including the procurement of 50 sets of medical equipment and facilities; v. Component 5: Institutional capacity building and strengthening.

8 The Erenhot Municipal Government (EMG) is the implementing agency for this subproject. The Erenhot municipal project management office (EPMO) has been established under the Erenhot DRC to carry out the overall coordination and supervision of subproject preparation and implementation at its level. Erenhot Yixin Urban & Rural Development and Construction and Asset Management Co., Ltd (Yixin) has been assigned to act as the PIE for Subproject 1. A project implementing unit (PIU) has been established inside the PIE to carry out the daily implementation of this subproject.

Subproject 2: Inner Mongolia Sustainable Cross-Border Development Investment Program in Mandula Port.

9 Located in Damaoqi Banner (County) in Baotou Municipality, the Mandula Highway Port

2 http://english.mofcom.gov.cn/article/newsrelease/significantnews/201906/20190602870682.shtml.

has been operational since 1992. As the only inland port that can be opened all year round in the Midwest IMAR, the Mandula Port plays an important role in the country’s Belt and Road Initiative, especially in trade with Mongolia and Russia.

10 The purpose of this subproject is to upgrade the Mandula Port International Highway Logistics Park, improve the connectivity in border areas and enhance the service capacity for trade promotion. This subproject includes the following four components:

i. Component 1: Expansion of port freight passage roads; ii. Component 2: Construction of a service area in the International Highway Logistic Park; iii. Component 3: Construction of a customs supervision center in the International Highway Logistic Park; and iv. Component 4: Institutional capacity building and strengthening.

11 The Baotou Municipal Government (BMG) is the implementing agency (IA) for this subproject. The Baotou municipal project management office (BPMO) is yet to be established under the Baotou DRC to carry out the overall coordination and supervision of subproject preparation and implementation at its level. Damaoqi Pine Boolean Property Service Co., Ltd (Songbuer) has been assigned to act as the PIE for Subproject 2.

Subproject 3: Establishment of Quarantine Station in Mandula Port, Upgrading of Stud Sheep Breeding Bases and Sheep Industry Comprehensive Development

12 Located in Tuyouqi County, Damaoqi County and Guyang County in Baotou, this subproject aims to increase the sheep production capacity by upgrading stud sheep breeding bases and to improve the product quality by adopting the embryo transplantation technology. The subproject will also act as a pilot poverty reduction and income generation project for small- scale herders and low-income farmers. This subproject includes the following seven components:

i. Component 1: Upgrading of stud sheep breeding bases; ii. Component 2: Construction of a quarantine station in the Mandula Port; iii. Component 3: Upgrading of five sheep farming bases; iv. Component 4: Establishment of a product tracing and management system; v. Component 5: Establishment of a Poverty Alleviation Program; vi. Component 6: Construction of a sheep slaughtering, processing and logistic facility; and vii. Component 7: Project management and capacity building.

13 The Baotou Municipal Government (BMG) is the implementing agency for this subproject, and Inner Mongolia Xiao Wei Yang Stock Raising Sciences and Technologies Co., Ltd (Xiaoweiyang), a private animal husbandry enterprise registered in Baotou in 2001, will be the PIE to carry out the daily implementation of this subproject. A PIU has been established inside the company to carry out the overall coordination and supervision of subproject preparation and implementation.

Subproject 4: SMEs in Cross Border Businesses Expansion in IMAR

14 Many of the SMEs in the border areas of the PRC and Mongolia are confronted with difficulties in accessing financing, which has been a main constraint for growing and improving

their businesses. The SME financing component under Tranche 1 of the Investment Program will provide financing to selected SMEs in IMAR, especially in Alxa, Bayannur, Baotou, Erenhot, and Xiang’an municipalities, through financial intermediaries (FIs) by using the financial intermediation loan (FIL) modality. The financing provided is expected to enable the qualified SMEs to gain access to competitively priced, medium to long term loans in order to fund their value addition businesses and increase the profitability of their businesses. The financing will also help increase the productivity of the cities and counties in which the SMEs operate. The first tranche loan for the SME financing is at the amount of €18.20 million (equivalent to $20.00 million).

15 A number of measures have been adopted in designing this subproject to address the financing barriers for SMEs in the border areas. Accordingly, the FIL modality was chosen to (i) allow multiple rollovers of the ADB loan to provide larger investments for SMEs over the loan tenor; (ii) build knowledge and capacity of the IMAR government and domestic financial institutions in risk assessment and management of the SME lending; (iii) reduce transactional complexities and costs by gaining familiarity and experience by both the IPMO and financial intermediaries through the subproject implementation; and (iv) enhance the governance and safeguard compliance for the SME investments beyond the first tranche investment subprojects.

16 The FIs in Tranche 1 are Bank of Inner Mongolia (BOIM) and other FIs to be selected by ADB and the IMARG during the implementation period. The FIL will be used to finance SMEs in cross border trade in the sectors of agribusiness, logistics, manufacturing, and border tourism in IMAR. An ESMS document is prepared for the FIs in accordance with ADB SPS 2009. This ESMS will be maintained and implemented by FIs as part of the overall management system to comply with the relevant PRC laws/regulations and ADB SPS 2009 requirements. The ESMS will be applied to all the subprojects supported by the FIs using (i) the ADB loan proceeds in the initial batch of subprojects; and (ii) the revolving fund established with reflows from the initial batch of subprojects.

Subproject 5: Institutional capacity building and strengthening

17 According to the due diligence and assessment carried out by the TRTA team, the Tranche 1 project has “substantial” risk in financial management due to the lack of familiarity with ADB financial management, disbursement procedures and requirements by the implementing agencies and PIEs. The procurement risk assessment concluded that the Tranche 1 project has a “medium” risk rating due to the lack of familiarity with ADB’s procurement requirements.

18 The institutional capacity assessment also indicates that the implementing agencies and PIEs lack the ADB project experiences and are short in proper staff who are the familiar with the ADB procedures and requirements. Mitigation measures that will be taken to address such risks include, but are not limited to: (1) recruit project implementation consultants (PICs) to facilitate the project implementation; (2) provide extensive training, workshop and seminars to strengthen the project management and institutional capacity; (3) engage a procurement agency with good English skills and proper experiences in World Bank/ADB financed projects; and (4) recruit qualified professional staff in the PIEs to improve human resources capacity, including financial accountant, procurement staff and engineers.

19 Institutional Arrangement. The IPMO will be responsible for implementing all the activities that are related to the project management and capacity building. The IPMO will also carry out the overall coordination and supervision of project preparation and implementation.

C. Potential Environmental Impacts and Mitigation Measures

20 No cultural heritage or archaeological sites are existing within 5 km of the project areas.

Based on the site visits, the nearest specially protected area to the project sites is the Erenhot Regional Dinosaur Fossil Reserve, which is about 10 km away the Erenhot Subproject location. There will be no impact to the protected area from project construction activities. The subproject sites are located at developed industrial areas and residential areas. Natural flora within the subproject areas is limited and there are no known ecological and/or sensitive resources in or near the subproject sites.

21 There are no documented rare, endangered, or protected flora or fauna species, or critical habitats, in or near the construction sites of the IMAR Tranche 1 subprojects. Affected vegetation and plants comprise widespread species. Most existing vegetation is secondary and planted; and the potential impacts from construction activities are short-term, temporary, small- scale and reversible.

22 As groundwater in the project areas of influence is generally deep, no major impacts on groundwater resources are anticipated during both the construction or operational phases of the roads and auxiliary facilities. No water supply wells/hand pumps are located in the areas of potential impact by the subprojects.

23 The scope of the project works will create some social impacts. To meet the needs for skilled and unskilled workers, the project construction will provide employment opportunities for local people, which can benefit the surrounding communities. Opportunities also arise for material suppliers and small-scale businesses that cater for the new development. The potential social impacts will be managed as follows: (i) local hiring will be given priority to avoid social conflicts; (ii) the project scale is not expected to cause large population influx to the project areas and will have limited impacts on the local municipal services; and (iii) Education of construction workers will be conducted to minimize social disturbance and cultural conflict.

24 The concerns over the community safety of the proposed roads have been thoroughly examined. All roads have separate pedestrian sidewalks. Pedestrian-priority traffic lights, crosswalks (zebra lines) will be established at all intersections. Mitigation measures related to the road operation and traffic safety have been developed and included in the environmental management plan (EMP).

Construction Phase

25 The potential environmental impacts during construction are mainly associated with fugitive dust, construction noise, soil erosion, runoff, solid waste and potential health and safety risks to workers and communities.

26 The severity of these potential impacts was assessed in relation to the baseline environment and sensitive receptors. The results of the IEE indicate that the environmental impacts of construction dust, noise, erosion, local disruption to traffic and communities are short-term and manageable in nature. The construction activities will not impact critical habitats, protected flora or fauna, or physical cultural resources. The construction-related impacts will be addressed by stringent site management and procedural provisions specified in the EMP. Environmental protection clauses will be included in the contracts for civil works to ensure that contractors are aware of and committed to implementing environmental mitigation requirements associated with the works.

Operational Phase

27 Upon completion of construction works, the proposed project facilities will undergo the operational stage, which will create a demand for consumption of natural resources and municipal waste collection/treatment services, such as the need for water supply, electricity supply, heating, solid waste collection, wastewater treatment, etc. Since the proposed Tranche 1 subprojects of the Investment Program are mainly located in two municipalities (Erenhot and Baotou Municipalities), such associated needs by the Tranche 1 subprojects for energy, water and city services are covered by the two municipalities.

28 The annual consumption of municipal water supply by Subproject 1 is estimated to be 0.192 million m3. Erenhot Municipality currently has the Qiharigetu water plant that provides an annual water supply up to 6.695 million m3 to Erenhot. In 2018, the annual domestic water consumption by Erenhot Municipality was 5.512 million m3, which shows that the Qiharigetu water plant has an extra capacity of 1.183 million m3 per year of water supply to Erenhot , which is sufficient to meet the water demand of 0.192 million m3 per year by the Erenhot subproject.

29 The daily consumption of municipal water supply by Subproject 2 is estimated to be 189 m3. Mandula Port currently has a water supply capacity of 1,500 m3 per day. In 2018, the domestic water consumption by Mandula Port was about 300 m3 per day. This indicates that Mandula Port has an adequate water supply capacity to meet the water demand by Subproject 2 of Tranche 1 in Mandula. The consumption of reclaimed water by Subproject 2 of Tranche 1 is estimated to be 62 m3 per day. Wastewater generated by Subproject 2 will be 133 m3/d and will all be treated into reclaimed water, which indicates that the demand for reclaimed water by Subproject 2 can be met.

30 The source of water supply during operation of the subproject components under Subproject 3 will be from the city water supply pipelines operated by Baotou Municipality. The component 1 and component 3 of Subproject 3 will introduce a new type of sheep, Australian White Sheep, for breeding operation to replace the existing local types of sheep in these sheep breeding bases. Since the new type of Australian White Sheep will not create additional water demand than the existing local sheep in the breeding bases, the proposed Subproject 3 on sheep breeding will not require more water than what is currently consumed. The water demand for sheep breeding in the subproject areas will not change and an additional water supply capacity by Baotou Municipality is not necessary to meet the water supply need of the project.

31 Apart from the increased demand for natural resources, key environmental issues associated with the operation of the project facilities include such issues as vehicle emission, traffic noise, storm-water runoff pollution, wastewater pollution control, traffic safety and the risk of hazardous spills.

32 No major environmental impacts are anticipated during the operation of Subproject 1 and Subproject 2 on urban infrastructure development in Erenhot and Baotou Municipalities. The project buildings and facilities will create certain levels of emission, which can easily be managed by integrating the new buildings with the existing or planned municipal services on water supply, municipal solid waste (MSW) disposal, and wastewater collection, treatment and discharge.

33 The noise level from the project facilities was predicted to meet the national noise limits. Upon completion of the construction works, the project areas will be mostly greened with trees and grasses. They will also be protected with road works such as geogrid, masonry stone retaining walls and concrete drainage ditches. Soil erosion due to operation of the project facilities is anticipated to be minimal. The potential operational impacts are expected to be minimal through appropriate design and implementation of the mitigation measures.

34 Component 2 on the Ecological Restoration for the PRC-Mongolian Erenhot-Zamyn Uud ECZ component under Subproject 1 involves afforestation and greening for constructing the greenbelts. Only local plant species will be used for planting as specified in the IEE and EMP. A drip irrigation system with smart features of automatic flow control through real-time monitoring of soil water content will be installed in the project. The drip irrigation system uses reclaimed water to promote water resource conservation, allows water to drip slowly to the root zone through a network of valves, pipes, tubing, and emitters to minimize the water loss due to evaporation. The system is one of the most advanced technologies for water saving irrigation. The monitoring and control can also be operated through an APP installed on mobile phones and/or notebook computers.

35 Medical wastes from the Erenhot International Traditional Chinese and Mongolia Medicine Hospital in Subproject 1 will be collected, sorted and stored in special containers at a temporal medical waste storage site. The medical waste will then be collected and transferred by a certificated company and incinerated in the existing Erenhot Medical Waste Incineration Plant. Relevant management and mitigation measures have been specified in the EMP.

36 A new inspection area will be constructed at the PRC-Mongolian Erenhot-Zamyn Uud ECZ, and the International Highway Logistics Park at the Mandula Port will be upgraded to improve the connectivity in border areas and enhance the port service capacity. For the current cross-border trading of animal, plant and food originated products, the PRC inspection and quality control standards are already applied to goods imported and exported. The project will further improve the quality standards through newly constructed port inspection building, facilities, and equipment.

37 There are no surface water bodies (lakes or rivers) near the project sites. There are no endangered, endemic or migratory species near the project sites. Wildlife around the project sites is minimal and there is no evidence of human trafficking. The critical wildlife habitat is located in protected areas that are far (more than 10 km) away from the project areas, and will not be affected by the project;

38 The types of the SMEs to be financed in Tranche 1 of the Investment Program are in the agribusiness, logistics, manufacturing, and border tourism sectors. An ESMS document has been prepared for the SMEs to guide the sub-borrowers and FI banks to meet the requirements of ADB SPS. IEEs prepared for subprojects under the FIs will be disclosed at the ADB website.

39 The component of Expansion of Stud Sheep Breeding Bases and Mutton Industry Comprehensive Development in Subproject 3 involves the sheep breeding. The types of sheep to be bred in the project is Australian White Sheep, not the mountain goat. The company of Xiaoweiyang is the PIE for this component. To ensure the food safety, the Xiaoweiyang company will provide high quality rams and ewes to household farmers for breeding, and then purchase back the lambs (3-6 months old) from the farmers. The lambs will be bred in the five breeding bases and slaughtered/processed in a centralized slaughtering and processing plant before the meat products are released to the market to ensure and secure the food safety by following PRC’s laws and regulations. In the process of sheep slaughtering, humane treatment of animals will be enforced through the application of the electric shocking method to make the animals faint at a step prior to entering the slaughtering house.

40 The component on waste collection and transfer Station construction under Subproject 1 involves the solid waste collection and transfer. The solid waste collected will be transferred to the existing Erenhot landfill for treatment and disposal.

41 Due diligence has been conducted to associated and existing facilities to the project: This includes the Erenhot Wastewater treatment plant (WWTP) as an associated facility, which has a reclaimed water supply capacity of 12,500 m3/d and will provide reclaimed water for

landscaping irrigation in Components 1 and 2 under Subproject 1 on inspection area construction and greenbelt development in the Erenhot-Zamyn Uud ECZ and border crossing point (BCP). Due diligence has also been carried out on the 5-existing sheep farming bases, which will be upgraded in this project and on the Erenhot International traditional Chinese and Mongolian Medicine Hospital, which will be expanded and upgraded under Tranche 1.

42 The proposed subprojects that are related to cross-border trading at the two Municipalities of Erenhot and Baotou under Tranche 1 have the following characteristics:

⚫ The PRC-Mongolian Erenhot-Zamin Uud ECZ in Erenhot is under planning and will establish an environmental management system (EMS). ⚫ At the Erenhot port, the major imported goods include iron ore, copper ore, pulp, coal, mineral products, timber, beef, and horse/donkey meat. The major exported goods include cement; chemicals; machinery / electrical; metals; petroleum, asphalt, rice; food products, stone / glass; tubes and pipes; and vehicles for goods transport. ⚫ At the Mandula Port, there is no timber trade. The major imported goods include coal and iron ore. The exported goods include construction materials and mechanical equipment. ⚫ The goods imported to PRC from Mongolia are mainly related to raw materials for industrial use and economic development, whereas the goods imported by Mongolia from the PRC are mainly used for domestic consumption by residents. ⚫ PRC currently does not allow importing artiodactyls, hogs, wild boars, poultry from Mongolia effective August 26, 2019.

43 Prohibited and restricted goods by the Government of Mongolia (GOM) for importing and exporting are shown below:

Table 1: Prohibited Goods by the GOM for Importing and Exporting

No. Description of Goods Import/Export Ozone depleting substances without relevant permits or that are 1 Import prohibited Narcotic drugs, narcotic plants and psychotropic substances without 2 Import, export, transit relevant permits Tree plantations, shrubbery and seedlings except for research and 3 Import experiment purposes 4 All kinds of advertisement materials for cigarettes Import, export, transit 5 Advertisement materials for alcoholic beverages Import, export, transit Toxic and hazardous chemicals and substances without relevant 6 Import, export, transit permits or prohibited to be used in Mongolia 7 Hazardous waste for the purposes of use, storage and destruction Import 8 All kinds of plastic bags of thickness under 0.025 mm Import 9 Nuclear materials designed for weapons Import, export, transit Nuclear materials, x-ray tools, equipment and technology without 10 Import, export, transit proper permit or prohibited by Mongolian laws and legislations 11 Counterfeit medications Import Pharmaceuticals, medical appliances, biologically active substances 12 Import without proper permit Human blood, blood fractions, tissue and organs for the purposes of 13 Import, export making profit Publications, books, videos, images and other items advertising 14 Import, export pornography 15 Ethyl alcohols except for research and testing purposes Import Ferrous and non-ferrous metal (cast iron, iron, steel, copper, brass, 16 Export aluminum or their alloys) scraps, except recyclable cans of beer or

No. Description of Goods Import/Export other drinks (beverages), ferrous and non-ferrous metals (casted) in ingots or other primary forms, spare parts made of ferrous or non- ferrous metals and lost their feasibility (not feasible for their intended use) Fauna and flora (animals and plants) specified in the I annex of the 17 Import, export CITES convention Plants without proper permits, roots of perennial plants, root stems, 18 Export bulbs Rare of endangered species of plants and products thereof except 19 Export for research purposes or those made into end products 25% or more concentrated acetic acid for consumption packaged for 20 Import retail 21 Products containing asbestos i.e., brake pads containing asbestos Import Equipment for manufacturing foam with substances such as HCFC- 22 22 and HCFC-141b that negatively impact global warming and ozone Import layers 23 Pyrotechnic equipment Export Source: http://www.customs.gov.mn/en/clearance/prohibited

Table 2: Restricted Goods by the GOM for Importing and Exporting

No. Description of Goods Import/Export License Granting Authority Ministry of Food, Agriculture, Light Industries, Department of 1 Breeding animals Export Veterinary hospital and Breeding Ministry of Environment and 2 Endangered animals Export Tourism Live animals other than endangered Ministry of Environment and 3 animals raw materials and research Export Tourism samples thereof Plants, roots of perennial plants, root Ministry of Environment and 4 Export stems, bulbs Tourism Rare of endangered species of plants and products thereof except for research Ministry of Environment and 5 Export purposes or those made into end Tourism products 6 Ozone depleting substances Import National Ozone Authority Ministry of Food, Agriculture, 7 Alcoholic beverages Import Light Industries Ministry of Food, Agriculture, 8 Cigarettes Import Light Industries Mineral Resources and 9 All types of fuel Import Petroleum Authority Veterinary medicaments and medical Department of Veterinary 10 Import equipment hospital and Breeding Ministry of Food, Agriculture, 11 Substance used for protecting plants Import Light Industries, Ministry of Environment and Tourism Ministry of Food, Agriculture, 12 Gene enhancing animals from overseas Import Light Industries Pharmaceuticals, medical equipment, 13 Import Ministry of Health tools and prosthesis 14 Biologically active substances Import Ministry of Health Tree plantations, shrubbery and Ministry of Environment and 15 seedlings except for research and Import Tourism experiment purposes 16 Pyrotechnic equipment Import Ministry of Mining

No. Description of Goods Import/Export License Granting Authority General Police Department, 17 Firearms, ammunition, and similar items Import, export Ministry of Legal Affairs Narcotics and psychotropic substances 18 Import, export Ministry of Health and precursors thereof 19 Disease-causing bacteria, toxins thereof Import, export Ministry of Health 20 Nuclear substances Import, export Nuclear Energy Commission 21 Nuclear minerals, radioactive substances Import, export Nuclear Energy Commission Explosive substances, devices, raw Ministry of Mining and Heavy 22 Import, export materials Industries Ministry of Food, Agriculture, 23 Strategic foodstuffs Import, export Light Industries Tissues and organs approved for only 24 Import, export Ministry of Health treatment purposes Items of general and unique historical Ministry of Education, Culture 25 and cultural value for the promotional Import, export and Science and refurbishing purposes Fauna and flora (animals and plants) Ministry of Environment and 26 specified in the II annex of the CITES Import, export Tourism convention 27 Electricity Import, export Ministry of Energy Toxic and hazardous chemical Import, export, Ministry of Environment and 28 substances transit Tourism Source: http://www.customs.gov.mn/en/clearance/prohibited

44 Mitigation measures to reduce all the identified impacts have been developed and included in the EMP. The EMP sets out the procedures and plans to carry out mitigation measures and monitoring procedures during sequential stages of the project from pre- construction stage, construction stage to operation stage.

D. Environmental Management Plan

45 A project environmental management plan (EMP) was developed for Tranche 1, and is included in this IEE report (Appendix 1) to ensure (i) implementation of the identified mitigation and management measures to avoid, reduce, mitigate, and compensate for anticipated adverse environment impacts; (ii) implementation of the monitoring and reporting activities; and (iii) project compliance with the PRC’s relevant environmental laws, standards, and regulations and ADB’s SPS. Organizational responsibilities and budgets are identified for the execution, monitoring and reporting of the EMP.

46 The EMP defines appropriate mitigation measures to minimize the anticipated environmental impacts, and defines institutional responsibilities and mechanisms to monitor and ensure the compliance with PRC’s environmental laws, standards and regulations, and the ADB SPS requirements. The EMP specifies (i) objectives; (ii) major environmental impacts and mitigation measures; (iii) implementing organization and responsibilities; (iv) inspection, monitoring, and reporting arrangements; (v) training and institutional strengthening; (v) a feedback and adjustment mechanism; and (vi) the grievance redress mechanism. The EMP will be reviewed and updated after the detailed engineering design, as needed.

47 The IMAR Government (IMARG) is the executive agency (EA) of the Investment Program. The EA has established a project leading group (IPLG) and has setup an IMAR project management office (IPMO) to support the Investment Program implementation. At the prefecture-level, Erenhot Municipal Government (EMG) is the implementing agency (IA) for Subproject 1. Erenhot municipal project management office (EPMO) has been established under the Erenhot DRC to carry out overall coordination and supervision of subproject preparation and implementation in its level. Erenhot Yixin Urban & Rural Development and

Construction and Asset Management Co., Ltd (Yixin) has been assigned to act as the PIE. A project implementing unit (PIU) has been established inside the PIE to carry out the daily implementation of this subproject.

48 Baotou Municipal Government (BMG) is the implementing agency for Subproject 2 and Subproject 3. Baotou municipal project management office (BPMO) has been established under the Baotou DRC to carry out overall coordination and supervision of subproject preparation and implementation in its level. Damaoqi Pine Boolean Property Service Co., Ltd (Songbuer) has been assigned to act as the PIE for Subproject 2. The Inner Mongolia Xiao Wei Yang Stock Raising Sciences and Technologies Co., Ltd (Xiaoweiyang), a private animal husbandry enterprise registered in Baotou in 2001, will be the PIE for Subproject 3 with a PIU already established inside the company to carry out overall coordination and supervision of subproject preparation and implementation of Subproject 3.

49 For the FIs in Tranche 1, BOIM and other FIs to be selected during the implementation period, are the PIEs for Subproject 4 of SMEs in Cross Border Businesses Expansion in IMAR. BOIM was selected based on the ADB’s set of eligibility criteria for lending transactions of this nature. The same eligibility criteria will be applied for selecting other FIs during the implementation period. The local project management offices at the two municipalities of Erenhot and Baotou (EPMO and BPMO) will supervise and coordinate overall implementation of the subprojects. The project implementing identities (PIEs) will physically implement the subprojects on behalf of the respective IAs.

E. Information Disclosure and Public Consultation

50 Information disclosure and meaningful public consultation for the project components were conducted in accordance with the PRC Guideline on Public Consultation for Environmental Impact Assessment (EIA) (2006) and ADB SPS requirements.

51 The project information on the subproject in Erenhot Municipality was publicized on August 21, 2019 on the website of the Government of Erenhot Municipality. The project information on the subprojects in Baotou Municipality was first publicized on 25 July 2019 on the website of Xiaoweiyang Company. Project information and environmental impact assessment information were disclosed to the public, especially to potentially affected persons near the construction sites, through online posting. The disclosed information includes the construction project overview, the name and contact information of the construction unit, the name and contact information of the domestic EIA institution undertaking the evaluation work, the working procedures and main work contents of the environmental impact assessment, the domestic EIA approval procedures, the public participation procedures and programs, and preliminary arrangements for work at each stage, major issues for public comment, main approaches for public comments and announcements.

52 Meaningful public consultations were also conducted from June to August of 2019 to seek the views and opinions of affected persons, local communities and departments, and other stakeholders. Questionnaires that contain 31 questions covering environmental issues and opinions towards the project were used to evaluate the public opinions. The project background information and potential environmental impacts were provided to the stakeholders in separate sheets. A total of 251 copies of questionnaires were distributed to the residents in the project areas of Erenhot and Baotou Municipalities, and 251 valid copies of answered questionnaires were collected. The recovery rate was 100%.

53 Of the respondents surveyed, 57% are male and 43% of the respondents are female. With regard to education, 25.1% of the participants are below junior high school, 18.3% are at junior high school, 29.3% are at high school, and 27.1% are at university or above. Regarding occupation, 35.5% of the participants are employees, 42.2% are local farmers, 40% are

government staff, and 12.4% belong to other categories.

54 All the respondents (100%) support the project and believe that the project could promote local economic development and have a positive attitude towards it. The public participation questionnaire indicates that the implementation of the project has been recognized and accepted by the public. About 96.0% of the respondents are aware of the project after the public consultation. The top 3 issues concerned about the project are ambient air (45.4%), noise (30.3%) and solid waste (12.7%). Most the respondents (97%) are very satisfied with the proposed environmental mitigation measures.

55 Other findings of the public survey include the following:

✓ 33.5% of the respondents think the project should promote the use of recyclable resources such as reclaimed water, wind power; ✓ 96.0% of the respondents understand the environmental impacts of construction activities (74.9% clearly understand, 12.7% somewhat understand; 8.4%barely understand), while 91.4% of them consider that the dust (39.4%) and noise (35.5%) generated by construction activities is a major environmental concern; ✓ All the respondents understand the environmental impacts of project operation (17.9% somewhat understand; 75.3% clearly understand), while all of them are receptive to the operational impact of the project on ambient air, surface water, groundwater, solid waste, ecological environment, acoustic environment, and health and safety issue; ✓ 98.4% of the respondents are satisfied with the mitigation measures implemented in this project (Very satisfied 84.1%; satisfied, 11.2%; basically satisfied, 3.2%); ✓ All the respondents think the project can improve local economic development and support the project construction.

56 The knowledge about the Project was high, reflecting that the information disclosure and dissemination activities were effective. The Project has strong support from locals in all areas. Concerns and suggestions from stakeholders were considered and incorporated into the project IEE.

F. Grievance Redress Mechanism

57 A project-level grievance redress mechanism (GRM) will be established in compliance with ADB’s SPS (2009) requirements to receive and facilitate resolution of complaints about the project during the construction and operational phases. The GRM includes procedures for receiving grievances, documenting key information, and evaluating and responding to the complainants in a reasonable timeframe to address the environmental, health, and safety concerns associated with the project construction and operation. The proposed project-level GRM, including a time-bound flow chart of procedures, is described in the project EMP.

G. Alternative Analysis

58 During the project preparation, various alternatives to the proposed project components were considered, screened, and analyzed based on technical, economic, social, and environmental perspectives. The primary objective with respect to environmental criteria was to identify and adopt options with the least adverse environmental impacts and maximum environmental benefits.

H. Project Risks and Key Assurances

59 All ADB-funded projects are required to comply with environmental safeguards, which focus on compliance with national laws and the EMP for a specific project. The project implementing agencies had limited previous experience in ADB safeguard procedures. Some potential risks related to the environment safeguard compliance include (i) weak institutional capacity of the implementing agencies and PIEs in their environmental management; (ii) potential delay in the project implementation; (iii) delayed recruitment of EMP implementation monitoring organizations; and (iv) lack of O&M budget for operating environmental treatment facilities.

60 The risks will be mitigated by (i) providing training in sound environmental management under the project; (ii) appointing a full-time environmental officer in the IPMO and one officer respectively in each of the implementing agencies (IAs); (iii) appointing a qualified loan environment implementation consultant in the loan consulting services; (iv) following appropriate project implementation monitoring and mitigation arrangements; (v) defining clear roles and responsibilities of all relevant agencies for the EMP implementation, including contractors and construction supervision companies; (vi) recruiting an independent agency to conduct the external environmental monitoring described in the EMP; and (vii) including clauses in the loan and project agreements to assure adequate O&M budget is allocated for operating environmental treatment facilities.

I. Overall Conclusion

61 This project IEE has: (i) identified potential negative environment impacts and established mitigation measures; (ii) assessed public support from the project beneficiaries and affected people; (iii) established a project GRM; and (iv) prepared a project EMP. It is concluded that the project will not result in significant adverse environmental impacts that are irreversible, diverse, or unprecedented. Any minimal adverse environmental impacts associated with the project will be prevented, mitigated, or minimized through the implementation of the project EMP.

I. INTRODUCTION

62 The Asian Development Bank (ADB) is processing the proposed Multitranche Financing Facility for Inner Mongolia Sustainable Cross-Border Development Investment Program (Investment Program).

63 The Investment Program is designed to support the participation of the PRC’s IMAR in RCI, especially the CAREC Program, with a focus on economic corridor development. The geographical areas to be covered by the whole Investment Program include: (1) Erenhot Municipality; (2) Darhan Muminggan United Banner (Damaoqi County) and Qingshan District in Baotou Municipality, (3) Arxan City in Xing’an League (Xing’an Municipality); (4) Alxa Left Banner (Azuoqi County) in Alxa League (Alxa Municipality); (5) Bayannur Municipality; and (6) SMEs3 located in IMAR through FIs.

64 Tranche 1 of the Investment Program covers the following subprojects:

65 This IEE is prepared for the above Tranche 1 investment loan subprojects, which are geographically located in two municipalities of:

i. Erenhot Municipality; and ii. Baotou Municipality (with project components in Mandula Port, Damaoqi County and Qingshan District of Baotou Municipality).

66 The IEE was prepared in accordance with ADB’s SPS requirements and PRC environmental laws, regulations and standards. It is based on information and data from: (i) domestic EIAs prepared by the local EIA institutes; (ii) feasibility study reports (FSRs) prepared by local design institutes (LDIs); (iii) environmental public consultations conducted during July to August 2019 by the consultants for the project transaction technical assistance (TRTA) in cooperation with the FSR institute, DEIA institutes, and IMAR government.

3 The classification of SMEs is defined in Statistical Methods on Classification of Micro, Small, Medium, and Large-Sized Enterprises, which was enclosed by National Bureau of Statistics, PRC on 28 December 2017. 14

II. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK

67 This IEE report was prepared in accordance with both PRC’s national environmental laws and regulations, and applicable international requirements (i.e., ADB policies and procedures).

68 The relevant PRC national laws and regulations, which the IEE preparation was in compliance with, include the PRC Law on Environmental Impact Assessment (2016), the PRC Management Guidelines on the EIA of Construction Projects (2015), the Technical Guidelines on Environmental Impact Assessment (HJ/T2-93), the Guidelines on Public Participation for EIA by the PRC Ministry of Ecology and Environment (MEE) in March 2006, the Regulation on EIA Public Disclosure by the NDRC in 2012, and the Requirements for Preparation of Environmental Impact Report Summary (2012).

69 The major applicable ADB policies, regulations, requirements, and procedures for environmental management and EIA of the Project are SPS 2009 and the Environmental Safeguards – A Good Practice Sourcebook (2012), which jointly provide the basis for this IEE. The SPS promotes good international practice as reflected in internationally recognized standards.

A. Legal Framework of the PRC

70 The environmental protection and management system in the PRC consists of a well- defined hierarchy of regulatory, administrative and technical institutions. At the top level, the People’s Congress of the PRC has the authority to pass and revise national environmental laws; the MEE under the State Council promulgates national environmental regulations; and the MEE either separately or jointly with the Administration of Quality Supervision, Inspection and Quarantine issues national environmental standards. The primary laws that govern the EIA study of the project are provided in Table II-1, while national administrative regulations and local laws and regulations are provided in Table II-2 and Table II-3.

71 The Environmental Impact Assessment Law of the PRC stipulates that an EIA is required for (i) planning projects for new development areas, and (ii) construction projects. Other two regulations, the Environmental Protection Management Ordinance of the PRC for Construction Projects and Environmental Impact Assessment Ordinance of the PRC for Planning Projects, also govern the way in which project screening and environmental categorization are executed for planning and construction projects.

72 In the PRC, the enforcement of environmental laws and regulations is conducted by environmental protection authorities within each level of the government. The regulatory enforcement and supervision authorities are the MEE at the national level, ecology and environment bureaus (EEBs) at the provincial level, and ecology and environment departments (EEDs) at the municipality level. The authorities are supported by environmental monitoring stations and environmental protection research institutes at different levels of the government.

Table II-1: Applicable PRC environmental laws No. Title of the Law Effective Date 1. Environmental Protection Law 1 January 2015 2. Environmental Impact Assessment Law 1 September 2016 3. Water Pollution Prevention and Control Law 1 January 2017 4. Air Pollution Prevention and Control Law 1 January 2016 5. Soil Pollution Prevention and Control Law 1 January 2019 6. Noise Pollution Prevention and Control Law 29 December 2018 7. Solid Waste Pollution Prevention and Control Law 7 November 2016 8. Water and Soil Conservation Law 1 March 2011 9. Forest Law 27 August 2009 10. Land Administration Law 28 August 2004 11. Urban and Rural Planning Law 24 April 2019 12. Water Law 1 September 2016 13. Law on Energy Conservation 1 September 2016 14. Law on the Protection of Cultural Relics 5 November 2017 15. Law on Clean Production Promotion 1 July 2012 16. Law on Circular Economy Promotion 1 January 2018 17. Environmental Protection Tax Law 1 January 2018 18. Law on Animal Epidemic Prevention 24 April 2015 Source: TRTA consultants.

Table II-2: National Administrative Regulations Year of No. Regulation effectiveness 1. Regulation on Pollution Control for Protection Zone of Drinking Water Source 2010 2. Regulation on EIA of Plans and Programs 2009 Regulation on Environmental Protection Management for Construction 3. 2017 Projects 4. Directive on Strengthening Wetland Protection and Management 2004 5. Environmental Protection Supervision Rules for Construction Projects 2017 6. Regulation on Protection of Wild Flora 2017 Regulation on Classification of Construction Project Environmental Protection 7. 2018 Management (MEP) 8. National Biodiversity Strategy and Action Plan (2011-2030) 2010 9. Requirement for Social Risk Assessment of Large Investment Projects 2012 10. Measures for Public Participation in EIAs (MEE) 2019 11. Regulations for Road Transport of Dangerous Goods 2013 Circular of the State Council on Printing and Distributing the Action Plan for Air 12. 2013 Pollution Control Circular of the State Council on Printing and Distributing the Action Plan for 13. 2015 Water Pollution Control Circular of the State Council on Printing and Distributing the Action Plan for 14. 2016 Soil Pollution Control Measures for Pollutant Discharge Permitting Administration (for Trial 15. 2018 Implementation) Measures for the Administration of Environmental Impact Assessment of 16. 2016 Construction Projects (for Trial Implementation) 17. Measures for the Environmental Emergency Response Management 2015 Circular on Issuing the Interim Provisions on the Administration of Pollutant 18. 2016 Discharge Permits Implementation Opinions of the Ministry of Environmental Protection on 19. 2018 Tightening Interim and Ex-Post Regulation of EIA of Construction Projects Notice on Effective Implementation of the Environmental Impact Assessment 20. 2017 System Related to the Pollutant Discharge Permits System Notice on Strengthening the Management of Environmental Impact 21. 2016 Assessment with the Core of Environmental Quality Improvement Circular on Issuing the 13th Five-year Plan for the Implementation of 22. 2016 Environmental Impact Assessment Reform 16

Year of No. Regulation effectiveness 23. Industrial Structure Adjustment Guidance Catalogue (2011) (Revised) 2013 Regulations on Pollution Prevention and Control for Large-scale Livestock and 1 January 24. Poultry Breeding 2014 Requirements for Construction of Designated Quarantine Facilities for 1 January 25. Imported Cattle and Sheep (or Goats) 2016 Source: TRTA consultants.

Table II-3: Local Laws and Regulations No. Law and Regulation Year issued 1. Environmental Protection Regulations of IMAR Dec. 2018 2. Regulation on PRC’s EIA Law in IMAR Sep. 2012 3. Regulations on Water and Soil Conservation Law of the PRC in IMAR 2015 4. Regulations on Air Pollution Prevention and Control in IMAR Mar 2019 5. Regulations on Wild Animals Protection of IMAR Dec. 2018 6. Regulations on environment supervision of Construction Projects in IMAR Sep 2012 Source: TRTA consultants.

73 The implementation of environmental laws is supported by a series of associated management and technical guidelines summarized in Table II-4.

Table II-4: Applicable Environmental Guidelines No. Guideline Effective Year 1. Guideline on EIA Categories of Construction Projects 2018 Guideline on Jurisdictional Division of Review and Approval of EIAs for 2. 2009 Construction Projects Technical Guidelines for EIA Public Consultation (public comment 3. 2011 version) Technical Guidelines for EIA of Construction Project General 4. HJ2.1-2016 Programme 5. Technical Guidelines for EIA Surface Water Environment HJ2.3-2018 6. Technical Guidelines for EIA Groundwater Environment HJ610-2016 7. Technical Guidelines for EIA Regarding Atmospheric Environment HJ2.2-2018 8. Technical Guidelines for Noise Impact Assessment HJ2.4-2009 9. Technical Guideline for EIA Ecological Impact HJ19-2011 10. Technical Guidelines for EIA Soil Environment HJ964-2018 11. Technical Criterion for Ecosystem Status Evaluation HJ192-2015 12. Technical Guidelines for Environmental Risk Assessment on Projects HJ169-2018 Technical Specifications on Comprehensive Management of Water and GB/T 16453.1~6- 13. Soil Conservation 2008 14. Technical Guidelines on Water Pollution Control Engineering HJ2015-2012 15. Technical Guidelines for Air Pollution Control Projects HJ2000-2010 Technical Guidelines for Solid Waste Treatment & Disposition 16. HJ 2035-2013 Engineering Technical Guidelines for Environmental Noise and Vibration Control 17. HJ 2034-2013 Engineering 18. Identification Standards for Solid Wastes General Rules GB 34330-2017 19. Identification of Major Hazards of Dangerous Chemicals GB18218-2018 20. Identification Standards for Hazardous Wastes GB5085.1~7-2007 Technical Specification for Hazardous Wastes Collection, Storage and 21. HJ2025-2012 Transportation Self-monitoring Technology Guidelines for Pollution Sources General 22. HJ 819-2017 Principles Source: TRTA consultants.

74 National environmental quality standards in the PRC are classified into two categories by function, namely, pollutant emission/discharge standards and ambient environmental standards. The relevant main standards applicable to the project are provided in Table II-5.

Table II-5: Summary of Applicable Environmental Standards No. Standard Code 1. Environment Quality Standards for Surface Water GB3838-2002 2. Environment Quality Standards for Noise GB3096-2008 3. Ambient Air Quality Standards GB3095-2012 Soil Environment Quality Risk Control Standards for Soil Contamination of 4. GB15618-2018 Agriculture Land Soil Environment Quality Risk Control Standards for Soil Contamination of 5. GB36600-2018 Development Land 6. Integrated Emission Standards of Air Pollutants GB16297-1996 7. Integrated Wastewater Discharge Standards GB8978-2002 GB/T14848- 8. Standards for Underground Water Quality 2017 9. Standards for Drinking Water Quality GB5749-2006 10. Noise Standards of Construction Site Boundary GB12523-2011 11. Noise Standards for Industrial Enterprises at Site Boundary GB12348-2008 GB/T 31962- 12. Water Quality Standards for Sewage Discharged to Municipal Sewers 2015 13. Standard for Pollution Control on Hazardous Waste Storage GB 18597-2001 Standards for Pollution Control on the Storage and Disposal Site for 14. GB 18599-2001 General Industrial Solid Wastes 15. Emission standards for Odor Pollutants GB 14554-93 16. Discharge Standard of Water Pollutants for Meat Packing Industry GB 13457-1992 17. Discharge standard of pollutants for livestock and poultry breeding GB 18596-2001 18. Technical standard of preventing pollution for livestock and poultry breeding HJ/T 81-2001 19. Standards for Treatment and Harmless Disposal of Sick Animal Carcasses GB 16458 Source: TRTA consultants.

B. Applicable ADB Polices and World Bank’s EHS Guidelines

75 All projects funded by ADB must comply with the ADB’s SPS 2009. The purpose of the SPS is to establish an environmental review process to ensure that projects funded under ADB loans are environmentally sound and to be operated in line with applicable regulatory requirements so that significant environment, health, or safety hazards are not likely to occur. The SPS promotes a good international practice as reflected in internationally recognized standards such as the World Bank (WB) Group’s Environmental, Health and Safety (EHS) Guidelines4. The principles and standards of the EHS Guidelines are adopted by the SPS. Some of the relevant EHS sector guidelines for this project cover general guidelines (including both occupational and community health and safety) and industry sector guideline on waste management facilities. The water, air and noise quality standards in the EHS guidelines provide a reference against project impacts. In general, many PRC standards are the same as, or higher than, the EHS standards.

76 Compared with PRC EIA requirements, the SPS requires a number of additional considerations for the EIA preparation, including: (i) a project-specific GRM; (ii) definition of the project area of influence; (iii) assessment of direct, indirect, induced and cumulative impacts; (iv) due diligence of project associated facilities; (v) protection of physical cultural resources;

4 World Bank Group Environmental, Health, and Safety Guidelines, 30 April 2007, Washington, USA. See: http://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/Sustainability-At- IFC/Policies-Standards/EHS-Guidelines#IndustryEHS 18

(vi) climate change mitigation and adaptation; (vii) occupational and community health and safety requirements (including emergency preparedness and response); (viii) impacts on livelihoods through environmental media; (ix) biodiversity conservation; (x) environmental audit of existing facilities; and (xi) ensuring that the EMP includes an implementation schedule and measurable performance indicators. These requirements are usually weak in PRC EIAs. With the assistance of TRTA consultants, the DEIA has been updated several times in accordance with SPS by the DEIA Institutes to fill in the gaps above and comply with SPS requirements.

77 ADB categorizes proposed projects based on the significance of potential project impacts and risks. A project’s category is determined by the category of its most environmentally sensitive component, including the direct, indirect, cumulative, and induced impacts in the project’s area of influence. Each proposed project is scrutinized per its type, location, scale, sensitivity and magnitude of potential environmental impact. A project is assigned by ADB to one of the following categories:

(i) Category A. A proposed project is classified as category A when it is likely to have significant adverse environmental impacts that are irreversible, diverse, or unprecedented. The impacts may affect an area larger than the sites or facilities subject to physical works. An environmental impact assessment, including an EMP, is required. (ii) Category B. A proposed project is classified as category B if its potential adverse environmental impacts are less adverse and fewer in number than those of the category A projects. These impacts are site-specific, few if any of them are irreversible, and under most circumstances mitigation measures can be readily put forward than that for the category A projects. An initial environmental examination, including an EMP, is required. (iii) Category C. A proposed project is classified as category C when it is likely to have minimal or no adverse environmental impacts. No environmental impact assessment or initial environmental examination is required although environmental implications need to be reviewed. (iv) Category FI. A proposed project is classified as category FI if it involves investment of the ADB funds to or through a financial intermediary.

78 Under the ADB’s SPS (2009), the Project is classified as category B for environment. Therefore, this initial environment examination including an environmental management plan (Appendix 1) was prepared in compliance with the SPS. The findings of the domestic EIA, the domestic feasibility studies, and the CRVA conducted for the Project were incorporated into the IEE report.

79 Compared with the PRC EIA requirements, the ADB SPS has additional requirements, including: (i) project grievance redress mechanism (GRM); (ii) definition of the project area of influence; (iii) assessment of indirect, induced and cumulative impacts; (iv) due diligence of associated facilities; (v) protection of physical and cultural resources; (vi) climate change mitigation and adaptation; (vii) occupational and community health and safety; (viii) impact on livelihoods through environmental media; (ix) biodiversity conservation; (x) environmental audit of existing facilities; and (xi) a project-specific EMP. This IEE report prepared for the Project complies with these SPS requirements.

C. International Agreements

80 The PRC is signatory to various international agreements dealing with environment protection, biodiversity preservation, wetland protection, climate change, etc. The relevant agreements with direct and indirect implications are listed in Table II-6. 19

Table II-6: Applicable International Agreements

No. Agreement Year Purpose Ramsar Convention on Wetlands of Prevention of the progressive encroachment on 1. International Importance Especially 1975 loss of wetlands for now and the future as Waterfowl Habitat Conservation and sustainable use of biological 2. Convention on Biological Diversity 1993 diversity and ecological values. United Nations Framework Stabilization of greenhouse gas concentrations 3. 1994 Convention on Climate Change in the atmosphere Kyoto Protocol to the United 4. Nations Framework Convention on 2005 Further reduction of greenhouse gas emissions Climate Change Montreal Protocol on Substances 5. 1989 Protection of the ozone layer That Deplete the Ozone Layer United Nations Convention to Combat Desertification in Those The combatting of desertification and mitigating 6. 1996 Countries Experiencing Serious of the effects of drought Drought and/or Desertification 1997 Identify the United Management Mechanism of Convention on The Law of The international water resources to achieve 7. Non-Navigational Uses of sustainable development planning and promote International Watercourses rational and optimal utilization and protection of water Convention on the International 1984 Protect certain species of wildlife and plants 8. Trade in Endangered Species of from over-exploitation and utilization as a result Wild Fauna and Flora (CITES) of international trade 1994 Stabilizing greenhouse gas concentrations in the UN Framework Convention on 9. atmosphere at a level that will prevent Climate Change anthropogenic induced climate change Source: TRTA consultants.

D. Comparison between the PRC and International Standards

81 Some of the PRC environmental standards are comparable to or more stringent than internationally accepted standards. Examples of such standards include the 24-h SO2 Class I standard, 24-h PM10 Class I and II standards, and annual and 1-h NO2 Classes I and II standards, which are comparable to the WBG EHS interim targets and air quality guideline (AQG). Some of the other PRC standards, such as CO and day time noise, are more stringent than the US Environmental Protection Agency (EPA) standards.

82 On the other hand, not all the PRC standards are always comparable to the standards suggested in international guidelines. Some of the PRC standards are not defined in international guidelines. For example, internationally accepted standards are lacking for NH3 and TSP, which are defined in the PRC ambient air quality standards. The exposure/averaging time period of some PRC ambient air quality standards are not included in the WGG’s EHS guideline. Environmental quality standards for noise of the PRC are defined for noise functional area categories by taking into consideration of influencing factors in the area such as road and rail traffic, and are different from the classification of the EHS guidelines that do not take the influencing factors into consideration. Other parameters that could not be fully comparable to international standards include surface and marine water quality standards (see Table II-7).

Table II-7: Comparison between the PRC and International Standards Parameter PRC standards International standards Remarks Ambient air quality GB-3095-2012 WHO Air Quality Guidelines Global Update (2005);

Parameter PRC standards International standards Remarks USEPA TSP 0.12 mg/m3 (Class I, 24h) WHO: No standard No comparison possible 0.30 mg/m3 (Class II, 24h) USEPA: No standard CO 4.0 mg/m3 (Class I, 24h) WHO: No standard PRC standard is more 4.0 mg/m3 (Class II, 24h) USEPA: 10 mg/m3 stringent than USEPA 3 3 NO2 0.08 mg/m (Class I, 24h) WHO: 0.04 mg/m (365d); PRC and WHO standards are 0.08 mg/m3 (Class II, 24h) 0.20 mg/m3 (1h) either not compatible given the 0.20 mg/m3 (Class I, 1h) USEPA: 0.14 mg/m3 (24h) different time periods, or the 0.20 mg/m3 (Class II, 1h) same for same time period. PRC standard is more stringent than USEPA standard 3 3 PM10 0.05 mg/m (Class I, 24h) WHO: 0.05 mg/m (24h) PRC standards are 0.15 mg/m3 (Class II, 24h) USEPA: 0.15 mg/m3 (24h) comparable to WHO and EPA standards. Ambient acoustic GB-3096-2008 World Health quality standard Organization (1999) LAeq (dBA) 45/55 (night/day, Category 1) Class I: 45/55 (night/day) WHO Class I: Residential, 50/60 (night/day, Category 2) Class II: 70/70 (night/day) institutional, educational 55/65 (night/day, Category 3) WHO Class II: Industrial, 55/70 (night/day, Category 4a) commercial 60/70 (night/day, Category 4b) Surface water GB-3838-2002 No comparable standard quality standard identified/suggested in the COD 15 mg/L (Category 2) EHS guideline 20 mg/L (Category 3) 30 mg/L (Category 4) NH3-N 0.5 mg/L (Category 2) 1.0 mg/L (Category 3) 1.5 mg/L (Category 4) TP 0.1 mg/L (Category 2) 0.2 mg/L (Category 3) 0.3 mg/L (Category 4) Sea water quality GB-3097-1997 No comparable standard standard identified/suggested in the COD 2 mg/L (Category 1) EHS guideline 3 mg/L (Category 2) 4 mg/L (Category 3) 5 mg/L (Category 4) Inorganic. N 0.2 mg/L (Category 1) 0.3 mg/L (Category 2) 0.4 mg/L Category 3) 0.5 mg/L (Category 4) Active P 0.015 mg/L (Category 1) 0.030 mg/L (Category 2) 0.030 mg/L (Category 3) 0.045 mg/L (Category 4) Noise standards for GB 12348-2008 World Health WHO Class I: Residential, industrial Organization (1999) institutional, educational enterprises at site WHO Class II: Industrial, boundary commercial LAeq (dBA) 55/45 (day/night, Category 1) Class I: 45/55 (night/day) 60/50 (day/night, Category 2) Class II: 70/70 (night/day) 65/55 (day/night, Category 3) 70/55 (day/night, Category 4) Noise standards of GB 12523-1990 USEPA PRC standards more stringent construction site than international standards boundary LAeq (dBA) 75/55 (Earth works, day/night) 85 (day, 8h exposure) 85 (Pile driving, day; banned for night) 70/55 (Structural works, day/night) 65/55 (Exterior and interior finishing works, day/night)

Parameter PRC standards International standards Remarks Construction- GB 10070–88 No comparable standard induced Vibration identified/suggested in the Z (dB) 80/80 (day/night, Both sides of EHS guideline railway main line) 65/65 (day/night, Special residential area) 70/67 (day/night, Residential, cultural and educational area) Source: TRTA consultants.

E. Assessment Standards for Project Construction and Operation

83 In this project area, Class II standard stated in “Ambient Air Quality Standards (GB3095- 2012)”. For point source air emissions during construction, “Integrated emission standards of air pollutants (GB 16297-1996)” for fugitive dust emission and Class II stated in “Emission standards for odor pollutants (GB14554-93)” are the relevant standards.

84 The area of influence for water quality assessment for project site will follow Class V stated in “Environmental quality standards for surface water (GB3838-2002)” and Class III stated in “Standards for groundwater quality (GB/T14848-2017)”.

85 The ambient noise assessment will follow the Class II stated in “Environmental quality standards for noise (GB3096-2008)”. During construction, the noise emission will follow “Noise standards of construction site boundary (GB12523-2011)”, and during operation, the noise emission will follow Class II in “Noise Standards for Industrial Enterprises at Site Boundary (GB12348-2008)”.

86 During project construction, solid waste will be identified and hazardous waste will be disposed by qualified agencies. General waste disposal will follow “Standards for Pollution Control on the Storage and Disposal Site for General Industrial Solid Waste (GB18599-2001)”. a. Ambient Air Quality The PRC ranks air quality into two classes according to its Ambient air quality standards (GB 3095-2012). The Class I standard applies to nature reserves, scenic areas, and regions requiring special protection. The Class II standard applies to residential areas, mixed residential and commercial areas, cultural areas, industrial zones, and rural areas. The project assessment of air quality was conducted in accordance with the GB 3095-2012 Class II standard and World Bank EHS guidelines as listed in

87 Table II-8..

88 WHO established air quality guideline (AQG) standards for various air quality parameters for the protection of public health. Yet WHO recognizes that progressive actions are needed to achieve these standards as there are financial and technological limitations in some countries, cities or localities especially in developing countries. Interim targets were therefore established as intermediate milestones towards the achievement of the AQG. The longer averaging period such as annual average is more applicable for assessing impacts from multiple and regional sources, while shorter averaging periods such as 24 hours and 1 hour averages are more applicable to the assessment of short-term impacts from project-related activities such as daily or peak construction activities.

Table II-8: Comparison of PRC and WBG Ambient Air Quality Standards WHO/World Bank Group EHS5 Air Quality Averaging PRC GB 3095-2012 (μg/m3) (μg/m3) Parameter Period Class I Class II Interim Targets AQG 1-year 20 60 n/a n/a SO2 24-hour 50 150 50 - 125 20 1-hour 150 500 n/a n/a 1-year 80 200 n/a n/a TSP 24-hour 120 300 n/a n/a 1-year 40 70 30 - 70 20 PM10 24-hour 50 150 75 - 150 50 1-year 15 35 15 - 35 10 PM2.5 24-hr 35 75 37.5 - 75 25 1-year 40 40 n/a 40 NO2 24-hour 80 80 n/a n/a 1-hour 200 200 n/a 200 24-hour 4,000 4,000 n/a n/a CO 1-hour 10,000 10,000 n/a n/a Note: n/a = not available SO2= sulfur dioxide, TSP= total suspended particulates, PM10= Particulate Matter smaller than 10 micrometers; PM2.5= Particulate Matter smaller than 2.5 micrometers, NO2= nitrogen dioxide, CO= carbon monoxide. Source: TRTA consultants.

5 World Bank Group 2007, ibid. 24

89 Table II-8 shows that:

(i) the WBG interim targets are comparable to the PRC’s GB 3095–2012 Class II standard; (ii) 24-hr SO2: the upper limit of EHS interim target (125 μg/m3) is 17% more stringent than GB Class II standard (150 μg/m3), while the lower limit of EHS interim target (50 μg/m3) is the same as the GB Class I standard; 3 (iii) 24-hour PM10: the upper limit of the EHS interim target (125 μg/m ) is the same as GB Class II standard, while the AQG is the same as the GB Class I standard 3 (iv) 24-hr PM2.5: the upper limit of the EHS interim target (75 μg/m ) is the same as GB Class II standard; and 3 (v) 24-hour NO2: the EHS AQG (200 μg/m ) is the same as GB Class II standard.

b. Fugitive Particulate Matters and Odor Emission

90 Fugitive emission of particulate matters (such as dust from construction sites) is regulated under the Integrated Emission Standard of Air Pollutants of the PRC (GB 16297-1996), which sets 120 mg/m3 as the maximum allowable emission concentration and ≤1.0 mg/m3 as the concentration limit at the boundary of construction sites, with no specification on the particle diameter.

91 Odor from the sheep breed bases should follow the Emission Standards for Odor Pollutants (GB 14554-93). The maximum allowable concentrations at the site boundary for NH3, 3 3 H2S and odor are 1.5 mg/m , 0.06 mg/m , and “20” (dimensionless), respectively. c. Surface Water Quality

92 The determining standard is PRC’s Environmental Quality Standards for Surface Water (GB 3838-2002). This defines five categories reflecting different environmental functions:

93 The water quality standard applied in this IEE is the Environmental quality standards for surface water of the PRC (GB 3838–2002). The PRC Surface Water Environment Quality Standard defines five water quality grades for different environmental functions: Grade I – highest water quality, for headwaters and national nature reserves; Grade II – drinking water sources in Class I protection areas, habitats for rare aquatic organisms, breeding grounds for fish and crustaceans, and feeding grounds for fish fry; Grade III – drinking water sources in Class II protection areas, wintering grounds for fish and crustaceans, migration routes, water bodies for aquaculture and capture fishery, and swimming; Grade IV – general industrial use and non-contact recreational activities; Grade V – lowest quality, suitable only for agricultural and scenic water uses (Table II-9). The World Bank Group has guidelines on effluent quality standards but not ambient water quality and recognizes the use of local criteria for EHS purpose.

Table II-9: Environmental Quality Standards for Surface Water Category Parameter unit I II III IV V pH 6 ~ 9 6 ~ 9 6 ~ 9 6 ~ 9 6 ~ 9 Dissolved oxygen (DO) mg/L ≥7.5 ≥6 ≥5 ≥3 ≥2 Permanganate index () NA ≤2 ≤4 ≤6 ≤10 ≤15 Chemical oxygen demand (COD) mg/L ≤15 ≤15 ≤20 ≤30 ≤40 5-day biochemical oxygen demand mg/L ≤3 ≤3 ≤4 ≤6 ≤10 (BOD5) Ammonia nitrogen (NH3-N) mg/L ≤0.15 ≤0.5 ≤1.0 ≤1.5 ≤2.0 Total phosphorus (as P) mg/L ≤0.02 ≤0.1 ≤0.2 ≤0.3 ≤0.4 Lakes & reservoirs mg/L ≤0.01 ≤0.025 ≤0.05 ≤0.1 ≤0.2

Category Parameter unit I II III IV V Total nitrogen (lakes, reservoirs, as mg/L ≤0.2 ≤0.5 ≤1.0 ≤1.5 ≤2.0 N) Copper (Cu) mg/L ≤0.01 ≤1.0 ≤1.0 ≤1.0 ≤1.0 Zinc (Zn) mg/L ≤0.05 ≤1.0 ≤1.0 ≤2.0 ≤2.0 Fluoride (as F-) mg/L ≤1.0 ≤1.0 ≤1.0 ≤1.5 ≤1.5 Selenium (Se) mg/L ≤0.01 ≤0.01 ≤0.01 ≤0.02 ≤0.02 Arsenic (As) mg/L ≤0.05 ≤0.05 ≤0.05 ≤0.1 ≤0.1 Mercury (Hg) mg/L ≤0.0005 ≤0.0005 ≤0.0001 ≤0.001 ≤0.001 Cadmium (Cd) mg/L ≤0.001 ≤0.005 ≤0.005 ≤0.005 ≤0.01 Chromium (Cr, hexavalent) mg/L ≤0.01 ≤0.05 ≤0.05 ≤0.05 ≤0.1 Lead (Pb) mg/L ≤0.01 ≤0.01 ≤0.05 ≤0.05 ≤0.1 Cyanide (CN) mg/L ≤0.005 ≤0.05 ≤0.2 ≤0.2 ≤0.2 Volatile phenol mg/L ≤0.002 ≤0.002 ≤0.005 ≤0.01 ≤0.1 Total petroleum hydrocarbon (TPH) mg/L ≤0.05 ≤0.05 ≤0.05 ≤0.5 ≤1.0 Anionic surfactant mg/L ≤0.2 ≤0.2 ≤0.2 ≤0.3 ≤0.3 Sulfide mg/L ≤0.05 ≤0.1 ≤0.2 ≤0.5 ≤1.0 Fecal coliform bacteria no./L ≤200 ≤2000 ≤10000 ≤20000 ≤40000 Source: PRC GB 3838-2002 d. Groundwater

94 In the PRC, this is divided into five categories according to the Quality Standards for Ground Water (GB/T 14848-2017) (Table II-10). Category III or above is suitable as drinking water. Category IV can only be used for drinking water after treatment.

Table II-10: Ground Water Quality Standards

Category Parameter Unit I II III IV V Color HU ≤5 ≤5 ≤15 ≤25 >25 Odor and taste --- none none none None none Turbidity NTU ≤3 ≤3 ≤3 ≤10 >10 Visible object --- none none none None none 5.5~6.5, pH --- 6.5~8.5 6.5~8.5 6.5~8.5 <5.5, >9 8.5~9 Total hardness (as CaCO3) mg/L ≤150 ≤300 ≤450 ≤550 >550 Total dissolved solid (TDS) mg/L ≤300 ≤500 ≤1000 ≤2000 >2000 2- Sulfate (SO4 ) mg/L ≤50 ≤150 ≤250 ≤350 >350 Chloride (Cl-) mg/L ≤50 ≤150 ≤250 ≤350 >350 Iron (Fe) mg/L ≤0.1 ≤0.2 ≤0.3 ≤1.5 >1.5 Manganese (Mn) mg/L ≤0.05 ≤0.05 ≤0.1 ≤1.0 >1.0 Copper (Cu) mg/L ≤0.01 ≤0.05 ≤1.0 ≤1.5 >1.5 Zinc (Zn) mg/L ≤0.05 ≤0.5 ≤1.0 ≤5.0 >5.0 Molybdenum (Mo) mg/L ≤0.001 ≤0.01 ≤0.1 ≤0.5 >0.5 Cobalt (Co) mg/L ≤0.005 ≤0.05 ≤0.05 ≤1.0 >1.0 Volatile phenol mg/L ≤0.001 ≤0.001 ≤0.002 ≤0.01 >0.01 Anionic surfactant mg/L non- ≤0.1 ≤0.3 ≤0.3 >0.3 detected Permanganate index (IMn) mg/L ≤1.0 ≤2.0 ≤3.0 ≤10 >10 - Nitrate (NO3 , as N) mg/L ≤2.0 ≤5.0 ≤20 ≤30 >30 - Nitrite (NO2 , as N) mg/L ≤0.001 ≤0.01 ≤0.02 ≤0.1 >0.1 Ammonia nitrogen (NH3-N) mg/L ≤0.02 ≤0.02 ≤0.2 ≤0.5 >0.5 Fluoride (F-) mg/L ≤1.0 ≤1.0 ≤1.0 ≤2.0 >2.0 Iodide (I-) mg/L ≤0.1 ≤0.1 ≤0.2 ≤1.0 >1.0 Cyanide (CN) mg/L ≤0.001 ≤0.01 ≤0.05 ≤0.1 >0.1 Mercury (Hg) mg/L ≤0.00005 ≤0.00005 ≤0.001 ≤0.001 >0.001 Arsenic (As) mg/L ≤0.005 ≤0.01 ≤0.05 ≤0.05 >0.05

Category Parameter Unit I II III IV V Selenium (Se) mg/L ≤0.01 ≤0.01 ≤0.01 ≤0.1 >0.1 Cadmium (Cd) mg/L ≤0.0001 ≤0.001 ≤0.01 ≤0.01 >0.01 Hexavalent chromium (Cr6+) mg/L ≤0.005 ≤0.01 ≤0.05 ≤0.1 >0.1 Lead (Pb) mg/L ≤0.005 ≤0.01 ≤0.05 ≤0.1 >0.1 Beryllium (Be) mg/L ≤0.00002 ≤0.0001 ≤0.0002 ≤0.001 >0.001 Barium (Ba) mg/L ≤0.01 ≤0.1 ≤1.0 ≤4.0 >4.0 Nickel (Ni) mg/L ≤0.005 ≤0.05 ≤0.05 ≤0.1 >0.1 Dichlorodiphenyltrichloroethane (DDT) μg/L non- ≤0.005 ≤1.0 ≤1.0 >1.0 detected Lindane (666) μg/L ≤0.005 ≤0.05 ≤5.0 ≤5.0 >5.0 Total coliform bacteria no./L ≤3.0 ≤3.0 ≤3.0 ≤100 >100 Total bacteria no./L ≤100 ≤100 ≤100 ≤1000 >1000 Total alpha (α) radioactivity Bq/L ≤0.1 ≤0.1 ≤0.1 >0.1 >0.1 Total beta (β) radioactivity Bq/L ≤0.1 ≤1.0 ≤1.0 >1.0 >1.0 Source: PRC GB/T 14848-2017 e. Noise

95 Noise impacts of the project activities were evaluated against the Class II limits of the Environmental Quality Standards for Noise (GB3096-2008), which divides the standards into five categories based on their tolerance of functional areas to noise pollution: Category 0 to Category 4. Category 0 is for areas with convalescent facilities that are the least tolerant to noisy environment and therefore has the most stringent day and night time noise limits. Category 1 is for areas predominated by residential areas, hospitals and clinics, educational institutions, and research centers. Category 2 is for areas with mixed residential and commercial functions. Category 3 is for areas with industrial production and storage and logistics functions. Category 4 is for areas adjacent to traffic noise sources such as major roads and railways, which is further subdivided into 4a and 4b with the former applicable to major road and marine traffic noise, and the latter applicable to rail noise.

96 Technical specifications for regionalizing environmental noise functions (GB/T 15190– 2014) define the distances for 4a and 4b areas from the road/railway boundary to be (i) 50 m ± 5 m for Category 1 noise functional area; (ii) 35 m ± 5 m for Category 2 noise functional area; and (iii) 20 m ± 5 m for Category 3 noise functional area. Beyond the 4a or 4b areas, the limits of noise level are based on the respective noise functional area categories.

97 The Environmental Quality Standards for Noise (GB3096-2008) of the PRC for various noise categories are listed along with the WBG’s EHS guidelines in Table II-11. The table shows that the EHS guidelines have lower noise limits for residential, commercial, and industrial mixed areas but higher noise limits for industrial areas than the PRC noise standards. The EHS guidelines do not differentiate the influencing factors such as major roads or railways and apply the same noise limits solely based on the types of areas, such as residential or industrial areas.

98 PRC’s Noise Standards of Construction Site Boundary (GB 12523-2011) regulates construction noise, limiting construction noise levels at the construction site boundary to 70 dB(A) in the day time (06:00–22:00) and 55 dB(A) at night (22:00–06:00). The World Bank Group does not have standards for construction noise per se but applies the same noise standards listed in Table II-11 to the receptors during construction activities.

Table II-11: Environmental Quality Standards for Noise [dB(A)]

GB 3096-2008 WBG EHS6 Standards Standards Noise Functional Applicable Area Day Night Day Night Area Category 06:00- 22:00- 07:00- 22:00- 22:00 06:00 22:00 07:00 Areas needing extreme quiet, such as 0 50 40 convalescence areas Areas mainly for residence, hospitals, cultural 1 and educational institutions, administration 55 45 55 45 offices Residential, commercial and industrial mixed 2 60 50 areas 3 Industrial areas, warehouses and logistic parks 65 55 70 70 Within the following distances from both sides of trunk road: 4a (i) 50 m ± 5 m for Category 1 functional area 70 55 (ii) 35 m ± 5 m for Category 2 functional area (iii) 20 m ± 5 m for Category 3 functional area 55 45 Within the following distances from both sides of railway: 4b (i) 50 m ± 5 m for Category 1 functional area 70 607 (ii) 35 m ± 5 m for Category 2 functional area (iii) 20 m ± 5 m for Category 3 functional area Source: PRC GB/T 12523-2011 f. Wastewater Discharge

99 Wastewater discharge is regulated under the Integrated Wastewater Discharge Standards of the PRC (GB 8978-1996). The Class I standards apply to discharges into Category III water bodies under GB 3838-2002. The Class II standards apply to discharges into Categories IV and V water bodies. The Class III standards apply to discharges into municipal sewers that drain to municipal WWTPs with secondary treatment.

6 World Bank Group 2007, ibid. 7 Night time noise standard for construction and operational or with EIA approval before 31 December 2010 is 70 dB(A) according to GB 12525-90 (amendment) Noise Limit and Its Measurement Method. 28

100 Table II-12 shows the discharge standards.

Table II-12: Standards for Wastewater Discharge (mg/L, pH excluded) Class I Class II Class III For discharge to For discharge to Parameter For discharge to Category municipal Category III water body IV and V water bodies sewers pH 6–9 6–9 6–9 SS mg/L 70 150 400 BOD5 mg/L 20 30 300 COD mg/L 100 150 500 TPH mg/L 5 10 20 Volatile phenol mg/L 0.5 0.5 2.0 NH3-N mg/L 15 25 --- phosphate (as P) mg/L 0.5 1.0 --- LAS (anionic surfactant) 5.0 10 20 mg/L SS= suspended solid; COD = chemical oxygen demand; BOD5 = 5 days biochemical oxygen demand; NH3-N= ammonia nitrogen; TPH = total petroleum hydrocarbons. Source: PRC GB/T 8978-1996. g. Odor pollutant

101 Odor pollutant generated from the subproject 3 operation is regulated under PRC’s Emission standards for Odor Pollutants (GB 14554-93). There is no equivalent standard recommended in the EHS Guidelines, and the PRC standard is adopted for use in this IEE report.

Table II-13: Applicable odor pollutant standard

Category II Standard at the site boundary No. Parameter (mg/m3, Odor concentration excluded) 1 Ammonia 2.0 2 Trimethylamine 0.15 3 H2S 0.10 4 Methyl mercaptan 0.01 5 Dimethyl sulfide 0.15 6 Dimethyl disulfide 0.13 7 Carbon disulfide 5.0 8 Styrene 7.0 9 Odor concentration 30 Source: PRC GB 14554-93.

F. Project Environmental Administrative Framework

102 Article 16 of the “PRC Environmental Impact Assessment Law (2016)” stipulates that an EIA document is required for any capital construction project producing significant environmental impacts so as to provide a comprehensive assessment of these potential environmental impacts. On 2 September 2008, the former Ministry of Environment Protection (MEP) released the “Management Guideline on EIA Categories of Construction Projects,” which came into effect on 1 October 2008, and which classifies projects into three categories:

• Category A: Projects with significant adverse environmental impacts, for which an EIA report is required;

• Category B: Projects with adverse environmental impacts which are of a less degree and/or significant than those of Category A, for which a tabular EIA report is required; and

• Category C: Projects that are unlikely to have adverse environmental impacts, for which an EIA registration form is required.

103 Under the PRC law, the full EIA report and the simplified tabular EIA report for Category A and B are similar to ADB’s EIA and IEE, respectively. The registration form of an EIA is equivalent to an ADB Category C project. The guideline is an amendment to the “Management Guideline of Environmental Protection Categories of Construction Projects (2002).” The new guideline provides detailed classifications of EIAs into 23 general categories and 198 subcategories based on the project’s nature (e.g., water resources development, agriculture, energy, waste management, etc.), scale, and environmental sensitivity (e.g., protected nature reserves and cultural heritage sites). In accordance with the guideline, the proposed project has been classified into the subcategories of social and regional development.

104 The Guideline on Jurisdictional Division of Review and Approval of EIAs for Construction Projects (2009) provides two prescribed lists of projects for which EIAs must be reviewed and approved. The guideline was amended in 2009 to include a list of construction projects for which EIAs require MEE review and approval, and a list of projects for which EIAs will be delegated to the provincial/municipal EEBs. Since the project is environment-friendly, the EIAs of the proposed components were approved by the relevant municipal EEBs.

G. Relevant Environmental Laws and Standards of Mongolia

105 Mongolia has enacted a comprehensive policy and legal framework for environmental assessment and management. It has policies, legislation and strategies in place to manage protected areas such as national parks, to satisfy its international obligations, and to protect the quality of the environment for the health and well-being of its citizens. The hierarchy of policies and legislative provisions for environmental management in Mongolia comprises the Constitution, international treaties, policies, and environment and resource protection laws8

106 The overarching policy on environmental resources and their protection is set out in the 1992 Constitution of Mongolia. The Constitution provided the impetus for the Government of Mongolia (GoM) to enact a series of environmental laws, regulations and standards. Among these, the Law on Environmental Protection and Law on Environmental Impact Assessment provide the core framework and general procedure and guidelines on environmental assessment. Relevant environmental laws in Mongolia are shown in Tables II-14 to 15.

Table II-14: Relevant environmental laws in Mongolia (1)

Law Year9 Purpose Law on 1988 Regulates relations concerning the use and protection of subsoil in the Subsoil interests of present and future generations. Law on 1994 Regulates relations concerning the use and taking of areas under Special (2004) special protection (natural conservation parks, natural complex areas, Protected natural reserves and national monument areas). Areas Law on Land 1994 Regulates the possession and use of land by a citizen, entity and (2012) organization, and other related issues. Articles 42/43 provide guide on removing possessed land and granting of compensation relative to removing.

8 UNDP. 2008. Philips Tortell, Ts. Adiyasuren and N. Erdenesaikhan, Institutional Structures for Environmental Management in Mongolia. 9 Latest amended year 31

Law on 1995 Regulates “relations between the state, citizens, economic entities and Environmental (2012) organizations in order to guarantee the human right to live in a healthy Protection and safe environment, have ecologically balanced social and economic development, and for the protection of the environment for present and future generations, the proper use of natural resources and restoration of available resources”. Article 7 requires the conduct of natural resource assessment and environmental impact assessment to preserve the natural state of the environment, and Article 10, the conduct of environmental monitoring on the state and changes of the environment. Law on Air 2012 Regulates the protection of the atmosphere to provide environmental balance and for the sake of present and future generations. Allows Government to set standard limits to emissions from all sources. Provides for the regular monitoring of air pollution, hazardous impacts and changes in small air components such as ozone and hydrogen. Law on 2012 Regulates relations for protection, possession, sustainable use and Forests reproduction of the forest in Mongolia. Defines prohibited activities in protected forest zones and their regimes and conditions when undertaking allowed activities in the utilization zone forests and their regimes. Law on 1995 Regulates the protection, proper use, and restoration of natural plants Natural Plants other than forest and cultivated plants. Law on Water 2012 Regulates relations pertaining to the effective use, protection and restoration of water resources. Specifies regular monitoring of the levels of water resources, quality and pollution. Provides safeguards against water pollution.

Table II-15: Relevant environmental laws in Mongolia (2)

Law Year Purpose Law on Water 2012 Introduces fees payable for pollution of water resources Pollution Fees (2019) Law on Plant 1996 Regulates the inhibition, protection, inspection of pasturelands and Protection (2007) plants. Regulates the determination of special protected area buffer zones and the activities. Article 9 requires the conduct of detailed Law on Buffer 1997 environmental assessment for the establishment of water reservoirs Zones or construction of floodwalls or dams in buffer zones for special protected areas. Regulates “relations concerning protection of the environment, Law on prevention of ecological imbalance, the use of natural resources, Environmental 1998 assessment of the environmental impact and decision-making on Impact (2012) the start of a project”. It sets out the general requirements and Assessment procedures for project screening and conduct of environmental assessment and review. Governs relationships concerning maintenance of sanitary conditions, defining the general requirements for sanitation in order to ensure the right of an individual to healthy and safe working and Law on Hygiene 1998 living conditions, ensuring normal sanitary conditions, and defining the rights and duties of individuals, economic entities and organizations with this respect. Regulates the collection, registration, research, classification, Law on evaluation, preservation, protection, promotion, restoration, Protection of 2001 possession and usage of cultural heritage including tangible and Cultural Heritage intangible heritage. Civil Code of 2002 Article 502 stipulates the liability for damage to environment. Mongolia 2012 Governs the collection, transportation, storage, and depositing in Law on Waste (2017) landfills of household and industrial waste, and re-using waste as a

Law Year Purpose source of raw materials to eliminate hazardous impacts of household and industrial waste on public health and the environment. Undertakings that generate significant amount of wastes must dispose of the wastes in designated landfills that meet prescribed standards. Regulates matters relating to the principles and full powers of disaster protection organizations and agencies, their organization Law on Disaster 2003 and activities, as well as the rights and duties of the State, local Protection (2012) authorities, enterprises, entities and individuals in relation to disaster protection. Law on soil protection and Regulates matters related protection of soil deterioration, 2012 prevention from reclamation, and prevention from desertification desertification

Environmental Policy of Mongolia

107 A fundamental principle of the Mongolian state environmental policy is that economic development must be in harmony with the extraction and utilization of natural resources and that air, water and soil pollution will be controlled. Mongolia’s National Council for Sustainable Development was established to manage and organize activities related to sustainable development in the country. The country’s strategy is designed for environmentally friendly, economically stable and socially wealthy development, which emphasizes people as the determining factor for long-term sustainable development.

108 The health of Mongolia's natural ecosystems and populations of wild species is of both national and global importance. The country forms an important part of the global ecosystem in the ecological transition zone in Central Asia, where the great Siberian taiga, the Central Asian steppe, the high Altai Mountains, and the Gobi Desert converge.

109 The main policy documents include the National Environmental Action Plan of 1996, updated in 2000; the State Policy for Ecology of 1997; the National Plan of Action to Combat Desertification, updated in 2010; the Biodiversity Conservation Action Plan of 1996 (now the Rare Animals Protection Plan of 2012); and the National Plan of Action for Protected Areas, all developed under the Ministry of Environment and Tourism (MET) auspices, as well as the Mongolian Action Programme for the 21st Century, developed by the National Council for Sustainable Development in 1996.

110 The National Action Plan for Climate Change was added in 2000 and updated in 2011. Several program documents, e.g., the National Water Program (updated in 2011), National Forestry Program; Program of Protection of Air; Sustainable Development Education Program (2009-2019); Special Protected Areas; and Protection of Ozone Layer; were also completed during this period. In addition, other guidance documents with important environmental repercussions were developed under the auspices of other ministries and these include the Roads Master Plan, the Power Sector Master Plan, the Tourism Master Plan, and the Renewable Energy Master Plan. Interrelated documents, such as the annual Human Development Reports, have increasingly incorporated environmental aspects.

Requirement for Mongolian Domestic EIA

111 In accordance with the EIA laws and associated regulations of Mongolia, at the detailed design stage of construction facilities, the PIU or contractor should provide materials (including the final feasibility study report, environmental baseline report of the project site, detailed design documents) to the Ministry of Environment and Tourism (MET) to screen and issue a General Environmental Impact Assessment (GEIA) conclusion. The GEIA conclusion will lead to one of

the following three actions based on MET’s review of the project documents:

• The project is allowed to proceed with construction, provided that certain conditions set in the GEIA conclusion are followed; or

• The project is not permitted to be implemented due to its irreversible negative impacts to the surrounding environment and/or community health; or

112 The project is required to undergo a detailed EIA (DEIA) for identification of potential impacts, avoidance of negative impacts with mitigation measures, and elaboration of an EMP. The DEIA should be conducted by a government licensed EIA company. Upon completion, the DEIA will be reviewed by the EIA committee of the MET for approval.

Domestic Assessment Standards for Project Construction and Operation

113 Key national standards of Mongolia that will be complied during Project construction and operation periods are listed in Table II-16. It gives relevant key environmental quality standards for this IEE and local GEIA and DEIA to be complied during the project construction and operation phases.

Table II-16: Relevant Mongolian National Standards to be applied for Project Construction and Operation

Environmental Media National Standard in Force Ambient air MNS 4585: 2007 Noise MNS 4584:2007 Soil MNS 5850:2008 Drinking water (groundwater) MNS 900:2016 Effluent wastewater MNS 4943: 2011 Ambient surface water MNS 4586:1998 Groundwater MNS 900: 2005

114 For wastewater reuse, the Mongolian effluent standards will be met (MNS 4943: 2011). In addition, World Health Organization (WHO) Guidelines10 for the safe use of wastewater will be met (for more details, comparison of Mongolian and international Standards is included in the following subchapter E). These guidelines specify health targets of ≤1 helminth egg per liter (l) for agricultural use. The guidelines state that ‘this level of health protection could be met by treatment of wastewater’. Stabilization ponds, because of the retention time, can be used as a surrogate to assure compliance with the ≤ 1 egg/l, therefore the chosen technology for the project will meet WHO standards because of the use of stabilization ponds, primary and secondary treatment.

115 In addition to the listed Mongolia National Standards in Table II-6, Mongolia also has an occupational health and safety standard (MNS 5002:2000). Article 16 of the National Constitution of Mongolia states that every employee has the right to ‘suitable conditions of work’. The Government adopted a National Program for occupational Safety and Health Improvement in 2001 and national standards are also adopted such as the National Standard on occupational Health and Safety MNS 5002:2000 which support the Law on Labor Safety and Hygiene (2008) which sets out policies, rules and regulations on occupational safety and health, and the most common requirements for workplace safety. Table II-17 lists the relevant national

10 World Health Organisation Guidelines for the safe use of wastewater, excreta and greywater; Volume Wastewaterr use in agriculture 34

environmental standards of Mongolia.

Table II-17: Mongolian National Environmental Standard and Guidelines

Code Name of Standards and Guidelines Boiler Emissions Guidelines: The Permissible Level of Air Pollutants from MNS 6298:2011 Power and Heating Plants. The Permissible Level of Air Pollutants from Operations of Water Heating MNS 5919:2008 and Steam Generating Facilities at Power and Heating Plants Environmental Protection: Rehabilitation of Eroded Land/Category of MNS 17.5.1.18:1983 Eroded Land. Environmental Protection: The General Requirements for Rehabilitation MNS 17.5.1.19:1992 of Eroded Lands MNS 3473:1983 Environmental Protection. Land, Land Use and Terms and Definitions Environmental Protection: Rehabilitation of Eroded Land, Terms and MNS 17.5.13:1980 Definitions MNS 17.0.0.06:1979 The System of Standards for Environmental Protection and Basic Rules Environmental Protection: Rehabilitation of Eroded Land, Terms and MNS 5914:2008 Definitions MNS 5918:2008 The General Technical Requirements for Vegetation of Eroded Land MNS 17.2.0.07:1979 Air Pollutants and Category MNS 17.2.1.17:1980 The Terms and Definitions of Industrial Pollutants to Atmosphere MNS 4585:2016 Air Quality, The General Technical Requirements MNS 3383:1982 The Terms and Definitions of Pollutant Sources for Atmosphere The Permissible Level of Pollutant Substance to Air/General and MNS 5885:2008 Technical Requirements MNS 3113:1981 The Technical Requirements for Determination of Air Emissions MNS 17.2.3.16:1988 Guidelines for Monitoring of Air Quality in Urban Settlements MNS 6063:2010 Air Quality: Permissible Level of Pollutants MNS ISO 14064- Greenhouse Gas- Second Chapter: Indicative Guidelines for Reporting 2:2015 and Monitoring on Changes and Adsorption of Greenhouse Emissions The General and Technical Requirements for Sampling of Air Quality MNS 3384:1982 Test MNS 17.1.1.10:1979 The Terms and Definitions for Water and Water Use MNS 4047:1988 Guidelines for Monitoring of Surface Water Quality The General Requirements for Protection of Underground Water from MNS 3342:1982 Pollution Water Quality: The Permissible Level of Pollutants for Underground MNS 6148:2010 Water MNS ISO 5667 13 Water Quality-Sampling: Chapter 13: Sampling method for sludge from 2000 wastewater treatment plants Sanitary Requirements for Sources of Water Supply to Urban and MNS 0899:1992 Household Purposes MNS 0900:2005 Sanitary Requirements and Safety Assessment for Drinking MNS ISO 5667:1:2002 Water Quality-Sampling: Chapter 1: Sampling method for drinking water Water Quality-Sampling: Chapter 3: Guidelines for handling of water MNS ISO 5667-3:1999 samples MNS ISO Water Quality-Sampling: Chapter 6: Sampling method for rivers and 5667:6:2001 streams MNS 4943:2015 Water Quality: The General Requirements for Wastewater MNS BS 8525-1:2015 The General Requirements for Grey Water MNS ISO 5667- Water Quality-Sampling: Chapter 10: Instructions for Sampling from 10:2001 Wastewater MNS ISO 5667- Water Quality-Sampling: Chapter 7: Instructions for Sampling from Water 7:2002 and Steam at Heat only Boilers (HOB) Water Quality. General Requirements for Wastewater discharged to MNS 6561:2015 Sewerage Network Water Biological Test: Determination Method of Dynamic Sludge ate MNS 5666:2006 Wastewater Treatment Plant

Code Name of Standards and Guidelines General Requirements for location, treatment process and levels of MNS 4288:1995 Wastewater Treatment Plant MNS 3297:1991 Soil: Soil Quality Indicators and Norms in Urban Settlements MNS 5850:2008 Soil Quality: The Permissible Levels of Soil Pollutants MNS 3298:1991 Soil Quality: The General Requirements for Soil Sampling MNS 3985:1987 Soil. Types of Sanitary Indicators of Soil MNS 2305:1994 Soil. Instructions to Sampling, Packing and Storing of Soil Samples MNS 4968:2000 Work Safety: General Requirements for Work Place Work Safety: Vibrations Norm and General Requirements for Safe MNS 4994:2000 Operations MNS 5147:2002 Electric and Static Conditions. Permissible Acid Level at Workplace MNS 5150:2002 General Requirements for Safety Procedures with Electric Appliances MNS 5146:2002 Work Safety: Electric Works; Protection and Wiring. MNS 5145:2002 Electric Safety: The Maximum level of voltage and electric current MNS 5002:2000 The General Requirements for Work Safety: The noise norms MNS The Labor Protection Equipment. Tools and Types 0012.4.005:1985 MNS 4244:1994 The General Requirements for Fire Safety MNS 5390:2004 Work Safety and Sanitary Conditions The General Requirements for Handling Toxic and Hazardous MNS 6458:2014 Chemicals MNS 3474:2003 Plant Protection: The Terms and Definitions MNS 5344:2011 The General Requirements for Transportation of Household Wastes MNS 5872:2008 The Service Requirements for Power Supply The General Technical Requirements for Boilers with capacity of 0.10 MNS 5043:2011 МВт - 3.15МВт The General Technical Requirements for Boilers with capacity up to 100 MNS 5041:2001 кВт MNS 5045:2001 The Technical Requirements for Water Heating Boiler with solid fuel The General Technical Requirements for Power Transmission Sub MNS 5643:2006 Station with Capacity of 25-2500 кВ•А The General Technical Requirements for Water Heating Unit with Solar MNS 4084:1988 Panel MNS 5207:2011 The Technical Requirements for Installation of the Fiber Optic Cable MNS AASHTO The Technical Requirements for Concrete Structure of Flood Protection 86:2005 Facilities Operation of Water Supply and Sewerage Network: Operations MNS ISO 24511:2012 Management and Maintenance of the Sewerage Facilities Operations Management and Maintenance of the Water Supply Facilities MNS ISO 24512:2012 The Technical Requirements for Pedestrians and Access for Disable MNS 5682:2006 Persons MNS 4597:2014 The Technical Requirements for Road Signs MNS 4759:2014 The Technical Requirements for Road Marks The Operational Instructions for Road Signs, Marks, Fences and Traffic MNS 4596:2014 Lights MNS 5342:2007 The General Requirements for Auto Parking Facilities

III. DESCRIPTION OF THE PROJECT

A. Introduction

116 The PRC is an active participant in the CAREC Program and is making joint efforts with Mongolia to develop CAREC Transport Corridor 4 and transform it into an economic corridor.

117 The proposed Investment Program is designed to support the participation of IMAR in RCI, especially the CAREC Program, with a focus on economic corridor development. The geographical areas to be covered by the Investment Program include: (1) Erenhot Municipality; (2) Darhan Muminggan United Banner (Damaoqi County) and Qingshan District in Baotou Municipality, (3) Arxan City in Xing’an League (Xing’an Municipality); (4) Alxa Left Banner (Azuoqi County) in Alxa League (Alxa Municipality); (5) Bayannur Municipality; and (6) SMEs11 located in IMAR through FIs.

B. Project Impact and Outcome

118 Impact and Outcome. The Investment Program will be aligned with the following impact: sustainable economic development and shared prosperity for Central Asia Regional Economic Cooperation (CAREC) region achieved. The Investment Program will result in the following outcome: sustainable economic opportunities and living conditions in areas along the IMAR– Mongolia border improved.

119 Outputs: The Investment Program will deliver four major outputs to address the key constraints:

(i) Sustainable infrastructure and services for cross-border connectivity improved.12 The investment program will support sustainable infrastructure and institutional changes at five key border crossing points (BCPs) stretched over 2,000 km along the border between IMAR and Mongolia. This output comprises: (i) establishing a smart port management systems including one- stop inspection and intelligent vehicle queuing; (ii) installing a wind-powered, clean energy heating supply for the Erenhot–Zamyn-Uud ECZ; (iii) building connecting and access roads at ECZs and BCPs; (iv) improving a transit systems to smooth and speed up BCP logistics and reduce transboundary health risks including storage and transshipment facilities, customs clearance systems, and sanitary and phytosanitary clearance facilities; and (v) enhacing capacity and quality of services at the PRC–Mongolia International Hospital in Erenhot through the provision of advanced medical equipment and technical training on regional health security issues. (ii) Ecological environment in key border towns improved. This output includes: (i) creating protective forest strips to safeguard BCP communities from sandstorms and improving their environmental conditions using smart forestation technologies such as advanced reclaimed water irrigation and intelligent fertilization; (ii) piloting a smart municipal waste collection system and introducing recycling systems to reduce negative impacts from human activities on the environment.

11 The classification of SMEs is defined in Statistical Methods on Classification of Micro, Small, Medium, and Large-Sized Enterprises, which was enclosed by National Bureau of Statistics, PRC on 28 December 2017. 12 G20 Principles for Quality Infrastructure Investment will be followed such as principles of sustainability, resilience, inclusiveness, and innovative technologies.

(iii) Income-generating opportunities expanded. This output comprises: (i) providing local currency loans to SMEs engaged in cross-border businesses through a financial intermediation loan (FIL); (ii) strengthening IMAR’s business development service system for SMEs with particular support going toward piloting a program to support female entrepreneurs and SMEs led by women; (iii) developing an inclusive sheep value chain to creat economic opportunities for farmers in border areas by building (a) animal quarantine facilities; (b) sheep processing logistics park; (c) stud sheep breeding and farming bases at the Mandula port, and (d) a livestock tracing and management system; and (iii) establishing the Poverty Alleviation Program (PAP) to ensure that poor households, including those headed by women, are integrated into the value chain. (iv) Cross-border cooperation mechanisms, technical project management, and institutional capacity strengthened. This output includes: (i) annual international workshops to support existing bilateral coordination mechanisms at the Erenhot–Zamyn-Uud BCP and facilitate cross-border policy dialogue between the PRC and Mongolia; (ii) training for agricultural enterprises, farming households, and rural cooperatives to improve their use of livestock farming technology, animal disease prevention, and livestock waste management; and (iii) training for executing agency, implementing agencies, project implementing entities (PIEs), and counterpart Mongolian officials in safeguards, procurement, financial management, gender equality, and awareness of sexual exploitation and harassment.

C. Project Scope

120 Tranche 1 of the Investment Program covers the following subprojects:

121 More details of project information on each subproject are provided as follows:

Subproject 1: Inner Mongolia Sustainable Cross-Border Development Investment Program in Erenhot.

122 Erenhot is a county-level city of the Xilin Gol League in Inner Mongolia Autonomous Region (IMAR). It is located in the Gobi Desert along the PRC-Mongolian border, across from the Mongolian town of Zamyn-Uud. The Erenhot highway towards the port at the border has been operated since 1992, but it has been used for both passenger and goods transport. The infrastructure and inspection conditions of the port area have been outdated since then. To modernize the Erenhot highway port, the IMAR government carried out expansion works on the highway in July 2000, which greatly improved the efficiency of custom clearance in the port. An agreement was signed on 4 June 2019 between the PRC and Mongolia for constructing the

Erenhot-Zamyn Uud Economic Cooperation Zone (ECZ) near the border.13 Based on the agreement, both sides will further (i) promote the economic cooperations between the PRC and Mongolia; (ii) facilitate the trade, investment and personnel exchanges; (iii) push ahead industrial cooperation between the two countries; (iv) accelerate the regional development of border areas of the two countries; and (v) enhance the economic and social benefits to the border areas and people of the two countries.

123 The purpose of Subproject 1 is to establish an inspection area in the PRC-Mongolian Erenhot-Zamyn Uud ECZ, and improve the living conditions of residents in local port areas and in towns on the Mongolian side of the border. This subproject includes the following five components:

vi. Component 1: Inspection Area Construction for the PRC-Mongolian Erenhot- Zamyn Uud ECZ, including (1) construction of the inspection area; and (2) establishment of a smart port management platform; (3) construction of a cross border economic cooperation center; (4) establishment of a fencing, alarming and monitoring system in the ECZ; and (5) construction of a heating pipeline network using clean energy in the ECZ; vii. Component 2: Ecological Restoration for the PRC-Mongolian Erenhot-Zamyn Uud ECZ, including (1) construction of a ecological protection greenbelt along the central axis, which includes reclaimed water storage, irrigation facilities and landscape lighting; and (2) construction of a ecological protection greenbelt along roadsides, including reclaimed water storage and irrigation facilities; viii. Component 3: Waste Collection and Transfer Stations, and Sanitation Intelligent Cloud Platform for the ECZ, including (1) construction of one waste collection and transfer station; (2) procurement of supporting facilities/equipment; and (3) establishment of a sanitation intelligent cloud platform; ix. Component 4: Upgrading Medical Equipment for the Erenhot International Traditional Chinese and Mongolia Medicine Hospital (PRC-Mongolia International Hospital in Erenhot), including the procurement of 50 sets of medical equipment and facilities; x. Component 5: Institutional capacity building and strengthening.

124 The Erenhot Municipal Government (EMG) is the implementing agency for this subproject. The Erenhot municipal project management office (EPMO) has been established under the Erenhot DRC to carry out the overall coordination and supervision of subproject preparation and implementation at its level. Erenhot Yixin Urban & Rural Development and Construction and Asset Management Co., Ltd (Yixin) has been assigned to act as the PIE for Subproject 1. A project implementing unit (PIU) has been established inside the PIE to carry out the daily implementation of this subproject.

The Detailed information on Subproject 1: Inner Mongolia Sustainable Cross-Border Development Investment Program in Erenhot are summarized in

13 http://english.mofcom.gov.cn/article/newsrelease/significantnews/201906/20190602870682.shtml. 40

125 Table III-1.

Table III-1: Summary of Each Component of Subproject 1 No. Item Amount Unit Remarks a) Inspection Area Construction for the PRC-Mongolian Erenhot-Zamyn Uud ECZ a.1. Construction of inspection area 1. Joint inspection building 26,877 m2 2. Inspection center 4,000 m2 3. Supporting service building 2,000 m2 4. Road hardening 294,300 m2 5. Greening area 110,550 m2 6. Fence 4,800 m2 a.2. Establishment of smart port management platform Border immigration inspection and examine 1. 14 Set system, information equipment and facilities Customs inspection and examine system, 2. 11 Set information equipment and facilities One-stop inspection passenger channels for 3. 10 Channel 5 for entry and 5 for exit border and customs inspection One-stop inspection freight channels for 4. 12 Channel 6 for entry and 6 for exit border and customs inspection a.3. Construction of PRC-Mongolian Regional Cooperation Center PRC-Mongolian Regional Cooperation 5. 20,000 m2 Floor area Centre 6. Greening 7,560 m2 7. Parking lots 4,550 m2 8. Road hardening 18,000 m2 9. Fencing wall 458 m a.4. Fencing, alarming and monitoring system in PRC-Mongolian ECZ Fence and alarm monitoring system in 1. 13.5 km PRC-Mongolian ECZ 2. Alarming system and installation 2 Set Equipment 3. Monitoring system and installation 2 Set 4. Wrought iron fence and installation 4,500 Piece a.5. Clean energy heating and pipe network for the PRC-Mongolian ECZ 1. Electrode boiler 2 No. Capacity: 4 MW 2,270 m3, with a total Thermal storage tank (hot water, including 2. 1 No. thermal storage capacity water distributor) of 72,000 kWh 3. Heating supply station 1638 m2 Height: 4.5 m Electricity supply, other associated 4. Multiple Set equipment and automatic control system 5. Welded steel pipes DN450 1,290 m Heating supply pipelines 6. Welded steel pipes DN500 1,324 m Heating supply pipelines 7. Welded steel pipes DN600 3,080 m Heating supply pipelines 8. Welded steel pipes DN700 2,564 m Heating supply pipelines 9. Welded steel pipes DN800 1,054 m Heating supply pipelines b) Ecological Restoration for the PRC-Mongolian Erenhot-Zamyn Uud ECZ Green belt along the central axis, reclaimed 1. water storage and irrigation facilities, and 20.5 ha landscape lighting Green belt along the roadsides, reclaimed 2. 15 ha water storage and irrigation facilities c) Waste Collection and Transfer Stations, and Intelligent Cloud Platform for the ECZ Floor area. 1. A waste compression and transfer station 320 m2 Daily capacity: 18.2 ton/d Compressing capacity: 2. Vertical compression equipment 1 Set 60t/d 3. Video surveillance system 1 Set 4. Deodorization system 1 Set 5. High -pressure cleaner 1 Set 6. Central control system 1 Set

No. Item Amount Unit Remarks Sanitation intelligent cloud platform service 7. 1 Set system Besom, shovel, reflective 8. Cleaning tools and facilities 78 Set vests, etc. 9. Garbage bin 150 No. 240 L 10. Intelligent garbage classification dustbin 5 No. 6 m3 11. Side -loader waste collection vehicle 3 No. Capacity: 3 tons 12. Cargo for transporting recyclable waste 2 No. Capacity: 1.7 tons d) Medical equipment upgrading for the Erenhot International Traditional Chinese and Mongolian Medicine Hospital 1. Radiology medical equipment 5 Set 5 pieces 2. Function section equipment 6 Set 7 pieces 3. Laboratory equipment 5 Set 5 pieces 4. Surgery/ Anesthesiology equipment 3 Set 4 pieces 5. Plastic surgery equipment 4 Set 4 pieces 6. Ophthalmology equipment 6 Set 6 pieces 7. Otolaryngology equipment 3 Set 3 pieces 8. Internal Medicine 9 Set 30 pieces 9. Pediatrics equipment 7 Set 19 pieces 10. Equipment for the First Aid Center 1 Set 2 pieces 11. Equipment for the disinfecting supply room 1 Set 1 pieces Source: IPMO, August 2019.

Figure III-1: Locations of Project Components in Subproject 1 at Erenhot Source: TRTA consultants

Subproject 2: Inner Mongolia Sustainable Cross-Border Development Investment Program in Mandula Port.

126 Located in Damaoqi Banner (county) in Baotou Municipality, Mandula Highway Port has been established since 1992. As the only inland port opened all year round in the Midwest IMAR, Mandula Port plays an important role in the country’s Belt and Road Initiative, especially in trade with Mongolia and Russia.

127 The purpose of this subproject is to upgrade the Mandula Port International Highway Logistics Park, improving the connectivity in border areas and enhance the service capacity to promote trade. This subproject includes four components as follows:

i. Component 1: Expansion of port freight passage roads; ii. Component 2: Construction of service area (including parking lots, service building, hotel, restautants, stores, related supporting equipment and facilities, vehicle repairing center and boiler room etc) in the International Highway Logistic Park; iii. Component 3: Construction of customs supervision center (including enclosed warehouse for automatic coal loading and storage and office building etc) in the International Highway Logistic Park; and iv. Component 4: Institutional capacity building and strengthening.

128 The Baotou Municipal Government (BMG) is the implementing agency (IA) for this subproject. The Baotou municipal project management office (BPMO) is yet to be established under the Baotou DRC to carry out the overall coordination and supervision of subproject preparation and implementation at its level. Damaoqi Pine Boolean Property Service Co., Ltd (Songbuer) has been assigned to act as the PIE for Subproject 2.. The detailed information on Subproject 2: Inner Mongolia Sustainable Cross-Border Development Investment Program in Mandula Port are summarized in Table III-2.

Table III-2: Summary of Each Component of Subproject 2 No. Item Amount Unit Remarks a) Expansion of Port Freight Passage Roads 1. Freight passage roads 6.14 km Two-way four-lane 2. Pipe road crossing 12 No. 3. Greening 13,513 m2 Traffic marking, 4. Other associated facilities Multiple Set fence, electronic monitoring, etc. b) Construction of service area 1. Land area 20.94 ha 2. Floor area 10,689 m2 3. Parking lots 1,181 No. Service building (4 floors), including hotel, 4. restaurants, stores and related supporting 8,679 m2 Floor area equipment and facilities. Vehicle repairing center (single floor with a 15m 5. 1,860 m2 Floor area chimney) 6. Boiler room (electricity-based) 150 m2 Road hardening, 7. Other linked facilities Multiple Set water and heating supply, etc. c) Construction of customs supervision center 1. Land area 29.45 ha 2. Floor area 44,770 m2 Floor area

No. Item Amount Unit Remarks Enclosed warehouse for automatic coal loading and 250,000 tons of coal 40,645 m2 storage storage capacity 4 sets coal unload equipment, 3 Coal unload system NA NA 3. conveyors and 2 coal taker equipment 3 conveyors and 2 Coal upload system NA NA coal upload equipment 4. Office building (3 floors) 4,126 m2 Floor area Source: TRTA consultants

Figure III-2: Locations of Project Components in Subproject 2 at Mandula Source: TRTA consultants

Subproject 3: Establishment of Quarantine Station in Mandula Port, Upgrading of Stud Sheep Breeding Bases and Sheep Industry Comprehensive Development

129 Located in Tuyouqi County, Damaoqi County and Guyang County in Baotou, this subproject aims to increase the sheep production capacity by upgrading stud sheep breeding bases and to improve the product quality by adopting the embryo transplantation technology. The subproject will also act as a pilot poverty reduction and income generation project for small- scale herders and low-income farmers. This subproject includes the following seven components:

130 The Baotou Municipal Government (BMG) is the implementing agency for this subproject, and Inner Mongolia Xiao Wei Yang Stock Raising Sciences and Technologies Co., Ltd (Xiaoweiyang), a private animal husbandry enterprise registered in Baotou in 2001, will be the PIE to carry out the daily implementation of this subproject. A PIU has been established inside the company to carry out the overall coordination and supervision of subproject preparation and implementation.

131 The Detailed information on Subproject 3: Establishment of Quarantine Station in Mandula Port, Upgrading of Stud Sheep Breeding Bases and Sheep Industry Comprehensive Development are summarized in Table III-3.

Table III-3: Summary of Each Component of Subproject 3 No. Item Amount Unit Remarks a) Upgrading stud sheep breeding base 448 in stud sheep 1. Construction of troughs 1,472 No. area; 1,024 in breeding area 2. Construction of straw silo 2,000 m2 3. Sheep manure storage silo 300 m2 4. Cremation kiln for dead sheep bodies 150 m2 5. Quarantine area for sick sheep 300 m2 6. Embryo transplant 47,000 No. 7. Raising cost for lambs 14,100 No. 14,100 lambs b) Construction of quarantine station in Mandula Port 1. Construction of sheep house 13,000 m2 20 farming houses 2. Walking area fence 5,200 m2 3. Cremation kiln for dead sheep bodies 100 m2 4. Facilitated house 1,250 m2 5. Motor -pumped well and associated equipment 1 No. 6. Grass silos 720 m2 7. Roads (inside and outside of the sheep house) 43,600 m2 8. Fence around the sheep house 1,500 m Environmental protection facilities – seepage 9. 3,000 m2 proofing 10. Wastewater treatment facilities 1 Set

No. Item Amount Unit Remarks 11. Dead sheep safety landfill wells 1 Set c) Upgrading five sheep farming bases C.1 No. 1 sheep farming base (247 mu 14) 1. Renovation of management house 532.8 m2 2. Renovation of the rooftop of sheep house 7,798 m2 3. Walking area 3,936 m 4. Renovation of wall 5,664 m2 5. Renovation of waste discharge pipeline 7 km 6. Main road renovation 4,000 m2 7. Side road renovation 12,073 m2 8. Fencing wall 600 lm Linear meter 9. Greening 2,500 m2 Other facilitated renovation, including electricity 10. 7,273 m2 and water supply 11. Seepage proofing engineering 36,000 m2 12. Wastewater treatment facilities 1 Set C.2 No. 2 sheep farming base (278 mu) 1. Renovation of management house 266.4 m2 2. Renovation of ground in the sheep house 4,320 m2 3. Renovation of the rooftop of sheep house 6,126 m2 4. Walking area 5,040 m 5. Renovation of wall 3,420 m2 6. Renovation of waste discharge pipeline 5,640 km 7. Road renovation (main roads and side roads) 13,784 m2 8. Fencing wall 598 lm Linear meter 9. Greening 5,000 m2 Other facilitated renovation, including electricity 10. 7,727 m2 and water supply 11. Seepage proofing engineering 18,000 m2 C.3 No. 3 sheep farming base (267 mu) 1. Renovation of management house 355.2 m2 2. Renovation of the rooftop of sheep house 4,084 m2 3. Walking area 4,160 lm Linear meter 4. Renovation of wall 2,640 m2 5. Renovation of waste discharge pipeline 5,160 km 6. Road renovation (main roads and side roads) 7,465 m2 7. Fencing wall 1,497 lm Linear meter 8. Greening 5,000 m2 Other facilitated renovation, including electricity 9. 7,727 m2 and water supply 10. Seepage proofing engineering 24,000 m2 11. Wastewater treatment facilities 1 Set C.4 No. 4 sheep farming base (756 mu) 1. Renovation of management house 902 m2 Renovation of the fence around walking area in 2. 1,320 lm Linear meter sheep house 3. Renovation of waste discharge pipeline 16,300 km 4. Construction of drainage ditch 600 m 5. Road renovation (main roads and side roads) 12,395 m2 6. Fencing wall 2,500 lm Linear meter Other facilitated renovation, including electricity 7. 7,273 m2 and water supply 8. Seepage proofing engineering 72,000 m2 9. Wastewater treatment facilities 1 Set 10. Dead sheep safety landfill well 1 Set C.5 No. 5 sheep farming base (100 mu) – Guyang County

14 15 mu = 1 ha. 47

No. Item Amount Unit Remarks 1. Renovation of management house 355.2 m2 2. Renovation of the rooftop of sheep house 4,084 m2 Renovation of the fence around the walking area 3. 2,080 lm Linear meter and troughs in sheep house 4. Renovation of wall 2,640 m2 5. Road renovation (main roads and side roads) 1,800 m2 Other facilitated renovation, including electricity 6. 6,364 m2 supply 7. Seepage proofing engineering 24,000 m2 8. Wastewater treatment facilities 1 Set 9. Dead sheep safety landfill well 1 Set d) Establishment of products tracing and management system 1. Network devices 40 Set 2. Video surveillance equipment Multiple Set 3. Big Data Center – equipment supply 8 Set Associated equipment for the sheep farming 4. Multiple Set bases Associated equipment for the mutton processing 5. Multiple Set base 6. Associated equipment for the marketing system Multiple Set e) Establishment of a Poverty Alleviation Plan 2,000 poverty HHs, Government + Company + Scaled Farming HHs + CNY 1. 100 25 scaled farmer Poverty HHs million HHs/cooperatives f) Construction of sheep slaughtering, processing and logistic park in Tuyouqi County 1. Small stock area 230 m2 2. Slaughtering area 6,988 m2 3. Refrigerator unit 1 Set 4. Thermal insulation system 1 Set 5. R&D and office building 2,400 m2 6. Storage room 331.5 m2 7. Wastewater treatment workshop 128 m2 8. Boiler room 274 m2 9. Fire control room 165 m2 10. Parking lots 102 m2 11. Road hardening 20,000 m2 12. Sheep slaughtering and cutting line 1 Set 13. Mutton processing and production line 1 Set 14. R efrigerator 1,550 m2 g) Project management and capacity building G.1 Project management 1. Training to PIU staff – project management 175 PD Person·day 2. Recruitment of additional staff in PIU 5 Person G.2 Capacity building 1. Recruitment of new staff in the Company 279 Person 2. Training to staff on the application of EIS system 6,975 PD Person·day Training to farmers on the quality and safety 3. 16,000 PD Person·day management during the production Training to farmers on the application of EIS 4. 5,000 PD Person·day system Source: IPMO, August 2019.

Figure III-3: Locations of Project Components in Subproject 3 at Baotou Source: TRTA consultants

Subproject 4: SMEs in Cross Border Businesses Expansion in IMAR

132 Many of the SMEs in the border areas of the PRC and Mongolia are confronted with difficulties in accessing financing, which has been a main constraint for growing and improving their businesses. The SME financing component under Tranche 1 of the Investment Program will provide financing to selected SMEs in Inner Mongolia Autonomous Region (IMAR), especially in Alxa, Bayannur, Baotou, Erenhot, and Xiang’an municipalities, through financial intermediaries (FIs) by using the FIL modality. The financing provided is expected to enable the qualified SMEs to gain access to competitively priced, medium to long term loans in order to fund their value addition businesses and increase the profitability of their businesses. The financing will also help increase the productivity of the cities and counties in which the SMEs operate. The first tranche loan for the SME financing is at the amount of €18.20 million (equivalent to $20.00 million).

133 A number of measures have been adopted in designing this subproject to address the financing barriers for SMEs in the border areas. Accordingly, the FIL modality was chosen to (i) allow multiple rollovers of the ADB loan to provide larger investments for SMEs over the loan tenor; (ii) build knowledge and capacity of the IMAR government and domestic financial institutions in risk assessment and management of the SME lending; (iii) reduce transactional complexities and costs by gaining familiarity and experience by both the IPMO and financial intermediaries through the subproject implementation; and (iv) enhance the governance and

safeguard compliance for the SME investments beyond the first tranche investment subprojects.

134 For the FIs in Tranche 1, BOIM and other FIs to be selected during the implementation period. The FIL will be used to finance SMEs in cross border trade in the sectors of agribusiness, logistics, manufacturing, and border tourism in IMAR. An ESMS document is prepared for the FIs in accordance with ADB SPS 2009. This ESMS will be maintained and implemented by FIs as part of the overall management system to comply with the relevant PRC laws/regulations and ADB SPS 2009 requirements. The ESMS will be applied to all the subprojects supported by the FIs using (i) the ADB loan proceeds in the initial batch of subprojects; and (ii) the revolving fund established with reflows from the initial batch of subprojects.

Subproject 5: Institutional capacity building and strengthening

135 According to the due diligence and assessment carried out by the TRTA team, the Tranche 1 project has “substantial” risk in financial management due to the lack of familiarity with ADB financial management, disbursement procedures and requirements by the implementing agencies and PIEs. The procurement risk assessment concluded that the Tranche 1 project has a “medium” risk rating due to the lack of familiarity with ADB’s procurement requirements.

136 The institutional capacity assessment also indicates that the implementing agencies and PIEs lack the ADB project experiences and are short in proper staff who are the familiar with the ADB procedures and requirements. Mitigation measures that will be taken to address such risks include, but are not limited to: (1) recruit project implementation consultants (PICs) to facilitate the project implementation; (2) provide extensive training, workshop and seminars to strengthen the project management and institutional capacity; (3) engage a procurement agency with good English skills and proper experiences in World Bank/ADB financed projects; and (4) recruit qualified professional staff in the PIEs to improve human resources capacity, including financial accountant, procurement staff and engineers.

D. Due Diligence for Associated and Existing Facilities

137 Associated facilities are those which are not funded by the project but whose viability and existence depend exclusively on the project and whose operation and services are essential for successful operation of the project (SPS 2009: 31). Existing facilities are those facilities which already exist or are under construction which the project may be involved or linked with in some way (SPS 2009: 67).

138 Associated facilities. There is one associated facility for the project: Erenhot WWTP will provide reclaimed water as landscape water for the component 3. The Erenhot WWTP has a reclaimed water supply capacity of 12,500 m3/d. The treatment process of Erenhot WWTP is anaerobic-oxic process with a waste water treatment capacity of 15,000 m3/d and reclaimed water supply capacity of 12,500 m3/d.

139 The reclaimed water of Erenhot WWTP in 2018 is presented in Table III-4.

Table III-4: Reclaimed water flow of Erenhot WWTP in 2018

Monthly reclaimed water Daily reclaimed water flow Month Note flow from the WWTP (m3) from the WWTP (m3) 1. 278,170 8,973 To Tian’e lake 2. 262,170 8,739 To Tian’e lake 3. 278,245 8,976 To Tian’e lake 4. 270,530 9,018 To Tian’e lake 5. 243,722 7,862 Used as landscape water 6. 249,352 8,312 Used as landscape water 7. 305,746 9,863 Used as landscape water 8. 284,535 9,179 Used as landscape water 9. 274,246 9,142 Used as landscape water 10. 277,203 8,942 To Tian’e lake 11. 286,630 9,554 To Tian’e lake 12. 323,256 10,428 To Tian’e lake Total 3,333,805 Source: TRTA consultants

140 The reclaimed water will be mainly used as landscape water in Spring and Summer (from May to October). In Autumn and Winter, reclaimed water will be stored at Tian’e Lake (with a storage capacity of 2.26 million m3). If the reclaimed water is not sufficient in Spring and Summer, water in Tian’e Lake can be used as reclaimed water after treatment.

141 In 2018, total reclaimed water was 3.34 million m3, in which 0.5 million m3 was evaporated, 1.25 million m3 was used as landscape water, 1.22 million m3 was used in nursery garden and the unused reclaimed water was 0.42 million m3.

142 The estimated reclaimed water consumption of subproject 1 was 28,281.24 m3 per year. The reclaimed water supply capacity can meet the demand of subproject 1. Besides, the Erenhot WWP has an expansion plan and the estimated capacity will be 25,000 m3/d in 2025.

143 Existing facilities. The 5 farming bases to be reconstructed, Erenhot International traditional Chinese and Mongolia Medicine Hospital and PRC-Mongolian Erenhot-Zamyn Uud ECZ are existing facilities of the subproject 1.

144 Further information on the associated and existing facilities is in Table III-5.

Table III-5: Due Diligence for Associated and Existing Facilities Link with Project EIA Date of Operational Operational Compliance Can meet Name Capacity Approval Function Construction Period Plan Issues? Physical Demand project Date demand? Associated Provide reclaimed 12,500 Erenhot WWTP 2000 2002 2008 Yes Erenhot City No water for 189 m3/d Yes m3/d component 3 Existing WWTP of Erenhot Receive International wastewater from traditional 2005 2007 120 t/d 2011 Yes Erenhot EEB No 5 t/d Yes the hospital during Chinese and operation Mongolian Medical Hospital Receive domestic solid waste during Erenhot landfill 2005 2006 300 t/d 2007 Yes Erenhot City No 0.2 t/d Yes construction of the project Receive domestic Tuyouqi County Tuyouqi solid waste during 2008 2010 200 t/d 2013 Yes No 250 kg/d Yes landfill County construction of the project Receive domestic Damaoqi County Damaoqi solid waste during 2014 2016 200 t/d 2018 Yes No 30 kg/d Yes landfill County construction of the project Receive domestic Guyang County solid waste during 2008 2010 200 t/d 2012 Yes Guyang county No 34 kg/d Yes landfill construction of the project Source: TRTA consultants.

145 PRC-Mongolian Erenhot-Zamyn Uud ECZ is a new ECZ and the master plan is under preparation now and construction of this ECZ has not started yet. An environmental audit of Erenhot-Zamyn Uud ECZ is conducted and presented below.

146 The environmental audit was conducted by the TRTA Consultants, based on the information provided by the PIE of the Erenhot Project, Erenhot DRC, together with available public information and a site visit. The site visit was undertaken at April 2019.

147 Erenhot-Zamyn Uud ECZ are located at both PRC and Mongolia. The area in Erenhot City is 9.03 km2 while in Zamyn Uud is 9 km2. The key sectors in the ECZ will be international logistic industry, manufacturing industry, high technology industry, cross-border tourism and emerging service industry15.

Figure III-4: General Plan of Erenhot-Zamyn Uud ECZ (2019-2035) Source: Domestic FSR, 2019

148 Erenhot-Zamyn Uud ECZ is located at both PRC and Mongolia. The area covers a total

15 Emerging service industry includes financial service, modern logistics, technology research and development, business service, information service, exhibition service, Leisure tourism, health industry etc. 53

area of 18.03 km2 of which the Chinese side covers 9.03 km2 and the Mongolian side covers 9 km2. The key sectors in the ECZ will be international logistic industry, manufacturing industry, high technology industry, cross-border tourism and new service industry.

149 The Erenhot-Zamyn Uud ECZ consists of four functional zones and presented in Table III-6.

Table III-6: Industry Layout Plan of Erenhot-Zamyn Uud ECZ Function division Main industry Area (Ha) Total area: 359 ha International logistic area International logistic industry PRC’s area: 225 ha Mongolian area: 134 ha Import processing industry Total area: 655 ha Export processing industry Production area PRC’s area:272 ha Import and export processing industries Mongolian area: 383 ha High technology industry Total area: 336 ha Cross-border tourism area Cross-border tourism PRC’s area:177 ha Mongolian area: 159 ha Total area: 433 ha Free border trade New service industry PRC’s area: 229 ha cooperation area Mongolian area: 204 ha Source: TRTA consultants. 150 The Erenhot-Zamyn Uud ECZ consists of four functional zones and the general plan is presented in Figure III-5.

Figure III-5: General Plan of Erenhot-Zamyn Uud ECZ at PRC side (2019-2035) Source: Domestic FSR, 2019.

151 The short-term and long-term development goals are presented below:

152 By 2025, three industry clusters including international logistic industry, import and export processing industries and modern service industry will be initially formed as the functional extension zone. During this period, the industrial output value of the park will reach 5 billion CNY.

153 By 2035, main industries including international logistic industry, manufacturing industry, high technology industry, cross-border tourism and new service industry in ECZ will be well developed. During this period, the industrial output value of the park will reach 17 billion CNY.

154 According to the PRC Law on EIA, an EIA report for Erenhot-Zamyn Uud ECZ will be prepared and submitted to the EEB for approval. Any construction or modification works in the ECZ is not permitted to commence unless an approval of the EIA from the EBB is obtained.

155 Now the management committee of Erenhot-Zamyn Uud ECZ has not been established. One of the committee’s responsibilities is to administer the ECZ on such activities and issues as planning, construction, land use, financing, personnel recruitment, social safeguard, environmental protection, public health and production safety.

156 The ECZ management committee also provides support to the IMAR EED and Erenhot EEB in environmental impact assessment, environmental monitoring, construction supervision, enforcement of environmental laws and regulations and emergency response procedures.

157 Overall, the ECZ management committee will have sufficient capacities to manage the ECZ and environmental issues in ECZ.

IV. DESCRIPTION OF THE ENVIRONMENT

A. Location and Physical Setting

158 The Tranche 1 subprojects will be implemented in Erenhot Municipality and Baotou Municipality (with subcomponents at Damaoqi County, Tuyouqi County and Guyang County of Baotou Municipality). Locations of the subprojects are presented in Figure III-1 to Figure III-3, respectively.

1. OVERVIEW a. Erenhot

159 Erenhot is a county-level city of the Xilinguole City, in IMAR, located in the Gobi Desert along the Sino-Mongolian border, across from the Mongolian town of Zamyn-Üüd. Erenhot City is located at 111°17′-112°25′ east longitude and 42°55′-43°53′ north latitude. It is located in the central part of Inner Mongolia Plateau, northwest of Xilinguole City, and adjacent to Zummen Ude City in Mongolia in the north. It boards Sunitezuoqi County in the east, boards Suniteyouqi County in the west and south. ErenhotCity is 390km away from Hohhot, the capital of the IMAR, 330km away from Xilinhot, the capatial of Xilinguole City, 714km away from Ulaanbaatar, the capital of Mongolia, 7,623km away from Moscow, the capital of Russia, and 720km away from Beijing. It is the border land port with a minimum distance to Beijing.

160 Erenhot experiences a cold desert climate (Köppen BWk) with long, very dry, and bitter winters and short, hot summers. Monthly daily average temperatures range from −18.1 °C in January to 23.3 °C in July, with an annual mean of 3.98 °C. The city receives 3,232 hours (about 73% of the possible total) of bright sunshine per year, and clear, sunny, dry weather dominates year-round; due to the aridity, the diurnal temperature variation frequently approaches and exceeds 15 °C. Over two-thirds of the sparse 142 mm of annual rainfall occurs from June to August alone. With monthly percent possible sunshine ranging from 67% in July to 78% in February, the city is one of the sunniest nationwide and receives 3,232 hours of bright sunshine annually. b. Damaoqi County

161 Baotou Municipality is located in the central and western part of IMAR. It is the largest city by urban population in IMAR. Its geographical coordinates are 109°16'-111°26' east longitude and 40°40'-42°44' north latitude. It borders Hohhot City in the east, Mongolia in the north, Bayannur City in the west, and Erdos City across the river in the south. It is about 182 km wide from east to west and 270km long from north to south, with a total area of 27,768 km2. The Baotou municipality administrative areas are shown in Figure IV-1.

162 Damaoqi County has a monsoon-influenced, continental semi-arid climate (Köppen BSk), barely avoiding arid designation, with very cold and dry winters, hot, somewhat humid summers, and strong winds, especially in spring. The monthly 24-hour average temperature ranges from −14.5°C in January to 21.1°C in July, with the annual mean at 4.23°C. The annual precipitation is 256 mm, with more than half of it falling in July and August alone. There are 3,164 hours of bright sunshine annually, with each of the winter months having over 70% of the possible total, and this percentage falling to 58 in July.

Damaoqi County

Baiyun Ebo Mining District

Guyang County

Shiguai District Kundulun District Qingshan District

Donghe District Jiuyuan District Tuyouqi County

Figure IV-1: Baotou Municipality Administrative Divisions Source: Wiki.

163 Damaoqi County belongs to Baotou Municipality, which is located in the north of Baotou Municipality. Its geographical coordinates are 109°16′-111°25′ east longitude and 41°20′-42°40′ north latitude. The east of Damaoqi County is Siziwangqi County of Wulancabu City, the west is Wulatezhongqi County of Bayannur City, the south is Guyang County of Baotou Municipality and Wuchuang County of Hohhot City, and the north is Monoglia, with a total area of 18,177 km2. c. Tuyouqi County

164 Tuyouqi County belongs to Baotou Municipality, which is located in the east of Baotou

Municipality. The County is located in the northern foot of Daqing Mountain and the southern end of the Mongolian Plateau. Its geographical coordinates are 110°14′-111°07′ east longitude and 40°14′-40°51′ north latitude. The east of Tuyouqi County is Tuzuoqi County of Hohhot City, the west is Donghe District and Shiguai District of Baoyan City, the south is Dalateqi County and Zhungeerqi County of Erdos City, and the north is Guyang County of Baotou Municipality and Wuchuang County of Hohhot City, with a total area of 2,368 km2.

165 Tuyouqi County has a monsoon-influenced, continental semi-arid climate (Köppen BSk), with very cold and dry winters, hot, somewhat humid summers, and strong winds, especially in spring. The monthly 24-hour average temperature ranges from −15.4°C in January to 22.9°C in July, with the annual mean at 7.5°C. The annual precipitation is 346 mm, with more than half of it falling in June, July and August alone. There are 3,095 hours of bright sunshine annually.

166 The annual precipitation in the county is very uneven, with a maximum annual precipitation of more than 600mm, while the minimum annual precipitation is only 131mm. The multi-year average evaporation is 6 times of the average precipitation.

167 The meteorological data of Tuyouqi County is presented in Table IV-1. The top one direction of prevailing wind was east with a frequency of 12.04%, top 2 was west with a frequency of 11.98%. Direction of prevailing wind in summer is east and in winter is west.

Table IV-1: Summary of Tuyouqi County meteorological data (1998-2017) Item Value Item Value Annual average temperature 8.4 Annual average wind speed (m/s) 2.1 (°C) Extremely high temperature 35.4 (12 May, No. of days with big winds 4.3 (°C) 2016) Extremely low temperature -22.0 (25 Dec Annual precipitation (mm) 346 (°C) 1998) Maximum annual precipitation Annual average pressure (hPa) 902.5 608.5 (mm) Annual average relative 53 Sunshine hours 3,095 humidity (%) Maximum depth of frozen ground Annual evaporation (mm) 1917.4 185 (cm) Source: Domestic EIA, 2019.

168 Monthly average temperature of Tuyouqi County is presented in Table IV-2.

Table IV-2: Monthly average temperature of Tuyouqi County (1998-2017) Item Jan Feb Mar Apr May Jun Jul Temperature (°C) -4 1 15 21 27 31 31 Item Aug Sep Oct Nov Dec Year Temperature (°C) 30 22 15 5 -2 8.4 Source: Domestic EIA, 2019.

d. Guyang County

169 Guyang County belongs to Baotou Municipality, which is located in the north of Baotou Municipality. The county is located in the northern foot of Daqing Mountain. Its geographical coordinates are 109°40′-110°41′east longitude and 40°42′-41°08′ north latitude. The east of Guyang County is Wuchuan County of Hohhot City, the west is Wulateqianqi County and Wulatezhongqi County of Baotou Municipality, the south is Tuyouqi County and Jiuyuan District of Baotou Municipality, and the north is Damaoqi County of Baotou Municipality, with a total area of 5,332.71km2

170 Guyang County has a temperate continental climate with low temperature, low precipitation, sufficient sunshine and large temperature difference. The monthly 24-hour average temperature ranges from −15.4°C in January to 23.8°C in July, with the annual mean at 5.5°C. The annual precipitation is 291.1 mm, with 64% of it falling in June, July and August alone. There are 2,989 hours of bright sunshine annually.

171 The meteorological data of Guyang County is presented in Table IV-3.

Table IV-3: Summary of Guyang County meteorological data (1998-2017) Item Value Item Value Annual average temperature Annual average wind speed 5.4 2.2 (°C) (m/s) Extremely high temperature 38.6 (22 Jun, No. of days with big winds 4.3 (°C) 2005) -33.2 (18 Jan, Extremely low temperature (°C) Annual precipitation (mm) 301.2 1998) Maximum annual precipitation Annual average pressure (hPa) 864.1 438.5 (mm) Annual average relative 51 Sunshine hours 2967.3 humidity (%) Maximum depth of frozen ground Annual evaporation (mm) 1917.4 185 (cm) Source: Domestic EIA, 2019.

172 Monthly average temperature of Guyang County is presented in Table IV-4.

Table IV-4: Monthly average temperature of Guyang County (1998-2017) Item Jan Feb Mar Apr May Jun Jul Temperature (°C) -13.5 -8.6 -1.5 7.4 14.7 19.9 22.0 Item Aug Sep Oct Nov Dec Year Temperature (°C) 19.6 13.8 6.0 -3.9 -11.3 5.4 Source: Domestic EIA, 2019.

173 The wind speed from April to June in Guyang County is the top in the whole year. In 2017, the maximum monthly wind speed is 3.68 m/s in April, while the minimum wind speed was 1.3 m/s in January.

2. GEOGRAPHY AND TOPOGRAPHY a. Erenhot

174 Erenhot City is located in the central plateau of Inner Mongolia and the layered plateau area north of Yinshan Mountain. The terrain is relatively flat, with a gentle slope from the southwest to the northeast. The urban area is located in the western margin of the sedimentary belt of the Erenhot Basin. The “Narenshaorong” and “Haritolgoi” in the southeast of Saiwusu are the highest, with an altitude of 1,016m. The Bulangyintuiraomu mountain near the urban

area has a second highest elevation of 964.3m. E’rennuoer is the lowest in Erenhot with an elevation of 900m.

Source: Google map, 2019 Figure IV-2: Erenhot topography b. Damaoqi County 175 The Damaoqi County is located in the northern foot of Daqing Mountain, in the central part of the Inner Mongolia Plateau. The terrain is high in the south and low in the north. It slopes from south to the north. The southern of the Damaoqi County is hill area, northern is soft hill area and the middle is plain. The terrain is flat and open. The average elevation is 1,376m. The highest point is the Habute Gaijisu mountain with an elevation of 1,846 m and the lowest point is Tenggenaoer with an elevation of 1,058m.

Source: Google map, 2019 Figure IV-3: Damaoqi County topography c. Tuyouqi County

176 The northern part of the Tuyouqi County is the middle and western sections of the Daqing Mountain. The Jiufeng Mountain, the main peak of Daqing Mountain, is located in the northeastern part of the county with a highest altitude of 2337.8 meters in the county. The lowest altitude in the county is 1,050 meters. The southern part is the open and flat Tumochuan Plain, with an area of 1667.12 km2. The elevation of the southern part is between 987 and 1,000 meters. It slopes slightly from northwest to southeast, and the slope of the county ranges from 1:7000 to 1:8000.

Source: Google map, 2019 Figure IV-4: Tuyouqi County Topography d. Guyang County

177 Guyang County is composed of the medium-low mountain with a denuded structure, the hilly area and the alluvial accumulation plain between low mountains and hills. The landform belongs to the middle and low hills, in which 40% are hills, 50% are mountains, only 10% is plain. Guyang County has an average elevation of 1,300-1,800m. The highest in the county is Chunkun Mountain with an elevation of 2,324m. The terrain of southern part of is mountainous. The northern part is relatively flat. The Danaobao Mountain goes through the county from east to west.

Source: Google map, 2019 Figure IV-5: Guyang County topography

3. SOIL COVER a. Erenhot

178 The urban area is located in the western margin of the sedimentary belt of the Erenhot Basin. The basic terrain of Erenhot forms from Quaternary to Triassic and Cretaceous. The main soil types in Erenhot are light chestnut colored soil and sand gravel.

179 The main soil type in the subproject are is light chestnut colored soil. b. Damaoqi County

180 The soil type in northern part is brown soil and southern is chestnut soil. The parent material consists of red sandstone, mudstone and gravel of the Tertiary and Mesozoic. The parent material is covered with a thick Quaternary eluvium, and some area is covered with Aeolian sand. The soil fertility is low and the organic matter content is 1.0-1.8%, and the main nutrient content is low nitrogen, low phosphorus and high potassium, and the C/N ratio is about 9.25-9.68. Vegetation type is desert steppe vegetation.

181 The main soil type in the subproject area is light chestnut colored soil.

c. Tuyouqi County

182 The soil types of Tuyouqi County are divided into three soil types: gray cinnamon soil, chestnut soil and meadow soil. Gray cinnamon soil and chestnut soil are the main types, accounting for 96.9%. Gray cinnamon soil accounts for 52.6% of the total land area and is the main soil type at the mountain area; chestnut soil accounts for 44.3% and is the main soil type at the hilly area; meadow soil only accounts for 3.1% and is the main soil type at the plain area. Soil nutrients are moderately low and is lack of phosphorus and nitrogen.

183 The total land area is 3.552 million mu, including 1.45 million mu farm land, accounting for 43.5%. the forest area is 593,000 mu and the forest coverage rate is 17.3%. In addition, there are 100,000 mu of alkali land to be developed and utilized.

184 The soil types are mainly gray cinnamon soil and meadow soil, and the salt soil and wind sand soil are scattered throughout. Nitrogen, phosphorus and potassium in the soil are high, therefore the soil is suitable for various crops growth.

185 The main soli type at the subproject area is gray cinnamon soil and meadow soil. d. Guyang County

186 The soil types of Guyang County are divided into three soil types: gray cinnamon soil, chestnut soil and meadow soil. Gray cinnamon soil and chestnut soil are the main types, accounting for 96.9%. Gray cinnamon soil accounts for 52.6% of the total land area and is the main soil type at the mountain area; chestnut soil accounts for 44.3% and is the main soil type at the hilly area; meadow soil only accounts for 3.1% and is the main soil type at the plain area. Soil nutrients are moderately low and is lack of phosphorus and nitrogen.

187 The main soli type at the subproject area is meadow soil.

4. SEISMOLOGY a. Erenhot

188 The PRC classifies seismic intensity into 12 grades under the China Seismic Intensity Table (GB/T 17742-2008), based on the severity of “shaking” of the earth surface and the extent of potential impact. According to the China Seismic Ground Motion Parameters Zoning Map (GB18306-2001, Amendment 1), the seismic intensity in the Erenhot is Grade 7, with a design peak ground acceleration of 0.10 g, a 10% probability of exceedance in 50 years, and a return period of 475 years. b. Damaoqi County

189 According to the China Seismic Ground Motion Parameters Zoning Map (GB18306-2001, Amendment 1), the seismic intensity in the Damaoqi County is Grade 6, with a design peak ground acceleration of 0.05 g, a 10% probability of exceedance in 50 years, and a return period of 475 years. c. Tuyouqi County

190 According to the China Seismic Ground Motion Parameters Zoning Map (GB18306-2001, Amendment 1), the seismic intensity in the Tuyouqi County is Grade 8, with a design peak ground acceleration of 0.20 g, a 10% probability of exceedance in 50 years, and a return period of 475 years.

d. Guyang County

191 According to the China Seismic Ground Motion Parameters Zoning Map (GB18306-2001, Amendment 1), the seismic intensity in the Guyang County is Grade 7, with a design peak ground acceleration of 0.10 g, a 10% probability of exceedance in 50 years, and a return period of 475 years.

5. WATER RESOURCES a. Erenhot

192 There are no perennial rivers in Erenhot, only some small gully at the edge of higher plains which is formed by flood in the rainy season. The small depressions at the higher plains are the sources of shallow groundwater. Surface water resources are scarce, and surface vegetation is sparse which is good for evaporation. The unevaporated water infiltrate into ground and becomes ground water.

193 Annual ground water resource in Erenhot is 17.557 million m3 and per capital average water resource in Erenhot is only 149m3, accounts for 9.5% of national level per capital

194 There are three main water resources in Erenhot: one salt lake in the east of urban area and two main ground water resources in Erenhot: Saiwusu water resource and Qiharigetu water resource.

195 Annual available water resource of Saiwusu water resource is 1.38 million m3. Because the alkalinity of the water in Saiwusu water resource is high, now the water of Saiwusu water resource is mainly used as irrigation water. In 2018, annual irrigation water consumption was 0.53 million m3.

196 Annual available water resource of Qiharigetu water resource is 10.887 million m3 and the water of Qiharigetu water resource is mainly used as domestic water. Qiharigetu water resource can provide 6.695 million m3 to Erenhot annually. In 2018, annual domestic water consumption in Erenhot was 5.512 million m3.

197 Annual available water resource of the saline lake is 7.4825 million m3. Because the salinity of the water in the saline lake is high, now the saline lake mainly provided industrial water to three mining companies.

Salt lake

Reclaimed water treatment plant

Saiwusu

Qiharigetu

Figure IV-6: Water Resources in Erenhot Source: Domestic EIA, 2019. b. Damaoqi County

198 Damaoqi County has six water systems: Tenggenaoer, Ulannaoer, Saidabusu, Halanaoer, Huhenaoer and Tugumunaoer. The total area of the rivers is 6800km2, and there are 9 main rivers with a total length of 742.6km. The Aibugai River is the longest river with a total length of 154km and is injected into Tenggenaoer River. Other major rivers include the Taerhun River, the Chaganbula River, the Kailing River, the Wulansumu River, the Tabu River, the Taolaitu River, the Wulanyigeng River, the Aguqigaole River, the Zhadagai River, etc. The total drainage area is 13,938 km2. The south of Bailingmiao Town is the runoff area and the main lakes in this area are Tengenaoer, Harinaoer, and Saidabusu. The river network density is about 0.8km/km2, and the daily average runoff is 1.5 million m3.

199 Annual average water resource in Damaoqi County is 91.27 million m3 (ground water is 75.54 million m3 and surface water is 15.73 million m3).

200 The Mandula port and Mandula town has a water supply project with a capacity of 5,500 m3/d (Mandula Port:1,500 m3/d; Mandula town: 4,500 m3/d). The project is located at Southwest of Mandula port with a distance about 5km.

c. Tuyouqi County

201 The Yellow River enters Tuyouqi County at the west of Liwuying Village, Daxicheng Village and traverses the southern edge of Tuyouqi County, then leaves at the southeast of Baliwan Village. The Yellow River section in Tuyouqi County has a length of 106 km and width of 0.2-0.95 km, has a drainage area of 2,656 km2 and the annual average runoff is 24.756 billion m3. In addition, there are 21 ravines with a drainage area more than 20 km2, such as the Meidaigou and Shuijiangou. Water in the 21 ravines accounts for 11.5% of the surface water resource.

202 Tuyouqi County is rich in ground water. Annual average water resource in Tuyouqi County is 276 million m3 (ground water is 228 million m3 and surface water is 48 million m3). Available shallow groundwater resource is 105 million m3. d. Guyang County

203 There are 7 small rivers namely Kundulun River, Wusutule River, Wudanggou River, Meidaigou River and Shuijiangou River which belong to the Yellow River system and Aibugai River and Tabu River which are inland rivers. The Tabu River originated in Wuchuan County, and the other six rivers originated from the county. The seven rivers are all seasonal rivers, and the river water is supplied by precipitation.

204 Annual average water resource in Guyang County is 201 million m3 (ground water is 143 million m3 and surface water is 58 million m3).

B. Environmental Quality

1. Noise a. Erenhot

205 In 2018, the annual average 12-hour daytime noise level was 53.8 dB(A) while the 12- hour nighttime noise level was 49.7 dB(A), which complies with the Class II standard of Environmental Quality Standard for Noise (GB3096－2008). b. Damaoqi County

206 Noise monitoring was conducted at the boundaries of the project subcomponents. The monitoring was carried out at over a 24-hour period on July 5, 2019. Weather conditions were sunny and cloudless with wind speed less than 5.0 m/s, which meet relevant PRC meteorological requirements for noise monitoring.

207 Monitoring was undertaken with HS 6298 and Aiwa AWA6218 multi-functional ambient noise detectors. Monitoring at the plant site boundaries was undertaken in accordance with the relevant requirements in PRC Noise Standards for Industrial Enterprises at Site Boundary (GB12348-2008). Noise monitoring at adjacent sensitive sites was undertaken in accordance with the relevant requirements in PRC Environmental Quality Standards for Noise (GB3096- 2008). Figure IV-7 presents the location of the monitoring points (site boundaries). Table IV-5 presents the monitoring results.

Legend N N Component site N N Monitoring points N N N N

Source: Domestic EIA, 2019 Figure IV-7: Noise Monitoring Location

Table IV-5: Monitoring Results of Noise at Site Boundaries (unit: Leq dB(A)) Monitoring results Standard No. Location Daytime Nighttime Daytime Nighttime 1 East boundary of logistics park 51.6 41.7 60 50 2 South boundary of logistics park 50.7 41.8 60 50 3 West boundary of logistics park 51.3 40.9 60 50 4 North boundary of logistics park 50.8 41.3 60 50 East boundary of customs 5 51.2 42 60 50 supervision place South boundary of customs 6 51.7 41.8 60 50 supervision place West boundary of customs 7 50.5 41.3 60 50 supervision place North boundary of customs 8 51.0 40.8 60 50 supervision place Start point of Mandula Port Freight 9 Passage (five for entry and five for 51.6 41.6 60 50 exit) road expansion project Source: Domestic EIA, 2019.

c. Tuyouqi County

208 Noise monitoring was conducted at the boundaries of the project subcomponents. The results are presented in Table IV-6.

Table IV-6: Monitoring Results of Noise at Site Boundaries (unit: Leq dB(A)) Monitoring results Standard No. Location Daytime Nighttime Daytime Nighttime 1 East boundary of No.1-4 farming bases 50.9-53.3 42.8-46.7 60 50 2 South boundary of No.1-4 farming bases 49.8-52.3 42.3-45.9 60 50 3 West boundary of No.1-4 farming bases 47.9-52.1 40.9-46.2 60 50 4 North boundary of No.1-4 farming bases 46.7-50.3 41.1-46.8 60 50 Source: Domestic EIA, 2019. d. Guyang County

209 Noise monitoring was conducted at the boundaries of the project subcomponents. The results are presented in Table IV-7.

Table IV-7: Monitoring Results of Noise at Site Boundaries (unit: Leq dB(A)) Monitoring results Standard No. Location Daytime Nighttime Daytime Nighttime 1 East boundary 51.2 40.9 60 50 2 South boundary 50.6 39.8 60 50 3 West boundary 50.7 41.5 60 50 4 North boundary 49.8 42.0 60 50 Source: Domestic EIA, 2019.

2. Air Quality a. Erenhot

210 In 2018, Erenhot has ambient monitoring results for 365 days, in which, 222 days had an Air Quality Index (AQI) below than 50, 93 days had an AQI between 51 and 100, 34 days had an AQI between 101 and 150, 2 days had an AQI between 151 and 200 and 10 days had an AQI between 201 and 300.

3 211 Monthly average concentration of SO2 in 2018 was 17 μg/m and monthly concentrations 3 of SO2 is 2-90 μg/m which can meet the PRC’s class II standard. Monthly average 3 3 concentration of NO2 in 2018 was 15 μg/m and monthly concentrations of NO2 is 1-199 μg/m in which only 1 day exceeded the PRC’s class II standard.

212 The monthly average concentration of PM10 in 2018 was 84 μg/m3 and monthly 3 concentrations of PM10 is 12-1984 μg/m in which 43 days exceeded the PRC’s class II 3 standard. The monthly average concentration of PM2.5 in 2018 was 20 μg/m and monthly 3 concentrations of PM2.5 is 5-245 μg/m in which 10 days exceeded the PRC’s class II standard.The monthly average concentration of CO in 2018 was 1.094 μg/m3 and monthly 3 concentrations of SO2 is 0.170-2.603 μg/m which can meet the PRC’s class II standard.

3 213 The maximum 1-hour concentration of O3 in 2018 was 104 μg/m and concentrations of 3 O3 is 24-288 μg/m in which 13 days exceeded the PRC’s class II standard. b. Damaoqi County

214 Based on Baotou Environment Quality Bulletin (2017), ambient quality of Damaoqi County in 2017 is presented in Table IV-8.

Table IV-8: Ambient Air Quality in Damaoqi County in 2017 (unit: ug/m3) Pollutants Parameter Value Limit Ratio to limit Compliance or not Annual average 11.38 60 18.97 Yes SO2 Daily average 25 150 16.67 Yes Annual average 8.82 40 22.005 Yes NO2 Daily average 20 80 25 Yes Annual average 50.5 70 72.14 Yes PM10 Daily average 119 150 79.33 Yes Annual average 16.75 35 47.86 Yes PM2.5 Daily average 47.7 75 63.6 Yes Annual average 0.640 4,000 16.0 Yes CO Daily average 1,330 4,000 33.25 Yes Annual average 99.05 160 61.91 Yes O3 8-hour average 78 160 48.75 Yes Source: Domestic EIA, 2019.

215 In 2017, ambient quality of Damaoqi County can meet the Class II of National Ambient Air Quality Standard (GB3095-2012). The ambient air quality in Damaoqi was good in 2017.

216 During the domestic EIA preparation, ambient air quality monitoring was conducted at the proposed sites for the animal quarantine station subcomponent. The monitoring was undertaken continuously over a 7-day period from August 3 to 9, 2019 for parameters of CO, SO2 and NO2 (1-hour average concentrations), H2S, NH3 and odor (particular pollutants) and TSP, PM10, PM2.5, SO2 and NO2 (24-hour average concentration). The monitoring results are presented in Table IV-9.

Table IV-9: Air quality monitoring results (Unit: mg/m3) 1-hour mean 24-hour mean Exceedance of national standards, % Item concentration rage concentration rage 1-hour mean 24-hour mean

SO2 0.034 - 0.092 0.045-0.058 0 0

NO2 0.022-0.059 0.029-0.040 0 0 CO 1.0-3.7 NA 0 NA

PM2.5 NA 0.035-0.065 NA 0

PM10 NA 0.074-0.101 NA 0 TSP NA 0.125-0.224 NA 0

NH3 0.035-0.080 NA 0 NA

H2S No detection NA 0 NA Odor No detection NA 0 NA Source: Domestic EIA, 2019.

217 The data show that all the 24-hour averaged SO2, NO2, TSP, PM10 and PM2.5 concentrations and 1-hour averaged SO2, CO and NO2 concentrations were in compliance with the relevant PRC ambient air quality standards: Class II of Ambient Air Quality Standards (GB3095-2012). The 1-hour averaged NH3, H2S and odor concentrations were in compliance with the PRC’s Emission Standards for Odor Pollutants (GB 14554-93).

218 The monitoring results show that air quality in the component area is good. c. Tuyouqi County

219 During the domestic EIA preparation, ambient air quality monitoring was conducted at the

proposed sites for the four sheep breeding bases. The monitoring was undertaken continuously over a 7-day period from August 11 to 17, 2019 for the parameters of CO, SO2 and NO2 (1- hour average concentrations), H2S, NH3 and odor (particular pollutants) and TSP, PM10, PM2.5, SO2 and NO2 (24-hour average concentration). The monitoring results are presented in Table IV-10.

Table IV-10: Air quality monitoring results (Unit: mg/m3) Exceedance of national standards, % 1-hour mean 24-hour mean Item concentration rage concentration rage 1-hour mean 24-hour mean

SO2 0.025 - 0.087 0.045-0.058 0 0

NO2 0.018-0.068 0.032-0.048 0 0 CO 0.9-2.6 NA 0 NA

PM2.5 NA 0.028-0.053 NA 0

PM10 NA 0.052-0.089 NA 0 TSP NA 0.089-0.163 NA 0

NH3 0.023-0.068 NA 0 NA

H2S No detection NA 0 NA Odor No detection NA 0 NA Source: Domestic EIA, 2019.

220 The data show that all the 24-hour averaged SO2, NO2, TSP, PM10 and PM2.5 concentrations and 1-hour averaged SO2, CO and NO2 concentrations were in compliance with the relevant PRC ambient air quality standard: Class II of Ambient Air Quality Standards (GB3095-2012). The 1-hour averaged NH3, H2S and odor concentrations were in compliance with PRC’s Emission Standards for Odor Pollutants (GB 14554-93).

221 The results show that air quality in the component areas is good. d. Guyang County

222 Based on Baotou Environment Quality Bulletin (2017), the ambient quality of Guyang County monitored in 2017 is presented in Table IV-11.

Table IV-11: Ambient Air Quality in Guyang County in 2017 (unit: ug/m3) Pollutants Parameter Value Limit Ratio to limit (%) Compliance or not

SO2 Annual average 23 60 38.3 Yes NO2 Annual average 24 40 60.0 Yes PM10 Annual average 92 70 131.4 No PM2.5 Annual average 34 35 97.1 Yes CO Daily average 2,100 4,000 52.5 Yes O3 8-hour average 153 160 95.6 Yes Source: Domestic EIA, 2019.

223 In 2017, the ambient quality of Guyang County except for PM10 met the Class II of National Ambient Air Quality Standard (GB3095-2012). The ambient air quality in Damaoqi was good in 2017 in general. The main reason for the exceedance of PM10 was a big local sand storm that occurred in Spring.

224 During the domestic EIA preparation, ambient air quality monitoring was conducted at the

proposed sites for the No.5 sheep breeding base. The monitoring was undertaken continuously over a 7-day period from August 19 to 25, 2019 for the parameters of CO, SO2 and NO2 (1- hour average concentrations), H2S, NH3 and odor (particular pollutants) and TSP, PM10, PM2.5, SO2 and NO2 (24-hour average concentration). The monitoring results are presented in Table IV-12.

Table IV-12: Air quality monitoring results (Unit: mg/m3) 1-hour mean 24-hour mean Exceedance of national standards, % Item concentration rage concentration rage 1-hour mean 24-hour mean

SO2 0.030 - 0.077 0.034-0.048 0 0

NO2 0.021-0.056 0.028-0.052 0 0 CO 1.5-3.0 NA 0 NA

PM2.5 NA 0.033-0.049 NA 0

PM10 NA 0.043-0.078 NA 0 TSP NA 0.072-0.158 NA 0

NH3 0.040-0.092 NA 0 NA

H2S No detection NA 0 NA Odor No detection NA 0 NA Source: Domestic EIA, 2019.

225 The data show that all the 24-hour averaged SO2, NO2, TSP, PM10 and PM2.5 concentrations and 1-hour averaged SO2, CO and NO2 concentrations were in compliance with the relevant PRC ambient air quality standard: Class II of Ambient Air Quality Standards (GB3095-2012). The 1-hour averaged NH3, H2S and odor concentrations were in compliance with PRC’s Emission Standards for Odor Pollutants (GB 14554-93).

226 The results show that air quality in the component areas is good.

3. Surface water quality a. Erenhot

227 There are no surface rivers in Erenhot. b. Damaoqi County

228 There are no surface rivers in a radius of 10km from Subproject 2 and the animal quarantine station. c. Tuyouqi County

229 The nearest surface water body of the 4 breeding bases is Shuijiangou River, which is about 8km away from the project site. During the domestic EIA preparation, surface water quality monitoring was conducted, and the monitoring results are presented in Table IV-13.

Table IV-13: Surface water quality monitoring results Parameter Unit Results Limit pH NA 7.3 6 ~ 9 Dissolved oxygen (DO) mg/L 7.5 ≥5 Permanganate index () NA 3.5 ≤6 Chemical oxygen demand (COD) mg/L 15.1 ≤20

Parameter Unit Results Limit 5-day biochemical oxygen demand (BOD5) mg/L 1.9 ≤4 Ammonia nitrogen (NH3-N) mg/L 0.22 ≤1.0 Total phosphorus (as P) mg/L 0.09 ≤0.2 Total nitrogen (lakes, reservoirs, as N) mg/L 0.45 ≤1.0 Copper (Cu) mg/L 0.02 ≤1.0 Zinc (Zn) mg/L 0.03 ≤1.0 Fluoride (as F-) mg/L 0.004 ≤1.0 Selenium (Se) mg/L 0.0003 ≤0.01 Arsenic (As) mg/L 0.0002 ≤0.05 Mercury (Hg) mg/L ND ≤0.0001 Cadmium (Cd) mg/L ND ≤0.005 Chromium (Cr, hexavalent) mg/L ND ≤0.05 Lead (Pb) mg/L ND ≤0.05 Cyanide (CN) mg/L ND ≤0.2 Volatile phenol mg/L ND ≤0.005 Total petroleum hydrocarbon (TPH) mg/L 0.003 ≤0.05 Anionic surfactant mg/L 0.02 ≤0.2 Sulfide mg/L 0.005 ≤0.2 Fecal coliform bacteria no./L 352 ≤10000 Note: ND means no detection. Source: Domestic EIA, 2019.

230 The results show that surface water quality near the four sheep breeding bases is good. d. Guyang County

231 There are no surface waterbodies in a radius of 10km from the No.5 breeding base.

4. Ground water quality. e. Erenhot 232 In 2018, the Erenhot EEB carried out monthly ground water monitoring at the Qiharigetu water resource. The concentrations of sulfate, fluoride and total hardness exceeded the Class III standards for Underground Water Quality (GB/T 14848－2017). The results are presented in Table IV-14.

Table IV-14: Monthly ground water monitoring results of 2018 unit: mg/L Month Parameter exceeds the Monitoring results Class III standard January Fluoride 1.4 Fluoride 1.41 February Sulfate 250.2 Fluoride 1.30 March Sulfate 315.6 Total hardness 515 Fluoride 1.35 April Sulfate 310 Total hardness 521 Fluoride 1.5 May Sulfate 318 Total hardness 509 Fluoride 1.32 June Sulfate 308 Total hardness 543 July Fluoride 1.5 Fluoride 1.39 August Sulfate 306

Total hardness 509 Fluoride 1.39 September Sulfate 290 Total hardness 478 October Fluoride 1.38 November Fluoride 1.54 December Fluoride 1.48 Source: Domestic EIA, 2019. f. Damaoqi County

233 During the domestic EIA preparation, ground water quality monitoring was conducted near the subproject 2 location and animal quarantine station. Three ground water samples were taken (one is for Component 1, one is for Components 2 and 3, and the other one is for the animal quarantine station). The monitoring results are presented in Table IV-15.

Table IV-15: Ground water quality monitoring results Parameter Unit Results Limit Color HU 5-8 ≤15 Odor and taste --- none none Turbidity NTU 1.3-1.8 ≤3 Visible object --- none none pH --- 6.9~7.8 6.5~8.5 Total hardness (as CaCO3) mg/L 121-168 ≤450 Total dissolved solid (TDS) mg/L 326-621 ≤1000 2- Sulfate (SO4 ) mg/L 105-188 ≤250 Chloride (Cl-) mg/L 59-123 ≤250 Iron (Fe) mg/L 0.005-0.008 ≤0.3 Manganese (Mn) mg/L 0.012-0.035 ≤0.1 Copper (Cu) mg/L 0.018-0.045 ≤1.0 Zinc (Zn) mg/L 0.021-0.031 ≤1.0 Molybdenum (Mo) mg/L ND ≤0.1 Cobalt (Co) mg/L ND ≤0.05 Volatile phenol mg/L ND ≤0.002 Anionic surfactant mg/L 0.03-0.08 ≤0.3 Permanganate index (IMn) mg/L 1.1-1.9 ≤3.0 - Nitrate (NO3 , as N) mg/L 5.0-7.8 ≤20 - Nitrite (NO2 , as N) mg/L 0.005-0.009 ≤0.02 Ammonia nitrogen (NH3-N) mg/L 0.05-0.09 ≤0.2 Fluoride (F-) mg/L 0.23-0.32 ≤1.0 Iodide (I-) mg/L ND ≤0.2 Cyanide (CN) mg/L ND ≤0.05 Mercury (Hg) mg/L ND ≤0.001 Arsenic (As) mg/L ND ≤0.05 Selenium (Se) mg/L ND ≤0.01 Cadmium (Cd) mg/L ND ≤0.01 Hexavalent chromium (Cr6+) mg/L ND ≤0.05 Lead (Pb) mg/L ND ≤0.05 Beryllium (Be) mg/L ND ≤0.0002 Barium (Ba) mg/L ND ≤1.0 Nickel (Ni) mg/L ND ≤0.05 Dichlorodiphenyltrichloroethane (DDT) μg/L ND ≤1.0 Lindane (666) μg/L ND ≤5.0 Total coliform bacteria no./L ND ≤3.0 Total bacteria no./L 15 ≤100 Total alpha (α) radioactivity Bq/L ND ≤0.1 Total beta (β) radioactivity Bq/L ND ≤1.0 Note: ND means no detection. Source: Domestic EIA, 2019.

234 The results show that ground water quality near the subproject sites is good.

g. Tuyouqi County

235 During domestic EIA preparation, ground water quality monitoring was conducted near the subproject 2 site and animal quarantine station. Three ground water samples were taken (one is for No.1 and No.2 breeding bases, one is for No.3 breeding base and one is for No.4 breeding base). The results are presented in Table IV-16.

Table IV-16: Ground water quality monitoring results

Parameter Unit Results Limit Color HU 4-7 ≤15 Odor and taste --- none none Turbidity NTU 1.3-2.1 ≤3 Visible object --- none none pH --- 7.2~8.3 6.5~8.5 Total hardness (as CaCO3) mg/L 207-311 ≤450 Total dissolved solid (TDS) mg/L 403-588 ≤1000 2- Sulfate (SO4 ) mg/L 75-121 ≤250 Chloride (Cl-) mg/L 89-157 ≤250 Iron (Fe) mg/L 0.008-0.012 ≤0.3 Manganese (Mn) mg/L 0.029-0.040 ≤0.1 Copper (Cu) mg/L 0.015-0.034 ≤1.0 Zinc (Zn) mg/L 0.011-0.048 ≤1.0 Molybdenum (Mo) mg/L ND ≤0.1 Cobalt (Co) mg/L ND ≤0.05 Volatile phenol mg/L ND ≤0.002 Anionic surfactant mg/L 0.08-0.14 ≤0.3 Permanganate index (IMn) mg/L 1.8-2.5 ≤3.0 - Nitrate (NO3 , as N) mg/L 8.1-11.2 ≤20 - Nitrite (NO2 , as N) mg/L 0.006-0.012 ≤0.02 Ammonia nitrogen (NH3-N) mg/L 0.04-0.08 ≤0.2 Fluoride (F-) mg/L 0.13-0.20 ≤1.0 Iodide (I-) mg/L ND ≤0.2 Cyanide (CN) mg/L ND ≤0.05 Mercury (Hg) mg/L ND ≤0.001 Arsenic (As) mg/L ND ≤0.05 Selenium (Se) mg/L ND ≤0.01 Cadmium (Cd) mg/L ND ≤0.01 Hexavalent chromium (Cr6+) mg/L ND ≤0.05 Lead (Pb) mg/L ND ≤0.05 Beryllium (Be) mg/L ND ≤0.0002 Barium (Ba) mg/L ND ≤1.0 Nickel (Ni) mg/L ND ≤0.05 Dichlorodiphenyltrichloroethane (DDT) μg/L ND ≤1.0 Lindane (666) μg/L ND ≤5.0 Total coliform bacteria no./L ND ≤3.0 Total bacteria no./L 21 ≤100 Total alpha (α) radioactivity Bq/L ND ≤0.1 Total beta (β) radioactivity Bq/L ND ≤1.0 Note: ND means no detection; Source: Domestic EIA, 2019.

236 The results show that ground water quality near the subproject sites is good.

h. Guyang County

237 During the domestic EIA preparation, ground water quality monitoring was conducted near the subproject 2 location and animal quarantine station. One ground water samples was taken. The results are presented in Table IV-17 Table IV-15.

Table IV-17: Ground water quality monitoring results Parameter Unit Results Limit Color HU 6 ≤15 Odor and taste --- none none Turbidity NTU 1.5 ≤3 Visible object --- none none pH --- 7.3 6.5~8.5 Total hardness (as CaCO3) mg/L 102 ≤450 Total dissolved solid (TDS) mg/L 471 ≤1000 2- Sulfate (SO4 ) mg/L 95 ≤250 Chloride (Cl-) mg/L 72 ≤250 Iron (Fe) mg/L 0.011 ≤0.3 Manganese (Mn) mg/L 0.013 ≤0.1 Copper (Cu) mg/L 0.033 ≤1.0 Zinc (Zn) mg/L 0.026 ≤1.0 Molybdenum (Mo) mg/L ND ≤0.1 Cobalt (Co) mg/L ND ≤0.05 Volatile phenol mg/L ND ≤0.002 Anionic surfactant mg/L 0.06 ≤0.3 Permanganate index (IMn) mg/L 0.61 ≤3.0 - Nitrate (NO3 , as N) mg/L 6.2 ≤20 - Nitrite (NO2 , as N) mg/L 0.007 ≤0.02 Ammonia nitrogen (NH3-N) mg/L 0.07 ≤0.2 Fluoride (F-) mg/L 0.29 ≤1.0 Iodide (I-) mg/L ND ≤0.2 Cyanide (CN) mg/L ND ≤0.05 Mercury (Hg) mg/L ND ≤0.001 Arsenic (As) mg/L ND ≤0.05 Selenium (Se) mg/L ND ≤0.01 Cadmium (Cd) mg/L ND ≤0.01 Hexavalent chromium (Cr6+) mg/L ND ≤0.05 Lead (Pb) mg/L ND ≤0.05 Beryllium (Be) mg/L ND ≤0.0002 Barium (Ba) mg/L ND ≤1.0 Nickel (Ni) mg/L ND ≤0.05 Dichlorodiphenyltrichloroethane (DDT) μg/L ND ≤1.0 Lindane (666) μg/L ND ≤5.0 Total coliform bacteria no./L ND ≤3.0 Total bacteria no./L 18 ≤100 Total alpha (α) radioactivity Bq/L ND ≤0.1 Total beta (β) radioactivity Bq/L ND ≤1.0 Note: ND means no detection; Source: Domestic EIA, 2019.

238 The results show that ground water quality near the subproject sites is good.

5. Solid Waste a. Erenhot

239 Erenhot has a landfill. The designed capacity of the landfill is 850,000 m3 and daily treated waste is 300 t/d. The landfill has been in operation since 2006. Subproject 1 will generate about 99.2 kg/d domestic waste, which will be treated and disposed of in this landfill.

b. Damaoqi County

240 Damaoqi County has a landfill. The designed capacity of the landfill is 650,000 m3 and daily treated waste is 200 t/d. The landfill was under operation from 2016. The No.1 to 4 sheep breeding bases and sheep slaughtering, processing and logistic facility will generate about 386 kg/d domestic waste, which will be treated in this landfill. c. Tuyouqi County

241 Tuyouqi County has a landfill. The designed capacity of the landfill is 700,000 m3 and daily treated waste is 200 t/d. The landfill is estimated to be operated for 20 years. The landfill was under operation from 2010. d. Guyang County 242 Guyang County has a landfill. The designed capacity of the landfill is 680,000 m3 and daily treated waste is 200 t/d. The landfill was under operation from 2010. The No.5 sheep breeding base will generate about 34 kg/d domestic waste, which will be treated in this landfill.

C. ECOLOGICAL RESOURCES AND ENVIRONMENT

1. FLORA AND FAUNA a. Erenhot

243 Flora plants in Erenhot are mainly desert plants which include Kleinmen, Stipa grandis, S. glabra, Artemisia scoparia, Agropyron, Artemisia, and Valerian. Among these plants, the common medicinal plants are ephedra, gmelin sealavender herb, rhizoma anemarrhenae etc.

244 There are few species of wild animals in Erenhot which include rabbits, rodents, sand chickens, and finches. Wild rare animals include Mongolian wild donkeys, yellow sheep, etc b. Damaoqi County

245 There are 62 families, 200 genera and 343 species of wild plants in Damaoqi County, with the largest number of compositae. Main plants are pinus tabulaeformis, platycladus orientalis, betula platyphylla, eucalyptus, apricot, astragalus, codonopsis, bupleurum, licorice, ephedra, gentiana, astragalus, rhubarb, and safflower. The main wild animals are roe deer, badger, scops owl, crow, magpie, ground squirrel, hemiptera, chukar, hare, fox, snake etc.

246 Main medicinal materials include licorice and scutellaria. Wild rare animals include Mongolian wild donkey, yellow sheep, etc. Common birds include hawk, lark, etc.

247 There are two PRC’s grade II protected rare plants- prunus mongolica and Cistanche salsa, one IMARS’s grade II protected plants- licorice and five IMARS’s grade II protected plants- atraphaxis bracteate, roundleaf polygonum, prunus pedunculata, scutellaria baicalensis and iris potaninii.

248 There are 28 national-level protected animals in the area, including 4 national Grade I protected animals: equus hemionus, great bustard, chlamydotis macqueeni and golden eagle; 24 Grade II protected animals: argali, gazella subgutturosa, mongolian gazelle, chinese mountain cat, lynx, saker etc. c. Tuyouqi County

249 The main wild plants include spruce, pinus tabulaeformis, oriental arborvitae, white birch, 77

apricot, jujube, alfalfa, licorice, scutellaria, codonopsis, ephedra, scutellaria, sedge, valerian, flat kidney bean, grass hibiscus, wild pea, wild leek etc.

250 The main wild animals include goral, wolf, fox, raccoon, rabbit, squirrel, sparrow hawk, golden eagle, swallow, mongoose, chukar, carp etc.

251 The medicinal materials produced in the area include scutellaria, medlar, licorice, radix isatidis, chrysanthemum, honeysuckle etc. d. Guyang County

252 The wild plants include pinus tabulaeformis, platycladus orientalis, betula platyphylla, elm, apricot, astragalus membranaceus, codonopsis pilosula, bupleurum, licorice, ephedra, radix gentianae, astragalus membranaceus, rhubarb, radix astragali, etc.

253 The main wild animals include roe deer, badger, scops owl, cormorant, eagle, hare, fox, hemiptera, chukar, black eagles, owls, crows, magpies, ground squirrel, snakes, etc.

2. SPECIAL PROTECTED AREA a. Erenhot

254 There is one IMAR’s protection zone in Erenhot- Erenhot basin dinosaur fossil reserve. The main protection objects are the stratum of Late Cretaceous in the protection zone. This protection zone is about 10 km from the subproject sites. The protection zone has an area of 10,471 ha and is the national 4A tourist attraction16 in China. The location of the zone is presented in Figure IV-8.

16 The tourist attractions in China are divided into five category: A, AA, AAA, AAAA and AAAAA. AAAAAA is the highest rank. The rating standard is Standard of rating for quality of tourist attractions (GB/T 17775-2003) 78

Figure IV-8: Location of Dinosaur Fossil Reserve Source: Domestic EIA, 2019. b. Damaoqi County

255 There is one IMAR’s protection zone in Damaoqi County- Bayin Hanggai Natural Protection Zone which is located at the west of Damaoqi County.This protection zone is about 120 km away from the subproject sites. c. Tuyouqi County

256 There is one PRC’s protection zone in Tuyouqi County- Jiufeng Mountain natural reserve. This protection zone is about 50km away from the subproject sites. d. Guyang County

257 There are two county level protection zones in Guyang County- Chunkun Mountain protection zone and Honghua Aobao protection zone. These protection zone are about 55km and 89 km from the subproject sites.

D. SOCIO- ECONOMIC CONDITIONS a. Erenhot

258 In 2018, the city’s GDP was CNY 11.78 billion, of which the primary sector accounted for 0.65%; the secondary sector accounted for 34.81%; and the tertiary sector accounted for 64.54%. Per capita disposable income in 2018 was CNY 43,750.

259 Total area of Erenhot was 4,015.1 km2 and urban area of Erenhot was 27 km2.Total population was 71,868 by the end of 2018.

260 Erenhot City is comprised of Gerileaodu Sumu and 8 communites (Dongcheng, Xicheng, Nanyuan, Beijiang, Xilin, Eren, Huhe and Wulan).

261 From January to July, 2019, Erenhot port imported 869,000 tons wood from Russia with a total value of 1.31 billion. The exported quantity was increased by 28.2% and the value was increased by 31.2%. b. Damaoqi County

262 In 2018, the city’s GDP was CNY 2.184 billion, of which the primary sector accounted for 6.8%; the secondary sector accounted for 60.4%; and the tertiary sector accounted for 32.8%. Per capita disposable income in 2017 was CNY 26,756 while in urban area was CNY 39,978, and in rural area was CNY 15,257.

263 Total area of Damaoqi County was 18,177 km2. Damaoqi County is comprised of 7 towns, 1 Sumu and 1 industrial park.

264 Total population was 111,586 by the end of 2017, in which 30,694 were in urban area, 80,892 in rural area, 56,920 were male and 54,666 were female.

265 The Mandula port mainly imports coal and iron from Mongolia. No wood is imported through the Mandula port.

c. Tuyouqi County

266 Tuyouqi County is comprised of 5 towns and 3 villages with a total area of 2,368 km2. Total population was 360,000 by the end of 2018.

267 In 2018, the city’s GDP was CNY 38.98 billion, of which the primary sector accounted for 9.2%; the secondary sector accounted for 47.8%; and the tertiary sector accounted for 43.0%. Per capita disposable income in urban area was CNY 37,125, and in rural area was CNY 17,601. d. Guyang County

268 Guyang County is comprised of 6 towns 1 street and 72 villages with a total area 5,025 km2. The total population was 213,000 by the end of 2018, of which 171,000 was agricultural population.

269 In 2018, the city’s GDP was CNY 14.29 billion. Per capita disposable income was CNY 31,616 in the urban area, and CNY 13,797 in the rural area.

E. PHYSICAL CULTURAL RESOURCES (PCRs) a. Erenhot

270 The area around the urban area, especially a saline lake known to paleontologists as Iren dabasu to the east, is known for the discovery of a number of different dinosaurs. The city has a dinosaur museum, and a big arch in the form of two Sauropoda was built in 2006 on the highway southward. In 2007, a number of smaller figures of different species were added.

271 Based on the site visit, there are no known PCRs in component site or in a radius of 500 m from the component site. b. Damaoqi County

272 Damaoqi County has a rich history. In the city, there are famous PCRs such as Aolun Sumu ruins of ancient city, Qin Dynasty Great Wall, Han Dynasty Great Wall, North Wei Kingdom Great Wall, Jin Kingdom Walls. Damaoqi County is also famous for rock paintings including the Wulancabu rock painting.

273 However, based on the site visit, there are no known PCRs in component site or in a radius of 500 m from the component site. c. Tuyouqi County

274 There is a famous Buddhist resort in Tuyouqi County-Meidaishao Town, which is a national cultural relics protection unit. There are places of historical interest such as Qingquan Temple and Chaoyang Cave. The Jiufeng Mountain Forest Area is the only original secondary forest area in the central and western Inner Mongolia.

275 Based on site visit, there are no known PCRs in component site or in a radius of 500 m from the component site. d. Guyang County

276 Guyang County has a rich history and is a strategic post. It was once a battleground

between the agricultural people from China’s central plains and the northern nomads. In the city area, there are famous PCRs like Qin Dynasty Great Wall and Jin Kingdom Walls.

277 Based on the site visit, there are no known PCRs in component site or in a radius of 500 m from the component site.

V. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES

A. Project Area of Influence and Sensitive Receptors

278 The following distances were applied to identify the sensitive receptors:

(i) for construction and/or operational noise – receptors within 200 m from the noise- generating source;

(ii) for construction-related air quality impact (e.g. particulates from road excavation) – receptors within 500 m from the source;

(iii) For construction/operation-related ecological impact, receptors within 300 m from the source

(iv) for construction/operation-related surface water quality impact - surface water within 300 m upstream and 1,000 m downstream from the construction sites.

279 A construction site with a radius of these distances is assumed to encompass the total project area of influence

1. Subproject 1: Inner Mongolia Sustainable Cross-Border Development Investment Program in Erenhot

280 The Components 1, 2 and 3 of Subproject 1 are located at undeveloped Sino-Mongolian Erenhot-Zamyn Uud ECZ and no sensitive receptors are existing as shown in for these three components in the ECZ in Erenhot.

281 The Component 4 will only has noise pollution and traffic impacts during the construction period. The environmental sensitive receptors defined for this subproject and its components are shown in Figure V-1 and in Table V-1.

Table V-1: Environmental Sensitive Receptors No. of Distance and People Item Name direction to Type of Impact potentially sensitive receptor affected

Zhongyu Yacheng Hotel SE, 225 m 150 Air, Acoustic Noise pollution Bianjian Community SE, 675 m 500 Source: Domestic EIA, 2019.

225m 675m

Figure V-1: Environmental Sensitive Receptors at Erenhot for Component 4 in Subproject 1 Source: Domestic EIA, 2019.

2. Subproject 2: Inner Mongolia Sustainable Cross-Border Development Investment Program in Mandula Port 282 Based on site visit, there are no environmental sensitive receptors defined for the construction components 1, 2 and 3 of Subproject 2 as shown in Figure III-2 (top) in Mandula Port of Boutou Municipality.

3. Subproject 3– Establishment of Quarantine Station in Mandula Port, Expansion of Stud Sheep Breeding Bases and Mutton Industry Comprehensive Development 283 The environmental sensitive receptors defined for this subproject and its components are shown in Table V-2.

Table V-2: Environmental Sensitive Receptors for Subproject 3 Distance and direction No. of people Type of Item Name to sensitive receptor potentially affected Impact Zhangjiahulutou NW, 604 m 350 Village Air, Donghulutou Village SW, 127 m 500 Air and noise Acoustic Zhaojiaying Village SW,737m 280 pollution Xibafenzi Village E, 1,410 m 400 Daolaban Village SW, 260m 360 83

Distance and direction No. of people Type of Item Name to sensitive receptor potentially affected Impact Xiadaolabanshen NW, 246m 450 Village Dasanyanjing SW, 370m 500 Village Dushoujiang Village S, 167m 600 Kangsiyingzi Village NW, 521m 400 Source: Domestic EIA, 2019.

284 For Component 6 on construction of a sheep slaughtering, processing and logistic facility, there are no identified sensitive receptors. For the No. 5 breeding farm (base) of Component 3, there are no sensitive receptors either.

Figure V-2: Environmental Sensitive Receptors for Component 2 of Subproject 3: Construction of quarantine station in Mandula Port Source: Domestic EIA, 2019.

No.1 farming base

Zhangjiahulutou Village

604m

No.2 farming base Donghulutou Village 127m Xibafenzi Village

1,410 m

Zhaojiaying Village 737m

Figure V-3: Environmental Sensitive Receptors near No.1 and No.2 Farming Base of Component 3 in Subproject 3 Source: Domestic EIA, 2019.

Daolaban Village

560m

Xiadaolabanshen Village

246 m

No.3 farming base

Dasanyanjing Village

370m

Figure V-4: Environmental Sensitive Receptors near No.3 Farming Base of Component 3 of Subproject 3 Source: Domestic EIA, 2019.

No.4 farming base

1462m 朱麻营村

521m

康四营子村 167m

Kangsiyingzi Village 杜守将营子村 521 m 997m Dushoujiang Village

167 m

壕堰村

Figure V-5: Environmental Sensitive Receptors near No.4 Farming Base of Component 3 of Subproject 3 Source: Domestic EIA, 2019.

Xingfu Village

1.3 km

Figure V-6: Environmental Sensitive Receptors near No.5 breeding base of Subproject 3 Source: Domestic EIA, 2019.

Meidaiqiao Village

850 m

Figure V-7: Environmental Sensitive Receptors near component 6 of Subproject 3 Source: Domestic EIA, 2019.

B. Impacts and mitigation measures during Pre-construction Phase

285 The following measures will be implemented in the engineering design and pre- construction phases to ensure the project’s readiness for environment management.

i) Preparation and updating of EMP in pre-construction planning and detailed design stage.

286 The following safeguards will be addressed.

➢ Appointing one environmental officer within each PIE to coordinate EMP implementation. ➢ Recruiting a PIC-ES by the IPMO for training on the EMP implementation, site specific EMP development, project specific environmental quality monitoring, developing detailed monitoring plan for construction and operation periods in accordance to the monitoring plan. ➢ Recruiting a EMA to conduct independent monitoring of the EMP implementation. ➢ Updating of the EMP prior to tendering and construction as necessary and including EMP requirements in tender and contract documents. ➢ Developing a plan to implement the GRM, including developing subproject operational GRMs; providing training to the PIE staff and GRM access points; disclosing the GRM phone numbers, addresses, and emails to the public on information boards at each construction site; and establishing database for feedbacks. ➢ Consulting and informing residents and key stakeholders near the construction sites regarding the construction timing and approach, and ➢ Confirming all project facilities will not use any materials containing asbestos.

ii) Contractor EMP in pre-construction planning and detailed design stage. The following safeguard issues will be addressed.

287 Prior to construction, prepare a site-specific EMP which shall fully respond to the requirements set in the project EMP, and shall include several sub-plans, including the following:

➢ Soil erosion protection plan, identifying likely areas of soil erosion and the mitigation measures which the contractor will employ to minimize potential erosion around any excavations and construction areas. ➢ Borrow and spoil management plan, specifying location of borrow pits, quarries and spoil disposal sites, as needed. Contractors will ensure that (i) borrow areas will be located away from residential areas, water bodies and will avoid valuable pasture/grazing land, (ii) after use borrow pit areas will be graded to ensure drainage and visual uniformity, and (iii) borrow pit restoration will follow the completion of works in full compliance with all applicable standards and specifications; ➢ Water protection plan, defining measures to be taken during construction to avoid/mitigate pollution arising from construction site drainage (silt), use of chemicals, construction around existing landfills containing leachate and other 89

potential pollution sources; ➢ Health and safety risk management plan for management of community and occupational health and safety. Civil work contractors shall also consult with relevant local departments to double check location of utilities prior to any construction activities at all MSW transfer sites; ➢ Spill management plan, defining the specific requirements, protocols, responsibilities, and materials necessary to implement an emergency spill response following an incident; ➢ Waste management plan, defining procedures for management of household waste, construction waste, detailing arrangements for storage and transportation of the waste to landfills; and ➢ Traffic management and access plan, identifying construction activities that may affect the local traffic and communicating with local traffic control agencies on the timing and locations of construction activities. iii) Soil resources. The project activities may cause a loss of land and topsoil, increasing the risk of erosion. To mitigate the impact on soil resources, following measures are recommended.

➢ Minimize land acquisition for development. ➢ Incorporate landscape and revegetation features in design; ➢ Retain/incorporate landscape features in design. ➢ Optimize balance between cut and fill and avoid deep cuts and high embankments to minimize earthworks. ➢ Maximize reuse of spoil and other material within the construction or adjacent construction works. ➢ Select spoil disposal sites and develop spoil management and rehabilitation plan. ➢ Specify removal and storage of topsoil for restoration works prior to main earthworks. ➢ Specify vegetation that serves specific bioengineering functions and is of local provenance. ➢ Design appropriate drainage systems for slopes to reduce soil erosion. iv) Emission. To minimize the air emissions of project activities, following measures will be adopted.

➢ Specify local materials to minimize transport distance. ➢ Locations for borrow areas must be at least 300 m downwind of the nearest household. ➢ On-site asphalting and concrete batching are prohibited. ➢ Procurement of less pollutive machines/equipment. v) Water bodies. To minimize the risk of polluted runoff into water bodies, the following measures will be adopted.

➢ Ensure in technical design that drainage design and discharge locations are specified to minimize risk of polluting nearby water bodies.

➢ Design on-site wastewater treatment facilities with appropriate technologies and adequate capacities. ➢ Ensure that water is treated to the relevant standards prior to discharge to the municipal sewer systems.

vi) Bidding documents and contract documents. The related clauses in the EMP will be included in all bidding documents and contracts for procurement of civil works, goods and services. All contractors and subcontractors will be required to comply with the EMP.

vii) Contractor obligations. All contractors, in their bids, will respond to the environmental clauses in the bidding documents to meet the EMP requirements.

viii) Grievance Redress Mechanism (GRM). The IPMO and IAs will launch the project GRM at least two months before the start of construction to ensure that project communities and public services (e.g. schools and hospitals) are well informed and provided with opportunities to voice and discuss their concerns.

ix) Institutional strengthening and staffing. The PIEs will assign qualified staff responsible for the EMP implementation.

x) Training in environmental management. The LIS-EC will provide training on implementation and supervision of environmental mitigation measures to the PIEs and contractors and construction supervision companies (CSCs). This will be organized by the IPMO and IAs.

C. Construction Phase - Impact and Mitigation Measures

1. Soil erosion and earthwork balance

288 Soil erosion mainly occurs during the construction phase. The formation of exposed surface due to excavation of high steep slope is more subject to soil erosion in rainy seasons. Temporary construction sites, earth borrow pits, spoil sites and other areas are most vulnerable to erosion where surface soil will be disturbed. Without management, the construction works may cause soil erosion and/or contamination. Soil erosion may be caused by unprotected stockpiles of soil and spoil, excavation and storm runoff.

289 Implement soil erosion control measures. Before construction, the contractors will be required to prepare a Site Drainage and Soil Erosion Management Plan (as part of the CS- EMP) to prevent soil erosion. The plan will include the following soil erosion control measures;

i) Maintain slope stability at cut faces by implementing erosion protection measures such as terraces and silt barriers during road constructions;

ii) Stabilize all cut slopes, embankments, and other erosion-prone working areas while constructions are going on;

iii) Stabilize all earthwork disturbance areas within 30 days after earthworks have ceased at the sites;

iv) Minimize active open excavation areas during trenching activities and use appropriate compaction techniques for pipe trenches construction;

v) Provide temporary detention ponds for containment to control silt runoff;

vi) Prevent runoff entering construction sites, and divert runoff from sites to existing drainage or open ground for watering the vegetation by constructing intercepting ditches and drains;

vii) Strip and stockpile topsoil, and cover or seed temporary soil stockpiles;

viii) Waste construction material such as residual concrete, asphalt, etc., will be properly handled for reuse or disposal.

ix) Limit construction and material handling during periods of rains and high winds;

x) Properly slope or re-vegetate disturbed surfaces, such as compacted pipeline trenches and cut banks and;

xi) Appropriately set up temporary construction camps and storage areas to minimize the land area required and impact on soil erosion.

290 Internal inspection and monitoring should be conducted by contractors and CSCs while compliance inspection and monitoring shall be conducted by the EMA or a licensed institute. The inspection and monitoring results will be submitted to the IPMO, PIEs, local EEBs and Water Resources Bureaus to serve as basis for project implementation progress reports and acceptance of construction.

291 Mitigation measures for soil contamination control include the following:

i) Properly store petroleum products, hazardous materials and wastes on impermeable surfaces in secured and covered areas, and use the best management practice to avoid soil contamination;

ii) Remove all construction wastes from the site to approved waste disposal sites;

iii) Establish a Spill Management Plan; and

iv) Provide spill cleanup measures and equipment at each construction site and require contractors to conduct training in emergency spill response procedures.

2. Noise

292 The major sources of noise are movement of construction vehicles, haulage of construction materials to the construction sites and the noise generating activities at the construction sites. Foundation works, concrete mixing and material movements are the primary noise generating activities and will be uniformly distributed over the entire construction period.

293 Each construction machine can be treated as one point noise source. The point source noise attenuation formula and noise superimposed formula were used in the noise impact assessment to predict the major construction machinery noise impacts during construction.

Point source noise attenuation formula:

 r  L = L − 20 lg  2  − L 2 1    r1 

Noise superimposed formula:

n  0.1Leqi  Leqs = 10 10   i=1  Where, L1,L2 - the noise value at points of r1.r2 (dB(A)); r1,r2 - the distances of the points to the noise source(m); △L- Houses, trees and other shield contributions to noise attenuation value (dB(A)); Leqs -The equivalent sound level value at the prediction point (dB(A)); Leqi - Equivalent sound level of the i-th point source on the prediction point (dB(A)).

294 Without consideration of the construction fence contribution to machinery noise attenuation (i.e., the △L=0), machinery attenuation only rely on spatial distance natural attenuation, the intensity and scope of the noise caused by the project have been modeled (Table V-3).

Table V-3: Predictive noise levels of construction machinery with various distances (Unit: dB(A)) Distance to meet Major construction GB12523-2011 GB12523-2011 Predictive noise values machinery standard standard (m) Distance from 20 40 80 160 200 10 m Day Night day night machine m m m m m Loader 78.0 71.9 65.9 59.9 57.2 56.1 70 50 53 225 Excavator 78 0 71.9 65.9 59.0 56.6 56.0 70 50 53 225 Bulldozer 78.0 71.9 65.9 59.9 57.2 56.1 70 50 53 225 Pneumatic hammer, 88.0 81.9 75.9 69.9 59.1 57.8 70 50 120 359 pneumatic drills Air compressor 88.0 81. 75.9 69.9 59.1 57.8 70 50 120 359 Static pressure piling 78.0 71.9 65.9 59.9 57.2 56.1 70 50 53 225 Tower crane 73.0 66.9 58.9 54.9 54.2 48.9 70 50 30 159 Bar Straightening 78.0 71.9 65.9 59.9 57.2 56.1 70 50 53 225 Machine Stone cutting 83.0 79 70.9 64.9 57.9 57.1 70 50 90 292 machine Chainsaw 73.0 66.9 60.9 54.9 57.2 56.1 70 50 53 159 Hammer 73.0 66.9 60.9 54.9 57.2 56.1 70 50 53 159 Multi-function 83.0 76.9 70.9 64.9 57.9 57.1 70 50 92 292 woodworking plane All machinery operated at the 93.1 87.0 81.0 75.0 72.6 68.2 230 430 same time Source: Domestic EIA, 2019.

295 Noise generated from a sole construction machinery, will decay as the distance increases. Table V-3 shows that for construction machinery noise in the unobstructed case, the impact zone of a single noise source is estimated to be 30-159 m in radius distance at daytime and 159-359 m in radius distance at night (i.e., distance to meet the requirements of Noise Standards for Construction Site Boundary, GB12523-2011). If all of the machinery and equipment are operated at the same time, the distance of impact increases to 230 m at daytime and 430 m at night.

296 Contractors will be required to regulate their construction activities and implement the following mitigation measures to ensure the compliance with the relevant provisions of the PRC Environmental Noise Pollution Prevention Ordinance and the IMAR Environmental Protection Ordinance:

(i) Limit the construction activities, and particularly noisy ones, to reasonable hours during the day and early evening. Construction activities will be strictly prohibited

during the nighttime (22:00 h to 07:00 h). Exceptions will only be allowed in special cases, and only after getting approval of the surrounding residents, local EEB and other relevant departments. And nearby residents should be notified of such night time activities well in advance. (ii) Avoid concurrent high-noise activities when undertaking construction planning and schedule high noise activities to be conducted during the day rather than evening hours. Similarly, construction sites shall be planned to avoid multiple high noise activities or equipment operations to occur at the same location. (iii) Select low-noise equipment as much as possible. Equipment and machinery will be equipped with mufflers and will be properly maintained to minimize noise. (iv) Provide noise PPE to workers to meet the requirements in occupational exposure limits for hazardous agents in work place Part 2, physical agents (GBZ 2.2-2007) and EHS Guidelines. (v) Maintain equipment and machinery in good working condition; undertake regular equipment maintenance, ensure compliance with PRC standards of GB 12523- 2011. (vi) Install temporary anti-noise barriers to shield buildings where non-compliance with Category II in Environmental Quality Standards for Noise (GB3096-2008) is monitored. (vii) Disseminate information on procedures of handling complaints through the GRM.

3. Vibration

297 Vibration impacts are expected during infrastructure works, including vibrations from roadbed compacting and rolling, etc. The impact of vibration during construction is mainly reflected by the impact of construction machineries with strong vibration on sensitive receptors that are close to the construction sites. Machines that generate vibration during construction include excavators, bulldozers, road rollers, and air compressors.

298 On the proposed construction sites, different degrees of mechanical vibration will occur. Such vibration is sudden and discontinuous, which can annoy people nearby the sites and construction workers. Main construction machineries include vibrating road rollers, land scrapers, loaders, stone crashers and spreading machines, among which the impact of vibrating road rollers is the highest.

299 Vibration level decreases quickly from the machinery source over distance. The vibration level decreases from the 80dB range at 10 m from the machine to the 70dB range at 30 m. The national standard is 67dB for the night and 70dB for the day time. This indicates that the vibration level will diminish quickly to the national standard level at approximately 30 m from the source of machine vibration.

300 There are no sensitive receivers within 30 m from the construction sites. Vibration generated during construction is anticipated to have very limited impacts to the areas beyond 30 m from a construction site. Mitigation measures defined in the EMP include prohibition of piling and compaction operations at night, which will effectively reduce the vibration impact to acceptable levels.

301 Mitigation measures for vibration control include the following:

(i) Avoid concurrent construction activities with high vibration when undertaking construction planning;

(ii) Schedule high vibration activities to be conducted during the day rather than evening. Similarly, construction sites shall be planned to avoid multiple high vibration activities or equipment operations to occur at the same location. (iii) Select low vibration equipment as much as possible. Equipment and machinery should be equipped with vibration dampers and will be properly maintained to minimize vibration. (iv) Maintain equipment and machinery in good working condition. (v) Disseminate information on procedures of handling complaints through the GRM.

4. Air Quality

302 Anticipated sources of air pollution from construction activities include: (i) dust generated from earth excavation, filling, loading, hauling, unloading; (ii) dust generated from disturbed and uncovered construction areas, especially in windy days); (iii) dust generated by the movement of vehicles and heavy machinery on unpaved access and haul roads; (iv) dust from aggregate preparation and concrete-mixing; (v) vehicle emission from construction vehicles and heavy diesel machineries and equipment (gaseous CO, CH and NO2); and (vi) asphalt flue gas during road pavement. The dust and gaseous air emissions could affect nearby sensitive receptors.

303 A particular emission from road construction is asphalt flue gas. During the asphalt heating and mixing process, the fuel burning will produce smoke, and the asphalt will produce flue gases emissions. Currently, modern asphalt mixing equipment used in the PRC releases typical emission concentrations of asphalt flue gases of about 30 mg/m3, which complies with asphalt flue gas discharge requirements of 80-150 mg/m3 of Integrated Emission Standards of Air Pollutants (GB16297-1996). It also complies with the Ambient Air Quality Standards (GB3095-1996), which limits the concentration of benzopyrene at 0.01 µg/m3 (at 100 m downwind from the asphalt mixing station).

304 The quantity of dust generated by the construction activities depends on the force of the wind, the humidity of the material, the level of construction and the state of site. It is estimated that under the general condition (with an average wind speed of 2.5 m/s) in the area of 150 m downwind from the construction, the dust becomes less apparent and disturbing.

305 For dust generated when transporting earth and other construction powdery materials, the impact exceeds 60 m on both sides of the transport route. However, dust concentration decreases rapidly as the distance increases, so there are basically no significant impacts beyond 200m downwind.

Table V-4: Households/persons within 150m of the construction works District/ Subproject area Households Population Donghulutou Village/ No.2 farming base 150 500

Total 150 500 Source: Domestic EIA, 2019.

306 A series of mitigation measures are defined for reducing the impact of air emission on the sensitive receivers (to be included in technical specifications):

i) Spray water on construction sites and earth/material handling routes where fugitive dust is being generated;

ii) Locate asphalt plants and mixers as far away as possible (at least 500 m downwind) from the nearest residential areas and other sensitive receptors; iii) Pay particular attention to dust suppression near sensitive receptors such as schools, hospitals and residential areas; iv) Limit transport vehicles to low speeds in construction sites; v) Store petroleum or other harmful materials in appropriate places with covers to minimize fugitive dust and emission; vi) Cover materials during truck transportation, in particular, the fine material, to avoid spillage or dust generation; vii) Maintain, water and sweep construction site roads on an needed basis; viii) Pay special attention to protecting sensitive sites near the subproject sites. High noise construction activities will be positioned as far away from sensitive sites as possible and ix) Ensure that emissions from vehicles and construction machineries are in compliance with the PRC standards of GB18352-2005, GB17691-2005, GB11340-2005, GB2847- 2005, and GB18285-2005.

307 With the above mitigation measures, the impact of construction on air quality is anticipated to be acceptable.

5. Wastewater

308 The proposed components are not expected to cause significant impacts on hydrology and water quality. Nonetheless, measures for construction site management described below are proposed.

309 Waste water generated during construction including domestic wastewater and construction wastewater. Construction wastewater is produced during construction from washing aggregates, pouring and curing concrete, wastewaters from maintenance and cleaning of mechanical equipment and vehicles. The estimated amount of domestic wastewater and solid waste generated by each construction worker is 0.048 m3/d and 0.6 kg/d respectively according to the domestic EIA reports. Each construction site is assumed to have 20 construction workers.

310 Based on the domestic EIA reports, during the construction period, the estimated amount of construction and domestic wastewaters generated from each subproject is summarized in Table V-5.

Table V-5: Wastewaters Generated during Construction of Three Subprojects in Tranche 1 No. Item Subproject 1 Subproject 2 Subproject 3 Total 1 Total construction sites 4 3 7 17 2 Average numbers of construction sites per year 2 1.5 3.5 8.5 3 Construction wastewater generated (m3/d) 3 2 5 7 Pollutant generation from construction 4 0.6 0.4 1 10 wastewater (SS kg/d) Pollutant generation from construction 5 0.03 0.02 0.05 2 wastewater (petroleum kg/d) 6 Number of workers at peak construction 80 50 150 0.1 7 Domestic wastewater (m3/d) 3.2 2 6 280 Pollutant generation from domestic wastewater 8 0.96 0.6 1.8 11.2 (CODcr, kg/d) 9 Pollutant generation from domestic wastewater 0.48 0.3 0.9 3.36

No. Item Subproject 1 Subproject 2 Subproject 3 Total (BOD5, kg/d) Pollutant generation from domestic wastewater 10 0.128 0.08 0.24 1.68 (NH3-N, kg/d) Source: Domestic EIA, 2019.

311 To prevent pollution of water resources, the following mitigation measures will be implemented:

i) Worker camps will be installed with sufficient toilets which will be provided for the workers and will be cleaned and discharged to municipal sewerage systems on a regular basis.

ii) Construction wastewater will be directed to temporary detention and settling ponds, and then treated water will be partially recycled for use in dust control and the rest of treated water will be discharged to the local municipal sewer systems. The waste residue in the tank is cleared and transported to designated and engineered landfills certificated by the local sanitation department for construction waste treatment and disposal. If needed, polyacrylamide flocculent will be used to facilitate the particle settling. All discharged construction wastewater will to be treated to meet the appropriate PRC standards (GB/T 31962-2015) prior to discharge.

iii) All necessary measures will be undertaken to prevent construction materials and wastes from entering drains and water bodies.

iv) Maintenance of construction equipment and vehicles will not be allowed on sites to reduce wastewater generation.

v) Oil traps are provided for service areas and parking areas, and oil-water separators are installed before the sedimentation tank for oil-containing wastewater. The separated oil and silts will be collected, transported and treated by certificated companies. The treated water will be discharged to municipal sewer systems;

vi) All construction machinery is repaired and washed at special repairing shops. No on- site machine repair, maintenance and washing shall be allowed so as to reduce wastewater generation;

vii) Storage facilities for fuels, oil, and other hazardous materials are within secured areas on impermeable surfaces with 110% volume of the materials stored, and provided with bunds and cleanup kits.

6. Impact on groundwater

312 As groundwater in the project areas of influence is generally deep, no major impacts on groundwater resources are anticipated during both the construction or operational phases of the roads and auxiliary facilities. No water supply wells/hand pumps are located in the areas of potential impact by the subprojects.

313 On the other hand, fuels and chemicals used for road construction could contaminate groundwater if they are not properly stored and disposed of. Spills of toxic substances resulting from traffic accidents during construction may also contaminate groundwater if no proper emergency responses are undertaken.

314 Measures to avoid surface water and groundwater contamination include the following:

i) During road construction, contractors will be required to pump slurry to the storage basins and properly dispose of cutting materials. This will reduce the disturbance of sediments and the impact to water quality; ii) Contractors will be required to develop contingency plans for control of oil and other dangerous substances (Spill Management Plan) as part of the CS-EMP; iii) Wastewaters from construction activities will be collected in sedimentation tanks, retention ponds, and filter tanks to remove silts and oil; iv) Wastewaters should drain to municipal sewer mains after the site pretreatment; v) All areas where construction equipment is washed will be equipped with water collection basins and sediment traps; vi) Fuel storage, maintenance shop and vehicle cleaning areas must be stationed at least 500 m away from the nearest waterbody; vii) Storage facilities for fuel, oil, and other hazardous materials will be located within secured areas on impermeable surfaces at a 110% volume of the materials stored, and provided with bunds and cleanup installations; viii) Contractors’ fuel suppliers must be properly licensed. They shall follow the proper protocol for transferring fuel and the PRC standard of JT3145-88 (Transportation, Loading and Unloading of Dangerous or Harmful Goods); ix) Labor camps will be located at least 500 m away from rivers and other surface waterbodies; and x) Eco-toilets and on-site wastewater pre-treatment systems will be installed at construction camps along with proper maintenance protocols. 7. Solid waste

315 Solid waste from workers’ camps. While most workers will live in rented apartments, some work camps might be needed. An estimated average of 0.6 kg/day per worker of garbage is produced in construction camps according to the domestic EIA reports. A covered garbage basin will be installed at each construction camp. It will be the responsibility of the construction contractors to provide sufficient garbage bins at proper locations and to ensure that these garbage bins are protected from birds and vermin, and emptied regularly. The contractors’ responsibility is included in the EMP and will be included in bidding documents and construction contracts. Because the construction sites are within or near the existing urban areas, most of the construction workers are anticipated to live in rented apartments, which are serviced with the existing municipal solid waste collection systems.

316 Construction wastes. Construction wastes could have adverse impacts on the surroundings if not properly managed. Construction wastes that are not re-cyclable will be collected on site and not be disposed of in a way that will damage nearby farmlands or the immediate environment. Construction wastes will be regularly transported off-site by the contractor for disposal at disposal sites approved by the local land resource bureaus in compliance with the PRC Law on Prevention and Control of Environmental Pollution by Solid Waste (issued on 29 December 2004). The waste disposal shall also comply with the scrap material and demolition waste disposal standards promulgated by the Ministry of Housing and Urban-Rural Construction.

Table V-6: Estimated Volumes of Solid Waste during Project Construction Number of Projected Recyclable solid Subproject to Be Disposal Workers During Solid Waste Waste (Plastic, Paper) Constructed (kg/d) Peak Season (kg/d) (kg/d) Subproject 1 80 40 4.8 35.2

Subproject 2 50 25 3 22 Subproject 3 150 75 9 66 Total 280 140 16.8 123.2 Source: Domestic EIA, 2019.

8. Physical Cultural Resources

317 No cultural heritage or archaeological sites are existing within 5 km of the project areas.

318 On the other hand, construction activities may have the potential to disturb unknown underground cultural relics. The EMP mitigation measures include the immediate suspension of construction activities if any archaeological or other cultural relics are encountered. The local Cultural Heritage Bureau, IPMOs, and IAs will be promptly notified under such circumstances. Construction will resume only after investigation and with the permission of the appropriate authority. The clause for protection of unknown underground cultural relics will be included in construction contracts.

319 The EMP mitigation measures include the following for protection of physical cultural resources:

i) If a cultural artefact is unearthed, construction works will be stopped immediately and the matter will be reported to the IAs, IPMO and local Cultural Relics Preservation Bureau. The ADB SPS 2009 requirements as well as PRC laws and regulations will be followed. Construction will resume only after investigation and with the permission of the appropriate authority. ii) The clause for protection of unknown underground cultural relics will be included in construction contracts, to ensure that contractors comply with the PRC's Cultural Relics Protection Law and Cultural Relics Protection Law Implementation Regulations in the event that cultural resources are discovered during construction. 9. Ecological Resources

320 Typical construction impacts on flora and fauna include the removal of vegetation and the disruption of ecosystem during construction. If present, rare or endangered flora or fauna may also be impacted.

321 Potential ecological impacts were assessed as follows:

i) Excavation and land formation activities will be carried out for Subproject 1, 2 and 3. These activities will help limit the clearance of vegetation and reduce the temporary noise and/or visual disturbance to fauna within and near the construction sites. ii) The subproject sites are located at developed industrial areas and residential areas. Natural flora within the subproject areas is limited and there are no known ecological and/or sensitive resources in or near the subproject sites.

322 The following mitigation measures will be implemented to minimize the ecological impact:

i) Clearly demarcate construction sites and off-limit areas, to minimize the removal of existing vegetation. ii) Implement timely site rehabilitation, using native plant species. iii) Store surface soil (0-30 cm) separately for reuse for landscape greening or agricultural soil amendment. The stockpiling shall have a height less than 5m and a slope less than 1:1.5 with proper compaction to avoid soil erosion. 99

iv) Provide training to contractors and workers to increase their awareness on the need for protecting the environment, wildlife and vegetation around the construction sites. v) Regularly inspect construction sites by the construction supervision companies (CSCs) and the IPMO environment officer to ensure that habitats are well demarcated and workers are fully informed of “no-go” areas

323 Overall, the ecological impacts by the Tranche 1 subprojects during construction phase are considered low and manageable due to the following:

i) There are no documented rare, endangered, or protected flora or fauna species, or critical habitats, in or near the construction sites of the IMAR Tranche 1 subprojects; ii) Affected vegetation and plants comprise widespread species; iii) Most existing vegetation is secondary and planted; and iv) The potential impacts from construction activities are short-term, temporary, small-scale and reversible. 10. Specially Protected Areas

324 Based on the site visits, the nearest specially protected area to the project sites is the Erenhot Regional Dinosaur Fossil Reserve, which is about 10 km away the Erenhot Subproject location. There will be no impact to the protected area from project construction activities.

11. Social Issues

325 A full set of land acquisition and resettlement (LAR) plans has been prepared in compliance with the PRC Land Administration Law (2004), PRC Law on Administration of the Urban Real Estate (2007 Revised); Regulations on Administration of Urban Housing Removal (2001); Guidelines for Urban Housing Removal Estimation, and other applicable national guidelines. The LAR plans were also prepared in accordance with local LAR policies of the prefecture and project city/counties, and with ADB’s Safeguard Policy Statement (2009).

326 The LAR plans will be updated based on the census of APs and detailed measurement surveys prior to the project implementation, and then submitted to ADB for review and approval prior to award of civil works contracts. The LAR plans provide a socioeconomic profile of the APs and scope of impacts, and address issues relating to compensation entitlement, legal framework, public consultation, grievance procedure, environmental protection, rehabilitation measure, budgeting and implementation schedule. Resettlement requirements have been carefully considered and incorporated into the design of each project component.

327 The scope of the project works will create some social impacts. Construction may cause unexpected interruption to municipal services in case of unintended damage to pipelines or transmission lines for water, drainage, gas, and/or electricity. The affected traffic by construction would also have an impact on shipping of local agricultural produces and resources out to the urban centers.

328 To meet the needs for skilled and unskilled workers, the project construction will provide employment opportunities for local people, which can benefit the surrounding communities. Opportunities also arise for material suppliers and small-scale businesses that cater for the new development.

329 The potential social impacts will be managed as follows:

i) Local hiring will be given priority to avoid social conflicts;

100

ii) The project scale is not expected to cause large population influx to the project areas and will have limited impacts on the local municipal services; and iii) Education of construction workers will be conducted to minimize social disturbance and cultural conflict. 12. Community and worker health and safety

330 Risks to community and/or worker health and safety include:

i) short-term construction disturbances such as noise and traffic inconvenience to communities; ii) potential harassment of local women from external workers and/or spread of sexually transmitted disease; iii) community safety risks from increased traffic and proximity to works sites and machinery; and iv) risk of injury to workers during construction.

331 The objective of environmental health and safety is to provide workers with safe and healthy working conditions and prevent accidents, injuries, and disease and avoid disturbance to local communities. It is also intended to establish preventive and emergency preparedness and response measures to avoid, and where avoidance is not possible, to minimize adverse impacts and risks to the health and safety of local communities.

332 Environmental health and safety therefore encompass the occupational health and safety of the staff/workers at the subproject facilities and the community health and safety of residents living nearby or potentially affected by failures or poor operation of the project facilities.

333 Risks to public utilities and community health and safety. Traffic congestion may worsen as construction traffic in urban areas increases, causing temporary inconvenience to traffic, residents, commercial operations, and institutions. The constructions may also contribute to road accidents through the use of heavy machinery on existing roads. Construction may cause unexpected interruptions in municipal services and utilities because of damage to pipelines for water supply, drainage, and gas supply, as well as to underground power cables and communication cables (including optical fiber cables).

334 Mitigation of impacts on community health and safety. The potential impacts on community health and safety will be mitigated through a number of activities defined in the EMP. The contractors will implement the following measures:

i) Traffic management. A traffic control and operation plan will be prepared, to be approved by the local traffic management administrations before construction. The plan will include provisions for diverting or scheduling construction traffic to avoid morning and afternoon peak traffic hours, regulating traffic at road crossings, selecting transport routes to reduce disturbance to regular traffic, reinstating roads, and opening them to traffic as soon as the construction is completed; ii) Vehicles transporting construction materials or wastes will slow down and not use their horn when passing through or nearby sensitive locations, such as residential communities, schools and hospitals; iii) Underground facilities survey and protection. Construction activities will be planned to minimize disturbances to utility services. Three-dimensional detection of underground facilities will be conducted before construction where appropriate;

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iv) Information disclosure. Residents, communities and businesses will be informed in advance through media of the construction activities, given the dates and duration of expected disruption; and v) Construction sites protection. Clear signs will be placed at construction sites in view of the public, warning people against potential dangers such as moving vehicles, hazardous materials, excavations etc., and raising awareness on safety issues. Heavy machinery will not be used at night. All sites will be secured, disabling access by the public through appropriate fencing whenever appropriate. vi) Environment, health and Safety. Trainings to workers on occupational health and safety, emergency response will be provided. Appropriate PPE to workers will be supplied. Emergency response exercises will be regularly conducted. The emergence response plan developed for the project will be disclosed to the residents, communities and businesses who may be potentially affected.

335 Risks to occupational health and safety. Construction industry is considered to be one of the most hazardous industries. Intensive use of heavy construction machinery, tools, and materials present physical hazards including noise and vibration, dust, handling heavy materials and equipment, falling objects, work on slippery surfaces, fire hazards, chemical hazards such as toxic fumes and vapors, etc.

336 Measures to ensure adequate occupational health and safety. Contractors will implement adequate precautions to protect the health and safety of their construction workers. The occupational health and safety risks will be managed by applying measures in the following order of preference: avoiding, controlling, minimizing hazards, and providing adequate protective equipment. The contractors will undertake the following activities:

i) Environmental, health and safety officer. An environmental, health and safety officer will be appointed by each contractor to implement and supervise the environmental, health, and safety management plan (see below). ii) Environmental, health and safety management plan. Each contractor will prepare such a plan for the construction works on the basis of the EMP. The plan will include the following provisions: iii) Clean water. Provide a clean and sufficient supply of fresh water for construction sites and for all camps, offices and workshops; iv) Sewage and wastewater. Provide an adequate number of latrines and other sanitary arrangements at construction sites and work camps, and ensure that they are cleaned and maintained in a hygienic state; v) Solid waste. Garbage receptacles at construction sites and camps will be set up, which will be periodically cleared to prevent outbreak of diseases; vi) Personal protection. Provide personal protection equipment, such as safety boots, helmets, gloves, protective clothing, goggles, and ear protection, in accordance with relevant health and safety regulations for workers; vii) Emergency preparedness and response. An emergency response plan to take actions on accidents and emergencies will be prepared, including environmental and public health emergencies associated with hazardous material spills and similar events, and submitted to the local EEBs for review and appraisal. Emergency phone link with hospitals in the three project towns will be established. A fully equipped first- aid base in each construction camp will be organized; viii) Records management. A records management system that will store and maintain easily retrievable records against loss or damage will be established. It will include

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documenting and reporting of occupational accidents, diseases, and incidents. The records will be reviewed during compliance monitoring and audits; ix) Safety communication. Ensure that occupational health and safety matters are given a high degree of publicity to all persons regularly or occasionally on each construction site. Posters will be displayed prominently in relevant areas of the site; and x) Training, awareness and competence. Train all construction workers in basic sanitation, general health and safety matters, and on the specific hazards of their work. Implement site HIV/AIDS and other communicable diseases awareness and prevention program to target the local community and construction workers.

337 Other Social Issues. No other social risks and/or vulnerability are anticipated as a result of the project construction and implementation. The project construction workers will be engaged locally. Prevention and control of transmissible diseases and HIV/AIDS, and community disturbance training and sensitization will be provided to the contractors. Drug and human trafficking education will be provided to the local communities, to be included in the loan assurances and monitored in the social action plans.

338 Core labor standards will be implemented. Civil works contracts will stipulate priorities to:

i) employ local people for works, ii) ensure equal opportunities for women and men, iii) pay equal wages for work of equal value, and pay women’s wages directly to them; and iv) not employ child or forced labor. Specific targets for employment have been included in the social development and gender action plan (SDGAP).

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D. Operational Phase - Impact and Mitigation Measures

339 Upon completion of construction works, the proposed project facilities will enter the operational stage, which will create a demand for consumption of natural resources and waste collection/treatment services, such as the need for water supply, electricity supply, heating, solid waste collection, wastewater treatment, etc. Since the proposed Tranche 1 subprojects are mainly located in two municipalities (Erenhot and Baotou Municipalities), these associated needs by the Tranche 1 subprojects for energy, water and city services are covered by the two municipalities.

340 Apart from the increased demand on natural resources, the key environmental issues associated with the operation of the project facilities include such issues as vehicle emission, traffic noise, storm-water runoff pollution, wastewater pollution control, traffic safety and the risk of hazardous spills.

341 No major environmental impacts are anticipated during the operation of Subproject 1 and Subproject 2 on urban infrastructure development in Erenhot and Baotou Municipalities. The project buildings and facilities will create certain levels of emission (summarized and discussed in Table V-7), which can easily be managed by integrating the new buildings with the existing or planned municipal services on water supply, MSW disposal, and wastewater collection, treatment and discharge.

Table V-7: Main Resource Use and Emissions, Proposed Abatement, and Conservation Measures Anticipated Item Users/Producers Pollutants Abatement and conservation measures amount Water conservation promoted through Water All subprojects 1273.3 m3/d application of water saving appliances and supply reclaimed water utilization. Domestic wastewater of subproject 1 and 2 will be discharged into the municipal sewer SS, COD, Domestic Dormitories and 3 and treated at the municipal WWTP. TP, NH3-N, 36 m /d Wastewater office buildings Domestic wastewater of subproject 3 will be E.coli treated by buried wastewater treatment equipment and recycled as landscape water. Slaughter wastewater will be treated at on- Production Slaughtering BOD, COD, site wastewater treatment station and partly 371.2 m3/d wastewater process TP, NH3-N, reused as landscape water and floor clean water. Reduce and reuse as possible (3R program Municipal Domestic Municipal SW 280 t/d coordinated by Sustainability Center); Solid Waste Waste landfilling by sanitation contractor. Fan, air Low noise equipment and Insulation Noise conditioners, dB(A) --- facilities. pumps Odor gas from Air High efficient purification equipment and breeding bases H2S, NH3. --- emissions proper mitigation measures. and slaughtering Source: Domestic EIA, 2019.

342 Wastewater treatment. The estimated amount of wastewaters generated from the proposed subprojects is shown in Table V-8.

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Table V-8: Estimated Amounts of Wastewaters Generated from the Proposed Subprojects Wastewater Wastewater Subproject Wastewater Treatment Type Volume After initial treatment with the new septic tanks, it will be discharged into municipal Domestic 1 456.9 m3/d sewer system and conveyed to the nearby wastewater Municipal WWTP Treatment Plant for further treatment. After initial treatment with the new septic tanks, it will be treated by newly built Domestic 2 76.2m3/d reclaimed water treatment equipment (200 wastewater m3/d) then recycled as landscape water.

The wastewater will be treated by buried Domestic 3 54.7 m3/d wastewater treatment equipment and wastewater recycled as landscape water. The wastewater will be treated at on-site wastewater treatment station and partly reused as landscape water and floor clean Production water then the remained wastewater will 4 552.1 m3/d wastewater be discharged into municipal sewer system and conveyed to the nearby Municipal WWTP Treatment Plant for further treatment. Source: Domestic EIA, 2019.

343 Potential impacts of the Tranche 1 subprojects on the environment during operation are discussed below for the components under Subprojects 1, 2 and 3, respectively:

1. Subproject #1 in Erenhot a. Air Quality 344 Odorous gases will be generated in the solid waste transfer station under Component 3, which involves the construction of a waste collection and transfer station. The gases of NH3 and H2S generated during the waste transfer are estimated to 68 kg/d and 9.2 kg/d, respectively. To reduce the odor impact, equipment for dust removal and odor removal will be installed at the waste transfer station. 345 With the installation of odor removal equipment, the impact of the components in Subproject 1 on odor and air pollution during operation is anticipate to be minor. b. Wastewater 346 Wastewaters generated from the component of Erenhot International Traditional Chinese and Mongolian Medicine Hospital in Subproject 1 will include domestic wastewater and medical wastewater. The mitigation measures will include the following. i) Domestic wastewater will be treated in digestion tank and discharged to the municipal sewerage system; ii) Wastewater from canteen will be treated in oil separation tank and discharged to the municipal sewerage system; iii) Medical wastewater will be pre-treated in the WWTP within the hospital to meet the effluent standard of medical water pollutants (GB18466-2005) and then discharged into the municipal sewerage system to the city WWTP for further treatment and disposal by the municipality.

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c. Noise

347 The proposed component of Inspection Area Construction for the Sino-Mongolian Erenhot-Zamyn Uud ECZ under Subproject 1 will be constructed in a new area, where there are no existing sensitive receptors. The traffic noise has no significant impact to the environment.

348 The following noise attenuation and protection measures will be implemented during the operation stage:

i) Low-noise pavement materials shall be used for road maintenance when possible; ii) Noise monitoring will be undertaken at the locations and frequencies indicated in the EMP by the four local EMSs; iii) Ambient noise monitoring will be mandated to determine whether mitigation measures will be required for sites where noise levels are expected to exceed by more than 3 dB(A); iv) Trees and shrubs will be planted as soon as possible along the proposed roadsides after construction; as far as possible, native species of local provenance (i.e. seedlings from the local area, not imported from elsewhere) will be used; v) Makes appropriate investment to construct acoustic buffering facilities, such as soundproof windows and sound barriers where applicable; vi) Low-noise equipment will be used as far as possible; vii) All equipment will be properly maintained in order to minimize noise; viii) Appropriate noise PPE will be provided to the workers who are likely to be exposed to high noise level environments to meet the requirements in occupational exposure limits for hazardous agents in work place Part 2: physical agents (GBZ 2.2-2007) and EHG Guidelines on Occupational H&S; and ix) Layout for subproject site will be reasonable planned to reduce noise. d. Solid Waste

349 During operation, the subprojects will generate MSW such as paper, cardboard, plastics, and general refuse in routine activities. The amount of MSW to be disposed can be reduced through the application of 3R (reduce, reuse, and recycle) methods. MSW shall be segregated into biodegradable and non-biodegradable wastes; these wastes will be stored in segregated bins and removed as required. Other solid wastes will be removed by sanitary contractors on a regular basis and disposed to designated municipal landfill sites.

350 During operation, medical waste will be generated from the Erenhot International Traditional Chinese and Mongolian Medicine Hospital (Component 4 of Subproject 1). The medical waste will be sorted and stored in special containers in a temporal medical waste storage site. The medical waste will be collected and transferred by a certificated company and incinerated in the existing Erenhot Medical Waste Incineration Plant.

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e. Water Resources

351 The water balance of Subproject 1 is presented in Figure V-8..

Unit: m3/d

Loss 98.21 491.06 Wastewater Doomeessttiicc waatteerr ffoorr 392.85 Seeppttiicc ttaannkk ccoomppoonneenntt 11 Municipal Loss 6.7 water Wastewater 30.35 Doomeessttiicc waatteerr ffoorr 24.28 WWTP ooff Erreennhhoott ccoomppoonneenntt 44 hhoossppiittaall WWTP 526.16 Loss 0.11 Wastewater 6.55 Doomeessttiicc waatteerr ffoorr 6.44 Seeppttiicc ttaannkk ccoomppoonneenntt 33

Loss 109 109 LLaannddssccaappee waatteerr ffoorr ccoomppoonneenntt 11 Reclaimed water 189

Loss 80 80 LLaannddssccaappee waatteerr ffoorr ccoomppoonneenntt 22

Source: TRTA consultants. Figure V-8: Illustration of Water Balance of Subproject 1

352 The daily consumption of municipal water supply by Subproject 1 is estimated to be 526.16 m3 and the annual water consumption is 0.192 million m3. Erenhot Municipality currently has the Qiharigetu water plant that provides an annual water supply up to 6.695 million m3 to Erenhot. In 2018, the annual domestic water consumption by Erenhot Municipality was 5.512 million m3. This indicates that the Qiharigetu water plant has an extra water supply capacity of 1.183 million m3 per year, which is sufficient to meet the water demand of 0.192 million m3 per year by the Tranche 1 projects in Erenhot.

353 In addition, reclaimed water from the Erenhot WWTP can be utilized for landscaping and greening irrigation, which will in turn help reduce the demand of Erenhot for water supply. In 2018, the total reclaimed water in Erenhot was 3.34 million m3, of which 0.5 million m3 was lost via evaporation, 1.25 million m3 was used for landscaping irrigation, 1.22 million m3 was used in nursery gardens and the unused reclaimed water was 0.42 million m3.

354 The consumption of reclaimed water by Subproject 1 of Tranche 1 is estimated to be 0.028 million m3 per year, which is significantly less than the remaining capacity of 0.42 million m3 reclaimed water per year. This indicates that the supply capacity of reclaimed water by Erenhot Municipality is sufficient to meet the water demand of Subproject 1.

355 The main water supply sources of Erenhot are the Saiwusu and Qiharigetu water resources. The annual availability of the Saiwusu water resource is 1.38 million m3. Because the alkalinity of the Saiwusu water resource is high, the water from the Saiwusu water resource is now mainly used for irrigation. In 2018, the annual irrigation water consumption was 0.53

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million m3.

356 The annual availability of the Qiharigetu water resource is 10.887 million m3 for domestic use. The Qiharigetu water resource has a capacity to supply 6.695 million m3 of water to Erenhot annually. In 2018, the annual domestic water consumption by Erenhot was 5.512 million m3, which was smaller than the supply capacity of the Qiharigetu water resource. This indicates that the water supply capacity of Erenhot Municipality is sufficient to meet the water demand by the city.

2. Subproject #2 in Mandula a. Air Quality

357 In Subproject 2, concentrations of NO2 and CO are the parameters designated by the EIA Institute for assessing the emission impact on air quality. The baseline monitoring indicates that the average concentration of NO2 in the project city met Grade II of the PRC Ambient Air Quality Standard of GB3096-2012 (see baseline data in Chapter IV of this project IEE).

358 Base on the FSR for the road construction component (Component 1: Expansion of port freight passage roads in Subproject 2), the traffic volume is projected to be 678/d in 2025 and 1,002/d in 2030. There are no existing sensitive receptors in the project area of proposed road expansion. The traffic emission is anticipated to have no significant impact on air quality.

359 Mitigating air pollution. The control of vehicle emissions on the project roads is closely related to the policies and measures for emission control of IMAR and the PRC. Therefore, the vehicle emission control measures under the infrastructure components of the project city should be considered in the context of IMAR and national policies and measures for vehicle emission control. Trucks and other transportation vehicles should preferably use low-sulphur diesel as fuel.

360 In 2005, the PRC promulgated the “Limits and Measurement Methods for Emissions of Pollutants from Light-duty Vehicles (grade III, grade IV)” (GB18352.3-2005), which became effective on 1st July 2007. The local EEBs and local Traffic Management Bureaus are in charge of implementing all the policies and measures for vehicle emission control formulated by the state and IMAR authorities. Corresponding measures are needed to control the emission of exhausting pollutants from vehicles driven on the project roads.

361 During operation, the dust will be generated from the newly built coal storage areas and coal unloading areas of the service facilities in the International Highway Logistic Park. These coal unloading areas are enclosed and installed with water spraying equipment to reduce the dust emission. Also during operation, volatile organic carbon (VOC) and particulate matters (PM) will be generated during painting in the vehicle repair center. These pollutants will be treated by ultraviolet photolysis process to meet the Class II standard on Integrated emission of air pollutants (GB 16297-1996) prior to being discharged through a stack of 15m in height.

362 Overall, the impact of the components in Subproject 2 on air pollution during operation is anticipated to be minor with the mitigation measures implemented. b. Wastewater

363 During operation, wastewater generated was mainly domestic waste. The domestic wastewater will be treated by septic tank first and treated in reclaimed water treatment equipment, then recycled as landscape water. The reclaimed water treatment process will be facultative anaerobic membrane bioreactor and the capacity will be 200 m3/d.

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c. Noise

364 The noise of the subproject will be from the operation of vehicles on the road and equipment in the newly constructed buildings under the project.

365 The following noise attenuation and protection measures will be implemented during the operation stage:

366 The subproject during operation will produce solid wastes from building facilities and the vehicle repair center.

367 Domestic waste will be routinely collected with garbage bins by the local sanitation department for recycling, if possible, or for final disposal at the Mandula landfill. Waste generated from the vehicle repair center will be sorted. Recyclable wastes such as tires, motor parts will be recycled. Hazardous wastes such as waste paint, paint containers, oily wastes, will be collected, transported and treated by a certificated hazardous waste treatment company. e. Water Resources

368 The water balance of the subproject is presented in Figure V-9.

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Unit: m3/d

Loss 311.18 155.92 Wastewater Doomeessttiicc waatteerr ffoorr 124.74 Seeppttiicc ttaannkk ccoomppoonneenntt 22 Municipal Loss 2.4 Reclaimed water Wastewater 9 Reclaimed 12 Doomeessttiicc waatteerr ffoorr waatteerr Seeppttiicc ttaannkk ccoomppoonneenntt 33 ttrreeaattmeenntt 189.82 Loss 21.9 eeqquuiippmeenntt 21.9 Duusstt ccoonnttrrooll waatteerr ffoorr ccoomppoonneenntt 33

Loss 46.2 46.2 LLaannddssccaappee waatteerr ffoorr ccoomppoonneenntt 22 Reclaimed water 62.0

Loss 15.8 15.8 LLaannddssccaappee waatteerr ffoorr ccoomppoonneenntt 3322

Source: TRTA consultants. Figure V-9: Water Balance of subproject 2

369 The daily consumption of municipal water supply by Subproject 2 is estimated to be 189 m3. Mandula Port currently has a water supply capacity of 1,500 m3 per day. In 2018, the domestic water consumption by Mandula Port was about 300 m3 per day. This indicates that Mandula Port has an adequate water supply capacity to meet the water demand by Subproject 2 of Tranche 1 in Mandula.

370 Consumption of the reclaimed water by Subproject 2 of Tranche 1 is estimated to be 62 m3 per day. Wastewater generated by Subproject 2 will be 133 m3/d and will all be treated into reclaimed water and recycled for landscaping use, which indicates that the demand for reclaimed water by Subproject 2 can be met.

3. Subproject #3 in Baotou Municipality a. Air Quality

371 For Subproject 3, odor will be generated from the operation of the five sheep breeding farms, the animal quarantine station and the sheep slaughtering and processing facility.

372 The main odorous pollutants of Subproject 3 are NH3 and H2S. To assess the dispersion of the odorous pollutants, an atmospheric dispersion of NH3 and H2S gases was modelled using an atmospheric dispersion model, AERSCREEN, which was developed by the US EPA. The AERSCREEN model is an air dispersion screening model based on AERMOD. The odor emissions from the seven components are presented in Table V-9.

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Table V-9: Estimated Odor Emissions from Seven Components of Subprojects Emission rate Surface source (kg/h) Item Pollution source Length Width Height(m) NH H S (m) (m) 3 2 Sheep house 414.0 233.1 4.5 0.0115 0.001 No.1 farming Temporary feces storage base 13 6 2 0.0006 0.00006 place Sheep house 371.5 216.8 4.5 0.0115 0.001 No.2 farming Temporary feces storage 13 6 2 0.0006 0.00006 base place Sheep house 378.5 175.8 4.5 0.007 0.001 No.3 farming Temporary feces storage 10 8 2 0.0004 0.00004 base place Sheep house 416.3 264.0 4.5 0.014 0.001 No.4 farming Temporary feces storage base 12 10 2 0.0008 0.00008 place Sheep house 297 224 4.5 0.007 0.001 No.5 farming Temporary feces storage 13 6 2 0.0004 0.00004 base place Sheep house 413.977 233.056 4.5 0.033 0.003 Quarantine Temporary feces storage station 13 6 2 0.001 0.0001 place Slaughtering Temporary sheep house 66 27 3 0.027 0.005 and processing Slaughtering workshop 0.6 0.6 12 0.037 0.007 logistics base Source: Domestic EIA, 2019.

373 The modelling results are summarized in Table V-10. Based on the air dispersion modelling results, the odor impacts of the project components in Subproject 3 will be minor.

374 The following mitigation measures will be implemented during the operation stage:

i) Feces in sheep houses will be cleaned regularly by dry clean method. Ventilation of sheep houses will be improved; ii) Temporary storage places for feces from healthy sheep will be installed with ceilings, windbreaks and intercepting drains. These storage places will have leakage and overflow prevention measures; iii) Derating and disinfection of the sheep houses will be improved; iv) Add deodorant to the fodder; v) Layout of the breeding bases, animal quarantine station and slaughtering and processing logistics base be reasonable planned to reduce odor diffusion; vi) Odor gas treatment facilities will be utilized in the slaughtering and processing logistics base to reduce odor diffusion; and vii) Coolant will not be ozone depleting substance and will have low greenhouse impact.

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Table V-10: Summary of Air Dispersion Modeling Results for Seven Components of Subproject 3 Maximum Distance Ratio of Item Source Pollutants concentration (m) limit (%) (mg/m3) NH3 0.01052 289 5.26 Sheep house H2S 0.0008692 289 8.69 No.1 farming base Temporary feces NH3 0.008199 8 4.10 storage place H2S 0.0008199 8 8.20 NH3 0.005455 216 2.73 Sheep house H2S 0.0004457 216 4.46 No.2 farming base Temporary feces NH3 0.008199 8 4.10 storage place H2S 0.0008199 8 8.20 NH3 0.004082 271 2.04 Sheep house H2S 0.0005833 271 5.83 No.3 farming base Temporary feces NH3 0.003705 6 1.85 storage place H2S 0.0003705 6 3.71 NH3 0.0023586 314 1.18 Sheep house H2S 0.0004214 314 4.21 No.4 farming base Temporary feces NH3 0.002541 75 0.13 storage place H2S 0.0001694 75 1.69 NH3 0.00622 198 3.11 Sheep house H2S 0.00098 198 9.82 No.5 farming base Temporary feces NH3 0.0001368 253 0.01 storage place H2S 8.34E-06 253 0.01 NH3 0.000842 286 5.21% Sheep house H2S 0.0002674 286 2.67% Quarantine station Temporary feces NH3 0.005213 89 0.26% storage place H2S 0.000187 89 1.87% Temporary NH3 0.01204 100 6.02% Slaughtering and sheep house H2S 0.000241 100 2.41% processing logistics Slaughtering NH3 0.0009776 113 0.49% base workshop H2S 0.000185 113 1.85% Source: Domestic EIA, 2019. b. Wastewater

375 The wastewater generated from Subproject 3 includes domestic wastewater and production wastewater.

376 For the five sheep breeding farms and the animal quarantine station, the domestic wastewater and production wastewater will be treated in wastewater treatment units within the facilities and then utilized as landscape irrigation water without discharge to external environment.

377 For the slaughtering and processing plant, domestic wastewater and production wastewater will be treated in the wastewater treatment station within the plant. Part of the treated water will then be further treated through tertiary treatment into reclaimed water used for landscape irrigation. The remaining wastewater will be discharged to the municipal sewer mains for further treatment by the nearby municipal WWTP. c. Groundwater

378 To prevent ground water pollution, the following mitigation measures will be implemented.

i) Wastewater collection will be carried out with implementation of leak proofing materials and overflow prevention measures in waste collection ditches and basins;

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ii) Storm water and sewage will be drained separately. iii) Temporary feces storage basins and sheep houses will be installed with ceilings, windbreaks and intercepting drains. These basins will have leakage proofing treatment and overflow prevention measures. iv) A clay layer with a thickness of 25 cm will be applied to sheep breeding houses at the depth of 35cm beneath the sheepfold to prevent the infiltration of urine into groundwater. The soil cover on top of the clay layer will be regularly removed and replaced. Dry feces will be regularly cleaned with the dry-cleaning method. v) Water proof measures will be implemented on medical waste storage rooms, and temporary feces storage basins. High density polyethylene with a thickness of 2- mm will be installed on the storage basins and facility for water proofing and leakage prevention. d. Noise

379 The noise will mainly be generated from equipment operation. The following noise attenuation and protection measures will be implemented during the operation stage:

i) Low-noise pavement materials shall be used for road maintenance when possible; ii) Noise monitoring will be undertaken at the locations and frequencies indicated in the EMP by the four local EMSs; iii) Ambient noise monitoring will be mandated to determine whether mitigation measures will be required for sites where noise levels are expected to exceed by more than 3 dB(A); iv) Trees and shrubs will be planted as soon as possible along the proposed roadsides after construction; as far as possible, native species of local provenance (i.e. seedlings from the local area, not imported from elsewhere) will be used; v) Makes appropriate investment to construct acoustic buffering facilities, such as soundproof windows and sound barriers where applicable; vi) Low-noise equipment will be used as far as possible; vii) All equipment will be properly maintained to minimize noise; viii) Appropriate noise PPE will be provided to the workers who are likely to be exposed to high noise level environments to meet the requirements in occupational exposure limits for hazardous agents in work place Part 2: physical agents (GBZ 2.2-2007) and EHG Guidelines on Occupational H&S; and ix) Layout for subproject site will be reasonable planned to reduce noise. e. Solid Waste

380 During operation, the following mitigation measures will be implemented for solid waste management in operating the five sheep breeding bases, the animal quarantine station and the slaughtering and processing plant:

i) Domestic waste containers will be provided at work sites. Domestic waste will be collected on a regular basis by local sanitation departments and transported for recycling, reuse, or disposal at a licensed landfill in accordance with relevant PRC regulations and requirements;

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ii) Feces in sheep houses will be cleaned regularly with the dry clean method. Collected feces will be transported to nearby fertilizer production plants to produce organic fertilizer. iii) Sick sheep will be quarantined and sheep houses will be disinfected. The sheep in the same flock will be put under observation and treatment to avoid being infected. Medical care will be provided to sick sheep by veterinarians based at the five breeding bases and animal quarantine station. The waste from sick sheep including feces will be treated in a designated animal waste treatment landfill; iv) Dead or sick sheep will be treated in designated animal waste treatment landfills, which will be constructed at the No.4 sheep breeding base, No.5 breeding base, and animal quarantine station, respectively, following PRC’s regulations and standards. The one constructed at the No.4 sheep breeding base will also receive and treat dead sheep from the No.1, 2 and 3 sheep breeding bases; v) Medical wastes will be temporally stored at a storage facility following PRC’s GB18597-2001. Medical wastes will be transported and treated by an independent company certificated for medical waste treatment; vi) Feces generated in the slaughtering and processing plant will be transported to nearby fertilizer production plants to produce organic fertilizer; vii) Inedible tissues, innards, bones, minced meat and waste meat generated at the slaughtering and processing plant will be transported to nearby independent, certificated companies for processing and treatment to produce pet food and oil. f. Water Resources

381 The water balance for the project components in Subproject 3 is shown from Figure V-10 to Figure V-15.

Unit: m3/d

Loss 26.24 Loss 83.968 131.2 To produce Shheeeepp ddrriinnkkiinngg 104.96 20.992 organic fertilizer Urriinnee Feecceess waatteerr Loss 0.45

0.45 Veehhiiccllee sstteerriilliizzaattiioonn waatteerr Loss 0.08 Wastewater 0.08 0.072 Medicine water Municipal Medicine water Stteerriilliizzaattiioonn water Loss 0.014 Wastewater Reclaimed water 176.16 0.07 Veehhiiccllee 0.056 Waasstteewaatteerr 36.149 Landscape waasshhiinngg waatteerr ttrreeaattmeenntt water Loss 0.153 Wastewater 10.2 Doomeessttiicc 8.67 Seeppttiicc ttaannkk waatteerr Loss 0.204 Wastewater 1.36 Oiill sseeppaarraattiioonn 1.156 Caanntteeeenn ttaannkk Loss 6.56 32.8 Wastewater Shheeeepp sstteerriilliizzaattiioonn 26.24 waatteerr

Source: TRTA consultants. Figure V-10: Water Balance of No. 1 and No.2 Sheep Farming Bases

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Unit: m3/d

Loss 8.533 Loss 27.305 42.664 To produce Shheeeepp ddrriinnkkiinngg 34.131 6.826 organic fertilizer Urriinnee Feecceess waatteerr Loss 0.225

0.225 Veehhiiccllee sstteerriilliizzaattiioonn waatteerr Loss 0.004 Wastewater 0.04 0.036 Medicine water Municipal Medicine water Stteerriilliizzaattiioonn water Loss 0.007 Wastewater Reclaimed water 59.41 0.035 Veehhiiccllee 0.028 Waasstteewaatteerr 13.51 Landscape waasshhiinngg waatteerr ttrreeaattmeenntt water Loss 0.765 Wastewater 5.1 Doomeessttiicc 4.335 Seeppttiicc ttaannkk waatteerr Loss 0.102 Wastewater 0.68 Oiill sseeppaarraattiioonn 0.578 Caanntteeeenn ttaannkk Loss 2.133 10.666 Wastewater Shheeeepp sstteerriilliizzaattiioonn 8.533 waatteerr

Source: TRTA consultants. Figure V-11: Water Balance of No. 3 Sheep Farming Base

Unit: m3/d

Loss 16 Loss 51.2 80 To produce Shheeeepp ddrriinnkkiinngg 64 12.8 organic fertilizer Urriinnee Feecceess waatteerr Loss 0.38

0.338 Veehhiiccllee sstteerriilliizzaattiioonn waatteerr Loss 0.006 Wastewater 0.06 0.054 Meeddiicciinnee waatteerr Stteerriilliizzaattiioonn Municipal water Loss 0.0105 Wastewater Reclaimed water 120.68 0.0525 Veehhiiccllee 0.042 Waasstteewaatteerr 33.29 Landscape waasshhiinngg waatteerr ttrreeaattmeenntt water Loss 2.67 Wastewater 17.85 Doomeessttiicc 15.17 Seeppttiicc ttaannkk waatteerr Loss 0.357 Wastewater 2.38 Oiill sseeppaarraattiioonn 2.023 Caanntteeeenn ttaannkk Loss 4 20 Wastewater Shheeeepp sstteerriilliizzaattiioonn 16 waatteerr

Source: TRTA consultants. Figure V-12: Water Balance of No. 4 Sheep Farming Base

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Unit: m3/d

Loss 8.533 Loss 27.305 42.664 To produce Shheeeepp ddrriinnkkiinngg 34.131 6.826 organic fertilizer Urriinnee Feecceess waatteerr Loss 0.225

Source: TRTA consultants. Figure V-13: Water Balance of No. 5 Sheep Farming Base

Unit: m3/d

Loss 8.533 Loss 27.305 42.664 To produce Shheeeepp ddrriinnkkiinngg 34.131 6.826 organic fertilizer Urriinnee Feecceess waatteerr Loss 0.225

Source: TRTA consultants.

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Figure V-14: Water Balance of Animal Quarantine Station

Unit: m3/d Wastewater 77.8

Loss 19.5

Woorrkksshhoopp cclleeaann 97.3

5 LLaannddssccaappee

Loss 12.4 78.6 Shheeeeppffoolldd cclleeaann Loss 88.3 Wastewater Wastewater 438.8 350.1 66.2 Sllaauugghhtteerriinngg Reclaimed water 180.9

Loss 5.8 Wastewater 28.4 Prreeppaarreedd muuttttoonn 22.6 To municipal pprroodduuccttiioonn Waasstteewaatteerr sewer system Loss 8.5 ttrreeaattmeenntt 370.8 42.4 Wastewater woorrkksshhoopp Cooookkeedd muuttttoonn 33.9 555511..77 pprroodduuccttiioonn

Loss 0.5 Wastewater 1.1 Cooookkeedd muuttttoonn pprroodduuccttiioonn Coonnddeennssaattee Municipal waatteerr 11..99 Steam 3.5 water Loss 0.65 551.7 Wastewater 2.5 0.25 Stteeaam bbooiilleerr

Loss 3.3 Wastewater Wastewater 17.45 16.5 Doomeessttiicc 13.2 Seeppttiicc ttaannkk waatteerr Loss 6

90 Wastewater 4 10 Ciirrccuullaattiioonn Chhiilllleerr waatteerr 8800 80

Source: TRTA consultants. Figure V-15: Water Balance of Slaughtering and processing logistics base

382 The total water consumption by all the project components under Subproject 3 is shown in Table V-11.

383 The source of water supply during the operation of the subproject components under Subproject 3 will be from the city water supply pipelines operated by Baotou Municipality.

384 Component 1 and Component 3 of Subproject 3 will introduce a new type of sheep, Australian White Sheep, for breeding operation to replace the existing local types of sheep in these sheep breeding bases. Since the new type of Australian White Sheep will not create

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additional water demand than the existing local sheep in the breeding bases, the proposed Subproject 3 on sheep breeding will not require more water than what is currently consumed. The water demand for sheep breeding in the subproject areas will not change and an additional water supply capacity by Baotou Municipality is not needed for operating the subproject components under Subproject 3.

Table V-11:Water Consumption and Wastewater Emission Unit: m3/d Wastewater Water Water Supply Wastewater Item Water Consumption Source Discharge Generation No.1 and No.2 farming 176.16 Municipal water 36.149 0 base No.3 farming base 59.41 Municipal water 13.51 0 No.4 farming base 120.68 Municipal water 33.29 0 No.5 farming base 59.41 Municipal water 13.51 0 Quarantine station 59.41 Municipal water 13.51 0 Slaughtering and 538.6 Municipal water 551.7 370.8 processing logistics base Total 1013.67 NA 661.67 370.8 Source: TRTA consultants.

4. Health and Safety

385 Traffic safety. The concerns over the community safety of the proposed roads have been thoroughly examined during the TRTA. All roads have separate pedestrian sidewalks. Pedestrian-priority traffic lights, crosswalks (zebra lines) will be established at all intersections.

386 The mitigation measures related to the road construction are listed as below.

i) Strictly enforce traffic laws to improve road safety and reduce traffic accidents. ii) Various signs will be installed for road safety and safety drive; iii) Improve the safety facilities of the traffic roads; iv) Carry out public awareness education campaigns v) Adopt traffic controls when necessary. vi) Prepare an emergency response plan for accidents and emergencies for review and appraisal.

387 Community and Occupational Health and Safety. To mitigate potential health and safety risks to workers and communities, the following measures will be taken:

i) The nearby communities will be informed of the potential risks and the emergency response plan. ii) PPE including goggles, gloves, safety shoes will be provided to worker. Masks will be provided to workers working with odor. Noise protection equipment will be provided to workers in high-noise area. iii) Provide training to workers on occupational health and safety, and emergency response. iv) Subproject site will be fence with restricted public access.

388 Emergency response plan. Emergency risk and response plans will be established in accordance with the “National Environmental Emergency Plan” (24 January 2006) and other relevant PRC laws, regulations and standards. The emergency risk and response plans will include measures contained in the World Bank EHS guidelines with respect to occupational and community health and safety. The nearby communities will be informed of the potential risks and the emergency response plan.

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E. Cumulative, Indirect and Induce Impacts

389 Cumulative impacts are defined as the combination of multiple impacts from the existing projects, the proposed project, and anticipated future projects that may result in adverse and/or beneficial impacts that would not be expected for a single standalone project. They could arise from other projects in the vicinity that are being constructed concurrently with the construction stage of this Project.

390 Construction related cumulative impacts, if any, will be effectively minimized by adopting proper mitigation measures, including: (i) coordination between all project components and other projects in the area of influence in terms of construction schedule, possible access road and borrow/disposal sites and spoil sharing; (ii) contractors will develop material transport plan with consultation of local road management authority and local community; (iii) enforcement of good construction management to minimize dust, noise and waste generation; (iv) education of construction workers to minimize social disturbance and cultural conflict; (vi) provision of temporary access to local traffic; (vii) proper maintenance of the access roads and timely restoration/strengthening upon completion. With effective implementation of good construction management measures, these common construction-related cumulative impacts can be adequately mitigated to acceptable levels.

391 Induced impacts are adverse and/or beneficial impacts on areas and communities from unintended but predictable developments caused by a project that may occur later or at a different location. Once the project begins operation, it will result in improved connectivity between IMAR and Mongolia and provide better infrastructures to improve the cross-border trade. Their quality of life at the project sites of IMAR and Mongolia will be improved due to enhanced access to goods, services and social infrastructures.

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VI. ANALYSIS OF ALTERNATIVES

392 Various alternatives for each component were proposed, screened, and compared against the technical, economic, social, and environmental criteria. The primary objective with respect to environmental criteria was to identify and adopt options with the least adverse environmental impacts and maximum environmental benefits. The range of alternatives considered depends on the infrastructure sector and its characteristics, and the following key environmental factors were used in comparing the alternatives: (i) resettlement and land occupation; (ii) minimization of community disturbance; (iii) adaptation to local context (climatic constraints, earth, etc.); (iv) minimize facilities energy consumption, and (v) eco-friendly. The alternative analysis also included the no-project alternative.

A. No Project Alternative

393 The project has four outputs to improve regional cooperation and integration opportunities in border areas in IMAR linking PRC and Mongolia. Without the project, the border areas in IMAR will continue to have difficulties in attracting investments for SMEs due to lack of infrastructure and services in the border economic zones, lack of new technologies such as e- commerce for accessing markets at and beyond the borders, inefficient cross-border financial transactions and settlement, and inability in customs inspection and clearance to handle the fast-growing cross-border trade.

1. Erenhot subproject (Subproject 1)

394 The alternative analysis of the Erenhot subproject is presented in Table VI-1.

Table VI-1: No Project Alternative Analysis Component Subproject benefits and impacts No Project benefits and impacts No. (1) Promote the cross-border trade; (2) Improve the communication between Erenhot (1) Impacts during construction and and Mongolia; operation will not occur; (3) Promote the capacity of regional cooperation of (2) The cross-border trade will not be Erenhot; developed quickly; 1 (4) Improve the living conditions of persons at border (3) living conditions of persons at regions; border regions will not be (5) Impacts during construction and operation; improved quickly; (6) Clean energy wind power will be utilized for (4) Coal will be utilized for heating. heating. (1) Impacts during construction and (1) Ecology restoration and improve environment; operation will not occur; 2 (2) Impacts during construction and operation. (2) Environment especially sand storm will not be improved. (1) Improve the sanitation facilities in the ECZ; (2) The cloud platform will improve the waste collection efficiency and monitor the waste (1) Impacts during construction and operation will not occur; 3 classification, collection and transfer; (3) Provide incentives by rewarding people for (2) Waste recycling will be a challenge recycling； (4) Impacts during construction and operation. (1) Provide better medical service to persons at border regions especially at Mongolia; (1) Impacts during construction and operation will not occur; 4 (2) Improve health of persons at border regions (2) The increased doctor-seeing especially at Mongolia； demand can’t be met (3) Impacts during construction and operation. Source: Domestic EIA, 2019.

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395 Based on the above information, although the subproject will have impacts during construction and operation, the impacts can be avoided or reduce with mitigation measures. Implementation of the subproject will bring in long term positive social and environmental benefits. For these reasons the “no project” alternative is considered unacceptable.

2. Mandula subproject (Subproject 2)

396 The alternative analysis of the Mandula subproject is presented in Table VI-2.

Table VI-2: No Project Alternative Analysis Subproject benefits and impacts “No Project” benefits and impacts (1) Promote the cross-border trade; (1) Impacts during construction and (2) Improve the communication between Mandula and operation will not occur; Mongolia; (2) The cross-border trade will not (3) Promote the capacity of regional cooperation of be developed quickly; Mandula; (4) Improve the living conditions of persons at border (3) Living conditions of persons at regions; border regions will not be improved quickly. (5) Impacts during construction and operation. Source: Domestic EIA, 2019.

397 Based on the above information, although the subproject will have impacts during construction and operation, the impacts can be avoided or reduce with mitigation measures. Implementation of the subproject will bring in long term positive social and environmental benefits. For these reasons the “no project” alternative is considered unacceptable.

3. Xiaoweiyang subproject (Subproject 3)

398 The subproject will introduce Australian White Sheep to promote new sheep production through the use of embryo transfer, artificial insemination and estrus techniques to breed new varieties. The subproject will apply blockchain technology to establish a traceability system for the entire industry chain. At the food store and food sales end, consumers can achieve the goals that quality can be monitored, source can be traced, flow can be tracked, information can be saved, and responsibility can be traced through mobile APP and WeChat scanning code.

399 The subproject will also establish a Poverty Alleviation Program to integrate poor households into the value chain. Increasing employment opportunities for poor and weak herders and driving poor households out of poverty and income.

400 For these reasons the “no project” alternative is considered unacceptable.

B. Alternatives Considered

401 The buildings and facilities of Subproject 1 and Subproject 2 will contribute to improve cross-border trade and communication by providing better services, environment and infrastructures. The scope in the consideration of alternative sites was very much limited because the customs buildings are included in Subprojects 1 and 2.

402 The five breeding bases of Subproject 3 are already existed, then there is no alternative for the location selection.

403 Slaughtering and processing logistics base will generate a lot of wastewater during operation which requires a municipal sewer system and WWTP. The proposed site of the logistics base is located at existing industrial park with a municipal sewer system and WWTP and is not far away from the existing breeding bases and the there is no alternative for the 121

location selection.

404 Animal quarantine station of Subproject 3 will require a good transportation condition, good infrastructures and will not be far away from the customs, the consideration of alternative sites was very much limited. In the FSRs, advanced technology, suitable renewable energy, advances sheep breeding and water recyclable are utilized by all subprojects.

405 For Component 3 of the Erenhot subproject, the alternative analysis of waste compressing technology is presented in Table VI-3.

406 Based on the operation experiences of existing waste transfer station, there is a lot of sand and stone in waste of Erenhot, therefore, horizontal compressors are easy to break down. Container compressors are suitable for large scale of waste transfer station. Therefore, the component 3 of Erenhot subproject will use vertical compressor.

C. Overall Alternative Analysis

407 Based on the analysis of alternatives, the Tranche 1 subprojects have selected the most appropriate and sustainable methods and technologies for the investment loan.

Table VI-3: Comparison of Waste Compressing Different Technologies Item Vertical compressor Horizontal compressor Container compressor

Appearance

Transfer vehicle

Closed vehicle Closed vehicle Hook arm vehicle Maximum 60t/d 100t/d 120t/d capacity Weight 8-14t 8-10t 8-16t Required supporting Two compressors with One compressor with one One compressor with one equipment for one vehicle and three vehicle vehicle one transfer containers station Power 18 kW 22 kW 32kW Floor area 20m2 42m2 35m2 Investment 1.6 million CNY 2.8 million CNY 3.5 million CNY Environment Limited odor impacts Limited odor impacts Limited odor impacts issues 1. High power consumption; 1. High investment; 1. A pit will be built, hard to 2. Lower compressor power and Disadvantage 2. High power clean easy to break under High consumption intensity operation Source: Domestic EIA, 2019.

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VII. INFORMATION DISCLOSURE AND CONSULTATIONS

A. PRC and ADB Requirements for Information Disclosure and Public Consultation

408 Meaningful participation and consultation during project planning, feasibility study, design and implementation is an important environment safeguards requirement. It can directly reflect the public’s perceptions of environmental quality in the project’s area of influence.

409 PRC Requirements. Relevant provisions in the PRC “Environmental Protection Law (2003)” and the “Regulations on Environmental Protection Management of Construction Projects (No. 253 Order of the State Council)” require that an EIA study for a construction project shall solicit opinions from affected residents, as well as other organizations and stakeholders concerned. However, the requirements for public consultation are different from various sectors and projects. For an environmental Category A project, two rounds of public consultations are required, while for a Category B project, only a simplified tabular EIA is required without requirements for any public consultation.

410 Public participation and environmental information disclosure provisions are among the most significant changes introduced in the amended Environmental Protection Law (2015). The legislative framework also includes decrees on the methods for public participation in environmental protection, information disclosure on construction project EIAs by government, preparation of EIA summaries for public disclosure, and technical guidelines for public participation in EIAs. The public disclosure and consultation process undertaken during the preparation of the domestic EIA was undertaken in compliance with the relevant PRC requirements.

411 ADB Requirements. In order to make key documents widely available to the general public, ADB’s SPS requires submission of finalized EIA for Category A projects, and the final IEE for Category B projects to ADB for posting on ADB website. ADB’s SPS requires that borrowers to take a proactive disclosure approach and to provide relevant information from environmental assessment documentation directly to affected peoples and stakeholders. The SPS also requires that the borrower to carry out meaningful consultation with affected people and other concerned stakeholders, including civil society, and facilitate their informed participation. Meaningful consultation goes beyond information disclosure. It involves two-way communication between the borrower and the affected communities and stakeholders, and active participation of affected communities and stakeholders in project design and implementation. For environment category B projects, such consultations will necessarily include consultations at the early stage of EIA field work and when the draft EIA report is available during project preparation, and before project appraisal by ADB.

412 ADB’s SPS (2009) has specific requirements for information disclosure and public consultation. Information disclosure involves delivering information about a proposed project to the public and to affected communities and other stakeholders, beginning early in the project cycle and continuing throughout the life of the project. Information disclosure is intended to facilitate constructive engagement with affected communities and stakeholders over the life of the project.

413 The ADB’s SPS requires that borrowers take a proactive disclosure approach and provide relevant information from environmental assessment documentation directly to affected peoples and stakeholders. In addition, to make key documents widely available to the public, the SPS requires submission of following documents for disclosure on ADB’s website as follows (Category B Projects):

(i) final IEE (upon receipt of Board approval, whichever is earlier)

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(ii) a new or updated IEE, if required during project implementation (iii) corrective action plans (for major noncompliance, if any) prepared during project implementation and (iv) environmental monitoring reports.

414 ADB’s SPS also requires that the borrower carry out consultation with affected people and other concerned stakeholders, including civil society, and facilitate their informed participation. Consultations should include presentations on environmental impacts, benefits and mitigation measures, project GRM, and ADB's Accountability Mechanism.

B. Information Disclosure

415 The objective of information disclosure is to facilitate information exchange and constructive engagement with affected communities and stakeholders throughout the whole project. Information disclosure and public consultations were conducted in the subproject cities/towns during the course of domestic EIA preparations and the TRTA in accordance with the PRC Guideline on Public Consultation in EIA and ADB SPS 2009.

416 This IEE will be disclosed on ADB website. All environmental monitoring reports during operation will also be disclosed on ADB website.

417 The subproject in Erenhot was first publicized on August 21, 2019 on the website of Government of Erenhot. The link is http://www.elht.gov.cn/elht_info_2018/bmgk/zfbm/fgw/xxgkml/201908/t20190821_184305.htm l.

418 The Xiaoweiyang’s subproject was first publicized on July 25, 2019 on the website of Xiaoweiyang Company. The links are: http://www.nmxwy.com/index/content/detail?model=article&navid=22&sid=424, http://www.nmxwy.com/index/content/detail?model=article&navid=22&sid=425, http://www.nmxwy.com/index/content/detail?model=article&navid=22&sid=426 and http://www.nmxwy.com/index/content/detail?model=article&navid=22&sid=427.

419 The subproject in Damaoqi County will be first publicized on September, 2019 on the website of Government of Damaoqi County. The link is http://www.dmlhq.gov.cn/gkxx/zfxxgk.

420 The disclosed information includes the construction project overview, the name and contact information of the construction unit, the name and contact information of the domestic EIA institution undertaking the evaluation work, the working procedures and main work contents of the environmental impact assessment, the DEIA approval procedures, the public participation procedures and programs, and preliminary arrangements for work at each stage, major issues for public comment, main approaches for public comments and announcements.

421 The information disclosure is also implemented near the component sites.

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Erenhot subproject information disclosure

Source: Domestic EIA, 2019. Figure VII-1: Information Disclosure by Website Posting

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Xiaoweiyang subproject information disclosure

Source: TRTA Consultants Figure VII-2: Information Disclosure by Website Posting

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Source: Domestic EIA, 2019. Figure VII-3: Information Disclosure at Project Component Sites

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C. Questionnaire Survey

422 During the preparation of domestic EIA and this IEE, the EIA Institutes conducted public consultations in the nearby villages during June to August of 2019. During the public consultations, information on the component contents and status was presented by the EIA Institutes. Information on potential environmental impacts and proposed mitigation measures, the GRM and component benefits was also presented. Questions and discussion meetings were focused on environmental issues and social benefits associated with different components. A questionnaire survey was conducted to seek the views and opinions of affected persons, local communities and government departments, and other stakeholders. The questionnaires contain 31 questions covering environmental issues and opinions towards the projects.

423 The project background information and potential environmental impacts were provided to the stakeholders in separate sheets. During the public consultations, most of the respondents believe that the project components will help increase their income, promote the local economy development and provide more job opportunities to the nearby villages. A 100% of participants supported the project. The most concerned environmental issue from the participants is the potential odor pollution from the sheep breeding bases. Some of the field survey activities are shown in Figure VII-4.

Meeting at Mandula port Meeting at Mandula Town

Meeting at Erenhot authorities Public consultation at the hospital

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Public consultation with the local Public consultation with the leader of Gesumu community of Erenhot of Erenhot

Public consultation at Guyang County Public consultation at Dengkou Village,Tuyouqi County

Public consultation at Dasanyanjing Public consultation at Dushoujiang Village,Tuyouqi County Village,Tuyouqi County

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Public consultation at Xingfu Village, Public consultation at Natai Village, Tuyouqi Guyang County County

Source: TRTA consultants. Figure VII-4: Photos of Public Consultation and Survey Activities

424 A total of 251 questionnaires were distributed in this survey, and 251 valid questionnaires were collected. The recovery rate was 100%. The demographical information of the respondents is shown in Table VII-1, and the key statistical results of the survey are shown in Table VII-2 and Table VII-3.

425 A total of 251 survey questionnaires were distributed and completed. Of those surveyed, 57.0% of the respondents are male and 43.0% of the respondents are female. With regard to education, 25.1% of the participants are below junior school, 18.3% are at junior school, 29.3% are at high school, and 27.1% are at university or above. Regarding occupation, 35.5% of the participants are employees, 42.2% are local farmers, 40.0% are government staff, and 12.4% belong to other categories.

426 All the respondents (100%) support the project and believe that the project could promote local economic development and have a positive attitude towards it. The public participation questionnaire indicates that the implementation of the project has been recognized and accepted by the public. About 96.0% of the respondents are aware of the project after the public consultation. The top 3 issues concerned about the project are ambient air (45.4%), noise (30.3%) and solid waste (12.7%). Most the respondents (97%) are very satisfied with the proposed environmental mitigation measures.

427 Other findings of the public survey include the following: 1) 33.5% of the respondents think the project should promote the use of recyclable resources such as reclaimed water, wind power; 2) 96.0% of the respondents understand the environmental impacts of construction activities (74.9% clearly understand, 12.7% somewhat understand; 8.4%barely understand), while 91.4% of them consider that the dust (39.4%) and noise (35.5%) generated by construction activities is a major environmental concern; 3) All the respondents understand the environmental impacts of project operation (17.9% somewhat understand; 75.3% clearly understand), while all of them are receptive to the operational impact of the project on ambient air, surface water, groundwater, solid waste, ecological environment, acoustic environment, and health and safety issue;

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4) 98.4% of the respondents are satisfied with the mitigation measures implemented in this project (Very satisfied 84.1%; satisfied, 11.2%; basically satisfied, 3.2%); 5) All the respondents think the project can improve local economic development and support the project construction.

Table VII-1: Demographical Information of Questionnaire Respondents Parameter Indicator No. % Male 143 57.0% Gender Female 108 43.0% Below 30 36 14.3% 31-40 41 16.3% Age 41-50 71 28.3% Above 50 103 41.0% Han people 215 85.7% Nationality Other 36 14.3% Primary School or Below 63 25.1% Junior school 46 18.3% Education High school, including technical Level secondary school 74 29.5% Bachelor degree or above, including junior college 68 27.1% Farmer 106 42.2% Employee 89 35.5% Occupation Civil servant 25 10.0% Other 31 12.4% Source: Domestic EIA, 2019.

Table VII-2: Questionnaire Respondents for Different Subproject Components Location Gender Participant No. Percent (%) Tuyouqi Male 57 59.4% County Female 39 40.6% Guyang Male 14 63.6% County Female 8 36.4% Dmaoqi Male 43 59.7% County Female 29 40.3% Male 29 47.5% Erenhot Female 32 52.5%

Table VII-3: Statistical Result of Public Consultation Questionnaire Question Item No. % Ambient air 36 14.3% Noise 22 8.8% Surface water 23 9.2% Ground water 26 10.4% 1. In your opinion, what are the major Soil 15 6.0% environment pollution issues in your Solid waste 36 14.3% areas? Odor 7 2.8% Risks associated with chemicals and hazardous chemicals Other concern 86 34.3% 2. Distance between your working place and <1 km 29 11.6% project site 1-3 km 56 22.3%

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Question Item No. % 3-5 km 86 34.3% > 5km 80 31.9% <1 km 12 4.8% 3. Distance between your house and project 1-3 km 29 11.6% site 3-5 km 96 38.2% > 5km 114 45.4% 5.2% Ambient air 5

Noise 6 6.3% Surface water Ground water 4. What do you think are the impacts of the Soil existing breeding bases on the Solid waste surrounding environment? Odor 11 11.5% Risks associated with community sanitation

and occupational safety Other concern 74 77.1% Very satisfied 211 84.1% Satisfied 28 11.2% 5. Are you satisfied with the mitigation Basically satisfied 8 3.2% measures implemented in this project? Very disappointed Do not understand 4 1.6% 6. Do you know that the existing breeding Yes 55 57.3% bases will cause risks to the surrounding No communities? 39 40.6% 7. If there is any emergency in the existing Yes 88 91.7% breeding bases, do you know how to deal No with it? 8 8.3% 8. Do you accept the impact of the existing Yes 92 95.8% breeding bases on the surrounding No environment and your life? Not understand 4 4.2% 9. Do you know this project before this Yes 117 46.6% public consultation? No 134 53.4% 10. Do you understand environment impacts Yes 106 42.2% of this project before this public No 145 57.8% consultation? Not clear 11. After this public consultation, are all the Clearly understand 188 74.9% potential positive and adverse impacts of Somewhat understand 32 12.7% the proposed project components clear to Barely understand 21 8.4% you? Do not understand 10 4.0% Exhaust air efficiency 86 26.3% treatment Controlling fugitive

emissions Wastewater treatment 54 21.5% Groundwater 12. In your opinion, what should be the most 22 8.8% protection critical area that the project should focus Soil protection on? Chemicals handling Odor control 25 10.0% Make use of recyclable 84 33.5% resources Noise disturbing to

residents

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Question Item No. % Protection for community health and safety Protection to workers

health and safety Others Clearly understand 58 23.1% 13. Do you understand the potential adverse Somewhat understand 168 66.9% impacts during the construction of the Barely understand 25 10.0% proposed project? Do not understand Necessary 234 93.2% 14. What do you think about the project Barely necessary 17 6.8% construction? Do you think it is Not necessary necessary? It does not matter Noise 89 35.5% Dust 109 39.4% 15. What would be the major impacts during Solid waste 35 13.9% project construction? Traffic congestion 18 7.2% Others No major impacts 10 4.0% Accept 16. Without mitigation measures, do you Barely accept 10 4.0% accept anticipated construction phase Do not accept 241 96.0% impacts? Have no idea Accept 233 92.8% 17. After learning about mitigation measures Barely accept 12 4.8% during the construction, do you accept Do not accept anticipated construction phase impacts? Have no idea 6 2.4% Yes 245 97.6% 18. Do you agree with project construction No after comprehensive consideration? I do not know 6 2.4% Clearly understand 189 75.3% 19. Do you understand all the anticipated Somewhat understand 45 17.9% environmental adverse impacts of the Barely understand 17 6.8% project during operation? Do not understand Clearly understand 34 13.5% Somewhat understand

20. Do you understand all the anticipated 212 84.5% health and safety adverse impacts of the project during operation?

Barely understand 5 2.0% Do not understand Clearly understand 15 6.0% 21. Do you understand the proposed Somewhat understand 234 93.2% mitigation measures during the project Barely understand 2 0.8% operation? Do not understand Accept 231 92.0% 22. Do you accept the impacts to ambient air Barely accept 14 5.6% quality by this project? Do not accept Have no idea 6 2.4% Accept 224 89.2% 23. Do you accept the impacts to surface Barely accept 27 10.8% water quality by this project? Do not accept Have no idea Accept 231 92.0% 24. Do you accept the impacts to ground Barely accept 20 8.0% water quality by this project? Do not accept

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Question Item No. % Have no idea Accept 233 92.8% 25. Do you accept the impacts to acoustic Barely accept 18 7.2% environment quality by this project? Do not accept Have no idea Accept 238 94.8% 26. Do you accept the solid waste pollution by Barely accept 13 5.2% this project? Do not accept Have no idea Accept 225 89.6% 27. Do you accept the impacts to ecological Barely accept 23 9.2% environment by this project? Do not accept Have no idea 3 1.2% Accept 221 88.0% 28. Do you accept environment, health, and Barely accept 30 12.0% safety risks caused by this project? Do not accept Have no idea Ambient air 114 45.4% Noise 76 30.3% Surface water 12 4.8% Ground water Soil 29. What issue do you concern the most? Solid waste 32 12.7% Odor 13 5.2% Risks associated with chemicals and hazardous chemicals Other concern 4 1.6% 30. Do you think construction of this project Yes 251 100% can improve local economic development No or not? I do not know Yes 251 100% 31. Do you support the project? No I do not know Source: Domestic EIA, 2019. Note: 96 questionnaires collected around the five existing farming bases.

D. Future Plans for Public Participation

428 Meaningful consultation to safeguard the environment and local residents will continue before and throughout the construction and operational phases of the Project. The forms of public consultation will include information disclosure on the web sites of the project proponent and relevant government departments, posting of project information on community notice boards, and discussion forums. A dialogue channel will be maintained with the affected public and stakeholders throughout project implementation by continued public consultation. Such dialogue will ensure that public concerns are understood and dealt with in a timely manner. A plan for future consultation during design, construction and operation has been developed, and is presented in the EMP. Future public consultation will be conducted via questionnaires surveys, household visits, workshops, and consultation meetings per schedule or when there are complaints or unanticipated negative environmental impacts.

429 The plan includes public consultation on (i) inspection and monitoring the impacts and mitigation measures during the construction and operation; (ii) evaluating the environmental and economic benefits and social impact; and (iii) consulting with the public after the project completion. The implementing agencies with the support from the IPMO and loan

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implementation consultants will be responsible for organizing the public consultations. The contractors will be required to communicate and consult with the communities in the subprojects’ areas, especially those close to their construction sites. Eye-catching public notice boards shall be set at each construction site to proclaim the purpose of the construction, the duration of disturbance, the responsible entities on-site, including contractor name, construction supervision company (CSC), implementing agency, and the project level GRM. Contact information of all GRM entry points (including community leaders, neighborhood organizations, local authorities, district EEBs, and contractors) and the Project Public Complaints Units (PPCU) will be disclosed on the construction site information boards. The cost for GRM will be included in the IAs’ operation budget.

430 Prior to construction, the implementing agencies will inform the affected people of the planned project interventions and the likely disturbances through information disclosure in the local newspaper. The GRM entry points will be briefed, which will in turn ensure that information is disseminated to project affected areas. During construction, affected people will be consulted at least once a year through formal questionnaire surveys and a public workshop. The surveys and the public workshop will be conducted by the implementing agencies supported by environment consultant. On-site environmental engineers of the construction contractors or construction supervision companies will conduct informal interviews with affected people on a regular basis. Public consultation will focus on complaints about community disturbances from construction activities, such as construction noise, dust, solid waste and wastewater, as well as public concerns about soil erosion, air pollution and water pollution.

431 The IPMO and IA will be responsible for organizing the public consultations, with the support of the PIC-ES and the project management consultant (PMC) team. The contractors will be required to communicate and consult with the communities in the project area of influence, especially those near the stations. Clearly visible public notice boards will be set at each work site to provide information on the purpose of project activities, the duration of disturbance, the responsible entities on-site (contractors, IA), and the project level Grievance Redress Mechanism (GRM).

432 Contact information on all the GRM entry points and the IPMO complaint center hotline will be disclosed on the information boards of construction sites. Consultation will focus on public nuisances from construction and operational activities, such as noise, dust, traffic disturbance, and public concerns about the environmental and social impacts.

433 Future consultation and participation will also include (i) involvement of affected people in discussion forums during inspection and monitoring of the EMP implementation during construction and operational phases; (ii) participatory evaluation of the environmental and social-economic benefits and impacts in these forums; and (iii) consultation with the public after the project completion.

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VIII. GRIEVANCE REDRESS MECHANISM

434 A grievance redress mechanism (GRM) has been developed in compliance with ADB’s SPS (2009) requirement to address environmental, health, and safety concerns associated with the project construction and operation. The GRM is designed to achieve the following objectives: i) provide channels of communication for local communities to raise concerns about environmental grievances which might result from the project; ii) prevent and mitigate adverse environmental impacts to communities caused by project construction and operation; iii) improve mutual trust and respect and promote productive relationships between the IA and local communities; and iv) build community acceptance of the project.

435 The GRM is accessible to all members of the community, including women, youth, and poverty-stricken residents. Multiple points of entry are available, including face-to-face meetings, written complaints, telephone conversations, e-mail, and social media. Public grievances related to the project construction may include damage to public roads, interruption of public services, dust emissions, noise, soil erosion, inappropriate disposal of waste materials, and safety for the public and construction workers.

436 The GRM meets the regulatory standards of the PRC that protect the rights of citizens from construction-related environmental and/or social impacts. Decree No. 431 Regulation on Letters and Visits, issued by the State Council of PRC in 2005, codifies a complaint acceptance mechanism at all levels of government and protects the complainants from retaliation. Based on the regulation, the former State Environmental Protection Administration (SEPA) published updated Measures on Environmental Letters and Visits (Decree No. 34) in 2006.

437 Currently in the PRC, when residents or organizations are negatively affected by a development, they may complain, by themselves or through their community committee, to the contractors, developers, the Township Government, the local EEB, or by direct appeal to the local courts. The main weaknesses of this system are: (i) the lack of a specialized unit to address grievances; and (ii) the lack of a specific timeframe for the redress of grievances. The project GRM addresses these weaknesses. A strength of the current system is the inclusion of the local EEB hotline for complaints and reporting environmental issues. The project GRM incorporates this hotline as one of the entry points for affected persons.

438 The details of the project GRM, including a time-bound flow chart of procedures, are included in the project EMP (Appendix 1 of this IEE).

439 Residents and/or organizations affected by the project activities were encouraged to participate in the preparation of the domestic EIAs, the IEE and the EMP. However, environmental issues and concerns usually develop during both construction and operation periods. Project-level GRMs in the subproject cities / counties have been developed in order to solve problems effectively, as well as guaranteeing that the project will be implemented smoothly and successfully. Grievances and complaints of potentially affected people and organizations will be recorded, addressed and solved completely and quickly through the mechanism.

A. Current Practice

440 Currently, when residents or organizations are negatively affected by project activities, such as noise, dust or safety issues caused by construction activities, they may complain to the contractors and implementing agencies by themselves or through their community committees, or complain directly to local EEBs before they finally appeal to the court. In the case of issues occurring during the construction period, they can complain to the contractors first if the construction is the source of the problem. If the contractors' responses cannot resolve the

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issues or if the contractors do not respond to the issues, they may contact municipal EEBs or the district/county EEBs, who will record the complaints and then visit the sites to investigate and obtain the contractors’ side of the story. Sometimes, the two sides might contradict, each defending its own argument. In such cases, the local EEBs will need to consult with the contractor or the environmental supervision engineer to acquire relevant project information and collect data. This kind of fact-finding or site investigation is usually time-consuming, thus delaying the mediation process. The major weaknesses of the current system are: (i) the lack of a specialized unit to address grievances on a project level; and (ii) no specific timeframe for the GRM.

B. Proposed Grievance Redress Mechanism

441 The proposed GRM process flow is illustrated in Figure EMP-1 of the EMP (Appendix 1). The Environmental and Social Officers of IPMO will be the lead coordinators for GRM implementation. However, all project agencies and staff will be trained required by the GRM and will take an active role in supporting these staff as and when necessary.

442 At the IPMO level, the Environmental Officer and Social Officer will establish a GRM tracking and documentation system, conduct daily coordination with the PMOs’ officers, arrange meetings and conduct site visits as necessary, maintain the overall project GRM database, and prepare the reporting inputs for progress reports to ADB. Besides, the environment and social officers will instruct contractors and CSCs on the GRM procedures, and coordinate with the local EEBs and other government divisions as necessary.

443 The contact persons for different GRM entry points, such as the IPMO Environmental and Social Officers, contractors, operators of project facilities (OPFs), sheep breeding bases and slaughterhouses for possible odor issues, and local EEBs, will be identified prior to construction. The contact details for the entry points (phone numbers, addresses, e-mail addresses) will be publicly disclosed on information boards at construction sites and on the websites of the local EEBs.

444 Once a complaint is received and filed, the IPMO officers will identify if complaints are eligible. Eligible complaints include those where (i) the complaint pertains to the project; and (ii) the issues arising in the complaint fall within the scope of environmental issues that the GRM is authorized to address. Ineligible complaints include those where: (i) the complaint is clearly not project-related; (ii) the nature of the issue is outside the mandate of the environmental GRM (such as issues related to resettlement, allegations of fraud or corruption); and (iii) other procedures are more appropriate to address the issue. Ineligible complaints will be recorded and passed to the relevant authorities, and the complainant will be informed of the decision and reasons for rejection.

445 The GRM does not affect the right of an affected person to submit his/her complaint to any agency he/she wishes to, for example the local village committee, community leaders, courts, PMO, CMG, district/county government, and/or ADB.

446 The IPMO shall bear any or all costs of implementing the GRM, including meeting, travel, and/or accommodation costs for project staffs or affected persons. The GRM will be implemented throughout project construction and at least the first year of operation for each project facility.

447 Complaints will be received by the IPMO staff or the environmental supervision engineer. Grievance focal points will be designated at these levels to receive, help resolve, report or forward complaints received from the people. People may visit, call or send a letter or email to any of the grievance focal points to register their comments or complaints related to

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environmental issues or other aspects of the project.

448 The IPMO will maintain a record-book to register the complaints and keep track of their status. Reports and complaint resolution will be subject to follow-ups by the Program Director. The grievance focal points will also be tasked to regularly coordinate with the IPMO to keep track of the complaints received, related actions taken and the status of resolution. Complaint forms will be distributed to the heads of local governments to facilitate the recording of complaints

C. Types of Grievances Expected

449 Public grievances to be addressed by the GRM will most likely include disturbance of agricultural activities, traffic, dust emissions, construction noise, odor caused by transport and treatment of workers’ domestic waste, soil erosion, inappropriate disposal of construction wastes, damage to private houses, safety measures for the protection of the public and construction workers, and/or water quality deterioration.

450 Grievances related to involuntary resettlement may relate to the lack, or un-timely payment of, compensation fees, other allowances, and/or lease fees as per entitlements described in the resettlement plan and associated documents.

D. GRM Steps and Timeframe

451 If any grievance was not effectively solved at the subproject level, provincial IPMO will facilitate the development of reasonable, effective, and satisfactory resolution. The following describes the five main steps of the Project level GRM.

Step 1: For environmental problems during the construction and operational stages, the affected person (AP) can register his/her complaint directly with the contractors or with the IPMO complaint center via its hotline. A joint hotline for resettlement and environment issues shall be established within PMO. Complaints related to land acquisition and resettlement issues shall be directed to the IPMO and relevant agencies in accordance with the resettlement plan (RP). Contractors are required to set up a complaint hotline and designate a person in charge of handling complaints, and advertise the hotline number at the main entrance to each construction site, together with the hotline number of the IPMO complaint center. The contractors are required to maintain and update a Complaint Register to document all complaints. The contractors are also required to respond to the complainant in writing within 7 calendar days on their proposed solution and how it will be implemented. If the problem is resolved and the complainant is satisfied with the solution, this can be recorded by the IPMO complaint center and follow-up shall be carried out during the next project site visit by the PIC-ES. The contractors are required to report complaints received, handled, resolved and unresolved to the IPMO complaint center immediately, and to the IA and IPMO monthly (through progress reporting). Step 2: If no appropriate solution can be found during step 1, the contractor has the obligation to forward the complaint to the IPMO complaint center, the IA and local EEBs. For an oral complaint, proper written records shall be made. Once a complaint is registered and put on file, the IPMO complaint center shall assess the eligibility of the complaint, identify the solution and provide a clear reply for the complainant within 14 calendar days. The PIC-ES shall assist the IPMO complaint center in addressing the complaint, and follow- up with the AP. The IPMO complaint center shall also inform the ADB project team and submit all relevant documents. Meanwhile, the IPMO complaint center shall convey the complaint/grievance and suggested solution to the contractors, and/or IA’s O&M unit in a timely manner. The contractors during construction and the O&M unit during operation shall

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implement the agreed redress solution and report the outcome to the IPMO complaint center within fifteen (15) working days.

Step 3: In case no solution can be identified by the IPMO complaint center, or the complainant is not satisfied with the proposed solution, the IPMO complaint center shall organize, within 14 calendar days, a multi-stakeholder hearing (meeting) involving all relevant stakeholders (including the complainant, IA, contractors, O&M unit, local EEB, and PMO). The hearing shall identify a solution acceptable to all, and formulate an action plan.

E. Disclosure of the Grievance Process

452 The complaint resolution process will be documented in the environmental monitoring reports. 453 In addition to the project GRM, ADB's overall accountability mechanism (2012) applies.17 This mechanism provides opportunities for people adversely affected by ADB-financed projects to express their grievances; seek solutions; and report alleged violations of ADB’s operational policies and procedures, including safeguard policies. ADB’s accountability mechanism comprises two separate, but related, functions: (i) consultation, led by ADB’s special project facilitator, to assist people adversely affected by ADB-assisted projects in finding solutions to their problems; and (ii) providing a process through which those affected by projects can file requests for compliance review by ADB’s Compliance Review Panel.

17 The revised accountability mechanism became effective on 24 May 2012. 139

IX. ENVIRONMENTAL MANAGEMENT PLAN

A. Objectives

454 An EMP has been prepared for the IMAR MFF Tranche 1 subprojects and the details of the EMP are presented in Appendix 1.

455 The EMP identifies the potential environmental impacts and defines mitigation measures and monitoring requirements for the design, construction and operational phases. It also defines the institutional arrangements and mechanisms, the roles and responsibilities of different institutions, procedures and budgets, capacity building and training for implementation of this project-specific EMP. The EMP specifies the effective implementation of environmental protection activities during pre-construction, construction, and operation in order to prevent, reduce, or mitigate adverse environmental impacts and risks. The EMP draws on the findings of the IEE report; domestic FSR and domestic EIA report; and discussions and agreements with the IA, EA and ADB

456 The EMP consists of six components: (i) institutional arrangements and environmental responsibility; (ii) environmental mitigation measures; (iii) environmental monitoring; (iv) institutional strengthening and training; (v) public consultation; and (vi) GRM. Environmental monitoring consists of two types of monitoring: (i) environmental monitoring in terms of environmental data collection and analyses for assessing the extent and severity of impact; and (ii) compliance monitoring (or audit) by independent entities for verifying EMP implementation. The last section of this EMP contains a list of environmental contract clauses for inclusion into all bidding documents and works contracts for environmental protection during station construction.

B. Institutional Arrangements and Responsibilities for EMP Implementation

457 The IMAR Government (IMARG) is the executive agency (EA) of the Investment Program. The EA has established a project leading group (IPLG) and has setup an IMAR project management office (IPMO) to support the Investment Program implementation.

458 At the prefecture-level, Erenhot Municipal Government (EMG) is the implementing agency (IA) for Subproject 1. Erenhot municipal project management office (EPMO) has been established under the Erenhot DRC to carry out overall coordination and supervision of subproject preparation and implementation in its level. Erenhot Yixin Urban & Rural Development and Construction and Asset Management Co., Ltd (Yixin) has been assigned to act as the PIE. A project implementing unit (PIU) has been established inside the PIE to carry out the daily implementation of this subproject.

459 Baotou Municipal Government (BMG) is the implementing agency for Subproject 2 and Subproject 3. Baotou municipal project management office (BPMO) has been established under the Baotou DRC to carry out overall coordination and supervision of subproject preparation and implementation in its level. Damaoqi Pine Boolean Property Service Co., Ltd (Songbuer) has been assigned to act as the PIE for Subproject 2. The Inner Mongolia Xiao Wei Yang Stock Raising Sciences and Technologies Co., Ltd (Xiaoweiyang), a private animal husbandry enterprise registered in Baotou in 2001, will be the PIE for Subproject 3 with a PIU already established inside the company to carry out overall coordination and supervision of subproject preparation and implementation of Subproject 3.

460 For the FIs in Tranche 1, BOIM and other FIs to be selected during the implementation period, are the PIEs for Subproject 4 of SMEs in Cross Border Businesses Expansion in IMAR.

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BOIM was selected based on the ADB’s set of eligibility criteria for lending transactions of this nature. The same eligibility criteria will be applied for selecting other FIs during the implementation period.

461 Environmental and ESMS Specialist of Project implementation consultant (PIC-ES). A PIC-ES will be recruited either through an individual contract or under the Project implementation consultant (PIC). The PIC-ES will advise the IPMO, IAs, PIEs, contractors and Construction Supervision Companies (CSCs) on all aspects of environmental management and monitoring for the project. The PIC-ES shall:

(i) assess the project’s environmental readiness prior to implementation based on the readiness indicators defined in Table EMP-3 in the EMP; (ii) support the IPMO in updating the EMP including environmental monitoring plan as necessary to revise or incorporate additional environmental mitigation and monitoring measures, budget, institutional arrangements, and others that may be required based on the detailed design; ensure compliance with the PRC’s environmental laws and regulations, ADB’s SPS 2009 and Access to Information Policy (2018); (iii) if required, update the IEE and EMP reports for changes during the detailed design or subproject implementation (for example if there is a minor or major scope change) that would result in adverse environmental impacts that are not within the scope of the approved IEE/EMP; (iv) assist the PIEs/IPMO in establishing a GRM; (v) conduct the EMP compliance check, undertake site visits, identify any environment- related implementation issues, and propose and oversee the implementation of necessary corrective actions; (vi) assist the IPMO in preparing the environmental section of quarterly project progress reports and semi-annual/annual environmental monitoring reports (EMRs) for submission to ADB; (vii) provide training to the IPMO, IAs, PIEs, and contractors on environmental laws, regulations and policies, SPS 2009, EMP implementation, and GRM in accordance; and (viii) assist the IPMO and PIEs in conducting consultation meetings with relevant stakeholders as required, who will be informed of imminent construction works and updated on the latest subproject development activities and GRM mechanisms during the consultations.

462 Construction Contractors, Construction Supervision Companies (CSCs). Construction contractors will be responsible for implementing relevant mitigation measures during construction under the supervision of the CSCs and PIEs. Contractors will develop site-specific EMPs on the basis of the project EMP. CSCs will be selected through the PRC bidding procedure by the PIEs. The CSCs will be responsible for supervising construction progress and quality, and EMP implementation on construction sites. Each CSC shall have at least one environmental engineer on each construction site to: (i) supervise the contractor’s EMP implementation performance; and (ii) prepare the contractor’s environmental management performance section in monthly project progress reports submitted to the PIEs and LPMOs.

463 Environmental Monitoring Agency (EMA). The IPMO will recruit a EMA to conduct periodic environmental impact monitoring during construction and operation in accordance with the monitoring plan.

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C. Inspection, Monitoring and Reporting

464 Three types of project monitoring will be conducted under the EMP.

(i) Project readiness monitoring. To be conducted by the IPMO EHS officers (under the support of PIC-ES). (ii) EMP environmental monitoring. To be conducted by the EMA (contracted by the IPMO) involving the collection and analysis of air quality, noise, water quality data, etc. at designated monitoring locations to assess the compliance with applicable environmental quality and emission standards during construction. (iii) EMP performance evaluation. To verify the EMP compliance during project implementation.

465 ADB will oversee the project compliance based on the quarterly project progress reports and semi-annual/annual EMRs provided by the PMO, and also based on site visits (generally once a year).

466 Project Readiness Monitoring. Before construction, the PIC-ES shall assess the project’s readiness on environmental management based on a set of indicators and report it to ADB and PMO. This assessment shall demonstrate that environmental commitments are being carried out and environmental management systems are in place before construction starts, or suggest corrective actions to ensure that all requirements are met.

467 Environmental Monitoring. The scope, location, parameter, duration, frequency, and responsible agencies for monitoring during the construction and operational phases are defined in the EMoP. Environmental monitoring to be conducted by the EMA (contracted by the IA) shall include monitoring of air quality, noise and water quality during construction; and water quality during operation. The selection of monitoring locations is based on a number of factors including the distance from the station sites, number of households and populations affected, and the extent of sensitivity to air, noise and water quality impacts (e.g. residential household, school). The monitoring shall comply with the methodology provided in the relevant national environmental monitoring standards. The monitoring results shall be compared with relevant PRC performance standards. Non-compliance with these standards shall be highlighted in the EMRs. The monitoring results shall be submitted by the EMA to the IPMO and PIC-ES also on a quarterly basis. The IPMO shall then submit the monitoring results to ADB in the semi- annual/annual EMRs prepared with the support of the PIC-ES.

468 Monitoring by ADB. Besides reviewing the annual EMRs from PMO, ADB missions will inspect the project progress and implementation on site at least once a year. For environmental issues, inspections will focus mainly on (i) environmental monitoring data; (ii) the implementation status of subproject performance indicators specified in the loan documents for the environment, environmental compliance, implementation of the EMP, and environmental institutional strengthening and training; (iii) the environmental performance of contractors, ESE, PIC-ES, IA and PMO; and (iv) operation and performance of the project GRM and ongoing information disclosure and public consultation. The performance of the contractors in respect of environmental compliance will be recorded and will be considered in the next bid evaluations. ADB also prepares the final Project Completion Report (PCR), which includes a section on environmental impact assessment of the Project.

469 Project completion environmental audits. Within three months after the subproject completion, or no later than one year with permission of the local EEBs, environmental acceptance monitoring and audit reports of each subproject completion shall be (i) prepared by a licensed environmental monitoring institute in accordance with the PRC Guideline on Project Completion Environmental Audit (2001), (ii) reviewed for approval of the official commencement

142 of individual subproject operation by environmental authorities, and (iii) finally reported to ADB through the annual EMP monitoring and progress reporting process. The environmental audits can be conducted together with the overall project completion acceptance inspection. The environmental acceptance report for the completed project shall indicate the timing, extent, effectiveness of completed mitigation and maintenance, and the needs for additional mitigation measures and monitoring during operation. The IPMO EHS officer with support of the PIC-ES shall prepare an environment chapter of the draft Project Completion Report.

X. CONCLUSION AND RECOMMENDATIONS

470 . This IEE including the EMP was prepared in compliance with ADB’s SPS, and relevant domestic environmental regulations. The IEE incorporates the findings of the domestic FSR, EIA, and topical studies conducted (including a climate risk and vulnerability assessment, environmental due diligence assessment etc.). Potential environmental impacts have been identified in the IEE and mitigation measures have been proposed. A comprehensive EMP including environmental monitoring program has been developed. Both internal and external environmental monitoring procedures during project implementation will be conducted to ensure the EMP implementation.

471 The IEE concludes that potential environmental impacts associated with the IMAR MFF Tranche 1 subprojects will not be irreversible and will either be of temporary nature or able to be avoided or mitigated with proper environmental management. The IEE’s findings have been incorporated in the EMP as mitigation and management measures to be implemented during the project execution. Assuming the full and effective implementation of the project EMP and loan assurances, the potential adverse environmental impacts can be minimized and/or mitigated to acceptable levels within the standards applied in this project IEE.

472 It’s suggested that the corresponding environmental mitigation measures will form part of the contractual obligations with contractors for construction and with operating units for project operation.

A. Risks and Assurances

473 Risk. The project has no unusual technical risks. Conversional engineering designs with proven reliability and performance will be adopted for all the project components. From an environmental safeguard point of view, the main risk is the failure of the PMO, IA and O&M units in monitoring the environmental impacts and implementing the EMP during the project construction and operation. To reduce this risk, the following mitigation measures will be undertaken: i) providing trainings in environmental management; ii) appointing qualified project implementation consultants, iii) following appropriate project implementation and monitoring arrangements, iv) conducting regular ADB project reviews; and v) covenanting project assurances in the loan and project agreements with ADB.

474 Assurance. The IA shall ensure that the preparation, design, construction, implementation, operation and decommissioning of the Project will comply with: (a) all applicable laws and regulations of the Borrower relating to the environment, health and safety; (b) the Environmental Safeguards; and (c) all measures and requirements set forth in the IEE, the EMP, and any corrective or preventative plans.

B. Overall Conclusion

475 The IEE has: i) identified potential environmental impacts; ii) developed appropriate mitigation measures; ii) assessed public support from the project beneficiaries and affected

143 people; iv) established a project GRM; iv) prepared a project EMP, including environmental management and supervision mechanisms, environmental monitoring plans, and capacity building and training arrangements.

476 It is concluded that the Tranche 1 subprojects will not lead to significant adverse environmental impacts that are irreversible, diverse, or unprecedented. Its impacts to the biological environment on noise, vibration, air, surface water, and groundwater during both the construction and operational phases are assessed to be minimal and can be reduced or eliminated to acceptable levels by implementing the proposed mitigation measures and by following the EMP developed for the tranche 1 subprojects.

477 The EMP and legal assurances reflected in the project and loan agreement will ensure that the mitigation measures are implemented in an appropriate institutional framework and are supported through comprehensive training, monitoring and reporting arrangements. The IEE concludes that the Project is feasible from an environment safeguards point of view, and the environmental categorization of “Category B” is confirmed.

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Appendix 1 Environmental Management Plan (EMP)

Project Number: 51192-001 June 2020

Proposed Multitranche Financing Facility People’s Republic of China: Inner Mongolia Sustainbale Cross-Border Development Investment Program

Appendix 1

CONTENTS

Appendix 1 Environmental Management Plan (EMP) ...... 1 CONTENTS...... 2 A. Introduction ...... 3 B. Institutional Arrangements and Responsibilities for EMP Implementation ...... 3 C. Summary of Potential Impacts and Mitigation Measures ...... 9 D. Environmental Monitoring, Inspection and Reporting ...... 21 E. Institutional Capacity Building and Training ...... 26 F. Consultation, Participation and Information Disclosure ...... 28 G. Grievance Redress Mechanism...... 29 H. Cost Estimates ...... 32 I. Mechanisms for Feedback and Adjustment ...... 33 J. Environmental Contract Clauses for Inclusion into Tender Documents and Civil Works Contracts ...... 33

2 Appendix 1

A. Introduction

1 This Environmental Management Plan (EMP) was prepared for Tranche 1 of the proposed Multitranche Financing Facility for Inner Mongolia Sustainable Cross-Border Development Investment Program (the Investment Program) in Inner Mongolia Autonomous Region (IMAR) of the PRC. The EMP was prepared in conjunction with the domestic Environmental Impact Assessment (EIA) Institutes, local design institutes, and IMAR Project Management Office (IPMO). It draws on the findings of a number of project preparation documents, including the project initial environmental examination (IEE) report; domestic feasibility study reports (FSRs) and domestic environmental impact assessment reports (EIARs); and city master plans.

2 The EMP specifies the effective implementation of environmental protection activities for all the implementation phases of the project, including design & pre-construction, construction, and operational phases to prevent, reduce, or mitigate adverse environmental impacts and risks. It defines appropriate mitigation measures and monitoring requirements for the anticipated environmental impacts, and identifies the institutional responsibilities and mechanisms for monitoring to ensure the compliance with relevant PRC’s environmental laws, standards and regulations, and ADB’s SPS. The EMP specifies (i) objectives; (ii) implementing organization and responsibilities; (iii) mitigation measures; (iv) inspection, monitoring, and reporting arrangements; (v) training and institutional strengthening; (v) future public consultation; and (vi) a feedback and adjustment mechanism.

3 In the design stage，the IPMO will pass the EMP to the design institute for incorporating mitigation measures into the detailed designs. The EMP will be updated at the end of the detailed design, as needed. To ensure that bidders will respond to the EMP’s provisions in their proposals/tendering documents, the IPMO will prepare and provide the following specification clauses for incorporation into all the bidding documents: (i) a list of environmental management requirements to be budgeted by the bidders in their proposals, (ii) environmental clauses for contractual terms and conditions, and (iii) component EIAs, and project IEE including updated EMP for compliance.

4 This EMP consists of six components: (i) institutional arrangements and environmental responsibility; (ii) environmental mitigation measures; (iii) environmental monitoring; (iv) institutional strengthening and training; (v) public consultation; and (vi) grievance redress mechanism (GRM). Environmental monitoring consists of two types of monitoring: (i) environmental monitoring in terms of environmental data collection and analyses for assessing the extent and severity of impact; and (ii) compliance monitoring (or audit) by independent entities for verifying EMP implementation. The last section of this EMP contains a list of environmental contract clauses for inclusion into all bidding documents and works contracts for environmental protection during station construction.

B. Institutional Arrangements and Responsibilities for EMP Implementation

5 The IMAR Government (IMARG) is the executive agency (EA) of the Investment Program. The EA has established a project leading group (IPLG) and has setup an IMAR project management office (IPMO) to support the Investment Program implementation.

6 At the prefecture-level, Erenhot Municipal Government (EMG) is the implementing agency (IA) for Subproject 1. Erenhot municipal project management office (EPMO) has been established under the Erenhot DRC to carry out overall coordination and supervision of subproject preparation and implementation in its level. Erenhot Yixin Urban & Rural Development and Construction and Asset Management Co., Ltd (Yixin) has been assigned to act as the PIE. A project implementing unit (PIU) has been established inside the PIE to carry out the daily implementation of this subproject.

3 Appendix 1

7 Baotou Municipal Government (BMG) is the implementing agency for Subproject 2 and Subproject 3. Baotou municipal project management office (BPMO) has been established under the Baotou DRC to carry out overall coordination and supervision of subproject preparation and implementation in its level. Damaoqi Pine Boolean Property Service Co., Ltd (Songbuer) has been assigned to act as the PIE for Subproject 2. The Inner Mongolia Xiao Wei Yang Stock Raising Sciences and Technologies Co., Ltd (Xiaoweiyang), a private animal husbandry enterprise registered in Baotou in 2001, will be the PIE for Subproject 3 with a PIU already established inside the company to carry out overall coordination and supervision of subproject preparation and implementation of Subproject 3.

8 For the FIs in Tranche 1, Bank of Inner Mongolia (BOIM) and other FIs to be selected during the implementation period, are the PIEs for Subproject 4 of SMEs in Cross Border Businesses Expansion in IMAR. BOIM was selected based on the ADB’s set of eligibility criteria for lending transactions of this nature. The same eligibility criteria will be applied for selecting other FIs during the implementation period.

9 The local project management offices at the two municipalities of Erenhot and Baotou (EPMO and BPMO) will supervise and coordinate overall implementation of the subprojects. The project implementing entities (PIEs) will physically implement the subprojects on behalf of the respective IAs. The EMP implementation arrangements and responsibilities of governmental organizations are summarized in Table EMP-1.

Table EMP-1: Institutional Responsibilities for EMP implementation Agency Environmental Management Roles and Responsibilities Executing Agency Responsible for project coordination with project city governments, (EA) –IMAR liaison with ADB, financial management and administration through the Government (IMARG), IMAR project leading group (IPLG) and its project management office represented by the (IPMO): Project leading group • provide overall guidance, coordination, supervision, and (PLG) management for project preparation and implementation; and • be responsible for coordinating project implementation activities among government agencies, as needed. Project Leading Group Headed by IMAR Vice Governor and consists of representatives of (PLG) IMAR DRC (IDRC), IMAR Department of Finance (IDOF), Department of Commerce, Office of Port and Exit, vice-mayor of project prefecture governments and the CEO of private-owned enterprise (POE), with others seconded as necessary to: • Provide overall coordination and supervision for project preparation and implementation; • Coordinate project implementation activities among government agencies; and • Resolve any institutional problems affecting project preparation and implementation. IMAR Project The IPMO will be responsible for supervision and day-to-day Management Office - management work during the project preparation and implementation IPMO (established periods: under IDRC) • Facilitate interagency coordination and coordinate with other involved agencies; • Direct project preparation and implementation activities; • Recruit procurement agency; • Recruit and manage PIC; • Prepare payment requests for project management and capacity building component, and submit to IDOF for review and approval; • Prepare annual work programs and budgets; • Guide project procurement activities, including the review and submission of bidding documents, bid evaluation reports (BERs), and other necessary documentation to ADB for necessary approval;

4 Appendix 1

Agency Environmental Management Roles and Responsibilities • Under Tranches 2&3, ensure that eligibility criteria for subprojects and other requirements stipulated in the relending agreement are met; • Implement the component for project management and institutional capacity building; • Ensure the eligibility criteria and other requirements for SMEs under FIL component are met, including those to be financed by revolved funds; • Establish and implement the project grievance redress mechanism; • Establish PPMS within 6 months after the loan effectiveness to monitor project progress, including regular monitoring of physical and financial progress, and safeguards compliance; • Support PIEs with the implementation of EMP and SDGAP, EMDF, RF and EARF for subprojects for subsequent tranches, and assist FIs in implementing of ESMS; • Ensure project implementation compliance with loan agreement and project agreement; • Facilitate and participate in annual ADB review missions; • Cooperate with the audit department for auditing of project accounts; • Consolidate and submit (1) semi-annual project progress reports (including investment loan component and FIL component), (2) semi- annual environmental safeguard monitoring progress report, including the implementation of EMP and EARF, (3) semi-annual social safeguard monitoring progress report, including the implementation of SDGAP, (4) semi-annual ESMS monitoring progress report; (5) annual project audited financial statements, (6) annual audited entity financial statements for POE and FIs, and (7) midterm and project completion reports to ADB and IMARG, with assistance from the PIC; and • Summarize the project experience and facilitate project replication over the regional ECZs. Implementing On behalf of project municipal government, the MPMOs will be Agencies (IAs) responsible for overall coordination and supervision of subproject (project municipal preparation and implementation in its level, including: governments, • Facilitate interagency coordination and coordinate with other represented by the involved parties in its level; municipal project • Direct subproject preparation and implementation activities; management office - • Prepare the annual work plan and budget in coordination with the MPMO). PIEs; • Organize and conduct procurement activities, particularly attend bid opening, supervise the bid evaluation process, and endorse BERs for all related procurement packages; • Coordinate training and capacity development activities; • Establish and implement the local level grievance redress mechanism; • Establish baseline data to monitor project impacts and outputs, including but limited to regular monitoring of physical and financial progress; • Implement the SDGAP, EMP and other safeguard related action plans; • Facilitate the identification of candidate SMEs; • Prepare and submit its level (1) semi-annual project progress reports, (2) semi-annual environmental safeguard monitoring progress report, including the implementation of EMP, (3) semi-annual social safeguard monitoring progress report, including the implementation of SGDAP, (4) annual project financial statements, (5) annual audited

5 Appendix 1

Agency Environmental Management Roles and Responsibilities entity financial statements from POE and (6) midterm and project completion reports to IPMO, with assistance from the PIC; and • Liaise with IPMO, ADB, and other agencies as needed. Project Implementing Erenhot Yixin Urban & Rural Development and Construction and Asset Entities (PIEs) Management Co., Ltd (SOE) is the PIE for Erenhot Municipality. Damaoqi Pine Boolean Property Service Co., Ltd (SOE) and Inner Mongolia Xiao Wei Yang Stock Raising Sciences and Technologies Co., Ltd (POE) are the PIEs for Baotou Municipality. The responsibilities of the PIEs include the following:

• Set up and maintain a PIU to implement day-to-day activities; • Recruit design institutes for preliminary and detailed designs; • Prepare the bidding documents with the support of procurement agency, participate bid evaluation, including signing of BERs, and signing and administration of contracts with the aid of procurement agency; • Ensure environmental and social safeguards are complied with based on ADB’s Safeguard Policy Statement (2009); • Establish and maintain the required project accounting arrangement and other implementation recording systems; • Prepare payment requests and submit to the local BOF for review and confirmation; • Retain supporting documents under payment request procedure; • Maintain the project ‘s financial records, making them ready for inspection by ADB missions; • Provide MPMO with inputs to (1) semi-annual project progress report, (2) semi-annual environmental safeguard monitoring progress report, (3) semi-annual social safeguard monitoring progress report, and (4) annual subproject financial statements, and (5) audit financial statements for POE, with assistance from the PIC, and (6) mid-term report and project completion report; • Operate and maintain the facilities constructed or improved under the project; and • Liaise with PMOs, ADB, and other agencies as needed. Project Implementing A PIU is setup and maintained in each PIE to implement day-to-day Unit (PIU) activities to ensue successful implementation of the relevant project components: • Appoint one staff for EMP coordinator; • Tendering contractors and equipment with assistance of the international tendering agency; • Administer and monitor contractors and suppliers; • Construction supervision and quality control; • Contracting of construction supervision companies (CSC) to conduct daily environmental inspection and supervision; • Contracting of local environmental monitoring agency (EMA) to conduct environmental compliance monitoring (air, water and noise) • Participation in capacity building and training programs; and • Commissioning of the constructed facilities. Asian Development • Provide guidance and support to executing and the implementing Bank (ADB) agencies to ensure compliance with loan and project agreements; • Conduct regular loan review missions, midterm review mission, and project completion review; • Review and approve sub-loans to SMEs that require prior review under FIL; • Review and approve procurement actions;

6 Appendix 1

Agency Environmental Management Roles and Responsibilities • Disburses the loan in accordance with the agreed procedures upon receipt of duly authorized disbursement applications and necessary supporting documentation; • Monitor the project implementation progress; • Review annual audit reports and follow up on audit recommendations; • Review project progress reports and monitors implementation of EMP, SDGAP, EARF, EMDF and ESMS; • Ensures that IMARG act on any non-compliance issues; and • Develop partnership with IMARG and supervises project implementation to ensure ADB interests are safeguarded. Facility Operators Ensuring successful ongoing operation and maintenance of the relevant project components: • In conjunction with PIEs, commissioning of the constructed facilities; and • O&M of completed facilities, including environmental management, monitoring and reporting responsibilities. ADB = Asian Development Bank, BOF = Bureau of Finance, EARF = environmental assessment review framework, EMDF = ethnic minority development framework, EMP = environmental management plan, ESMS = environmental and social management system arrangement, FIL = financial intermediation loan, FIs=financial intermediaries, IDOF = Inner Mongolia Autonomous Region Department of Finance, IDRC = Inner Mongolia Autonomous Region Development Reform Commission, IMARG = Inner Mongolia Autonomous Region Government, IPMO = Inner Mongolia Autonomous Region project management office, MOF = Ministry of Finance, PCR = project completion report, PIC = project implementation consultants, PIU = project implementing unit, PLG=project leading group, MPMO = municipal project management office, PPMS = project performance management system, SDGAP = social development and gender action plan, SMEs = small and medium-sized enterprises, SPS = Safeguard Policy Statement, RF = resettlement framework. Source: Asian Development Bank.

10 Environment staff within Municipal Project Management Offices (MPMOs) and PIEs. The MPMOs (e.g. the local EPMO in Erenhot and BPMO in Baotou Municipalities for Tranche 1) will have main EMP coordination responsibility for project subcomponents in each subproject municipality, respectively. Each MPMO will establish an environmental management unit (EMU) and designate a leader and an appropriate number of staff in its office. The EMUs will take charge of (i) coordinating the implementation of the EMP at its level and developing implementation details; (ii) supervising the implementation of mitigation measures during project construction and operation; (iii) ensuring that environmental management, monitoring, and mitigation measures are incorporated into bidding documents, construction contracts and operation management plans; (iv) submitting semi-annual (during construction)/annual (during operation) environmental monitoring reports to the MPMOs; (v) coordinating the local GRM; and (vi) responding to any unforeseen adverse impact beyond those mentioned in the domestic EIAs, the project IEE and the EMP. The EMUs will be technically supported by the PIC-ES.

11 The IAs are responsible for the preparation and implementation of all civil construction works. Each IA will appoint one environment supervisor to do the following: (i) review and approve contractors’ site-EMP; (ii) organize periodic environmental monitoring in compliance with the approved monitoring plan; (iv) act as local entry point for the project GRM; (v) assess the contractors’ compliance with the site-EMP and PRC environmental quality standards for ambient air, water and noise; (vi) submit quarterly inspection and monitoring results to the contractors for information, and to the MPMO for verification and confirmation..

12 For environment safeguards, the IPMO is responsible for overall management of project preparation and implementation activities, coordinating implementation of the EMP, coordinating the Project level GRM, monitoring project progress and project impacts, and facilitating the communication and coordination with ADB. The IPMO will assign one safeguards officer (IPMO-SO) in charge of supervising the effective implementation of the EMP. An

7 Appendix 1 implementation schedule showing phasing and coordination with overall subproject implementation shall be developed, and institutional or organizational arrangements, namely, who is responsible for carrying out the mitigation and monitoring measures, shall be described. Institutional arrangements may include one or more of the additional topics to strengthen environmental management capability, including technical assistance programs, training programs, procurement of equipment and supplies related to environmental management and monitoring, and organizational changes. The estimates of capital and recurrent costs and sources of funds for implementing the environmental management plan shall be described. ADB will oversee the project compliance based on the quarterly project progress reports and semi-annual/annual EMRs provided by the IPMO, and also based on site visits (generally once a year).

13 Environmental and ESMS Specialist of Project Implementation Consultant (PIC- ES). A PIC-ES will be recruited either through an individual contract or under the project implementation consultant (PIS) by the IPMO. The PIC-ES will advise the IPMO, IAs, PIEs, contractors and Construction Supervision Companies (CSCs) on all aspects of environmental management and monitoring for the project. The PIC-ES shall:

14 Construction Contractors and CSCs. Construction contractors will be responsible for implementing relevant mitigation measures during construction under the supervision of the CSCs and PIEs. Contractors will develop site-specific EMPs on the basis of the subproject EMP. CSCs will be selected through the PRC bidding procedure by the PIEs. The CSCs will be responsible for supervising construction progress and quality, and EMP implementation on construction sites. Each CSC shall have at least one environmental engineer at each construction site to: (i) supervise the contractor’s EMP implementation performance; and (ii)

8 Appendix 1 prepare the contractor’s environmental management section in subproject progress reports submitted to the PIEs and IPMO.

15 Environmental Monitoring Agency (EMA). The IPMO will recruit a EMA to conduct periodic environmental monitoring during construction and operation in accordance with the monitoring plan (Tables EMP-4 and EMP-5).

C. Summary of Potential Impacts and Mitigation Measures

16 Table EMP-2 lists the anticipated impacts of the project components in the project cities during the phases of design and pre-construction, construction and operation, respectively, as identified by the domestic EIAs and the project IEE. Corresponding mitigation measures are defined to minimize the environmental impacts. There are two types of mitigation measures:

⚫ Measures that will permanently become part of the infrastructure such as engineering measures for noise barriers and station wastewater treatment facilities, etc. should be included within the main civil work contract costs, and are not double- counted as part of the EMP costs. ⚫ Temporary measures during the construction phase (e.g. dust suppression by watering, use of quiet / low noise powered mechanical equipment (PME), flocculants used to facilitate sedimentation of suspended solids in construction site runoff, etc.) will need to be included in the tender documents to ensure that contractors will budget these items in their bids.

17 The mitigation measures will be incorporated into detailed design, bidding documents, construction contracts and operational management manuals, which will mainly be implemented by design institutes (during detailed design) and contractors (during construction), under the supervision of CSCs, LPMOs and PIEs, with technical support from the PIC-ES. The effectiveness of these measures will be evaluated based on environmental inspections and monitoring to determine whether they should be continued, improved or adjusted.

18 The mitigation measures defined in the EMP will be (i) checked and where necessary updated by the design institutes with the EMP subsequently updated; (ii) incorporated into tender documents (where appropriate), construction contracts, and operational management plans; and (iii) implemented by contractors and the IA under the IPMO supervision. The effectiveness of these measures will be evaluated based on the results of environmental monitoring conducted by the EMA, and through EMP compliance checks conducted by the CSCs and PIC-ES.

9 Appendix 1

Table EMP-2: Potential Impacts and Mitigation Measures during Design, Preconstruction and Construction Phases Environmental Who Who Item Issues and Mitigation Measure Implements Supervises Impacts 1.1 Design Detailed design • Finalize detailed designs for all infrastructure. PIEs, LDI IA stage • Include all agreed environmental mitigation and pollution control measures identified in the IEE, the EMP and the domestic EIAs into the detailed design • Confirm all project facilities will not use any materials containing asbestos.

1.2 Establish • Contract a Loan Implementation Environmental Consultant (LIEC) EA ADB Implementation implementation • Contract Environmental Monitoring Agency (EMA) for external monitoring during Contractors, LIEC Support support construction and operation. PIEs positions Establish • Appoint PIE Environment Specialists (PIE-ES) in each PIE PIEs IA, LIEC environmental staff positions at different levels of supervision 1.3 Update EMP • Review EMP to assess if the current mitigation measures need to be updated due to IA-ES, PIEs- IA, ADB, Construction any changes in the final engineering design. For changes in project locations, sites, ES, LIEC Preparation or other changes that may cause new or greater environmental impacts or involve Stage additional affected people: the IA will conduct additional environmental assessment and public consultation. The revised environmental assessment reports will be submitted to the IA, EEB and ADB for approval and disclosure. Environmental • Prior to construction, the IA and/or PIEs will hire an EMA, to conduct environmental EMA IA, ADB monitoring plan monitoring in accordance with the EMP monitoring plan. Contract • Prepare and include clauses referencing this EMP in the terms of reference for bidders PIEs with IA-ES, LIEC documents for construction contracts. LDI • Prepare environmental contract clauses for contractors, especially the EMP and monitoring plan. Grievance • Implement the GRM described in this EMP. IA-ES, LIEC ADB, IA Redress • Publicize GRM at all construction sites. Mechanism (GRM) Construction • Prepare Site-specific EMP (SEMP), including health and safety plan and an Contractors PIEs-ES, site planning emergency preparedness and response plan for construction emergencies. IA-ES • PIEs and IA review and approve each SEMP Capacity • Provide training on implementation of this EMP to all relevant agencies, especially the LIEC IA, ADB building PIEs and contractors.

10 Appendix 1

Environmental Who Who Item Issues and Mitigation Measure Implements Supervises Impacts Construction Phase 2.1 Water Domestic • Provide portable toilets and small package wastewater treatment systems and/or Contractors CSC, PIEs, wastewater and septic tanks on construction sites and construction camps for the workers. If there are IA construction nearby public sewers, install interim storage tanks and pipelines to convey wastewater wastewater to public sewers. from • Empty toilets regularly and transport sewage to a wastewater treatment plant. construction • Labor camps will be located at least 500 m from rivers and other surface water bodies; sites • During road construction, contractors will be required to pump slurry to shore and properly dispose cutting materials. This will reduce the disturbance of sediments and the impact to water quality; • Contractors will be required to develop contingency plans for control of oil and other dangerous substances (Spill Management Plan) as part of the CS-EMP; • Wastewater from construction activities will be collected in sedimentation tanks, retention ponds, and filter tanks to remove silts and oil; • Wastewater should drain to the municipal sewer after treatment; • All areas where construction equipment is being washed will be equipped with water collection basins and sediment traps; • Fuel storage, maintenance shop and vehicle cleaning areas must be stationed at least 500 m away from the nearest water body; • Storage facilities for fuels, oil, and other hazardous materials will be within secured areas on impermeable surfaces with 110% volume of the materials stored, and provided with bunds and cleanup installations; • Contractors’ fuel suppliers must be properly licensed. They shall follow proper protocol for transferring fuel and the PRC standard of JT3145-88 (Transportation, Loading and Unloading of Dangerous or Harmful Goods); • 2.2 Air Generation of • Spraying water on construction sites and earth/material handling routes where fugitive Contractors CSC, PIEs, dust by dust is being generated; EMA construction • Paying particular attention to dust suppression near sensitive receptors such as activities schools, hospitals and residential areas; • Transport vehicles will be limited to low speeds in construction sites; • Storing petroleum or other harmful materials in appropriate places and covering to minimize fugitive dust and emission; • Covering materials during truck transportation, in particular, the fine material, to avoid spillage or dust generation; • Construction site roads will be well maintained and watered and swept on an as- needed basis;

11 Appendix 1

Environmental Who Who Item Issues and Mitigation Measure Implements Supervises Impacts • Special attention will be paid to protect sensitive sites near the subproject sites. High noise construction activities will be positioned as far away from sensitive sites as possible and • Ensure emissions from vehicle and construction machineries are in compliance with the PRC standards of GB18352-2005, GB17691-2005, GB11340-2005, GB2847- 2005, and GB18285-2005. 2.3 Noise and Noise from • Construction activities, and particularly noisy ones, are to be limited to reasonable Contractors PIEs, IA, Vibration vehicles and hours during the day and early evening. Construction activities will be strictly EMA construction prohibited during the nighttime (22:00 h to 07:00 h). Exceptions will only be allowed in machinery special cases, and only after getting approval of the surrounding residents, local EEB and other relevant departments. And nearby residents should be notified of such night time activities well in advance. • When undertaking construction planning, simultaneous high-noise activities will be avoided, and high noise activities will be scheduled during the day rather than evening hours. Similarly, construction site will be planned to avoid multiple high noise activities or equipment from operating at the same location. • Low-noise equipment will be selected as much as possible. Equipment and machinery will be equipped with mufflers and will be properly maintained to minimize noise. • Noise PPE will be provided to workers to meet the requirements in occupational exposure limits for hazardous agents in work place Part 2: physical agents (GBZ 2.2- 2007) and EHS Guidelines. • Maintain equipment and machinery in good working condition; undertake regular equipment maintenance, ensure compliance with PRC standards of GB 12523-2011. • Install temporary anti-noise barriers to shield buildings where non-compliance with Category II in Environmental Quality Standards for Noise (GB3096-2008) is monitored. • Disseminate information on procedures of handling complaints through the GRM vibration from • Avoid concurrent high vibration activities when undertaking construction planning and Contractors PIEs, IA, construction schedule high vibration activities to be conducted during the day rather than evening EMA machinery hours. Similarly, construction sites shall be planned to avoid multiple high vibration activities or equipment operations to occur at the same location. • Select low vibration equipment as much as possible. Equipment and machinery will be equipped with vibration damper and will be properly maintained to minimize vibration. • Maintain equipment and machinery in good working condition. • Disseminate information on procedures of handling complaints through the GRM.

12 Appendix 1

Environmental Who Who Item Issues and Mitigation Measure Implements Supervises Impacts 2.5 Soil erosion Erosion from • Implement soil erosion control measures. Before construction, the contractor will be Contractors PIEs, IA and stability construction required to prepare a Site Drainage and Soil Erosion Management Plan (as part of the sites CS-EMP) to prevent soil erosion. The plan will include the following soil erosion control measures; • Maintain slope stability at cut faces by implementing erosion protection measures such as terraces and silt barriers during road constructions; • Stabilize all cut slopes, embankments, and other erosion-prone working areas while constructions are going on; • Stabilize all earthwork disturbance areas within 30 days after earthworks have ceased at the sites; • Minimize active open excavation areas during trenching activities and use appropriate compaction techniques for pipe trenches construction; • Provide temporary detention ponds for containment to control silt runoff; • Prevent runoff entering construction sites, and divert runoff from sites to existing drainage or open ground for watering the vegetation by constructing intercepting ditches and drains; • Strip and stockpile topsoil, and cover or seed temporary soil stockpiles; • Waste construction material such as residual concrete, asphalt, etc., will be properly handled for reuse or disposal. • Limit construction and material handling during periods of rains and high winds; • Properly slope or re-vegetate disturbed surfaces, such as compacted pipeline trenches and cut banks and; • Appropriately set up temporary construction camps and storage areas to minimize the land area required and impact on soil erosion soil • Properly store petroleum products, hazardous materials and wastes on impermeable contamination surfaces in secured and covered areas, and use the best management practice to avoid soil contamination; • Remove all construction wastes from the site to approved waste disposal sites; • Establish Spill Management Plan; and • Provide spill clean up measures and equipment at each construction site and require contractors to conduct training in emergency spill response procedures. 2.6 Solid waste Domestic waste • Wastes will be reused or recycled to the extent possible. Contractors PIEs, IA and • Littering by workers will be prohibited. construction • Excavated soil will be backfilled onsite to the extent possible. Excess spoil that cannot waste from be used on-site will be transported to an approved spoil disposal site. construction • Domestic waste containers will be provided at work sites. Domestic waste will be sites collected on a regular basis by the local sanitation departments and transported for

13 Appendix 1

Environmental Who Who Item Issues and Mitigation Measure Implements Supervises Impacts recycling, reuse, or disposal at a licensed landfill, in accordance with relevant PRC regulations and requirements. • Construction waste dumpsters will be provided at all work sites. Construction waste will be collected on a regular basis by a licensed waste collection company and transported for recycling, reuse, or disposal at a licensed landfill, in accordance with relevant PRC regulations and requirements. • There should be no final waste disposal on site. Waste incineration at or near the site is strictly prohibited. • Contractors will be held responsible for proper removal and disposal of any significant residual materials, wastes, spoil and contaminated soils that remain on the site after construction. Vegetation 2.7 Flora and • Protect existing vegetation nearby construction sites; protection Fauna • Properly backfill, compact and re-vegetate pipeline trenches; • Protect existing trees and grassland during road constructions; where a tree has to be removed or an area of grassland is disturbed, replant trees and re-vegetate the area immediately after construction; • Remove trees or shrubs only as a last measure if they impinge directly on permanent works or approved necessary temporary works; • In compliance with the PRC’s forestry law, undertake compensatory planting of an equivalent or larger area of affected trees and vegetation; • Use native plant species of local provenance for replanting;

Habitat • Clearly demarcate construction sites and off-limit areas, to minimize removal of Contractors PIEs, IA retention existing vegetation. Implement timely site rehabilitation, using native plant species. • Surface soil (0-30 cm) will be stored separately for reuse for landscape greening or agriculture. The stockpiling shall have a height less than 5m and a slope less than 1:1.5 with proper compaction to avoid soil erosion. • Provide training to contractors and workers to increase their awareness on the need to protect the environment, wildlife and vegetation around the construction sites. • The construction supervision companies (CSCs) and PIE environment officer will regularly inspect construction sites to ensure that habitats are well demarcated, and workers are fully informed of “no-go” areas

Social issues • Local hiring will be given priority to avoid social conflicts; Contractors PIEs, IA

14 Appendix 1

Environmental Who Who Item Issues and Mitigation Measure Implements Supervises Impacts 2.8 Social and • The project scale is not expected to cause large population influx and will have limited Cultural impacts on the local municipal services; and • Education of construction workers to minimize social disturbance and cultural conflict. Community • Traffic management. A traffic control and operation plan will be prepared, to be Contractors CSC, PIEs safety (all sites) approved by the local traffic management administrations before construction. The plan will include provisions for diverting or scheduling construction traffic to avoid morning and afternoon peak traffic hours, regulating traffic at road crossings, selecting transport routes to reduce disturbance to regular traffic, reinstating roads, and opening them to traffic as soon as the construction is completed; • Vehicles transporting construction materials or wastes will slow down and not use their horn when passing through or nearby sensitive locations, such as residential communities, schools and hospitals; • Underground facilities survey and protection. Construction activities will be planned so as to minimize disturbances to utility services. Three-dimensional detection of underground facilities will be conducted before construction where appropriate; • Information disclosure. Residents and businesses will be informed in advance through media of the construction activities, given the dates and duration of expected disruption; and • Construction sites protection. Clear signs will be placed at construction sites in view of the public, warning people against potential dangers such as moving vehicles, hazardous materials, excavations etc., and raising awareness on safety issues. Heavy machinery will not be used at night. All sites will be secured, disabling access by the public through appropriate fencing whenever appropriate Construction • Environmental, health and safety officer. An environmental, health and safety officer Contractors CSC, PIEs site safety (all will be appointed by each contractor to implement and supervise the environmental, sites) health, and safety management plan (see below). • Environmental, health and safety management plan. Each contractor will prepare such a plan for the construction works on the basis of the EMP. The plan will include the following provisions: • Clean water. Provide a clean and sufficient supply of fresh water for construction sites and for all camps, offices and workshops; • Sewage and wastewater. Provide an adequate number of latrines and other sanitary arrangements at construction sites and work camps, and ensure that they are cleaned and maintained in a hygienic state; • Solid waste. Garbage receptacles at construction sites and camps will be set up, which will be periodically cleared to prevent outbreak of diseases;

15 Appendix 1

Environmental Who Who Item Issues and Mitigation Measure Implements Supervises Impacts • Personal protection. Provide personal protection equipment, such as safety boots, helmets, gloves, protective clothing, goggles, and ear protection, in accordance with relevant health and safety regulations for workers; • Emergency preparedness and response. An emergency response plan to take actions on accidents and emergencies will be prepared, including environmental and public health emergencies associated with hazardous material spills and similar events, and submitted to the local EEBs for review and appraisal. Emergency phone link with hospitals in the three project towns will be established. A fully equipped first-aid base in each construction camp will be organized; • Records management. A records management system that will store and maintain easily retrievable records against loss or damage will be established. It will include documenting and reporting of occupational accidents, diseases, and incidents. The records will be reviewed during compliance monitoring and audits; • Safety communication. Ensure that occupational health and safety matters are given a high degree of publicity to all persons regularly or occasionally on each construction site. Posters will be displayed prominently in relevant areas of the site; and • Training, awareness and competence. Train all construction workers in basic sanitation, general health and safety matters, and on the specific hazards of their work. Implement site HIV/AIDS and other communicable diseases awareness and prevention program to target the local community and construction workers. Cultural, • The local Cultural Heritage Bureau and IA will be promptly notified. Contractors CSC, PIEs, physical and • Construction will resume only after investigation and with the permission of the IA natural heritage appropriate authority. protection • The clause for protection of unknown underground cultural relics will be included in construction contracts, to ensure that contractors comply with the PRC's Cultural Relics Protection Law and Cultural Relics Protection Law Implementation Regulations in the event cultural resources are discovered during construction. 3.0 All areas If unexpected environmental impacts occur during construction operations, immediately PIEs IA Unexpected inform the IA; assess the impacts; and update the EMP environmental impacts

Operation Phase 3.1 Erenhot 1. Air quality Odor gas • Odor and dust collection and treatment equipment will be installed at the waste PIE IA compression and transfer station

16 Appendix 1

Environmental Who Who Item Issues and Mitigation Measure Implements Supervises Impacts 2. Noise the noise during • Trees and shrubs will be planted as soon as possible along the proposed roadsides PIE IA operation. after construction; as far as possible, native species of local provenance (i.e. seedlings from the local area, not imported from elsewhere) will be used; • Makes appropriate investment to construct acoustic buffering facilities, such as soundproof windows and sound barriers where applicable; • Low-noise equipment will be used as far as possible. • Properly Install and maintain noise and vibration control facilities on air conditioning and ventilation systems. • Install ventilated sound insulation windows on the buildings along the boundaries of campus if needed. 3. Solid Waste domestic waste • Domestic waste bins will be provided and domestic waste will be routinely collected PIE IA by the local sanitation department for recyclin or final disposal at Erenhot landfill 4. Wastewater domestic • After initial treatment with the new septic tanks, it will be discharged into municipal PIE IA wastewater sewer system and conveyed to the nearby Municipal WWTP Treatment Plant for further treatment. 5.Healht and Community and • The nearby communities will be informed of the potential risks and the emergency PIE IA Safety workers response plan. • PPE including goggles, gloves, safety shoes will be provided to worker. Masks will be provided to workers working with odor. Noise protection equipment will be provided to workers in high-noise area. • Provide training to workers on occupational health and safety, and emergency response. • Subproject site will be fence with restricted public access. • Ensure compliance with relevant health and safety regulations pertaining to ventilation, indoor air quality, lighting, noise, fire escape, etc; • Establish preparedness plans and operation plans under emergency conditions, such as fire, earthquake, wind, storm, water contamination, epidemic, air contamination, infestation, explosion etc., as part of the EMS to ensure safe environment for all staff and visitors. • Prepare a safety checklist and reporting forms as procedural documents of the EMS. 3.2 Mandula 1. Air quality automobile Strengthen traffic management, promote air circulation and facilitate the diffusion of PIE IA exhaust, mainly pollutants. CO, NO2, THC 2. Noise noise • Noise monitoring will be undertaken at the locations and frequencies indicated in the PIE IA EMP by the EMA;

17 Appendix 1

Environmental Who Who Item Issues and Mitigation Measure Implements Supervises Impacts • Ambient noise monitoring will be mandated to determine whether mitigation measures will be required for sites where noise levels are expected to exceed by more than 3 dB(A); • Trees and shrubs will be planted as soon as possible along the proposed roadsides after construction; as far as possible, native species of local provenance (i.e. seedlings from the local area, not imported from elsewhere) will be used; • Low-noise equipment will be used as far as possible; • All equipment will be properly maintained in order to minimize noise 3. Solid Waste domestic waste Domestic waste bins will be provided and domestic waste will be routinely collected by PIE IA the local sanitation department for recycling or final disposal at Mandula landfill 4. Wastewater domestic • After initial treatment with the new septic tanks, it will be treated by newly built PIE IA wastewater reclaimed water treatment equipment (200 m3/d) then recycled as landscape water. 5.Health and Community and • The nearby communities will be informed of the potential risks and the emergency PIE IA safety workers response plan. • PPE including goggles, gloves, safety shoes will be provided to worker. Masks will be provided to workers working with odor. Noise protection equipment will be provided to workers in high-noise area. • Provide training to workers on occupational health and safety, and emergency response. • Subproject site will be fence with restricted public access. • Ensure compliance with relevant health and safety regulations pertaining to ventilation, indoor air quality, lighting, noise, fire escape, etc; • Establish preparedness plans and operation plans under emergency conditions, such as fire, earthquake, wind, storm, water contamination, epidemic, air contamination, infestation, explosion etc., as part of the EMS to ensure safe environment for all staff and visitors. • Prepare a safety checklist and reporting forms as procedural documents of the EMS. • 3.3 Xiao Wei Yang 1. Air quality Odor gas • Feces in sheep houses will be cleaned regularly by dry clean method. Ventilation of PIE IA sheep houses will be improved; • Temporary feces storage places will be installed with ceilings, windbreaks and intercepting drains. These storage places will have leakage and overflow prevention measures; • Derating and disinfection of the sheep houses will be improved; • Add deodorant to the fodder to reduce odor;

18 Appendix 1

Environmental Who Who Item Issues and Mitigation Measure Implements Supervises Impacts • Layout of the breeding bases, animal quarantine station and slaughtering and processing logistics base be reasonable planned to reduce odor diffusion; • Odor gas treatment facilities will be utilized in the slaughtering and processing logistics base to reduce odor diffusion. 2. Noise noise • Noise monitoring will be undertaken at the locations and frequencies indicated in the PIE IA EMP by the EMA; • Ambient noise monitoring will be mandated to determine whether mitigation measures will be required for sites where noise levels are expected to exceed by more than 3 dB(A); • Trees and shrubs will be planted as soon as possible along the proposed roadsides after construction; as far as possible, native species of local provenance (i.e. seedlings from the local area, not imported from elsewhere) will be used; • Makes appropriate investment to construct acoustic buffering facilities, such as soundproof windows and sound barriers where applicable; • Low-noise equipment will be used as far as possible; • All equipment will be properly maintained in order to minimize noise; • Appropriate noise PPE will be provided to the workers who are likely to be exposed to high noise level environments to meet the requirements in occupational exposure limits for hazardous agents in work place Part 2: physical agents (GBZ 2.2-2007) and EHG Guidelines on Occupational H&S; and • Layout for subproject site will be reasonable planned to reduce noise. 3. Solid Waste Manure waste • Domestic waste would be collected by garbage bins and disposed of by the sanitation PIE IA generated department. • Feces in sheep houses will be cleaned regularly by dry clean method. Collected feces will be transported to nearby fertilizer production plants to produce organic fertilizer; • Dead sick sheep will be treated by safety landfill well. Safety landfill wells will be built at No.4 breeding base, No.5 breeding base, animal quarantine station following PRC’s regulations and standards; • Medicine waste will be temporally stored at storage place following PRC’s GB18597- 2001. Medicine waste will be transported and treated by 3rd party certificated companies; • Feces generated by slaughtering and processing logistics base will be transported to nearby fertilizer production plants to produce organic fertilizer; • Viscera, bones, minced meat and waste meat will be transported to nearby 3rd party companies for treatment; • Waste active carbon from odor treatment equipment will be transported to active carbon manufactures for regeneration; and

19 Appendix 1

Environmental Who Who Item Issues and Mitigation Measure Implements Supervises Impacts • Waste oil generated by slaughtering and processing logistics base will be transported to nearby 3rd party companies for treatment. 4. Wastewater Domestic The wastewater will be treated by buried wastewater treatment equipment and recycled PIE IA wastewater as landscape water. Production The wastewater will be treated at on-site wastewater treatment stations and partly PIE IA wastewater reused as landscape water and floor clean water then the remained wastewater will be discharged into municipal sewer system and conveyed to the nearby Municipal WWTP Treatment Plant for further treatment. 5. Groundwater Potential Adopts mitigation measures. A clay layer with a thickness of 25 cm will be installed at the PIE IA pollution from depth of 35cm beneath the sheepfold to prevent the leakage of urine. This soil on the top animal waste of the clay layer will be regularly (annually) changed. Ground water monitoring will be implemented. 6. Health and Community and • The nearby communities will be informed of the potential risks and the emergency PIE IA safety workers response plan. • PPE including goggles, gloves, safety shoes will be provided to worker. Masks will be provided to workers working with odor. Noise protection equipment will be provided to workers in high-noise area. • Provide training to workers on occupational health and safety, and emergency response. • Subproject site will be fence with restricted public access. • Ensure compliance with relevant health and safety regulations pertaining to ventilation, indoor air quality, lighting, noise, fire escape, etc; • Establish preparedness plans and operation plans under emergency conditions, such as fire, earthquake, wind, storm, water contamination, epidemic, air contamination, infestation, explosion etc., as part of the EMS to ensure safe environment for all staff and visitors. • Prepare a safety checklist and reporting forms as procedural documents of the EMS. All components 3.7 All areas If unexpected environmental impacts occur during project operations, immediately inform All O&M PIEs, IA Unexpected the IA; assess the impacts; and update the EMP Units environmental impacts Source: TRTA consultants.

20 Appendix 1

D. Environmental Monitoring, Inspection and Reporting

19 Three main types of project monitoring will be conducted under the EMP18.

20 Monitoring and reporting arrangements are described below:

21 Project Readiness Monitoring. Prior to construction, a subproject’s readiness on environmental management should be assessed and reported to ADB and the IPMO based on a set of indicators (as shown in Table EMP-3). This assessment shall demonstrate that environmental commitments are being carried out and environmental management systems are in place before construction starts, or suggest corrective actions to ensure that all requirements are met.

Table EMP-3: Project readiness assessment indicators Indicator Criteria Assessment EMP update • EMP was updated after technical detail design & approved by Yes No ADB Compliance with • The borrower complies with loan covenants related to project Yes No loan covenants design and environmental management planning Public involvement • Meaningful public consultation completed Yes No effectiveness • GRM established with entry points Yes No • Project implementation environmental consultant (PIC-ES) is in Yes No Environmental place supervision and • Staff environmental coordinators appointed by the IPMO and Yes No monitoring in place IAs • Environment monitoring agency (EMA) contracted by the IPMO Yes No • Bidding documents and contracts have incorporated the Bidding documents environmental activities and safeguards that are listed as loan Yes No and contracts with assurances environmental safeguards • Bidding documents and contracts have incorporated the Yes No environmental contract clauses. EMP financial • The required funds, if applicable, have been set aside for the Yes No support EMP implementation Source: TRTA consultants.

22 Environmental Monitoring. The scope, location, parameter, duration, frequency, and responsible agencies for monitoring during the construction and operational phases shall be defined in the environmental monitoring plan. A detailed environmental monitoring program (EMoP) is shown in Table EMP-4. The scope, location, parameter, duration, frequency, and responsible agencies for monitoring during the construction and operational phases are defined

18 In addition to project-specific monitoring, local EEBs will conduct independent ambient and/or enforcement monitoring as per national requirements. This is separate to, and not funded by, the project.

21 Appendix 1 in the EMoP. Environmental monitoring to be conducted by the EMA (contracted by the IPMO) shall include monitoring of air quality, noise and water quality during construction; and water quality and noise during operation. The selection of monitoring locations is based on a number of factors including the distance from the sensitive receptors, number of households and populations affected, and the extent of sensitivity to air, noise and water quality impacts (e.g. residential households, schools).

23 The monitoring shall comply with the methodology provided in the relevant national environmental monitoring guidelines. The monitoring results shall be compared with relevant standards of the PRC and EHS Guidelines. Non-compliance to these standards shall be highlighted in the environmental monitoring reports. The monitoring results shall be submitted by the EMA to the IPMO, which will be included in the semi-annual/annual environmental monitoring reports to be submitted to ADB. Monitoring measures should be developed with technical details, including parameters to be measured, methods to be used, sampling locations, frequency of measurements, detection limits and definition of thresholds that will signal the need for corrective actions. Monitoring and reporting procedures should also be described to ensure early detection of conditions that necessitate particular mitigation measures and document the progress and results of mitigation.

24 Internal monitoring/supervision and reporting by CSCs. During construction, CSCs will be responsible for conducting internal environmental monitoring in accordance with the monitoring plan (Table EMP-4). The monitoring results will be reported through the CSCs’ reports to the PIEs.

25 Environmental compliance monitoring by EMA. The EMA will conduct environmental monitoring in accordance with the monitoring program (Table EMP-4). A detailed cost breakdown will be provided by the EMA when the environmental monitoring program is updated at the start of each component implementation. Monitoring will be conducted during the construction and operational phases until a project completion report is issued.

26 EMP implementation monitoring and progress reporting. The PIC-ES will review the project progress and status of the EMP compliance by conducting field visits and reviewing the results of environmental monitoring conducted by the EMA. The findings of the PIC-ES will be reported to ADB through the semi-annual (during construction)/annual (during operation) environmental monitoring reports. The reports will include (i) overall project implementation progress; (ii) compliance with national regulations; (iii) compliance with environmental covenants in the Loan Agreement; (iv) progress in implementing the Environmental Management Plan (EMP)/Environmental Monitoring Program; (v) significant events or issues encountered, changes in project scope, and corresponding safeguard measures undertaken, if applicable; (vi) implementation of the GRM and complaints received from stakeholders during the report period; and (vii) conclusion and recommendations. The IPMO prepares the reports and submit the English reports to ADB for review and disclosure. A template of environmental monitoring report is shown in Annex 1 of this EMP.

27 Monitoring by ADB. In addition to reviewing the environmental monitoring reports, ADB missions will inspect the subproject progress and implementation on site at least once a year. For environmental issues, inspections will focus mainly on (i) environmental monitoring data; (ii) implementation status of the subproject performance commitments specified in the loan documents for the environment, environmental compliance, implementation of the EMP, and environmental institutional strengthening and training; (iii) environmental performance of contractors, IAs and the IPMO; and (iv) operation and performance of the subproject GRM and ongoing information disclosure and public consultation. The performance of the contractors in respect of environmental compliance will be recorded and considered in the next bid evaluations. ADB also oversees the preparation of the final Project Completion Report, which includes a section on environmental impact assessment of the Project.

22 Appendix 1

28 Project completion environmental audits. Within three months after the subproject completion, or no later than one year with permission of the local EPBs, environmental acceptance monitoring and audit reports of each subproject shall be (i) prepared by a licensed environmental monitoring institute in accordance with the PRC Guideline on Project Completion Environmental Audit (2001), (ii) reviewed for approval of the official commencement of individual subproject operation by environmental authorities, and (iii) finally reported to ADB through the annual environmental monitoring report. The environmental audits can be conducted together with the overall project completion acceptance inspection. The environmental acceptance report for the completed subprojects shall indicate the timing, extent, effectiveness of completed mitigation and maintenance, and the needs for additional mitigation measures and monitoring during operation. The IPMO with support by the PIC-ES shall prepare an environment chapter of the draft Project Completion Report.

29 Quality assurance (QA) /quality control (QC) for compliance monitoring. To ensure the accuracy of the monitoring, the QA/QC procedures will be conducted in accordance with the following regulations: i) Regulations of QA/AC Management for Environmental Monitoring issued by the State Environmental Protection Administration in July 2006; ii) QA/QC Manual for Environmental Water Monitoring (Second edition), published by the State Environmental Monitoring Centre in 2001; and iii) QA/QC Manual for Environmental Air Monitoring published by the State Environmental Monitoring Centre in 2001.

23 Appendix 1

Table EMP-4: Environmental Monitoring Program Estimated Who Who Subject Parameter Location Frequency Cost Implements Supervises (USD$) Construction Groundwater SS, NH3-N, oil, CODcr, total At each project site Impact/compliance Monitoring: Once EMA IAs, PIEs 25,000 coliforms per day, for 2 consecutive days, 2 times per year during construction activities. Air Inspection of dust mitigation Visual inspection at all Internal Monitoring: weekly CSCs IAs，PIEs 20,000 measures (water spraying, construction sites. External Monitoring: At least four PIC-ES IAs, PIEs, 15,000 cover transport vehicles, etc.); times per year EEBs and maintenance of vehicles and construction equipment TSP, PM1019, NOx At all construction sites (at Impact Monitoring: Twice per day for EMA IAs, PIEs, 20,000 least one point upwind, two 3 consecutive days, 4 times per year EEBs points downwind) and sensitive during construction activities. receivers nearby (see Chapter IV-sensitive receivers within project area of influence) Noise LAeq At the boundary of all Impact Monitoring: Twice per day EMA IAs, PIEs, 30,000 construction sites and sensitive (once in day time and once at night EEBs receivers nearby (see Chapter time) for 2 consecutive days, 4 times IV-sensitive receivers within per year during construction project area of influence) activities. Solid Waste Garbage from work-camps and Visual inspection at all Internal Monitoring: weekly CSCs IAs, PIEs 15,000 construction waste at construction sites and work- External Monitoring: Twice per year PIC-ES, EEBs, IAs, 10,000 construction sites camps (EEM) PIEs Soil erosion, Soil erosion intensity, re- Visual inspection at borrow pit Internal Monitoring: Random check CSCs PIEs 15,000 vegetation vegetation and spoil sites after rainstorm (rainfall＞50mm) External Monitoring: twice per year, IA, PIC-ES EEBs, EA, 15,000 and once after completion of construction Slope stability, topsoil stockpile Visual inspection of all Internal Monitoring: At least four CSCs IAs, PIEs 30,000 and rehabilitation of subgrade slopes and retaining times per year construction sites walls, culverts External Monitoring: Twice per year, PIC-ES EEBs, IAs, 15,000 and once after completion of PIEs construction Compensatory plantings and Visual inspection at all disposal Internal Monitoring: At least four CSCs IAs, PIEs 50,000 re-vegetation of borrow pits, sites, borrow pits and times per year

24 Appendix 1

Estimated Who Who Subject Parameter Location Frequency Cost Implements Supervises (USD$) spoil disposal sites and temporary occupied lands External Monitoring: Twice per year, PIC-ES EEBs, IAs, 25,000 construction sites and once after completion of PIEs construction Occupational Work camp hygiene and safety, Inspection at all construction Internal Monitoring: Monthly CSC IAs, PIEs 20,000 health and availability of clean water and sites and work-camps safety emergency response plans External Monitoring: Twice per year PIC-ES City Health 20,000 Bureau Subtotal 335,000 Operation Noise LAeq All sensitive receivers along Twice per day (once in day time and EMA IAs, EEBs 10,000 the roads once at night time) for 2 consecutive days, twice per year Air TSP, SO2, NOx, PM10 All sensitive receivers along Twice per day for 3 consecutive EMA IAs, EEBs 10,000 the roads days, twice per year Soil and Vegetation survival and Re-vegetated sites (spoil Spot check, twice per year OPFs, EEBs, 15,000 Vegetation coverage rate disposal sites, construction LPMOs Forestry sites) Bureau, IAs Traffic flow and Vehicle numbers and road use Project roads Road traffic monitoring program OPFs, City/county 10,000 safety (against predictions), accident LPMOs Traffic incidents Bureau, IAs Subtotal 35,000 BOD5 = 5-day biochemical oxygen demand; CODcr = chemical oxygen demand; CSC = construction supervision company; EMA = environmental monitoring agency; EEB = ecology and environment bureau; IPMO = IMAR Project Management Office; IA = implementation agency; LAeq = equivalent continuous A- weighted sound pressure level; NH3-N = ammonia nitrogen; NOx = nitrogen oxides; OPF = operators of project facilities; PM10 = particles measuring 10Âμm or less; LPMO = local project management office; SO2 = sulfur dioxide; SS = suspended solids; TSP = total suspended particle Source: TRTA consultants.

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30 Environmental Acceptance Monitoring and Reporting. Following the PRC’s management measures for inspection and acceptance of environmental protection at the completion of construction projects (MEP Decree [2001] No. 13 and 2010 amendment), within three months after the completion of the project construction, an environmental acceptance monitoring and audit report for the project shall be prepared by an organization specified under PRC’s Construction Project Environmental Protection Management Ordinance (amended 2017). The report shall be reviewed and approved by the local EEB, and then reported to ADB (Table EMP-5). The environmental acceptance report for the completed project shall indicate the timing, extent, effectiveness of completed mitigation and maintenance, and the needs for additional mitigation measures and monitoring during operation. The IPMO EHS officer with support of the PIC-ES shall prepare an environment chapter of the draft Project Completion Report.

Table EMP-5: Environmental Reporting Plan Report From To Frequency of Reporting A. Construction Phase Internal progress reports CSCs PIEs Monthly Environmental monitoring reports EMA IPMOs, IAs Semi-annually IPMO ADB Semi-annually Environmental monitoring reports Annually (stand-alone IPMO ADB report) Environmental acceptance Licensed local EEBs, IPMO, Within three months after monitoring and audit reports institute IAs, PIEs, ADB component completion B. Operation Phase Annually until a PCR is Environmental monitoring reports IPMOs ADB issued

Project completion report IPMOs ADB On completion including environmental chapter Notes: ADB = Asian Development Bank; EHS= Environment, health and safety; EMA = Environmental Monitoring Agency; EEB = Ecology and Environment Protection Bureau; CSC = construction supervision company; IA = implementing agency; PIC-ES = Project implementation consultant - environment specialist; IPMO = IMAR project management office, PCR = project completion report; PIE = project implementing entity. Source: TRTA consultants.

E. Institutional Capacity Building and Training

31 The capacity of the PMO, IA and contractors’ staff responsible for the EMP implementation and supervision shall be strengthened. All parties involved in implementing and supervising the EMP must have an understanding of the goals, methods, and practices of project environmental management. The EMP will address the lack of capacity and expertise in environmental management through (i) institutional capacity building, and (ii) training.

32 Institutional Strengthening. The capacities of the IPMO and IAs to coordinate environmental management shall be strengthened through a set of measures:

(i) The loan implementation support consultant shall support the IPMO with appointment of a national environmental specialist as the PIC-ES to provide support on environmental management for the project, and to guide the IPMO and IA in implementing the EMP and ensuring compliance with ADB’s Safeguard Policy Statement (SPS 2009); (ii) The appointment of qualified staff within the IPMO and IAs as environmental coordinators in charge of the EMP coordination, implementation and site

26 Appendix 1

inspections including GRM; (iii) The commissioning of an independent ESE by the IA to provide independent monitoring and verification of EMP implementation.

33 Training. To ensure effective implementation of the EMP, the capability of the LPMOs, IAs, PIEs, OPFs, CSCs and contractors must be strengthened, and all parties involved in implementing the mitigation measures and monitoring of environmental performance must understand the goals, methods, and the best practices for the project environmental management. The EEB and PIC-ES will offer training specific to their roles for the project. The main purpose of training is to ensure that the contractors, CSCs, PIEs, IAs, LPMOs, and OPFs are well versed in environmentally sound practices and are able to undertake all construction and operation with the appropriate environmental safeguards.

34 The training program (Table EMP-6) addresses immediate training needs, i.e. training needed for project personnel in order to ensure that involved institutes are well versed in environmentally sound practices and are able to undertake all construction activities with appropriate environmental mitigation measures. The training program also addresses the long- term capacity building needs, i.e. for the operational phase of the project. Training will be provided by qualified experts on infrastructures management, road safety, and emergency preparedness and response planning.

35 The following training programs will be delivered or organized by the Project implementation consultant (PIC)consulting company during the course of project implementation. A Training Needs Assessment will be conducted by the PIC consultants to tailor the training for the maximum impact. The trainers will include a before/after assessment in their programs to evaluate the success of the training. The PIC-ES will design an evaluation questionnaire to gauge the usefulness of the training/capacity building design and performance of the trainer. The evaluation will be taken into account in the training performance evaluation.

Table EMP-6: Indicative List of Training Program Related to Environment Training Scope of Training Trainer Trainee topic Procurement • ADB’s procurement guideline and bidding procedure PMC, CSC, IAs, and contract • Bidding document preparation, including EMP clauses PIC-ES PIEs management • Risk of improper procurement and mitigation measures • Handling variation orders and contract management Implementatio • EMP implementation, including implementation responsibilities, EEB, CSC, IAs, n of EMP and environmental monitoring, inspection and reporting, consultation EED, PIEs other health and participation, mechanism of EMP review, feedback and PIC-ES Contractors, and safety adjustment; EEBs, GRM requirements • GRM, including GRM structure, responsibilities and timeframe, access types of grievances, eligibility assessment; points, other • EHS considerations during project construction and operation; related local • Monitoring and inspection methods, data collection and bureaus processing, interpretation of data, reporting system; • Communication with the public by different means (Innovative community-based advocacy campaigns); Municipal solid • International and national good practices for solid waste PIC-ES CSC, IAs, waste management PIEs management • Municipal solid waste management technologies and options • Public awareness program and public willingness • Use of performance indicators • Short-, medium- and long-term planning Road safety • International and national good practice for road safety PMC CSC, IAs, • Road safety audit tools and approaches PIEs • Data collection for road safety • Institutional responsibility and set-up • Policies for improving road safety • Public awareness program and education • Use of performance indicators

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ADB = Asian Development Bank, CSC = construction supervision company; EA = executing agency, EHS = environment health and safety, EMP = environment management plan, EEB = environment and ecology bureau, GRM = grievance redress mechanism, IA = implementing agency, PIC-ES = Project implementation consultant - environmental specialist, PMC = project management consultant; PIE = project implementing entity. Source: TRTA consultants.

F. Consultation, Participation and Information Disclosure

36 Consultation During Project Preparation. Meaningful consultations were conducted during the EIA study and project processing. Direct public participation was conducted as an ongoing element in the development of the project components, which are described in Chapter VII of this IEE. These activities were carried out by the EIA institutes in their preparation of the domestic EIAs and by the ADB consultants following the PRC National EIA Technical Guidelines, ADB SPS (2009) and Public Communication Policy (PCP, 2011).

37 Public Consultation Plan During Project Implementation. Future plans for public involvement during the design, construction, and operation phases were developed during project processing (Table EMP-7). These plans include public participation in (i) monitoring impacts and mitigation measures during construction and operation, (ii) evaluating environmental benefits and social impacts, and (iii) interviewing the public after the project is completed. These plans include several types of public involvement such as site visits, interviews, workshops and investigation of specific issues

38 The IAs and PIEs, supported by the PIC-ES, are responsible for public participation during the project implementation. Costs for conducting the public participation activities during construction are included in the project funding.

Table EMP-7: Public Consultation and Participation Plan Organizer Approach/Format Times/Frequency Subjects Participants Project preparation EIA Questionnaires and During field work Project priority, effects, Residents within Institute interviews for EIA attitudes to the Project and project construction suggestions area ADB Site visits, and One round of Comments and Representatives of Consultants public consultation for recommendations of APs APs and stakeholder consultations, and each component and stakeholders agencies interviews Construction IPMO, IAs, Public consultation Once a year during Adjusting mitigation Construction PIEs, PIC- through construction period measures if necessary, workers within ES questionnaire construction impacts, construction area; survey, site visits, comments and suggestions and residents within informal interviews construction area Public workshops At least once EMP implementation Representatives of during peak progress, adjusting residents, APs and construction period mitigation measures if social sectors necessary, construction impacts, comments and suggestions Operation IAs, PIEs, Public consultation At least once Effects of mitigation Residents, APs OPFs and site visits measures, impacts of adjacent to project operation, comments facilities and suggestions Public workshop As needed based Effects of mitigation Representatives of on public measures, impacts of residents, APs and consultation operation, comments and social sectors suggestions

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Organizer Approach/Format Times/Frequency Subjects Participants Public satisfaction At least once after Comments and suggestions Project beneficiaries survey one year of operation EIA = Environmental Impact Assessment, AP = Affected people, OPF = Operator of Project Facilities, PIE = Project Implementing Entity, IPMO = IMAR Project Management Office, PIC-ES = Environmental Specialist of Project implementation consultant. Source: TRTA consultants.

G. Grievance Redress Mechanism

39 A Grievance Redress Mechanism (GRM) was established as part of this EMP to receive and manage any public concerns or issues which may arise due to the project implantation. The GRM comprises: (i) a set of clear procedures developed by the IPMO to receive, record, and address any concerns which are raised; (ii) specific contact details for individuals at the PMO, IAs and the contractors, and (iii) specific contact details for local EEBs.

40 All contractors and work staff shall be briefed by the IPMO on the GRM. Contractors and workers shall be instructed to be courteous to local residents and, in the event they are approached by the general public with an issue, to immediately halt their work and report the issue to the foreman. The foreman shall immediately report the issue to the IA or IPMO for action.

41 There are multiple entry points to the GRM, including face-to-face meetings, written complaints, hotline number and telephone conversations, anonymous drop-boxes for written comments, and/or e-mail. All concerns received shall be treated confidentially and professionally. The identity of individuals shall not be circulated among project agencies or staff and shall only be shared with senior staff, and then only when there is clear justification. In the construction period and the initial operational period covered by loan covenants, IPMO shall report on GRM to ADB, including complaints and their resolution in the quarterly project progress reports and semi-annual/annual environmental monitoring reports up to the project completion report.

42 Basic steps for resolving complaints are as follows and illustrated in Figure EMP-1.

Step 1: For environmental problems during the construction and operational stages, the affected persons (APs) can register his/her complaint directly with the contractors or with the IPMO complaint center via its hotline. A joint hotline for resettlement and environment issues shall be established within the PMO. Complaints related to land acquisition and resettlement issues shall be directed to the IPMO and relevant agencies in accordance with the resettlement plan (RP). Contractors are required to set up a complaint hotline and designate a person in charge of handling complaints, and advertise the hotline number at the main entrance to each construction site, together with the hotline number of the IPMO complaint center. The contractors are required to maintain and update a Complaint Register to document all complaints. The contractors are also required to respond to the complainant in writing within 7 calendar days on their proposed solution and how it will be implemented. If the problem is resolved and the complainant is satisfied with the solution, this can be recorded by the IPMO complaint center and a follow-up shall be carried out during the next project site visit by the PIC-ES. The contractors are required to report complaints received, handled, resolved and unresolved to the IPMO complaint center immediately, and to the IAs and IPMO monthly (through progress reporting).

Step 2: If no appropriate solution can be found during Step 1, the contractor has the obligation to forward the complaint to the IPMO complaint center, the IAs and local EEBs. For an oral complaint, proper written records shall be made. Once a complaint is registered and put on file, the IPMO complaint center shall assess the eligibility of the complaint,

29 Appendix 1

identify the solution and provide a clear reply to the complainant within 14 calendar days. The PIC-ES shall assist the IPMO complaint center in addressing the complaint and follow- up with the APs. The IPMO complaint center shall also inform the ADB project team and submit all relevant documents. Meanwhile, the IPMO complaint center shall convey the complaint/grievance and suggested solution to the contractors, and/or IA’s O&M unit in a timely manner. The contractors during construction and the O&M unit during operation shall implement the agreed redress solution and report the outcome to the IPMO complaint center within fifteen (15) working days.

Step 3: In case no solution can be identified by the IPMO complaint center, or the complainant is not satisfied with the proposed solution, the IPMO complaint center shall organize, within 14 calendar days, a multi-stakeholder hearing (meeting) involving all relevant stakeholders (including the complainant, IAs, contractors, O&M unit, local EEB, and PMO). The hearing shall identify a solution acceptable to all, and formulate an action plan.

43 The tracking and documenting of grievance resolutions by the IPMO shall include the following elements: (i) tracking forms and procedures for gathering information from project personnel and complainant(s); (ii) regular updating of the GRM database by the IPMO environmental coordinator; (iii) processes for informing stakeholders about the status of a case; and (iv) procedures to retrieve data for reporting purposes, including the periodic reports to the ADB.

44 If the above steps are unsuccessful, persons who are, or may in the future be, adversely affected by the project may submit complaints to ADB’s Accountability Mechanism through Office of the Special Project Facilitator (OSPF) or Office of Compliance Review Panel. The Accountability Mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted projects can voice, and seek a resolution of their problems, as well as report alleged violations of ADB’s operational policies and procedures. Before submitting a complaint to the Accountability Mechanism, affected persons should make a good faith effort to solve their problems by working with the concerned ADB operations department. Only after doing that, and if they are still dissatisfied, should they approach the Accountability Mechanism.20

20 See: http://compliance.adb.org/

30 Appendix 1

Stakeholders involved will depend upon the nature of the complaint and will include as a minimum the affected person(s), PMO, IA (for the district), and EEB. Other stakeholder agencies relevant to particular concerns can be called upon to contribute through the PLG. Note: AP = affected person, EEB = ecology and environment bureau, O&M = operation and maintenance, PMO = project management office; IA = Implementing Agency. Source: TRTA consultants. Figure EMP-1: Proposed Grievance Redress Mechanism

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H. Cost Estimates

45 The total cost for EMP implementation comprises: (i) mitigation measures (Table EMP- 2); (ii) environmental monitoring (Table EMP-4); (iii) supervision of EMP implementation by ESE, (iv) training (Table EMP-6), (v) public consultation (Table EMP-7); and (vi) the compliance monitoring, training and reporting by PIC-ES. The total cost is summarized in Table EMP-8 and is US$4,530,000. Of this total the mitigation cost of US$4,280,000 would have been included in the civil works costs in the contractor bids for implementing environmental mitigation measures for air quality, noise, water quality and solid waste on construction sites. The budget allocation is indicated in the notes accompanying Table EMP-8.

Table EMP-8: Estimated budget for environmental management plan implementation （USD$） Implementing Agency Estimated Cost Subproject Subproject PIE Subproject 3 EMP Item 1 2- Funded ADB FIs Xiao Wei Funded Erenhot Mandula Yang Soil erosion and 160,000 240,000 140,000 NA 540,000 contamination Dust control/air 60,000 80,000 110,000 NA 250,000 quality Noise and vibration 70,000 80,000 150,000 NA 300,000 Wastewater 60,000 70,000 470,000 NA 600,000 Mitigation management 1 measures Groundwater 90,000 60,000 510,000 NA 660,000 (included protection in civil Solid waste 50,000 40,000 230,000 NA 320,000 work Protection of flora contract) 240,000 550,000 410,000 NA 1,200,000 and fauna Community health 20,000 30,000 60,000 NA 110,000 and safety Occupational health 60,000 60,000 180,000 NA 300,000 and safety Subtotal 810,000 1,210,000 2,260,000 NA 4,280,000 0 Internal EMP compliance 25,000 45,000 80,000 NA 150,000 NA monitoring2 Monitoring Environmental impact monitoring by EMA NA NA NA NA NA 220 (External)3 Subtotal 4,430,000 220 Environment Training4 75,000 Public Consultation5 25,000 Total: 4,430,000 100,220 Grand Total: 4,530,220 1 Included in civil works contract - contractors’ bids 2 Included in environmental monitoring costs paid by PIEs 3 Included in Project Management Consultant Services and the Finance Department of IMAR will pay for the consultant service. 4 Included in Project Management Consultant Services training budget 5 Included in Project Management Consultant Services Note: Internal monitoring during construction is covered under construction costs; and during operations by the PIEs. Source: DEIA and TRTA Consultants estimates

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46 Excluded from the budget are (i) infrastructure costs which relate to environment and public health but which are already included in the project direct costs; and (ii) remuneration for the IPMO and IA environment coordinators and consulting packages for the non-structural components, (covered elsewhere in the project budget).

47 Contractors shall bear the costs for all mitigation measures during construction, including those specified in the tender and contract documents as well as those to mitigate unforeseen impacts due to their construction activities. The O&M unit shall bear the costs related to mitigation measures during operation if needed. The IAs will pay for the external environmental monitoring costs during construction, and will bear the costs related to environmental supervision during construction and operation. The IPMO will bear the costs for training, the GRM, and the LIEC.

I. Mechanisms for Feedback and Adjustment

48 Based on environmental inspection and monitoring reports, the LPMOs, PIEs shall assess, in consultation with the PIC-ES, whether (i) further mitigation measures are required as corrective actions, or (ii) some improvements in environmental management practices are required. The IPMO will inform ADB promptly on any changes to the project and needed adjustments to the EMP. The updated EMP shall be submitted to ADB for review and approval, and will be disclosed on the ADB website, if required.

49 The effectiveness of mitigation measures and monitoring plans will be evaluated by a feedback reporting system. Adjustment to the EMP will be made, if necessary. The LPMOs and their EMUs will play a critical role in the feedback and adjustment mechanism.

50 If during inspection, substantial deviation from the EMP is observed or any changes are made to the project that may cause substantial adverse environmental impacts or increase the number of affected people, then the LPMOs will immediately consult with ADB and form an environmental assessment team to conduct additional environmental assessment and, if necessary, further public consultation. The revised EIA report including the EMP will be submitted to the ADB for review and appraisal, and disclosure. The revised EMP will be passed to the contractors, CSCs and OPFs for implementation.

J. Environmental Contract Clauses for Inclusion into Tender Documents and Civil Works Contracts

51 The following contract clauses for safeguarding the environment during construction shall be incorporated into all the tender documents and works contracts.

1. Construction time: 1.1 There shall be no night time (between 22:00 and 06:00 hours) construction. 2. Protection of air quality 2.1 Concrete batching station for civil works construction shall be sited at least 300 m downwind of the nearest household 2.2 Concrete batching plant shall be equipped with fabric filters and/or wet scrubbers to reduce the level of dust emissions. 2.3 Personal protective equipment (PPE) such as goggles, gloves and respirators shall be provided to construction workers where necessary to minimize skin exposure to and inhalation of fumes and dust. 2.4 Unpaved areas, haul roads and exposed dust-prone stockpiles shall be sprayed with water at least twice each day except on rainy days

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2.5 Frequently travelled haul roads and construction site and construction staging area exits shall be paved with gravel or asphalt. 2.6 Vehicle speed in unpaved areas including unpaved haul roads shall be controlled to ≤ 8 km/h. Speed limit signs shall be posted in these areas. 2.7 Wheel washing equipment shall be installed or wheel washing shall be conducted manually at each exit of the works area and concrete batching station to prevent trucks from carrying muddy or dusty substance onto public roads. 2.8 Dust-prone materials shall be stored in areas with shelters on four sides and on top. If such materials have to be stored in open area, cover with strong tarpaulin. 2.9 Vehicles with an open load-carrying case, which transport potentially dust- producing materials, shall have proper fitting sides and tail boards. Dust-prone materials shall not be loaded to a level higher than the side and tail boards, and shall always be covered with a strong tarpaulin. 2.10 Construction vehicles and machinery shall be regularly maintained to minimize exhaust emissions from these sources. 2.11 Unauthorized burning of construction waste material and refuse shall be subject to penalties for the Contractor, and withholding of payment. 3. Protection of the acoustic environment 3.1 Machinery and equipment shall be maintained and repaired regularly and properly to keep them in good working condition and to minimize noise. 3.2 Low noise machinery or equipment with sound insulation shall be deployed when working within 100 m from villages or townships. 3.3 Concrete batching plant for civil works construction shall be sited at least 300 m away and downwind (for air quality purpose) from the nearest sensitive receptor. 3.4 Temporary noise barriers or hoardings shall be erected around the equipment to shield the noise from equipment when there are residences, schools, health clinics or mosques within 50 m of the noise source. 3.5 Suitable hearing protection (such as ear muffs) shall be provided to construction workers when working near noisy machinery. 3.6 The use of horns is forbidden unless absolutely necessary. The use of whistles shall be minimized. 4. Protection of water quality 4.1 Portable toilets and small package wastewater treatment plants and/or septic tanks shall be provided on construction sites and construction camps for the workers. If there are nearby public sewers, interim storage tanks and pipelines shall be installed to convey wastewater to public sewers. Runoff from construction sites and construction camps shall be collected and treated with drainage provisions. 4.2 Sedimentation tanks shall be installed and operated on construction sites and concrete batching station to treat process water (e.g. concrete batching) and muddy runoff with high concentrations of suspended solids. If necessary, flocculants such as polyacrylamide (PAM) shall be used to facilitate sedimentation. 4.3 Storage and refueling facilities for fuels, oil, and other hazardous materials shall be sited within secured areas on impermeable surfaces at least 300 m away from water bodies, and provided with bunds and cleanup kits. If refueling in the field is required, it shall be done from road-licensed fuel trucks away from watercourses or other environmentally sensitive areas. 4.4 Material stockpiles shall be protected against wind and runoff water which might transport them to surface waters. There shall be no storage of materials and equipment in or close to water bodies. 4.5 Any chemical spills into drains and water bodies shall be cleaned up within 24 hours of the occurrence, with contaminated soils and water treated according to Technical guidelines for site soil remediation (HJ 25.4-2014). Records must be handed over without delay to the Project Management Office and the local Environmental Protection Bureau. 5. Protection of biological resources and wildlife

34 Appendix 1

5.1 Construction workers are prohibited from capturing any wildlife during construction. 5.2 Existing trees and grassland shall be protected during construction. Trees or shrubs shall be removed only as the last resort if they impinge directly on the permanent works or necessary temporary works. 5.3 Where a tree has to be removed or an area of grassland disturbed, trees shall be replanted and the area revegetated after construction. 6. Solid waste management 6.1 The re-use of construction waste on the project shall be maximized. 6.2 Borrow area and spoil disposal site for station construction shall be located at least 300 m from residential areas so as to reduce potential dust and noise impacts from these sites. 6.3 Spent borrow area and spoil disposal site shall be rehabilitated and vegetated within one month after closure to prevent soil erosion and dust generation. 6.4 All refuse and construction waste generated on construction sites shall be stored in designated areas and regularly removed from these locations for disposal or reuse. 7. Prevention of soil erosion 7.1 Soil erosion prevention measures shall be installed and implemented in all construction sites, construction staging areas, borrow areas and spoil disposal sites in accordance with requirements in the approved revised environmental impact report. 7.2 The Contractor shall pay close attention to drainage provision and establishment of vegetation cover on backfilled areas to prevent soil erosion. 7.3 If restoration is carried out during periods of hot or extreme weather, ensure adequate aftercare to maximize survival of vegetation. 8. Construction site sanitation 8.1 Adequate and functional systems for sanitary conditions, toilet facilities, waste management, labor dormitories and cooking facilities shall be provided. 8.2 The site shall be effectively cleaned and disinfected. During site formation, the site shall be sprayed with phenolated water for disinfection. Toilets and refuse bins shall be disinfected and timely removal of solid waste shall be ensured. 8.3 Rodents on site shall be exterminated at least once every 3 months. Mosquitoes and flies shall be exterminated at least twice each year. 8.4 Public toilets shall be provided in accordance with the requirements of labor management and sanitation departments in the living areas on construction site, and designated staff responsible for cleaning and disinfection shall be appointed. 8.5 Construction site domestic wastewater shall be discharged into the municipal sewer system or treated on-site using portable systems or septic tanks. 9. Occupational safety 9.1 At least one environment, health and safety (EHS) officer shall be appointed to manage occupational health and safety risks on construction sites. 9.2 Personal protective equipment (PPE) (such as safety hats and shoes, high visibility vests, and safety belt and harness for above ground works) shall be provided to all construction workers. The use of PPE by all workers shall be strictly enforced. 9.3 Safety goggles, gloves and respiratory masks shall be provided to workers doing interior fit-out works. 9.4 Ear plugs for hearing protection shall be provided to workers operating and working near noisy power mechanical equipment. 10. Food safety 10.1 Food hygiene in canteens on site shall be inspected and supervised regularly. Canteen workers must have valid health permits. 10.2 If food poisoning is discovered, effective control measures shall be implemented immediately to prevent it from spreading. 11. Disease prevention and health services

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11.1 All construction workers shall undergo a physical examination before starting work on site. If infectious disease is found, the patient must be isolated for treatment to prevent the disease from spreading. Physical examination shall be conducted on 20% of the workers every year from the second year onwards. 11.2 Health clinic shall be established at location where workers are concentrated, which shall be equipped with common medical supplies and medication for simple treatment and emergency treatment for accidents. 11.3 Induction and training by local health departments on prevention and management of communicable diseases shall be provided. 12. Community health and safety 12.1 A traffic control and operation plan shall be prepared together with the local traffic police prior to any construction. The plan shall include provisions for diverting or scheduling construction traffic to avoid morning and afternoon peak traffic hours, regulating traffic at road crossings with an emphasis on ensuring public safety through clear signs, controls and planning in advance. 12.2 Construction billboards, which include construction description, schedule, responsible person and complaint phone number, shall be erected at the entry to each construction site and construction staging area. 12.3 Residents and businesses shall be informed in advance of noisy construction activities such as piling, given the dates and duration of expected disruption and made aware of the project grievance redress mechanism. 12.4 Clear signs shall be placed at construction sites in view of the public, warning people of potential dangers such as moving vehicles, hazardous materials, excavations, etc. and raising awareness on safety issues. 12.5 All construction sites shall be made secure and access by members of the public shall be discouraged through appropriate fencing, signage and/or security personnel, as appropriate. 13. Utility interruption 13.1 Contractors shall assess construction locations in advance and identify potential for disruption to services and risks before starting construction. Any damage or hindrance/disadvantage to local businesses caused by the premature removal or insufficient replacement of public utilities shall be subject to full compensation, at the full liability of the contractor who causes the problem. 13.2 If temporary disruption is unavoidable the contractor shall, in collaboration with relevant local authorities such as power company, water supply company and communication company, develop a plan to minimize the disruption and communicate the dates and duration in advance to affected persons. 14. Grievance redress mechanism 14.1 The contractor’s environment, health and safety (EHS) officer shall be responsible for managing the grievance redress mechanism (GRM) on site for receiving and handling complaints. In case of a complaint, the contractor shall notify the project management office within one week and shall advise on the agreed solution. 14.2 The contractor shall disclose the GRM to affected persons before construction begins at the main entrance to each construction site.

52 The contractor shall maintain and update a Complaint Register to document all complaints.

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Annex 1

Environmental Monitoring Report

Semi-annual/Annual Report {Month Year}

Proposed Multitranche Financing Facility People’s Republic of China: Inner Mongolia Sustainable Cross-Border Development Investment Program

Prepared by {complete and accurate name of implementing agency or external monitoring agency} for the {complete name of the borrower} and the Asian Development Bank.

37 Appendix 1

CURRENCY EQUIVALENTS (as of {Day Month Year}) {The date of the currency equivalents must be within 2 months from the date on the cover.} Currency unit – {currency name in lowercase (Symbol)} {Symbol}1.00 = ${ } $1.00 = {Symbol_____}

ABBREVIATIONS {AAA} – {spell out (capitalize only proper names)} {BBB} – {spell out} {CCC} – {spell out}

{WEIGHTS AND MEASURES} {symbol 1 (full name 1)} – {Definition 1} {symbol 2 (full name 2)} – {Definition 2} {symbol 3 (full name 3)} – {Definition 3}

NOTES (i) The fiscal year (FY) of the Government of {name of borrower} {and its agencies} ends on {day month}. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2011 ends on {day month} 2011. (ii) In this report, "$" refers to US dollars.

This environmental monitoring report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

38 Appendix 1

Environmental Monitoring Report

TABLE OF CONTENTS Page Executive Summary

• Brief description of the project

1.0 Introduction

1.1 Description of scope of report, reporting period, and overall project implementation progress

2.0 Compliance to National Regulations

2.1 Environmental Impact Assessment Law, etc.

3.0 Compliance to Environmental Covenants from the ADB Loan Agreement

3.1 Schedule x Environment (prepare a matrix to show how compliance was achieved)

4.0 Progress in Implementing the Environmental Management Plan/Environmental Monitoring Plan

5.0 Significant Events or Issues Encountered, Changes in Project Scope, and Corresponding Safeguard Measures Undertaken, if Applicable

6.0 Implementation of Grievance Redress Mechanism and Complaints Received from Stakeholders

(Summary of any complaint/grievance and the status of action taken)

7.0 Conclusion and Recommendations