Environmental Impact Assessment (Draft) May 2018 PRC: Yunnan Lincang Border Economic Cooperation Zone Development Project Prepared by Lincang Border Economic Cooperation Zone Development Project, People’s Republic of China for the Asian Development Bank. 1 CURRENCY EQUIVALENTS (as of 23 May 2018) Currency unit – Chinese Yuan (CNY) CNY1.000 = $0.157 $1.000 = CNY6.368 ABBREVIATIONS ADB – Asian Development Bank AH – Affected Households AP – Affected Persons CB – Construction Bureau CRVA – Climate Risk and Variability Assessment CPS – Country Partnership Strategy DI – Design Institute EA – Executing Agency EIRR – Economic Internal Rate of Return EIA – Environmental Impact Assessment EMoP – Environmental Monitoring Plan EMP – Environmental Management Plan EPB – Environment Protection Bureau FIRR – Financial Rate of Return FSR – Feasibility Study Report GHG – Green House Gas GRM – Grievance Redress Mechanism IA – Implementing Agency IEE – Initial Environmental Examination LBECZ – Lincang Border Economic Cooperation Zone LDI – Local Design Institutes LEPB – Lincang Environmental Protection Bureau LMDRC – Lincang Municipal Development and Reform Commission LMFB – Lincang Municipal Financial Bureau MASL – meter above sea level MCM – million cubic meter MOU – Memorandum of Understanding MSL – Mean Sea Level O&M – Operations and Maintenance PMO – Project Management Office PRC – People’s Republic of China RCI – Regional Cooperation and Integration RoW – Right of Way RP – Resettlement Plan SEPP – Soil Erosion Prevention Plan SPS – ADB’s Safeguards Policy Statement 2009 TA – Technical Assistance WTP – Water supply treatment plant WWTP – Waste water treatment plant YEPB – Yunnan Provincial Environment Protection Bureau 2 WEIGHTS AND MEASURES 1 ha – 1 hectare=10,000 sq. meters = 15 mu km – 1 kilometer = 1000 meters kV – 1 kilovolt =1,000 volts 1 mu – Chinese unit of area (15 mu = 1ha, 1 mu=666.7 square meters) 1 ton – 1000 kg GLOSSARY project site – individual sub-project site project area – 13 project sites funded by ADB assessment area – Lincang Border Economic Cooperation Zone project influence area – Gengma County including Zhenkang and Cangyuan Counties NOTES (i) The fiscal year (FY) of the People’s Republic of China and its agencies ends on 31 December. FY befo a calendar year denotes the year in which the fiscal year ends, e.g., FY 2017 ends on 31 December month 2017. (ii) In this report, "$" refers to US dollars. This environmental impact assessment 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 on ADB’s 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. 3 TABLE OF CONTENTS PREFACE 6 EXECUTIVE SUMMARY 7 1.0 INTRODUCTION 1 1.1 Background 1 1.2 Project Impact and Outcome 1 1.3 Project Outputs 1 1.4 Project Cost Estimates and Financing Plan 2 1.5 Methodology 3 1.6 Structure of the EIA document 5 2.0 POLICY, LEGAL, AND ADMINISTRATIVE FRAMEWORK 6 2.1 Applicable PRC Environmental Law and other Legislations 6 2.2 Environmental Impact Assessment and Protection Laws 10 2.3 Clearances/permits from relevant state/provincial agencies or local Authorities 17 2.4 Status of clearances of DEIA 19 2.5 Multinational Agreements 20 2.6 Asian Development Bank’s Safeguards Policies 21 2.7 Equivalence of International Best Policies in Infrastructure Development 25 3.0 DESCRIPTION OF THE PROJECT 27 3.1 Project 27 3.2 Proposed Lincang Border Economic Border Cooperation Zone Project 28 3.3 Temporal Context: Project Rationale and Justifications 29 3.4 Major Components of the proposed LBECZ 31 3.5 Size and Magnitude of the Operation 34 4.0 DESCRIPTION OF ENVIRONMENT (BASELINE DATA) 56 4.1 Physical Environment 56 4.2 Ecological environment (Terrestrial and Aquatic) 71 4.3 Land use Assessment in Project Area 78 4.4 Social Environment 79 4.5 Economic Development 80 4.6 Key Health Issues 82 4.7 Infrastructure facilities in Project Area 84 4.8 Baseline Data for Study Area 87 5.0 ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES 117 5.1 Environment Impacts and Mitigation Measures 117 5.2 Environment problems due to project location and design 118 5.3 Environmental Impacts Associated with Pre-Construction Stage 119 5.4 Environmental Problems Associated with Construction Stage 120 5.5 Environmental impacts associated with operational stage 157 5.6 Cumulative and Induced Impacts 171 6.0 ANALYSIS OF ALTERNATIVES 182 6.1 LBECZ’S Approach for Site Selection 182 4 6.2 The “no” action alternative 182 6.3 The “with” project alternative LBECZ site selection 182 7.0 INFORMATION DISCLOSURE, CONSULTATION, AND PARTICIPATION 200 7.1 Information Disclosure 200 7.2 Public Consultations 201 7.3 Follow-up Actions from the consultations 204 7.4 Future Public Consultations 205 8.0 GRIEVANCE REDRESS MECHANISM 207 8.1 Awareness of Stakeholders 207 8.2 The Grievance Redress Mechanism and LBECZ 207 9.0 ENVIRONMENTAL MANAGEMENT PLAN 213 9.1 Construction Management, Material sourcing and Demolition 213 9.2 Disaster Management, Health and Safety, Training 214 9.3 Critical Environmental Review Criteria 217 9.4 Environmental Management Plan 217 9.5 Mitigation Measures 222 9.6 Monitoring 231 9.6.1 Environmental Monitoring Plan (EMoP) 232 9.7 Environmental Management and Monitoring Plan Budget Costs 243 9.8 Institutional arrangements 247 9.9 Implementation Plan 252 9.10 Performance indicators 256 10.0 CONCLUSION AND RECOMMENDATION 258 ANNEXURES 262 Annexure 1: Assessment Standards of Environmental Quality 262 Annexure 2: Baseline Environment Test Reports 275 Annexure 3: Environment Management Plan (EMP) 292 Annexure 4: Environment Monitoring Plan (Environmental Parameters) 304 Annexure 5: Environmental Safeguard Monitoring Report 310 Annexure 6: Public Disclosure and Public Consultations 312 Annexure 7: Approval letter of EIA by Lincang Environmental Protection Agency (LEPA) 333 Annexure 8: Other consent Letters 336 Annexure 9: Integrated Biodiversity Assessment Tool 348 Annexure 10: Water Intake Permit 354 Annexure 11: GHG Computation Methodology 356 APPENDIXES 360 Appendix 1 Biodiversity Management Report 360 Appendix 2: Water and Soil Conservation Report 360 Appendix 3: Climate Risk and Variability Assessment Report 360 Appendix 4: Summary of Water Allocation of Resources report 360 5 PREFACE This document describes the environmental studies conducted for the Lincang Border Economic Project. These studies were conducted between 2017-2018 on behalf of the Project Proponent - The Lincang Border Economic Cooperation Zone (LBECZ) Project. This Environmental Impact Assessment (EIA), prepared according to the Asian Development Bank (ADB)’s Safeguard Policy Statement (SPS) 2009 for evaluation of project impacts and mitigation measure, comprises of the following: • Environmental Management Plan (EMP) prepared to comply with the ADB’s SPS 2009. • Environment Monitoring Plan (EMoP) and Grievance Redress Mechanism, including public disclosure according to ADB SPS 2009. The report comprising EIA document is arranged as follows: EIA Document: Environmental Impact Assessment including Environmental Management Plan This Main body of the document presents the final assessment of the environmental impacts of the Lincang Border Economic Cooperation Zone Project and the cumulative impact assessment of the Lincang prefecture prepared in compliance with ADB SPS 2009 policy. Annexures 1-11 includes Environment Management Plan, Public Consultations held in 2018, Environment Monitoring program; Consent by Lincang Environmental Protection Bureau, Lincang Water Resources Bureau to the LBECZ, Water allocation agreement, annual GHG Estimation affected by project. Appendixes 1-4 includes Biodiversity Report and Water, Soil Conservation Plan and the Climate Risk and Variability Assessment for the area is attached. The reports are attached separately. Appendix 4 consists of a summary of the Water Resources Allocation Report prepared for water supply requirements for LBECZ. 6 EXECUTIVE SUMMARY 1. The project covers three Chinese border cities/towns, namely Qingshuihe, Zhenkang and Cangyuan as shown in Figure 1. 4, along the China-Myanmar border in Lincang prefecture in Yunnan Province in China. The project area is a much less developed area in comparison to other parts of the country in a remote mountainous area. Most of the populations are ethnic minorities consists of Wa, Dai, Yi, Miao, Bai etc. This part of China shares a long inland border with Myanmar without very obvious physical separations, and many local residents from both countries are from the same ethnic groups with similar living styles and habits, and share the similar culture, language, habits and economy. The interactions and exchanges of merchandise as well as border trades have existed throughout the long history of the area. The Asian Development Bank (ADB) and PRC government reached a n agreement to use ADB loan of $250 million with a similar amount of counterpart fund from PRC local government for the improvement of regional cooperation and integration facilities and infrastructures to promote the regional cooperation and local economic development. Introduction Components and Summary Environmental Issues