Environmental Assessment Sourcebook

1OTP-/ f

WORLDBANK TECHNICAL PAPER NUMBER139

Public Disclosure Authorized Environmental Assessment Sourcebook

Volume I Policies, Procedures, and Cross-Sectoral Issues

Environment Department Public Disclosure Authorized Public Disclosure Authorized EEg mmIu001TIF% EVE ON LAND TENRIMN T Public Disclosure Authorized RECENT WORLD BANK TECHNICAL PAPERS

No. 76 Noetstaller, IndustrialMinerals: A TechnicalReview (also in French, 76F) No. 77 Gunnerson, WastewaterManagement for CoastalCities: The OceanDisposal Option No. 78 Heyneman and F5gerlind, UniversityExaminations and StandardizedTesting: Principles, Experience, and PolicyOptions No. 79 Murphy and Marchant, Monitoringand Evaluationin ExtensionAgencies (also in French, 79F) No. 80 Cernea, Involuntary Resettlementin DevelopmentProjects: Policy Guidelines in WorldBank-Financed Projects(also in Spanish, 80S,and French, 80F) No. 81 Barrett, UrbanTransport in West Africa No. 82 Vogel, CostRecovery in the HealthCare Sector: Selected Country Studies in West Africa No. 83 Ewing and Chalk, The ForestIndustries Sector:An OperationalStrategy for DevelopingCountries No. 84 Vergara and Brown, The New Faceof the WorldPetrochemical Sector: Implications for Developing Countries No. 85 Ernst & Whinney, Proposalsfor Monitoringthe Performanceof ElectricUtilities No. 86 Munasinghe, IntegratedNational Energy Planning and Management:Methodology and Applicationto Sri Lanka No. 87 Baxter,Slade, and Howell, Aid and AgriculturalExtension: Evidence from the WorldBank and Other Donors No. 88 Vuylsteke, Techniquesof Privatizationof State-OwnedEnterprises, vol. 1:Methods and Implementation No. 89 Nankani, Techniquesof Privatizationof State-OwnedEnterprises, vol. 11:Selected Country CaseStudies No. 90 Candoy-Sekse, Techniquesof Privatizationof State-OwnedEnterprises, vol. III: Inventory of Country Experienceand ReferenceMaterials No. 91 Reij, Mulder, and Begemann, WaterHarvestingfor Plant Production: A ComprehensiveReview of the Literature No. 92 The Petroleum Finance Company, Ltd., WorldPetroleum Markets: A FrameworkforReliable Projection No. 93 Batstone, Smith, and Wilson, The SafeDisposal of HazardousWastes: The SpecialNeeds and Problems of DevelopingCountries No. 94 Le Moigne, Barghouti, and Plusquellec, Technologicaland InstitutionalInnovation in Irrigation No. 95 Swanson and Wolde-Semait, Africa'sPublic Enterprise Sector and Evidenceof Reforms No. 96 Razavi, The New Era of PetroleumTrading: Spot Oil, Spot-RelatedContracts, and FuturesMarkets No. 97 Asia Technical Department and Europe, Middle East, and North Africa Technical Department, Improvingthe Supply of Fertilizersto DevelopingCountries: A Summaryof the WorldBank's Experience No. 98 Moreno and Fallen Bailey, AlternativeTransport Fuels from NaturalGas No. 99 Intemational Commission on Irrigation and Drainage, Planning theManagement, Operation, and Maintenanceof Irrigationand DrainageSystems: A Guidefor the Preparationof Strategiesand Manuals (also in French, 99F) No. 100 Veldkamp, RecommendedPractices for Testing Water-PumpingWindmills No. 101 van Meel and Smulders, WindPumping: A Handbook No. 102 Berg and Brems, A Casefor PromotingBreastfeeding in Projectsto Limit Fertility No. 103 Banerjee,Shrubs in TropicalForest Ecosystems: Examples from India No. 104 Schware, The World SoftwareIndustry and SoftwareEngineering: Opportunities and Constraints for Newly IndustrializedEconomies No. 105 Pasha and McGarry, Rural WaterSupply and Sanitationin Pakistan:Lessons from Experience No. 106 Pinto and Besant-Jones,Demand and NetbackValues for Gasin Electricity

(List continues on the inside back cover) WORLDBANK TECHNICAL PAPER NUMBER 131

EnvironmentalAssessment Sourcebook Volume I Policies, Procedures, and Cross-SectoralIssues

EnvironmentDepartment

Th World Bank Wasldno, D.C. Copyright i 1991 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433,U.S.A.

Technical Papers are published to communicate the results of the Bank's work to the development community with the least possible delay. The typescript of this paper therefore has not been prepared in accordance with the procedures appropriate to formal printed texts, and the World Bank accepts no responsibility for errors. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequence of their use. The boundaries, colors, denominations, and other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address shown in the copyright notice above. The World Bank encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Pernission to copy portions for classroom use is granted through the Copyright Clearance Center, Inc., Suite 910,222 Rosewood Drive, Danvers, Massachusetts 01923,U.SA. The complete backlist of publications from the World Bank is shown in the annual Index of Publications, which contains an alphabetical title list (with full ordering information) and indexes of subjects, authors, and countries and regions. The latest edition is available free of charge from the Distribution Unit, Office of the Publisher, The World Bank, 1818 H Street, N.W., Washington, D.C. 20433,USA., or from Publications, The World Bank, 66, avenue d'Iena, 75116Paris, France.

ISSN: 0253-7494

Libraryof Congress Cataloging-in-PublicationData

International Bank for Reconstruction and Development. Environment Dept. Environmental assessment sourcebook / Environment Department p. cm. - (World Bank technical paper, 0253-7494 ; no. 139). Includes bibliographical references. Contents: v. 1. Policies, procedures, and cross-sectoral issues. ISBN 0-8213-1843-8 1. Economic development-Environmental aspects.. 2. Environmental impact analysis. I. Title. II. Series. TD195.E25I58 1991 333.73'14 91-4324 CIP iii

Volume I: Polkies, Procedures, and Cro-Sctoral lam

CONTENTS

Foreword vii Preface ix How to Use the Sourcebook xi Acknowledgments xHii

Chapt I Th Environtal ReviewProem 1

EnvironmentalReview, Policies, and Principles 1 EnvironmentalReview and the ProjectCycle 2 OverallRelationship to the ProjectCycle 2 Screening 4 Preparingfor an EnviromentalAssessment S Conductingthe EnvironmentalAssessment 7 EnvironmentalAssessment Review and ProjectAppraisal 9 Implementadonand Supervision 10 Completionand Evaluation 11

Regionaland SectoralEnvironmental Assessments 12 RegionalEnvironmental Asssments 12 SectoralEnvironmental Assessments 14

Alternativesto EnvironmentalAssessment 17 InsdtutionalAspects of EnvironmentalAsement 18 InteragencyCoordination 18 Involvementof AffectedGroups and LocalNGOs 18 StrengtheningEnvironmental Capabilities 19 FinancialIntermediary Lending 19 Managementof EnvironmentalAssessment 20 Cost and Timeto PrepareEnvironmental Asessments 20 Sourcesof Financing 20 Procurementof Consultants 20

Conclusion 23 iv

References 24

OD 4.00, Annex A: 'EnvironmentalAssessment' 27 Annex 1-2. Sample Terms of Reference(TOR) for Envirommental Reconnaissance 39 Annex 1-3. Sample Terms of Reference (IOR) for Environmental Assessment 40 Annex 1-3A. SampleTerms of Reference (TOR) for Environmental Assessmentof WastewaterCollection, Treatment, Reuse, and Disposal Systems 44 Annex 1-4. OperationalDirectives, OperationalManual Statements,and OperationalPolicy Notes Related to Environmental Review and Assessments 46 Annex 1-5. On Project-LevelGuides for EnviromnentalSustainabiity 51

Chapter 2 Global and CrossSectoral Issues In Environmental Review 55

Global and Trans-BoundaryConcerns and Regulations 55 AtmosphericPollution 55 InternationalTreaties and Agreementson the Environmentand Natural Resources 63 InternationalWaterways 65

Cross-SectoralIssues 68 BiologicalDiversity 68 Wildlands 76 Wetlands 80 Tropical Forests 83 Arid and Semi-AridLands 84 Coastal Zone Management 87 Land and Water Resource Management 91 Natural Hazards 95

References 100

Chapte 3 Social and Cultural Issues In Envirownental Redew 107

Core Concernsin Social Analysis 108

Social Issues in EcologicallySensitive Areas l

IndigenousPeoples 114

Cultural Property 120 v

New LandSettlement 126 PlannedAgricultural Settlement 126 Spontaneousor UnplannedAgricultural Settement 129

InducedDevelopment 130

References 134

Chapter 4 BconomlcAnalysis of Projects and Policieswith Considerationof Environmntal Coshsnd Benefits 137

Part I: Reviewof CurrentPractices 137 The Contextfor EconomicAnalysis of Projectsand Policies 137 Part I: Possibilitiesand Constraintsfor IncludingEnvironmental Costs and Benefitsinto Economic Analysis of Projectsand Policies 141 PhysicalImpacts and Relationships 141 Valuingthe Impactsin MonetaryTerms 141 Monetary-ObjectiveDecision-Making 147 The DiscountRate Issue 149 Issuesof Risk and Uncertainty 149 Part III: Conclusions 10

References 151

Chapter5 StrengtheningLocal Capabilitiesand Istitutions 1SS EnvironmentalManagement Institutions 155 Policiesand LegalInstruments 157 NationalEnvironmental Organization for Policy-Makingand Oversight 157 ImplementingEnvironmental Policies in SectoralDevelopment Programs 158 IncorporatingEnvironmental Concerns into Project Implementation 159 EnforcementAgencies and Processes 161 AnalyzingInstitutional Capabilities 161 CommonInstitutional Problems 163 Inventoryof Institutions 164 ConceptualFramework for Analysis 164 Methodsof InstitutionalAnalysis 165

Rocommendationsfor StrengtheningEnvironmental Capabilities 166 Guidelinesfor DesigningImplementable Solutions 166 vi

Recommendationsfor Strengtheningthe Environmental AssessmentProcess 168 Recommendationsfor National and Sectoral Levels 171

References 174

Annex 5-1. Common InstitutionalProblems 175

Chapter 6 Sedor and Finandal Intrmedar Lending and EnviromnmntalReview 177 Screeningof Loans to Financial ntemediaries 178 Planning InstitutionalResponsibility for EnvironmentalReview 180 Guidelinesfor AppraisingInstitutional Capacity 181 Optionsfor StrengtheningNational Policy or Instittions 182 Options for Meeting EnvironmentalAssment OperationalDirective Requirements 183 FinancingEnvironmental Review and Assessments 186

Conclusion 187

Annex 6-1. Examplesof Arrangementsfor EnvironmentalReviews in Financial IntermediaryCredit Operations 188 Annex 6-2. Examplesof Criteria for Bank Review of SubprojectProposas 190

Chaplr 7 Community Involvement and the Role of Nongovernmental Orgniations In EnvironmentalReview 191

World Bank Policy 191

Roles and Responsibilities 192

The Public ConsultationProcess 193

Maxims and Caveats 203

References 205

Annex 7-1. Public Consultationin the EnvironmentalAssessment Process 208

AbbuWiadAcronyms 213

3uvfb lmntA _ument- A Guide To Furthereadlng 217 viu

FOREWORD

The Sourcebookis desined to asist all those involved in environment assessment(EA). They includethe environmentLassessors themselves, project designersand World Bank task managers (IM). This focus supportsan importantpremise of EA, that sustainabledevelopment is achievedmost efficienldy when negative environmentalimpacts are idendfiedand addresed at the earliestpossible planningstage. Ihe Sourcebookprovides practial guidance for designingjust such sustainableBak-assisted projects.

Environmentalasesment teams conducn EAs for borrowing governmentsneed to know Bank policy regarding the project under considerationand which aspects of a project are of particular concern to the Bank. Ihis Sourcebookprovides specific informationand common ground for discussionamong those involved: EA professionals,the Bank and borrowing governments.

Project designersneed to lnow applicableBank requirementsand the environmentalimplications of their design choices. In addition, they need to understand the objectives of an EA team. Ihe Sourcebookprovides not only project-specificconsiderations, but establishescommon ground for general discussion,such as that regarding country strategy.

TMs are responsible for ensuring that borrowers fulfill Bank requirements for envronmental review, includingEAs where indicated. The Sourcebookprovides wistance for these advisory tasks, through discussionsof fundamentalenvironmental considerations (with emphasison those with relatively more impact); summaries of relevant Bank policies; and analyses of other topics that affect project implementation(e.g., finan iWermediarylending, communityinvolvement, economic evaluation).

Additionalaudiences likely to be interestedin the Sourcebookare other economicdevelopment and finance agencies, EA teams for non-Bankprojects, environmentalists,academics and NGOs.

The Sourcebookfocuse on those operations with major potential for negative environmentl impact, such as new infrastructure,dams and highways. Projects with relativelyless negativepotential, such as maintenanceand rehabilitation, are not examinedin detail at this stage; they merit a companion volume.

Bank policies and procedures, guiddines, precedents and 'best practice' regarding the environmenthave been scaered throughoutthe institution and its publications- or have resided only in the heads of Bank staff. Ihis Sourcebooknow collects this corporateknowledge into a single source. It is planned to be an easy-to-usereference manual, hence the overlaps and repetition. Its format is designedto facilitatethe frequent updating necessaryin a rapidly cbangingfidd such as the environmmeaL The Table of Contents is the most efficient entry point from which to locate secdons relevant for an individualuser. Commentsare invited at any stage from users on ways the Sourcebookcan better mmo their needs.

HOW TO USE THE SOURCEBOOK

The Sourcebookis designed to facilitatethe environmentalassessment process. It is intendedto be used by all involved in EA, primarily the EA practitioner, but also groups managingthem, project designers, task managers and environmentalistsin general. While much of the documentrefers mainly to project loans, policy-basedand adjustmentlending may be addressed subsequently. The Sourcebook is a reference manual which contains the informationneeded to manage the process of enviromental assessmentaccording to the requirementsof the World Bank's OperationalDirective on EA (OD 4.00 Annex A, October 1989). It is a long document because of the wide range of subjects addressed. However, no one user will need all of the informationin the book. Its contents have therefore been organized to be individuallyas easily accessible as possible, and there is a logical way in which a user can find the items that are pertinent to any particular lending operation. The Sourcebookfocuses on operations with more potential for negative env':onmental impacts, such as major new infrastructure, rather than on operations with less potential impact, such as rehabilitationand maintenance,important though these investmentsundoubtedly are.

The Table of Contents is the most important section of the Sourcebook. It will assist the user of this reference manual who may be concernedabout a specific operation (see the irrigation example below).

Chapter 1 is recommendedreading for anyone responsible for a Bank-supportedproject with potentially significant environmentalimpacts. It summarizes Bank EA requirements and outlines the Bank's environmentalreview process, from screening at the time of project identification,right through to post-completion evaluation. A number of 'boxes' illustrate different applications of EA in developmentactivities. OD 4.00, Annex A is appended to Chapter 1, along with a list of other Bank operational policy and procedural documentsrelevant to EA. Annex 1-3 offers a standard format for Terms of Reference (TOR) for an EA that TMs may want to tailor to their specific needs.

Chapters2 and 3 are 'issues' chapters. They provide informationand guidanceon a number of topics, some of which are likely to arise in any EA. The issues in Chapter 2 are primarily ecological, while those in Chapter 3 are social and cultural. The chapters can, of course, be read in their entirety, but there are two other ways to use them. Their subtopicsare shown in the Table of Contents, allowing the user to find them individually. They are also cited where applicable in the discussions of EA guidelinesfor specific project types, so that they can be referred to in the course of preparing to conduct a particular EA.

Chapters4, 5, and 6 are "methods"chapters: economics,institutions, and financial intermediary lending. They are not intendedto substitutefor the knowledge and skills of experts carrying out the actual EA. Chapter 4 gives Sourcebookusers an idea of what can be accomplished in the way of economic evaluation of environmental costs and benefits as part of an EA. Chapter 5 addresses institutionalstrengthening. It stresses the need to develop local capabilityin EA, identifiessome of the broader needs for building country environmentalmanagement capacity that an EA may disclose, and considers what may be realistically expected in either area from a single loan or credit. Chapter 6 discusses the particular problems associatedwith EAs of sector and financial intermediarylending. xii

'Me eet to which ies chaptersare importantto an individualuser dependson the typeof projectand the natre of eironmental managementin the borrowingcountry.

Chapter7, communiy involvementand the role of nongovernmentalorganizations in EA, exploresthe implicationsof OD 4.00, AnnexA requirenentsin this area and offersguidance on how to meatthem. Becau communityinvolvement is a new conceptnot only to someBank staff but also to officialsIn borrowingcountries, the chapteris recommendedreading for all environmentalassessors as well as task managers. Chapters8, 9 and 10 containsectoral guidelines for EAs. The chaptes begin with general considerationspertaining to EA in the sector(s)covered and with discussionsof particularlyrelevant topics(e.g., IntegraWtPest Management and Useof Agrochemicals"in Chapter8, whichconcerns the agriculturalsector, or plant siting in Chapter10, on industrialand energysector projects). The topics are shownin the Tableof Contentsand cross-referencedthroughout the Sourceboolk.The balance of each chaptercovrws specific types of projects,chosen primarily because they have potentiallysignificant environmentaimpacts. For each type, the projectis brieflydescribed (intended only to indicatethe featre of the projectwhich have environmentalsignificance), potential impacts are summm , and specialissues are noted that shouldbe consideredin an EA. Possiblealternatives to the projectare outlined,and discussionsof managementand trainingneeds and monitoringrequirements are added. Each reviewconcludes with a tableof potentialimpacts and the measureswhich can be used to mitigate them. SampleTerms of Referencefor the variousproject types are collectedin one sectionin each chapter. In the caseof a loanfor an irrigationproject to reclaimarid land,the user wouldat a minimum consultthe followingSourcebook sections:

Chapter1: 'The EnvironmentalReview Process" (if not alreadyacquainted with Bank EAs) Chaer 8: "Irrigationand Drainage' (forthe project-specificguidelines and sampleTORs) Chapter2: "Aridand Semi-AridLands' and "Landand WaterResource Management" (for a reviewof ecologicalissues) Chapter7: "CommunityInvolvement and the Roleof NOOsin EnvironmentalReview' (if not alreadyfamiliar with the topic in BankEAs) The noeefor other infrmation will becomeapparent; for example,tribal peoples, international waterways,now land stldoment,resaetlment, or institutionalstrenghtening may emergeas important concernsin the project,and the appropriateSourcebook sections can be consulted. xiii

ACKNOWLEDGMENTS

The Sourcebookstaff is indebtedto Bankcolleagues and consultantswho contributedto the first editionof TheEnvironmental Agsessment Source . Wewish to expressour gratitude to the members of the EnvironmentalAssessment Steering Committee for overseeingthis projectfrom beginning to end. We thank our colleaguesin the internationalcommunity as well as colleaguesin govenmunt and environmentalagencies for their commentson varioussections of the Sourcebook,and for sharingtheir own materials. EnvironmentDepartment: KennethPiddington, Director.

Environmental AssessmentSourcebook Staft: The Envir_nmentalAemen was compiledand editedby Robert Goodland,Thomas E. WaltonIII, ValerieEdmundso and Charlotte Maxey. EnvironmentalAssessment ImplementatIon Steering Committee: Gloria1. Davis,Chair, (ASTEN); CynthiaC. Cook(AFTEN); Colin Rees (ASTEN);Martyn J. Riddle(CENDD); J.A. Nichola Wallis (EDIAR);Bernard Baratz, Stephen F. Lintner(EMTEN); Cesar A. Plaza(LATEN); Suridor P.S. Dool (POPTR);and JamesListorti (Consultant). Chapter 1: The EnvironmentalReview Process: Author: ThomasE. Walton,m (Comnutant). Reviewers:Cynthia C. Cook(AFTEN); Walter J. Ochs(AGRPS); Arthur E. Bruestle,Gloria J. Davis and ColinRees (ASTEN); Thierry Baudon, Stephen F. Lintner,Spyros Margetis an PeterW. Whtford (EMTEN);Robert Goodland (ENVDR); and AlbertPrintz (Consultant). Chapter 2: Global and Cros-Sectoral lIsues In EnvironmentalRoview: Authors: Jan C. Post (ENVAP);Alcira I. Kreimer(ENVPR); Barbara Lausche (LEGOP); Barbara Brat, CharlotteMaxey, Peter Little,Byron Nickerson, Richard Stoffle, Jon M. Trolidalen,James Talbot and Thoma E. Walton III (Consultants).Reviewers: AgnesKiso, Walter J. Lusigl, RobertTillman (AFTEN); David A.P. Butcher,Gloria J. Davis, ColinRees and SusanS. Shen(ASTEN); Benard Buatz, StephenP. Lintner and PeterW. Whitford(EMTEN); Warren D. Fairchild(EMTAG); Robert Goodland (ENVDR); Alcira I. Kreimer(ENVPR); George Ledec (LATEN);Hans J. Peters(INUTD); Albert Printz and Lee Talbot (Consultants). Chapter 3: Socialand Cultural Issues In EnvironmentalReview: Authors: DavidA.P. Butcher, GloriaJ. Davis, AugustaMolnar and WilliamPartridge (ASTEN); Mona Fikri, JasperIngersoll, Peter Little,Pam Stambury, Richard Stoffle and June Taboroff (Consultants). Reviewen: MichaelM. Cornea, ScottE. Gugenheim(AGRPS); Poul A. Sihm(AFTAG); Cynthia C. Cook,Lee Talbot, Robert Tiilman (AFTEN);Valter Angell, Arthur E. Brueste, ColinRoe (ASTEN);Raymond 1. Noronha(ENVAP); Mary B. Dyson and MichaelP. Wells (ENVPR);John M. Courtney(ITFPS); Shelton F. Davis (LATEN);and AlbertPrintz (Consultant). xiv

Chapter 4: Economic Evaluation Methods in Environmental Review: Authors: Herman Daly, Ernst Lutz and Mohan Munasinghe (ENVPR). Reviewers: Valter Angell (ASTEN); Jeremy J. Warford (ENVDR); John Dixon (LATEN); and Albert Printz (Consultant).

Chapter 5: Strengthening Local Capabilities and Institutions: Authors: Gloria J. Davis (ASTEN); StephenF. Lintner (EMTEN); Barbara Lausche (LEGOP); and Thomas E. Walton m (Consultant). Reviewers: Jean B. Aden (ASTEN); Robert Goodland(ENVDR); Albert Printz (Consultant).

Chapter 6: Sector and Finandal Intermediary Lending and Environmental Review: Authors: Martyn J. Riddle (CENDD); Charlotte Maxey and Thomas E. Walton III (Consultants). Reviewers: Rolf Glaeser (AFIE); Paul Murgatroyd(ASIIE); Jean B. Aden (ASTEN); Kurt M. Constant (ASTIF); Paul A. Popiel (AFiTF); Robert D. Graffam and Rudolf van der Biji (CCMDR); Millard F. Long (CECFP); Khosrow Zamani (CEMD2); Khalid Siraj (CODOP); Fred D. Levy, Jr. (EAS); Delbert A. Fitchett (EDIAR); Josef Duster (EMIAG); Bernard Baratz (EMTEN); Mark R. Nicholson (INVDI); Samia El Baroudy (LA1TF); and Christophe Bellinger (MIGGU); MelanieJohnson and Albert Printz (Consultants).

Chapter 7: Community Involvement and the Role of NGOs in Environmental Review: Authors: Robert Goodland(ENVDR) and William Nagle (Consultant). Reviewers: Francis J. Lethem (AF2DR); CynthiaC. Cook (AFTEN); MichaelM. Cernea, Scott E. Guggenheim(AGRPS); Gloria J. Davis, David A.P. Butcher, William Partridge (ASTEN); Maritta Koch-Weser,Raymond J. Noronha, June Taboroff (ENVAP); Mary Dyson (ENVPR); David M. Beckmann(EXTIE); SheltonH. Davis (LATEN); Nany Alexander (Friends Committeeon National Legislation);Albert Printz (Consultant);and Diane Wood (World Wildlife Fund).

Chapter 8: Agriculture and Rural Development: Authors: Agnes Kiss (AFTEN); Robert Goodland (ENVDR); Anil Somani, Kirk Barker, Susan Braatz, Eugene Dudley, Peter Freeman, John Glenn, CharlotteMaxey, Byron Nickerson,James Talbot, and Thomas E. Walton III (Consultants). Reviewers: Poul A. Sihm (AFTAG);Cynthia C. Cook, Agnes Kiss, Robert Tillman(AFTEN); Guy J.M. LeMoigna (AGRDR); Shawki Barghouti, Walter J. Ochs (AGRPS);John F. Cunningham,Robert G. Grimsbaw (ASTAG);Valter Angell, Roger S. Batstone, Susan Braatz, Arthur E. Bruestle, Colin Rees (ASTEN); Martyn J. Riddle (CENDD); J.A. NicholasWallis (EDIAR); Warren D. Fairchild, PermanandGupta, Colin W. Holloway, Gert Van Santen (EMTAG); Bernard Baratz, Anders 0. Halldin, Stephen F. Lintner, and Spyros Margetis (EMTEN); Robert J. Goodland (ENVDR); Asif Faiz (INUTD); Daniel Gross (LAIAG); William D. Beattie, Michael J. McGarry (LATAG); Dennis Child (USDA); Albert Printz, James Smyle (Consultants); and David J. Parrish (Virginia Polytechnic Institute and State University).

Chapter 9: Population, Health and Nutrition; Urban Development; Transportation; Water Supply and Sewerage: Authors: Carl R. Bartone (INURD); Albert M. Wright (INUWS);Sandra Cointreau, Colin Franldin, Peter Freeman, James Listorti, Charlotte Maxey, Byron Nickerson, James Talbot and Thomas E. Walton m (Consultants). Reviewers: CynthiaC. Cook, Robert Tillman (AFTEN); Shirin N. Velji (AS21N);Roger J. Batstone, Arthur E. Bruestle, David G. Williams(ASTEN); Jean H. Doyen (AFTIN); Shirin N. Velji (AS2IN);Martyn J. Riddle (CENDD);A. Amir Al-Khafaji(EM21N); Mario A. Zelaya (EM3IN); Maurice W. Dickerson(EM4IN); Stephen F. Lintner, Spyros Margetis, Peter W. Whitford (EMTEN); Richard A. MacEwen (EMTIN); Carl R. Bartone, Michael A. Cohen (INURD); xv

Asif Fadz,Jdefr S. Guman, Ian 0. HoWe, Han J. Pers (INUTD);Albat M. Wright(INUWS); John M. Coutney (ffS); SheltonH. Davi (LATEN);J. Rausche(United State ArmyCorps of Engineers);Perry Davis ad AlbertPrintz (Consultants). Chaptr 10. ergwand Induty: Authors: Robert Goodlad (ENVDR);Hans Adler, Samdr Cohreu, EugeneDudley, Valerie Edmundson, Bansda Flicatein,Ken Kosky,Tom Loomis,JOhn Mulckhuy, JamesNewman, Byron Nickeson, Anil Somani, Jama Talbot,and Thoma E. Waltonm (Coultants). Rvswem: RobertTilman, (AFTEN);John E. Strougman,Pet va der Veen(AFTIE); UrI AhmadS. KrmA, Mihir Mtra, Chitopher Warddl (ASTEG);Roger J. Batstone,Colin Roa (ASTEN);M ty J. Riddle,Jen M.H. Tixhon(CENDD); David A. Crai (EM41E);Suman Babbar (CFSPS);Bead Bartz, Andes 0. HalIdin,and Stephen F. Lintor (EMTEN);Achilles Aam , Mog_ H. Fog (EMTlE); AnthonyA. Churchill(IENDR); John Homer (IENGU);Alvaro J. Covairubi, Hmn G. Garca (LATIE);and AlbertPrintz (Conultant).

CHAFPER1 THE ENVIRONMETAL REVIEW PROCESS

1. The purposes of the Bank's policy and procedures for environmentalassessment (EA) are to ensure that developmentoptions under considerationare environmentallysound and sustainableand that any environmentalconsequences are recognized early and taken into account in project design. Ihe precise operational meaningof 'sustainable' is still being clarified, but some guidelinesare suggestedin Annex 1-5. As concern has grown worldwideabout environmentaldegradation and the threat it poses to human well-beingand economicdevelopment, many industrialand developingnations, as well as donor agencies,have incorporatedEA procedures into their decision-making. BankEAs emphasizeidentifying environmentalissues early in the project cycle; designingenvironmental improvements into projects; and avoiding, mitigating, or compensating for adverse impacts. By following the recommended EA procedures, designers,implementing agencies, borrowers, and the Bank are able to address environmental issues immediately,thereby reducing subsequentrequirements for project conditionalitiesand avoiding costs and delays in implementationdue to unanticipatedproblems.

2. The Bank's EA policy is set out in OperationalDirective 4.00, Annex A (October 1989). Ihe full text of the EnvironmentalAssessment Operational Directive (EA OD) is provided in Annex 1-1. EA begins with screening, in which the Bank task manager (FM), in collaboration with the Regional Environment Division (RED), evaluates the project or project componentsaccording to the magnitude and sensitivity of the environmentalissues raised. Screening determines the type of environmental analysis to be conducted for the project, ranging from no further analysis to a full EA. EA or other analyses are the responsibilityof the borrower, but Bank staff are availableto assistwherever requested, such as in determiningthe scope of work and developingterms of reference (TORs).

ENVIRONMENTAL REVIEW, POLICIES,AND PIRNCIPLES

3. Throughout the remainder of this Sourcebook,the term "environmentalreview' refers to the process just described, from screening at identificationthrough evaluationafter the last disbursement,or after implementationis complete. Environmentalreview may entail preparation of a fill EA, a more limited environmentalanalysis, or no further analysis at all, depending on the results of screening.

4. The terms "environmentalassessment" or 'EA' identifythe more intensive examinationwhich is required for lending operations that have diverse and significantenvironmental impacts. Formal EAs should cover the topics listed in Annex A-1 to the EA OD, includingproject description,baseline data, environmentalimpacts, analysisof alternatives,mitigation plan, environmentalmanagement and training requirements,monitoring plan, interagencycoordination, and consultationwith affectedcommunities and local nongovernmentalorganizations (NGOs).

S. Environmentalreview is required for all Bank loans and credits except sectoral adjustmentloans and structuraladjustment loans. Sector investmentprojects and the investmentcomponent of hybrid loans and credits are subject to the enviromental review requirement. "Bank" in this instancerefers to IBRD and IDA; IFC has developed similar environmentalreview procedures appropriateto the nature of its investmentoperations.

6. EA is a flexible process, designed to suit the entire rangeof Bank projects and the different circumstancesof Its borrowing countries. Thereis no fixed inventory of issues to be examined in any 2 particularEA; instead,the Bank's procedurerelies on screening,environmental reconnaissance, and discussionsbetween Bank and borrower to identifythe criticalissues and to establishthe scopeof the EA. The EA OD also calls for interagencycoordination and consultationwith affectedgroups and local (NGOs)at an early stageto ensurethat all significantenvirommental issues are covered.

7. "Enviroment"is broadlydefined by the Bankas 'the naturaland socialconditions surrounding all...mankind, and includingfuture generations' (as amplifiedin OperationalManual Statement [OMS] 2.36, para 3). The EA OD reflectsthis scope in settingprocedure for evaluatingimpacts on health, culturalproperty, and indigenouspeoples as well as on the naturalenvironment. Sociocultural effects of projects,such as new land settlement,involuntary resettlement and induceddevelopment, are also to be includedin the environmentalreview.

8. The Bank directiveintegrates EA or other enviromnentalanalysis into project preparation, includingproject selection, siting, and designdecisions. In mostcases, an EA shouldform part of the overall feasibilitystudy. This facilitatesincorporation of the findings into selectionof sites and technology,designs and implementationplans. For projectswhich would have majorenvironmental impacts,the Bankrecommends thatthe borrower retain independent experts not affiliatedwith the project preparationor feasibilitystudy team to conductthe EA. However,specialists responsible for the EA as a separatetask shouldwork closelywith the feasibilityand designteam. 9. EAs providenumerous opportunities for coordinatingenvironmental work in the country,and shouldbe linkedto otherenvironmental strategies, action plans, and free-standingprojects. EA provides a formalmechanism for interagencycoordination and for addressingthe concernsof affectedgroups and localNGOs. EA canhelp strengthen environmental management capability in the country,and Bankstaff shouldtake advantageof opportunitiesto use it for thatpurpose.

ENVIRONMENTAL REVIEW AND THE PROJECT CYCLE

OveraU Relationship to the Project Cycle

10. TheBank's environmental review is intimatelylinked to the projectcycle. As Figure 1.1shows, environmentalreview begins with screening at the timeof projectidentification. Scoping and preparation of the EA occur in tandemwith or as integralparts of the pre-feasibilityand feasibility studies. The final EA is sent to the Bankby the Borrowerprior to appraisal.If the EA is satisfactoryto bothborrower and the Bank, it formsthe basis for the RED's decisionon enviromnentalclearance and the environmental conditionsto be negotiatedwith the borrower,some or all of which are incorporatedinto the loan agreement.The EA may be adequatefor the purposesof appraisal,but the Bankreview may reveal needsfor additionalanalyses before clearance can be givenand negotiationsundertaken.) Supervision includesmonitoring the project'senvirommental performance and compliancewith relevant conditions agreedon betweenthe Bankand the borrower. Afterimplementation is complete, the ProjectCompletion Report(PCR) includes evaluation of both the impactsthat actuallyoccurred and the effectivenessof mitigationmeasures. The OperationsEvaluation Department (OED) again audits selectedprojects possiblysome years after the PCR. Owe-

FEAS~~~~~~~~~'

/~~~~TDE l v XEs

CREATIVE DESIGN PHASE mAILED DESJQ|

|~~ /at"_tsc| by IMPLE£MENTgATIONPhIASE/ yiz / \u asp - Divaam 0ots dP ao ly ""c.Wc* / o NChw

*Flure 1.1. Enronment Ament and the Project Cydle 4

ll. Environmentalscreening is the responsibilityof the TM, with adviceand assistancefrom Ihe RED. An essentialpart of screeningis to identifywhich aspects of a projectare not environmentaly significantand whichtherefore can prudentlybe droppedfrom further consideration. Its purposesae to ensurethat the appropriateamount of attentionis devotedto the enviromentalaspects of the proposed projectfrom the very outsetof the projectcycle, to identifyas muchas possiblethe key enionmenl issues,and to determinethe type of environmentalanalysis which is neededso that those issues(and otherswhich may arise) canbe addressedeffectively in projectplanning, design, and appraisal.

12. Screeningis carriedout at the time of identification.Projects are assignedto one of four categorieson the basis of the nature, magnitudeand sensitivityof the environmentalissues, and so designatedin the InitialExecutive Project Summary (IEPS).

CategoryA: EA is normallyrequired, as the projectmay have diverse and sigificant environmentalimpacts.

CategoryB: More limitedenvironmental analysis is appropriate,as the projectmay have specificenvironmental impacts.

CategoryC: Environmentalanalysis is normallyunnecessary, as the projectis unlikelyto have significantenvironmental impacts. CategoryD: Environmentalprojects for whichseparate EAs are notrequired, as environment is a majorfocus of projectpreparation. 13. AnnexA-3 of the EA ODlists the typesof projectsor componentswhich commonly fall into each category. Cetain types of projectsalmost alwaysfall into a particularcategory - thermal and hydropowerdevelopment, for example. In other projecttypes, the categorydepends on scale and on other factorssuch as the statusof environmentalmanagement capability in the country. Largescale irrigationand drainageprojects are usuallyCategory A, whereassmall-scale projects of the sametype mayfil intoCategory B. CategoryB projectsare a diversegroup, and the scopeof the environmental analysismay vary - from a detailedstuly of certaincomponents that is almostas complexas that for an A" project,to a routinecheck that projectdesign conforms to applicablestandards. CategoryC projectsmay not be entirelydevoid of environmentalimpacts; in a healthproject, for example,the desip mayhave to providefor disposalof medicalwastes. 14. Otheroutputs of the screeningprocess are the key environmentalissues, the type of environmentalanalysis recommended, and a prediminaryschedule for conductingthat analysis. Tbis Information is incorporatedinto the IEPS and discussedat the IEPS meeting. The meetingresults in decisions regardingtype, timing,and majorissues for the environmentalreview, unless those decisions have to be deferred pending receipt of additionalinformation. It is helpful in reviewingthe environmeal informationto includea map in the IEPS showingthe geographicallocation of the proposedproject. 5

15. Results of screening are also reported to the Bank's executive directors in the Monthly OperationalSummary (MOS). Overviewsheets (Table 1.1) have been designedto record the information necessary for preparing the MOS. In addition to basic data on the project and a description of its principal components, the sheets record the project category (A,B,C, or D), the major environmental issues, proposed actions (such as special studiesto be conducted,environmental components to be added, other environmental work to be done in the sector), the projected date for completion of the enviromental assessmentor other analysis, and a report on the current status of that analysis. The TM prepares the draft overview sheet, which is then reviewed by the RED. Once any revisions are agreed and made, the overview sheet is cleared by the Sector OperationsDivision (SOD) or Country Operations Division (COD) chief, signed by the RED chief, and forwardedto be processedfor the next MOS. The complete overviewsheet appears in the MOS, for Category A projects; only header informationis shown for Category B. Overviewsheet informationis updated wheneverthe ExecutiveProject Summary(EPS) is revised, wheneverthe project categoryis changed (for instance,because a componentwith significant impacts is deleted) or whenever there are other significant changes in the informationon the sheet. Overviewsheets are made final at the Final Executive Project Summary (FEPS) stage.

16. In somecases, screeningrequires reconnaissanceby Bankenvironmental specialists or consultants in order to develop a full understandingof the pertinent environmentalissues and the items which need to be includedin any further enviromental analysis. Where site visits are necessary, as is normallythe case in sensitive areas or with complexenvironmental issues, REDs assistthe TM in preparing terms of reference (TORs)for the mission. Often a product of this mission is a draft of the TORs for the EA or other environmentalanalysis. Annex 1-2 contains sample TORs for a reconnaissancemission.

17. It is good practice for the TM to keep the borrower informed of the initial results of the Bank's screening. The EA OD specifies that the Bank should review the results with the borrower, especially with regard to the type of environmental review required and its general scope, schedule, and implementingarrangements.

Preparngfor an Environmental Assessment

18. It is the borrower's responsibilityto prepare TORs for the EA or other analysisand to obtain the necessary experts to carry it out. The Bank is availableto assist the borrower as necessary. The task of determining the scope of the EA is critical, and is therefore one in which the Bank normally participates. It is important not only to cover the environmentalissues known at the inceptionof the study, but also to allow breadth and flexibilityso that new issues can be identified and, if significant, addressed. However, it is also important to frame the investigationso that time and resources are concentratedin the areas where potential impacts are likely to be found. There are many examplesof EAs in which massive amounts of money and effort were expendedin collectingand reporting data on every aspectof the environmentand producingvoluminous reports in which there was much insignificant and irrelevant informationthan there were findingsof significance. The Bank intendsthat EAs be useful to decision-makersin the countryand to Bank staff in determiningwhether or not to proceed with a given project and howto implementthe project efficiently. This means that the work must be focusedon the issue which are critical to such decisions. 6

Table 1.1. Exampleof a CompletedOveriew Sheet

EUVIROEKUTAL OVIRYIEV Of PROJCTS In TEE IBRD1tDA LEDING PROGRAM

PROJECT IDt 4SRIPA082 COUNTRY: SRI LANKA FT AND STATUSs FY91 PROJFCTt Local GovernmentDevelopment SECTORt Infrastructure/Urban EST BOARD DATE, February 91 ZST APPRAISAL DATEs May 1990 TOTAL PROJECT COST: US$36.0 m MANAGING DIVISIONS ASlIN LOAN/CREDIT AMOUNT: US$25.0 m TASK MANAGtERPatrick McCarthy

IWVIROMIEETALIMPACT CLASSIFICATION:B PROJZCT DATE FOR COMPLETIONOF EWIVIOUIENTALASSESSHKT To be determined during sub-project appraisal, as necessary. ______--_---_--______MAJOR PROJFCT CONPONZNTSiSupport to the restructuredLocal Loans Development Ftnd (LLDF) as a vehicle for financing the investmentrequLrements of Local Authorities (LAs). Project will consist of (a) line of credit to the LLDF; and (b) technicalassistance and training for LAs. Subloans would finance (a) social infrastructureprojects, e-g., roads and sidewalks,parks and playgrounds,drainage, street lighting; and (b) revenue generating projectf. e.g.. offices, markets, trade centers and slaughterhouses.

------.--- _------__------__- MAJORL9NVIRON01ENTAL ISSUES. A number of sub-projectswhilch may be proposed for financingwould likely have adverseenvironmental impacts. An integrated part of the sub-projectappraisal process by the LLDF, and by the Bank over the specific free limit sub-loan,would be an environmentalappraisal. The loan proposal would have to be modified to the extent necessary to accommodate environmentalissues before a loan is granted.

PROPOSID ACTIONSt Where loan proposalswould clearly deonAstrate an adverse environmentalimpact if implemented,the urban local authoritywould be requested to amend its proposal aecordingly. This could take into account, for example, providing adequate sanitation for offices, market complexes etc., or re-siting slaughterhouse..

STATUS OF XA (IF AIT): A draft environmntal Lssues paper for Sri Lanka has boen prepared. The first report would likely include recoemendationsfor a strategy to be adoptedby the Covernment to prioritizeenvironmental inmestments.

…______...___._...______.____.___.__ RDYIKS: Overall,the projectis expectedto have a positiveenvironmental impactas the LLD? appraisalprocess will Lncludeaddressing environmental isue.s.

SIGNATURE. SIGNATURE: Gtvrie 0 0'J'S lain?.* ristie GloriaDavis Chief.Infrastructure Operations Division Chief,lEviroantsl Division Asia Country Department One Techancal Department 7

19. In determiningthe scope of an EA, it is useful to consultwith sources besides the borrowe .e implementingagency or organization,and the technicalexperts. In addition,other governmentagen can provide valuable perspective. They often have special informationabout the region and px9pseA site(s) of the project, and may be able to identify potential intersectoral impacts which shouid U examined. Consequently,the EA OD recommnendsthat an interagencymeeting be held soon afer e decision is made to prepare an EA, and that at least one more be held when the EA is completed submitted for review by the government. At the initial meeting, participants should a.e$ on arrangementsfor ongoing coordination.

20. The concernsof communitiesaffected by the project and of local nongovernmentalorganiomie (NGOs) with environmentalinterests also should be covered in the EA. These groups can provide informationuseful for the EA; in fact, sometimesthey are the only source of detailed knowledge*out the local study area. Chapter 7 provides guidance for discussionsobtaining the informed vie-as of affected communitiesand for involvingthem and local NGOs in EA (see para 51).

21. An EA may already have been developedunder official proceduresof the countryor a co'@,r to the project. Such EAs shouldbe examined and where elements appear to be missing or inadeume., Bank TMs may call for selective and enhancing studies. Where the Bank and another donor are r financinga project, TMs should clarify at the beginning which EA procedures--ofthe borrower, Ba* or co-donor-will be used to ensure that EA OD requirementsare met.

22. TMs, assistedas necessaryby RED staff, shouldreview the detailed TORs before the EA begins, payingparticular attentionto the provisionsfor interagencycoordination and communityinvolvem.e DT to the design of baselinedata collectionprograms. The latter are often the most expensiveaspect of .EQ and borrowersshould seek the adviceof experts in design of environmentalor sociologicaldata colle&wen programs to avoid three pitfalls: (a) collectingdata that are not relevant to the decisionsto be mre, ( samplingthe correct parametersbut timing the observationsincorrecdy or making an insufficientnumbN of observationsfor an acceptablerepresentation of the phenomenabeing studied, and (c) omitfi3r Ney parameters from the program. Avoidingthese pitfalls at the outset minimizesthe risk of reaching e of a program, which might extend over an entire year or more, and discoveringthat the expendedtlwe and money have been wasted. Annex 1-3 contains a sample of a 'generic TOR' which can be use preparing project-specificones.

23. The TM should also review the EA implementationschedule with the borrower, to deteimie whether it is consistent with key decision points in project preparation and provides for ade& e integrationof findings into feasibilitystudies and designs. The Bank can also advise borrower 0'3 obtaining consultantsand funding for EA, as discussed later in this chapter (paras 58-71).

Conducting the Environmental Assessment

24. Cafrying out the actual EA is the borrower's responsibility. The governmentor project spentar arranges for the EA; they often select consultantsor an institutionto conduct the analyses. Waen ie i$ necessary to use internationalexperts to supply skills not availablein the borrowing country, the Ik encouragesinvolvement of local consultantsas well, in order to take advantageof local knowledge s5A to strengthentheir capabilityfor future EA work. 8

25. EA is most effective when even preliminaryfindings are made availableearly in the preparation process. At that time, alternativeswhich might be desirable from an environmentalviewpoint (sites, technologies, etc.) can be considered realistically, and implementationand operating plans can be designedto respond to critical environmentalissues in the most cost-effectivemanner. Later on, maling a major design change or selecting an alternative proposal-or deciding not to proceed at all with a project-become very expensive. Even more costly are delays in implementationof a project because of enironmental issues which were not consideredduring design. Consequently, integrationbetween EA andfeasibility studies and designwork is essential. (See Chapter7 for furher discussionof dissemination of EA findings.)

26. The EA implementationplan shouldprovide for frequent coordinationmeetings between EA and feasibilitystudy teams to exchangeinformation on environmentalissues and the responsesthey require. Preliminary drafts of the key sections of the EA and working papers on specific issues are also useful modes of communicationbetween the teams, especially when key decisions are made as preparation proceeds. Most successfulEAs have thorough mid-term reviews.

27. The TM should agree with the borrower on which drafts, if any, the Bank wishes to see, and when. At a minimum, however, the TM should review a final draft, with RED assistance, in order to scertain that the issues of importance to the Bank have been addressed, to obtain any clarification noded, and to provide other commentsto the borrower in the interest of having informationon all the critcal environmentalissues ready before appraisal. Since, in practice, some final EAs may be available only shortly before appraisal,preliminary review at an appropriateinterim stage (for example, when the significantenvironmental issues are all identifiedand mitigatingmeasures described) is highly desirable * well. This will ensure that the scope of the EA is correct, that communicationbetween designers and the EA team is occurring, and that changes are actually being made in the project to address evironmental concerns. In general, most major concerns become Inown within the first few months; the remainder of the EA period focusses on mitigatingmeasures.

28. The EA schedule must specify submission of the final EA report to the Bank for detailed examinationprior to the start of project appraisal. Annex A-1 of the EA OD is a sample report outline. As generalguidance, the main text of the report shouldnot exceed 100 pages. The report should provide an Executive Summary highlighting the significant findings and recommended actions (in order of importance), in relativelynon-technical language and not more than 20 pages in length. More detailed information, such as summaries of baseline data, model results, records of community involvement acdvities and reports of specialstudies, shouldbe placed in a separatevolume as a technicalannex to the main report.

29. The Bank recommendsthat interim EAs and related studiesbe releasedto interestedagencies and to affectedcommunities, and to NGOs involvedin project preparation. It encouragesmember countries to prepare EAs on this basis. However, as the EA is the property of the borrower, public release of the docment can only be made with the borrower's consent. 9

Environmental Assment Review and Project Appraisal

30. The borrowershould review the EA to ensurethat the consultantsor agencystaff followed the TORsand met both Bank and countryrequirements. The TM, assistedby RED staff,should also reaiew Iheadequacy of the EA report,checking especially the followingitems:

* Werethe TORsfollowed?

* Are the itemsrequired by the EA OD included? •Is the ExecutiveSummary adequate? Decision-makers may read only the summary,therefore it must present the significantimpacts Cn order of importance),clarifying which nr unavoidableand whichare irreversible;the measureswhich can be takento mitigatethem; the cumulativeeffect of impacts;and the requirementsfor monitoringand supervision. * Are recommendationsclearly stated in the ExecutiveSummary?

* s the projectoutline descriptioncomplete, insofar as the aspectswhich can affect the environmentare concerned?

* Are projectalternatives described? i s the baselinestudy section in the main reportconcise and useful to readerswho are not specialistsin the scientificdisciplines covered? Doesthe sectiongive an overallpicture of presen conditionsand trends,and includeongoing and proposeddevelopment activities in the studyarea? Does it providecomments on the qualityof the data and the completans of the database? * Is there considerationof probabilityin the section in which impactsare predictedand evaluated?Are potendal impacts mentioned that wereexpected a pilorl but not found? Are significantimpat analyzedin more detail than less significantones? Is sufficient justificationprovided for droppingtopics from further consideration?

• Do mitigatingmeasures both control advere impactsand enhanceproject benefits? Are the institutionalarrangements for implementingthe measuresdefined? Are the costs of implementingall its recommendationsadequately budgeted in the costtables? * Wheremonitoring programs are described,are the reasonsfor and costs of the monitoring activitiescovered? Is there a descriptionof the institutionalarrangements for carryingout the work, evaluatingthe results,and initiatingany necessaryaction to limitadverse impact disclosedby monitoring? * Willthe projectbe incompliance with Bank directives and policies on environmentalmatters, such a involuntaryrsttment, culturalproperties and wildlands? * Are proposa for nstitutionalstrongohning and trainingadequate? 10

• Is there documentationof communityinvolvement, including an overview of the issues raised and their disposition?

• In general, is the report free of jargon, and are technicalterms defined where they occur or in a glossary?

I Where existing databases, planning studies, other EAs, scientific papers, etc., are used as informationsources, are the referencesgiven?

31. Bank staff review in detail the EA findings and recommendationsand include in the Final Execatve Project Summary(FEPS) a summary of the EA status, the major environmentalissues, and how those issues have been or will be addressed. It notes any proposed enviromental conditionalities.

320 The appraisalmission reviews the EA with the borrower, resolves any remaining environmental quions, assesses the capacity of country institutionsto implementEA recommendations,determines wheher the EA findings have been properly addressed during project preparation, and discusses anironmentalconditionalities to the loan agreements. The Staff AppraisalReport (SAR)and President's R6 (PR) contain summariesof the EA and its main findings. An annex to the SAR should provide a mare complete summary, including(but not limitedto): baseline conditions;alternatives considered; sifit impacts and preventive, mitigative or compensatory actions; capability of environmental iMtn$tionsand steps to strengthenthem; environmentalmonitoring arrangements; and consultationswith aff&u6 groups and local NGOs. Any necessary changes in country or agency environmentalpolicy shm 1sobe stated in the SAR.

33. The RED chief issues formal environmentalclearance for the project, based on the information prceutad in the SAR and the EA. Clearance is a necessaryprerequisite to the RegionalVice President's authoizaetionto begin negotiations. In the negotiationsthemselves, the issues and actions critical to .ewyizoaental soundnessand sustainabilityin the project are discussed, and appropriate covenants are inciWaracd intoloan or creditdocuments.

Implementation and Supervision

34 EA recommendationsprovide the basis for supervising the environmentalaspects of project iploAamitation. The borrower is obliged to implementmeasures to mitigate anticipatedenvironmental ipa to monitorprograms, to correct unanticipatedimpacts, and to comply with any environmental corutioalities. Procedures for start-up and continuingoperation of the project will normally specify then aareements, as well as measures to protect the health and safety of project staff. Proper staffing, sUftaiaining, and procurement of spare parts and equipment to support preventive, predictive and wicxeavzmaintenance are also necessary elementsof implementation.

35S Supervisionis an essentialaspect of the Bank's environmentalreview, since the environmental dwn& decision is based in part on the assumptionthat mitigatingmeasures and other provisionswil begiy implementedand will be effectivein avoidingor controllingadverse impactsthat might otherwise 11 have made the project unacceptablefor Bank support. Supervisionis carried out through a combination of the following:

* reports required from the borrower on compliancewith environmentalconditionalities, status of mitigatingmeasures, results of monitoringprograms and other environmentalaspects of the project; . oversight by line agency with responsibility for the sector, and/or by environmental management,land use control, resource conservation,or permit-issuingagencies at the local, regional or national level; * early warningby the borrower's staff about impendingunforeseen impacts; * Bank supervisionmissions to review implementationof environmentalprovisions, corrective actions taken to respond to impacts, and compliancewith environmentalconditionalities, includinginstitutional strengthening components; and * site visits by Bank environmentalspecialists or consultantsas required to supervisecomplex environmentalcomponents or respond to environmentalproblems.

36. Annex D-2 of OD 13.05: "Project Supervision," contains guidelines for supervisionreports. Paragraph 36 prescribes the general content for the section on environment. In reporting on the environmentalaspects of projects, Bank staff should cover critical environmentaldata (e.g., violations of environmentalquality standards or pollutant discharge limits), descriptions of impacts observed, progress on mitigatingmeasures, the status of monitoringprograms (especiallythose for detecting new impacts), progress on institutionalstrengthening, and adherenceto environmentalconditionalities.

37. OD 13.05 encourages TMs to exhaust all means of persuasion before resorting to contractual remedies when the borrower is not meeting obligationsof loan, guarantee or credit agreements. Such obligationsinclude implementationof environmentalcomponents or mitigationmeasures and adherence to environmental conditionalities. The contractual remedies available include informal or formal suspensionof disbursementsunder loans or credits, cancellationof all or portions of outstandingloan or credit balances, and accelerationof maturity. These are described in Articles VI and VII of 'General ConditionsApplicable to DevelopmentCredit Agreements"and "GeneralConditions Applicable to Loan and Guarantee Agreements." OD 13.40: "Suspension of Disbursements" and OD 13.50: 'Cancellations" set forth guidelinesand procedures to be followed in exercisingthese remedies.

Completion and Evaluation

38. At the conclusionof a project (after the last disbursement),the PCR is prepared and submitted to the OperationsEvaluation Department (OED). Tle borrower is responsiblefor submittinginformation that will be the basis of the report. It is importantthat environmentalinformation be includedso that the Bank's environmentalreview process can be improved as necessary, and progress toward funding of projects that are enviromnentallysound and sustainablecan be monitoredand ma_inned. The EA OD requires that the PCR includea descriptionof the impactsthat actuallyoccurred, a determinationfor each as to whether or not it was anticipatedin the EA report (if one was required), and evaluationsof the effectvenes of mitigatingmeasures and of institutionalstrengthening and training. Additionalitems usefiMin evaluatingenvironmental review include: 12

* discussionof the extent to whichrecommendations of the EA or other environmentalanalysis were followed; * an assessmentof the extentto whichenvironmental review influenceddecision-making during project preparation, appraisal, negotiation, and implementation; * particular problem areas to be consideredin future environmentalreview work; * an assessmentof project operation and maintenance, as it affects the environment (e.g., functioningof pollutioncontrol equipment,compliance with effluentor emissionlimits, status of staff training programs); and * evaluationof the benefits which resulted from environmentalcomponents of the project.

REGIONAL AND SECTORAL ENVIRONMENTAL ASSESSMENTS

39. EA proceduresmay be appliedto developmentactivities other than specificprojects. EA can be adapted to regional or sectoral scales and used to assess impacts of sector-wide programs, multiple projects, or developmentpolicies and plans. A regional or sectoral EA can reduce the time and effort required for project-specificEAs in the same region or sector by identifyingissues, initiatingbaseline data collection,and assemblingexisting data in advance,or in certain cases, by eliminatingthe need for the project-specificEA altogether.

Regional Environmental Assessments

40. RegionalEAs are desirablewhen a numberof developmentactivities are planned or proposed for a relativelylocalized geographic area, such as several projects in one watershed (see Table 1.2). They serve a number of useful purposes, for example:

e definit on of study areas in terms which make environmentalsense (e.g., river catchment basin, airshed, coastal zone); * selectionof sustainabledevelopment patterns from alternativesin a region under development pressure (e.g., the coastal zone), or being programmedfor developmentfor the first time; * identificationof cumulative impacts of different activities (e.g., the combined effects on receiving water qualityof the effluentsof several municipaland industrialtreated wastewater discharges),and design or implementationschedule changesand other measures to avoid or mitigatethem; * identificationof environmental interactions or conflicting demands on resources among projects in which the impacts of one project may reduce the benefits of another, and of measuresto avoid such a result; * formulationof criteria for environmentallysustainable development in the region, including treatment of environmentallysensitive areas and resources, site selection criteria, design criteria, region-specific measures to mitigate adverse impacts, and land-use planning guidelines; * identificationof monitoringdata needs and definitionof data collectionprograms to support EA and developmentdecisions; and * examinationof policy alternativesand institutionalelements needed for achievingsustainable developmentin the region. 13

Table 1.2. Regional Environmental Assessment for Exploration and Production of Hydrocarbon in Coastal Alabama and Miissippi (USA)

The purposesof this EA were to identifythe effectsof genericunit actionsand the cumulativeimpacts of the issuanceof permitsfor hydrocarbonresource development projects in a coastalarea overa thirty-yearperiod and to expeditethe permitissuance process. Generic unit actionsinvestigated included site preparation,well completion,gathering system construction, and gas treatmentfacility operation. Alternativemeans of undertakingeach action were considered. Environmentaleffects were determined for each unit action,and thesewere used as the basisof the cumulativeimpacts analysis. The U.S. ArmyCorps of Engineerswas lead agency;12 other agenciesparticipated. In the cumulativeanalysis, it wasassumed that the impactswould be a fumctionof the differentunit activitiesoccurring together at varioussites in the regionat one time. A number of developmentscenarios were used in this analysis,not a prodictionsbut rather a8men to establishlimits within which future developmentwould occur. Potentialadverse impacts includedloss of wetlandvalues for sites not locatedin a waterway(unless the altenativesof usingplatforms for drillingand trestlesfor acce8swere selected),removal of vegetationfrom pipelinerights-of-way, temporary turbidity with possible damage to oysterand sa gras beds, and lossof benthichabitat at openwater drilling and pipelinesites extending for one to two year after completionof construction.Operation of facilitieswould contribute to air pollution.Los of well controlor oil pipelinerupture could have an extensiveimpact on regionalecosysms, commercialand sport fishing,and tourism. Loss of ga well controlor gS pipelinertre couldreeaso hydrogensulfide, a hazardto publichealth and safety,and to nearbyplat and animalcommunities. The EA concludedwith a numberof products:

* a set of impact-limitingassumptions applicable to all sites, e.g., no dicharge of cuttings,drilling fluids, formation wators * a set of ninegeneral permit conditions which, If met, developmentto procod without sitespecificpermit application . a designad part of the study area in which no genera permit would apply, requiringsite-specific permit applications * a list of environmentallypreferred drilling and constructiontechniques

* a regionalmonitoring program 14

41. Regional EAs fit into the Bank project cycle in a number of ways, dependingon which of the above purposes are being met. They can:

* serve as planningtools, assisting in the identificationof environmentallysound projects; * contributeto implementationstrategies which take into accountthe combinedimpacts of a set of projects alreadybeing pursued; and * assist in projectpreparation by supportingplans and designs whichare sensitiveto cumulative impacts, synergisms,interactions, and competitionfor natural and socioculturalresources.

42. RegionalEAs contributeto the efficiencyof project preparationby reducingthe time and effort spent on project-specificEAs. At the least, a regional EA will have defined the major issues that need to be considered in studying individualprojects (and perhaps prepared the TORs for the studies), and will have assembled existing environmentaldata. It may also have initiated monitoring programs to remedy data deficiencieswhich would otherwisedelay the project-specificEA. When the regional EA has developedcriteria and guidelinesfor individualprojects and institutionalarrangements for ensuring their implementation,the need for project-specificEAs may be eliminatedaltogether, or reduced to more limited studies of environmentaleffects unique to the individualprojects.

Sectoral Environmental A_ents

43. Like regional EAs, a sectoralEA can be used to examine the cumulativeimpacts of multiple projects planned in the same sector. SectoralEAs usually address the mixture of projects proposed for the next few years. For example, in a power sector, a program includingthree coal-fired plants, two major hydroelectricstations, a loss reduction component,and a major institutionbuilding and training component may be studied. They may address several large Category A projects together (e.g., thermoelectricpower), or a number of small projects (e.g., run-of-river hydropower) that may not warrantEAs individually. When appliedin this way, sectoralEAs offer the same advantagesas regional EAs and have a comparablerelationship to project-specificEAs. They can, in some cases, substitutefor project-specificEAs, by producing guidelinesand criteria for the design and implementationof projects in the sector. More often, they will result in identificationof the major environmentalissues in the sector and developmentof a data base, enabling project-specificEAs to proceed more expeditiously. (See Tables 1.3 and 1.4 for examplesof sectoral EAs.)

44. A variant of this application,often called a 'programmatic' EA, is the use of a sectoral EA to asses the impacts of a sector-wideprogram, such as locust control. These are programs that will be replicatedat a variety of locations,and for whichthe impactsare more or less the same at any location (see Table 1.3). A programmaticEA may includeamong its outputsguidelines for conductof the activity and site-pecific questionswhich must be answeredbefore initiatingthe activity.

45. Tbe other purposes of sectoral EAs are somewhatdifferent:

review of the environmentalimpacts of sector investmentaltenatives, e.g., centralizedor decentralizedwastewater treatment, expansionof existingpower generation capacityversus consuction of new facilities; 15

Table 1.3. Pakistan DrainageSector Environmental Assment

The government of Pakistan has undertaken a 21-month sectoral EA of its national drainage program, with grant funding from Japan and leadership by the Water and Power DevelopmentAuthority. Its products are to be (a) an environmentalassessment for a national drainage program which is intended to relieve widespreadwaterlogging and salinity problems, and (b) a "framework concept" for the program, emphasizinginstitutional arrangements and proceduresto facilitatethe efficientplanning, design, implementation,operation and maintenance of drainage schemes.

The scope of work requires the EA consultantto address engineering, environment, health, institutions,policy and programs in the entire Indus Basin, in all areas with existingand proposed irrigation and drainage facilities, and in all natural resource areas adjacent to or affectedby irrigation and drainageprograms and projects. The consultantmust evaluateexisting drainage systems, estimate future drainage requirements,and predict significantimpacts, such as water quality changesin receivingwaters, health hazards from irrigationor drainagesystems, and deteriorationof land quality resultingfrom irrigation. The consultantis required to identify environmentally acceptable drainage alternatives and possible mitigation and enhancement measures, includingreuse of drainage water and treated effluentto minimizedrainage.

Institutional components of the EA are to be recommendationson linkages between enviromnentalagencies, improved sustainability in terms of cost recovery and effectiveoperation and maintenance, planning procedures for drainage systems, and training programs. The 'framework' emphasizesflexible approaches to improve efficiency in identification,planning, construction,operation and maintenanceof drainage facilities.

The EA core team is composed of a team leader (planner, engineer, or economist), a drainage engineer, a resource economist,an institutionalspecialist, and an ecologist. Together, they account for 165 of the estimated 220 staff weeks. Other speciists, with participation ranging from two to seven staff weeks each, include a chemist, microbiologist,soil scientist, hydrogeologist,training specialist, social scientist,environmental health specialist, environmental engineer, anthropologist,irrigation engineer, and entomologist.

evaluation of the environmentaleffects of sector policy changes, e.g., implementationof industrialwaste minimizationstandards, pricing water to reflecttrue cost of service, requirng energy conservationto offset new generatingcapacity needs, modificationof criteria for reuse of treated effluents, differentiationbetween new sources and existing sources in settiag air emision standards, and use of alternativefuels for fossil-fuelpower and heat plants; and 16

Table 1.4. NigeriaMulti-State Roads Project SectoralEnvironmental Assessment

TheNigerian road network consists of interstatehighways managed by the FederalMinistry of Works and Housing (FMWH),secondary roads managedby State Ministriesof Work (SMOWs),and rural roadsadministered by LocalGovernment Councils. Internationalassistance has concentratedon rural roadsin agriculturaldevelopment projects and on the Federalhighways. Ihe Statesystem includes 30,000 kan of secondaryroads, 10,000km of whichare paved. Many of them,constructed or last upgradedin the 1970s,urgently require rehabilitation followed by an effectiveprogram of routinemaintenance. The Governmentof Nigeria is preparinga project for a five-year programof road maintenancein selectedstates. It wouldfinance repair of priorityroads, pavingof high-priority unsurfacedroads, routinemaintenance, and an institutionaldevelopment and trainingcomponet. ITe projectis beingprepared by a CoordinationUnit within FMWH, in collaborationwith selected SMOWs. An environmentalreconnaissance was conductedby a consultantand staffmembers from FMWHand FEPA (the NigerianFederal Environmental Protection Agency), to providefocus to projectpreparation studies. It establishedbaseline conditions in the selectedstates, identified the enviromnentalissues associated with roadupgrading/rehabilitation and maintenancein each state, and recommendedways in whichEA could be incorporatedinto the projectplanning process. Recommendationsincluded: (a) surveyingand enviromentalscreening and rankingof proposed subprojects;(b) preparation by FEPAof EA guidelinesfor secondaryroads; (c) preparationof EAs for subprojectslikely to have a majorimpact; and (d) reviewand revisionof standardscontact specificationsto requireenvironmental safeguards, such as reseedingand embankmentproteton, and researchby FMWHto proposemeasures to addressthe mostimportant problems, such as gully erosion. The reconnaissancestudy also addressedthe institutionalcapacity of FEPA,FMWH, and the SMOWsto carryout the workidentified. It recommendedEA training for FEPAstaff, traini for FMWHand SMOWdesign engineers in generalenvironmental practices, in-sevice training for constructionsupervisors, and joint FEPA/FMWHworkshops on specificaspects of the problemof land degradation.

assessmentof (i) requirementsin the sectorfor environmentalreview, implementationof environmentalmanagement and mitigationmeasures, and monitoringprograms, (iio the capacitiesof sectoralinstitutions to carry out those acvities, and (iii) needsfor tr , developmentof guidelines,or other aspectsof institutionalstrengthening. 46. Whenused in thesethree ways, sectoralEAs provide information which can most edfevely be ud to plansector strategies, investment programs, and institutionalstrengthening efforts. heyoreate to the project cycle from the beginningby contributingto the Identificationof projectswhich are cowistottwith sustainable development in the sector. 17

Table 1.5. "Programmatic" Environmental Assessment for Locust Control

Consultantsprepared a programmaticEA for the United States Agencyfor International Development(USAID) for locust control in Africa which had the followingobjectives:

. to describe the impacts of current and projected locust and grasshopper programs, with specific reference to pesticide use;

* to evaluate alternative control measures and mitigativeactions which may have less adverse impacts; and

. to provide comprehensiverecommendations to ensure that environmentalconcerns are fully addressedin future control programs.

The 32 programmaticrecommendations included preparing an inventory and mapping program of environmentallysensitive areas; prohibiting spraying in human settlementsand environmentallyfragile areas; selectingpesticides with the least impact on non-targetspecies; monitoringselected organisms, and soil and water for pesticide residues; supplementingcontrol techniques with a strong technical assistance component; assisting countries in disposal of obsoletepesticides; testing biological control in the field;and providingtraining and equipment.

ALTERNATIVES TO ENVIRONMENTAL ASSESSMENT

47. Bank policy in the EA OD allows for flexibilityand alternativesto EA in projects where the range of environmentalissues is comparativelynarrow and the issues can be understood and managed through less extensive analysis. These are typically smaller projects, not located in environmentally sensitive areas. They usually fall into CategoryB in the screeningprocess. Reconnaissanceand informal scoping are normally completed, followed by the design of preventive or mitigating measures. Alternatives include:

* specificdesign criteria to safeguardthe enviromnentthat will be applicable,for example, to rural electrification,rural water and sanitation,small-scale irrigation systems; * pollution control standardsor effluent and emissionlimits for small-scaleindustrial plants; * 'best practice' standards for certain activities, such as small-scaleirrigation; • integrated pest managementprograms for agriculturalprojects which do not involve major irrigation or land development; * reliance on local governmentpermit programs covering actions such as siting, constuction, operation, pollutantdischarge, and waste disposal; 18

* preparation of environmentalmanuals, and institutionalstrengthening and training; and * applicationto individualprojects of design criteria, guidelines, and standards developedin regional or sectoral EAs.

48. Alternativesto EA allow the effort devoted to environmentalconsiderations to be commensur with the magnitudeof potential impact. It is importantto remember, however, that their acceptability in any given situationdepends in part on the environmentalpolicy and regulatorystructure in the country and the institutional capabilities of the borrower and the government. It will not be effective, for example, to manage the environmentalimpacts of small- and medium-scaleindustry by pollutioncontrol standards and design criteria if inspection,monitoring, and enforcementfunctions are weak. Similarly, relying on 'best practice" or integratedpest managementfor agriculturalprojects will be unsatisfactory where there is no effective agricultural extension service and inspection. In these cases, unless an institutionalstrengthening component with a highprobability of successfulimplementation can be included in the project, a project-specificEA should be conducted.

INSTITUrONAL ASPECTS OF ENVIRONMETAL ASSESSMET

Interagency Coordination

49. Interagency coordination is crucial to effective EA because environmental issues, in their complexity and variety, are often intersectoral and regional, even international. The authority and responsibilityto deal with them-to collect information,prepare plans, approve designs, issue permits, allocate resources, develop budgets, monitorprogress and regulate activities-is spread over a number of agencies at all levels of government. An EA team needs to take advantage of all major information sources and specializedknowledge. Successfulimplementation of EA recommendationswill dependon the capabilitiesof the institutionsinvolved in environmentalmanagement.

50. Interagencycoordination is best achievedthrough interagencymeetings at key points in the EA schedule. A meeting at the time of scopingis vitally important: to inform all interestedagencies about the project and the intentionto prepare an EA; to seek their views throughoutthe process; to identify issues; to discuss any special types of analysis required, data sources and managementprocedures, responsibilitiesand schedules; and to draft TORs for the EA. At that meeting, the participants should agree on a schedule for additionalmeetings and other means of communicationand coordination. It is also appropriateto hold a meetingwhen the draft final report is submittedfor governmentreview. Other meetings-such as a mid-term review-are very useful in complexEAs. Circulationof interim drafts on issues of specialinterest to other agenciesis an effectivemeans of interagencycoordination. TMs should attend at least the initial meeting, and in any case should ensure that the borrower includes adequate interagencycoordination in the EA process.

Involvement of Affected Groups and Local NGOs

St. Ihe EA OD states that borrowers are expectedto take the views of affected groups and local NM fully into account in project design and implementation,and in particular during the prepartion 19 of EAs. Communityinvolvement is importantin orderto understandthe natureand extentof potential impacts,especially the sociocultural,and to assessthe suitabilityand acceptabilityof variousmeasures that mightbe used to preventor mitigateimpacts, or to compensateaffected groups for unavoidable ones. Communityinvolvement is also usefulin the analysisof the distributionof projectcosts and benefits. Moreover,a genuineeffort to providethe publicwith informationabout a projectand to solicitpublic reactionsand suggestionsleads to projectsthat are moreacceptable and morelikely to be supported. Thereare manydifferent ways to fostercommunity involvement, not all of whichwill be appropriatein any given situation. Chapter7 amplifiesthis topic and providesguidelines for successfulcommunity involvement.

Strengthening Environmental Capabilitis

52. The ultimatesuccess of EA dependson strengtheningenvironmental capability in agenciesand organizationsconcerned with natural resource management and environmentalprotection. Projects with majorpotential impacts normally require institutional strengthening and trainingcomponents, not only in the organizationexecuting the projectbut in the line agencyand other governmentaldepartments or ministriesas well. Involvementof these units throughoutthe EA process is a logicalelement of institutionalstrengthening, since it provideson-the-job training and continuitywhich will contributeto successfulimplementation of EA recommendations.It is also importantto use localexpertise (supported by internationalconsultants where necessary)in preparingEAs, so that country EA capabilityis stengthened.

53. Because EA requires analysis of the institutionalrequirements for implementationof environmentallysound projects, it often recommendsinstitutional strengthening that extendsbeyond the projectitself. Thus,there may be linkagesbetween EAs and sectoror countryenvironmental strategy, policy,legislation and organization. Institutional strengthening is oftenthe mostimportant part of project work. However, there are limitationsto what can be accomplishedin a single project, besides strengtheningthe agenciesdirectly involved.

54. TMs should take advantageof opportunitiesto produce an incrementalimprovement in institutionalcapacity outside the boundariesof the project-includingline ministry staff in an EA training coursefor the implementingagency, for example-butthere willoften be needfor strengtheningbeyond that which can reasonablybe included. TMs shouldensure that any such recommendationsemerging from an EA are broughtto the attentionof colleaguesconcerned with sectoral policy planning and with formulationof environmentalaction plans (EAPs),environmental issues papers (ECPs),and country strategy. Chapter5 discussesthe strengtheningof localcapabilities and institutions.

FbnancialIntermediry Lending

55. The Bankincreasingly supports development projects through loans to financialinstitutions, for onlendingto sub-borrowers.The subprojectsmay be in a singlesector, in the caseof sectorinvestment loans, or in more than one sector. The detailsof the subprojectsare usuallynot knownat the time of appraisal.Under these circumstances, the EAOD makesit clearthat the participatingorganizations must fulfill the requirementsfor environmentalreview. Chapter6 addressesalternative approaches for evironmentalreviews in financialintermediary lending. 20

MANAGEMENT OF ENVIRONMENTAL ASSESSMENT

Cost and Time to Prepare EnvironmentalAsssments

56. The time requiredto prepare an EA, and the resultingcost, vary with the type, size and complexityof the project;the characteristicsof its physical,sociocultural and institutionalsettings; and the amountand qualityof environmentaldata already available. EAs need as muchtime as the feasibility study,of whichEA is essentiallya part. Therefore,EAs can take from less than sixmonths to morethan 18 monthsto complete,but many require about 12 months. EAsconducted according to Bankprocedures do not delay projects; on the contrary, in many cases, they have shortenedthe total time from identificationto operation,by revealingpromptly environmental issues that mighthave halted work altogether,had they emergedat a laterstage. Whetheror not a particularEA actuallydelays a project dependslargely on howwell it is coordinatedwith feasibility studies and otherpreparation activities.

57. EA preparationcost rarely exceedsone percentof the total capitalcost of the projectand is frequentlyless than that. The cost of implementingmitigating measures can rangefrom 0 to 10 percent of total projectcost, with 3 to 5 percentbeing common. These estimatesdo not take into account possiblecost savingsthat result fromimplementing EA recommendationsthat reduceor avoidthe cost of environmentalimpacts or allowenvironmental objectives to be met in a morecost-effective manner. For example,project-induced epidemics of malariaor schistosomiasis,ignoring the costs in human misery, may cost millions tUSS)to bring under control,compared to the relativelyminor cost of preventingthem.

Sources of Fincing

58. It is the borrower'sresponsibility to conductand financeEAs, and in general,they are financed in the sameway as feasibilitystudies. EAs canbe consideredpart of projectpreparation costs and funded irough ProjectPreparation FacilitIes, or throughgrants from various environmental trust funds. Other posible sourcesof EA fundingare internationalNGOs and major foundationswith environmental interests. In the caseof financialintermediary lending, where the participatinginstitutions have to carry out muchor all of the entireenvironmental review, technical asistance componentscan be incorporated into the projectto set up the proceduresand organization. The routinecosts thereafterbecome the responsibilityof the participatinginstitutions.

Procurement of Consultants

59. Althoughthae are countrieswhere government agencies themselves are capableof preparg EA, the usual methodis for the borrowerto obtainspecialist consultants, just as they often do for feibility studies. EAsrequire interdisciplinary analysis and are thereforeprepared by teams: membes worktogether in the field. Tbe disciplineslisted below are generallyrepresented on the core teamfor any EA. projectmanager: often a planner,social or naturalscientist, or environmentalongineer; has experiencein preparingseveral, similar EAs; has managementskills and sufficientybroad 21

trainingand/or experience to be ableto provideoverall guidance and to integratethe fndings of individualdisciplines; * ecologistor biologist(aquatic, marine or terrestrialspecializations, as appropriate); * sociologist/anthropologist:has expience with communitiessimilar to that of the project; * geographeror geologistJhydrologistlsoilsscientist; and * urbanor regionalplnner: has experiencein developingcounties.

If the projectis in the agriculturalsector, an agronomist,land-we specialist, forest scientist, or fisheri biologist,as appropriate,should be includedin the core team. For industrialor energyprojects, an engineerwith the correspondingexperdse (such as in pollutioncontrol) will be needed. 60. The core team needsto be supportedby variousspeialists dependingon the project and its seing. Table 1.6 showssome of the specialtiesthat shouldbe calledupon. 61. EA specialistscan be obtainedfrom a varietyof sources. Large inaonal eironmental consultingfirms have manyof the necsary disciplineson staffor in subconsultantarangements, and can formand manageteams for any EA. Thereare also smallerfirms tht specializein EA and manWa EAs. Ihey are more likelyto needsubconsultants to fill out EA teams.

62. The experdseof local consutingfirms varies from country to country. Frequenty a localfirm will be able to provideexperts (e.g., fromlocal universities or instituon) to participatein an EA as a coreteam member of a specialist.It is less common,at prent, to find localfims withexperience and capabilityto carry out an EA on their own. Where such firms do exist, they shouldbe seriouly consideredfor EA projects. Wherethey do not, the Bankis committedto usingthe EA processto promote anddevelop such capabilities.Therefore, local firm shoiudbe participant in EAsbeing managed by int onal firms. This providesthe local staff with o-the-job trng, and provides the internatonalstaff with essential local knowledge and experience.

63. Othersources of expert includeresearch institutions (e.g., marineinsttes, tropicalmedicine researchcenters, national research institutns), collegesand universities, demies of scie andtech- nology,goverment agenciesin the countryand inother countries Ooans and exchangesmay be possible), and NGOs.

64. The methodfor selecingconsultants depends on the sourceof finance. Th. Bankhas published its procedure in Use of Consultan by World Bank owe an by The World Bak as xect Ar : uiddines. Theborrowing country may have established procedures for obtning comultn for studiesand design projects, or for EA. Other donors may be involvedand they, too, have procedure. TMs shouldreview such proceduresto eanr that they ae generallyconsiten withthe Bans objectives.

65. When the Bank is finding the EA directy, thoe G id should wsu e the borrowees proadur. In any case, the Bank's recommendedmethod for procurinSconsudting sMrvcs is fr the bormwerto viteproposals from a shortlist of threeto six firm or joint venturaead to followformal predu to sdect the beat qualified. Ihe REDsmay be requetd to adst Ts in adving tIo borrowers,where appropriate. 22

Table 1.6. Spelists Related to Environmental A _essment

NaturalResource Subcomponent Specialist

Air Air quality Air quality/pollutionanalyst Winddirection/speed Air pollution control Precipitation/humidity engineer Temperature Meteorologist Noise Noiseexpert

Land Land capability Agronomist Soil resources/structure Soilsengineer Mineralresources Soilsscientist Tectonicactivity Civilengineer Uniquefeatures Geologist Geotechnicalengineer Mineralogist Miningengineer Engineeringgeologist Seismologist

Water Surfacewaters Hydrologist Groundwaterregime Water pollution control Hydrslogicbalance engineer Drainage/channelpattern Water quality/pollution Flooding analyst Sedimentation Marinebiologist/engineer Chemist Civil/sanitaryengineer Hydrogeologist

Flora and fauna Environmentallysensitive areas: Ecologist wetlands,marshes, wildlands, Forester grasslands,etc. Wildlifebiologist Speciesinventory Botanist Productivity Zoologist Biogeochemical/nutrientcycling Conservationist

Human Socialinfrastructure/ Socialanthropologist institutions Sociologist Culturalcharacteristics Archaeologist Physiologicaland psychological Architect well-being Socialplanner Economicresources Geographer Demographer Urban planner Transportadonplanner Economist 23

66. TheBank can assistand advisethe borrowerin the procurementprocess on request. The Bank doesnot ordinaily takepart in preaing shortlists (exceptin veryunusual cases, which are coveredin the Guidein), evaluatingproposals, or negotatingcontracts. However,the Bankreviews TORs and short lists, and will guide borrowersto sources of informationon availableconsultants. Tbe Bank officiallyapproves TORs, short lists and draft contractsonly when it is fundingthe EA. 67. It is sometimesuseful to preparethe short list by solicitingletters of qualificationsfrom a longer list of consultants.Ihis yieldsa shortlist madeup of firmswhich are bothqualified to performthe work and interestedin being consideredto perform it. It is not necessarywhen the borrowerdevelops a adequatelist withoutit.

68. The selectionprocess should be basedprimarily on technicalcompetence and experience.The Guidelineallow the use of price as a selectioncriterion only under very restrictedcrcu . It is highlyunlikely that such circumstanceswould apply to an EA, as such studiesare inherentlycomplex, withoutputs that are difficultto specifycompletely in advance. 69. Undertechnical competence, the borrowershould examine the following: tthe experiencein EA of the firmor joint venture; * the adequacyof the proposedwork plan in terms of demonstratedundestanding of the project,responsiveness to the TORs,and effectivemanagement of the work; and - the qualificationsof the personnelto be assigned,in terms of education,training and experience;suitability to performthe dutiesto be assigned;language skills; succefl EA experiencein similarsituations; experience in developingcountries; and experiencein the particularcountry or region.

70. If overseasfirms are used, the REDs and the CD EnvironmentalCoordinators can package signmentsso that the experts'time and cost canbe sharedby severalprojects in the region.Pacg opportunitieswithin one CD can reapmajor cost savings. 71. TheBank normally comments on the successfulproposal before the borrowerbegins negotato, and on the contractbefore it is executed. Negotiationoften results in changesto the consultant's proposedwork plan or EA team, to best suit the needsof the borrowerand the project.

CONCLUSION 72. EA is a tool to assistTMs in makinggood decisions: to screenprojects efficiently for their environmentalimpacts; to claify to governmentswhat is neededfor sustainableprojects; and to deig dhemeffectively. If EA is approachedpositively as an opportniy to findout a lot abouta projet before cosly problemsarise, the combinedexperience gained Bank-wide will produce increasigly flexible and cost-effectiveprocedures. It is in that spirit and withthat goal thatthis Sourcebookis offered. 24

References

Ihe Environmental Review Process

Ahmad, Y. J., S. El Serafy, and E. Lutz, eds. 1989. EnvironmentalAccounting for Sustainable Development. Washington,D.C.: A UNEP-WorldBank Symposium.

Barbier, E. B., A. Markandya, and D. W. Pearce. 1989. Blueprintfor a Green Economy. London: EarthscanPublications Ltd.

Constanza, R., and others. 1990. "The Ecological Economics of Sustainability: Making Local and Short-TermGoals Consistentwith Globaland Long-TermGoals. " EnvironmentDepartment, Policy and Research Division WorkingPaper 32. World Bank, Washington,D.C.

Dixon, J. A., and L. A. Fallon. 1989. 'The Concept of Sustainability:Origins, Extensions, and Usefilness for Policy. Enviroment Department,Policy and Research DivisionWorking Paper 1989-1. World Bank, Washington,D.C.

Goodland, R. 1989. *Environmentand Development:Progress of the World Bank (and Speculation towards Sustainability).' EnvironmentDepartment, Policy and ResearchDivision Working Paper 1989-5. World Bank, Washington,D.C.

World Bank. 1984. 'EnvironmentalAspects of BankWork." OperationalManual Statement2.36. (To be issued as OperationalDirective 4.00: "EnvironmentalPolicy.") World Bank, Washington, D.C.

1987. Environment, Growth and Develogment. Development Committee Pamphlet 14. Washington,D.C.: World Bank.

1988. Environment.Growth and Development:Implementing the World Bank's New Policies. DevelopmentCommittee Pamphlet 17. Washington,D.C.: World Bank.

Environmental Review and the Project Cyde

World Bank. 1989. "Cancellations." OperationalDirective 13.50. World Bank, Washington,D.C.

1985. "General Conditions Applicable to Development Credit Agreements." World Bank, Washington,D.C.

1985. "General Conditions Applicable to Loan and Guarantee Agreements." World Bank, Washington, D.C. 25

1990. "Procedurefor EnvironmentalReview of IFC Projects." WorldBank, Washington, D.C.

1989. 'Project Supervision." OperationalDirective 13.05. Annex D-2: 'Preparationof ImplementationSummary (Form 590)." WorldBank, Washington, D.C.

_. 1989. "Suspensionof Disbursements."Operational Directive 13.40. WorldBank, Washington, D.C.

Managementof EnvironmentalAssessment

Schramm,G., andJ. J. Warford,eds. 1989. griron M ae and EconomicDevelgm=. Baltimore,Maryland: The Johns Hopkins University Press.

1981. "Use of Consultantsby WorldBank Borrowersand by The WorldBank as Executing Agency:Guidelines." World Bank, Washington, D.C.

THE WoRLDBANIC OPERATIONAL MANuAL 27 October 1989 . . . OD 4.00--AnnexA Operational Directive Page 1 of 6

Operational Directive 4.00, Annex A: Environmental Assessment

Introduction in a timely and practical fashion, (b) reduce the need for projectconditionality, because appro- 1. This annexoutlines Bank policy and pro- priate stepscan be taken in advanceor incorpo- cedures for the environmentalassessment (EA) of rated into project design, and (c) help avoid costs Bank investmentlending operations,Iand related and delaysin implementationdue to unanticpated types of environmental analysis. EA is a flexible environmnentalproblems. EAs also provide a for- procedure, which can vary in breadth, depth, and mal mechanismfor inter-agencycoordination and type of analysis,depending on the project. It may for addressingthe concernsof affectedgroups and be carried out at one point in time, stretchedover local nongovernmentalorganizations (NGOs). In a year to account for seasonalvariations, or done addition, they can play a major role in building in discrete stages. environmental capability in the country. 2. For the purpose of this annex, EA covers 4. Like economic, financial, institutional, also project impactson health, cultural property, and engineering analyses, EA is part of project and tribal people, and the environmental impact preparation, and is therefore the borrower's of project-inducedresetlement. 2 EAs utilize the responsibility.Close integration of EA with these findings of country environmental studies and other aspects of project preparation ensures that action plans which cover nationwide issues, the (a) environmental considerations are given due overall policyframework, legislation, and insdtu- weight in project selection,siting, and design deci- tional capabilities in the country. sions, and (b) carrying out EAs does not unduly delay project processing. Purpose and Nature of EA Types of Environmental Analysis 3. The purpose of EA is to ensure that the developmentoptions under considerationare envi- POjwctSpecificEAs ronmentallysound and sustainable, and that any environmentalconsequences are recognizedearly 5. Project-specificEAs are used to analyze in the project cycle and taken into account in specific investment projects (e.g., dams, fac- project design. EAs identify ways of improving tories, irrigation systems) with significant envi- projects environmentally, and minimizing, miti- ronmental issues. The detail and sophistication gating, or compensatingfor adverse impacts. By of analysis should be commensurate with the alerting projectdesigners, implementing agencies, expected impacts. A project-specificEA should and borrower and Bank staff to issuesearly, EAs normallycover. (a) existingenvironmental "base- (a) enable them to address environmental issues line" conditions; (b) potential environmental

1. Rcferencesto the Bankinclude 1BRD and IDA; "loan" includecredits. investment lending coven specific and sctor investments includingrehabilitaion loansthrough rinancial intermediaie. andthe investment component ofhybrid loan. Sectorand structural adjustmentloa arenot coveredby this annex,but are subjectto the generalpolicies in OMS 2.36, Estrsntmial A:pguo1 Seam Wor (gobe reissuedasOD 4.00. avmwwd AEia). IFC is dvelopinssmiar proceduresfor environmentalreview, which refleet the pfecialcircumstances of its work, h aing in mind its specl circumstances.MICA will coopentewith the Sankto ensure.to the extent possible,that the objectivesof the directive ae met in itsoperations. 2. For Bankpolies regardingsuch impacts.we (a) OPN 11.03,M Umet of C'd*ra(P~*" usiwy &AFiwed A.jeru to be reissued a OD4.50, Cauul Propoty.(b) OMS 2.34. rpi6Prpk in &Oak wid ;JrF;su, to be reisuedas OD 4.40, rih Pep*, and (c) OMS 2.33. Secsamst Assuc,d wi&4 Jmlaaae Raeuwnmirn 8h kFfiwwtd P/Jsu, and OPN 10.08.0sre,w I ind Trtu. am sJJawrjkResakms in BSa*Ffmmdf_u , to be rissud as 00 4.30. Imalowgr RaadL,n.

Th?%udoJegw wu pwidfor e pamw of * efofX WnU 5O ad iusse owaensy e cempktetrmamww of Ae subjuteemes October 1989 Tim WotLD BANxO?UTInoNAL MANUAL OD 4.00--AnnexA Page 2 of 6 Directive

impacts, direct and indirect,3 includingopportu- 8. In some cases, regional or sectoral EAs nties for environmentalenhancement; (c) system- cover aU the normal requirements of project- atic environmental comparison of alternative specific EAs. More often, the latter are still investments, sites, technologies, and designs; needed for major investments(see para. 14 con- (d) preventive, mitigatory, and compensatory cerning sectorinvestment loans), but the regional measures, geneally in the form of an action plan; or sectoral EAs wiUhave identified the relevant (e) environmentalmanagement and training, and issues,collected much ofthe data, and, in general, (f) monitoring.To the extent posible, capitaland greatly reduced the work needed in the project- recurrent costs, environmentalsaffing, training, specific EAs. and monitoring requirements,and the benefitsof proposed alternatives and mitigation measures, AlnwiwS to EAs should be quantified. Annex Al gives a sample outline for a project-specific EA report, and 9. Alternative approaches that focus on a Annex A2 is a checklist of specificissues to be narrower range of issuesare acceptablefor many covered where relevant. typesof projects,especially smaer onesand those not in environmentally sensitive areas. These Resonal and&oral EAs approaches may be more effectivein integrating environmentalconcerns into the borrower'splan- 6. Regional EAs are used where a number ning process.Such alternativeapproaches include: of signifcant development activitieswith potentially cumuative impacts are planned for a rea- (a) integrated pest management programs sonably localized area. Ir such cases, they are for many agricultural projects which generally more efficientthan a seriesof project- do not involve major irrigation or land specificEAs, and may identify issues that the latter development; might overlook(e.g., interactionamong effluents, or competitionfor water or land). Regional EMs (b) specificenvironmental design cnteria and compare alternativedevelopment scenarios, and pollutionstndards for small-or medium- . .recommendenvironmentally sustainable growth scale industrial plants; and ates and land use patternsand policies.The study area is normallydefined on a physicaland/or bio- (c) specificenvironmental design criteriaand logical basis (e.g., airshed, habitat type, river construcdon supervision programs for basin), and may sometimesextend across national small-scalemral works projects. boundaries;however, regional EM with an institutional focus might followadministrative boun- Other examplesof projects for which alternative daries instead. approaches are generallyacceptable are listed in Annex AS, para. 9, under "Category B." 7. Sectoral EM are used for the design of sector investment programs. They are partcuarly Cowi ior of CJobul Isnws suitablefor reviewing(a) sector investmentalter- natives; (b) the effect of sector policy changes; 10. A number of specializedagencies-inside (c) institutional capacities and requirements for and outside the U.N. system-carry out scientific environmentalreview, implementation, and mon. investigationsof globalenvironmental issues (ozone ioring at the sectorallevel; and (d) the cumulative depletion, global warming, hazardous wastes, impacts of many relativelysmall, similar invest- etc.). The Bank keeps fully abreast of findings, ments which do not merit individual project- primarily through its Principal Adviser, Science specificEAs. and Technology,and drawsupon prevailingviews

3. IdaIreot dpammetc iti pdacdforneaf ourieaproject myh ectrucer r ttor Oarthn paqnefth environment,e.g.. Ua a river ischmoee or dammed,its capacity bor *elf.puarillcaion may it edcd andthe ongln.A aqatic coystemdam:ijed or destryd.

Ths6wa a r,'dvM udu !Mf 1M mdBn t imdn*i~ pN riea, vzhvatiid Tim WOnD BU OPERATIONALMiuAL 29 October 1989 OD 4.00--Annex A Operational Directive Page 3 of 6

in developingits own environmental, economic, sultationsafter the EA report is completedare also and sectoral policies, with a view to minimizing a valuable way to obtain feedback on the report possible adverse impacts on global systems such and to increasecommunity cooperation in imple- as the atmosphere and oceans. While EAs should menting the recommendations. collector refer to the relevantdata, the Bank does not normally expect global environmental issues S*wgthning EnvirnmeuiadCapabilitss to requireseparate analysis in project-specificEAs. Such issuesshould, however, be addressed where 13. The ultimatesuccess of EA depends upon relevant in policy and sector work. the developmentof environmental capabilityand understandingin the agenciesconcerned. Projects Institutional Aspects of Projects with majorpotential impacts normaly require the establishmentor strengthening of in-house envi- Intr-Agewg Coordinaion ronmental units for the project (locatedor repre- sented on site), the implementingagency and the 11. Because environmental issues generally ministry. Involvementof these units throughout involvenational, regional, and local government the EA process (a) ensures that the agencv'st agencies, and cover a broad range of responsibil- ministry's knowledgeand perspective are taken ities (wildlife,health, water and land use, tourism, into account in the EA, (b) provides on-the-job etc.), coordination among government agencies training for the staff, and (c) provides continuitv is crucial. This is best achieved through inter- for the implementation of the EA's recommen- agency meetinp at key points in the EA cycle. dations. Such projects normally need to include The first meeting, nonnally held soon after the an institutional development and training com- decision to prepare an EA, identifies the issues, ponent for such units. In addition, to help develop types of analysis required, sources of relevant EA capability in the country, the Bank should expertise, responsibilites and schedule for the (a) encourage the use of local expertise in EA EA, and mitigating measures to be considered. prepaation (in association with international Another meeting should normally be held when consultanu, where appropriate), and (b) help the EA report is completedand submittedfor final arrange EA training courms for local specialist government review, staff and consultants.

Involvemunof Affuud GrOups LSer andFinancial Intwmdsa Lnding and NMongouarnmutalOrganwauienu 1a. For sector investment loans and loans 12. The Bank expectsthe borrowerto take the through financial intermediaries, subproject viewsof affected groups and local NGOs fully detais may not be known at the dme of project into account in project design and implementa- appraisal. In such cases, the project implement- tion, and in paticular in the preparation of EAs. ing institutions will need to screen subprojects This is impoortnt in order to understand both the (see para. 18) and carry out environmental anal- nature and extent of any socialor environmental yses consistentwith this directive. To ensure that impact, and the acceptabilityof proposed mitiga- this can be done, the Bank should appraise the tion measures. An approach which has proven implementingagencies' capabilities for EA, and effectivein many countries is to expand the initial strengthen them where necessary. The appraisal inter-agency meeting (para. 11) into a "forum" mission should also indicate the proper division or "scoping session" with representatives of of responsibilityfor preparing and reviewing EAs affectedgroups and relevant NGOs. Simiharcon- between the ultimate borrower, the inancial

4. So OD 14.70.Inswag sVqM e.ip m OvmiaMimini ANNA4d Aewuiaft theBank's ovJid appmawhto NOO0.

7U "lWu. 1 a_A.p*A if+suje aS UVoi Soa oaa No umwl .pf.su USiaja wue. October1989 30 TimWonD BAN OpzuTIoNAL MA.L OD 4.00--AnnexA 3 W . Page4 of 6 Operational Directive

intermediaryor sector agency, and the agencies whichare both environmentallyand economically responsiblefor environmental regulation. sound, and consistent with the environmental laws, policies, and procedures of the borrower. EnvimxmmntalAdvisoy PaxeLs The Environment Department(ENV), Legal Department, and the REDs maintain information 15. For major projectswith seriousand multi- on these requirements. dimensional environmental concerns, the Bank shouldexplore with the borrowerwhether the lat- 5Smng ter needsto engagean advisorypanel of independent, internationallyrecogruzed, environmental 18. Projects/componentsshould be screened specialists,to review and advise on, intrulia, the at idendficationby the TM, with advice from the termsof reference(TOR) and findingsof the EA, RED, and assigned to one of the foilowingcate- the implementationof its recommendations, and goriesbased upon the nature, magnitude,and sen- the developmentof environmentalcapacty in the sitivity of environmental issues: implementing agency/ministry. Such a panel should meet at least once a year untl the project Category A-EA is normally required as the is operating routinely and environmental issues projectmay havedrverse and si- have been addressed satisfactorily.5 nificant environmentalimp. EA Procedures Category B-More limited environmental analysis is appropriate, as the ogervigw project may have specific environmental impacts. 16. Though EA preparation is the responsibility of the borrower, the task manager (TM) in Category C-Environmental analysis is nor- the Bankassist and monitorsthe EA process,with mally unnecessary. support mainly from the Regional environment division (RED). The borrower and the Bank Category D-Environmental projects, for should agree as early as possibleon the slection which separate EAs may not of consultantsor borrowerstaff to prepare the EA, be required, as environment and the EA procedures, schedule, and outline. would be a major focus of proj- Major steps in the EA process normally include: ect preparation. (a) screening, (b) decisions based on the Initial ExecutiveProject Summary (IEPS), (c) notifica- Annex 3 givesillustrative lists, to be applied flex- tion to the Boardthrough *e MonthlyOperatonal ibly, of the type of project/component in each Summary (MOS), (d) preparation of TORs for category. the EA, (e) EA preparation, (f) EA review and incorporation of environmental measures into the Initial EZKui ProjectSumnmy project,(g) supervision,and (h) ex post evaluation. 19. In the IEPS, the TM, in consultationwith 17. Since project and country conditions, the RED, should (a) identify key environmental national legislation, and institutional experience issues,(b) indicatethe category(A-D) and the type vary among borrowers,both the borrowerand the of environmental analysis recommended, and Bank must exercisejudgement in using these (c) provide a preliminaryEA schedule. If an EA procedures to design and implement projects is not likelyto be availableprior to appraisal, the

S. SeeOD4 .00. Anna 3, Ewod hlJirD. d Ruri. pea1I8 br mre detaib on the ion afunctions of the parL

il dimifl VWw mvd guWaWSW o efItA WPMSW Ua if so uwns;*a esu#* Utma of dA szJpu ceud. Tim WotD BANxOpITioNAL MANUAL31 October 1989 OD 4.00--AnnexA Operational Directive Page 5 of 6

IEPS shouldpropose special procedures to addr involving large scale resettlement, it is recom- the situation. The IEPS meeting would confirm mended that the borrower retain independent the type, tung, and isues of enviuonmentalanal- experts not affiliatedwith the project. Borrowers ysi (although in the event of inadequate infor- may request Bank assistance for financing Eh mation, the decision may be deferred). through a Project Preparation Facility (PPF) advance,6or from the TechnicalAssitnce Grant MorenUOiradmna Swnmwy Program for the Environment. EAs generaly account for 5-10 percent of the cost of project 20. The TM should ensure that the MOS, preparation. which is used to alert the executivedirectors to forthcomingprojects, contains the followinginfor- 24. For some projects, a full year of basline mation as soon as available: (a) the category data is desrable to capture the seasonaleffects of *gned(A-D); (b) the main issues to be exam- certain environmentalphenomena; however, so ined;(c) whether agreement with the borrower a not to delaycritical project decisions, short-term hs been reached on EA preparation; and (d) the monitoringshould be used to provideconervatve EA schedule.The MOS entry shouldbe updated estimatesof environmentalimpacts, whilelonger- whener appropriateto reflectthe progressof the term data collectionis being undertaken. Since EA, and the related Bank and borrowerdecisions. specialcare in desigmingthe baselinemonitoring program is warranted, the borrower should be Pmspionof TORsfor du EA encouraged to discuss the matter with the Bank. 21. Following the IEPS meeting, the Bank EA Ruuiw and Piwfit Appnsal should discusswith the borrower the scopeof the 1A, and asit the borrower, as necesry, in pre- 25. The borrowershould submit the finalEA paring TORs for the EA. For this purpose, a field report to the Bank prior to Bank appraisal. The visit by Bank environmental staff is generally EA report is the borrower'sproperty, but the Bank desale. The Bankshould ensure that the TORs encouragesthe borrowerto relea relevantinfor- provide for adequate inter-agency coordination mationto appropriateinterested parties. The Fnal (pm. 11) and consultation with affectedgroups ExecutiveProject Summary should summarize the and local NGOs (para. 12). EA's status and describe how major environmental issues have been resolved or are to be EAN&*wdon addressed, noting any proposed conditionality. The appraisal mission should review both the 22. An EA for a major project typicallytakes procedural and substantive elements of the EA 6-18 months to prepare and review. EA drafts with the borrower, resolveany issues, ass the should be available at key points in the project adequacyof the institutions responsiblefor envi- cycle. The final EA should be availableprior to ronmental managementin light of the EA's find- appraisal, to minimize the risk of project design ings, and determine if the EA's recommendations changes and resultant delays at a late stage. are properly addressed in project design and economic analysis. 23. In most cases, the EA should form part of the overall feasibility study, so that the EA's Lea Dewnenu, findingsare directlyintegrated into projectdesign However,the EA is normallyprepared separtely 26. TheEA proceduresfollowed and the LA's by specialists. For projects which would have main findinp should be explained briefly in the mjor impacts, such as large dams or project text of the StaffAppraisal Report (SAR) and the

*. dk OMS2.15. p a sw.m p iuOD,ow ArWuekd be u 008.00.

li,dwi m rp.d.rua ud.au aufaf duu_sheWvdiu wey .. &eu.w fsh,ujrasw. October 1989 TN WowDBNK. OrnuIoNAL MIu(A OD 4.00-Annex A Page6 of6 'bperational Directive

Memorandum and Remmendaion of the Preui- implementation. Compliansc with environnmma dent. An SAR annex should summarize the EA conditionality, the status of mitigating measues, more fully, covering, it, dia, environmental and the findingp of monitoring programs should baseline conditions, alternaives considered mid- be put of borrower reporting requirements and gptg and competory actions, capability of project supervion. When major isxues arus. environmental units and measure to strengthen special supervision missions with adequate evi- them, eavironmnu monitoring arrangements, ronmental experdse may be needed. and the borrower's consultations with affected. groups and NGOs. The fuctorswill provide the Er PostEusiutiou basis for the RED's formadenvironmental dear- ance prior to the authorization of negoations by 28. The project completionreport 7 submi the Regional vice preident. Measures critical to to the Opeations Evaluaton Department shoud ound projectimplementation my requirespeific evaluae (a) eronmental impacts,noing whesw loan conditionality. they wereanticipated in the EA report,and (b) the effectiveneuof mitiating measures takcenan of SVvwirim insdtutional development and trining.

27. EA ' p Cthebasis for superviing the environmeal aspect of project

7. Smdw OPNSV mwmuda. Mi&w*, A_ign C- 0 asp.,Junu- 7,1969, and OMS 3.56, GWWa Gaiddiw1 hupwim TdC Jerpw**o-, k wppuee, to becombind 1. adis " D 1U.S, Pt C_ua tGa R

nk~ A.W wjdw4owppd4 w VttWMAbodi wwn*aa* om wi Tn Woaw BANKOPEATIONAL MANuAL 33 October 1989 OD 4.00--AnnexAl Operational Directive Page 1of 2

Sample Outline of a Project-SpecificEA Report

1. EA reports shouldbe conciseand limited explored. The extent and qualityof avail. to sigificant environmentalissues. The detailand able data, key data gaps, and uncertain- sophisticationof analysisshould be commensurate ties associated with predictions should with the potential impacts. The target audience be identified/estimated. Topics that do should be project designers, implementing agen- not require further attention should be ciea, and borrower and Bank staff. specified.

2. The EA report should include: () Analysis of Alternative. Proposed investment design, site, technology, and opera- (a) ExecutiveSummary. Concise discussion of tional alternatives should be compared significant findings and recommended systematically in terms of their potential actions. environmental impacts; capital and recur-. rent costs; suitability under local condi- (b) Policy, legal, and adninisttrativefamewok tions; and institutional, training, and within which the EA is prepared. The monitoring requirenients. To the extent environmnental requirements of any cofi- possible, for each of the alternatives, the nanciers should be explained. environmental costs and benefits should be quantified, and economic values (c) Projeddescription in a geographic, ecologi- attached where feasible. cal, social, and temporal context, including any off-site investments that may be (g) Mitgation Pa. Feasible and cost-effective required by the project (e.g., dedicated measures which may reduce potentially pipelines, access roads, power plants, significant adverse environmental impacts water supply, housing, and raw material to acceptable levels should be proposed, and product storage facilities). and the potential environmental impacts, capital and recurrent costs, and institu- (d) Baseline Data. Dimensions of the study tional and training requirements of those area and description of relevant physical, measures estimated. The plan (sometimes biological, and socio-economic condi- known as an "action plan" or "environ- tions, including any changes anticipated mental management plan") should pro- before the project commences. Current vide details on proposed work programs and proposed development activities and schedules, to ensure that the proposed within the project area (but not directly environmental actions are in phase with connected to the project) should also be engineering activities throughout prepara- taken into account. tion. The plan should consider compensatory measures if mitigation measures are (e) Environment Impacu. The positive and not feasible or cost-effective. negative impacts likely to result from the proposed project should be identified and (h) EnvironmentalManent and Training.The assessed. Mitigation measures and the existence, role, and capability of environ- residual impacts that cannot be mitigated mental units at the on-site, agency, and should be identified. Opportunities for ministry level should be assessed, and environmental enhancement should be recommendations made concerning the

?b iMNEMD VWs % StgUUDAE#1Iff ( WI MA i U MIW( SUIStSUSE*E A ikhJEtftwt.. October 1989 34 Tu WOUDBAn OnuTnAL MAm OD 4.00-AnnexAl Page2 of 2 Operatlofnal Diectve

esablishment and/or e_asion of such (ii) Rwntcs-writen matals usd in units, and the training of saf, to the study praation. This is ape_ point that EA PReoomenAdtionscan be cialy inpoartt gven the arge implemnxted. amount of unpubliHd dom- tion often usd. (i) Monitoing Pamregardng environmntal impac ad perfrmace. The -pshol (ii) Amid ofIutwrAg=i/Pwar Mm*g, specifythe type of monitoring,who would inudi list of both invite. an do it, how much it would cos, and what attendees. Where the view of other inputs (eg., aiing) are necmary. affected groups and local NGO wer obtained by other means, these App1dia should be specified. (i) Lidtqof E pr..p individualsand organztons.

Il A'apdm.Vi,IkIj_ i* ~u' uu#ib &A auSi~*amur_f 35 TH£ Wow BANKOPEuTroNAL MaNuu October 1989 OD 4.00--Annex A2 Operational Directive Page 1of 2

Checklist of Potential Isues for an EA

Where applicable, EA shouldaddress the Hazardoiu and Toxic Matrias. Guidelines following issues, which are subject to the Bank are available from ENV on the safe man- policies and guidelines identified below. ufacture, use, transport, storage, and disposal of hazardous and toxic materials. (5) Agrochemicals.The Bank promotes the use of integrated pest management (IPM) and (g) lxducd D&dpnwt and OtherSoi-Culural the careful selection, application, and dis- Aspct. Secondary growth of settlements posal of pesticides (see OPN 11.01, Guide- and infrastructure, often referred to as lincsfor the Seketion and Use of Pesticida in "induced development" or "boomtown" Bank-FinancedProjec and their Prormt effesu, can have major indirect environ- whenFimced by the Bank, to be reissued mental impacts, which relatively weak as OD 4.00, Annex C, Agricuu Put local governments may have difficulty Managmnt, and Selctionand Use of Psti- addressing. sids). The use of fertilizers, due to their inpacts on surface and groundwater qual- (h) Inial zardr. All energy and industrv ity, must also be carefully assessed.° i*y msaloecae aseprojects*Alce3 should include a formaln plandsr to (b) BioogicalDiv . The Bank promotes prevent and Bioloicalhe ivers~~Bak prootes(See TwnK.iaimanage of Assessig industrial Industial hazards. Has- conservationof endangeredplant and ani-ar-AM d,WldBnTehil mal species, cridcal habitats, and protected ar-A MN l, World Bank Tehia areas (pam. 9b, OMS 2.36, Eviromel aer o. 5.) Aspet of Bank Work, and OPN 11.02, Wildlands: hir Protetion and Mangemt (i) Inksahoxal Traties and Agmmts on the intFcoxamic DCDekpmat, to be missued as Envirnnment and Natural Resource. Es ODE.00cAn excD , o bWieris: Tsuedr should review the status and application Dion40 Mannge W andt). of such curent and pending treaties and agreements, including their notification (c) Cotstal and Marine Resourcs Managemet. requirements. The Legal Department Guidelines are available from the Environ- maintains a list of international treaties, mental Department (ENV) on the plan- and could obtain, whenever required, ning and management of coastal marine informnationon applicable law in individ- resources inqluding coral reefs, manual countries. groves, and wetands. xtri*oAl Waems. OD 7.50, PRj" (d) CuluralPrperties. OPN 11.03,Mana on InternatioAalWatewas provides guid- of Cultura Prop" in Bank-Fixaned Nroj&e ance. This OD exempts from notification (to be reissued as OD 4.50, Cutural Pr- requirements rehabilitation projects which eny), confirms the Bank's commitment to will not affect the quality or quantity of actively protect archaeological sites, his- water flows. toric monuments, and historic settlements. (k) Inxvolunt Resetmen. OMS 2.33, Soi (e) Dam ad Raservoirs.OD 4.00, Annex B, Ia Associat with InvolUtarYRment Environmei Polfr Dam and Reseoir in Bank-Financed Projecu, and OPN 10.08, PrQjets, provides specific guidance for Opedions Issua in the Tretment of Involun- addressing environmental issues in the tatyResetlein Bank-FinancedProjts (to planning, implementation, and operation be reissued as OD 4.30, InvoluntaryReset- of dam and reservoir projects. tlmnt), provide guidance.

Tli demiuve4w (Apiudt #&Vgadm4/ qatof KIMw51 adu uno owwro.i.ja osuae ammai#eqo so wih)ttemp Octoer 1989 36 Tn WORLDBANK Onu1ol=L MAua OD 4.00-AnnexA2 Page2 of 2 Operational DLrective

(1) Lad Saukmm. Due to the complexphys (p) Tropiea Fows. The Bank co-authored ical, biological, socioeconomic,and cul- de TropicalForet Acon Plan (published tural impacu, land setdement should in 1984);up-to-date infonnation is avail- generally be carefully rviewed (see able from ENV. OPN 11.02, W :ddand. 04.31, Land &U&me*,to be issued). MhirPreeion andMqana et in Ec.um Dewelopmu(to be reissued as OD 4.00, ( N HaxD).as oo ddeesie e)ues reating (rn) N &wrH*wds.EAs d,-Id ieww whediertob tropical foresu. the project may be affected by natural hazards (e.g., earthquakes, floods, vol- (q) Waterskds.Bank policyis to promotepro- canic tivity),and dsouldpropose specific tection and management of watershecis measures to addres thes concernswhen as an element of lending opertions for appropriate(see OD 8.50, Emqs.s R_n.. dans, reservoirs, and irrigation systems ay ALiuance, to be isued). (OD 4.00, Annex B, En_1omenuulicy fiw Dan and Rawueirbqjc, para. 6). (n) Oaatim,d Hel andSiify. A industry (r) Wddr. The Bankpromotes convafin and energy projects, and projectsin other and managementof wetlands(e.g., estuar- seon where relevant, should include a ies, lakes, mangroves, manhes, and formal plan to promote occupational swamps).This is covered by OPN 11.02 health and safety (0 14fiwnaH*aM and on wildlands(see (s) below). Sooiy Guidelines,World Bank, 1988). (s) Wildds. The Bank is committedto protect wildlands, including through com- (o) Trihl Papip. OMS 2.34, Tribal Pop penSatorymeasures when lending could in Bank-Fnaed Pjtw (to be reisued result in adverseimpacts (se OPN 11.02, 0D 4.40r,Tr"ihl Avpk), provides specific Wixdl : TheirPmoeio ad Mangeme guidancefor addresing the rightsof tribl in Eacni Dwelsmw, to be reissued as Peoples, including traditional land and OD4.00, Annex D, WLdands:Their Pr- water rights. *eoe andMangmea).

76 u - P*wd* jf degm eI 'It At W m s.d ad m iwua am* b, q &# sa,xu e Tn WORLDB&iK O?pATIONAL MANUAL 37 October 1989 OD 4.00-Annex A3 Operational .Lrectlve Page 1of 2

Environmental Screning

IIIr6diea (x) Port and Harbor Devdopmnt; 1. IThe tak manager, in consultation with (xi) Recamation and New Lnd Develop the Regional environment divison, i respons ment; ble for screeninga proposedproject to determine the appropriate type of environmental anysi, (xii) Resettlement; based on the nature, potential magnitude, and (xiii) River Basin Development; sensitivity of the issues. The categories below, basd upon pnor Bankstaff experience, are scdy (v) Rural Rod; illustatve. Altematives to EA are acceptable where they are expectedto result in an environ- (xv) Thermal and Hydropower Deveop. mentally sound project. ment;

2. Catgey A: NjccC. WAi" M4 (XVi) TourisM (lre scale); Ham Dim, andSignfica wmimcnadIgmp- Nowill RequireEA' (xvii) Trnsportation (airpors, raiways, rod, waterways); (i) Aquaculture/Mariculture(large scale); (xviii) Urban Development(arge sale); ui) Dms and Reservorus; (xix) Urban Water Supply and Sanitaion uiii) Electrical Transmission (large scale); (large scale); (iv) Forestry; (xx) Manufacture, Transportation, and Use of Pescides or other Hazardous (v) IndustrialPlants (rge scale)and Indus- and/or Toxic Materials;4 and trial Estes; (sxi) Projects which Pose Serious Accident (vi) Irrigption and Drainage (large scale); Risks.5

(vii) Land Clearance and Leveling; 3. CaeW B: PjcCqmpou whichms Hav Spafi ExNjWmul IfmPaEs-M. Limi (viii) Mineral Development(including oil and a,iumnads 4Alss Appopriat gus); ProJectsin this catry normally equir (ix) Pipelines (oil, ga, and water); more limitedenvironmental analysis than an EA.

2. ODIpt y fr pAno diS. ted o miOand imp d ppu # m D liied o s.

3. While OMS 2.33. Smid bw Ahwiad wiht liseIaRs a k w- AmI4_ pyio (to be caisred a00 4.30. lmreit. RawI), cmy dw .. d apet of rmdw_etese theeavimm.al kapciou of th tdemm itcfa cbe majr. 4. Iamc aeto gdi sae _ teA(... 01K 11.0 tfa S_t. U,,q/ A Phiintd Itwad Ituir Awemuw *Amd_ D.dt I t, to beW med - OD04.00 Annex C. A;_ hA M _awKadSriie ad Use#PAiiidw). Ceiate maeia (eg. PCDe)are nto be usedin ank p. andadohr materi (e.g. asbet) amtoe ue crtdyunder eatramly ruicsedwAdlm. A RIaut Tomc Material List (IThtL) wiNbe a ada fm IVNVnd updted peidioaky. 5. So robseroAm ig 1n&wW Nmawt-A Mad. Wod loek TechnicalPawr N. $5.

7&dnew iwpvwp.dfIvr ,aMpi*wofN 1O growVMIV.ul Dd ad so emw*au(e ieuhte Otwit #/ Ar saajvu eereo 38 OCtOber1989 Tim WOILDBANK OPm.TIoNAL MUAL OD 4.00-AnnexA3 Page 2 of 2 Operational Dlrectlve

A wik ne of environmentl guideines. devel- 4. Caep C: PfjaerCoCmpeno wAi NM- apedby a number of organisations,ar aica u,a1y Do Not Resaut in Stnfica EwimnmIu In additon,specific envionmental polluto san- lmadc-EnvvirW uAnasm NemiUalyUwcw duas or designcriteria can be developedfor indi- Vid projects. Opporunitics to enhance enviromental benefits should be sought in these projecu. (i) Agroindustrnes(srnall scle); (i) Education (except school construction); (u) Aquaculture and Mariculture (smll .. Family Plnning; scale); (iii) ElectricalTmansmission (smawllsCale); (iii) Health (except hospital contruction); (iv) Nutrition; (iv) Industries (sml scle); (v) Institutional Development; and (v) Irrigadon and Drainae (sm scale);

(vi) Mini Hydro-Power, 5. Cuq D: Ewirn* Pmwj

(vu) Public Facilies (hospitals, housing, Projectswith a majorenvizonmental focu schools, etc ); may not require a separateEA, as environment would be a majorpart of the project preparnon. (viii) Renewable Energy; 6. £nawgn Rxsw, Prj (ix) Rural Electrification; Because emergency recovery project (x) Telecommunications; (a) needto be processed rapidly, and (b) seek mainlyto restore existingfacilities, they normally would not require a fullEA. However,the extent (xi) Tourism (small le); to which the emergencywas precipitated and/or exacerbtedby inappropriateenvironmental prac (xii) Urban Development(small scale); and tices should be determined, and corrective measures built into either the emergency project or (xiii) Rural Water Supply and Sanitadon. a future lending operation.6 39

ANNEX 1-2

Sample Terms of Reference (TOR) for Environmental Reconna a

JBadgroundinfornmtion. Briefproject description and alternativesconsidered in its planning Description of site: geographical and state of development(develop-A v. greenfield) Potentialimpacts of project Purpose of overall missionto which expert will be assigned(project prepa appraisal) Typesof otherexperts on mission Peopleand institutionswhom expert should meet Missiontiming * Expectedoutput of mission * Backgrounddocuments, including maps (as annexes) 2. Technicalaspects.

(a) Objectivesof the expert services. A briefstatement to ensurethat all partiesundersto f purposesof the expertservices and whatis to be deliveredupon its completion. =p)Isues for study. Describethe key issuesto be studiedby the expert.

(c) Scopeof study. Describehere the natureand extentto whichthe expertwill o te issues. Includephrase "notnecessarily limited to" as indicationthat the expertis to lde and, after authorization,to workon other issuesof importanceshould they emerge. (d) Government'srole in EA. If not doneby othersit maybe desirablefor the expertao appraisethe government'srole and capabilitiesto carry out and deliverenvironm - assessmentsand to recommendhow this may be implementedand, if necessary,strengfhzO.

(e) Contentof outputs. Background,analysis, findings, recommendations, further actions, m timingand cost estimates. (f) Form of outputs. (Sectionof AideMemoire, sections of otherreports, free-standing r -.) 3. Admhistrativeaspects. (rhese couldbe in the letterof solicitationand not duplicatedh In the lowel.) Missiontiming Expected person-daysof effort: at home for backgroundreading, in ftdl k Washington,home'for report writing, and maximumnumber of paid days 40

ANNEX 1-3

Sample Terms of Reference (TOR) for Environmental Assessment (Name of Project Category)

Note: Commentsin (brackets and bold face type] in this TOR Outline indicate where content may have been included, excluded or modified in the project- specificsample TORs (see Annex 1-3A). When combined,the TOR Outline and the project-specificsample TORs provide comprehensiveguidance for TOR preparation. Paragraph numbers in each text correspondfor ease of reference.

1. duction. This section should state the purpose of the terms of reference, identify the developmentproject to be assessed, and explainthe executingarrangements for the environmental assessment.

2. Background Information. Pertinent background for potential parties who may conduct the environmentalassessment, whether they are consultantsor governmentagencies, would include a brief descriptionof the major componentsof the proposed project, a statementof the need for it and the objectivesit is intendedto meet, the implementingagency, a brief history of the project (including alternatives considered), its current status and timetable, and the identities of any associatedprojects. If there are other projects in progress or planned within the region which may compete for the same resources, they should also be identifiedhere.

3. Qbiectives.This section will summarizethe general scope of the environmentalassessment and discuss its timing in relation to the processes of project preparation, design, and execution.

4. Enrmnent AssessmentReguireme. This paragraph should identify any regulationsand guidelineswhich will govern the conduct of the assessmentor specify the content of its report. They may includeany or all of the following:

* World Bank OperationalDirective 4.00, Annex A: "EnvironmentalAssessment," and other pertinent ODs, OMSs, OPNs, and Guidelines;

• nationallaws and/or regulationson envirownentalreviews and impact assessments;

* regional, provincialor communalenviromental assessmentregulations; and

* environmentalassessment regulations of any other financingorganizations involved in the project.

5. Stuy Ar. Specifythe boundariesof the study area for the assessment(e.g., water catchment, airshed). If there are any adjacentor remote areas which shouldbe consideredwith respect to 41

6. Scoe of Work. In some cases, the tasks to be carried out by a consultantwill be known with sufficient certainty to be specified completely in the terms of reference. In other cases, informationdeficiencies need to be alleviatedor specializedfield studies or modellingactivities performed to assess impacts, and the consultantwill be asked to define particular tasks in more detail for contracting agency review and approval. Task 4 in the Scope of Work is an example of the latter situation.

7. Task 1. Description of the Proposed Project. Provide a brief descriptionof the relevant part of the project, using maps (at appropriate scale) where necessary, and including the following information: location;general layout; size, capacity,etc.; pre-constructionactivities; construction activities; schedule; staffing and support; facilities and services; operation and maintenance activities; required off-site investments;and life span.

[Note: there may be particular types of information appropriate in the description of the project category you are concerned with. Please specify themnhere.]

8. Task 2. Descriptionof the Environment. Assemble,evaluate and present baseline data on the relevant environmentalcharacteristics of the study area. Include informationon any changes anticipatedbefore the roject commences. [Annotate or modify the lists below to show the critical information for this project category, or that which is irrelevant to it. You should particularly avoid compiling irrelevant data.]

(a) Physical environment: geology; topography; soils; climate and meteorology; ambient air quality; surfaceand groundwaterhydrology; coastal and oceanicparameters; existingsources of air emissions; existingwater pollutiondischarges; and receiving water quality.

(b) Biologicalenvironment: flora; fauna; rare or endangeredspecies; sensitivehabitats, including parks or preserves, significant natural sites, etc.; species of commercial importance;and species with potential to become nuisances, vectors or dangerous.

(c) Socio-cultural environment (include both present and projected where appropriate): population; land use; planned development activities; community structure; employment; distribution of income, goods and services; recreation; public health; cultural properties; tribal peoples; and customs, aspirations and attitudes.

9. Task 3. Legislative and Regulatory Considerations. Describe the pertinent regulations and standards governing enviromnental quality, health and safety, protection of sensitive areas, protectionof endangeredspecies, siting, land use control, etc., at international,national, regional and local levels (he TOR should specify those that are known and require the consultantto investigatefor others.)

10. Task 4. Determination of the Potential Impacts of the Proposed Project. In this analysis, distinguishbetween significant positive and negative impacts, direct and indirect impacts, and immediate and long-term impacts. Identify impacts which are unavoidable or irreversible. Whereverpossible, describe impactsquantitatively, in terms of environmentalcosts and benefits. 42

Assign economic values when feasible. Characterizethe extent and quality of available data, explainingsignificant informationdeficiencies and any uncertaintiesassociated with predictions of impact. If possible,give the TOR for studiesto obtain the missing information. [Identifythe types of special studies likely to be needed for this project category.]

H. Task 5. Analysis of Alternatives to the Proposed Project. Describe alternatives that were examinedin the course of developingthe proposed project and identify other alternativeswhich would achieve the same objectives. The concept of alternatives extends to siting, design, technology selection, construction techniques and phasing, and operating and maintenance procedures. Compare alternatives in terms of potential environmentalimpacts; capital and operating costs; suitability under local conditions; and institutional, training, and monitoring requirements. When describingthe impacts, indicatewhich are irreversibleor unavoidableand vwhichcan be mitigated. To the extent possible, quantify the costs and benefits of each alternative,incorporating the estimatedcosts of any associatedmitigating measures. Include the alternative of not constructingthe project, in order to demonstrate environmentalconditions without it.

12. Task 6. Developmentof ManagementPlan to Mitigate NegativeImpacts. Recommendfeasible and cost-effectivemeasures to prevent or reduce significantnegative impactsto acceptablelevels. Estimate the impacts and costs of those measures, and of the institutional and training requirementsto implementthem. Consider compensationto affected parties for impacts which cannot be mitigated. Prepare a managementplan includingproposed work programs, budget estimates, schedules,staffing and training requirements,and other necessary support services to implementthe mitigatingmeasures.

13. Tak 7. ldentification of Institutional Needs to Implement Environmental Assessment Reconmmendations. Review the authority and capability of institutions at local, provincial/regional,and nationallevels and recommendsteps to strengthenor expandthem so that the managementand monitoringplans in the environmentalassessment can be implemented. The recommendationsmay extend to new laws and regulations, new agencies or agency functions, intersectoral arrangements, management procedures and training, staffing, operation and maintenancetraining, budgeting, and financial support.

14. ak B. Development of a Monitoring Plan. Prepare a detailed plan to monitor the implementationof mitigatingmeasures and the impacts of the project during constructionand operation. Include in the plan an estimate of capital and operating costs and a description of other inputs (such as training and institutionalstrengthening) needed to carry it out.

~. Tak 9. Assist in Inter-Agency Coordination and Public/NGO Participation. Assist in coordinatingthe environmentalassessment with other government agencies, in obtaining the views of local NGO's and affected groups, and in keeping records of meetings and other activities, communications,and commentsand their disposition. (The TOR should specify the tpes of activities;e.g., interagencyscoping session, environmental briefings for project staff and interagencycommittees, support to environmentaladvisory panels, public forum.) 43

16. wrt. The environmentalassessment report should be conciseand limitedto significat environmentalissues. The maintext shouldfocus on findings,conclusions and recommeded actions,supported by summariesof the data collectedand citationsfor any referencesused in interpretingthose data. Detailedor uninterpreteddata are not appropriatein the maintext and shouldbe presentedin appendicesor a separatevolume. Unpublisheddocuments used in the assessmentmay not be readilyavailable and shouldalso be assembledin an appendix.Organize the environmentalassessment report according to the outlinebelow. * ExecutiveSummary * Policy,Legal and AdministrativeFramework * Descriptionof the ProposedProject * Descriptionof the Environment * SignificantEnvironmental Impacts Analysisof Alternatives MitigationManagenent Plan EnvironmentalManagement and Training MonitoringPlan Inter-Agencyand Public/NGOInvolvement List of References Appendices: List of EnvironmentalAssessment Preparers Recordsof Inter-Agencyand Public/NGOCommunications Data and UnpublishedReference Documents (fnis is the formatsuggested in OD 4.00, AnnexA-1; the TOR may specifya diffrent one to saisfy naional agencyrequirements as longas the topicsrequired in the Bank'sdirctWve ae covered.)

17. ConsWltingIea.

[Environmentalassessment requires interdisciplinaryanalysis. IdentifyIn this paragrapb whichspecializations ought to be induded on the team for the partlcular project category.J

18. Schedule. Specifydates for progressreviews, interim and fial reports,and other significant events. 19. l nf on. Includehere lists of data sources,project background reports and studies, relevantpublications, and other itemsto whichthe consultantesattention sbould be directed. 44

ANNEX 1-3A

Sample Terms of Reference (OR) for EnvironmentalAussinent of Wastewater Collection, Treatment, Reuse, and Dsposal Systen

Note: paragraphnumbers correspondto TOROudine

S. Sold*A Th.The drainage area to be servicedby the wastewatercollecdon system; the tract of landon whicheffluent or sludgewe to be appliedin reusesystems; marine, estuarine or inland wates whichcould be influencedby effluentdischarge; remote sites identifiedfor disposa of solidwaste generated in the treatmentprocess; and, if incinerationis includedas a sludgedisposa technique,the airshedwhich might be affected. 7. Task 1. Dscrition of the oosed Prolect. Providea fiul descriptionof the project,using maps(at appropriatescale) where necessary, and includingthe foilowinginformation: location; generallayout; unit processdescription and diagram;size in termsof populationand population equivalents,present and projected;number and types of connectedindustries; anticipated influent and effluentc tcs; pre-constructionactivities; construction activities, schedule, staffing and supportfacilities and services;operation and maitenane activities,staffing and support facilitiesand services;required off-site investments; life span. 8. Task 2. Dcription of the Envimen. (a) Physicalenvironment: geology (general description for overallstudy area; details for land applicationsites); topography; soils (generaldesption for overallstdy area; detailsfor land applicationsites); monthly average temperat , rainfll and runoff characteristics; descriptionof receivingwaters (identity of streams,lakes, or marinewaters; annual average dishage or currentdata by month,chemical quality; existing dicharges or withdrawals). (b) Biologicalenvironment: terrestrial communities in areas affectedby construction,facility sting, land applicationor disposal;aquatic, estuarine or marinecommunities in affected wates; rare or endangeredspecies; sensitivehabitats, includingparks or preserves, significantnatural sites; speciesof commercialimportance in land applicationsites and receivingwater.

(c) Sociocltura environment:present and projectedpopulation; presnt land use; planned developmentactvties; communitystructure; present and projected employment by industrial catgory; distributionof income,goods and services;recreation; public health; cultural properties;tribal peoples, customs, aspirations, and attitudes.

9. Tak 3. Llative and RegulatoryConsiderations. Deacribethe prtine reulations and Ianas governingenvironmental quality, pollutant discharges to surfce waters and land, dustrl dibchares to publicsewers, water reclamationand reuse,agricuural and landsae 45

useof sludge,hedlth and safety, protection of sensitiveares, protecdonof andsagd spoed, itiW,lad use control,etc., at Intrnatdond,national, regional and local levds. (h TOR shouldspecify those that are known and require the consultant to investpte for ohen.)

10. Task4. Determinationof the PotentialIMpacts of thePrMosed Project. Specidattention should be givento: theextent to whichreceiving water quality standards and/or beneficial use objectdv will be achievedwith the proposed type and level of treatmen * the lengthof streamor expaneof lakeor marinewates whichwill be positvy or negativelyaffected by thedischarge, and the magnitude of the changesin watorqalit parametes; * projectedquantitative changes in beneficialuses, such as fishriaes(species cmpos , productivity),recreation and tourism(visitor-days, overnights, epediur), wes availablefor portablesupply, irrigation, industrW use; and - sanitationand public health benefits anticipated.

17. Consulting.Twm. Coreteam: environmenta engineer; environmental planner (or i); specialistin ecology(terrestrial, acquatic or maine, dependingon typeof dipse), wor quality, soils science (for land application),wastewater uility ZanAgeMu,ad sociology/anthpology. Other specialtiesthat may be needed,depending on the natureof the project,ae: pui health,agronomy, hydrology, lan useplanning, oceanography, water quality modeling, and resourceeconomics.

19. Othaanation. Examplesare pre-feasibility studies, population and land use projeco, lnd use plans, industri activityinformation, water quaity studies,sewer serviceneeds suve, public heath reports,sewa systemevaluations. 46

ANNEX 14

Operational Directives, Operational Manual Statements, and Operational Policy Notes Related to Environmental Review and Assessments

Note: In each subsection, precursory Manual Statementsor Policy Notes are listed for further reference. Proposed Operational Directives are listed, whether or not a draft is available. In such cases, descriptivenotes for the precursory policy will be provided in the appropriatesection. Direct quotationsare from the policy statementsthemselves.

Operational Directives

1. OD 4.00: 'Environmental Policies" (to be issued). Will replace OMS2.36: EnvironmentalAspects of Bank Work (May 1984).

2. OD 4.00, Annex A: 'Environmental Assessment" (October 1989). 'This annex outlines Bank policy and proceduresfor the environmentalassessment (EA) of the Bank investmentlending operations, and related types of environmentalanalysis." Annex A-1 is a sample outline of a project-specificEA report. Annex A-2 is a checklistof typical environmentalissues encounteredin Bank projects. Annex A-3 discusses Environmental Screening, the process of labeling projects according to probable environmentalimpacts.

3. OD 4.00, Annex B: 'Environmental Policy for Dam and Reservoir Projects' (April 1989). Principles of planning (e.g., determination of affected area, costs and benefits, alternauves), eanvironmentalissues at each stage of the project cycle and institutionalaspects are specified. Annex B-1 details typical environmentaleffects of dams and reservoir projects. Annex B-2 defines the area of influence for projects of this type. Annex B-3 is a sample TOR for environmentalreconnaissance. Annex B-4 is 'Sample Clauses for Inclusion in the BiddingDocuments Related to the Constructionof Dam and Reservoir Projects."

4. OD 4.00, Annex D: "Wildiands: Their Protection and Management" (to be issued). Will replace OPN 11.02: "Wildlands: Their Protectionand Managementin Economic Development"(June 1986).

S. OD 4.02: 'Agricultural Pest Management" (Draft; replaces OD 4.00, Annex C). Provides guidance for pest managementand the use of pesticides and promotes adoption of the Integrated Pest M ement (IPM) approach, toward the "fundamentalgoal of increasingagricultural productivityon a sustainablebasis." OD 4.02 is the guidelinesfor implementationof an IPM program, and it sets forth comprehensive guidance for the selection and use of pesticides. OD 11.00: "Guidelines for the Procurement of Pesticides' (Technical Note) will accompany OD 4.02. Replaces OPN 11.01: 'Guidelinesfor Selectionand Use of Pesticides in Bank-FinancedProjects and Their Procurementwhen Finnced by the Bank" (March 1985).

6. OD 430: 'Involuntary Resettlenent" (June 1990). Emphasizes:minimizing involuntary resettle- met; providing people displacedwith the means to restore or improve their former living standard; 47 resettlementplanning; community participation; and compensationvaluation and principles. Also providespractical guidance concerning project options, processing, documentation, etc.

7. OD 4.31: 'Land Settlement"(to be issued).

8. OD 4.40: "Cultural Property." ReplacesOMS 2.34: "TribalPeople in Bank-FinancedProjects" (February1982).

9. OD 4.50: "Cultural Property." ReplacesOPN 11.03: "Managementof Cultural Property in Bank-FinancedProjects" (September1986).

10. OD 7.50: "Projectson InternationalWaterways" (September 1989). Projectson international waterwaysrequire specialhandling as they may affect relationsnot only betweenthe Bank and its borrowersbut also betweenstates, whether members of the Bankor not." Thisdirective describes what typesof waterwaysand projectsare affectedand the governingprocedure. Annex A sets procedurefor circumstancesrequiring technical advice from independent experts.

11. OD 8.0: "Project Preparation Facility" (to be issued). Will replace OMS2.15: "Project Preparation Facility"(July 1986). 12. OD 8.30: 'Financial Intermediary Lending" (to be issued). Will replace OMS 3.73: "DevelopmentFinance Companies" (September 1976).

13. OD 8.50: "EmergencyRecovery Assistance" (Draft). This directivedefines Bank objectives in emergencyrecovery loans (ERLS), i.e., to support broad recovery activitiesrather than provide immediateemergency relief. Preparationand implementationof ERLSis discussedcomprehensively, as well sa strategiesfor mitigatingthe impactsof futureemergencies. Annex A discussesissues needing immediateattention after a disaster. AnnexB lists and discussesspecial considerations in designing ERLS. AnnexC providesguidance for preparationof a TechnicalAnnex in lieu of the StaffAppraisal Report (when speed is essential). ReplacesOPN 10.07: "Guidelinesfor Bank Participation in ReconstructionProjects after Disasters"(July 1984). 14. OD 9.00, AnnexD: "ProjectBrief System"(to be issued). Willreplace OMS 2.13 'Project Brief System." 15. OD 10.00 "Project Generation and Preparation" (to be issued). Will replaceOMS 2.12: "Project Generationand Design"(August 1972).

16. OD 10.10: "Project Appraisal" (to be issued). Willreplace OMS 2.20: "ProjectAppraisal" (January1984).

17. OD 10.70: "ProjectMonitoring and Evaluation"(September 1989). Definesand distinguishes betweenmonitoring and evaluation,and discussesBank objectivesin each. Providescomprehensive discion of monitoringand the developmentof a managementinformation system (MIS). An annex ls usel publicationson projectmonitoring and evaluation. 48

18. OD 11.10: "Use of Consultants" (to be issued). Will replace OMS 2.18: "The Development of Local Capabilities and the Use of Local Consultants" (April 1977) and OMS 2.50: "Services of Consulting Firms for Bank Group Projects and UNDP Studies" (April 1973).

19. OD 12.10; "Retroactive Financing" (March 1989). Provides comprehensivediscussion, including: policy regardinglending operations(investment, adjustment, hybrid, emergency recovery);exception to policy; safeguards; and notification procedures. Annexes provide sample formats for: Monthly Operational Summary (AdjustmentOperations); Notice of Invitation to Negotiate for an Adjustment Operation Requiring an Exceptionto the Guidelines on RetroactiveFinancing; and Notice of Status of Negotiationsfor an Adjustmentoperation Requiring an Exception...etc. (These last two annexes are adapted for an 'Investment Operation' as well.

20. OD 13.55: "Project Completion Reports" (to be issued). Will replace OMS 3.58: "General Guidelines for Preparing Project Completion Reports" (June 1977) and OPNSV Memorandum: "Guidelines for Preparing Completion Reports" June (1989).

21. OD 14.30: "Aid Coordination Groups" (March 1989). This Directive provides guidance for coordination,taking into accountnot only variousdevelopment assistance programs but also government policies and programs. Annex A is practical guidelines and procedures for preparing a 'Sample TransmittalMemorandum for Chairman's Report of Proceedings." Annex C is a "SampleTransmittal Memorandumfor World Bank and GovernmentReports." Annex D is a 'Sample Notice of Meeting, Proposed Agenda, and Note on AdministrativeArrangements."

22. OD 14.70: "Involving Nongovernmental Organizations in Bank-Supported Activities" (August 1989). The diversity of nongovernmentalorganizations (NGOs) is discussed, and ways to involve them in projects are laid out.

Operational Manual Statements

23. OMS 2.12: "Project Generation and Design" (August 1972). Discussesthe Bank's approach to generatingprojects; the impactsof design alternativeson project outcome;Bank/Borrower relationships in project generationand design; and managementof tfie process. Annex titles are: Project Generation and Design: Definitions; Origin of Project Ideas; Project Identification/Formulation/AnalysisProcess Flow Chart; and Sourcesof Assistancein ProjectIdentification and Preparation. Will be replacedby OD 10.00.

24. OMS 2.13: "Project Brief Systemn (April 1977). Discussionof objectivesof project brief (PB), "the basic issues-orientedoperational document relating to the early part of the project cycle." Annex 1 provides practical guidance for preparation of documents. Annex 2 is comprehensivediscussion of the PB system. Will be replaced by OD 9.00 Annex D.

25. OMS 2.15: "Project Preparation Facility"(July 1986). Provides discussionof rationale for Project Preparation Facility (PPF), including financial characteristics, appropriate application, and operating procedures. Annex A lists sources availablefor necessaryprepatory work for Bank projects. Annex B-1 is a "Modelof GovernmentLetter Requestinga PPF Advance." Annex B-2 sets forth stipula- tions for financial advances. Annex B-3 is a 'Model of a Bank Response Granting a PPF Advance.' 49

Annex C is a sample agreement of how the special account will be set up. Annex D is a sample agreementfor reporting arrangements. Annex E is a 'PPF RequestTransmittal Sheet.' Will be replaced by OD 8.00.

26. OMS 2.18: 'The Development of Local Capabilities and the Use of Local Consultants*(April !977). Discussesthe Bank's commitmentto developinglocal capabilitiesto conceive,design and carry out development work, and to developing capabilities among local consultants specifically. Will be replaced by OD 11. 10.

27. OMS 2.20: "Project Appraisal" (January 1984). Provides discussionof general objectives of appraisal; major aspects of the project (economic, technical, institutional, financial, commercial, sociological);technical assistance requirements; and procedures and responsibilitiesfor appraisal. A circular is filed with OMS 2.20: 'Construction Insurance Consultants' (with an annex listing analysis of project risks and insurance needs). Will be replaced by OD 10.10.

28. OMS 2.34: "Tribal People in Bank-FinancedProjects" (February 1982). Discussion of characteristicsof tribal people that make them particularly vulnerable to being adversely affected by projects. Concise overview of Bank policy and applicability.

29. OMS 2.36: 'Environmental Aspects of Bank Work." States the Bank's emphasis on environmentalopportunities and risks introducedby the developmentprocess: local, regionaland global. Discussion of Bank environmentalpolicies and responsibilities. Will be replaced by OD 4.00.

30. OMS 2.50: "Services of Consulting Firms for Bank Group Projects and UNDP Studio." Provides practicalsuggestions for involvinglocal consultantsin Bank projects; e.g., preparationof short list," evaluationof consultants, and sample letter of invitation. Will be replaced by OD 11.10.

31. OMS 3.02: "Format and Content of President's Report and Recommendations" (December 1977). Comprehensiveguidelines for preparation of the President's Report. Atachments provide insimuctionsand sample formats for various parts of the report.

32. OMS 3.58: "General Guidelines for Preparing Project Completion Reports" (June 1977). Will be replaced by OD 13.55.

33. OMS 3.73: "DevelopmentFinance Companies" (September1976). Will be replaced by OD 8.30.

Operational Policy Notes

34. Addendum to OPN 11.01: 'Guidelines for the Use, Selection and Specificationof Petlcldd In Public Health Programs" (September 1987). Discusses vector control, guidelines fbr seloctg pesticides for public health use, and specifications. 50

35. OPN 11.02: *Wildlands:Their Protctlon and Ma ent In 130nomnkDevelopmuzt (Jun 1986). Providesdiscussion of justificationfor protection,the Bank's involvementto date, policy guidance,and designof wildlandmanagement areas (WMAs). Annex tites are: Categoriesof Wildbnd Management;Some Tropical Wildlands of SpecialConcer; [inclusionof wildlandsmanagement in te Project Cycle; PhysicalInputs requiredin Most WMAs[supplies, saffing, faciities]; and Wildand Surveyand ManagementForm [sample].Will be replacedby OD 4.00, AnnexD. 36. OPN 11.03: "Managenentof Cultural Property in Bank-FinancedProjects (September1986). ProvidesUnited Nations definition of culturalproperty, discussion of Bankpolicy, and guidancoebr procedure.Will be replacedby OD 4.50. 51'

ANNEX 1-5

On Project-Level Guides for Environmental Sustainability

1. The Bank'sOD on environmentalassessment states that sustainabilityis a requirementthat Bank projectsmust meet. "Thepurpose of EA is to ensurethat the developmentoptions under consideration are environmentallysound and sustainable...."(OD 4.00 para 3, October1989). Notethat this language does not treat sustainabilityas one valueto be tradedoff againstothers in an economicanalysis. Rather it statesthat the 'developmentoptions under consideration", i.e., all the optionsto be comparedmust be sustainable,so whateveris not sustainableis not even to be includedamong the optionsto be ranked economically.Some guidance on the operationalmeaning of sustainablitywas given in OMS2.36 (May 1984),under the generalheading of headingof "EnvironmentalAspects of BankWork," para 9(a): WThe Bank endeavorsto ensure that each projectaffecting renewable natural resources (e.g., as a sink for residuesor as a sourceof raw materials)does notexceed the regenerativecapacities of the environment."

2. The stringencyof the aboverequirements may soundextreme on first reading- as if we had abandonedeconomics as a criterion. Nothingcould be furtherfrom the truth, however. The insistence that projectsbe sustainableis in fact the reassertionof the elementaryeconomic principle that capital consumptionmust not be countedas income. Incomeis by definitionthe maximumamount that canbe consumedout of the receiptsof a projectwithout impairing the capacityof that projectto continue producingthat amountin the future: A projectthat exceeds the regenerativecapacities of its environment is reducingits futurecapacity to produceand to that extentis countingcapital liquidation or depreciation as income. The WorldBank should not be in the businessof financingcapital consumption. In an era in whichnatural capital was consideredinfinite relative to the scaleof humanuse, it wasreasonable not to deductnatural capital consumption from gross receiptsin calculatingincome. That era is nowpast. The goalof a sustainabilityis the conservativeeffort to maintainthe traditionalmeaning and measure of incomein an era in whichnatural capital is no longera free good. At a conceptuallevel the justification for makingsustainability a sine quanon forproject eligibility could not be strongeror moreconservative. The difficultiesin applyingthe conceptarise mainlyfrom operationalproblems of measurementand valuationof naturalcapital. Theseproblems are addressedbelow. 3. The followingguides seek to elaboratethis principleand extendit to nonrenewableresources in so far as possible. Beloware somerules of thumb. It is a matterof judgmentfor EA teamsto apply them in a reasonableway to diverse projects. Where the EA team finds wide divergencefrom sustainability,it shouldwork with the projectdesigners to narrowthe gap as early in the projectcycle as possible. 4. In whatfollows the use of the terms "assimilativeor regenerativecapacity' should not be taken necessarilyto implythat there is a discontinuousthreshhold of use intensitybelow which there is no effect on the ecosystembeing used. Capacitymay be thoughtof as a currentlevel of a particularecosystem service beyondwhich fiurtheruse.will cause unacceptable(e.g., cumulative,irreversible, excessive) degradationof the ecosystemand lossof its futureservices. Also capacityrefers to the capacityof the relevant ecosystem,not to individualspecies in isolation. There are many difficultiesin defining sustainableyieldand sustainable use, just as there are manyanalogous difficulties in definingincome. 52

But to answerthe unavoidablequestion - Howmuch can we consumethis year withoutreducing our capacityto producenext year?- requiresthat we at least give a prudentrule of thumb.

Output Guide

5. Wasteemissions from a projectshould be withinthe assimilativecapacity of the localenvironment to absorbwithout unacceptable degradation of its futurewaste absorptivecapacity or other important services. Input Guide

6. Harvestrates of renewableresource inputs should be withinregenerative capacity of the natural systemthat generatesthem; depletion rates of nonrenewableresource inputs should be equalto the rate at whichrenewable substitutes are developedby humaninvention and investment.

Discussion: Output Guide

7. If each projectobeyed this rule this rule, then the sum of all projects,or the averageproject, wouldalso conformto the rule. But the averageor sum mayobey the rule eventhough each project fails to, as long as there is compensationamong project pairs or other combinations.Of courseit is easier for earlierprojects to meetthis conditionthan for laterones addedafter assimilative capacities have been largelyused up or evendecreased. Oncecapacity has beenreached a new projectmight be pairedwith an old one that is removedto makeroom for it, if the new one is more valuablethan the old one. Alternativelythe newproject may be pairedwith another new project that makes room by absorbingthe wasteoutputs of other projectsup to the amountemitted by the new one. The pairing idea has been discussedby DavidPearce, and is a variantof the 'bubble concept". Underthe 'bubble concept' the total emissionsfor an area must be st collectively,but the market can allocatethat total among competinguses by exchangeof emissionpermits.

Dscussion:Input Guide

S. The inputsof interestare the primaryinputs from nature,not the interindustryor intermediate inputsfrom other firms. Thisrule thenonly applies to the extractivesector, whereas the previousrule appliesto all sectors. Inputsfrom nature are of two kids, renewableand nonrenewable. (a) RenwablehJMr: The rule Is that harvestrates shouldnot exceedregeneration rates. In other words sustainableyield exploitationshould be the rule. The sustainableyield concept presentstwo problems:measurement difficulties, and the existenceof manydifferent sustainable yields,one for each possiblepopulation of the exploitedresource. The measurementproblem is similarto thatfaced by the incomeaccountant - measuringincome in a way thatkeeps capital (productivecapacity) intact ad proventsinadvertent impoverishment by overconsumption.The point in both casesis to fd a prudentrule of thumbto avoidoverconsumption, not to find the 'theortically uniquescietifically precise number." But the rule to exploitat sustainableyield doe not tell us whatsize population of the exploitedresource should be maintainedin this way. Choosingthe populationsize that gives maximumsustainable yield does not give a sufficient swer, thoughit Is rdeevt consderation. Ihe economicallyoptimum yield generally does no coincidewith the biologicalmaximum yield (they coincideonly when harvest costs are 53

constantwith respectto the amountharvested). lhere is no warrantfor assumingthat the existingpopulation size of an exploitedspecies is optimal. It can be quite reasonableup to a pointto cut downforest for farmland.But whenwe do this wemust be dear thatthe trees from the virginforest cut in excessof replacementrepresent capital consumption, not income. If total capitalis to be maintainedintact the net receiptsfrom the cut virgintimber should be treatedas a depreciationfund to be reiLvestedin somealternative renewable resource that is morevaluable at the margin. (b) NonrenewableiMu. The rule is to depleteat a rate equalto the rate of developmentof renewablesubstitutes. Thus extractive projects based on nonrenewablesmust be pairedwith a projectthat developsthe renewablesubstitute. Net receiptsof nonrenewableexploitation are dividedinto two components(mcome and a capitalset-aside) such that the capitalset-aside, when investedin a renewablesubstitute each year will, by the timethe nonrenewableis depleted,have grownto a stocksize whosesustainable yield is equalto the incomecomponent that wasbeing consumedall along. The capitalset-side will be greaterthe lower the growth rate of the renewablesubstitute (real. or biologicaldiscount rate) and the shorter the lifetime of the nonrenewablereserves (i.e., the reservestock dividedby annualdepletion). The logic and calculationshave been workedout by El Serafyin the contextof nationalincome accounting, but applywith equalrelevance to accountingat the projectlevel. (SeeS. El Serafy,"The Proper Accountingof Incomefrom Depletable Natural Resources", in Y. J. Ahmed,S. El Serafy,and E. Lutz, Enviromental Accountingfor SustainableDevel .) The true rate of return would on the projectpair wouldbe calculatedon the basisof the incomecomponent only as net revenue. Difficultiesremain in the questionof defining'substitute' - whether narrowlyor broadly. Probablya broad definitionwould be indicatedinitially - at least broad enoughto encompass improvementsin energy efficiencyas a renewablesubstitute for petroleumdepletion, and improvementsin recyclingas a renewablesubstitute for copperdepletion.

Further Discussion 9. In the caseof renewables,capital consumption is treatedas deprociationof a productiveasset (the sacrificedbase population that was producing a permanentyield). Depreciadonshould be deductedfrom gross incometo get net income. In the case of nonrenewables,the reductionof stocksis treatedas a liquidationof existinginventories rather than as runningdown of capacityfor future production,and consequentlyshould not evenbe a part of grossincome, as El Serafyrightly insists. 10. Althoughthe inputand outputrules of thumbhave been treated independently, it shouldbe noted that, thanksto the law of conservationof matter-energy,the reductionof inputsto a sustainableyield level will help in the reductionof outputsto a suswtainableabsorbtion level. But "giventhe spatial separationof inputproduction and outputdisposal, and especiallythe generationof manynew and toxic substancesin the productionprocess, the outputrule cannotbe avoided. Neverthelessthe mere fact of mass balancewould lead us to suspectthat in somecases the input rule will be bindingand the output rule redundant,and in other casesvice versa. 11. Somewriters have advocatedthe pairingrule in theory,but have backedoff in practice. For example,in Blueprintfor a GreenEconomy, Barbier, Markandya and Pearcestate: *atthe level of each projectsuch a requirementwould be stultifying.Few projec wouldbe feasible." The authorsadvocate 54 applying the principle at a program (multi-project)level, so that the nondegradationof natural capital stock criterion would only hold on the average for the set of projects in the program and not for each project. This may be a sensible modificationfrom an administrativestandpoint, but seems to sacrifice efficiency by 'socializing' the costs of sustainabilityamong all the projects in a program instead of making each project bear its own full marginal social opportunitycost - a principle eloquentlydefended elsewherein their book.

12. In any event it is not sufficientto say that sustainabilityis a macroeconomiccriterion that is irrelevant at a project level, unless we are able and willingto limit the aggregatethroughput of matter- energy (by severance taxes or depletion quotas)to a flow volume that is within gross regenerative and absorbtive capacities of a country. In this sense a macro approach to sustainabilitymay be the best strategy. Since all projects would have to pay the same prices, which then would reflect the cost of sustainabilityin the aggregatesense, there would be no cost in efficiencyfrom socializingthe costs among various projects in a program by non-price means. Also, applyingthe rules at a project level requires a lot of micro level informationand interference.

13. Althoughthe macro approachseems better from the point of view of a country applyinga national policy, the micro or project-levelrules may be the more relevant from the point of view of a development bank that is committedto sustainabledevelopment as a criterion governing its own lending, but which is not in a position to dictate national policies at the macro level. Of course imposing macroeconomic policies as a condition for making project loans, or lending directly to finance macroeconomicpolicy change is exactly what structural adjustmentlending does. So one could indeed argue that sustainabiity ought to be treated as a macroeconomicgoal to be attained by structural adjustment, and not as a set of project-level conditions. It could be argued that the proper way to treat sustainability is as a macroeconomicgoal to be pursued through structural adjustmentor through macroeconomicconditions tied to project lending, rather than as a characteristicof individualprojects. Emphasisin this case would then shift from the project-levelguides to some analogousmacro-level guides limiting the overallresource throughput to within the regenerativecapacities of the larger national ecosystem. Because the EA OD focuses almost entirely on projects, this issue is not analysed further here. But it remains an important question for further reflection and research. CHAPrER 2 GLOBALAND CROSS-SECTORALISSUES IN ENVIRONMETAL REVIEW

Tbischapter presents information and guidanceon a numberof pervasivenatural resource issues. By discussingthem in a singlechapter, the Sourcebookavoids the multiplepresentations that would otherwiseresult, since these issuesare encounteredin a widevariety of Bank-supportedprojects. Whetherthe topic is one of globalsignificance, such as atmosphericpollution or biological diversity,or concernsa particularcategory of ecosystem,such as wetlands,the formatis generallythe same. Each sectionintroduces the issue, presentsany Bank policiesor proceduresthat have been established,discusses the relationshipof the issueto Banklending, and providesguidance for TMswho mustdeal withthe issue in enviromentalassessments.

GLOBAL AND TRANS-BOUNDARYCONCERNS AND REGULATIONS

Atmospheric Pollution

1. Atmosphericpollution refers to a varietyof physicaland chemicalalterations of the atmosphere, includingnatural alterationssuch as volcanicemissions of particulatematter, and anthropogenic (manmade)alterations such as climatewarming (the 'greenhouse effect"), ozone depletion, acid rain, and the releaseof airbornetoxic pollutants. This section will discuss two phenomenaof globalsignificance, climatewarming and ozonedepletion, together referred to as globalchange. It will also consideracid rain, whichcan have significanttransboundary impacts. 2. Thegreenhouse effect is a naturalcomponent of the earth'sclimate by whichcertain atmospheric gases(known as greenhousegases) absorb some of the radiantheat which the earth emitsafter receiving solar energy. Tbisphenomenon is essentialto life on earth as we know it, since withoutit the earth wouldbe approximately30°C cooler. However,certain anthropogenic activities have the potentialto amplifythe greenhouseeffect by emittinggreehouse gases(primarily carbon dioxide, methane, nitrous oxide, chlorofluorocarbonsand halons,and troposphericozone) to the atmosphereand causingtheir concentrationsto increase.The resultis an increasein meanglobal temperatures, i.e., climatewarming.

3. Ozone(0s) is a gasthat occurs at lowconcentrations throughout the earth'satmosphere, although most residesin the upperatmosphere, or stratosphere(from about 10 to 50 kilometersabove the earth's surface),where it acts as a protectiveshield, preventing harmful ultraviolet radiation from reaching the earth's surface. Ozoneis constantlyformed and destroyed in the stratosphere,forming a balancebetwoee .,,02, and 0. However,reactive chlorine and brominespecies, originating primarily from the use of chlorofluorocarbons(CFCs) and halons,promote the destructionof ozoneand upsetthis balance. It is dhechemical stability of CFCsand halons,and consequentlytheir extremelylong atmospheric lifetimas of up to a cenry and longer, that allowsthem to reach the stratosphere. Oncein thestraosphere, ultviolet radiationcaues the releaseof chlorineand bromineatoms, which act as catalys in the de- 56 structionof ozone. Throughthis process, CFCs and halons contribute to generalozone depletion, as well as to localizedseasonal ozone holes over Antarcticaand perhapsalso in the Arctic.

4. The anthropogenicactivities that contributeto climatewarming and ozone depletionare an integralpart of humanlife and economicdevelopment. Anthropogenic increases in concentrationsof carbondioxide (CO 2), whichare responsiblefor abouthalf of the climateforcing that occurredduring the 1980s,result primarily from the combustionof fossilfuels (coal, oil, and naturalgas) and tropical deforestation.Cement production produces a minoramount of CO2. Anthropogenicmethane (CH 4) emissions,responsible for about 15 percentof the climateforcing in the 1980s,result from agricultural activities(anaerobic decomposition of organicmaterial in floodedrice fieldsand in the guts of domestic animals,burning of landsfor pastureand crop management,and burningof agriculturalwastes such as rice straw),fossil fuel production (coalbed methane release during mining, and ventingand leakageof naturalgas duringproduction and transmission), and anaerobic decomposition in landfills. Anthropogenic nitrousoxide (N 20) emissions,responsible for about5 percentof the climateforcing in the 1980s,result primarilyfrom agriculturalactivities (use of nitrogenfertilizers, land clearing,and biomassburning). A small,uncertain portion of the N20 emissionsarise from fossil fuel combustion. Tropospheric ozone, responsiblefor a smalland highlyuncertain portion of the climateforcing of the 1980s,is not emitted directlyby humanactivity. However,its concentrationis stronglygoverned by trace gas emissions resultingfrom industrial activity and transportation. 5. CFCsand halonsare manmadechemicals, responsible for about17 percentof the presentclimate forcing, and believedto the main causeof the ozonedepletion observed to date. CFCs are used as aerosolpropellants, refrigerants, electronics solvents, and in foam blowingand chemicalproduction; halonsare usedfor fire extinguishers.Two otherlong-lived, manmade chemicals, carbon tetrachloride, whichis usedin chemicalproduction, as a solvent,and as a grainfimigant, and methyl chloroform, used in industrialdegreasing, cold cleaning, and as a solvent,are additionalimportant greenhouse gases as well as ozone depleters. Table 2.1 presentsanthropogenic emissions of the major greenhousegases, by activity,and the effectof thoseemissions on climateforcing over the lastdecade. 6. Anthropogenicemissions of greenhousegases over the last centuryhave alreadycommitted the earth to a warmingof 1-2°C. An effectivedoubling of CO2 (an increase in the atmospheric concentrationsof all the greenhousegases that in total is equivalentto a doublingof the pre-industrial concentrationof CO2),expected to occuraround the middleof the next century,is predictedto result in warmingof 1.54.5C. For comparison,between the lastglacial maximum (about 18,000 years ago) and today,average global temperature has risenabout 5C. Evenover the last700,000 years, the maximum globaltemperature swing was no greaterthan 5 0C. 7. It is not only the magnitudeof the potentialwarming that is alarming,it is also the rate of expectedclimate change. Naturalecosystems that could possiblymigrate or adapt in a less rapidly changingworld, may not be ableto adjustquicldy enough to survive. Potentialimpacts include loss of forests, wetlands,and other ecosystems,and the decline and possibleextinction of many species. Managedsystems may be more resilient,although impacts are still likelyto be large, particularlyin countriesthat are least equippedto adapt. Changes in temperatureand precipitationwill affect agriculturaland water managementpractices. Sea levelrise will causecoastal flooding and saltwater intruion intobays and coastalaquifers to increase,and willdestroy valuable wetlands. The frequency of extremeweather events (e.g., heatwaves,hurricanes) is likelyto increase,affecting human health and 57

Table 2.1. Greenhouse Gases

AnthropogenicEmissions, Contribution to ClimateForcing, and AtmosphericLifetimes (1985 Data)

Approximate Contributionto Clime Forcing Atmo ic Emissios for the 19801 Lifeime TraceGas (milliontons/yr) (X) (year.)

Cabon Dioxide(CO) (C) Fossil Fuel Combustion 5208 Deforestation 400-2600 CementProduction 130 So 50-200 Total C0 2 5800-8

Metdane(CH4 1 (CH) Rice Paddies 60-170 Domestic Animals 65-100 BiomassBurning 50-100 Natuhl Gas Production and Transmission 25-S0 Coal Mining 2S-45 Landfills 3070 20 8-12 Total CH4 250-500

Nitrous Oxide (N20) (N) Nitrogen Fertilizs 0.2-2.4 Conaminat Aquifen 0.8-1.7 Land-Use Modification 1.0-1.5 Posil Fuel Combustin < 5 120-10 Total N20 3.6

CFCs uad halons 17 w25-200+

Note: Ranges reprosentuncertainties n emissions stimates. Th e tota ar not mm of the individualsoure, since the ktos am better conrined thn individuslsources. Emison esmates for CFCs and halons are not given becaus of the lack of informationon emissons of thesechemicals.

3ouwr: USEPA 1990. 58 property, and natural and managed ecosystems. Higher temperatures may exacerbate air pollution, especiallysmog.

8. The Antarcticozone 'hole' was first recognizedin the late 1970s, and its connectionto the use of CFCs and halons was establishedabout a decade later. Significantdeclines in ozone in the Southern Hemispheremid-latitudes and more modest declinesin the northern mid-latitudesobserved in the 198ks, as well as the decrease in the global concentrationof ozone of a few percentbetween 1969 and 1986, are also believed to be due primarily to the use of CFCs and halons.

9. Continuedstratospheric ozone depletionand the resultant increasein penetrationof biologically- damagingultraviolet radiation to the earth's surface will have harmful effects on human health and the environment. Solar ultravioletradiation induces skin cancer, cataracts,suppression of the humanimmune response system, and indirectly (through immunosuppression)the development of some cutaneous infections, such as herpes. Natural and managed ecosystemsare likely to be affected through three mechanisms:(a) general damageto biologicalfunctions in plants resultingin stuntedgrowth and lowered competitivecapacity, (b) specificdamage to DNA with similar effects, and (c) specific damageto germ cells resulting in increased mutation rates. Agriculturalyields are likely to decrease and be of poorer quality, althoughplant breeding and genetic engineeringmay produce ultraviolet-resistantcrops. Non- managedecosystems, however, may not fare so well; less resistant species will be more vulnerable and ecologicalbalance may thusbe threatened. Ozonedepletion is also likely to cause accelerateddegradation of plastics and paints used outdoors, and to exacerbateurban smog.

10. Becausethe gases responsiblefor climatewarming and ozone depletionhave very long lifetimes once they are introducedinto the atmosphere,delays in reducing emissionsproduce a relatively longer commitmentto global change (see Table 2.1.). Althoughthe magnitudeof the effects are uncertain, they are potentiallysevere and possibly irreversible. Taking prompt action seems wise, in light of the risks associatedwith delay, as well as the fact that many commonlyproposed actions make economic, social, and environmentalsense on their own.

* more efficient use of fossil fuel energy and developmentof alternative, renewable energy sources; * reducing the rate of deforestationand increasingreforestation (e.g., carbon sink forests); * collectionand use (as an energy source) of coalbed methane and methane generated from anaerobic systemsOandfills, animal wastes, etc.); * more efficient agricultural practices (more efficient fertilizer use, sustainable rather than shifting agriculture);anid * developmentand use of less damagingreplacements for CFCs and halons.

11. Acid rain results from the presence of abnormallyhigh atmosphericconcentrations of substances that form acids in reaction with water - principallysulfur dioxide (SW2)and, to a lesser extent, nitrogen oxides (NO). These oxides are formed in nature (in volcanic gases and sea spray, for instance), but in highly industrializedor urbanizedareas, man-madesources emit quantitieswhich exceed natural amounts. Coal- and oil-fired generatingplants are the largest sources of SO2, followedby use of high-sulfur coal and oil in industry and home heating. Energygeneration and internalcombustion engines are the largest sources of NO.. Data show that precipitation in wide areas of both Europe and North America is abnormally acidic. 59

12. Availableevidence does not permit a completeassessment of the extent of damagecaused by acid rain worldwide. However, poorly-bufferedlakes and streams are susceptibleto the changes in pH acid rain can cause, and food chains have been shownto be affected in North America and northern Europe. Certain tree species are also sensitive to acid rain, and forests have been affected on both of those continents. Stone buildings and monuments, among them many properties of historic and cultural importance,deteriorate faster whereprecipitation is acidic. In the casesof Canada, Germany,Yugoslavia and the Scandinaviancountries, major sources of the SO2 that forms the acid rain are located in other countries.

Bank Policies, Procedures, and Guidelines

13. Althoughthere is no separate Bank policy on climatewarming and ozone depletion,guidance on global environmentalissues is provided in the Bank publications,and work on the GlobalEnvironmental Facility is accelerating. OperationalDirective 4.00, Annex A: "EnvironmentalAssessment," states that the Bank 'keeps fully abreast of findings [of investigationsof global environmentalissues), primarily through its Principal Advisor, Science and Technology,and draws upon prevailingviews in developing its own environmental,economic, and sectoral policies, with a view to minimizingpossible adverse impactson global systems such as the atmosphereand oceans. While EAs should collect or refer to the relevant data, the Bank does not normally expectglobal environmentalissues to require separate analysis in project-specificEAs. Such issues should, however, be addressedwhere relevant in policy and sector work.'

14. A 1989 policy paper from the Energy Sector Management Assistance Program (ESMAP) emphasizedthe challengesto the energy sector by the potentiallydisastrous effects of climate warming. The paper stresses the need for developingcountries to increasesustainable energy use and improve the efficiency of productionand distribution.

15. A World Bank DiscussionPaper on climatewarming outlinesthe present state of the science of climate warming, and reviews its implicationsfor economicdevelopment (Anderson and Waltz, 1990). Policy on energy-efficiencyis stressed as making sense environmentallyand economicallyas well. Also, international collaboration is recognized as essential for effective response to climate warming (see paragraph 20).

16. The Bank, through such actions as sponsorship of the Consultative Group on International Agricultural Research (CGIAR), participatesin programs to improve our understandingof the science of climate change. CGIAR supports the InternationalRice Research Institute, which is involved in research to quantify and reduce methane emissionsfrom rice paddies.

17. The Bank's EnvironmentalGuidelines recommendlimits on SO2and NO, from industrial and energy sector projects. Adherenceto them or to comparablelimits through selectionof low-sulfur fuels and installation of pollution control equipment, important in the managementof regional air quality, contributes to control of acid rain as well. The Bank has also supported numerous urban projects involvingconversion of heating systems from coal to gas. Sarajevo, Yugolsaviais an example. Such investments,made primarily to alleviate unhealthfulair quality, act to reduce acid rain formation. 60

Relafionshp to Bank Investments

18. Numerousdevelopment activities, such as the following,may influenceclimate change and ozone depletion:

* energy projects involvingincreased production, transportation, and consumptionof fossil fuels; * forestryprojects involvingclear-felling or intensivelogging, constructionof access roads and establishment of forest products industries which induce development and further forest clearing; * agricultureprojects involvingconversion of forests to pasture or crops, cultivationof paddy rice, livestock management,use of nitrogen fertilizers, bumningof savanna and other lands for pasture management,burning of agriculturalwastes; and * industrial developmentprojects involvingthe use of CFCs, halons, and related manmade chemicals;and constructionof landfills.

19. Activitiesthat may decelerate the threat of global change are:

* energy projects invofving increased fossil energy efficiency and conservation, the development of alternative energy sources (e.g., biomass, solar, wind, hydroelectric, and cogeneration),collection and use of coalbedmethane as an energy source, improved natural gas transmissionsystems to reduce leakage; mindustrial development projects involvingthe use of substitutesfor CFCs, halons, and related manmaae chemicals; collectionof methane from landfDlsand other waste streams and use as an energy source; • forestry projects involvingsustainable fuelwood use and agoforestry development, forest conservationand reforestation/afforestation; * agricultureprojects involvingthe developmentof sustainablesystems, restoration of degraded lands and accumulationof soil carbon, and improvedefficiency of livestockmanagement and fertilizer use; and * developmentof effective environmentalregulations and agencies.

20. Energy-relatedinvestments mentioned in paragraphs 11 and 12 have Implicationsfor acid rain as well. In addition, the followingprojects or componentscan have positive impacts on the problem:

* requirementsfor S%-removal equipmentin industryand energy projects; * conversionto low-sulfur energy sources in urban and industrialareas; and * transportationsector policies which emphasizealternatives to automobiles.

21. The Bankfinances projects in all of these sectors. It can therefore influencepotential greenhouse warming, ozone depletion and acid precipitationthrough the selection and managementof projects that mimize omisions of gases that contributeto these problems, and through recommendationsregarding seutora and nationaldevelopment strategies of borrowing countries. Of particular importanceare those 61 projectsthat increaseefficient energy generation and energyuse, and that reducereliance on CFCs and halonsand fossilfuels.

22. The Bank alreadysupports programs designed to improveenergy efficiency and comservation. Examplesinclude the FY88 and FY89 projectsin Argentina,Bangladesh, India, Malawi, Morocco, Somalia,and Zimbabwe,all of whichspecifically addressed improvements in utilityefficiency.

23. The Bankhas undertakena seriesof bilateraldiscussions to assessinterest in the establish of a GlobalEnvironment Facility, a mech&nismthrough which additional funds for globalenvironmental problemswould be mobilizedand managed. Suchfunds would be used to assistdeveloping countries reduce use of substancesthat are ozonedepleting (e.g., make technologytransfer to reduce CFC- dependency;adopt cleanerfuels and technologiesin the energysector; retrofit or designplants in the power and industrysectors to reducegreenhouse gas emissions;and improveforest managementand conservationto increasethe absorptionof atmosphericCO2).

24. Actionsthat can reducethe risk associatedwith global change, include:

* scalingdown and/ordelaying long-lived projects in favor of shorterlivedones undi future regionalclimatic change can be moreaccurately predicted; * carefullyevaluating coastal development projects in lightof expectedfuture relative sea level rise (a functionof the globalrise due to climatewarming plus local land motiondue to groundwaterwithdrawal, tectonic forces, etc.); * conservationof an adequategene poolto ensurethe abilityto developagriculturd species ableto withstandclimate extremes and increasedultraviolet radiation.

Guidance for EnvironmentalAussments

25. Ideally,contributions to dimate warmingand/or ozone depletion will be amongthe majorisues identifiedduring the screeningof proposedprojects. Duringinidtal environmena reconnaiss the significanceof the contributionsshould be determinedand any addiionalconcrns identified.Although the absolutemagnitude of the contributionto globalchange, e.g., extentof climatewaming atibutable to the projectover its expectedlife, will often be difficultto estimate,the relativemagnitude of the contributionshould be assessed. A draft CongressionalReport by the U.S. Environmt Protection Agency(EPA) contains extensive information on greenhousegas emissioncoefficients that canbe usod in this process,e.g., gramsof CO2 per gigajouleof deliveredenergy for a combinedcycle gas turbine versusa simplecycle gas turbine(USEPA 1990). Also, studiesare availablethat quantifythe relaive effectson ozonedepletion of CFCs, halons,and theirpotential replacements (Fisher 1990). 26. Optionsto reducea project'scontribution to globalchange without adversly affectngthe cost or success of the projectshould be evaluated. For example,expansion of domesticcoal mining operationsis likelyto result in methaneemissions. Collectionof the coalbodmethane and use as an energysource would not onlyreduce the contributionto climatewarming, but mightalso be economic. Similarly,the developmentan use of alternativesto CFCs and halons shouldbe encouragedwhen appropriate. Sevel U.S. EPA reportscontain detailed discussions of technicalopdons to reduce greenhousegas emissions(Gibbs ad Lewis 1990). 62

27. When evaluating various alternative projects, not only should potential total gas emissionsbe considered, but also the particular gases that are released since not all the gases are equally efficient in terms of their greenhouse and ozone depletion capacity. For example, even though natural gas emits approximately30 percent less CO2 per unit of energy produced than oil (and over 40 percent less than coal), the production and distributionof natural gas often results in the releaseof CH4, which radiatively is a much more effective greenhouse gas than CO2 - over 20 times more effective (kilogram for kilogram)over a 100-yearperiod. Therefore, when consideringswitching from oil to naturalgas in order to reduce CO2 emissions,the increasedpotential for CH, emissionsmust also be considered(Shine 1990).

28. Implications of climate warming and ozone depletion for a proposed project should also be assessed. For example, projectedsea level rise and increasedcoastal flooding should be consideredwhen evaluatingthe design of a coastaldrainage and wastewatersystem. The Report of Working Group 1 of the IPCC (1990) provides estimatesof future sea level rise.

29. The effect of existinggovernment policies and institutionson activitiesthat contributeto global change should be examined, and those that provide disincentivesto reducing emissions of trace gases identified. For example, certain economic policies (e.g., tax concessions,subsidies) may promote deforestationor inefficientuse of energy. Constructionof roads and industriallogging developmentmay provide access to previously inaccessible forests and indirectly contribute to loss of forest lands. Technologiesthat use chemicalsthat are likely to be phasedout over the next decade (i.e., certain CFCs) should not be endorsed (USEPA 1990).

30. Innovative methods to fund reductions in emissions of greenhouse gases and ozone depleters and/or compensatelocal affected groups for costs they may incur, include:

* levy of a carbon (or greenhousewarming potential)tax on the basis of a country's emission of greenhouse gases, measured in terms of the impact of the emitted gases on global warming; * establishmentof a cleafinghousefund through which countries can substituteaction at home for a more efficient, i.e., economic, action in another country; * private investment, especially in renewable energy, energy conservation, and sustainable forest management;and * an environmentallevy from all countries based on GNP.

These and other funding mechanismsare discussed in more detail in the World Bank DiscussionPaper, Funding for the Global Environment,May 1990.

31. In project-specific, regional and sectoral EAs in urban, transportation, energy and industry sectors, implicationsfor acid rain formationshould be considered. Where acidificationof precipitation is found to be a probable effectof the project, the assessmentshould proceed to identifythe geographical area which could be affected (which may greatly exceed the limits of the study area for other environmentalimpacts) and to characterize the resources within it in terms of susceptibilityto damage from acid rain. The presence of poorly-buffered(ow alkalinity)lakes and streams, cultural properties constructedof acid-solublerock (imestone, marble and serpentine,for example)or sensitivetree species (e.g., northern rad spruce) shouldraise concerns about possibleecological or cultural property damage which should be encompassedin the assessmentof impactsand developmentof mitigatingmeasures. 63

International Treaties and Agreements on the Environment and Natural Resources

1. Public internationallaw governs the conduct among states and other international "persons, namely internationalpublic organizations. The World Bank, an organization created and governed by public internationallaw, undertakes its operations in compliancewith applicablepublic internationallaw principles. These are commonlyreflected through such legal instrumentsas treaties, conventions,or other legally binding multilateral,regional, or bilateral agreements.

2. Environmentaland conservationmatters fall within the ambit of public internationallaw in a number of instances. First, many resource and environmentalquestions can only be properly addressed if a number of states adopt common rules for the solution of the problems posed, the most frequently cited examplesbeing those affecting the entire global community(e.g., high seas, atmosphere). The principle applies equally within a narrower geographicscope (e.g., regional seas or rivers). Similarly, the proper managementof shared resources (such as fish stocks) can only be achievedby action on the regional or sub-regionallevel. Second, actions taking place within one state may produce effects which impinge upon resources or environmentalquality in one or more other states or beyond the limits of naional jurisdiction. These results may be direct and apparent, as in the case of air pollutantsaffecting a state downwind of their sources; or, they may illustrate more complex consequencesof the action complainedof, as when a lower riparian state suffers from floodingor siltation caused by deforestation in a state upstream. In general, the scope of the appropriatelegal response is determinedby the nature of the issue to be addressed.

Scope of International Environmental Law

3. More than 300 multilateraltreaties and formal agreementsrelevant to environmenal protection have been adopted since 1869 and many of these carry substantiveobligations for the states which are parties to the treaty. In addition, a much larger number of bilateral agreementshave been concluded, ranging from understandingsbetween states about the exchangeof informationand research cooperation, to substantive questions like those on boundary water management. Where a country has assumed internationalor bilateral environmentallaw obligations,they mustbe taken into accountin project design to prevent violationsand, if possible,to promote compliance.Accordingly, EA will identifywhether there are internationalenvironmental law obligationsof the borrower that may affect or be affected by the project.

4. The subject matter of international environmental law instruments includes (a) issues that traditionally have been considered global, and (b) issues that traditionally were considered domestic matters but whose ecosystemlinkages or resource use considerationsmade internationalcooperation necessary. Historically,marine pollution on the high seas receivedthe most attention. Recent years have brought increasedfocus to other global issues, such as:

* protection of the ozone layer (Vienna Conventionfor the Protection of the Ozone Layer, 1985); * trade in endangeredwildlife (Conventionon InternationalTrade in Wild Flora and Fauna, 1975, commonlyknown as CITES); 64

* regulationof the seas (lhe United NationsConvention of the Law of the Sea, 1982 - not yet in force); and . trade in toxic substances (Convention on the Control of Transfrontier Movement of HazardousSubstances, 1989, commonlyknown as the Basel Convention- not yet in force).

A global law of the atmospherealso is being developed.

5. In the category of issues which traditionallywere considereddomestic, most of the international law activity has related to conservationof naturalresources. In particular, the Conventionon Wetlands of InternationalImportance Especially as Waterfowl Habitat, 1971, (commonlyknown as the Ramsar Convention) provides international mechanisms for declaration of national wetlands of international significance which, once declared, carry state obligationsto protect. The ConventionConcerning the Protection of the World Cultural and Natural Heritage, 1972, provides an internationalmechanism for recognizingimportant national heritage sites, of either outstandingcultural or naturalvalue, with similar state obligations. A number of treaties or bilateral agreementsalso exist dealing with regional resourca management issues, such as regional fisheries use, protection of wildlife habitat or river basin management. The African Conventionon the Conservationof Nature and Natural Resources, 1968, the Conventionof Nature Protection and Wildlife Preservation in the Western Hemisphere, 1940, and the ASEAN Agreementon the Conservationof Nature and Natural Resources, 1984, incorporateprinciples for the protection of wildlife and parks and the sustainableuse of harvested natural resources. Recent initiatives for a global umbrella conventionin biodiversityconservation (both habitat and species)have produced a draft text, but formal deliberationsby states have not yet begun.

Analyzing Obligations Under International Law

6. When identifying international environmentallaw obligations of a particular borrower, it is importantto look beyondthe text of formal treaties to a number of subsidiarydevices which may be used to avoid delays in bringing multilateraltreaties into force. One of the most commonforms of subsidiary greementsis the protocol' which is authorizedby the treaty in questionand generally containsfar more deailed provisionson some aspects of the subject matter of the treaty than the text of the treaty itself. Familiar examplesInclude protocols under the RegionalSeas Agreementsrelating to oil-pollutioncontrol, control of land-basedsources of pollution,and speciallyprotected areas. Similarly, there is the Montreal Protocol on Substances that Deplete the Ozone Layer, 1987, under the Vienna Convention for the Protection of the Ozone Layer. It is importantto be aware of which protocolsborrower states may be party to, for such agreements have the potential to develop almost as if they were sub-conventions devoted to precise questionswith very specific implicationsas to resulting state obligations.

7. Another subsidiary device used under international law to speed implementationand regular updatingof treaties is to put references to technical matters in an appendix or annex, with the treaty spcifying that annexamendments are possibleby less rigorous or formal means than for the body of the treaty itself. Common examplesof this approach include the list of protected species in appendicesto CITES, various annexesto conventionsdealing with marine pollutionfrom different harmful substances, and the new Basel Conventionon toxic trade (not yet in force). As part of the analysisof a country's treatyobligations, it is important to understandthe specific content of such technical annexes and the borrower'slegal standingwith them (e.g., has the borrower ratified, renounced, made reservations,etc.). 65 inplementation

8. Internationalor bilateraltreaties by themselveshave little direct impacton environmentalquality or natural resource conservation. They operate primarily through domestic policies, statutes, and programs. A number of situationsmay arise under national law when a treaty is ratified bv a state and triggers an obligation for implementation. First, the treaty in question may be entirely consonant with domestic law and practice, and thus be implementedexactly as domesticlaw. Second, while consonant in all material respects with domestic law, the treaty may require the governmentto monitor or report on environmentalconditions or natural resource degradationto an internationalbody or another country; thus, the treaty may assign govermnentauthorities a role in implementationwhich they did not have earlier (e.g., CITES reporting, toxic dumpingreporting, CFC reporting). Third, the treaty may require a material change in the law.

9. A further implementationconsideration resides in which domesticagencies have implementation responsibility. While commonly it is the role of the Ministry of Foreign Affairs (or equivalent) to negotiate treaties abroad on behalf of the country, once a multilateral treaty or agreement has been ratified, some technicalentity typicallywill be responsiblefor implementation.Frequently, local capacity to deal with the technical complexitiesand reporting and enforcementrequirements may lag far behind what is anticipatedduring the treaty negotiationprocess. Therefore, an analysis of existing institutional capacity to implementtreaty obligationsalso may provide importantinformation on whether compliance is feasible in practice and what strengtheningmeasures might be warranted to ensure compliance.

Legal Information and Analysis

10. There are several publications on internationaltreaties and agreements in force. These are updated periodically (see References). TMs can obtain the most recent information for a particular country by consultingthe country counsel in the Legal Departmentof the Bank. Identificationof the actual national environmentalobligations under public intenational law generally requiresthe assistance of legal experts in the country concerned. Typically, the Ministryof Justice and/or Ministryof Foreign Affairs (or equivalent) maintain a list of internationaland bilateral agreements to which the state is a party. With this list, it is possible to identify obligationswhich may have a relationship to proposed development projects. The Legal Department is available to assist through the country counsels and enviromnentalcounsels in identifyingand working with local lawyers and reviewingdetails of particular treaty obligationsand their implicationsfor proposed projects.

HnenatlonalWaterrways

1. Projects involvinginternational waterways and subject to the World Bank OperationalDirective (OD) 7.50 "Projects on International Waterways' are those corresponding to the following descriptions:1/

1/ Definitons and project descriptionsare the same as those used in OD 7.50 'Projects on InternationalWaterways." 66

(a) Typesof internationalwaterways:

(i) river, canal, lake or any similarbody of water whichforms a boundarybetween, or any river or body of surfacewater which flows through two or more states,whether membersof the Bankor not; (ii) any tributaryor anyother body of surfacewater which is a part or a romponentof any waterwaydescribed in (i) above;and

(iii) bays,gulfs, straits, or channels-boundedby two or morestates or, if withinone state, recognizedas necessarychannels of communicationbetween the open sea and other states-and any river flowinginto such waters. (b) Typesof projects: (i) hydroelectric,irrigation, flood control, navigation,drainage, water and sewerage, industrial,or similarprojects which involve the use or pollutionof international waterwaysas describedabove; and (ii) detaileddesign and engineeringstudies of projectsunder (b)(i)above, including those to be carriedout by the Bankas executingagency.

2. Waterwayshave alwaysbeen importantto countries,for trade and defenseand as a commodity to be used, and likelywill becomemore so as awarenessof the interconnectednessof globalresource. (asreflected in suchterms as 'global commons")and as concernfor globalpollution and potentialgloba threats (suchas depletionof the ozonelayer and globalwarming or forcing)grow.

Bank Poicy

3. The Bankrecognized the significanceof internationalwaterways to its membersand incorporated into OD 7.50 explicit guidelinesfor projects involvingthem. This operationaldirective will be summarizedand quotedfrom here, but shouldthere be a differenceof emphasis,the directiveshould be followed. Theguidelines emphasize the necessityof identifyingearly in projectplanning the possibility of internationalwaterways being involved and of notifyingBank officers and the other partiesinvolved (e.g., the other riparians). Not4lcationof Bank Officers 4. The processof reportingbegins with the InitialExecutive Project Summary (IEPS). Throughout the project,the SeniorVice President, Operations (OPNSV), should be kept informedby the directorof he County Department(CD), through the RegionalVice President (RVP) and in consultationwith the Legal Department. Before an appraisalis undertaken,the transmittalmemorandum for the Final ExecutiveProject Summary (FEPS) should be preparedin collaborationwith the LegalDepartment and shouldconvey all relevantinformation on the internationalaspects of the project. The transmittalmemo shouldbe addressedto the RVPand copiedto the OPNSVand the VicePresident and GeneralCounsel. 67

5. The Staff Appraisal Report (SAR) and the Memorandumand Recommendationof the Presidet (MOP) should deal with the internationalaspects of the project, and should state that Bank staff have consideredthese aspects and are satisfied that:

(a) the issues involved are covered by appropriate agreement or arrangement between the beneficiary state and other riparians; or

(b) the other riparians have given a positiveresponse to the beneficiary state or to the Bank, in the form of consent, no objection, support to the project, or confirmationthat the projectwill not be harmful to their interests; or

(c) in all other cases, in the assessmentof Bank staff, the project would not cause appreciable harm to the other riparians, or would not be harmed in like manner by the use of the waten by other riparians.

Notificationof Other Riparians

6. As early as possible during the identificationstage of the project cycle, the Bank should advise the state proposing the project on an internationalwaterway (the beneficiary state) that, if it has not already done so, it should formallynotify the other riparians of the proposed project. If the beneficiary state does not wish to give notification,the Bank normallywill do so. If the beneficiarystate objects to the Bank's giving notice, the Bank will discontinuefurther processing of the project. The executive directors should be informed of these developmentsand of any further steps taken.

7. OD 7.50 (para 8) describes cases where notificationof riparians will not normallybe required.

(a) Projects involvingadditions or alterationsto any ongoingschemes that in the judgmentof the Bank meet the followingcriteria:

(i) they will not adversely change the quality or quantity of water flows to downstream riparians; and

(ii) they will not be adversely affected by the use of water that upstream riparians might make.

However, if there is any agreement or arrangementbetween the riparians, Bank staff should secure compliancewith such agreements.

(b) Water resource surveys and feasibility studies on or involving international waterways. Beneficiarystates should, however, be required to include in the terms of referencefor such surveys and studies, an examinationof any potential riparian issues.

8. Explicit procedure is provided (OD 7.50, paras 10-14) for complexsituations where there ar conflicting objectivesbetween riparians. 68

negradionInto Eaivlronmena Muw t Proc

9. Ile environmentalimpacts of projectsalways should be evaluatedas early as possible in planning,but it is crucialwhen international waterways are concerned. Whenthe other riparian ae notifiedof a projectthat may involvetheir waterways,enough data shouldbe providedto enablethem to determineits potentialeffects. If ProjectDetails are not availableat the time of notification,they shouldbe made availableas soon as possibleafter the notification. Bank staff shouldevaluate the informationand ensurethat it is adequatefor the purposeof makingan informeddetermination. 10. If it is proposedto go aheadwith project appraisal prior to the availabilityof projectdetails, the CD directorshould notify the OPNSV(according to specifiedprocedure in OD 7.50, para4), clarifying the internationalaspets, and requestapproval to so proceedwith appraisal.

11. The Bank's Legal Departmeatwill explore the various internationalagreements, country legislationand regulationsand so forth,that willaffect a projectinvolving international waterways. (See sectionon "InternationalTreaties and Agreements on theEnvironment and Naural Resources"for further discussion.)The TM willnormally need only to be advisedof the sensitivityof suchprojects, to foresee as quicldyas possibletheir involvement,and to bringthe matterto the attentionof the appropriateBank officers.

InterndtionalWaterwys M a GlobalConcern 12. There is growingawareness about the globalenvironment and growingconcern about the far- reachingeffects of a country'spractices - practicesthat at onetime seemed to be the properconcern only of the statein whichthey occurred. For example,one nation'sindustries or agriculturehave become the proper concernof anotherwhen they pollute its lakes and rivers. If the trend towardglobal awareness continues,It can be expectedthat Bankprojoct increasinglywill be de inedas involvinginterational waterwaysand thus be regulatedboth by Bankpolicy and internationallaw.

CROSS-SECTORALISSUES

Biologkal Diversity

1. Biologicaldiversity, or biodiversty,refers to the varietyof the world's biologicalresources - its living organism. It is a funcdonnot simplyof the numberof ecosystemsand distinctplant ad animalspecies in existenceat any giventime, but also of geneticdifferences within individual species. This groat diversityof the world's plant andanmal specieshas intrinsicvalue, simplyfor existing. Further, biologicaldiversity is more than a concept;it is a preciousnatural resource - a resource essentialto humanexistence ad commerce. 2. All principalfood cropsof todaywere derived from wildspecies, and the existenceof genetic variabilityin the form of wildrelatives of domesticcrops Is the sourcefor continuedimprovement in yield andresistance to disase or strssfulchanges in environmentalconditions. Many industries depend on plants d aimals for tain, resi, dyes,oils andother raw materials. A large numberof modern dru originatefrom wild spes of fungi, baeria, higher plans d animals. Many crops are pollined by nalurallyouring events. Wild speies helpprevet pest outbreak. With onlya small fractionof existingspecies inventoried (perha a few s five percent),the divesity of biological resourcespromiss numerousdcovies of usefulproducts u yet unidentified.

3. No less importantare the intangible,cutural valuesof biodiversity. Wild plant and animal speciesare sourcesof recreationand aestheticpleasure to manypeople. They are deeplyembedded in folldoreand our shared heritage;they inspireworks of art and expressionsin languagesand figure prominentlyin religions. 4. Biologicaldiversity is also the characteisdcof wildspecies and naturalecosystems that allows them to withsand extern stres. Genedcvaiability withina speciesis the basis for its developing resistanceto a diseaseor a changein climatewhich wouldotherwise cause its extinction. Species diversityaffords stability to ecosystems;while a particularpollutant may destroy or driveaway some of the speies at one level in a food chain, others whichare more resistantmay remainto reproducein greaternumbers and sustainthe organismswhich depend on them.

5. Conservationof biologicaldiversity is thereforea formof naturalresource managementwhich has as itsprimary goal maintining the long-termpotenial of worldbiological resources to meetthe needs and upirations of futuregenerations - a fundamentalprinciple of sustainabledevelopment. Naural resourcemanagement pracdces which seek only to maximizeshort-term productivity, and even some practiceswhich maximize long-term productivity of specificresources, often have the oppositeeffect. Thus we are witnessingloss of biologicaldiversity at an alarmingrate, due largelyto the demandsof growingpopulations on biologicalresources and habitats- and the losses a irreversible. Some scientistsbelieve 15 to 20 percentof the estimated10 to 30 millionspecies of plantsand animalsextant in 1930may become extinct by the year2000 if presenttrd condue. They estimatethat extinctions are occurring1,000 to 10,000times more rapidlytoday than during the millionsof yearsbefore human interventionbecame a significantforce. Ihese tatics illustratethe urgentneed for soundmanagement of naturalresources (and especially for conservationof biologicaldiversity) in the workof development agenciesworldwide.

Bank Policy,Procedures, and Guidelines 6. TheBank has two policiesdirectly relevant to biologicaldiversity - preservationof endangered speies and criticalhabitats, and conservationand magement of wildlands. 'Te Bank's biodiversity workinggroup addressa other aspectsof the Iuuo also andis promotingways for the Bankto increase its role in this field. 7. OperationalManual Statement 2.36 PEnvironmentalAspects of BankWork," issuedin May 1984,states in paragraph9(b) that the Bank "willnot financeprojects that causesevere or irreversible environmentaldegradation, including speies extinctionswitiout mitigatorymeasures acceptable to the Bank." In para9(g), It states at the Bank"wll not fiance projectswhich would significantly modify natur reas designatedby internationalconventions a WorldHeritage sites or BiosphereReserves, by naional logislationas nationalparks, wildliferefges, or otherprotected are." 70

8. Operational Policy Note 11.02 *Wildlands: Their Protection and Managementin Economic Development,' issued in June 1986, is based heavily on the principle of conservingbiological diversity. Becas most of the world's plant and animal species depend on wildlands for their existene, tho destuction of wildlands is acceleratingthe extinction of species. The Bank has derived its primary wildlandsstrategy from this relationship: conservebiological diversity by preserving sufficientamunts of representativewildlands and protectingor managingthem to sustaintheir viabilityas plant and animal habitat.

Relatonship to Bank Investments

9. Examplesof developmentactivities which may have the most significantnegative consequnc for biological diversity are:

• agriculture and livestock projects involvingland clearing, wetlands elimination, inundation for irrigation storage reservoirs, displacementof wildlife by fences or domestic livestock, heavy use of pesticides, introduction of cash crop monoculture into settings previously dependenton a large suite of local crops for subsistenceagriculture;

i fisheries projects involving conversionof important natural breeding or nursery sites for aquaculture or mariculture, over-fishing, introductionof exotic species in natura aquatic ecosystems;

- forestry projects involvingconstruction of access roads, intensivelogging, establish t of forest products industrieswhich induce other developmentnear the project site;

* transportationprojects Involvingconstruction of highways,bridges, rural roads, railways, or canals, all of which may facilitate access to and spontaneoussettlements in naural areas;

* channelizationof rivers;

- dredge and fill activitiesin coastal or inland wetlands;

* hyJropower projects involving large water diversion, inundation or other major transformation of aquatic or terrestrial natural areas, leading to habitat reduction or modificationwith resultantforced movementof fauna into new areas and likely violationof carrying capacity there;

* irrigation and other water supply projects that may remove water, drain wetland habitats or eliminateessential watering sources;

* industrialprojects involvingair, water, or soil pollution;

large-scaleloss of habitatsdue to mining and mineral exploration; and

* conversionof biological resourcesfor industrialfuels or feedstocks. 71

10. Ihe Bank finances projects in all of these categories. It can therefore influencethe managemet and protectionof biological resourcesand promote conservationof biologicaldiversity through selection of projects, participationin the project preparationand environmentalreview process, project appraisal, implementationand recommendationsregarding the sectoral and national development strategies of borrowing countries.

11. Between 1975 and 1988, the Bank has assisted in the finance or execution of more than 40 projects with componentsfor conservationof biologicaldiversity, primarily in the courseof implementing its wildlands protection policy. Most of these projects have involved the establishment and/or strengtheningof institutionsresponsible for wildlandsmanagement areas. More recently in Madagascar, the first countrywhere the Bank assistedin developingan EnvironmentalAction Plan, a major investment program entitled EnvironmentalI Project includes watershed managementand protection of biological resources in the Malagasypatrimony in associationwith the developmentof tourism.

12. The Bank participates in programs to improve the internationalgene bank network; it has been direct donor to the ConsultativeGroup on InternationalAgricultural Research (CGIAR)and an indirect supporter of the International Board for Plant Genetic Resources. CGIAR has enabled agricultral research centers in a number of regionsto become storagecenters for wild (and locally important)species and varieties of economicallyimportant food crops.

Guidance for Environmental Assessments

Determinationof Impacts

13. Ideally,any implicationsfor biologicaldiversity will be among the major issues identifiedduring the screening of proposed projects. During environmentalreconnaissance conducted as part of an ealy preparation mission, the significance of the issues can be determined and any additional concerns identified. The resulting information is useful both for integrating biological diversity into project planning and design and for establishingthe scope of an environmentalassessment or other environmental study which may be conductedin conjunctionwith project preparation. A simple checldistto assist in early identificationof biological diversity issues is provided here.

(a) Identify the specifictypes of ecosystemthe proposed project will affect (e.g., tropical forest, salt marsh, wet savanna, etc.). Are any of them wildlandsof special concern or designated natural sites of national or internationalimportance?

(b) What are important biological features of the ecosystems; e.g., habitat for endangered species, or only breeding and nesting area for a particular species.

(c) Determine the general nature of the project's impact on ecosystems; e.g., deforestation, flooding,draining, changinghydrologic regime, facilitatinghuman access, vehicletraffic and noise.

(d) Assess the significanceof likely negative impacts relative to:

total area of ecosystem type in region and/or country (e.g., project will d ey approximately10 percent of nation's remaininglowland swamp forest); and 72

cumulativeeffects and trendsfor ecosystemtype (e.g., tidal wetlandsarea is being lost in the countryat an annualrate of three percenta year; this projectand two other harborfacilities projects planned for the coastalzone will involvea totalof 6 percentof the remainingarea).

14. Whena projecthas implicationsfor biologicaldiversity but the issueis relativelyuncomplicated and the natureof the projectpermits, the designmay be modifiedto eliminatethe concern(e.g., change in highwayalignment to avoida wildliferefuge). Otherwise,the issueshould be incorporatedexplicitly intothe scopeof anenvironmental assessment or otherstudy where it willreceive more detailed analysis and will be consideredwhen measuresto mitigateadverse impacts are developed. In most cases, a qudifiedspecialist will be essential. 15. The sampleterms of referencefor environmentalassessments presented in the Sourcebookand the surveytechniques just describedshould yield most of the informationneeded to assessproject impacts on biologicalresources. In makinga rapidassessment of habitatsand speciescomposition of plant and animalcommunities, the followingare importantinformation sources:

* publicationson naturalareas of specialconcern or internationalimportance; * nationalcompilations of flora and fauna; * stockassessments; timber, fish or otherbiological surveys providing census data and trends in speciesand populations; * nationalor regionalprograms monitoring the statusof or trendsin biologicalresources; and * localand regionalresearch institutions and NGOs.

16. The contributionof particularecosystems to the regionand countryprobably exceeds simple coservation of biologicaldiversity. OPN 11.02discusses free environmentalservices that wildlands provide. Sometimesthese contributionsto national,regional and local economiescan be measuredin monetay or otherterms, and canbe includedin any considerationof the costs and benefitsof a project modificationor mitigatingmeasure to conservespecific biological resources. When not measurable,they shold be describedquantitatively.

Determinationof InstitutionalResources to MitigateImpacts 17. In conjunctionwith preparing an inventoryof biologicalresources, examine existing government policiesand laws and the institutionsavailable for their management. * Reviewlegislation and policiesin sectorsthat may affectbiological diversity, the extentto whichconservation of biologicaldiversity is integratedinto rural development programs, and conflictsor cooperationbetween agencies responsible for naturalresources exploitation and/or conservation- agriculture,fisheries, forestry, mineral resources, energy, water resources, recreationallands. * Determinewhether sectors such as commerce,transport or the militarywill have major impactson biologicalresources and, if so, whether their policiesare consistentwith 73

conserving biological diversity or, at least, do not unnecessarilydeplete the resources in question.

* Identifypolicies that providedisincentives to conservationof the biologicalresources important to sustainingdiversity, includingtax concessions,credits, subsidies,grants, or indirect incentives such as constructionof roads or other infrastructurein forest reserves.

* Evaluate the effectivenessof proceduresand organizationsfor implementationof policies, laws and regulations.

MitigatingMeasures

18. The technical aspects of mitigation plans for projects which may have adverse impacts on biological diversity include actions such as:

* establishingwildlands managementareas or other protected habitats in the project's area of influence; * establishingequivalent conservationunits elsewhere in the region to offset unavoidableloss of habitat in the project area; * designingbuffer zones, wildlife corridors, and other features to maximizethe benefits of the wildlifemanagement areas or minimizeimpacts of the project on wildlife; * restoring damagedhabitats; * creating new habitat, such as wetlands, artificial reefs, bird nesting sites; and * maintainingrare or endangeredspecies in special facilities, such as zoos, botanical gardens, seed storage.

19. Institutionalaspects of mitigationplans may include:

* strengtheningexisting agencies with managementresponsibility for parks and preserves, other wildlandsmanagement areas, and biologicalresources in general; * establishingnew institutions,procedures and regulations; * promotingregional perspectives in developmentplanning to avoid loss of biologicaldiversity through cumulativeor intersectoralimpacts; * strengtheningland use planning and control institutionsand instruments; * supportingscientific research pertinent to biologicaldiversity; * environmentaleducation; * incentivesfor conservation;and * compensationand/or concessionsto groups negatively affectedby conservationmeasures.

OPN 11.02 on wildlandsprovides more informationand referenceson these topics.

20. Communityinvolvement is critical to conservingbiological diversity, especially in cases where the approach involves imposing restrictionson the use of lands enjoyed by the public or consideredthe domain of indigenouspeoples. It is especiallyimportant to pursue dialoguewith affected groups on the following topics: 74

* the importanceof biological diversity; * benefits to be gained from conservationof diversity; * local costs and benefits of the project; * realistic managementoptions; and * local customs, traditions, and cultural values.

21. Project componentsfor conservingbiological diversity are usually a small percentage of total project costs. However, they do not often produce revenue directly, and their operatingcosts may fall on agencies which are not participatingin the main componentsof the project. It will be difficult to obtain enthusiasticcooperation from the local parks and recreation department, for example, if it finds itself burdened by the additional expense of managing a reserve establishedas part of a hydroelectric power project, from which it derives no income. Implementingagencies must receive the necessary resources.

22. There are a numberof methodsto financeconservation of biologicaldiversity and/or compensate local affectedgroups for costs they may incur in participating:

- charging entry fees to natural areas where visitors are pennitted; - taxing tourism revenues in localities where natural areas are tourist attractions; - returning a portion of the profits from exploitingbiological resources to the local community; - implementingwater use charges for the water produced by a protected area; - includinga modestcharge in electricityrates where power source is a reservoir protectedby the conservationunit; * *renting' the inundatedarea in perpetuity to the hydroelectricpower producer; * establishinglinkages with other developmentprojects; * buildingconditionality into extractiveconcession agreements; e seeking support from internationalorganizations; and e establishinglocal 'ownership" by implementingconservation through local special-purpose corporationsor conservationNGOs.

23. Sectoraland intersectoralopportunities to support biologicaldiversity initiativesdo not normally arise of their own accord. In many instances they must be pursued out of the project context, for example: * incorporationof biologicaldiversity concerns into economic and sectorplanning documents; * assistancewith government planning for the managementof biologicalresources; * inclusionof biologicaldiversity management issues in policydialogues between governments and internationalagencies; * cooperationwith national and internationalNGOs; and * incorporationof biologicaldiversity into the curriculaof developmenttraining institutions suchas EDI.

(SeeTable 2.2 for examplesof how theseinitiatives can be carriedout.) 24. Supervisionis a key aspect of conservationof biologicaldiversity in Bank projects. It is importantto monitorthe implementationof biodiversitycomponents and to evaluatethe qualityof the work. In addition,longer-term monitoring, perhaps beyond the endof the actualproject implementation, Table 2.2. Objectives and Examples of Management Systems to Maintain BiologicalDiversity Onuite Offsite

Ecosystemmaintesanc Species mugement Livingcollections Germplasmstorage

Increusinghuman intervention > < ----- Incr ing natrl procesm

Maintan: Maintain: Maintain: Maintain:

* a reservoir or "lbra * geneticinternction * breedingmatl that * convenient sourceof of genetic resoures betwoensenidomestid cannot be stored in germplsm for breeding spce and wild relatives genebanh programs

* ewobticonaypotea * wild populationsfor * field researchand * colections of gsmplasm U susrinable expoitation developmenton new from uncetain or varieties and breeds thratened sources

* func_inng of various * viable populationsof * offsite cultivationand * reference or type ecologcal prees tr_ea species propagation collectionsu standard for rseach and patentingpuposes

* vat manky of known spoeciestat provide . captivebreeding stock of * acoess to geaplasm from Nd unknwn impoot indirect popuations threnod in widc geogrphic areas beneft (for polli, the wvld nation or pest contol)

* _resentativesof unique * "keysoW species with * ready acceosto wild * genetic material from na1a ecoyems impoant ecoyn sup- speciesfor resarch, criticallyendangeed poenor reguling function education,and display

Naosa park Agmecosytem Zoologicalpau Seed and pollen banks Reeamc mimi arms Wdf refuges Botanicgardes Marine u _acae Insiu genebankc Fild collections Reource deokp Game park and resves Captivebreeng programs Seon Ole of Tedasbu A _unsnu,1986 76 maybe the only way to determinethe extentto whichthe projectcomponet are bing sned and are actuallycontributing to coDnsevingbiological diversity. That informationshoud be fed back into countrysrategy and projectplanning to improvebiodiversity componet in futurework.

Wilands

I. Wildlandsare naturalland and water areas that have been modifiedby humanactivities only slightlyor not at all. Any relativelyundisturbed natural ecosystemmay be a wildtand;forest, grasslands,inland bodies of water,inland and coastalwetlands, and marineareas such as coralreefs are adlexamples. 2. Wildlandsmerit special attention in environmentalassessments. They are valuablebecas: (a) they constitutehabitats for indigenousplant and animalspecies (and thus contributeto maintaining biologicaldiversity); (b) they performimportant environmental services for societyat little or no direct cost; and (c) they are in some casesessential to the livelihoodof indigenouspeoples (see sectionson "SocialIssues in EcologicallySensitive Areas and "IndigenousPeoples"). Wildlands are vulnerableto the pressuresof populationgrowth, landlessness, and economicdevelopment and have been rapidy disappearingin manycountries, developing and developedalike. 3. Wildlandsof specialconcern are those recognizedas exceptionallyimportant in preserving biologicaldiversity or performingenvironmental services. Someof thesehave been officially designated by nationalgovernments, sometimes in collaborationwith internationalacies such as the United Nations(e.g., WorldHeritage Natural Sites). Othersare as yet unprotoctedbut recognizednationally or internationallyas biologicallyunique, ecologically fragile, or of specia importancofor localpeople or environmentalservices. Bank Policy,Procedures, and Guidelines

4. The Bank'sOperational Policy Note No. 11.02 Wildlands:Their Protection and Management in EconomicDevelopment' expresses its generalpolicy: (a) The Bank normallydeclines to fince projectsinvolving conversion of wildlandsof specialconcern, even if this conversionoccurred prior to the Bank's being invitedto participatein the project. (b) Whenwildiands other than those of specialconcern may becomeinvolved, the Bank prefersto site projectson landsalready converted sometime in the past, rather than In anticipationof a Bankproject.

(c) Where deveopmentof wildlandsis justified, then less valuablewildlands should be convWertedrather than more valuableones. 77

(d) Whensignificant conversion (100 km 2 or a significantproportion of the remainingwildatd area of a specificecosystem, If smaller)of wildbandsis Justified,die Ion shouddbe compensatedby inclusionof wildiandmanagement component in the projectconcened, ratherthan in somefuture project. Ihis componentshould directy supportprotection of an ecologicallysimilar area.

5. This policypertains to any projectin whichthe Bankis involved,whether or not the Bankb financinga componentthat affectswildlands.

6. Bankpolicy further states that, wherethe successof a projectdepends on environmentalservices providedby certainwildlands, a projectcomponent should be includedwhich wil conservethe wildlands. Wherethe wildlandsdo not directlyserve the project,the projectmay be improvedthrough wildland managementto providesocio-economic benefits in the generalarea. Projectswith wildlands management as their sole objectiveare to be encouraged. Relationshipto Bank Investments

7. Wildlandsare potentiallylinked to virtuallyevery sectorof Banklending operations, either as resourceswhich may be damagedor eliminatedas a director indirectimpact of a project,or as resources on whichthe successof the projectin part depends.

- Agricultureand livaetockprojects may result in the displacementof wildlifeand eliminationof wildlands.

Aquacultureprojects sometimes lead to lossof naturalbreedi and murserygounds and disturbanceof ecosystemsby introductionof exotic species;many natural fisheries, however,are dependenton headwaterand wetlandnursery areas and may be adverely affectedif these are not protected. Forestryprojects may includelogging of wildlandareas and can facilitateuncontrolled accessto them via loggingroads. A varietyof transportationprojects, including roads, railways, canals, river dredging,And port development,also make wildland areas more accessible, induce development, and may direcdyeliminate wildlands. * Shippingchannel maintenance becomes more cosdywhen a watersed has a highrate of soil erosion,which may be cused by eliminationof naturalvegetation. Damsmay inundatewildland area but mayalso benefitfrom them for controlof siltation, protectionof reservoirwater quality, and maintenanceof a balancedhydrologic cycle. Industrialdevelopment can affect wildlandsadvrsely (throughtherml pouion from coolingwater discharges,for example,or chemicalpollution of aquaticand terrtri wildlas via wateror air). 78

8. Environmental impacts on wildlands are often intersectoral. For instance, wetlands and headwatersare vulnerableto industrialor municipalwastewater discharges, agriculturalrunoff, siltation from forestry operations, or dredging and filling for transportationprojects or shoreline development. If these wildland areas are not protected, fishery productivityand revenue can be diminished. Where the wildiands in question are tourist attractions, loss or damagecan reduce tourism revenues as well.

9. There are also linkages to regional or global environmental conditions. Wildlands can be breeding, resting or wintering sites for fish or bird species which migrate long distances to other ecosystems. Large tracts of forest can have a moderatingeffect on regional climate, and destructionof them may also contributeto global warming.

10. Experience from more than 40 Bank-supportedprojects that included an explicit wildlands managementcomponent, has demonstratedthat failure to include wildlandmanagement provisions early in the project cycle can reduce project benefits. While it may increaseproject complexitysomewhat, it has rarely caused significant delays. The main exceptionsare cases where not incorporatingwildland managementearly caused costly delays later. The Bank therefore concludedthat wildland management should routinely be incorporatedinto certain types of projects, and that this should be done as early as possible in the project cycle to minimizecosts and facilitate implementation.

Guidance for Environmental Assessments

11. The environmentalassessment process providesa frameworkwithin which the costs and benefits of convertingwildlands to more intensiveuses can be comparedwith those of conservingthem. It also serves as a vehicle for discovering project alternativesor components which have neutral or positive impactson wildlandsand for identifyingand implementingmeasures to mitigateor offsetnegative impacts when they are otherwiseunavoidable.

12. The process of describingthe environmentof a proposedproject in an environmentalassessment includes locating and characterizing all wildlands which exist in the study area. The following information shouldbe obtainedfor each wildiand:

* site name (if an official name has been given); * type of ecosystems; * geographicalextent (best shown by map) and size; * important physical, biological and socio-cultural characteristics (e.g., recharge area for significant aquifer, habitat for endangered species, presence of tribal people, religious significance, etc.); * international,national or other designation,if any; * current site condition(e.g., undisturbed, degraded); * type of protection or management,if any, using IUCN wildlands managementarea (WMA) categories (see Annex I of OPN 11.02) or relating local nomenclatureto those categories; * agency responsiblefor management;and * source of above information.

13. Informationon internationallyrecognized wildlands-such as UNESCO World Heritage natr sits, wedands of internationalimportance, endangered species habitats and national parks and protected 79 ar can be obtainedfrom the publicationsand computerizeddata baseof the InternationalUnion for Conservationof Nature (IUCN). Within individualcountries, agenciesresponsible for wildland managementcan provide locations and descriptionsof nationallysignificant wildlands. National nongovernmentalorganizations can be good informationsources, as can conservation-oriented internationalNGOs like World Wildlife Fund and The Nature Conservancy. 'Wildlands: Their Protectionand Managementin EconomicDevelopment' contains directories of governmentaland nongovermnentalorganizations concerned with wildlandsand an extensivebibliography of pertinent publications.

14. Theremay be wildlandsin a projectstudy area whichwill not be discoveredfrom the sources just described;they may be smallin size, unstudied,lacking international recognition, or withoutany nationalstatus as a wildlandmanagement area (WMA),yet may still be valuableto the regionor importantto the successof the project. Nationalor local NGOs,scientific research organizations, and local governmentsmay have informationon these sites. Aerialphotography and field reconnaissance shouldbe employedwhen the projectsetting is such that there is reasonto believewildiands exist of whicheven these sourcesare not cognizant.

15. The processesof analyzingproject alternatives and predictingenvironmental impacts of the proposedproject include consideration of potentialeffects on wildlands,and the environmentalassessment reportshould present the resultsexplicitly. Measuringimpacts is a task for specialistsin the typesof ecosystemsinvolved. It includesbut is not limitedto the followingconcepts: • area lost, in absoluteterms and as a proportionof the totalarea of the ecosystemtype in the regionor country; * area altered,in the sameterms, and the natureof the alteration; * extentof changein resourcescritical to the wildland,e.g., waterquality, freshwater flow, tidalflushing, ambient air quality,nutrient cycles; - extent and durationof externaldisturbances (e.g., noise, smoke,dust and fumes during constructionor operation;vehicle or ship traffic; visitorsto previouslyundisturbed site; interferencewith animalmigration or daily movement); - extentof habitatloss or modificationand the likelyeffects on numbersand diversityof plant and animalspecies; * changesin plant and animalproductivity, including economic value when possible(e.g., annualfishery revenue); . losses in environmentalservice levels (e.g., waste assimilation,erosion control, and groundwaterrecharge); replacement costs of the lost services); * numbersof indigenouspeoples affected and the natureof the impact; * changein numbersof visitors,and associatedrevenues, if the wildlandis an importanttourist site; * changes in other socW benefits and services (e.g., recreation,aesthetic enjoyment, conservationeducation, medical research); indirectimpacts of lossof wildland(e.g., increasedpressures on remainingwildland areas, need for more frequentchannel dredging); and * indirect impactsof improvedaccess to wildlands,such as increasedtourist revenues, recreationalbenefits, poaching, disturbance of wildlife,illegal conversion to otherland uses, nd illegalharvesting. 80

16. Measuresto avoid or mitigatenegative impacts should be recommendedand incorporatedinto the EA's ManagementPlan to MitigateNegative Impacts. Where there are unavoidablenegative impacts, such as conversionsof significantamounts of wildiandareas to other land uses, the environental sessmentshould include not only mitigationmeasures but also recommendationsfor the wildlands managementcomponent of the projectwhich OPN 11.02requires to compensatefor the loss.

17. Managementsystems vary dependingon biologicalconservation needs, environmentalsavice. requiringprotection, regional economic opportunities, subsistence needs of localpeople, and adjacentland use patterns.Often mitigation measures and management techniques, of whichexamples are listedbelow, willoverlap or coincide. In everysituation, the capacityof existinginstitutions to implementtechnical or regulatorysolutions must be evaluated,and the ManagementPlan to MitigateNegative Environmea Impactsand/or the wildlandmanagqment component should incorporate appropriate recommendations for institutionbuilding or strengthening,training and education.Measures to be consideredare: * alternativeproject siting or routingto avoidwildlands; * establishmentof WMA's to provide for protectionor some form of controlleduse of wildlands(see AnnexI of OPN 11.02for categoriesof WMA)either in projectarea or elsewhere(as compensationfor convertedwildlands); * includingwildland-sensitive features in projectdesign, such as fishladders, wildlife passages or crossings,noise barriers; * establishingbuffer zones around wildlands; * rehabilitatingor creatingecosystems to offsetwildland conversions or addto existingstockl; . supportingresearch programs relevant to wildlandsmanaement and preservationof biologicaldiversity; * strengtheningwildland management institutions, both government and nongovernment,with staff, equipment,training, and supportof enforcementactivities; and * establishingenvironmental and conservationeducation programs at localschools.

18. 'Wildlands:Iheir Protectionand Managementin EconomicDevelopment' contains a greatdeal of practical informationpertinent to project developmentand environmentalassessment. The appendices listedbelow are particularlyuseful: AppendixC: IdentifyingWildlands of SpecialConcern in the ProjectDesign AppendixD: The AppropriateSiting, Size and Shapeof WMAs AppendixE: Categoriesof WMAs AppendixF: The Managementof WMAs AppendixG: SelectedInternational Agreements Related to WildlandManagement

Wetlands

1. The UnitedNations convention on Wetlandsof InternationalImportance (Ramsar Convention) defis wetands u areasof marsh,fen, peatlandor water,whether naural or ardficial,permanent or temporary,with water that Is staticor flowing,fresh, brackishor sat, includingareas of marinewater 81 the depth of which at low tide does not exceed six meters." Among the most importantwetlands are: tidal and fresh water marshes, bogs, fens, herbaceous and wooded freshwater and peat swamps, mangroves, coastal lagoons, floodplains,deltas and estuaries.

2. Wetlands are wildlandsof particular importanceboth economicallyand environmentally. 'Me most important roles which wetlandsperform are:

Production of services. Wetlandscan contributeto local rainfalland can be an efficient,low cost water purification system (herbaceous swamps), a recreation area (hunting, fishing, boating), a buffer against floods, and protectionfrom coastal erosionby storms (mangroves).

• Preservation of biological diversity. For many species of shrimp, fish, and waterfowl,tidal and fresh water marshes, coastal lagoons and estuaries are of vital importanceas breeding grounds as well as stagingareas in their migrationroutes. All types of wetlandsmay harbour unique plants and animals.

* Production of goods. Wetlands are among the most productive ecosystems in the world. Estuaries and tidal wetlands, in particular mangroves, are important nursery areas for most species of fish and shrimp which are later caught offshore. Shallow water areas are, in general, rich fishing grounds. Floodplainsare importantgrazing areas for cattle and wildlife and vital spawninggrounds for many fish species. Swamp forest may yield valuable timber.

Note that certain of the roles of wetlands are institutionallysignificant. For example, fishes do not recognize national boundaries or may migrate long distances. Consequently, destruction or degradationof wetlands in one country may have direct impacts on the biological resourcesof others. (See section on "InternationalWaterways.")

3. Despite their importance, wetlands everywhere are under threat. These threats come from conversion to intensive agriculture and/or aquaculture, industrial development, artificial hydrological changes or degradationthrough over-exploitation.

Relationshipto Bank Investments

4. The issue of wetland conservationis relevar.tto a large variety of Bank projects, such as:

* projects which affectthe hydrologyof a wetland, such as constructionof a road or high dam, flood control, lowering of the aquifer drainage, and irrigation and other water supply systems;

* direct conversion of wetlands for agriculture, port facilities, navigation project, and aquaculture (in particular mangrovesfor shrimp culture);

* projects which indirectly influencewetlands through disturbanceof the ecologicalconditios, such as those causing pollutantsto flow into the wetlands, those posing the threat of 82

introductionof exoticspecies (aquaculture), those introducing physical disturbance by people, and thosecontributing to acid rain or to rise in sea level; and

* watershedmanagement on otherprojects conducted for environmentalpurposes.

BankExperience

S. TheBank has significantexperience with wildiands conservation and managementissues through financingof variousprojects on wetlands.Wetland management issues played major role in projectssuch as:

* the NakdongBarrage and Land ReclamationProject in Korea,where the Bankfinanced a managementstudy, changes in the designof the projectand set loanagreement conditions to safeguarda wettandof internationalimportance that wasthreatened by the project;

* the SouthernConveyor Project in Cyprus,where plans havebeen madeto restoreAkrotiri Lake,an importantwetland;

. those within the context of the EnvironmentalProgram for the Mediterraneanwhere managementof the mostimportant wetlands in that regionhas been foreseen;

- the LowerGuayas Flood Control Project in Ecuadorwhich includes an Environmental Impact Assessmentand a conservationcomponent for wetlands;and - conservationprojects in Brazil'sPantanal, the world'slargest freshwater swamp, through the NorthWest DevelopmentProgram and the NationalEnvironmental Project.

BankPolicy, Procedures, and Guidelines

6. Themost important Bank policy document is the OperationDirective 4.00, Annex D: 'Wildlands: TheirProtection and Management,"which lists wetlandsas wildlandsof particularimportance.

7. Bankprocedures, in turn, are supportedby such internationalpolicy as the RamsarConvention whichencourages member countries to designatesignificant wetlands within their borders for a worldwide list of areas valuedfor their biologicaland other scientificfeatures. (Tbere are currentlyover 395 designatedwetlands sites in 46 countries.) Wetlandslistings are availablethrough the regional environmentaldivisions. However; it is criticalto rememberthat virtually all wetlandsperform important functions. Large or "listed"sites are not the onlyones to be consideredin projectpreparation. Guidancefor EnvironmentalAssessments

8. In case a particularproject is likely to impacta wetland,the followingquestions are usually relevant. 83

Is the area on the Ramsarlist? (Listavailable from the Bank's EnvironmentDepartment.) Willthere be changesin the hydrologyof the wetland? Willthe projectpollute or increasenutrients or physicaldisturbance in the wetland? Will(parts of) the wetlandbe convertedor willthere be a changein use? Whatis the socioeconomicvalue of the wetlandas it is used at present? Whatwould be the sustainableyield under better management? What is the replacementcost of the free goods and servicesnow beingproduced by the wetlandsif it weredestroyed? Whatinstitutions exist which can or couldmanage or protectthe wetlandsand whatare their capabilitiesand limitations? Are localpeople willing and ableto adapttheir traditional exploitation systems to the eventual changesin the wetlandcaused by the project?

9. In conversionof wetlandsfor agriculture,the costs associatedwith the loss of opportunityto exploitthe wetlandssustainably should be incorporatedinto the economicanalysis. However,many wetlandscontain poor acid soils, hardly suitablefor agriculture. Drainageand exposureto air exacerbatesacidity, especially in mangroves. 10. Whena projecthas potentialadverse impacts on wetlands,the designshould be modifiedto avoid them, or to mitigateor compensatefor thosethat are unavoidable.Options include any or all of the following: - selectionsof alternativesites to avoidimpact on wetland; designfeatures to preventdisturbance of the flow patternsand hydrologicregimes critical to conservationof the wetland(e.g., flowregulating works, road crossings on trestlesor pilings, ratherthan on embankments); enhancementand/or protection of other weltandsin substandardconditions to offsetlosses at projectsite; artificialconstruction of wedandsto replaceareas lost (whereexperience has shownthat the wedandtype in questioncan, in fact, be constructed); * strengtheninginstitutions to lhanageand protectwedands; includinglocal NGOs in the institutionalarrangements for wetlandsconservation; promotingdevelopment of nationalwetland incentives and managementstrategies; requiringwetland concerns to be consideredin nationaland local planningand law use decision-makingprocesses; and * environmentaleducation programs to disseminateknowledge on importanceof wetlands. The sectionon "Wildlands'and OPN 11.02on wildlandscontain additional guidance for task managers.

Tropical Forests

The 1978Forestry Policy is beingcompletely revised and will be presentedto the AdvisoryBoard in May 1991. The main elementsto this sectionwill be insertedin the nextrevision. 84

Arid and Semi-Arid Lands

1. Drylands of the world constitutea naturallow-productivity environment, where the major limiting factor to biological productionis normallywater. When limitingfactors are overcome-economicallyand technically-drylands can becomemoderately productive. However, under intensiveproduction systems they require carefulmanagement as they are highlyprone to soil salinization,alkalinization, waterlogging, and wind and water erosion. Insect pests also threaten to agricultural production (e.g., locusts, grasshoppers,aphids, etc.), especiallywhere the project reduces the natural pest control value of the dry season.

2. The drylands of the developingworld, including lands receiving a long-term annual average precipitationof 200-1000 mm, harbor some 550 million people, many of whom are among the poorest and most vulnerable groups.

3. Recentdegradation and famines in drylands,together with frequent economic,physical and health problems in major irrigation schemes, have demonstratedthe difficultiesinvolved in developingsuitable mechanismsand the need for concerted actions. Yet, drylandshave remainedremarkably resilient over generations,producing magnificentcivilizations, as well as untold human misery.

4. The faminesof the last few generations,in China, India and recently in Africa, have revealedthe fragility of these ecologicallymarginal areas. While the media have focused on famines and the worst affected areas, little attention has been paid to the less marginal and potentially more productive environments. Recent evidencesugests that the impact on the environmentof growing populationsand their needsfor food, energy and water may in the long run prove more acute in the more productiveareas than in the driest ones.

5. Much uncertaintyhas developedamong lending institutionsand the donor communityin general on how best to support drylands development. While some claim that investment in the drylands represents a low return, an unacceptableeconomic risk-taking, and a potential increase in debt-burden to borrowing dryland countries, others stress the need to avoid recent famines. It is importantto consider the consequencesof the economic(opportnity) costs of doing nothing.

BankPolicy, Procedures, and Guidelines

6. Althoughthere is no separate, formal Bank policy on dryland intervention, the issue underlies policies in many related areas, such as agriculture, forestry, rangeland, energy, transportation,migration and resettlement. The different policy and guidelinesof sector interventionswill influence any dryland interventionsand should be applied in an overa1lapproach rather than restricted to sectors alone.

7. 'Dryland ManagementGuidelines (DMG): The Key Elements in Dryland Project Design and Review' is a valuable reference. A presentationof strict standardsmay be too ambitious,given the many variationsof physical, economic, social and cultural factors involved. ITe DMG has been developedas a tool for reflection and sistanceto Bank staff in designingand reviewingdryland managementprojects. 8S

RelatIonsip to Bank Investment

8. By 1991the Bankwill have preparedand appraisedat least twenty-nineprojects with a direct impacton drylandareas and willhave invested an esdmated$200 million a yearto restoredegraded areas and improveagricultural production.

9. Two elementshave emerged as crucialin drylandinvestment: * an increasedemphasis on the ecologicaland human consequences of individualprojects; and * the integrationof environmentalissues into economicpolicy at all levels.

10. Thesechanges are reflectedby an 84% increasein Banklending to drylandmanagement-related sectorsfrom 1982/85to 1986/89($929.2 million and $1707.7million, respectively) in Saheland Sudan zonesalone. 11. The issue of drylandintervention may be relevantto a large varietyof Bankprojects, such as:

* projectsthat affect the productivityof drylandirrigation schemes, flood control, agricultural and energydevelopment, soil and waterconservation, and forest and rangelandmanagement; * projectsthat indirecy influencedrylands through resettlement or constuctionof roads or highdams; and * policy interventionson the macroeconomiclevel (pricing,subsidies, taxation, and land tenure/rights).

idancefor EnvironmentalAssessment

12. The DMG discussesthe limitations hat sectoraland macroeconomicpolicies place on the _stainability of single projects. As long as incentiveswhich may lead to deteriorationof the environment(e.g., pricingpolicy on certainresources such as charcoal)are not dealt with, isolated interventionshave proven to be unsuswtainable. 13. The DMG deals with three aspectsof environmentalaessment: an outlineof development objectives; key indicatorsto be consideredin projectreviews; and an outlineof essentialproject and policy issues. A selectedbibliography is an annex. Someof the main points are outlinedin the discussionbelow. OverallObjectives for Interventions 14. Ongoingand potentialdryland interventions should be evaluated,through active participation of the beneficiaries,on the improvementto physical,social and cultur wellbeing.This implies a long-term perspectivewhere the resourcebase mustbe wiselyutilized and consevedfor futuregenerations. 86

15. Theenvironment, economic efficiency and equitymust be consideredwhen designing alternative interventions.The interventionsshould therefore have a solideconomic, human, technical and scientific base. Once completed,these activitiesshould prosper withouta higher level of outsidesupport or subventionthan is justifiedby the returnsfrom the project. Thisshould also be achievedwithout unduly degradingthe physicalresource base that sustains it. 16. Consistencywith EstablishedSocio-Economic Systems. Utilizationof traditionalknowledge and strengtheningof the culturalidentity is important. The interventionmust identifyand supportthe welfareand culturalidentity of affectedindigenous people. 17. Theintervention should also be consistentwith existing systems for naturalresources management at both nationaland locallevels. In caseswhere management systems are shownto be in transitionby the socio-economicanalysis, a substantialmonitoring and evaluationcapability should be built into the activitiesto mitigatenegative effects that mayaffect the populationor the resourcebase. A long-term researchactivity should be carriedout for large-scaleinterventions. As appropriate,follow-up design of a large-scaleintervention should reflect the resultsof the researchor lessonslearned from a pilot effort. 18. ResilientManagement of Natural Resources. Sincedryland ecosystems are naturallydynamic, productivitywill changedespite any interventions.The capabilityof the landunder given landuse to retmn to its initialproductivity should be sustained. Short-term(1 to 3 years)and long-term(5 to 30 years) studiesof resiliencemay indicatedegradation. Knowledgeof short-termresilience should be includedin planning,particularly in highrisk areas;and longterm resilienceshould guide resettlement projectsand long-terminvestments. Sustainable interventions must have a long-termperspective (15 years),where carefully selected incentives for the beneficiarypopulation should be developed.

OperationalIndicators in ProjectDesign and Reiew

19. Objectivesshould be based on a non-sectoralapproach. Site- and project-specific variations imply that the selectionof key indicatorsand analysesmust be flexible. However,it is crucialto identifythe relative importanceof each indicator. Systemsapproaches have provento be promisingtools in that respect. Rural AppraisalTechniques may also help the selectionprocess in order to better reflectthe concernsof the beneficiaries.The DMGprovides a set of indicators(with sub-sets) to be consideredat an early stage in the projectcycle: * climate * populationdevelopment * healthand nutrition * energy * economicfactors * accessto land, goodsand services * stateof the naturalenvironment * productionsystems and degreeof risks * livestock/rangelandmanagement * technologicalinterventions and adoptions 87

Remedia Measures/Projectand Policy Issues

20. The analysis of constraints and opportunitiesthrough selectionof key indicators should reflect the overal objectives of intervention. The next step would be to formulate strategies and mitigating measures to reach those goals. The complexityof the problems and the site- and project-specificcondi- tions make it impossibleto formulateone single stategy. The next step would be to outline principles which may be applied in project design and reviews. The following aspects should be dealt with (cf. DMG):

* Rainfed Agricultureand Recession Cultivation

* Water Harvesting and Conservation * Soil Fertility Technologies * Dune Stabilization

* RangelandManagement and Pastoral Association * Forestry and Agroforestry * Energy - InstitutionalIssues

- The Role of Central Governments - InstitutionalReforms • Local Participation

* Land Security and Tenure * Pricing Policy and Subsidies * Migration and Off-Farm Income IInfrastructure * Natural Resources Inventory, GIS and Monitoring * Wildlife and ConservationUnits * Women in Development

Coastal Zone Management

1. Tbere is no precise definitionof the coastal zone." All definitionsseek to includecoastal waters, marine and estuarine(and nearshorewaters of large lakes and inland seas), and some portion of the land along the coast in which human activitiesand natural processes both affect and are affectedby those in the waters. The extent of land area included varies, because its limits are determined not only by ecological and geological characteristics but also by some concept of what is politically and administrativelymanageable. Thus while one might include the entire land area of watersheds which drain to the sea, and the entire water area out to the continentalshelf, in practice the coastal zone is a relatively narrow band of water and land along a shoreline. Its natural features include beaches, wetlands, estuaries, lagoons, coral reefs, and dunes. Man-made features include ports, commercial fisheres and aquacultureoperations, industries,recreational and tourist developments,archeological sita ad, above all, some of the largest and most densely populatedurban areas in the world. 88

2. The economicsignificance of the coastalzone is vast. Virtuallyall shellfishused by humanslive aDdare harvestedthere. Mostof the world'scommercially important finfish depend on the coastalzone, and much of the commercialfishery takes place in it. Coastlineshave been the obviouslocations for seaports and for the siting of industrialand commercialoperations which involve movementand processingof large volumesof raw materialsor finishedproducts. The land is attractiveand valuable for residentialuse; in manyareas of the developingworld, population growth rates and urbanpopulation are highestalong the coasts. Coastalareas have been used for recreationfor centuries,but tourismis nowbig business, sometimes the largestsector of a country'seconomy. Less obvious, but also important economically,are servicesthe naturalfeatures of the coastalzone perform,without cost: sboreline stabilization,protection from storms,fish nurture,flood control, nutrient cycling, and wastetreatment.

3. It is a particularchallenge to managedevelopment in the coastal zone in a way which is environmentallysound and sustainable:coastal and marineareas are amongthe mostsensitive to the impactsof developmentand, as describedabove, especially attractive for it. Someof the activities associatedwith coastlinedevelopment, such as extensivedredging and filling,intensive urbanization of watersheds,siting of industries,and conversionfor agricultureor aquacultureare relativelyirreversible transformations.Most economic development projects in coastaland marineareas have the potentialto seriouslyaffect the resourceslocated in theseenvironments and to present conflictsamong competing resourceuses. Consequently,EA aloneis insufficientfor coastalzone management.Special attention to regionalplanning is required,both to minimizeor mitigateadverse impacts and promoteoptimal use of the resourcesavailable. Relationshipto Bank Investments

Projects WhereIssue Is Relevant

4. The followingtypes of projectshave potential impacts on coastaland marineareas: * Agriculture:coastal and upland;large irrigationdams. • Fisheries: coastal capture fisheriesand mariculture/aquaculture,including conversion of marshesand mangroves. * Forestry:mangrove forest products harvesting; fuelwood and other renewable resources;large-scale forestry in uplands. * Energy: oil and gas explorationand operation;coastal power generation;large inland hydroelectricdams. * Transportation:ports and harbors; channel construction and maintenance dredging; dredge spoil disposal;roads, railroadsand bridges. * Urbanization:shoreline modification; waste disposal; recreation and tourism;large-scale water resource development; urbanization of watersheds. * Industry/commerce:industrial plant siting; coastal and marinemining (e.g., sand);salt manufacture;and wastedisposal.

Sectomaland IntersectoralLinkages S. Threebroad categories of issuesare relatedto developmentof coastaland marineareas which are linkedand interdependentwith respect to soundmanagement of associatedresources. First, sectoral 89 developmentprograms tend to focuson large,single-purpose projects such as buildinga largeport facility (amplifiedin the 'Port and HarborFacilities" section), implementing an extensivecapture fishery project (see 'Fisheries' section),or devisinga schemeto convertmangroves to rice productionand shrimppond culture(see 'Natural ForestMnagement" section). Multiple-useresource management is particularly appropriatein the coastalzone.

6. Second,as a result of the economicinterests associated with sectordevelopment, government agencies,lending institutions,and public constituenciestend to align themselveswith one sector or another. Conflictscan arise betweenindividual economic interests, among governmentagencies responsiblefor the managementof the individualresources, or betweenthose agenciesand the organizationscharged with broaderplanning responsibilities. These conflicts can manifestthemselves ecologicallyand economically,since the productivityof coastaland marineareas and their abilityto recover from heavy pollution or other perturbationsare often diminishedby the effects of one developmentactivity on another. Integratedapproaches to planningand resourcemanagement are essentialto avoidadverse intersectoral impacts and institutemitigative measures. 7. Third, coastal and marine zones encompassmany different kinds of resourcesthat are demonstrating,in manyparts of the world,a decreasingability to sustaindevelopment. This is evidenced by increasingpollution, rising human health hazards, decliningfisheries, spoiled beaches, conflicts betweenlocal culturesand tourists(see "TourismDevelopment section), and displacementof groups which subsist on coastalzone resources. It is a trend which can be reversed, when the unique managementneeds of the coastalzone are recognized.

Bank Experience S. The Bankexperience in coastalzone management projects is not extensive,but significantsteps havebeen takenduring the last ten yearsto incorporatecoastal and marineenvironmental management principlesin a numberof projects. A sampleof this involvementfollows. and also by controllingactivities inland which have downstreamimpacts.

(a) The CentralVisayas Regional Project, Philippines, undertaken in 1983,is contributing to productionof coastalfisheries by protectingvital mangrove and coralreef habitatsand by partiallyrehabilitating selected fish habitats(e.g., by plantingof mangrovesand by constructionof artificialreefs) damaged by non-productrelated activities. (b) The Tourism DevelopmentProject, Honduras, completedin 1989, included an environmentalcontrol master plan for Roatan Island, relocated Tourasal beach developmentto protectmangroves and other coastal ecosystems of QuemadaLagoon, and establisheda smallnational archeological park at Copan. (c) The EnvironmentalProgram for the Mediterranean,a regionalstudy begun in 1988, consistsof an assessmentof environmentalproblems and priorities for 18 countriesin the region,and eventualdevelopment of an actionplan coveringpolicy reform, institutional strengtheningand investmentneeds. Manyof the environmentalproblems of this region are coastaland marinein origin, providinga uniqueopportunity for the Bank to be involvedin helpingthese countriesset prioritiesto protectand manageaspects of the coastalenvironment. 90

(d) Tbe NakdongBarrage and Land ReclamationProject near Pusan, Korea, where changes in the design of the civil engineeringworks were made to protect a NationalTreasure; in addition, a nature reserve was established including the financing of studies and managementprograms to safeguardenvironmental, production and conservationvalues in the estuary.

9. In addition to specific project interventions, the Bank indirectly is promoting protection and managementof coastal and marine resources through the implementationof sound environmental guidelinesfor infrastructure and urban developmentprojects and through support to the Asia Wetland Bureau, an NGO located in Kuala Lumpur, Malaysia.

Bank Policy, Procedures, and Guidelines

10. Thereare no formal Bank policiesor guidelineson overall coastal and marine area planning and management. However, a number of Bankpolicies and guidelineson other subjects have direct applicabilityto developmentactivities in the coastal zones. Two of particular importance concerns dams and biodiversity. First, the policy on dams and reservoirs requires examinationof downstreameffects. (See 'Dams and Reservoirs' section for list of referenceson this and related topics.) Second, conservation of biologicaldiversity and environmentalservices are two of the basic elements of the Bank's wildlands policy, and they mean that coastal area developmentsshould be planned to avoid impactson mangroves and other coastal wetlands, coral reefs, or other protected and biologicallyimportant areas (see sections on 'Wildlands' and 'Wetlands"). A numberof Bank policy and guidancedocuments are concernedwith port and harbor developmentsand dredged material disposal(see 'Port and Harbor Facilities" section). Finally, the Bankhas stated at the Oslo Conferenceon SustainableDevelopment, held in 1988, that it will not support projects involving the ocean dumping of hazardous waste. (See 'Hazardous Materials Management"section.)

Guidance for Environmental Assessments

11. A growingnumber of developedand developingcountries employ coastalzone planning as a basis for land and water resource use decisions. Such planning, which is characterized by its integrated approach to all sectors and resources, should be encouraged in country environmentalstrategies and sector work. Each investmnentproject may present an opportunityfor incrementalprogress toward the same objective. Integrated environmentalplanning is especially critical in the coastal zone because of the high social, ecologicaland economicvalues of the resources there; the intense demand for those resourcesfor a varietyof competingand potentiallymutually inconsistent uses; and the extremesensitivity of those resources to damage.

12. Such planning may offset the need to conduct detailed EAs for specific projects, if it has led to environmentallysound physical plans, standards and guidelines,and if adequate resource use control instrumentsare in place. In the absence of coastal zone planning, the EA process should be used to ensure that communityinvolvement and interagencycoordination are initiatedat the project identification stage, that the full range of alteriatives and intersectoralimpacts are consideredbefore the sponsoring agency makes its decisionabout the project, that appropriateimplementation plans are prepared, and that institutionsare competentto implementthose plans. 91

13. A large number of treaties and internationalconventions exist to protect the coastal and marine environments(see "IntemationalTreaties and Agreementson the Environmentand Natural Resources" section). Most countrieshave signedthem, but adherenceto them is inconsistent. Compliancewith these agreementsin design, constructionand operationshould be consideredas part of EAs on projects in the coastal zone.

14. Several international organizations, including UNEP, EEC, the Intemational Maritime Organization, and the International Association of Ports and Harbors have published guidelines for managing environmentalimpacts of various activities in coastal areas. The EA team should assess the extent to which applicableguidelines are being used in project planning and design.

15. Socioculturalimpacts can be especiallysignificant and shouldnot be neglected(see "SocialIssues in EcologicallySensitive Areas' section in Chapter 3).

Land and Water Resource Management

1. The Sourcebookis not intended to be a guide for natural resource management. This section merely identifies some critical issues and key concepts the user should keep in mind when examining enviromnentalimpacts of projects which involve modificationof the land's surface contour or cover or commitmentof significant quantities of groundwater or surface water to various human uses. The discussionis particularly relevant to preparationand review of the plan for mitigatingadverse impacts on land and water resources that must be included in every EA report.

2. The section is written with no particular type of ecosystemin mind; for land and water resource concernsrelated to sensitiveecosystems, the reader shouldconsult the section on "Cross-SectoralIssues." Socioculturalissues related to land and water resource managementappear in Chapter 3.

3. Land and water resources are consideredtogether because of the inescapablecausal relationships between them. A change in the way one is managedis likely to have an effect on the other, especially if insufficientattention is given to the interactionsin project planning.

Environmental Issues in Land Resource Management

4. Almost any developmentproject will involve disturbanceof the land surface. When the area involved is small, the environmentalimpact is likely to be minimal. However, the cumulativeimpacts of many separate small disturbances can be substantial. The kinds of alterations to the land that are of concern are listed below. Many of these topics are discussed elsewherein the Sourcebook,as indicated by a cross reference in parentheses, and most are therefore discussedonly in general in this section.

* clearing (Roads and Highways; Large-ScaleHousing Projects) * topsoil removal (see above) * grading (see above) * filling (Wetlands;Coastal Zone Management;Roads and Highways) * draining (Wedands) llandscape planting (Large-ScaleHousing Projects) * cultivation(Agricultural Management; Forestry) 92

paing (RWadsand Highways;Large-Scale Housing Projects) * buildingconstruction (Large-Scale Housing Projects) * waste disposal (Solid Waste Collectionand DisposalSystems; WastewaterCollection, Treatment,Reuse and DisposalSystems)

Thedirect and immediateenvironmental impacts of thesealterations can be groupedinto four categories.

Loss of Habitat 5. Anyof the activitieslisted result in lossof habitat. The seriousnessof the impactdepends on the typeof habitatbeing converted, as wellas on the wayin whichthe conversionis carriedout. When wildlands,wetlands, tropical forests or other sensitiveecosystems are involved,the EA team should carefWllyassess the impacts,examine the alternativesthat were considered,and perhapspropose new alternatives.(See section on "Wildiands.")

Loss of Soil Productivity 6. Certainforest soils, when stripped of naturalcover, become laterized or subjectto rapiderosion, and essentiallyunproductive. Removal of topsoilduring grading also reducesproductivity. Soil loss througherosion has the sameeffect, and in additionmay degrade water resources. Conversionof high- qualityagricultural land to urban uses also reducesproductivity. Mitigationmeasures an EA might recommendinclude avoidance of constructionon steepslopes, retention of forestcover, stockpiling and replacementof topsoil,conservation of primeagricultural land, applicationof goodcultivation practices, and controlof erosionand sedimentationthrough use of mulchduring construction and rapidreplacement of vegetativecover on slopesand constructionof siltationbasins and barriersof strawor filterfabric to protectwaterways.

ModIW HydoloV 7. Clearing,grading, filling, paving or constructionof buildingsalter patterns of surfacerunoff and infiltration.The results include local ponding and flooding, increased flood frequency and/or magnitude downstream,lowered water table, diminishedgroundwater recharge, and increasein low flows in sreams. Managementmeasures include design and constructiontechniques to maintainor replacelocal drainagechannels, retention or detentionstructures to avoid increasesin rates of runoff, measuresto offsetreduced infiltration (porous pavement, infiltration ponds, etc.), and conservationof openspace on criticalaquifer recharge areas.

SoUlContaminaton 8. Soil canbe contaminatedthrough salinization if irrigationsystems are not properlydesigned and operated. It can also be contaminatedby disposalof hazardouswaste or improperoperation of solid waste and land-basewastewater disposal systems. Mitigationmeasures for irrigationsystems are describedin the Irrigationand Drainage' section. Measuresfor waste disposal, solid waste and wastewaterare discussedin Chapter10. 93

Iand Clearing

9. Land clearingfor agricultureis discussedas a separatetopic becauseof the environmentl implicationsof the choiceof land to be clearedand the methodemployed to clear it. In general,the impactsof clearingare moresignificant in tropicalthan temperate regions because the formerexperience highertemperatures which accelerate chemical degradation of soils and higherintensity of precipitation leadingto more severeerosion.

Land CearingMethods

10. Thereare three basic methods,and theyare oftenused in combinationon singleproject:

(a) Manualmethods - fellingor cuttingvegetation, allowing a dryingperiod, and then burning the debris;

(b) Mechanicalmethods - usingheavy equipment (e.g., bulldozers,heavy chains and tractos) to fell trees and cut and lay down underbrush,windrowing (raking debris into rows or piles),burning, and final clearingof the residue;

(c) chemicalmethods - usingherbicides to establishareas for crops,either leaving dead trees standing,felled, or burned. Mechanicalmethods have significant adverse impacts, including topsoil loss or inversion,destruction of soil structure,and compactionleading to increasedrunoff. Bothmechanical and manmu methods involve burning,which often reduces soil nutrientcontent and the activitiesof beneficialsoil organismsas won as contributingto elevatedatmospheric carbon dioxide concentrations. Chemical techniques have been shownto haveless drasticeffects on soil. However,the long-termeffects of herbicideuse in the tropics are not well understood.

Post-ClearingManagement

11. Inappropriatepost-clearing management practices, such as lack of manuring,filure to employ soil conservationpractices, and repeatedfires have oftenled to reductionin soil fertlity to the point at whicheconomic agricultural production cannot be sustained.Abandonment and weedinfestation are the ultimateresults. EnvironmentalIssues In Water ResourceManagenent 12. Waterresource management issues that mayemerge in an EA are associatedwith water use or land use decisionsthat affect the quantityor qualityof surfacewater or groundwater. Changesin quantityor qualitymay in turn affectthe rangeof usesthe particularwater resource can support or alter the functionsof a naturalsystem dependent on the water.

13. The actionsrelated to developmentprojects which can alterwater qualityor quantty include: contaminationof surfacewater by directlydischarged effluents (Chapters 8, 9 and 10); con ationof surfacewater by non-pointor diffusepollutant sources (Chapters 8, 9, and 10);contamination of surface waterby atmosphericpollutants (Chapter 2); contaminationof groundor surfacewater by wastesdisposed 94 of on or beneath the land (Chapter 9); increase in runoff by clearing, grading, paving, drainage or channel modification;decrease in surface water flow by diversion, impoundment,consumptive use; and reductionin water table elevationor artesianflow by interferencewith groundwaterrecharge or excessive groundwaterwithdrawals.

The first four topics, which concern water quality, have been discussedelsewhere in the Sourcebook,as indicated by the cross-references. The topics related to water quantity will be consideredhere in more detail.

EnvironmentalImpacts of IncreasedRunoff

14. Increases in runoff, result from any activities which make the land surface less permeable, "smoother' or both. The rate of runoff, the total amount of runoff or both may be affected. The impacts includedeclining water tables, more frequent or more intenseflooding, more prolongedor extreme dry- weather flows, and scouring or silting of channels. Changes in natural flow patterns can modify or eliminatewetlands and affect agriculturethat dependson seasonalflooding for irrigation and maintenance of soil fertility. Where these impacts are predicted, structural and non-structural measures can be incorporatedinto projects to mitigate them.

EnwronmentalImpacts of Reduced Surface Water Flow

15. When the overall flow of surface water is reduced significantlyby impoundment,diversion, or consumptiveuse, downstreamusers and natural systemsexperience impacts. Two commoncauses of the flow reductions are growth in the watershedin excessof that which existingwater resourcescan support or overcommitmentof water resourcesfrom failureto take all uses and users into considerationin project planning. The immediate impacts may include: decline in water quality from diminisheddilution of pollutants; seasonal or continuousshortfall in supply for downstreamusers; reduction in wetland area; and increases in salinityand changes in circulationin estuaries.

Each of these impacts can in turn have secondary impacts, such as decline in shellfish harvests, loss of revenue from water-dependent industry and commerce, or reduced hydroelectric power output. Mitigatingmeasures are few, and most are expensive;relocating industries or importingwater from other watersheds are examples. The sound approach is prevention through water resource planning and managementon a watershedscale. The terms of reference for the EA on any project involvinglarge- scale water consumptionor diversion should require analysis of existing, planned and projected water availability and use to avoid these impactsfrom the outset.

EnvironmentalImpacts of Lowered Water Table or Reduction in Artesian Flow

16. The most obviousimpact is the increasedcost of drilling deeper wells and pumping water from greater depths. More disruptive is interruption of previously reliable water supply as a result of overpumpingfrom nearby wells or cessation of artesian flow. When the aquifers affected are near the seacoast, saline water may intrude as fresh-water flow diminishes, making coastal wells unusable. Finally, a long-termimpact which can occur over a large area and be virtually impossibleto reverse is subsidence of the land surface caused by reduced water pressure in unconsolidatedrock. Mitigation measures are aBainfew and quite difficult. They involve replacinglost or salt-contaminatedgroundwater 95 supplies with surface water. Attemptsat reversing saline intrusionhave met with only limited success. Subsidencemay be arrested but is not realistically reversibleby any artificial means.

Watershed Planning and Management

17. Water use and land use are interrelated. Water use decisions in one part of a watershed are likely to pose opportunities and constraints for users in another part. These circumstancesargue for integrated planning on a watershed basis, to ensure that the basin's water is not overcommitted,that upstream water users do not deprive those downstreamof opportunities,that projects meet their intended purposes, and that patterns and amounts of growth are kept in balance with the capacity of the water resources. Tools and technical knowledge exist to accomplishsuch planning and management. The difficultiesare institutional. Water resourcesdo not respect politicalboundaries, and there is thus a need for an institutionwith sufficientcapacity and power to influenceland and water use decisionsin multiple jurisdictions. This frequently entails a correspondingwillingness on the part of those jurisdictions to subordinate their authority to the watershed institution. In projects which depend on watershed-wide planning and management,EA teams should carefully analyze the institutionalstructure, the needs for strengtheningit, and whether it is politically realistic to anticipatesuccess in the effort.

Natural Hazards

1. Major areas of the world are subject to risks from natural hazards. Earthquakes, volcanic eruptions, droughts, floods and hurricanes hinder development through their direct, indirect and cumulative impacts. There is a two-way, direct relationshipbetween environmentaldeterioration and natural hazards; that is, soil erosion, deforestation,desertification, and coastal degradationincrease the risks of extremeevents, and in turn, naturalhazards exacerbateenvironmental degradation. Furthermore, the potential for human and economiclosses in an area is directly related to its vulnerabilityto natural hazards.

2. The resilience and sustainabilityof development may be significantly improved by reducing disaster vulnerability. Reducing losses from natural hazards can be brought about through appropriate and sound planning strategies and management. Disaster-resilientplanning and managementmust be based on a sound understandingof naturalhazard risk and such understandingmust be incorporatedinto social and economicplanning. In addition, scenarios concerningclimate change indicate a potentialfor sea level rise, increased severe droughts, shifting in agricultural zones and more frequent hurricanes which underline the need for efficient mitigationand preparedness.

Relationship to Bank Investments

3. Over the last decade, extreme events have increasedin number and impact, seriouslyhampering the developmentprocess and requiring a substantialreallocation of resourcesfrom developmentto relief 'andrecovery. Vulnerabilityto naturaldisasters is increasingdue to continuedenvironmental degradation, population growth, location of investments in high risk areas, and concentrationof infrastructureand industry in disaster prone areas. Lending by the Bank as a response to major disasters has increased significantly in the last five years. In fiscal years 1988 and 1989, the total amount for emergency recovery-including both reallocationsfrom existingoperations and new emergencyrecovery projects- amountedto about four percent of the Bank's total lending portfolio. This significantamount indicates 96

a need to (a) increasethe resilience of member-countriesto disasters, and (b) incorporatenatural hazard risk managementinto investmentdecisions.

4. Natural hazards are relevant in virtuallyevery sector of Bank lendingand in every region of Bank operations. Bank investmentsin different sectors-industry, energy, education, health, agriculture and urban development-are vulnerableto disruption from extreme events. In many countries the existing capacity in both the public and private sectors to address natural hazard risk and to integrate disaster prevention and mitigation into development programs is limited. In addition, understanding of the potential economicand financial impact of natural hazard risk is limited.

5. For example, in the industrialsector, the decisionto locate a given investmentin an area subject to extreme events implies taking a chance with such investmentin general, and specificallywith the physical plant and the well being of its employees. If the investmentis destroyed by an extreme event, the true measure of the negative impact is not merely the value of the assets lost. The real measure is such loss, plus the revenues lost over the life of the industry,plus incomeand additionalinvestments that would have accrued from the indirect and multiplier effects of an alternate, prospering, risk-resilient enterprise. Risk resilient enterprises in these cases, even if more expensive initially, ultimatelywould prove to be the more efficient use of resources. Similar examplescan be drawn for other sectors, such as infrastructure, energy, agriculture,health, educationand housing.

6. The most notable reasons for the failure to integrate natural hazard risk into development programs are (a) inadequateunderstanding of mitigationoptions to prevent/reducecatastrophic losses, (*) weak institutions, (c) inappropriate mechanisms for collecting and processing the necessary informationabout natural hazard risk, (d) lack of a coordinatedpolicy for risk reductionacross sectors, and (e) inadequateemphasis on implementingand monitoringmitigation.

Bank Experience

7. Since its creation in 1947 the World Bank has been requested to provide assistance in about 100 cases of disruptionafter naturaldisasters, such as floods, hurricanes, earthquakes,volcanic eruptions, and forest fires. Examples of the countries that have received emergencyrecovery assistanceare:

* Bangladesh,Pakistan, Sudan, Brazil, Nepal, Yemen AR, India, Honduras, Nicaragua,Peru, Romania, and Western Samoa (for floods); * Mexico, Nicaragua, Peru, Romania, Guatemala,Ecuador and Nepal (for earthquakes); * Costa Rica, Jamaica, Mexico, Madagascar,Dominican Republic, Swaziland,Fiji, Mauritius, and Bangladesh(for hurricanes); * Colombiaand Iceland (for volcanic eruptions); and * China (for forest fires).

S. In the past few years there has been an increased concern for disaster reduction in Bank programs. The inclusion of disaster prevention and mitigation in emergency recovery projects was encouragedin an OperationalPolicy Note on emergencylending (1984), and more recently in a Policy Paparon emergencies(November 1988)and in OperationalDirective 8.50 (October 1989) on emergency recoveryoperations. This recommendation was based on the notion that disastersprovide a "window of opportty to introduce measures to reduce losses. The concern for vulnerabilityreduction goes 97 beyond emergency recovery projects and recent efforts have been made to develop self-standing preventionand mitigationprojects and to includethose concernsin sectoral work and in countrydialogue.

9. Disaster mitigation and prevention are now the main objectivesof the InternationalDecade for Natural Disaster Prevention,declared by the United Nationsin the 1990s. Both internationaland national agenciesare currentlydeveloping programs for the Decade, with significantparticipation from NGOs and from the private sector. Natural hazard risk reduction is also a main concern in the many initiatives currentlyunder considerationconcerning global climatechange. Global climatechange and the potential increase of extreme events is being discussed in a number of internationalfora, includinginter alia the IntergovernmentalPanel on Climate Change (IPCC) and the planning for the 1992 UN Conferenceon the Enviromnent.

Bank Policy and Operational Directives

10. OperationalDirective 4.00, Annex A: "EnviromnentalAssessment' (October1989), recommends that environmentalassessments review whether the project may be affected by natural hazards and if so that they propose specific measures to address those concerns.

TXhepolicy for "Lending by the Bank for Emergencies"(issued as OperationalDirective 8.50: 'Emergency RecoveryAssistance") was adoptedby the ExecutiveBoard of Directorson November 1988. According to the policy, the main criteria for mountingan emergencylending operation include:

* focus on economicreconstruction and recovery, rather than on relief; * demonstrable(even if not easily quantifiable)economic benefits; * significantscale, but neverthelesstemporary nature of impact of the emergency; * urgency and effectivenessof short or medium-termaction; and * prospectsfor mitigatingthe impact of future emergencies.

11. The policies for reducing the impactof future emergenciesare: (a) attention in country strategy work and in national planning and investment programs to the risks of large-scale natural disasters; (b) close collaborationin this area with the official internationaland NGO communities;(c) increased focus within the Bank on technologies to reduce natural hazards; and (d) inclusion of prevention/ mitigationcomponents where appropriatein regular loans as well as in emergencylending operations.

12. OperationalDirective 8.50 'Emergency RecoveryAssistance" addresses procedures for recovery assistance after disasters of slow and sudden onset. The OD defines the main objective of recovery assistance as the immediaterestoration of assets and productivity. It outlinesspecial considerationsfor designing EmergencyRecovery Loans (ERLs), including:

* early involvementof Bank staff; * limitedobjectives and realistic schedule; . conditionalitieslinked only to the emergencyrather than to macroeconomicpolicies; 98

* simpleimplementation arrangements and fulluse of existinginstitutions, including sector agencies,NGOs, and communitygroups, use of disaster-resilientreconstruction desip standards;and * inclusionof measuresfor preventingand mitigatingthe impactof futuredisasters.

The OD also outlinesspecial procedures for processingERLs, includingcompact documentation and simplifiedprocessing.

Guidancefor EnvironmentalAssessments

13. The environmentalassessment process provides a frameworkwithin which to analyzenabtl hazardrisk andto evaluatethe costsand benefitsof disasterprevention and mitigation.It also servesas a vehicle for analyzingdevelopment alternatives which do not have negativeimpacts on disaster vulnerabilityand for identifyingdisaster prevention and lossreduction measures. 14. In assessingnatural hazard risk it is importantto considerthe specific qualities and characteristics of differenttypes of disasteragents, as well as theirpotential direct and secondaryeffects. For instance, damagecaused by hurricanescould be due to the directeffect of violentwind andexcessive rainfall, and fromthe secondaryeffects of riverflooding, storm surge and landslides. Earthquakes can have numerous direct and indirecteffects such as tsunamis,fires and landslides.It is also importantto identifythose activitiesthat may increasethe potentialfor extreme events. For example,deforestation degrades watersheds,promotes erosion and soil degradation,and increasesflooding. The compiledinformation concerningthe two-wayrelationship between natural hazards and development should give a statusprofile for risk assessmentas well as for responsepurposes. 15. The EA of naturalhazard risk includesthe following: (a) Identifyspecific natural hazards, including natural hazard characteristics, distribution, intensities,qualities, and historicalrecords to review frequency,and probabilityof occurrenceand regional and localcharacteristics. Cb) Identifythe criticalsectors in the economyand naturalresources that maybe impacted by the identifiedhazards, analyze the constraintsand conflictsthat may be imposedby the naturalhazards on each relevantsector and on naturalresources and examinethe possiblestructural and non-structuralactions required to mitigaterisks. (c) For each sector/areaat risk, evaluateits degreeof vulnerabilityincluding facilities, infrastructureand populationexposed and specifymechanisms that would help in reducingthe identifiedvulnerabilities. (d) For eachsector/area at risk, examinestandards, design criteria and maintenancepractices that mayfoster vulnerability and makeappropriate changes to helpreduce it. (e) Identifythe locationof facilitiessuch as hydroelectricplants, oil storageplants, gS storageplants, nuclear facilities or industriesthat may be exposedto naturalhazard dsk. 99

(f) For the facilities/industriesat risk, identify risk reductionstrategies including alterate sites and analyze the cost and effectivenessof the different reductionalternatives.

(g) Examine the institutional capabilities for disaster prevention and mitigation at the national/regional/locallevels, highlighting inter-institutional coordinationmechanisms and the areas that may require strengthening.

(h) Analyze the role of the private sector (e.g., NGOs, insurance,banking, developers)both in promotingor in reducing vulnerabilityin the differentsectors/regions under analysis.

(i) Identify the specific capabilities of local NGOs in vulnerability reduction activities, particularly concerningcommunity involvement, education and training.

(j) Examine the existence/need for disaster prevention and mitigation policies and regulationsboth at the local and national levels.

(k) Analyze developmentoptions in terms of their impact on natural hazards.

16. Most of the informationin disaster-pronecountries that could be used for naturalhazard impact reduction or for post disaster planning and managementhas not been collected specificallyfor that purpose. Thus, adaptationwill be necessary for using such informationfrom disparatesources in risk reduction.

17. In every case analyzed, the capacityof existing institutionsto develop policy on naturalhazards and to implementit through regulations(ordinances), economic incentives/disincentives (taxation, credit, subsidies), land use and building codes should be evaluated. Likewise, the institutionalcapacity to develop and implement education and training programs should be assessed. Appropriate recommendationsfor institutionalstrengthening and for training and educationprograms that facilitate the participation of the concernedagencies and communitiesin disaster mitigation program should be included in the plan. 1a00

References

AtmosphericPollution

Arrhenius, E., and T. W. Waltz. 1990. The Greenhouse Effect: Implications for Economic Deveogment. World Bank DiscussionPaper 78. Washington,D.C.: World Bank.

Fisher, D. A., and others. 1990. 'Model Calculationsof the Relative Effects of CFCs and lheir Replacementson StratosphericOzone." Natur 344(6266):508-512.

Gibbs, M. I., and others. 1990. Reducing Methane Emissions from Livestock: QOportunitiesand Ise. Washington, D.C.: USEPA.

United StatesEnvironmental Protection Agency. 1990. "PolicyOptions for StabilizingGlobal Climate." Draft Report to Congress. Washington, D.C.

World Bank. 1989. "EnvirommentalAssessment." OperationalDirective 4.00, Annex A. World Bank, Washington,D.C.

1989. 'Greenhouse Gases and the Potential for Global Warming," in Eneriy Ogtions for the Develo'in& World and ESMAP's Role. Energy Sector ManagementsAssistance Program. Paper presented at the World Bank Annual Meeting. World Bank, Washington, D.C.

1990. Funding for the Global Environment. World Bank Discussion Paper 12. World Bank, Washington, D.C.

International Treaties and Agreementson the Environmentand Natural Resources

Ba Qadir, A. B. A. 1983. Meteorology and Environmental Protection Administration. Gland, Switzerland:IUCN.

Burhenne-Guilmin,F., C. De Klemm, M. Forster, and B. Lausche. 1986. "Legal Implementationof the World Conservation Strategy - Problems and Progress." EnvironmentalPolicy and Law 16:189-205.

Burhenne, W. E., ed., and Robert Muecke, comp. 1974-. International Environmental Law: MultilateralTreaties. VolumesI-V. Berlin, Germany: E. Schmidt. (Containscomplete treaty texts in official languageswith loose-leafservice for updatingparties and amendments.)

De Klemm C., and B. Lausche. 1986. Africn Wildlife Laws. IUCN EnvironmentalLaw Center. Gland, Switzerland. 101

Dupuy, R. J., ed. 1984. The Future of the InternationalLaw of the Environment.Volume XNII. 'he HagueAcademy of InternationalLaw and the UnitedNations University. Dordrech/Boston: MardnusNijhoff Publishers.

&&mMnm PolioyandLaw. 1987. Volumes17-. Lausanne,Switzerland: Elsevier Sequoia. Kiss, A. 1989. Droit Internationalde l'Environnement.Paris, France:A. Pedone. (IncludesTable Chronologiqueand Index.) Morcilo, P. P. 1989. Legislaciony Aito Ambientalesen Algns PaisesMiembros Prestatariosdel BID (Mexico.Costa Rica. Panama.Colombia. Venezuela. Ecuador. Peru. Bolivia,Chile. Argentina. Brasil. Jamaica). Washington,D.C.: IABB.

Munro,R. D., 1. G. Lammers. 1986. D J Protectionand SustainableDevelome: Legal Pridmes andRemmendations. VolumeXXI. World Commissionon Environmentand Development,Experts Groupon EnvirommentalLaw. London/Boston:Graham & Trotman/ MartinusNijhoff Publishers.

SociedadArgentina para el Derechoy la Administraciondel Ambientey los RecursosNaturales. 1988. AmbienteY RecursosNaturales: Revistade Derecho.Politica y Administracion.Editorial la Loy. BuenosAires, Argentina. Teclaff, L. A., and A. E. Utton, eds. 1974. InternationalEnvironm a Law. VolumeVm. New York:Praeger Publishing Company. United Nations EnvironmentProgramme. 1989. Register of InternationalTreaties and Other Agreementsin the Fieldof the Enviromnent.Volume XII, revisededition. Nairobi,Kenya. UnitedStates Environmental Protection Agency. 1990. PolicyOptions for StabilizingGlobal Climate. Draft Reportto Congress. Washington,D.C.

Intirnaenl Waterways

Caldwell,L. K. 1984. InternationalEnvironment Policy: Emergenceand Dimensions. Durham: DukeUniversity Press. WorldBank. 1990. Fundingfor the GlobalEnvironment. World Bank Discussion Paper 12. World Bank,Washington, D.C. 1989. "Projectson InternationalWaterways." Operational Directive 7.50. Washington,D.C.

-. 1989. WorldBank Supgort for the Environment:A ProgressReport. DevelopmentCommittee Pamphlet22. WorldBank, Washington, D.C. 102

Bioogical Diversity

Goodland,R., and G. Ledec. 1990. "Wildlands: BalancingConversion with Conservation in World Bank Projects." Environment31(9):7-35.

House Committeeon Banking,Finance, and Urban Affairs. 1983. Envirmnal Imp= of Multi DevelopmentBank-Funded Projects. Serial 98-37. Washington,D.C.: GPO.

Lausche, B. 1980. Guidelinesfor Protected Area Legislation. IUCN EnvironmentalPolicy and Law Paper 16. Gland, Switzerland:IUCN.

Ledec, G., and R. Goodland. 1988. Wildlands: Their Protection and Management in Economic Development. Washington,D.C.: World Bank.

McNeely, J. 1988. Economicsand BioloeicalDiversity. Gland, Switzerland:IUCN.

National Research Council. 1978. Conservation of Gernlasn Resources: An hmpeLtiv. Washington, D.C.: National Academyof Sciences.

Officeof TechnologicalAssessment. 1987. Technolo ain BiologicalDiveisq. Washington, D.C.

Raven, P. H., ed. 1980. Research Priorities in Tropical Biology. Washington, D.C.: National Academy of Sciences.

Reid, W., and K. Miller. 1989. Keening QOtions Alive: The Scientific Basis for Conserin Biodivers4. Washington,D.C.: World ResourcesInstitute.

United States Agency for InternationalDevelopment. 1985. U.S. Strategy on the Conservation of Diversi. An InteragencyTask Force Report to Congress. Washington, D.C.

World Bank. 1984. "EnvironmentalAspects of Bank Work." Operational Manual Statement 2.36. World Bank, Washington,D.C.

1986. "Wildlands: Their Protectionand Management-ifEconomic Development." Operational Policy Note 11.02. World Bank, Washington,D.C.

Worldwatch. 1978. On the Brink of Extinction: Conservingthe Diversityof Life. Washington, D.C.

Wldhands

Goodland,R., ed. 1990. The Race to Save the Tropics. Washington,D.C.: Inland Press.

Goodland, R., and G. Ledec. 1990. "Wildlands: BalancingConversion with Conservadonin Wodd Bank Projects.' Envirownt 31(9):7-35. 103

Ledec, G., and R. Goodland. 1988. Wildlands: Their Protectionand Managementin Economk Devlome. Washington,D.C.: WorldBank.

Westman,W. E. 1977. 'How MuchAre Nature'sServices Worth?" Scien 197:960-964.

World Bank. 1986. "Wldlands: Their Protectionand Managementin EconomicDevelopment." OperationalPolicy Note 11.02. WorldBank, Washington, D.C.

Wetlands

Crisp,P. 1986. CoastalWetlands. Wellington, New Zealand: Nature Conservation.

Dugan, P. J., ed. 1990. WedandConservation. A Reviewof CurrentIssues and RequiredAction. Gland,Switzerland: IUCN. Drijver, C. A., and M. Marchand. 1985. Taning the Floods: EnvironmentalAspects of Floodplain Dewelo=menin Africa. Leiden,Netherlands: Centre for EnvironmentalStudies.

IntemationalUnion for the Conservationof Nature. Wetland Conservationand Sutnabl Dmveloum=nt.Gland, Switzerland. Ledec, G., and R. Goodland. 1988. Wildlands: Their Protectionand Managementin Economic Dlevelomnt. Washington,D.C.: WorldBank. Lugo, A. E., and others. 1989. ForestedWetlands. New York:Elsevier Scientific Publications.

Scodari,P. F. 1990. WetlandsProtection: The Role of Economics.Washington, D.C.: Environmental Law Institute. World Bank. 1986. "Wildlands: Their Protectionand Managementin EconomicDevelopment." OperationalPolicy Note 11.02. WorldBank, Washington, D.C.

Arid and Saul-Arid Lands Bie, S. W. 1990. "DrylandDegradation Measurement Techniques." Environment Department, Policy and ResearchDivision Working Paper 26. WorldBank, Washington, D.C.

Nelson,R. 1988. "DrylandManagement: The 'Desertification'Problem." EnvironmentDepartment, Policyand ResearchDivision Working Paper 8. WorldBank, Washington, D.C.

Trolldalen,J. M. 1990. 'Dryland ManagementGuidelines (DMG): The Key Elementsin Dryland ProjectDesign and Review."Environment Department, Policy and ResearchDivision Working Paper (unpublished).World Bank, Washington, D.C. 104

TroUdalen,J. M. 1990. 'Professional DevelopmentWorkshop on DrylandManagement." Environment Department,Policy and Research DivisionWorking Paper 33. World Bank, Washington, D.C.

Seve, J. E., and others. 1990. "World Bank Drylands ManagementStudy: Lessons of Experience." EnvironmentDepartment, Policy and Research Division Working Paper 1990-9. World Bank, Washington,D.C.

Co l Zone Managenent

Ahmad, Y. J. 1982. Environmental Guidelines for Coastal Tourism. UNEP Environmental ManagementGuidelines 6. Nairobi, Kenya.

Asian DevelopmentBank. Manual of EnvironmentalGuidelines for DevelopmentProjects in Coastal ZQu". Manila, Philippines.

Baker, J. M., and W. J. Wolff, eds. 1987. Biological Surveys of Estuaries and Coasts. Amsterdam/NewYork: CambridgeUniversity Press.

Baisse, M. 1990. "Developmentand Implementationof the Biosphere Reserve Concept and Its Applicabilityto Coastal Regions." Epvironental Conservation 17:111-116.

Brunn, P. 1989. "Coastal Engineering and Use of the Littoral Zone." Ocean and Shoreline Managammii(U.K.), 12(5&6):495-516.

Burbridge, P. R., and J. E. Maragos. 1985. Coastal Resources Management and Environmental AssessmentNeeds for AguaticResources 1evelment for Indonesia. Washington,D.C.: IIED.

Carpenter, R. A., and J. E. Maragos. 1989. How to AssessEnvironmental Impacts on Tropical Islands ad Coastal Areas: A Training Manual Prenared for the South Pacific Regional Environment EPogramm&. Hawaii: Environmentand Policy Institute, East-WestCenter.

Carter, R. W. G. 1988. Coastal Environments: An Introductionto the Physical. Ecological and Cultural Systemsof Coastlines. San Diego, California: AcademicPress.

Chapman, V. J., ed. 1977. Wet Coastal Ecosystems. New York: Elsevier Scientific Publication Company.

Charlier, R. H. 1989. "Coastal Zone: Occupance, Managementand Economic Competitiveness." Ocean and Shoreline Management(U.K.), 12(S&6):383-402.

Charlier, R. H., and C. P. De. 1989. "CoastalDefense and Beach Renovation." Ocean and Shoreline MAUgU= (U.K.), 12(5&6):525-543.

Clark, J. R. 1977. Coastal Ecosstem A Technical Manual for the Conservation of CQatWlZone Resources. New York: John Wiley and Sons. 105

Edwards, S. F. 1987. An Introductionto Coastal Zone Economics: Concepts. Methods. and Can Studies. New York: Taylor and Francis.

Hamilton, L. S., and S. C. Snedaker. 1984. Handbk . Nairobi Kenya: UNEP and Hawaii East-WestCenter.

Hinrichsen,D. 1990. Our CommonSeas: Coasts in Crisis. United NationsEnvironment Programme. London: EarthscanPublications.

International Association of Ports and Harbors. 1989. Guidelines fir EnvironmentalPlannin_ and Managementin Ports and Coastal Area Developments. Tokyo, Japan.

Lemay, M. H., and L. Z. Hale. 1989. Coastal Resources Management: A Guide to Public EducationPrograms and Materials. Connecticut:Kumarian Press.

Mehta, A. J., and R. M. Cushman. 1988. Workshop on Sea Level Rise and Coastal Processes. Washington, D.C.

SaIm, R. V., and J. R. Clark. 1984. Marine and Coastal Protected Areas: A Guide for Planners and Manaers. Geneva, Switzerland:IUCN.

Snedaker, S. C., and C. D. Getter. 1985. Coastal Resources MMafagmnGuiddnm. Research Planning Institute Series, Coastal ManagementPublication 2. Columbia, South Carolina.

Sorensen, C., and S. T. McCreary. 1990. Insuth ffangeme Manag Coast Reso and Environments. The United States Agency for InternationalDevelopment. Narragansett: University of Rhode Island.

Symposium. 1985. "Coastal Management:Planning and the Edge. Journal of the AmericanPlarumg Associatin 51:263-336.

United Nations Envirownent Programme. 1985. Ecological Interactions Between Tropical Coas Ecosystems. Gland, Switzerland.

Natural Hazards

Burton, I., R. W. Kates, and G. F. White. 1978. The Environmentas Hazard. New York: Oxford UniversityPress.

Chang, S. 1983. "Disasters and Fiscal Policy: Hurricane Impact on MunicipalRevenue." Ikba AffairsOuarterly 18(4)511-523.

Cuny, F. C. 1983. Disas aleve1Dpmhut. New York: Oxford UniversityPress.

Dacy, D. G., and H. Kunreuther. 1969. Tle Economicsof Disterse ications for Federal EQ1iWx.New York: Free Press. 106

Friesema, H. P., and others. 1979. Aftermath: CommunitiesAfter Natural Disasters. Beverly Hills, California: Sage Publications.

Funaro-Curtis, R. 1982. Natural Disasters and the DevelopmentProcess: A Discussion of IssLues. Washington, D.C.: Office of U.S. Foreign Disaster Assistance.

Hagman, G., and others. 1984. PreventionBetter than Cure: Human and EnvironmentalDisasters in the2TbirdWorld. Stockcholm:Swedish Red Cross.

Kreimer, A. 1985. 'AsentamientosHumanos y Politicas para Prevenir Desatres Naturales." BeiU Latinoamericanade PlanificacionX1X(73).

1989. 'Reconstruction after Earthquakes: Sustainabilityand Development." Environment Department, Policy and Research DivisionWorking Paper 1989-3. World Bank, Washington, D.C.

National Academy of Sciences. 1987. Confronting Natural Disasters: An InternationalDecade for Natural Hazard Reduction. Washington,D.C.

1979. Assessing InternationalDisaster Needs. Washington, D.C.

Office of the United Nations Disaster Relief Coordinator. 1978. Disaster Prevendon and Miti&W= A Compendium of Current Knowledge. Volume 1: Volcanolgga AsO=. Geneva, Switzerland.

1976. Disaster Preventionand Mitidation: A Compendiumof Current Knowledge. Volume 2: HydrologicalAspects. Geneva, Switzerland.

United NationsCommission on HumanSettlements. 1982. Planningfor Human Settlementsin Disasr- ProneAreas. DocumentHs/C/5/3. Nairobi, Kenya.

White, G. F., ed. 1978. Natural Hazards: Local, National. Global. New York: Oxford University Press.

White, G. F., and J. E. Haas. 1975. Assessmentof Research on Natural Hazards. Cambridge: MassachusettsInstitute of TechnologyPress.

World Bank. 1989a. "EmergencyRecovery Assistance." OperationalDirective 8.50. World Bank, Washington,D.C.

-. 1989. Striking a Balance: The Environmental Challenge of Development. World Bank, Washington,D.C. CEHAPTER3

SOCIAL AND CULTURAL ISSUES IN ENVIRONMENTAL REVIEW

Developmentprojects are intendedto modify social and natural environmentsin order to create or enhance the economic, health, educationaland other benefits that are valued by society. This goal, however, can be denied throughunanticipated or unintendednegative social or environmentalimpacts that reduce desired benefits or, if severe enough, threaten the sustainabilityof the project. Environmental review providesan opportunityto identifymajor environmentalimpacts so that measurescan be proposed to avoid or mitigate negative ones and to reinforce positive ones. An environmentalassessment should identify the social changes, evaluate the social costs of long-term continuation of the project, and formulate strategies to achieve the desired objectives. Informationon social processes gained through environmentalassessment is likely be useful in other areas of project design.

Social analysis in EA is not expectedto be a completesociological study nor a social cost/benefit analysis of the project. Of the many social impacts that might occur, EA is concernedprimarily with those relating to environmentalresources and the informed participationof affectedgroups.

Social changes resulting from projects can have positive or negative- temporary or permanent - effects on environmentalresources. For example, in Brazil, large-scale farmers whose lands were expropriatedfor a dam and reservoirreceived sufficient cash compensationto purchasereplacement farms elsewhere, but the smallholders' shares were insufficientto compete in the steeply rising prices of the local market. The latter had little choicebut to clear public forest lands for agriculture. In another case, diversion of water for an irrigation scheme in Mexico killed riverine reeds used by mat weavers living downstream. The unemployedweavers adjusted to this loss by producing charcoal to sell to urban consumers, exacerbatingdeforestation problems that were already serious. Similarly, the clearing of brush from a river bank for a dam in Kenya eliminated tsetse-fly habitats, which in turn stimulated unanticipatedgrowth of agriculturalsettlements in the area, which eventuallyseriously depleted wildlife and exhaustedfuelwood in the region.

Frequently in the past, environmentalimpacts from social change resulting from Bank projects have not been anticipatedor systematicallyincorporated into projectpreparation and appraisal. The social analysis componentof the Bank's EA OD now furnishes the means to achieve both of these objectives.

Chapter 3 is devoted to practical discussion of key issues in social analysis related to environmentalreview. It provides a description of specific core concerns and an overview of social issues in ecologicallysensitive areas. In addition,five topics of particular significanceto Bank projects are discussed: indigenouspeoples, cultural property, involuntaryresettlement, new land settlementand induced development. The EA OD requires that, where they are relevant, these topics are to be explicitly addressed in the EA. 108

CORE CONCERNSIN SOCIALANALYSIS

1. Socialassessment for EApurposes focuses on howvarious groups of peopleaffected by a project allocate,regulate and defendaccess to the environmentalresources upon which they dependfor their livelihood. In projectsinvolving indigenous people or peopledependent on fragile ecosystems,social assessmentis particularlyimportant because of the closerelationship between the way of life of a group of peopleand the resourcesthey exploit. Projects with involuntary resettlement, new land settlement and induceddevelopment also introducechanges in the relationshipsbetween local communities and their use of environmentalresources. To identifyand assesssocial impacts that arise in these cases, information is neededin the followingareas. VariationWithin Communities

2. Communitiesare composedof diversegroups of people, including,but not restrictedto the intendedbeneficiaries of a developmentproject. Organizedsocial groups hold tertory, dividelabor and distributeresources. Socialassessment in EA disaggregatesthe affectedpopulation into socialgroups whichmay be affectedin differentways, to differentdegrees and in differentlocations. Important social differenceswhich may be environmentallysignificant include ethnic or tribal affiliation,occupation, socioeconomicstatus, ageand gender.

* Ethnic/Tribal groups. A projectarea may includea range of differentethnic or tribal groupswhose competition for environmentalresources can becomea source of conflict. Ethnicitycan have importantenvironmental implications. For example,a resettlement authoritymay inadvertentlycreate competition for scarceresources if it grantsland to new settlerswhile ignoringcustomary rights to that land by indigenoustribal groups. These issuesare coveredin more detailin the sectionon "SocialIssues in EcologicallySensitive Areas."

OOccupational groups. A project area may also includepeople with a wide array of occupationswho may havediverse and perhapscompeting interests in usingenvironmental resources.Farmers require fertile land and water, herders require grazing lands, and artisans mayrequire forest products such as woodto producegoods. A projectmay provide benefits to one groupwhile negatively affecting another. For example,while constructionof dams and reservoirsfor irrigationand power clearlybenefits farmers with irrigation,they may adverselyaffect rural populationsengaged in other activitiesliving downstream of the dam. * SocioeconomicStratification. The populationin the projectarea will also vary according to the land and capitalthey control. Some will be landlesspoor, others will be wealthy landowners,tenant farmers or middlemenentrepreneurs. Disaggregating the populationby economicstatus is importantbecause access to capital and land can result in different responsesto projectbenefits. For example,tree crop developmentmay benefitwealthy farmers,but displacethe livestockof poor farmersto more marginalareas. * Age and Gender. A socialassessment should include identification of projectimpacts on differentindividuals within households. Old people may be more adverselyaffected by 109

resettlementthan young people. Men, women, and children play different economicroles, have different access to resources, and projects may have different impacts on them as a result. For example, a project that changes access to resources in fragile ecosystemsmay have unanticipatedimpacts on local womenwho use those resourcesfor incomeor domestic purposes.

Control Over Local Resources

3. All local communitieshave some degree of sovereigntyor spheres of semi-autonomousaction regarding environmentalresources, whether recognizedformally in law or not. Sovereigntyis defined here as the actual capabilityof people to make major decisionsregarding uses of natural resourcesupon which they depend for livelihood. Social assessmentin EA begins with sorting out the degree of local control over natural resources.

4. A forest area, for example, may be formallyowned by the State and managedby a specialized agency of government. But at a practical level the forest area is often the habitat of local communities which determine to a great extent what happens to the forest. For example, rights to farm land or fish at a favorablespot on the river may be vested customarilyin a kin group or village, but such rights may not be recorded or registeredoutside the area. Rights to use an area whichvary seasonally, as when one group grazes cattle on land that another group farms, may not be recognizedin law. Communitygrazing areas may be formally common property for use by everyone, but in fact be set aside for the poorest members of the community. Village wood lots which are legally common property may actually be harvested by families powerful enough to deny access to others. People who are legally landless may actually depend for most of their incomeupon gatheringfuel, grass, medicinalplants and other products on public lands

Variation Within Production Systems

5. Obviously, production systems have environmental implications, but the components of a production system are also more cotnplexthan they appear to outsiders. A farming system, for example, typically involvesmanagement of over one hundredplant species in fields, orchards, gardens, grasslands and forests as well as livestockspecies. An important, but often overlooked, farm strategy to minmi ze risk is to cultivatea mixtureof perennial and annual crops (the latter being interplantedand maturing at different times) and to work separate plots of land. Changes in such patterns can have unexpected consequences. Farm families are also often engaged in processingand marketingacdvities and off-farm wage labor. Fishing communitiestypically divide production activities between the water, beach and inland areas, with the latter two often providing more than 50 percent of dietary intake. Nomadic pastoralists who depend largely upon their livestock may also own land along their annual migration route, which they rent to sedentary relatives and others.

Institutions

6. Access to natural resources, decision making regarding use of resources, conflict resolution among competitorsfor access to resources, and relationswith groups outsidethe local communitysoeekag access to resources take place within an institutionalsetting. The term institutionImplies an authority or leadership structure, a set of procedures or customsfor handling issues, and a system of incentives 110

and constraintsor rewards and sanctions which govern and guide the behavior of people. Depending upon the society, relevant institutionsmay be village councils, elders of a clan, a religious brotherhood or an agency of local government. They may have customs which are locally unique, as well as elementsof cultures with regional, national, and internationaldistribution.

7. It is through institutionalstructures that individual participation in activities is mobilized and controlled; followers are made responsiveto leaders; leaders are made accountableto followers; and competitionand conflict are resolvedand cooperationoccurs. Social assessmentin EA identifiesthe local structure of incentivesand constraintsthat guide and govern behavior with respect to natural resources. This is particularlyimportant to the process of consultationwith local communitiesin conductingan EA, and involvesthe forging of links betweenagencies of government(project) and the traditionalinstitutions of the people. Mechanismsto promote communityparticipation in project design are provided in Chapter 7.

Use of Social Information in Environmental Assessments

8. Social informationin the areas indicatedabove is useful at several levels. First, the information is used to verify or modify existing assumptionsabout the local population that may be pivotal in environmental assessment. Actual patterns of access to and use of natural resources by local communities,for example, may differ considerablyfrom what people in a capital city believe. Officials appointedto manage natural resourcesby a central governmentmay in fact have little practical authority and no influenceover locallypowerful groups. The findingsof social analysis may challengeprevailing assumptionsand introducemore accurate information.

9. Second, social analysis is used to predict the likely response of local groups to a project. In a hypotheticalexample, a project requiresthe resettlementof farmingvillages from a watershedarea where the averageholding is 5 ha. Compensationfor acquisitionof 5 ha is sufficientfor the farmers to buy 3 ha of replacement farm land, which is enough to resettle without further project assistance. Disaggregationof the affectedpopulation, however, reveals that the average of 5 ha results from a few familiesowning large parcels while the majorityfarm marginalplots of less than 1 ha and still others wno rent or sharecrop the land. Compensationfor less than 1 ha will not be sufficientto buy a plot large enough to support a family. Moreover, fifty percent of the village is technically landless and these families receive no compensationwith which to resettle. One likely outcomewould be clearing of forest in the upper watershedfor agriculture by the marginalfarmers and landless in order to survive.

10. Third, social analysis is useful in the process of formulating social strategies for addressing enviromnentalimpacts. Probablythe most important individualcriterion of a viable social strategy to manageenvironmental impacts is that it is self-supportingand, therefore, can be sustainedby local people when political fashions change. Strategiesthat require inputsor subsidiesfrom beyond the area usually cease when external priorities shift or when external budgets are otherwise constrained. Equally important, a viable social strategy must fit the social organization and institutionalstructure of local communities. For example, if social analysis reveals the importanceof decentralizedcorporate groups led by elders who lack authoritybeyond a single settlement,then an enviromnentalmanagement stategy calling for consolidatingcontrol over, say, forest resources under one individualelder would produce resistanceon the part of the other settlements. 111

SOCIAL ISSUES IN ECOLOGICALLY SENSITIVE AREAS

1. Development investments in zones of unique biological diversity or ecologically fragile ecosystems, such as tropical forests, coastal and marine areas, may entail significantsocial changes for human populations whose livelihoods and cultures are dependent upon them. Social changes in communitiesdependent upon ecologicallysensitive areas may lead, in turn, to unacceptableenvironmental risks. The EA should identify potential social changes which may result in negative and positive environmentalimpacts and formulate strategiesto prevent or mitigateundesirable impactsand enhance positive impacts in ecologicallysensitive areas.

Relationship to Bank Investments

2. Some human communitieshave occupiedecological sensitive areas for thousandsof years, while others have moved into these areas only recently. Due to the fragilityof the environmentalresources in ecologicallysensitive areas, human populationsare normally small and have often not increasedin size or density over many centuries. In additionto their small numbers, people traditionallypresented little threat to sensitive ecological zones because their production systems were sustainable and resource- extensive, dispersed over a large territory, and they had the power to keep encroachers, poachers and others out of the area. These factors are changing in each of the major types of ecologicallysensitive areas. The EA should therefore assess the likely social changes which will accompanya development investment and which have the potential for changing resource access and use patterns in the following areas.

Forest Areas

3. Tropical forests and temperateforests in mountainregions are consideredby the Bank and others as fragile ecosystems. Tropical forest zones are fragile in part because high annual rainfall is concentratedin brief but violent storms so that areas of even slight slope have a high level of erosion when not protected by vegetation. Temperateforest zones on the steep slopes of mountainregions are also subject to high erosion hazard. Forest cut in zones prone to erosion and other forms of soil degradation can be regeneratedonly under controlledconditions and at great expense.

4. Human communitiesin forest areas depend on agriculture, gathering of forest produce, fishing and hunting for the bulk of their diet. They collect resins, seeds, nuts, fruits, roots, fibers, and medicinal products of many kinds for cash income. Social changes introducedby projects in fragile forest areas can entail displacementof people or changes in forest policies and/or resources which require changes in the subsistencepatterns of populationsliving there or the introductionof additionalsettlements.

CoastalMarine Areas

S. Some of the most biologicallyproductive ecological zones in the world are coastal marineareas. ITey include beaches, sand dunes; estuaries, mangrove and other swamps, marshes and coral reefs. Esuares, mangroves, marshes and other wetland areas provide the breeding grounds, nurseries and habitatsfor manymajor commercialspecies of shellfishand finfishconsumed worldwide. Coastalmarine ecological areas are fragile because the complexfood chains and life cycles of all species are easily 112 damagedwhen a few are affectedby enviromnentalchanges. Thus, dumpingurban and industrialwastes or runoff of agricultural chemicals may damage a relatively small area, but the impacts may ricochet throughoutthe rest of the ecosystem.

6. Development projects that may adversely affect coastal marine areas commonly involve mariculture,tourism, port and harbor improvements,energy generation from dams and thermal power stations, industrial effluent discharges, runoff of agricultural fertilizers and pesticides, and improper watershed management. The abundanceof marine resources in certain seasons is marked by scarcity in other seasons, leadingto a 'boom and bust' cycle characteristicof fishing communities. For this reason, human communitiesin coastal marine zones traditionallyexploit not only the sea but also the beach and inland areas through agriculture, hunting and gathering. As much as half of diet and income may be derived from beach and inland areas of the zone. Women run the communitieswhile men are at sea or working inland during the heightsof boom and bustperiods. Social changesassociated with development investmentin coastal marine areas includerestricted access to one or more of the sub-zonesof the area, over-exploitationof selected species to meet demands of new markets, population displacement, and attractionof new settlements. Adjustmentto these social changesoften leads to additionalenvironental impacts elsewhere in the coastal marine zone.

Rangeland

7. Land with natural or semi-naturalvegetation that provides habitat for domestic ruminants and wildlife is generally defined as rangeland. The term is often used interchangeablywith arid and semiarid land, shrubland, wasteland, savanna and grassland. These areas are characterized by low population densities, human populationsthat are heavilydependent on herds of domesticatedlivestock, mobilityover an extensivearea, and complexcultures speciallyadapted to the harsh conditionsof drought-proneareas.

8. Development projects that affect rangeland commordy involve dryland farming, plantation forestry, irrigation, sedentarizationand settlement,livestock development, dairy production, tourism and conservationwildlife parks. Rangelandsare often perceived to be little utilized, so social impactsmay wotbe readily perceived. Humanpopulations are mobilewithin a territory which often includesmarginal lands with meager resourceswhich may not be used most years, that are nonethelesscritically important in drought years. Such areas may contain traditional 'famine food' consumed only when hungry livestock and people must turn to them. Contrary to common assumptions,property ownership in most rangelands is highly skewed, often with a small percentageof families controllingmost livestock. Many communitiesthat use rangelandsare organizedalong tribal lines and rights to water sources and grazing are regulated by clan elders. In other cases, water points and grazing may be controlled by certain families powerful enough to dominate others. Social changes commonlyassociated with development investments in rangeland areas include worsened land/population ratios, exacerbation of income inequalities, loss of territory and consequentpopulation displacement and health risks associated with conversionof subsistenceproducts like milk to commoditiesfor urban consumption. Sedentarizationof migratory or nomadic herders almost invariably leads to significant environmentaldeterioration and impoverishmentof affected people.

Zonesof UniqueBiological Dlversky

9. Many zones of biologicaldiversity have been remoteor isolatedfrom developmentprocesses until receny, and scientists may have incompleteknowledge of the full range of species present and the 113 environmentalfunctions served may not be well established. For example,tropical forests provide habitatsfor the greatestvariety of plantspecies of any ecosystem,but onlya fractionof thosehave boe Identified,systematically studied, and their biological,medicinal or economicvalues estimated. Fragile forestareas, coastal marine areas and rangelandsmay also be viewedas zonesof biologicaldiversit that constituteunique habitats for indigenousplant and animal species, and at the same time seve environmentalfunctions at littleor no cost. Developmentinvestments that mayintroduce social changes whichimpact upon zonesof uniquebiological diversity are generallythose which 'open up' prviovuly remoteareas to resourceextraction and newhuman settlements. In such circumstancesthe role of local indigenousknowledge becomes critical to the definitionof uniquebiological diversity zones and to the identificationof issuesin the protectionof resourcesthat mightbe endangeredby developmentprojects.

Guidelinesfor EnvironmentalAssessment

10. TheEA shouldassess the changesin pressureson naturalresources in ecologicallysensitive area likely to be introducedby the developmentinvestment. A first step is to disaggregatethe human populationfound in and aroundthe area. Normallythere are at leastthree broadcategories of resource users: peoplewho have livedin the area for severalgenerations, people who haverecently moved into the area, and non-residentpopulations who enter the area periodicallyto extractor utilize selected resources. Each categorycould be furtherdivided into subcategories. 11. Socialgroups that havelived in ecologicallysensitive areas for generations,while well aware of environmentalconstraints on their activities,have been able to evolvestable, low-energy, sustained-yield productionsystems which are well adaptedto the envirommentand compatiblewith contemporary approachesto environmentalmanagement. Developmentinvestments should be designedto increase naturalresource yields result in modifyingstable and sustainablepractices, with negative impacts on the peopleand their environment. 12. Stable,low-energy, sustained-yield production systems are basedon knowledgetransmitted from generationto generationthat containa wealthof informationabout the naturalresources of the area and resourcesmanagement practices. The EA can be strengthenedby includinglocal knowledge of plants, animals,ocean currents, hydrology, soils and other aspectsof the environmentthat maybe affectedby the developmentinvestment. The EA can help avoidharmful impacts by assumingthat wherestable systemsof this kindare foundthat pnost natural resource use practicesare environmentallyappropriate. 13. Recentsettlers into ecologicallysensitive zones may be anothertype of socialgroup residing in the area. In contrastto groupswhich have traditionally lived there, settlers usually have little knowledge of environmentalconstraints or sustainableresource use practices. As a result, settlerssometimes colonizeareas whichare unsuitablefor the productionsystems they operate; for example,some areas In the humidtropics where lush vegetationis mistakenlythought to be an indicatorof fertilesoil. 14. Whereagriculture fails, settlersmay derive the bulkof their incomefrom loging, often in the employof neighboringplantations or cattleestates which are attemptingto expandthe cleared-landarea theyexploit. The EA shoulddefine the effectsof colonization,the socialinstitutions and processeswhich producethem, and alternativesfor mitigatingtheir Impacts.

15. Non-residentpopulations that extractor utilizeselected resources Include fuelwood supplier to uba arte, logging concessions,mining and petroleumcompanies, hunters or poaches, tourists, 114 dectricity companies,cattle ranchers, and plantationenterprises. With some exceptionsmost enterprises of this kind are controlled by absenteeowners.

16. Developmentinvestments that have major impactson forests commonlyinvolve road construction which directly leads to land clearing and new settlements;forest clearing for mining, agriculture, forest plantations, or industry; commercial logging for constructionmaterials, manufacturingpaper, forestproducts processing, wood-basedindustries as well as fuel consumption;and, closure of forest areas for commercialor conservationpurposes.

INDIGENOUS PEOPLES%/

1. Special action is required when Bank investmentsaffect local communitiescomposed partly or entirely of indigenous,tribal, low caste, or ethnic minority groups. This is particularlytrue where their social status restricts their capacityto assert or defend their interests in the land and other resourcesupon which they depend for their livelihood. Because of their powerlessnesssuch groups are vulnerableto dislocationand impoverishmentin conditionsof rapid socioeconomicchange. This can lead, in tum, to the adoptionof inappropriateproduction systems with negativeenvironmental impacts. To lower the risk of impoverishmentand environmentaldegradation, special development plans tailored to the social, cultural and ecologicalconditions of these groups are required.

Concepts and Definitions

2. The terms indigenous,tribal, caste and ethnic minorityemphasize the differenthistorical, culturl and social contexts in which these groups have become vulnerable as well as certain features of their social organization.

Indigenous generally refers to native peoplesdistinguished by their close culturalachn and economicdependence upon ancestrallands or upon lands to whichthey have been pushed by dominantgroups. Indigenouspeoples threatened by the encroachmentof dominantgroups have increasinglysought the protection of their lands and their rights to self-determination under domestic and international law. Indigenous groups may be organized into tribes, loosely-knitbands or villages. While tribes have a strong leadership hierarchy, band or village headmen lead by force of personalityand have little mandate to make decisions for the group.

* Tribes are people organized into local descent group lineages and clans.Z/ Genealogical position in the clan often determinesthe right to use land held in customaryownership by the tribe. Tribes are often stratified into age sets, wherebyyoung men and young womenin one generationare treated as a "set" for their entire lives. Age sets cross lineage and clan ties. Resource managementactivity is often organized along age set lines, but decision-making

I/ For backgroundon this subject see: Tribal Peoples and Economic Development:Human Eclgial Consideration&.(Goodland, 1982).

ZI Local descent groups are composedof living members of a lineage: lineages are all descendant of a knownancestor and clans are several lineages claiming common origins. 115

authorityfor managementof land, livestockand other resources is usually vested with elders of the lineage or clan.

* Castes are social and occupationalcategories based on beliefs in religious purity. People often occupy prescribed positions in society by virtue of the caste group to which they are born. Society is stratified into a complexsystem of exchangesof ritual, social and economic services among castes. Lower castes are often technicallylandless, but many in fact survive by cultivation, livestockrearing and gatheringon public lands and forests.

* Ethnic minorities are a segment of society set apart by dialect, race, religion or historical origin, characteristicswhich often are taken as the basis for discriminationagainst them by other groups. Ethnic minority groups may identify with specific territories, but generally lack an organizationalstructure based on ethnicity alone.

Group Variations and Legal Status

3. In some countries the rights of indigenouspeoples to own or use lands and other environmental resources are established in special constitutionalprovisions, government policies or legal rulings. However, in practice these formal arrangementsmay be nullifiedby local social, economicand political restrictions on the ability of indigenous people to manage their own affairs. For example, many indigenous tribes in lowland Latin America do not have security of land tenure or other normal protections of their country's legal system despite constitutional guarantees. In other countries, indigenouslanguages, land tenure systems, and other customs importantto survival of the group are not recognized under law or are insufficientlysupported by public officials and conventionaldevelopment programs.

4. Most rural areas of Africa are inhabitedby people who belong to tribes and it is not uncommon for towns and cities to be divided into separate wards, each identified by the predominanttribe of its inhabitants. Tribes in most countries in Africa are elementsof the nationalculture and the basic building blocks of society. There is a tendencyfor national politics in some countriesto be dominatedby certain tribes, and for the interests of other, weaker tribes to be ignored or denied. In some countries dominant groups define tribal differences as an obstacle to development,thereby downplayinginequality among different groups by promotingnationalism. In such contextsthe label tribal may be consideredpejorative. The situation is similar in North Africa and parts of the Middle East. Tribes remain importantforms of rural and urban social organizationin some countries,whereas in other countriestribal groupshave given way to less cohesive ethnic, languageand religious groups.

S. The populationof Asia is made up of highly diverse cultures, many of which are distinguished by their caste, tribal and ethnic social status. Nomadic graziers who migrate through arid regions or mountain areas of the Himalayanregion are tribals, as are many highland agriculturalpeople in Southeast Asia and forest-dwellingpeople of the Indian subcontinent. Millions of these people are traditionally allowed to occupy and use state-owned lands, but have no constitutionalor legal rights to the land or resources. Several million people in China are classifiedas NationalEthnic Minorities. Some of these ar tribal, and occupy prefectureswhich have been granted varying degreesof semi-autonomy. In South Asia the caste system is reflected in the constitutionsof most countries through special protection for 116 certain scheduled"tribes and lower castes, but in partsof WestAfrica and China where castes also occur no such formalprotection exists.

Bank Polcy

6. The Bankwill not assistdevelopment projects that knowinglyinvolve encroachment on lands being used or occupiedby vulnerableindigenous, tribal, low-casteor ethnic miwrity people,unml adequatesafeguards are providedto at least mitigatethe negativeor adverseeffects of suchprojec on these people, their culturesand their environments.This is particularlyapplicable to developmet projectswhich affect relatively isolated and unacculturatedindigenous groups.

7. It is importantto recognize,however, that some indigenous groups are notisolated and paticipate In the economy,political processes, educational system and other institutionsof the largersociety. Many are fullyconvinced of the valueof developmentand wanta shareof their country'seconomic resources. Othershave a strongantipathy to whatrepresentatives of the dominantsociety define as the benefitsof developmentor are convincedthey willnot benefitfrom development projects. Stillothers do notknow enoughto choose. Key concernsin EA, therefore,relate to the preferencesof indigenous,tribal, low- caste or ethnicminority people and their responsesto developmentopportunities. Relationshipto Bank Financing

B. Vulnerableindigenous, tribal, caste and ethnic minoritygroups are usuallydependent upon a specificterritory. Manyhave developedstable, low-energy, sustained-yield production systems which are welladapted to their environment.Others have been pushed by moredominant groups into marginal and fragileenvironments where traditional production systems fail to adequatelysustain them. Stillothors occupyancestral lands, the qualityand size of whichhave been reducedby populationgrowth and pressure from dominantgroups. Developmentinvestments which threaten fiurtherreduction or degradationof the naturalresources of the territorymay impoverishthese people. Since such grups havelittle recourse but to intensifyexploitation of remainingmarginal and fragile environments, the result is environmentaldegradation. 9. The experiencesof vulnerableIndigenous, tribal, caste and ethnicminority groups affected by developmentinvestments have rarely been satisfactory.Two of the majorreasons have beenfailure to understandthe needsof suchgroups or to formulateand appraisea developmentplan tailored to the local situation.This has often led to under-designedand under-financeddevelopment programs in which investmentsdid not achievedevelopment objectives for the affectedgroups. The most sinificat environmentalimpact of faileddevelopment programs for indigenousgroups is impoverishmentand the onvironmentaldegradation that povertyproduces.

Guidan for EnvironmentalAsm ents 10. Environmentalassessments for projectswhich will affect vulnerable populations should explicily addrs any significantenvironmental Impacts that may result from the project'seffect on these socil groups. Significantsocial and environmental Impacts usually occur in areaswhere now infrastructure d ew production systems are lntroaucod or where existing Infrastructure and production sysm are modified. Assessmentshould therefore take pluce during the formulationof developmentplans so ta e noedsof indignous peoplecan be takeninto account in preparingthe projectproposal. 117

11. An environmentalassessment of projectimpacts on vulnerablegroups should include infrmation such as the following:

Formal Lgal and CustomaryUse-Rights. Determineactual workings of constitutional, legislative,administrative, contractual or customaryrights to use naturalresources.

* ResourceUse Patterns. Assesschanges in patternsof accessto or use of land, water, forest, pasturageor other naturalresources affected by the projectplan, includingfarming, livestockrearing, manufacturing, gathering systems.

* Use of Area by Non-Residents. Analyzedata on use of seasonalresources by graziers, fisherfolk,collectors of forestproducts, logging companies, suppliers of industrialmaterials. * Conmunity Participation. Determinethe extentto whichindigenous groups feel proposed developmentis environmentallysound and culturallyappropriate, which enviromental constraintsare to be addressedin projectdesign and implementation,which environmental opportunitiesare to be enhanced,and so forth.

* Identification,Demarcation and Registry of Area. Evaluate effectivenessof local mechanismsto resolveterritorial disputes; establish boundaries and buffer zones;develop waysto keepout loggers,encroachers.

i Inventory of Flora and Fauna. Survey and analyze fauna and flora and habitats, particularlyendangered species, under both adverse and normalconditions; uses by resident and non-residentpeople; indigenous knowledge of biodiversity. * Social Infrastructure. Evaluate impacts on schools, medical facilities, communications/tranportnetworks, markets; impactson water supply, drainage,waste disposalsystems.

* Public Health Conditions. Evaluatehealth risks and diseasesin the area; environmental pollution;health, sanitation and hygienicconditions; traditional medicines and practices.

InstltutionalAssessment. Determine capacity of localorganizations and indigenousgroups to participatein decision-making,implementation, operations and evaluation.

12. Thisbaseline sociocultural and environmentalinformation should be takeninto account in project design. A primaryconcern is whetheror notthe naturalresources base is adequateto supportthe present populaton as well as potentialgrowth. Increaseddensity may call for specialmeasures to addroe saary and publichealth conditionswhere none were neededbefore. Developmentmay incrase competitionfor certainscarce nat,uralresources and therebyplace them under groater exploitation. Intrduction of miningor manufacturingincreases the risks frompollution, as well as from newhealth ad safetyhazards. Agriculturalimprovements may affectcertain soils, flora and fauna, and water somres whichwill requiremitigation masures. Otherusers of the area maybe negativelyaffected by Indigenousdevelopment If they are deniedcontinued accoe. 118

13. The economic viabilityof proposed production systems is a critical element of the assessment. If new production systems fail, people may turn to extraction of natural resources to achieve desired income levels. For example, an industrialforestry plantation project in India was designed to employ tribal groups who would be affectedby clearing tropical hardwoodsfor export. After the primary forest had been cleared, the selectedplantation species was discoveredto be unsuitablefor the area. Thetribals did not benefit from the sale of a portion of the forest, but are today criticized for intensifyingtheir use of what remains.

14. The infrastructurerequirements of developmentrequire special emphasis. Access roads may be needed, which can be expected to induce resource extraction activities by loggers, hunters or others. Improperly designedroads may disrupt drainagesystems, animal migrationroutes, and in sloping terrain become major sources of soil erosion. Contaminationof water suppliesfrom new economicactivities, such as runoff from crop, livestock or manufacturingareas, should be examined. Introduction of a constructionwork force from outside the indigenousterritory without proper health screening or health care of local people creates unacceptablehealth and safety risks. Outsiders may also disrupt areas of religious significance and induce social tensions. Employment of local people in construction of infrastructure lowers most risks introduced by an outside work force, but this must also be planned. Training to enhance employabilityof local people can be assisted by the Bank.

Plans for Affected Groups

15. In general, unless specialmeasures are adopted,indigenous, tribal, low-casteand ethnic minority people are more likely to be harmed than helpedby developmentprojects designedto benefitgroups other than themselves. In such cases the development investment should be designed so as to prevent or mitigatenegative effects. Experiencehas shownthat where vulnerableminority people are to be affected by a developmentinvestment, a separateplan for indigenouspeoples, tailored to their specific needs and local situation, is necessary. The objective is to move toward the active participationof indigenous people in ways which enhance social and environmentalconditions.

16. Satisfactoryplans to achieve this objective should include the following:

* Baseline Data of Affected Area and Population. Census of population. Demarcationof lands and territories upon which they depend for livelihood. Maps of area. Environmental resources inventory and identificationof constraintsand opportunitiesfor development.

* Development Policy and Legal Framework. Legal rights to develop lands and territories, includingrights to possess and use naturalresources (e.g., forests, wildlife,medicinal plants, etc.) vital to their subsistence and reproduction. Development objectives, strategies, grievanceprocedures, and legal assistancerequired.

* Participation of the Affected People. Formal mechanisms necessary for participating directly, or indirectly through NGOs, in decision-making,implementation, operation, and evaluationof developmentplan. Formal incorporationof indigenousknowledge, personnel and practice into land and naturalresource management systems and environmentalprotection schemes. 119

* Development Plan. Detailed plans for development of infrastructure, education, public health, credit, or other services. Detailed plans for developmentof production systems in agriculture, transport, industry or manufacturing sectors. Monitoring and evaluation arrangements.

* Organizational Capacity for Implementation. Evaluationof departmentsresponsible for developmentplanning and implementation,natural resources management, indigenous affairs, public health protection; and line agencies expected to assist. Plans for staff training and organizationaldevelopment.

* Cost Estimate, Financing Plan and Implementation Schedule. Activities, cost and financingby year.

17. Equally important is the capacity of institutions responsible for indigenous development to implement developmentplans. In Senegal a public health investmentfailed because health workers assignedto serve tribal beneficiarieswere from different, antagonisticgroups. In Brazil, despite agreed developmentplans, institutionalweaknesses impedeprogress on demarcationof territories, public health care, effective registry and protection of land.

Special Issues Regarding Indigenous Peoples

Involuntary Resettlement

18. Project design should avoid involuntaryresettlement, especially where vulnerableminorities are involved. Where resettlement is necessary, Bank OD 4.30 should be consulted for policy guidance. During project identification and preparation, the advice of qualified social scientists and direct consultationwith local ethnic and religious leaders are essentialas the basis for planning. TMs should also encouragethe affected groups to actively participatein the resettlementprocess. Replacementland of equal productivepotential, ideally within areas of traditionaloccupancy, is also required.

ProtectedAreas Management

19. In those areas wherethere is overlap betweenprotected areas (nationalparks, ecologicalreserves, protected forests, etc.) and areas of traditionalindigenous occupancy, the Bank's OD 4.00, Annex D on Wildlands (to be released) should be consulted for policy guidance. Indigenous groups should be incorporatedas equal partners in the design and implementationof managementplans. Copartnership arrangements,such as those implied in the "biospherereserve" concept, shouldbe implemented.

Com,pensaton

20. Where projects require the acquisition of land or the extraction of resources (e.g., water, minerals, timber, etc.) from indigenousterritories, the indigenouspeople affected shouldbe compensated in kind or in cash at replacementvalue for the expropriatedassets. In other cases, the peoples concerned may want the benefits of ongoingparticipation in the design, operationand profits of resource extraction activities. Dependingupon circumstances,it may be prudent to lease rather than acquire land outright from indigenouspeoples. 120

Tourism

21. Projects that promote tourism in indigenousareas should be designed in consultationwith the indigenouspopulation. In some cases, special measures may be needed to protect indigenoussocieties and cultures from disruption by tourism.

CULTURAL PROPERTY

1. 'Cultural property' refers to sites, structures,and remainsof archaeological,historical, religious, cultural, or aesthetic value. Many projects or project components have a potential impact on archaeologicalsites, buildingcomplexes, architecture, monumental sculpture, painting, inscriptions,and other physical remains left by previous human inhabitantsand consideredpart of a country's cultural heritage. In numerous cases cultural property sites coincide with important natural sites. Cultural resources are a part of the resource base, and it is therefore important that developmentoptions under considerationare screened for potential impacts on cultural property. As discussed in the World Bank Operational Directive 4.50: "Cultural Property," the Bank's approach to the conservation and managementof cultural property is to assist in the protection and enhancementof cultural property affected by Bank-financedprojects.

Pollcy, Procedures, and Guidelines

2. The Bank recognizesthat sociallystable developmentrequires societies to retain and keep alive ties to their past and their cultural traditions. The Bank's policy as stated in OperationalDirective 4.50 (which updates OperationalPolicy Note 11.03: "Managementof Cultural Property in Bank-Financed Projects") is to: (a) assist in protecting and enhancing cultural property through specific project componentsand (b) decline to finance projects which significantlydamage cultural property, and asist only those that are designed to prevent or minimize such damage. Bank Operational Directives on environmentalassessment, involuntary resettlement, and tribal peoples also deal with cultural property concerns.

Relationship to Bank Investments

3. Recognizingthe value of their cultural heritage, most countries have enacted legislationaimed at the protection of their cultural properties. Unless development projects address the interests of archaeologicaland historical conservationas an integral elementin planning, expensivedelays can result and cultural resources can be inadvertentlydestroyed. Contractorscan avoid costly constructiondelays by maintaining close contact with the appropriate department of antiquities or national museum of archeology. If archaeologistsare notifiedwell in advance, they can completetheir investigationof a site before the constructionbegins, without affectingthe contractor's schedule. If antiquitiesare encountered in the course of construction, a team from the department of antiquities and/or an international archaeologicalinstitute usually needs only a few days to excavateand record vital information, In most cases, the constructionwork can continuewhile the archaeologistsare on site.

4. Any project which Involves excavation, levelling or filling of eth a part of construction oporationalpractices, Is a potentialthreat to archaeologicaland historical remains (see OD 4.00, Ann 121

A: 'Environmental Assessment' and Chapter I of the Sourcebook for a listing of environmental screening category A and B projects). While it is not possible to generalize about the extent of impact of projects on cultural property, infrastructure and energy are the sectors most affected by cutural resource issues. Both urban and rural developmentschemes may also encounter cultural property in carrying out urban infrastructureimprovement: road building, land reclamation,irrigation, drainage, etc. Public facilities (schools, hospitals, housing, etc.) can also affect cultural property if facilities are constructedupon or adjacent to archaeologicalsites.

5. The relationshipsbetween cultural property issues and a project can range from direct to indirect. A hydropower project may result in the inundation of cultural sites unless mitigating measures are implementedor relocationof the project are undertaken. A new road adjacent to an archaeologicalsite or historic building may facilitate access and therefore increase the cultural property's vulnerability. Construction work near archaeological or historical remains may cause damaging vibrations and disturbances. The location of a new industrial facility may bring cultural resources into contact with airborne pollutants. Envirommentalprojects aimed at improvingair qualitymay have a notable effect on decreasingair pollutionthat danages stone structures. Reducingdrainage problems associatedwith both irrigation and wastewater, which disturb building foundations,may also have a direct favorableimpact on the conditionof historic structures.

Guidance for Environmental Assessments

6. At the earliest stages of project identification and preparation, it is incumbent on the task manager, with advice and operationalsupport providedby the RegionalEnvironment Division (RED) and the EnvironmentDepartment (ENV) to alert govemmentsto potential cultural property issues. A first step would be to check the list of Unesco World Heritage Sites, which now numbers over 300 sites defined as constitutinga recognized heritage of outstandinguniversal value. Responsiblegovernment agencies(including ministries of antiquitiesor culture), museums,university departments of archaeology, art history, or architecture,should be contactedfor informationand expertiseabout the cultural resources in the project area. Nationalinventories of cultural resourcescan provide importantdata to assist project officers. Internationalresearch institutes (foreign archaeologicalmissions are present in a number of countries) are also sources of expertise. Relevant nongovermmentalorganizations, such as the national committeesof the InternationalCommittee of Monumentsand Sites (ICOMOS), and the International Centre for the Study of the Preservationand the Restorationof CulturalProperty (ICCROM),may also be helpful in gaining a full understandingof the cultural property that may be affected, Its relative Importance, and conservationneeds. International organizations with expertise In cultural property protection (for example, Unesco) are other sources of expert advice.

7. To coordinatethe various governmentagencies, a representativeof the departnent of antiquities shouldbe invited to participate in interagencymeetings held at key points In the EA cycle, as well as in forum meetingswith representativesof affectedgroups and relevant NMOs.

8. For certain types of projects that Involve large-scale modificationand/or disturbance of earth surfaces (such as dams, irrigationsystems, ports, principalroads, pipelines,subways, sewen, mines, and land reclamation) and that are located in areas where there Is reasonable evidenc, to believe cultural rources are present, a field survey by a qualified expert (e.g., an archaeologist or architectura hitorian) is required. Informed decisions can be made about subsequent actions on the basi of this survey. Full Inventoriesand further studies may be needed. 122

9. Detailedanalyses, includingreview of projectalternatives, mitigation measures, and institutional, trainingand monitoringrequirements, should be used to assistthe project executingagency and Bank staff in deciding whether to redesign or relocate the project so that sites and structures can be preserved, studied, or conserved intact in situ. In certain cases, it may be feasible for structures and remains of culturalvalue to be relocated, restored, preserved, and studied on alternativesites. Archaeologicalfield survey, selectivesalvage, and preservationof excavatedfinds in museumsprior to large-scaleexcavation, land levellingor tilling may help to minimizethe loss of or damage to cultural property.

10. Sites that are buried or not located by the survey may be discovered during project implementation,especially in the course of constructionor mining. Such unanticipateddiscoveries of remains of an archaeologicaland/or historicalnature, termed archaeologicalchance finds, are frequently found within 0-3 meters of the present surface. Most often they are concentrationsof pottery, worked stone, and human and animal bones, without commercialvalue, but of significanceto archaeologists, historians, anthropologistsand paleontologists. In general, the following archaeological chance find procedures should be adopted in project design and constructioncontracts:

* notificationof the relevant departmentof antiquities; * request for a representativeto make a site inspection; * cessation of work in the vicinity of the find until the visit of a representative;and * decision by department of antiquitieson possible salvage or excavation (usually required within 48-72 hours of notification).

National laws normally assess penaltiesfor violationsof archaeologicalchance find procedures.

11. In projects with major impactson cultural resources,consideration should be given to setting up a conservationunit located in a ministryor line agency. Efforts should also be made to develop local institutionalcapacity through technical assistanceand training.

12. Archaeologicaland historic sites, settlements, and structures are vulnerable to disturbancesof various types. Among these are flooding, changes in water table, deterioration of air quality, coastal erosion, seismic disturbances, vibrations caused by constructionactivities, building, or airplanes, and human intrusion. Cultural sites can tolerate finite numbers of visitors, just as natural sites, and this should be assessed in project design. The number of visitors and areas of access need to be controlled in order to prevent sites from deteriorationdue to overuseand physical proximity(visitors touching walls, paintings, sculptures).

13. It is not enoughto acknowledgethe existenceof culturalproperty that will be affectedby a Bank project. The site's long-termsustainability should be considered and a well-designedmanagement plan be devisedthat addressesconservation and maintenancerequirements. In this context,the Bank is willing to provide technicalassistance for training in conservationand management.

14. Where sites are consideredsacred, as in the case of religious shrines, the impact of relocationis complex. In such instances it is strongly advisedthat a team be formed to develop mitigationmeasures. The team shouldhave an art or architecturalhistorian knowledgeableabout the particular cultural tradi- tion, an architecturalconservator, an anthropologistfamiliar with the populationof the area, and a coordinator who would bring togetherthe relevantgovernment organizations, experts, and communityleaders. It is important that such interventionsbe scientificallysound, and that they respond, as completelyas 123 possible, to patterns of social organization and existing social and cultural institutions. Project staff should ensure that the culturalheritage of nondominantcultures are accordedthe same care as that of the dominant cultures.

INVOLUNTARY RESETfLEMENT

1. Bank-financedactivities that entail land acquisitionusually cause involuntaryresettlement. Most irrigation, hydropower and water supply projects, but also some urban, transport and industry projects can only be implemented if people are resettled from land required for civil works. Involuntary resettlementis complexbecause lost incomesources such as farmland,forests, pastures, shops, and other production resources, must be replaced, or equally productive alternative assets provided, if affected people are to reconstructtheir lives and economicproductivity. Even acquisitionof small strips of land, where the loss makes farming nonviable,or where people are dislodgedfrom their homes and shops for highways or transport lines, require planning for involuntaryresettlement.

Bank Policy

2. Treatment of resettlementin Bank projects is covered in OD 4.30: 'Involuntary Resettlement' (June 1990). Due to the social and economic disruption it causes, World Bank policy enjoins staff to avoid or minimizeinvoluntary resettlement. When forced resettlementis unavoidableand fully justified, Bank policy requires that a resettlementplan be formulatedand financedto ensure that people displaced are provided developmentopportunities to improve, or at least restore, the standardsof living they had before the project.

3. The first objective of an EA on a resettlementproject should be to estimate the capacity of the receiving area to sustain additional population under the conditions introduced by the resettlement operation. Second,the EA should identifythe environmentalrisks the resettlementplan will entail, such as those stemmingfrom increasedpressure on naturalresources, construction of infrastructure,and others mentioned above. Third, an EnvironmentalManagement Plan should be formulated which addresses these risks to mitigateimpacts on and protect the natural, human-madeand social environments.

Social Aspects of Resettlement

4. Involuntary resettlementin the past has been one of the least satisfactorycomponents of Bank- assisted developmentprojects. A major reason has been failure to appraise a resettlement plan in the field. This has often led to under-designedand under-financedresettlement components, which turned into relief rather than development operations. The most significant environmental impact of poor resettlementoperations is impoverishmentand the environmentaldegradation poverty produces.

5. The risk of impoverishmentin forced resettlementoperations is high because of the loss of a productiveresource base. In addition,unlike voluntary settlementwhich involvesself-selected, younger families, involuntaryresettlement compels everyone to move. This means that resettled communities must support not only the able bodied but also less productivepeople, such as the old, the incapacitated and the unskilled. Moreover, wealthier and better-educatedfamilies tend to split off, taking with them important sources of local investmentcapital and socioeconomicsupport, leaving a disproportionately poor communityto be resettled. 124

6. For these reasonsthe Bankstipulates that the ResettlementPlan shoud be preparedso a to be ready at the timeof appraisa, at the latest. Thisis true regardlessof the size of the operation.Where the numberof peopledisplaced is relativelysmall (hundreds), a modestplan may be adequate; where the displacedpeople number in the thousandsthe resettlementplan shouldbe comprehensiveand part of wideror regionaldevelopment strategies. In all casesresettlement planning should be startedas early as possible,as part of the feasibilitystage. 7. In accordancewith OD 4.30, resettlementplans satisfactoryto the Bank should provide informationin the followingareas: * OrganizationalCapacity for Resettnent and Development.Department responsible; line agenciesto assist;plan for organizationaldevelopment, training. * PartIipation of AffectedPeople. Strategiesfor director indirectparticipation in decision- making,implementation, operation, and evaluationof the resottlementof both setdersand host populations.

* BaselineData on AffectedArea and Population. Censusof population;property and commonareas inventory; map of receivingarea; environmental constraints in receivingarea.

v ResettlementPolicy and Legal Framework. Definitionof affectedlands, structres; compensationand entidementcriteria; resettlement objectives; grievance procedures. * DevelopmentPlan for New Site. Detailedengineering plaw and layouts;agricultural developmentpackages; non-agdcultural employment packages; monitoring arrangemen"t; environmentalprotection.

* Trafer Arangemts. Informationcampaign; transition monitoring; maintenance arrangement;mobilization schedule.

* Cost Edtimate,Financing Plan and ImplementatdonSchedule. Diagramof activities,cost and financingby year.

EnvIronmentalInpacts of Resettlment 8. EAs shouldinclude analysis of the impactsof the ResettlementPlan on natural,human-made and socialenvironments. The most significant environmental impacts occur in the resettlementreceiving areas to which peopleare movedand stem mainlyfrom new productiveactivities they take up once there. Assesmen thereforetakes place once developmentplans are detailedenough to specifyaltenative resettlemnftsites and proposedproduction systems.

9. Environmentlassssment beginswith the sectionof the RosotlementPlan whichanalyzes the onmen contnts in the alternativerdving areas. Resettlematwill mean increased populaton density,wth consequoe for localpeople as wellas natu rource. Ilneed populationdnsias may call for specialmeaures to addresssanitary and publichoalth conditions where none were noeded befor. Relocatedpeople may Introduce new diase riss to whichhost peoplehave littlo resitnc. 125

More people usually means more livestock,which increases competitionwith hosts for pasture. Game, fish and bird species may be more heavily exploited. Forests may be damaged by increasedfuel and forest products gathering. Migratoryor seasonalusers of the area may be negativelyaffected by the new settlements. The informationprovided in the developmentplan for the new sites should encompass:

Host Population. Census of people alreadyresiding in receivingarea; social organization of the host communities; ethnic, linguistic, religious and other cultural features of groups; populationdensity and growth rates.

Resource Use Patterns. Customs which regulate access to -land, water, forest and other resources; uses of resources in production systems, includingfarming, livestock rearing, manufacturing,gathering systems.

Use of Area by Non-Residents. Seasonaluse by graziers, fisherfolk, collectorsof forest products, logging companies,suppliers of industrialmaterials.

Formal Legal and Customary Use-Rights. Inventory of constitutional, legislative, administrative,contractual or customary rights to use resources.

; Inventory of Fauna and Flora. Surveysunder both adverse and normal conditions;uses by host population.

* Social Infrastructure. Inventoryof schools, medical facilities, communications/transport networks,marketplaces; information on water supply,drainage, and wastedisposal systems.

Assessmentof Public Health Conditions. Epidemiologyof healthrisks and diseasesin the area; environmentalpollution problems; sanitary and hygienic conditions.

Institutional Assessment. Capacity of local, regional and national organizations to participatein decision-making,implementation, operations and maintenance,and evaluation of the resettlement.

10. The economic viabilityof proposed production systemsis a critical element of the assessment. If new production systemsfail to restore or improve incomes, displacedpeople may turn to extraction of natural resources to survive. For example, studies of tribals relocated in India without provisionof agriculturalland to replacethat lost indicatethat almosthalf resortedto cutting and sellingfirewood after constructionemployment opportunitiesceased. In the Philippinesresettlement without provision for means to support themselves turned farmers into loggers and charcoal manufacturers, resulting in degradationof the watershed,reservoir siltationand reductionof the estimateduseful life of the reservoir from 100 years to 30. In Mexico failure to maintain market roads to new settlementareas transformed relocatedcommercial agriculturalists into slash-and-burnsubsistence cultivators in only a few seasonsand resulted in degraded forests and erosion. 126

11. The infrastructurerequirements of new settlementsdemand special emphasis. Access roads may be needed to establish resettlementsites, which can be expectedto induce resource extractionactivities by loggers and hunters. Improperlydesigned roads disrupt drainagesystems, game migrationroutes, and in slopingterrain become major sources of erosion. Studieshave shown that availabilityof potablewater is a major element of successfulresettlement; contaminationof water supplies from the new economic activities, such as runoff from residential, cropping and livestock areas, should be examined.

12. The constructionwork force brought in to build new roads as well as schools, clinics, water supply systems, and so forth will require residentialcolonies to be established,together with equipment yards, supply depots, and commissaries. Spontaneousor voluntary settlementsare likely to appear on the outskirts of planned settlements due to work opportunity, the provision or improvement of infrastructure,and new social services. Indeed, the constructionwork force for the resettlementoperation (as well as the main project civil works) may be induced to remain in the area following completionof the work. Part of the solution to this problem is to employ displaced people in construction of infrastructurefor resettlementsites.

13. Similar considerationsapply in urban areas. Populationdensities and the health and safety risks associatedwith crowding are major constraintson involuntaryresettlement. Land speculationtogether with the need to accommodatetenants and squattersoften limitsoptions for urban resettlementand results in greater nucleationthan environmentalhealth considerationwould permit.

14. Like their rural counterparts,urban people depend upon a network of kin and neighbors who provide a large number of low-cost socioeconomicsupport services. These range from child care to diversificationof income-earningopportunities to informal credit arrangements. Disruption of these networks due to involuntaryresettlement places urban people, and in particular women, at risk. As in rural situations,compressing different and sometimeshostile ethnic groups into one area will introduce unacceptablerisks. Resettlementsite location in relation to people's jobs is critical, in that even small increases in transportationcosts or time spent in travel may jeopardize employment. Finally, in many societies urban householdsproduce a substantialportion of their diet and some cash from garden, patio or yard areas. House plot areas must be sized and designed to accommodatecustomary social and economicproduction activity.

NEW LAND SETTLEMENT

Planned Agricultural Settlement

1. Many governmentshave invested in land settlement schemes with various objectives in mind. The division of large farms into small parcels for redistributionto settlers (Zimbabweand Kenya), the clearing of apparentlyunderutilized land for allocationto landless settlers represent types of approach which emphasizethe redistributionof land (Bolivia). A second type is exemplifiedby the estate project approach, under which a commerciallyrun estate supervises and purchasesthe produce (cash crops) of the small holders who are often settlers (Malaysia,Indonesia). Typicallythe estatetype project produces rubber, oil palm, sugar, coconuts, and other cash crops. The Bank does not have a specific policy on land settlement in general but is developing an operational directive, expected to be issued in 1991. Further guidance is provided in World Bank Report, Experienceof the World Bank with Government- Sognsored Land Settlement., 127

Guidance for Environmental Assessments

Impact on Local People

2. Any land considered to be suitable for a settlement scheme will have been used by people previously, unless it lies in an area from which endemic disease has been recently eradicated. Even though such areas bear few signs of cultivation, they often support sizable populationswho gain their livelihood through hunting, fishing and the collectionof forest products such as sago, rattan, traditional medicines, fruits, and fallen tree limbs for sale as firewood. Such people may also cultivate crops in valley bottoms and practice agriculturethrough land rotationto provide basic foodstuffs.Grasslands may form part of an intricategrazing system developedby transient pastoralists.Frequently such users of the land have no recognized title to the land, and the EA should estimate the effects which the proposed project may have on indigenouspeople socially, and its effects on their sources of livelihood.

3. Settlementplans need careful examinationas there is a strong possibilitythat the other land is already used. The issue is not one of equity alone, but of virtually increasingthe populationdensity in an area in which the people already present live in an ecologicalbalance with the natural environment. The resulting increase in population may lead to damage to watersheds and forested areas, due to the shorter land rotation cycles imposed by the newcomers and the ecological imbalancetheir presence brings.

Land Allocation

4. The area of land to be allocated to each settler will vary with land capability, the crops to be grown and the family incometarget. There is a tendencyto overestimatethe fertility of the soilsof lands to be used for settlement, so that expected farm areas and yields can be checked against local performances. The size of holdingprovided shouldbe workablewithin the amountof labor availableand produce an adequate income, but without imposinga strain on its capacity for sustainedproduction.

5. The EA should also examinethe proposed tenancyarrangements in relationto their effects on the environment. A variety of land tenure devices may be employed. These range from a type of renewable tenancy under which lazy and otherwise unwanted settlers can be expelled to "free-hold' ownership of the land by the settler (usuallyafter a period of probation). Whateversystem of tenure is adopted it must provide settlers with a sufficientdegree of security to provide the motivationto conserve their land as a viable asset and to invest their own resources in its improvement. Either the title itself, or general legislation,should discourage or prohibitthe sub-divisionof farm holdingsbelow the point that they can remain viable in terms of subsistenceand saleable surplusesfor their occupants.

lltiing and Inheritance

6. In many parts of the world, women often hold land in their own right, or at least have an inalienableright to cultivatelands belongingto clans, familiesor other groups to whichthey may belong. Most settlementschemes seem to assume that wives are there to assist their husbands regardless of the type of division of labor normally practiced. This may work well in cases where the returns from farming are shared between men and women, but in situations where the women's farms provide subsistence and cash for children's needs the issue needs close attention. Bearing in mind that the acquisitionof land is usually the greatest incentivefor would-besettlers to volunteer, an appropriatefbrm of title guaranteeing security for women and their children is a necessary part of the project design. 128

7. The EA process should analyze what is likely to happen to a settlement farm holding on the decease of the original settler. Will the wife inherit the farm, or will it be the eldest son? If polygamy is the practice, what will happen to the second wife, or to the wive(s) who is not the mother of the son who inherits. Also what will happen to the other children? These issues are not only related to equity, but to the environment. Unless there is provision within the settlement area for the allocation of new farms for the increasing population, or there are other employment opportunities open to settlers' children, greater pressure on the land resources, both on the farm holding and on the surroundingforests (sources of firewoodetc.) will lead to reduced yields and incomesand environmentaldegradation. Bank staff need to evaluatethe trade-offsbetween leaving fertile land near settlementsfor future use by settlers' children, the costs of leaving land now reasonably accessible in an undevelopedstate, and the risk of spontaneoussettlers moving into those lands in an uncontrolledmanner.

SettlerSelection

8. Settlers need to have an agricultural background, be married and be strong and healthy. Settlementsdependant on unmarried school-leavingmales generally do not work, nor do those intended for vagrants and the homelessrecruited (conscripted)from cities. Care must be taken with the proteges and relatives of influentialpersonages as prospectivesettlers, as such people usually seek future windfall profits from sale of the land, and their wards will probably not make good farmers in the interim, although the presence of some may attract secondaryinvestment and maintenanceof infrastructureby the government.

CroppingSystems and Land Use

9. Croppingpatterns shouldbe designedaccording to land suitability.It makes litde sense to expect setters to continue to cultivate the crops they are used to in their areas of origin if the soil, slope or rainfall are different. During the stage of project preparation it pays to look at the type of agriculture practiced by the people already living in the surroundingareas, noting the mix of crops and the ways in which the land is protected by plant canopies. Although forested areas (South East Asia and South America) look lush and fertile, it must be remembered that the clearing of this land exposes it to the weather and forest soils rapidly lose their initialfertility (mainlyfrom organic material), and suffer from leaching, laterizationand the build-upof aluminumtoxicity. Nowherehas it been proven that nonirrigated tropical soils can be used for continuousarable cultivationwithout lengthy fallow periods or application of fertilizers.

10. Settlers should be encouragedto plant fruit trees on their home gardens, and the cropping plan should ensure that only land with less than an eight degree slope is used for annual crops. Provisionfor fdlow periods needs to be made, and to the extent possible perennial crops, especiallytrees should be grown. The converion of forest land to pasture should not be supportedby the Bank.

Family Planning

11. Newly arrived settlers tend to want large families, as the amount of work required to bring new lands Into full production Is usually greater than the labor needs of a mature farm. Thus settlers tend to have fewest family hepers when they are most needed in the early years of settlement, and too many mouths to feod afterthe period of peak labor needs Is over. A familyplanning componentto counsel md 129

advise settlers from the beginningis advisable,otherwise overcrowding will lead to croppingwith increasingintensity and overgrazing.

Spontaneous or UnplannedAgricultural Settlement

12. Spontaneousor unplannedagricultural settlement generally entails expansion into areas hitherto used or reservedfor otherpurposes, and it oftenmeans expanding agricultural frontiers into areas which are potentiallysubject to severeland degradation (Southgate and Pierce, 1988). Suchexpansion may or maynot be as a resultof officialencouragement by governments.There are a numberof featuresof the this kindof agriculturalexpansion which can causedamage to the environment.These features are:

* the area of land being clearedfor agricultureis greaterthan the area recoveringthrough adequatefallow periods;

* there is a tendencyto moveinto forest areas, catchmentareas, wetlandsand marginalareas of low rainfall;

- boththe modeof clearing(mechanized) and the cropsgrown (often annuals) may deplete soil fertilityand erodetopsoil; and

* an absenceof clearland tenure leads to the maximizationof short-termgains to the detriment of the environment.

13. WhileBank projects themselves are planned,the incentivesand infrastructurethey foster may be unplanned,and there may be land settlementas a secondaryeffect. (See section on 'Induced Development,for furtherdiscussion). Such projects with limitedcontrol over the resultantsettlement of land needto be viewedfrom the perspectivesprovided below. Relationshipto Bank Lending

14. Spontaneousagricultural settlement is relevantto manytypes of Bank-financedprojects. Any projectrequiring new or improvedaccess will enable, and likely attract, people into the area to cultivate newlyaccessible land and to sellto new marketscreated by the projectitself. For example,mining, agricultural(including planned land settlement),hydroelectric, thermal electric power, and of course highwayprojects may all encouragespontaneous agricultural settlement. Bank staff need to considervery carefullythe potentialeffects of each project,not onlyas direct causeand effectbut as sets of effects whichwould not have occurredhad the projectnot beenconstructed. Typically migrant laborers move to projectsites in the hopeof employmentand clearland for farming,while others engage in tradingand providingservices to thosethat havejobs. 15. In additionto projectswhich provide access to land throughroad construction,there are others which convert untenableareas into habitableones, mainlythrough the eradicationof holo-endemic diseases such as onchocerciasis(river blindness)and trypanosomiasis(sleeping sickness). A classic exampleof the formeris the UN/Banksupported program in West Africa,and plansof the Zamblan 130 authorities to eradicatesleeping sickness. Scrupulousanalysis of the trade-offs needs to be made when such programsare being considered: for example,the value of productionto be expectedfrom settlement of the area, with the strong possibilityof environmentaldegradation, against the value of leavingthe ar uninhabitablefor people, but with watershedsprotected from erosion, with consequentbenefits derived from the green cover and water managementand quality.

Guidance for Environmental Assessments

16. In situationswhere there are incentives for the expansionof frontier agricultural colonization, estimates of the rate that this will occur as a result of the project shouldbe made, and the effects on both the natural environment and the indigenous people. Changes in tax laws which encourage frontier agriculture may take time to be implemented,even if governmentsare willingto undertake such action. If the land is technically suitable for agriculture and there are no conflicting claims by local people, it may be possibleto include a project componentfor planned settlementin the area.

17. Typical effects will include those which are deliberate, e.g., the constructionof roads, villages, land clearing and cultivation,etc., and the unplannedbut foreseeableimpacts caused by people. These latter impactswould include the attractionof immigrantsto the area who will constructdwellings, need water and drainage, and will either clear land for farming or will use some land for trade or other business. Agriculturaleffects can be considerable,especially cultivation, and can include leachingof the soil, sheet and gully erosion, and undesirable"s from run-off and seepage containingdissolved chemicalssuch as fertilizers, pesticidesand herbicides. Th oreseeable direct and indirect effects of the likely consequencesfor the natural environment,the indigenouspeople and the new colonists shouldbe analyzed.

INDUCED DEVELOPMENT

1. There are a number of important but indirect social impacts of development, which may be overlooked in project design and monitoring. Often these are impacts which result from secondaryor inducedgrowth. Some of these impactscan be predicted, fairly reliably, based on past experience,while others are unexpected and can only be identified and addressed if an adequate system of impact monitoringis put into place during project implementation. This section examinessome of the negative social impactswhich can result from induced developmentand outlinessome mitigatingactions that can be undertaken. It does not address the social impactswhich are the direct result of developmentprojects. These are addressed elsewhere in this section on social issues.

Relationship to Bank Investments

2. A variety of developmentprojects can result in significantsecondary changesin the project area. These include large dam projects, mining projects, large industrial projects, planned agricultural colonization projects, integrated rural development projects which generate new markets and infrastructure,and roads projects whichopen up remoteareas. A commonshortcoming in the design and environmentalassessment of such projects is the failureto plan for the influx of a secondarypopulation of voluntarymigrants who take advantageof the new economicopportunities created. For example,large dam or miningprojects usually make provisionsfor housing, food, schools, and other essentialservices for the constructionworkers or miners that will move into the area around the project site. What may 131 not be taken into account is the influx of an equallylarge populationof people who seek employmentor who come to provide other servicesthat are not availableto the new population,and who may also place na burden on the surroundingenvironment given their needs for food, fuelwoodand living space. It is important to take accountof such impacts in environmentalassessments.

Impacts from Increased Population Size

3. The entrepreneurswho come to project sites provide alternative sources of commoditiesto the construction crews or mining population. These include the sale of constructionmaterials, tools, and goods such as cigarettes or cookingoil; cheapervarieties of the goods provided in companystores, such as plastic shoes or lower-qualityclothing, tools, and household goods; or pre-cooked street foods from vender stalls or small restaurants. It also includes service industries, like repairing of leather, tools, clothing, or householditems; bars, prostitutionand gamblingconcerns; or transport servicesto the nearby towns. Voluntarymigrants also includethe familiesof entrepreneursif the time-periodis relativelylong.

4. The influx of an unexpected number of outsiders has predictable social impacts on the local population, includingthe following:

(a) Pressure on existing resources and infrastructure: competition for fuelwood, housing materials, electricity, water supplies, waste disposal, fisheries, and land areas diverted for shops or squatter housing.

(b) Pressure on existinginstitutions: small town or village institutionsare unable to handle the increasedincidence of violence, crime, and disputesover land and other resourcesin scarce supply; or to take over more sophisticatedplanning functions.

(c) Increased pressures on health and sanitary facilities, due to an increased incidence of contagiousdiseases or pest outbreaks.

(d) Breakdownof traditional methods of social control and discipline and social disorientation of the local population,resulting from the rise in social problems, changes in the values of children and adolescents,and the possible rise in the cost of living due to inflation.

(e) Increased marginalizationof the minoritygroups in the local populationand a wideningof the poverty gap, since the more vulnerablegroups in the population, includingthe aged and women, must competeboth with the local populationand with outsiderswho may have more political and physical clout.l/

/ Althoughthe opposite may occur If the newcomersare the ethnic and cultural minorities, and the local populationbegin to exploit them instead. 132

Special Cases of Induced Migration

Boom Towns

S. There is comprehensiveliterature on a specificsub-set of induceddevelopment, the boomtowne. Boom towns arise in situationsof temporarypopulation increase, e.g., the constructionof large projects or road networks, or the mining of temporarily productive sites. Boom towns have a particulady dramatic effect on nearby environmentssince prices rise and the normal mechanismsfor naturalreource managementbreak down, leadingboth newcomersand long-termresidents to exploittheir environments for short-term gain.

6. Becauseof the temporary nature of the populationinflux, there is a distinct cycle to boom towns whichneeds to be understoodwhen planning measuresfor mitigatingnegative impacts. In general, boom towns pass through a cycle of (a) rapid growth before and during construction, (b) high population densities during construction, (c) declining populationafter construction, and (d) a demographic and economic 'bust' after construction. Social impacts from boom towns followthe cycle as well. Socia disorientationchanges in dimensionfrom one stage of the cycle to another. The local populationmay be quite euphoric in the initial stages of the boom, due to increased economicopportunities, then sour as social problems surface and life slows down to a pre-boom pace, with the induced problems of resource overuse and degradationremaining behind.

Planned Colonization

7. In planned agricultural colonizationor planned urban settlement, a large population is often brought into a relatively undevelopedgeographic area. Projects of this type plan for a fixed number of immigrants,but the creation of new infrastructure, economic opportunities, and services also draw a number of spontaneousmigrants to the site. Unlike the boom town situation,the influx of new colonists results in a permanentpopulation increaseand there is no cycle of boom and bust. Otherwisethe types of pressures resulting from an unplannednumber of immigrantsare similar to those for a boom town or temporary constructionsituation.

8. One negative impact on the local populationthat occurs in planned colonizationis that, even in the absence of spontaneousin-migration, local people can be marginalizedin the developmentprocess if colonistsare providedspecial educational, financial, technical,and service resources,while localpeople are left with the normal level of developmentservices. This has been a problem for tribal populations in India, for example, when refugees from the Sind and Bangladeshwere settled in the fifties and early seventies on forest lands cleared for agriculturenearby and provided agriculturaldevelopment services, includingirrigation, that raised the migrant population's standard of living and resulted in the eventual exploitationof the tribal populationby the migrants. In such cases, there are often both adverse social and environmentalimpacts.

A ssment and Mitigation of Adverse Impacts

Duratdonof Assessment

9. An ament of the social impacts on the environment should include a comprehensve demographicsurvey of the project population(surveying all sites, not a limited sample of sits), u well 133 a a surveyof the localresources and seasonal resource management strategies. The objective of the EA shouldbe to assessthe magnitudeof the expectedimpacts of induceddevelopment, so that mitgatng actions are plannedon an adequatescale. To do this, observationsmust be made over different sasons, differenttimes of the day, and take intoaccount the overlappinguse of resourcesby sedentary farmes, pastoralists,fisherfolk, and migratorywage workers. Whatlooks like an emptyhillde or field in Marchmay be filledwith grazinganimals in August. Thereshould also be adequateanalysis of the natureof the localand regional institutions which may have responsibility for planningand administratve decisions. Mitgatng Actons 10. Mitigatingmeasures, such u the following, address the problemsrelated to sponuane immigrationand minimizethe need for massesof temporaryworkers from outside. (a) Train local peoplebeforehand, especially for less skilledjobs, makingspecial efforts to providetraining for localminority peoples; and improvetransport facilities to andfrom the site to enablelocal people to work at thosesites. (b) When budgetingfor new infastructureand services,plan adequatelyfor the voluntary immigrantsas well as the knownnumbers of constructionworkers, miners, or colonists. (c) Promoteinvestment in localresources (e.g., fishponds, animal raising, local water supplies, literacyand job training)to improvethe local resourcebase and capacityto producefood or servicesfor sale to the migrants;to reducethe pressuresduring a boomperiod; and to bufferthe populationagainst the econom!-bust whichfollows. (d) Locally, strengthenexisting institutions or developnew ones to undertakelong-term developmentand regionalplanning that addresseschanges, to handlean increasednumber of disputesand socialproblems, and to accommodatea much more diversifiedpopulation. (e) Plan adequatehealth, drinking water and sanitaryfacilities to deal withthe unexpectedrise in the incidenceof diseaseand pest problems. (0) Providethe necessarysocial, psychological and counseling services to old and newresidents to enablethem to copewith socioeconomic changes, particularly for vulnerablegroups and the aged. Monitoring

11. In additionto the abovemeasures, an evaluationsystem should assess periodically the impacts of developmentintervention/induced development that are not predictableor anticipatedat the outset. Such impacts includethe proliferationof unexpecteddiseases or the informal establishmentof environmentally-harmfulor population-drawingindustries or enterprisesas a result of the general economicgrowth in the area. 12. For example,individuals living near major construction sites who develop skills during the period of constructionmay subsequendystart informalbusinesses that draw upon their acquiredskllls. When a large numberof such individualsstart new enterprises, this leadsto an unexpectedproliferation of new industries,with potental problemsof noise,air, or waterpollution or inadequatewaste disposal. Such enterprs can includesmelting enterprs near a mine,eectricity-based enterprises in an area of nw powerdistribution or agrIcultWalprocossing industries which use large quantitiesof fuelwood. 134

References

Indgmoim People

Anderson,R. S., and W. Huber. 1988. TheHour of the Fox: TropicalForests, the WorldBank and Indigo=o Peple in CentralInia. Seatde:University of WashingtonPress.

Bodley,J. H. 1975. Victm ofProgr. MenloPark, California: Cumminp. Brokensha,D. W., D. M. Warren,and 0. Werner,ods. 1980. ge Knowledg Systemlsand DeviePml . Latham,Maryland: University Press of America. Clay,J. 1988. IndigenousPeoples and TropicalForests: Modelsof LandUse and Managementfrom Latin America. Cambridge,Massachusetts: Cultural Survival. Davis, S. H. 1988. Indienous Peoples.Envronmental Protection and Sustaiable Dedopment. Geneva,Switzerland: IUCN. Epstein, T. S., and D. Penny. 1972. Oprt niv and Resonse: Case Studies in Economic Devlsopmemt.London: C. Hurst. Goodland,R. 1982. Tribal Peoles and EconomicDevlogment: HumanEcolog Consideratios. Washington,D.C.: WorldBank. McKinnon,J., and B. Vienne. 1989. Hill TribesToda: Problemsin ChanUe.Bangkok, Thailand: WhiteLotus-Orstom.

Parkin,D. 1972. Palms.Wine and Witnesses. SanFrancisco, California: Chandler.

Poole,P. 1989.1evelgpiag a a n Use Plannerin LatinAmerica. World Bank Working Paper 245. WorldBank, Washington, D.C.

Culual Property Departmentof Antiquidesof the HashemiteKingdom of Jordanand the AmericanSchools of Oriental Research. 1983. Aoonc 2asegoM Archalogy in the MiddleEau. AmmaD,Jord: AmericanCenter of OrientalResarch. Gooiland,R., and M. Webb. 1987. OfC raP in World Pjeca. WorldBak TochncalPar 62. WahIton, D.C.: WorldBank.

InternatonalCentre for the Studyof the Presrvaton and the Restoradonof Culturi Propety. 1986. Preventive __ _ _ Sk_ _t e . Rome,Italy. 135

InternationalCommittee of Monumentsand Sites. 1964. Itmational Charter for the Conservation d Restorationof Monumentsan Sites. Venice: Stamperiade Venezia.

Sykes, N. 1984. Manual on Systemsof InventoryingImmovable Cultural Propert. Paris, France: UNESCO.

Taboroff, J. 1990. Conservationand Managementof CulturalPatrimony in the MediterraneanRegion. EnvironmentalProgram for the Mediterranean. World Bank Working Paper 6. Washington, D.C.: World Bank and the European InvestmentBank.

United Nations Educational, Scientific and Cultural Organization. 1976. ConventionConcerning the Protectionof the World Cultural and Natural Heritage. Paris, France.

United States Army Corps of Engineers. 1989. The ArchaeologicalSites Protection and Preservation Notebook. Vicksburg, Virginia.

World Bank. 1986. 'Management of CulturalProperty in Bank-FinancedProjects." OperationalPolicy Note 11.03. World Bank, Washington,D.C.

Involuntary Resettlment

Burbridge, P. R., R. B. Norgaard, and G. S. Hartshorn. 1988. Environmental Guidelines for Resment Proiects in the Humid Tropics. Environmentand Energy Paper 9. Rome, Italy: FAO.

Cernea, M. M. 1988. InvoluntaryResettlement in DevelopmentProjects: Policy Guidelinesin World Banlc-FinancedProies. World Bank TechnicalPaper 80. Washington, D.C.: World Bank.

Chambers, R., ed. 1970. Ihe Volta Resettement Edn. London: Pall Mall Press.

Colson, E. 1971. The Social Consences of Resettmnt. ManchesterUniversity Press.

Hansen, A., and A. Oliver-Smith. 1982. Iluntary Migradionand Resettlement: The Problemsand o=nses of Dislocated Boulder,Be". Colorado: Westview Press.

World Bank. 1985. Exnerience of the World Bank with Government-SnonsoredLand Settlement. Report 5625. World Bank, Washington,D.C.

1990. 'InvoluntaryResettlement." OperationalDirective 4.30. World Bank, Washington,D.C.

1986. "Operations Issues in the Treatment of Involuntary Resettlement in Bank-Financed Projects." OperationalPolicy Note 11.08. World Bank, Washington, D.C.

1980. "Social Issues in the Treatment of Involuntary Resettlementin Bank-FinancedProjects." OperationalManual Statement2.33. World Bank, Washington,D.C. 136

Now IlA Sedement Hrdjno, J. M. 1977. ig_ KualaLumpur: Oxford University Prs. Ndls, M. 1973. The Devfogmentof Trical Lands. Baltimore,Maryland: Ihe Jobns Hopkin UniversityPress. Schumam, D., andW. Partridge,ods. 1989. Amml&.Boulder, Colorado: Westlew Press. Soutgate, D., and D. Pierce. 1988. 'Agricltural Coloniaon and Eiromta Degdation in FrontierDeveoping Economie. " EnvironmentD _parmut,Policy and ResoachWoing Pper 9. WorldBank, Wasbington, D.C. UnitedNation. Centre for HumanSetilements. 1986. a Se t Formation Isgon. VolumesI andH. Nairobi,Kenya. World Bank. 1985. Epence of the WorldBank with. RePort5625. Wodd Bank,Washington, D.C.

Ideed Development Bowles,R T. 1981. c mact Ausm in Smlw An eReviewo . Toronto,Canada: Buterworth. Corts, C. F. 1977. *TheSociological Analysis of BoomTowns. W etn olm a Rxliew8:76- 89. Davenport,J., and J. Davenport,od. 1980. TheBoom Town Problens a Promisesin the EnerR VMort. Laami,: Universityof Wyomi Socl WorkDeparmet.

Fluterbuach, K. 1980. Socl the Efff gf Public Pojts. BeverlyHills, California:Sage Publications.

Gold,R. 1975. A Soim Missoula:Univerity of MontaA, Initut for Socal R arch. CHAPTER4 ECONOMIC ANALYSISOF PROJECTS AND POLICIES VVIll CONSIDERATIONOF ENVIRONMIENTALCOSTS AND BENEFITS

1. This chapter reviews current economicapproaches to the analysis of projects and policies and discusses possibilitiesfor better integratingenvironmental concerns. Part I outlines current practicesas they relate to the analysis of traditionalprojects, to public expenditureand investmentreviews, and to the analysis of economicpolicies, such as in the context of economicand sector work, or in connection with structural or sectoral adjustmentoperations.

2. Part II deals with four key issues:

* physical impactsof projects and policies * valuing these in monetaryterms - the discount rate - issues of risk and uncertainty

Approachesfor valuing environmentalimpacts are emphasized. Where possible, practical examplesare given for "broad-based' analyses, which deal with what has often been referred to as "externalities." Conclusionsare presented in Part HI.

PART I: REVIEW OF CURRENT PRACTICES

The Context for Economic Analysis of Projects and Policies

3. Most governments pursue certain general objectives in terms of economic growth, income distribution/povertyalleviation, and proper managementof natural rources. There may be some complementaritiesin these objectives, but it is acceptedthat significanttrade-offs are involved, at least in the short term. Giventhe existingscarcities of financialand human resources in developingcountries, it is particularlyimportant to invest the limitedresources in such a way as to reap the maximumbenefit in terms of the country's objectives. Sound economicanalysis of projects and policies is an important means of making the allocationprocess more efficient.

Economic Analysis of Projects

4. Project analysis is a method of presenting systematicallythe choice between competinguses of resources. It assessescosts and benefits with a commonyardstick. Benefits are defined relative to Iheir effects on the improvementsin human well-being. Costs are defined in terms of their opporunity costs, which is the benefit foregone by not using these resources in the best of the available altenative Investments. 138

Economic Anauysis Versus FinancialAnalysis

5. Economicanalysis of projects differsfrom financial analysis. The latter focuses on moneyprofits accruingto the project entity. Various financialindicators are used to evaluatethe entity's ability to meet its financial obligationsand to finance future investments. The economic analysis, on the other hand, measures the project's effect on the efficiency of the whole economy. Rather than financial prices, shadow prices are used that reflect opportunitycost. The cost and benefit streams are compared, and indicatorssuch as net present value (NPV) and internal rate of return (IRR) are calculated. Sensitivity analysesare undertakento determine which component(s)of the project are particularlyimportant for a satisfactoryoutcome.

Social Cost-Benefit Analysis

6. Basic cost-benefit analysis (CBA) uses economicallyefficient values of costs and benefits to determine which projects contribute the most toward the growth/efficiencyobjective of the economy, independentof who the beneficiariesare. The SCBAtries to take incomedistribution effects into account by assigninghigher weightsto benefits accruedby the poor (Squire and van der Tak 1975). In practice, formal weighting systemshave seldom been used in project analysis. Income distribution,and indeed other social goals, have typically been treated ad hoc.

Past Shortcomingswith Regard to the Environment

7. In principle, economicanalyses are to take into account all costs and benefits of a project. With regard to environmentalimpacts, however, there are two basic problems. First, environmentalimpacts are often difficult to measure in physicalterms. Second, even when impactscan be measuredin physical terms, valuation in monetaryterms is difficult. In spite of such difficulties, a greater effort needs to be made now to "internalize"environmental costs and benefits by measuring them in money terms and integratingthese values in economicappraisal (see Part ED.

The Value of ConsideringEnvironmental Effects Early on in the Project Cycle

8. The main purpose of the economicanalysis of a project is to ascertain whether the project can be expectedto create more net benefits than any other, mutually exclusiveoption, includingthe option of not doing it. Considerationof alternativeoptions therefore is a key feature in proper project analysis. Often, importantchoices about alternativeproject optionsare made early on in the project cycle. These options may differ considerablyin their general economiccontribution, and they may also differ greatly in environmentalimpact. Therefore, including enviromental effects in the early economic analyses, however approximately,should improve the quality of decision-making.

Public Investment Reviews

9. An important lending institution like the Bank needs to consider not only the viability of individualprojects, but also the overall investmentprogram of a country. ITe Bank's leverageis limited, however, and governmentsmay be sensitive about outsiders' views on priority-settingbased on explicit criteria. This is particularlyso when "nationalsecurity concerns"are invokedin justificationof projects, or when projects are politically motivated. Nevertheless, an overall appraisal of a country's public investmentprogram (PIP) is important. Money is fungible, and the financingof a sound project by the 139

Bank mightpermit a countryto utilize its own or other resourcesto finance a project that may make only a limited contributionto the overall objectives.

10. An analysisof PublicInvestment/Expenditure Reviews (PI/ERs) has been undertakenby the Bank. The following recommendationswere made to improve their cost-effectiveness: (a) clear, achievable objectivesshould be set (e.g., by limitingthe number of sectors covered); (b) coverageof issues should be selective and tailored to country circumstances, except for core components (PIP and recurrent expendituresfor the main sectors); (c) the Bank shouldavoid taking direct responsibilityfor drawingup the PIP; (d) more attention should be paid to upstream sector work (to be included in the PI/ER); and (e) for a crisis mission, a detailed aide-memoirewill be more timely and often more cost-effectivethan a full report (de Melo 1988).

Analysis of Economic Polides

11. Previous Bank guidelineson the economic analysisof projects dealt exclusivelywith projects in a narrower sense. Since the guidelineswere issued in 1980, sectoral and structural adjustmentlending has increased rapidly and stabilized at around 25 percent of Bank lending. Also, 'hybrid' projects are now financed that contain elements of both investment-typeand policy-basedoperations. For sound economic analysis,the same cost-benefitstandards should applyto the whole spectrumof "projects' that are financed.

12. Most of the policy and institutionalreforms supported under structural adjustment loans are intended to increase the efficiencyof the economyand to promote economicdevelopment. The extent to which economic growth is increased by the reforms is seldom explicitly expressed in quantitative terms. The design of policy reformswould be improvedif better attemptscould be made to identify and (whereverpossible) estimate their costs and benefits, basedon a comparisonof the standard 'with policy' and 'without policy' projections(Kanbur 1990).

13. With regard to recognizingand includingenvironmental concerns in economicanalyses explicitly of macro-policies,a number of observationscan be made, particularlyon national income accounts and the environmentaleffects of macro-policieson the natural resource base.

PerformanceMeasurement in the NationalIncome Accounts

14. Performanceis currently measured by the growth in Gross Domestic Product GDP, and policy reforms are justified on the basis of their short-, medium-, or long-term contributionto such growth. While GDP measuresmarket activityreasonably well, it does not includenon-market value added. More importantly, since GDP does not consider depreciationof man-made capital and also leaves out the degradation of 'natural capital", it is an inaccurate measure of true, sustainable income (Ahmad, El Serafy and Lutz 1989).

15. The Bankand the UnitedNations Statistical Office (UNSO)are conductingcase studiesto develop methods for deriving and Environmentally-adjustedNet Domestic Product (EDP). Until such work has come to fruition, policy analysts should keep in mind the limitations of current national accounts information. The most desirablepolicy reforms are thosethat increaseEDP rather than GDP, since EDP more accuratelymeasures 'sustainable" income. 140

7h)cg Policy Effects on the NaturalResource Base

16. Interactionsbetween the economicsystem and the environmentare complex and our understandingof them limited. Ideally,a comprehensivemodel is neededthat tracesthe packageof policyreform through the economicand ecological system. Generally, time and data limitationspreclude the use of such modelsin developingcountries. Practicalpolicy analysis is usuallylimited to a more "partial equilibrium"approach that seeks to trace the most importantimpacts of specificreforms, qualitativelyand, wherepossible, quantitatively.

17. Severalstudies contain practical examples of whatan analystcan achieveeven with limited time and resourcesavailable. Binswanger(1989) showed that in Brazil generaltax policies, specialtax incentives,the rules andland allocation,and the agriculturalcredit system all acceleratedeforestation in the Amazon. Thesepolicies also increasethe sizeof land holdingsand reducethe chancesof the poor to becomefarmers. Mahar (1989) madea thoroughhistorical analysis of governmentpolicies and programsin Brazil. He tracedmany of today'sproblems in the Amazonto the decisionin the mid-1960s to provideoverland access to Amazonia- a decisionmade before enough was knownabout the region's naturalresources to be able to developit is a sustainablemanner. 18. In a studyon CostaRica, Lutz and Daly (1990) reviewed incentives and regulation,and atempted to assess how these affect deforestationand sustainableland use. They found that most of the deforestationat presentis being donenot by squatters,but by the loggingindustry, banana companies and large cattleranchers, driven by profitand assetmaximization motives. 19. In anotherstudy, Lutz andYoung (1990) traced the effectsof agriculturalpolicies on the natural resourcebase. Someof these can be assessedrelatively easily, at least in quantitativeterms. For example,where the removalof a fertilizeror pesticidesubsidy is being consideredin an adjustment program,it is clear that, as a result of the proposedreform, governmentexpenditure will decrease, farmers'use of theseproducts will decrease, and enviromnental effects will tend to diminishas well. The quantitativeeffects essentially depend on the relativeelasticities involved. 20. For certainpolicy or institutionalreforms it may not be possiblea priori to determinethe environmentalimpact in the short or long run, since there may be both posidve and negadve enviromentaleffects. The net effectmay depend on the size of the relevantparameters that are case- specificand whichmust be estimated. The Casefor More EnvironmentalAnalysis Under ResourceConstraints 21. Littleand Mirrlees (1990) noted that between the mid-1970sand 1990,there occurred a ariseand declineof projectappraisal in the WorldBank and elsewhere,"and claimthat currentlythe incentives are inadequatefor projectanalysts to undertakethorough, in-depth analysis of projects. 22. In view of the existingdiscrepancy between what ought to/could be done and whatis actually being done,the questionarises whether it is realisticto expectmore thorough treatment of extrnality issues.However, even in situationswhere task managershave limited resources at their disposa, natural resourceand environmentalissues may be criticalto the successor failure of a project or policy. Therefore,even under budgetconstraints, where environmental issues are involved,some funds should be opnton enviromentally-orientedeconomic analysis, preferably early in the projectcycle. PartI 141

suggests "best practice" for integratingnatural resource and environmentalissues into eeonomicanalyses of projects and policies.

PART I: POSSIBILITIESAND CONSTRAINS FOR INCLUDING ENVIRONMENTAL COSTS ANDBENEFTS NTO ECONOMIC ANALYSIS OF PROJECTS AND POLICIES

23. Four key issuesin measuringenvironmental costs and benefits are discussedhere: (a) determining physical impacts and relationships;(b) valuing impacts in monetaryterms; (c) discounting;and (d) risk and uncertainty. Emphasis is given to methods and approaches.

Physical Impacts and Relationships

24. The first step in environmentallysound economicanalyses is to determinethe environmentaland natural resource impacts of the project or the policies in question. These impacts are determined by comparing the "with project' and the "without project" impacts. The difficulty in doing this varies greatly. For example, solid waste production of an industrial plant can be estimated easily, whereas it is much more difficultto identify all the environmentalimpacts of a trade policy reform, of air pollution, or even of soil erosion on agriculturalproductivity.

25. For determiningphysical impacts, an economistwill have to rely on the expertiseof engineers, ecologists, agronomists,social scientists,and other specialists. The task is complexin that somephysical relationshipsmay not be Inown, may be stochasticor may occur only over the long-term.

Valuing the Impacts In Monetary Tenns

26. A number of conceptual approaches have been developed for valuing physical impacts and relationships. An environmentalimpact can show itself in a measurable change in production or environmentalquality. Different methods are appropriatedepending on the types of effects (see Table 4.1).

27. The methods and approaches discussed below are applicable or potentilly applicable in developing countries. The techniques are presented in decreasing order of reliance upon market information, beginning with those that rely on actual market prices, and ending with survey-basedand other hypotheticalmethods.

Market-Based Methods

28. The primary feature of these methods is that they are based directly on market prices or productivity. They are applicablewhere a change in environmentalquality affects actual production or production capability. 142

Table 4.1. Chid ValuationTechniques

SURROGATEMARKET POTENTIALEXPENDITURES DIRECT VALUATION VALUES OR WILLINGNESS-TO-PAY

* Change of productivity * Property values * Replacementcosts

* Loss of earnings * Wage differences * Shadowproject

* Defends expenditures * Travel costs * Contingentvaluation

* Marketedgoods as proxies

Change-in-ProductivityApproach

29. Development products can affect production and productivity positively or negatively. For example, a land management project involving soil conservation measures, may yield increased agricultural output. The incrementaloutput can be valued by using standard economicprices.

30. The environmentalcosts of reclaimingwetlands or of water pollutionare now being recognized. Where these affectfish catch either in the short-termor long-termthe value of fish catch can be estimated directly by using actual or projected market prices. (Wetlandsare beneficial in more ways than fish catch, of course; for a detailed discussion,see Chapter 2.)

31. An empiricalexample of the change in productivityapproach is a studyby Anderson(1988) that measured the benefits of afforestationin Nigeria. Studies show that in Northern Nigeria, shelterbelts have significanteffects on crop yields, generallyin the range of 10 to 30 percent. Therefore, in addition to the wood production, the benefits from increased farm production should be considered (see Table 4.2).

32. Loss-of-EarningsApproach. Changesin environmentalquality can have significanteffects on human health. Ideally, the monetaryvalue of health impactsshould be determinedby the individuals' willingnessto pay for improved health. In practice, 'second best' techniquesmay be necessary, such as valuing earnings that are foregone through premature death, sickness or absenteeism;and increased medical expenditures. This approach may be relevant, for example,when consideringroad and industrial plant safety, and projects that affect air pollutionin major cities. 143

Table 4.2. Estimatingthe Benefitsof Afforestation

Treesprovide a varietyof benefitsother than wood. Thus,economic analyses concentrating only on wood productionclearly underestimate total benefitsfrom tree planting. In the Andersonstudy cited, four benefitsof afforestation(for NorthernNigeria) were considered: (a) stemmingfuture declines in soilfertility; (b) improvingcurrent levels of soil fertility;(c) acquiringtree products(firewood, poles, fruit, etc.); and (d) increasingthe availabilityof fodder.(Fodder can be increasedby increasingsoil fertilityand by plantingfodder trees and shrubs as part of a farm forestryprogram. In turn, thesepractices can enhanceeconomic outputor livestockbenefits.)

Consideringthe benefitof wood products alone results in a modest rates of return of approximately5 percent. Evaluatingthe three other benefitsraises the net presentvalue fourfoldand the economicrate of returnto over 15 percent. Thesecalculations were based on conservativeestimates of the ecologicalbenefits. Andersonconsidered two types of investments:(a) shelterbeltsand (b) tree plantingsnear farm dwellingsand on farm boundariesby the farmers themselves. Both have similar qualitativeecological benefits, but differentcosts, risls, and quantitativeeffects.

Costsand benefits were estimated in sevensteps: (a) determininggross and net farm income; (b) determiningthe growthof agriculturalproductivity; (c) determining the rise in grossfarm incomeas a resultof protectingthe environment;(d) calculatingthe rate of changein soil fertility;(e) calculatingthe valueof woodper hectarefarmed; (f) detenriningthe costsof a project;and (g) computingthe valueof the landarea occupiedby trees. Andersonshows how the calculationswere done. The resultsare summarizedin the figurebelow:

350

Gross incomewith p)rojct/

250 Incomcin Niam 200 Grossincome without project

150 100I Net incomewith project 100/

0p ------T- -

50 11.00e 1 Net incomewithout project

S 5 7 9 1113I 15 17 19 21 23 25 27 29 Year

(So8r: Andro 189) 144

33. The *value-of-health' approach is often questioned on ethical grounds. It is argued that it dehumanizeslife, which is of infinite value. In practice, however, society implicitlyplaces finite values on human life and health when it makes policy and project decisions that affect environmentalquality, workers' health or safety, etc. If this were not so, we would be justified in spending all of GDP on health improvements.

34. In the case of an increase or reduction in numbers of deaths, a first estimate is made by evaluating the projected loss in earnings of the individuals involved. 'he value of an increase or reductionin sickness can be approximatedby adding medical costs to loss in earnings.

Defensiveor Prevenive ExVenditures

35. Individuals, firms, and governmentsundertake a variety of "defensiveexpenditures in order to avoid or reduce unwanted environmentaleffects. Environmentaldamages are often difficult to assess, but defensive expendituresmay be determined more easily in monetaryterms than direct valuationsof the environmental good in question. Such actu expenditures indicate that individuals, firms or goverments judge the benefitsgreater than the costs. The defensiveexpenditures can then be interpreted as a minimum valuationof benefits.Jl/ However, caution is dvisable with this approach, especially in cases where governmentsarbitrarily mandate defensive expenditureshaving little or no relationship to market forces or free choices.

Methods Based on Surrogate Market Values

36. The methods and techniquesdescribed in this section use market informationindirecty. The approaches discussed are the property value approach, the wage differential approach, the travel cost method, and uses of marketed goods as surrogates for non-marketedgoods. Each technique has its particular advantagesand disadvantages,as well as requirementsfor data and resources. Tle task of the analyst is to determine which of the techniquesmight be applicableto a particular situation.

Prty Value Approach

37. This approach, also referred to as the hedonic price technique, is a subset of the more general land value approach. Its objective is to determine the implicit prices of specific characteristics of properties. When used in environmentalissues, its purpose is to place a value on improvementsor deterioration in environmentalquality.

38. The property value approachhas been used to analyzethe effects of air pollutionin certain areas. Where pollutionis localized,the method comparesprices of houses in affected areas with houses of equal

1/ Considerablework is going on to identifydefensive expenditure. Such expendituresby firms are treated in the current Systemof NationalAccounts (SNA) u intermediatecost and therefore are not part of value added or final output. Defensiveexpenditures by householdsand govern- ntos, on the other hand, are trated as final expendituresand ircluded in GDP. Tldspractice is beingquetdoned, and prposals are being discussedto chage this. 145 size and similar neighborhoodcharacteristics elsewhere in the same metropolitanarea. The approah is based on the assumption of a competitivereal estate market, and its demands on information and statistical analysis are significant;therefore, applicabilityto developingcountries is limited.

Wage DifferentialApproach

39. This approach is based on the theory that in a competitivemarket the demand for labor equals the value of the marginal product, and that the supplyof labor varies with working and living conditions in an area. A higher wage is therefore necessary to attract workers to locate in polluted areas or to accept risky work. Again, as in the case of the property value approach, the wage differentialapproach can only be followed if the labor market is very competitive. Also, the approach reflects only privaee, not social, valuationof health risks.

Travel Cost Approach

40. This approach is most often used in analyzingthe economicbenefits of recreationalfacilities in industrial countries (parks, lakes, forests, wilderness, etc.). Essentiallythe same approach can also be used to value 'travel time' in projects dealingwith fuelwood and water collection(Hanley 1989).

41. The surroundingarea of a site is divided into concentriczones of increasingdistance, representing increasinglevels of travel cost. A survey of users should be conductedat the site to determinethe zone of origin, visitationrates, travel costs, and various socioeconomiccharacteristics. Users close to the site would be expected to make more use of it, because the implicitprice for them, as measured by travel costs, is lower than for more distantusers. Based on analysisof the questionnaires,a demand curve can be constructedand the associatedconsumers' surplus determined. This surplus represents an e imate of the value of the environmentalgood in question.

Marketed Goodsas Surrogatesfor Non-MarketedGoods

42. There are situations where environmentalgoods have close substitutesthat are marketed, and where therefore the value to the environmentalgood in question can be approximatedby the observed market price. For example, the value of a non-marketedfish variety can be valued at the price of the most similar fish being sold in local markets.

Methods Based on Potential Expenditures or Willingness-to-Pay

43. Sometimes it is not possible to estimate the benefits of environmental quality protection or improvements. In some of these cases it may be possibleto estinate benefits by calculatingthe costs of replacing the environmentalservices that have been or mightbe destroyedby a project, or by estimating what people might be willing to pay to protect an environmentalasset. Once again, however, great care needs to be exercisedto avoid improper valuation.

Replacement Cost Approach

44. Under this approach, the costs of replacing a damaged assetare estimated. The estmate Is not a measure of the benefit of avoiding the damagein the first place, since damage costs may be higher or 146 lower than the replacementcost. However, it is an appropriatetechnique if there is compellingreion to restore the damaged asset, or certaintythat it will be restored.

45. The replacement cost approach has been used to estimate the benefits of erosion prevention measuresby calculatingthe cost of the fertilizerthat would be needed to replacethe nutrientslost thrugh soil erosion. The method applies only if, in the absenceof erosion control measures, the fertilizer would actually be applied.

ShadowProject Approach

46. Used for evaluating projects with negative environmentalimpacts, this approach involves the designand costing of one or more 'shadow projects' that wouldprovide substituteenvironmental services to compensatefor the loss of the original assets. This approach is essentiallythe same as the replacement cost approach; it is being mentioned increasingly as a way to make operational the concept of sustainabiity at the project level. It assumes a constraint for mainning environmentalcapital intact, and could therefore be most relevant when "critical" environmentalassets are at risk.

Contingent Valuation Method

47. In the absence of market informationabout people's preferences,the contingentvaluation method tries to identify them by posing direct questionsabout willingnessto pay. Basically, it asks people what they are willingto pay for a benefit, and/or what they are willingto accept as compensationfor tolerating a cost. This process of 'asking' may be either through a direct questionnaire/survey,or by expeimental techniques in which subjects respond to various stimuli in 'laboratory' conditions. What is sought are personal valuationsby the respondentfor increases or decreases in the quantityof some good, connget upon a hypotheticalmarket. Willingnessto pay is constrainedby the income level of the respondent, whereas willingnessto accept payment for a loss is not constrained. Estimates show that willingnessto accept tends to be several times greater than willingnessto pay.

48. Pearce and Markandya (1989) compared the contingent valuation method with other (more market-based) methods and found that in seven studies done in industrial countries the overlap of estimates is complete, if accuracy is expressed as plus or minus 60 percent of the estimaes computed. This result is reasonably reassuringthat the contingentvaluation method, while not being very precise, nevertheless can produce useful valuations. Data based on the method may be sufficient to rule out certain alternativeprojects or favor others, and thus can be a valuable tool.

49. The contingent valuation method has many shortcomings, however, including problem in desgning, implementing and interpreting questionnaires (Phe Energy Journal 1988). While its applicabilitymay be limited, there is now considerableexperience in applyingthis survey-sed approach in developingcountries, e.g., to evaluate the quality of supply of potable water and electricitysvIces (Whtlngton and others; Munasinghe1990). In certain cir, the contingentvaluation method may be the only available technique for benefit estimation, and can be applied to common property reoureos, to amenity resources with scenic, ecologicalor other caacteritica, or to other stuatons whr market information is not available. Caution shouldbe exercisedin seekingto plac a value on dte more absract benefits of environmentalasets, such a exioe or intrinic value (Randallad Stall 1983). 147

Multi-Objective Decision-Making

50. The methods described above seek to esmate costs and benefits of a given project in monetary terms. When projects/policiesand their impacts are to be embedded in a system of broader (national) objectives,some of which cannot be easily quantifiedin monetaryterms, multi-objectivedecision-malking offers an alternative approach which may facilitate the optimal choice among investmentoptions or policies available.

51. Desirable objectives need to be specified. These often exhibit a hierarchical structure. The highest level represents the broad overall objectives (e.g., improvingthe quality of life), often vaguely stated and, hence, not very operational. Some of these, however, can be broken down into more operational lower-levelobjectives (e.g., increase income), so that the extent to which the latter are met may be practically assessed. Sometimesonly proxies are available (e.g., if the objective is "to enhance recreation opportunities', the attribute 'number of recreation days" can be used). Although value judgements may be required to choose the proper attribute (especially if proxies are involved), measurementdoes not have to be in monetaryterms, in contrast to the single-criterionmethodologies used in economiccost benefit analysis. More explicit recognitionis given to the fact that a variety of concerms may be associatedwith planning decisions.

52. An intuitiveunderstandingof the fundamentalsof multi-objectivedecision-making can be provided by a two-dimensionalgraphical such expositionsuch as in Table 4.3. Assume that a project has two non- commensurable and conflicting objectives, Z1 and Z2 . Assume further that alternative projects or solutionsto the problem (A, B and C) have been identified. Clearly, point B is superior (or dominates) to A in terns of both Z1 and Z2. Thus altenative A may be discarded. However, we can not make such a simple choice between solutionsB and C since the former is better than the latter with respect to objective Z2, but worse with respect to Zl. In general, more poins (or solutions)such as B and C may be identified to define the set of all non-dominatedfeasible solution points that form a Pareto optimal curve (or curve of best options). This line is also called a transformationcurve or efficient frontier.

53. For an unconstrainedproblem, firther ranking of alternativescannot be conductedwithout the introduction of value judgements. Specific informationhas to be elicited from the decision-makerto determine the most preferred solution. In its most complete form such informationmay be summarized by a family of equi-preferencecurves that indicatethe way in which the decision-makertrades off one objective against the other, as illustrated in Table 4.3. The preferred alternative is that which results in the greatest utility - which occurs (for continuousdecision variables as shown here), at the point of tangency D of the highest equi-preferencecurve, with the Pareto opdmal curve. In this case, the point E (on an even higher equi-preferencecurve) is not attainable.

54. Several multd-criteriamethods have been developed (Romero and Rehman 1987; Petry 1990). Which practical method in particular is suitable to deternine the 'best' alternativeavailable, depends on the nature of the decision situation. For instance, interactiveinvolvement of the decision maker has proved usefil in the case of problemscharacterized by a large nunber of decision vaiables and complex cusal inter-relationships. Some objectives can be dealt with through direct opbmization, while others require the sadsfaction of a crain standard (e.g., level of biological oxygen IBOD] not below 5 mg/ liter). 148

Table 4.3. Pareto Optimal Curve and Isopreference Curves

Increasing Pareto Pareto ; \ / ~~~Preference optimal > ~~~~~~~~~~~~~~~~Equipreference curves

Objective Z.

55. Ihe major accomplishmentof multi-objectivedecision modelsis that they allow for more acurate representationof decisionproblem, in the sensethat severalobjectives can be accountedfor. However,a key questionconcerns whose preferences are to be considered.The modelonly aids a single decision-maker(or a homogenousgroup). Variousinterested groups will often wign differentprioddes to the respectiveobjectives, and normallyit maynot be possibleto determinea singleT bestosolution via the mutd-objetivomodd. Also, the mathematicalframework imposa constraintsupon the abilityto repreent effetivdy the planningproblem. Non-linear,stochastic and dynamicformulations can asist in bettordefining the problem,but imposecos in terms of complexityin formulationand solvingthe model(Cockdin 1989). 149

56. Nevertheless,in constructingthe modelthe analystcommunicates information about the nure of the problem. He specifieswhat factors are importantand how they interact. Liebman(1976) obser that "modellingis thinkingmade public", and considers this transferof lnowledgeto representpehaps the mostimportant contribution of modelling.With respect to the secondpoint of criticism(i.e., diverse preferences),Liebman suggests that there is valueto be gainedin constructingmodels from differing perpectivesand compaingthe results.

The Discount Rate ]ssue

57. Afterthe physicaleffects of projectsand policieshave been determinedand, where possible, estimatedin moneyterms, the next issueis the rate at which the cost and benefitsstreams are to be discounted.Ibis is a generalissue in cost-bnefitanalysis; but it is particularlyimportant with regard to environmentalcosts and benefits,since at least someof them are of long-term. 58. In standardanalysis, past costs and benefitsare treatedas "sunk"and are ignoredin decisions aboutthe presentand future. Futurecosts andbenefits are discountedto their equivalentpresent value and then compared.In theory,in a perfectmarket, the interestrate measuresboth the subjectiverate of time preferenceand the rate of productivityof capital. Theserates are equatedat the marginby the market,so that the rate at whichindividuals are willingto trade presentfor futurevalues is just equalat the marginto the rate at which they are able to transformpresent goods into futuregoods by capital investment. 59. Becauseof imperfectfinancial markets and governmentdistortions introduced by taxation,the rate of timepreference and the rate of capitalproductivity are not equal. Also, individualdecisions differ from socialdecisions in that individualsare mortaland societiesare quasi-immortal.Thus one strong reasonfor individualpreference for the present-the oertaintyof deathcoupled with the uncertaintyof whenit will occur-is absentfrom the community'spoint of view. So, the communityhas reasonto discountthe futureless than individuals. 60. In orderto favorenvironmental projects that havebenefits accruing in the longrun, it has been suggestedthat lower discountrates be used. This has a drawback,however, in that not only environmentallysound activities would pass the cost-benefittest more frequently,but also a larger numberof projectsgenerally would pass the test and thus lead to additionalenvironmental stress. The main recom ions, therefore,are that: (a) the standardopportunity cost of capitalbe used (e.g., 10 percent)for environmentalcost- benefitanalyses, as it is for NPVcalculations and for computingthe IR comparator; (b) short-and long-termcosts and benefitsbe estimatedas carefullyas possible;and (c) a rigorous analysis of non-monetaryconsequences (including those that might be irreversible)be madeto supplementstandard cost-benefit analyses.

esues of Risk and Uncertainty

61. Projectsand policies alike involve risk anduncertaines. Risk are involvedwhen probabilities canbe assignedto the likelihoodof an eventoccurring, such as an industrialaccident. Uncertainty 150 describesa situatonwhere little is knownabout fuite impactsand wheretherefore no probabilitiesca be assignedto certainoutcomes, or whereeven the outcomesare so novelthat they cannot be anticipated.

62. Risk can be insuredagainst and treated as a cost, but uncerauintydefis actuarialprinciples becauseof noveltyof outcomes,e.g., ozonelayer depletion was an unknown outcome of CFCsand could not have been evaluatedas a risk whenthey were introduced. Uncertaintyis especily importa in enviromental issues. As projects grow larger in scale and introducenovel substancesinto the environment,the categoryof risk becomesless relevantand the categoryof unceraintymore relevant The properresponse to risk is to countit as a cost in expectedvalue formulations. The proper response to uncertaintyis likelya policyof generalcaution: if one cannotsee very far ahead,slow down.

63. Muchwork has beenundertaken on the subjectof risk and uncertnty in projectappraisal. (For a recent treatment,see Andersonand Quiggin1990.) In practice,the way risk and uncutity are includedin project appraisalwork is throughsensitivity analyses, which determinehow the IRR is dependenton differentvariables. Analysesshould also be undertakenthat indicatehow environmenta featurescan affect the IRR of a projectand how the projectmight affect naural resourcesand the environment.

PART mI: CONCLUSIONS

64. Incorporationof the effects of enviromental degradationinto public decision-makingis an essnialstep towardsachieving economically efficient management of naturl resourcesand formulating a practicalstrategy for sustainabledevelopment. In particular,the economicanlysis of projectsand policiescan help a countrymake investmentsof scarce resourcesthat contbute most to its overaU objectives.'External factors" have often been neglected in the past,but theseshold nowbe internalized to the extentpossible. In this regard,rough qualitative atsasments early in the projectcycle can yield valuablereturns by identifyingenvironmentally unsound alternatives and focussingon thosethat are more soundoverall-and designing the latterto achievesustainable development goals.

65. The principlesdiscussed in this chapterhave been applied to evaluatingenvironmental CotS and benefitsin onlya limitednumber of actualsituations. Therefore, more case study work is necessaryand perhaps couldbe carriedout as part of projectpreparation. A majorpurpose in such endeavoris to indicateorders of magnitude,rather than provide fine-tuned numbers. In this fashion,some altenatives couldbe ruled out, and the key estimatesfor decision-makingidentified and focussed on.

66. At this time,the best one can do is to use cost-benefitanalysis to the extentpossible-and push it to its acceptablelimits. In addition,risks and consequencesthat cannot be measuredin monetaryterms shouldbe identifiedand rigorouslyanalyzed. These two approaches-andgood judgement-are at present the best strategiesfor sounddecision-making. 151

Reform=

Mb Contet for F=omIk Anlys of Peo ad NErdr Dixon, J., and others. 1988. Economic Of th E mM Of Project. Manila,Philippines: Ea n i Dvpn Bank. Gitunger,J. P. 1982. LlarisofAAnamic gibud .m. Baldmor,Maylad: lb John HopkinsUniversity Pres.

Ray, A. 1984. Cost-BenefitAnysis: sues and M ologes. Baltimore,Maryland: Mbm Idm HopkinsUniversity Press. Squire,L., and H. van der Tak. 1975. EBwmic AnLyhiLof PIoat. Baldmore,Maylnd: lMm JohnsHopkins University Press. WorldBank. 1980. *EconomicAndysis of Projects.- Opeatona Mau State 2.21. World Bank,Washington, D. C.

Pubic Invetment Reviws Anderson,D. 1987. EconMic Growthand Retn to WorldBnk Dbison Pae 12. Washington,D.C.: WorldBank. Baum,W. C., andS. M. Tolbert. 1985. in Lns of WorldBan} Expe. New York:Oxford Unversity Pms. do Mdo, M. 1980. Public itv_RRviews IheLc's ie . Wa s, D.C.: WorldB.

Anlysis of EconomicPolii Ahmad,Y. J., S. Srafy, and E. Lutz,ods. 1990. _ L. f Wasidgton, D.C.: A UNEP-WorldBak SymposhuL Binswanger,H. 1990. riian Polici a re Def i In the . WorldBak Worki Par 16. Washio D.C.: WorldDan Kabur, R. 1990. 'Projcts vs. Policy Reorm. Pae prsented at the Anm Codfer on Dveopdnt Ewomics. WorldBan, Whington, D.C.

Lut, E., andH. Daly. 1990. .n in _ _I_ World Bak WorkingPar 34. Whgto, D.C.:World Bak. 152

Lutz, E., M. Munasimghe,and R. Chander. 1990. A DevelopingComtr ersetv on Enrmenta Accounting. World Bank Working Paper 1990-12. Washington, D.C.: World Bank.

Lutz, E., and M. Young. 1990. AgriculturalPolicies in Industrial Countries and Their Environmental Impacts: Aiplicability to and Comparisonwith DevelopingNations. World BankWorking Pape 25. Washington, D.C.: World Bank.

Mahar, D. 1989. GovernmentPolicies and Deforestationin Brazil's Amazon Region. Washingtn, D.C.: World Bank in cooperation with the World Wildlife Fund and the Conservation Foundation.

The Case for More Environmental Analysis Under Resource Constraints

Little, I. M. D., and J. A. Mirrlees. 1990. 'Project Appraisaland PlanningTwenty Years On." Paper presented at the Annual Conferenceon DevelopmentEconomics. World Bank, Washington, D.C.

Repetto, R. 1988. EconomicPolicy Reform for Natural ResourceConservation. World Bank Working Paper 4. Washington,D.C.: World Bank.

Valuing the Impacts in Monetary Tenms

Anderson, D. 1989. "Economic Aspects of Afforestation and Soil Conservation Projects.' In Evironmental Managementand Economic Development, edited by G. Schramm and J. J. Warford. Baltimore, Maryland: The John Hopkins UniversityPress.

Dixon, J., and M. Hufschmidt, eds. 1986. Economic Valuation Techniques for the Environme. Baltimore, Maryland: The Johns Hopkins University Press.

Go, F. C. 1988. EnvironmentalImp= Assessment:Oraional Cost BenefitAnalysis. London: Kings College, Monitoringand AssessmentResearch Center.

Hanley, N. D. 1989. "Valuing Rural Recreation Benefits: An Empirical Comparison of Two Approaches.' Journal of AgriculturalEconomics 40(3):361-374.

Hicks, J. 1946. Value and Ca"ital. 2nd ed. London: Oxford UniversityPress.

Contingent Valuation Method

Ihe Enwg Journal. 1988. SpecialIssue on ElectricityReliability, Volume 9.

Munsinghe, M. 1990. Electrc Power Economics. London: ButterworthsPres. 153

Peuce, D., and A. Markandya. 1989. PolicyB e Monea Valon. Pads, France:Organization for EconomicCoopeation and Development.

Randall,A., and J. Stoll. 1983. 'ExistenceValue in a Total ValuationFramework.- Mgi [ Oualitvand ScenicResources at NationalParks and WildernessAreas. Boulder,Colorado: WestviewPress. Whoitngton,D., and others. "Estimatingthe Willingneuto Pay for Water Servicesin Developing Countries:A Case Study of the Use of ContingentValuation Surveys in SouthernHaiti." EconomicDevelomn Ed CulturalChange 38(2):293-31 1.

MulW-ObjectiveDecision-Making Anderson,D., and J. Quiggin. 1990. "Uncertaintyin Project Appraisal." Paper presentedat the AnnualConference on DevelopmentEconomics (April 26-27). WorldBank, Washington, D.C.

Cocldin, C. 1989. "MathematicalProgramming and ResourcesPlanning I: The Limitationsof TraditionalOptimization." Journal of EnvironralManagcmml 28:127-141. Liebman,J. 1976. 'Some Simple-MindedObservations on the Roleof Optimizaonin PublicSystems Decision-Making."Iferfaces 6:102-108. Petry, F. 1990. 'Who is Afraid of Choices? A Proposalfor Multi-CriteriaAnalysis as a Tool for Decision-MakingSupport in DevelopmentPlanning." Lnrnaof Jbwnatnal 2:209-231. Romero,C., and T. ReSman. 1987. "NaturalResource Management and the Use of MultipleCriteria Decision-MakingTechniques: A Review." Eurn Reviewof AgriculturalEconomics 14:61-89.

General Randing Hufschmidt,M., and others. 1983. roment NaturalSystems and Development.Baltimore, Maryland:The JohnsHopkins University Press. Sebastian,I., and A. Alicbusan. 1989. "SustinableDevdopment: Issues in AdjustmentLending Policies." EnvironmentDepartment, Policy and ResearchDivision Wnrking Paper 1989-6. WorldBank, Washington, D.C.

Tldsll, C. 1986. "Cost-BenefitAnalysis, the Environmentand InformationalConstraints in LDCs." Journalof ]2evelgg 11:63-81.

CHAPrER 5

STRENGTBENING LOCAL CAPABILITIES AND INSTITUTIONS

1. The success of environmentalassessment (EA) as a means to ensure that developmentprojects are environmentallysound and sustainabledepends in large measure on the existence of environmental managementcapability in the institutionsof the borrowing countries. The Bank is committedto using the EA process as a means for strengtheningenvironmental institutions and local capabilityto deal with environmentalconcerns and to integrate them into the identification, design and implementationof economicdevelopment activities (OD 4.00, Annex A: "EnvironmentalAssessment" [the EA OD], para 13).

2. In a project with environmentalissues, the institutionsinvolved in EA should have or be able to obtain the capacity to produce a satisfactory EA, to incorporate the EA findings into designs and implementationplans, to monitor and manage the construction and operation of the project, and to evaluate the results in order to improve future activities. Many projects also represent an opportunity to promote progress toward a longer-term objective: strengtheningthe country's overall institutional structure and process so that natural resourceuse is consistentwith environmentallysound and sustainable development,whether the Bank is participatingor not.

3. This Sourcebook chapter is intended primarily to provide guidance to Bank task managers (TMs) in using projects to help develop EA capabilities in the country. It is also intended to assist TMs in recognizing and making use of opportunities to contribute to improved environmentalmanagement capacity country-wide. There are three subsections: (a) EnvironmentalManagement Institutions; (b) Analyzing Institutional Capabilities; and (c) Recommendations for Strengthening Environmental Capabilities.

ENVIRONMENTAL MANAGEMENT INSTTUTIONS

4. The term "institutions"as used here covers government agencies, such as the Ministry of the Environment, the line agencies with activities that affect the environment (Ministries of Energy, Transportation, Agriculture, Tourism, etc.), or the State Pollution Control Board; nongovernmental organizations, such as a National Environmental Advocacy League; and private and quasi-private organizations,such as the environmentaldepartment of the nationaluniversity, an industrialdevelopment corporation,or a nationalwater supplyand seweragecorporation. Also includedunder "institutions' are the legalframework within which the organizationsfunction, includingenvironmental laws and other legal instrumentsthat define the organizations' responsibilities,authorities or privileges; the regulations or procedures with which the organizationscarry out their functions; and the relationshipsthat exist among them.

5. There is no universal model or set of institutionsthat will be satisfactoryin every situation; nor is there necessarilyone optimalinstitutional structure for any particularsituation. Figure 5. 1 is a diagram of a structure that is common, but no attempt is made here to define a standard. We can, however, describe the functionalcomponents that appear to be most useful in any structure. Nure 5.1. Envionmntal Ilstitutions In Typical Country Orgapnitional Structures

MINISTRY MINISTRY MINISTRY MINISTRY MINISTRY OF OF OF OF OF EDUCATION AGRICULTURE ENVIRONMENT ENERGY TRANSPORT ENVIRONMENTAL ENVIRONMENTAL ENVIRONMENTAL UNT /UNIT UNIT

UNIVEST ENVIRONMENT STATE POLLUTION NATIONAL DEPARTMENT CONTROL BOARD /NGOs

WATERSHED/ DEVELOPMENT. BOARD NATIONAL ** HYDROELECTRIC AUTHORITY > ENVIRONMENTAL UNIT

* sponsoring ministry in this example

** implementing agency 157 6. In almostevery country,some of these componentswill alreadyexist. Whichons exist, and howeffectivdy they function, will directly affect the abilityof a projectsponsor to conductEA andapply the results in projectpreparation and implementation.For example,a projectEA will be less difficult to carry out in countrieswhere the legal frameworkalready requires some form of EA and where governmentagencies already have the capacityto administerEA processes. Mitigatingmeasures, monitoringprograms, and specialoperating requirements identified in an EA willbe difficultto put into practicewithout strong implementingorganizations and withoutan institutionalstructure in place to provideindependent oversight and technicalassistance.

7. The logicalstarting point for buildinglocal capabilities is to workwith the exist insutions, identifyingapproaches for strengthening,modifying and supplementingthem in ways that are implementableand effectivewithin the politicaland socioculturalcontext.

Policies and Legal Instnts

B. Clearpolicies, based in law, that facilitate incorporating environmental concans intodevelopment planning and decision-makingand that support environmentalmanagement and protection are fundamental.The formin whichthey are articulatedis not particularlysignificant. However, the need for formalrather than ad hoc policies,implies the needfor involvementof high-levelleadership, a policy- makingbody, and a mechanismfor policyformulation. 9. Environment-relatedresponsibilities and powersare mosteffective when grounded in law. Legal authorityto implementnational environmental policy should be clearlyestablished. Subsidiary legsation maybe necessaryto establishthe authorityfor settingenvironmental quality and performan stdards; for enforcingcompliance with regulations; or for requiringlicenses, permits or EAsfor crtain acti. These standards and procedures may themselves be promulgatedas regulations,decrees or a sve orders.

10. The need for legal groundingdoes not necessarilyimply pasge of a new, comprehensive nationalenvironmental law; frequentlymuch of the neededauthority is alreadyprovided in legislato What are then necessaryare regulationsto implementparticular laws - e.g., environmentalquaity standards,EA guidelinesand procedures,procedures for EA reviewand rquiremen fr community involvement.Regulations are usuallydeveloped and issuedthrough at processos,such u ministerialor presidentialdecrees.

National Environmental Organization for Pollcy-Making and Oversgt

11. Effectiveenvironmental management depends on the existenceof the followingprocones at the mional level: (a) developmentof environmentalpolicies and laws (b) incorporationof onvironmentalconcerns Into economicdevdopmat plannig and budgeti (c) iency coordinationon environmentalisues that cro ectoralboundaris (d) mechanimto resolveinterageny disagreementson naturalresource-u deciios 158

(e) operationof monitoringprograms (f) establishmentof guidelinesfor EA (g) provisionfor independentreview and approvalof EAs preparedfor line agencies

12. A varietyof organizationalapproaches have been implemented to performthe policy-makingand relatedfunctions: (a) an enviromnentalcommittee of the existingcabinet (b) an interministerialenvironmental coordinating committee (with secretariat) (c) an environmentalministry (d) an environmentalunit withinan existingministry, such as the Ministryof Planning (e) an environmentaldirectorate within the PrimeMinister's office

In federally-organizedcountries, some of the nationalfunctions may be decentralizedthrough establishing branchesof the national agency or throughdelegation to state, regional, provincialor municipal environmentalagencies.

Implementing Environmental Policies in Sectonl Development Progl ms

13. Ministries and other line agencies with natural resource and/or environmentalprotection responsibilitiesmost directlyaffect the qualityof the environmentand thereforeneed to be given the responsibilityfor ensuringenvironmentally sound production or serviceperformance and the capacityand the day-to-dayoperational authority to carryit out. Ideally,enviromental concerns should be considered throughouttheir planning,project development, financing, implementation, monitoring and enforcement activities. 14. Requiring,reviewing or conductingEAs are importantaspects of this work. Withinthe frameworkof nationalEA guidelines,individual ministries may definemore specificEA procedures applicablein their sectors. Some countrieshave establishedspecial environmental units withinthe sectoralagencies most directly involved with environmental issues, while others have reliedon a single environmentalagency or on the use of consultants(see TableS.1). Therehas not been sufficient study of existingexperience to permit generalevaluation of differentapproaches. Experiencedoes show, however,that insdtutional arrangements must be custom-tailoredto the socioculturaland political contexts of countryand site. 15. Environmentalunits can be particularlyeffective when housed within agenciesthat have intetsectoralplanning, development or regulatoryauthority for a particularregion. The best-known exampleis a river basincommission, that has the potentialto integrateenvironmental concerns into aUl waterresource and reated landuse decisionsaffecting water supply or waterquality within a watershed. Anotherexample is a coastalzone management agency, that developsplans for and/orreviews all types of developmentprojects in the coastalarea. 159

Table 5.1. Institutional Developmnt in Rwanda

As pet of the Gitma AgriculturalProject, the Bank is finacing the ppartion of a Mater Plan for the future developmentof the NyabarongoRiver Valley. The panning proce includes prepartion of an EA to determinethe potentialimpuats on the ecologyof the valley.

An environmentalcoordinating unit already exists within the Minitr of Plan(Miniplan), but it has as yet no administrativestructuroe. The governmentof Rwanda(GOR) is exploringop tios for a permanentorganizational strucue to overseeenvironmntal studies suhau this one and to coordinate all environment-relatedactivities in the country. Japanhas providedgrut funds,to be administerd by the Bank,to msistGOR in that effort. Anenvironmental component has been incorporated in theproject, to be executd by MinipIL In it, the rant fundswill be usedprimarily to provide loca ad intraiol consutiantswho will ist Miniplanin formulatingTORs for theenvironmntal unit, determining staffing and t g needs,ad deinig its orizational andadministmative relationships within Miniplan and with ah of the odhr rdevant ministriesand departments.The grmt wil also financelocal ad ovea traung for the onvironentl unit staffand defrayits opeating costs for nine months.

The objectiveof the institutionalstrengthening activities is to provideGOR with institutionl capacity to:

* deveop organizationalmecanisms to ensurethat environmetalpolicies are folowedin all developmentprogrms and projocts

* provideintegency coordinationon onviromnmentalisues * asure follow-upto tho NationalStrate for the Eovi _mntand the Enviome_ Action Plan

* asist line agecies in srngteing thir owncapacity to dealwith enviionmente and developenvirom tallysound investment progmms

* defineoverall needs for envionmentdeducaio, intion, prom ion trainng

Inorporaing Environmea Concerns into ProjectI

16. The lineagencies or enterprisesthat implementdevelopment decisions ar also the orpnzaions ta should usuallyconduct or commissionenvironmental assments; thee agenciesalso shouldbe responible for incorporatingthe BAfindings into designs and implementationprograms (se Table5.2). Whenthey are publicsector agencies, they may alroadyhave slf-cono expertise;for tanc, an energyministry may control energy planning, power plant sitg, environntal _ t of proposedgerating stationsand transmison lines, licnsing, and superviionof utllityopation. 160

Table 52. Pakistan Drainage Sector Environmental Assessment

As part of a projectto producea sectoralEA of the nationaldrainage program and develop a compreesve approachto dranageinvestment, the consulmtant is required to recommendinstitutiona strengtheningactivities to promote economic and sustainable development in thesector, with appropriato environmentalsafeguards. Organizations involved in construction,opeion and mauntenanceare of theWater and Power Development Authority (WAPDA), the ProvincialIrrigation Depatments (PIDs), and the WaterUser Associations(WUAs). Responsibilityfor environmentalprotection is divided amongthe PakistanEnvironmental Protection Agency (PEPA), the four provincialEPAs, and the environmentalunit of WAPDA. The environmentalprotection agencies are new and small,and the linksbetween them and the implementingagencies are weak. TORscall for recommendationson the followingitems:

(a) improvedlinkages between the environmentalinstitutions and WAPDAand the PIDs

(b) improvedinterface between WAPDA and PIDs and their program to incse environmentalawareness/capability (c) progrms for adequateoperation and maintenance, including funding, staffing, facilities and equipment (d) a rationaland equitablecost recovery system to sustainthe operationand maintenance functions

(a) planning,authorizing and fundingprocesse whichprovide decision-makers adeaWte informationto meettheir environmentalprotection responsibilities

(f) trainingfor nationaland provincialofficials in environmentalaspects of water sector planning (g) proposl for dainage staff development,including an evaluationof the benefitsof a careerladder WAPDAis loadagency for the EA and is dsinating a full-timeproject coordinator. The prime consltant is a local firm, withintenational subconsultants. WAPDA staff member whohad ben asembledfor a previousWator Sector Investment Study participate in theproject, as do planners in provincialDepatments of Planningand Development.Institutional components account for 35 of the 222 staff-weeksestiate to prepare the EA.

in such cua, it is paricularly importantthat there be an objectivereview and approvalof the EA by the national environmenta body or other outside agency. At the other extreme, such production or deveopment agencies may need to contract for the services of other agencies or consultants for environmentalexpertse and regulation. 161

17. The Bank has found that establishingenvironmental units with the resourcesand skills to conduct and/or review and implementthe findingsof EAs withinthe line agenciesthat overseeor executeenviron- mentally significantprojects works effectivelyin certain cases. Consultantsare normally employedto carry out the EA work. In countries where the capacity of the implementingagencies is limited, the consultantsmay actually do more than that, serving in effect as environmentaladvisors.

18. In large projects, environmentalunits are necessary at the project level to monitor impacts and implementationof mitigationmeasures. Project units typically need the expertiseto deal with physical, biological, and social impacts. This implies a minimum staff of three specialists-e.g., a chemist or geologist, a biologist, and a sociologistor anthropologist-plus a manager. More staff may be needed in any of the three divisions, depending on the size and characteristicsof the project.

Enforcement Agencies and Processes

19. There must be institutionalcapability to monitor complianceand, where enforcementaction is needed, to carry it out (see Figure 5.2). Where there is a national environmentalorganization, it may have regulatory and enforcement powers, which it may exercise directly or through regional offices. Alternatively,enforcement authority may be delegated to state, provincial, or municipal agencies. The main types of regulatory units are national environmentalprotection agencies,pollution control boards, health departments,local and regional environmentalunits, governmentprosecutors' offices, municipal and marine police, coast guard, and a multitudeof national, state and local agenciesthat manage wages, establish zoning and building codes, review developmentapplications, issue permits and licenses, and inspect projects. Funding agencies (includingthe Bank) have the option of withholdingdisbursements or cancellingloans or credits if an executingagency does not adhere to requirements. It is importantto note that the responsibilityfor enforcementof centralizeddecisions involvinguses of particular natural resources may rest with local government, which therefore must not be neglected in institutional strengthening.

20. The courts may play a role in effectingcompliance by efficientlyenforcing environmentallaws, but many court systems are severely overworked,with such large case backlogsthat they are unable to respond to enviromental offenses in a timely fashion. Moreover, many judges do not understand existing environmentallaws and may be lax in enforcement.

ANALYZING INSTITUTIONAL CAPABILITIES

21. Experiencewith Bank projects that include institutionalstrengthening has shown the importance of adequate analysis of the existing institutional structure. This is true whether the institutional component has had a short-term focus, emphasizing implementationof a single project, or has been oriented towad longer-termsustainability, addressing more complex, sector-wideor intersectoralissues (see Paul 1989a and 1990). Both types are relevant within the contextof EA: institutionalstrengthening componentscan range from developmentof EA preparationcapability for one project to developmentof environmentalreview and approval and monitoringcapacity for projects nationwide. The Bank may also support broader institutional initiatives, involvingstrengthening of sectoral or national environmental policy and organization. 162

FIgre 5.2. Enviromenta Institutions In Typkia Project Orizaon Structures

PROJECT IMPLEMENTING AGENCY

LOCAL ENVIRONMENTAL UIEST GOVERNMENT UNIT 7ENVIRONMENT AGENCIES \/ DEPARTMENT

ON-SITE IENVIRONMENTAL ENVIRONMENTAL ASSESSMENT UNIT CONSULTANTS .

AFFECTEDLOA GROUPS NGOR 163

22. Thereis no set methodologyfor assessinginstitutional capacity. Situations vary widely from one countryto the next,defying any "cookbook'approach. TMs willhave to relyon experience-theirown or that of specialists,especially local experts. TheSourcebook can offer general principles derived from the historyof Bankwork in institutionalstrengthening.

Common Inistiutional Problems

23. The institutionalweaknesses that can impairthe effectivenessof environmentalmanagement in generaland environmentalassessment in particularmay be dividedinto five broad categories. They are describedbelow as a guideto TMs in planningfor institutionalanalysis. Annex5-1 supplementsthe discussionwith lists of the typicalproblems that havebeen encountered in eacharea; these may be helpful to TMs in preparingfor assessmentsof institutionalcapacity for EA and environmentalmanagement.

Human Resources 24. The mostcommon institutional problems in anyenvironmental organization stem from shortages of qualifiedpersonnel and/or deficiencies in the managementof the personnelavailable. The causes are frequentlyfound to be somecombination of lackof managerialcapacity, low salaries, low job status,lack of strongleadership and inadequateresources for educationand training. OrganizationalStructure

25. The most obviousstructural shortcomings affecting EA are the absenceof the unit(s)needed to performone or morekey functions,such as EA review,technical supervision, monitoring or regulation, and the fragmentationof responsibilityfor key functionsamong many units without an effective mechanismto coordinatethem. Othercommon weaknesses stem from structuresthat do not intrate environmentalconsiderations into development planning, especially when intersectoral issues are involved. EnviromnentalPolicy, Lawsand Regulations

26. Commonproblems with legal instrumentsincludethe absenceof (or lack of commitmentto) a clear nationalpolicy, lack of up-to-datelaws on environmentalprotection and legalauthority for EA and other environmentalmanagement procedures, lack of implementingregulations, and inadequateor inconsistentlaws or rules. Examplesof the last categoryare incentivestructures inconsistent with environmentallaws and sanctionsthat are inadequateto promote compliancewith environmental requirements. EA and EnvironmentalManagement Procedures 27. It is frequentlythe case that nationalprocedures for EA preparationand reviewhave not been defined. Even where the necessaryinstitutions exist, there may be needsto strengthenthe decision- makingprocesses whereby programs and proceduresare identified,assigned priority, and implemented to get results. Oftenmonitoring programs, if any, havenot providedadequate baseline data for EA work and environment-relateddecisions. Successfulinteragency coordination, without which many environmentalissues cannot be resolved,is difficultto achievein the absenceof establishedproceduros. 164

Manyprojects that resultin adverseenvironmental impacts in spiteof properplanning and desigS,do so becauseof weakor nonexistentprograms essential to soundimplementation-monitoring and supevion, operationand maintenance, and communityinvolvement are the onesmost frequendy cited in thisregard.

Finandal Issues 28. Financialfactors may be the basis for manyof the humanresource, organizional structureand proceduralweaknesses listed. Fundingfor the EA processand for follow-upfunctions (supeiion, implementationof mitigationplans, monitoring,measurement of impacts,feedback) may be inadequa, either becausethe environmenthas been given low priority in economicplanning and budget preparion or becausethe availableresources are not beingmanaged effectively. Poor project performance many timescan be tracedto insufficientprovision for operatingand maintenancecosts. In the case of public infrastructureand serviceprojects, unreliable or ineffectivecost recoverysystems may be at fault.

Inventory of Institutions

29. Anyanalysis of institutionalcapacity for EA in the contextof a specificproject should beon with a *map of the organizationalstructure involvedPaul 1990). The breadthand depth of this analysis dependon the environmentalaspects of the project. In any case, the inventoryis likely to inlude organizationsat more thanone levelofV gev as well as the privateentities and NGOsthat may be affectedor involved. 0 --- 30. The inventoryshould includeall institutionsresponsible for EA or EA implementationin the projectconcerned. The basic informationneeded for each is:

* range of responsibilitiesor area of cognizance(health, natural resources,polluton control,etc.) * principal functions(advisory, coordination,policy-making, resource management, regulatory,operating, EA, etc.) * legal authorityfor existenceand functions i organizationalstructure capacityto carry out functions-staffingand management,facilities and equipment, funding,etc. Muchof this informationmay alreadyexist, collectedduring previous work in the countryand sector, or aimilated by staffwith experience in the country.

Conceptual Famework for Aiayds

31. The analysisshould yield an evaluationof the strengthsand weakness of the Insditonal structure,specifically regarding its capabilityto carryout recommendationsfrom the EA. The rag of typicalinstitutional problems is wide, and the questionsthat can be askedare correspondily varied. Fundamenlquestions include: 165

What EA procedures apply to the organization(s)identified? Are there guidelins to mak them operational? Are they being caried out?

How is environmentalinformation assembled and analyzed, and by whom?

How is the informationused in selecting,planning, designingand executingprojects? Who are the actors in these processes?

When intersectoralissues arise, how are they resolved? Are the mechanismsfor resolution formal or informal?

What are the proceduresfor monitoring, evaluatingand reporting on project impactsduring construction? During operation?

How clearly are responsibilities and authorities defined? Is each agency's authority commensuratewith its responsibility?

What are the formal and informallines of communicationamong the involvedorganizations?

is there evidence of political and managerial commitment (adequate funding and other resources, leadership, etc.) to accomplishdesired objectives?

32. It is importantto provide a framework so that the analysis is not haphazardbut systematic(Pal 1990). Usually a checldistor an interviewform showingthe basic itemson which responsesare needed and providing room for additional items will be sufficientfor a specific project. Paul (1989b) offers a more rigorous model of a framework that may be useful in situations where extensive institutional analysis is a major project component.

Methods of lustitutlonal Analysis

33. There are three general approachesthat are effective in analyzinginstitutions - survey methods, strcture-analytical methods, and process methods. More than one may be applied in a single projet (Paul 1989b).

34. Survey methods involve quantitativeor qualitativedata collectionand are useful for assessing institutionalneeds that can be measured- staffing, funding,water treatmentchemical supplies, etc. They are applicableto existingorganizational structures and especiallyhelpful where there are numero units.

35. Structured-analyticalmethods are suitable for institutionalissues that can be rather narrowly defind. Ibey utilize conceptsof structureand functionthat are widelyaccepted in comparablesituatdon a a buis for anlysis of the practices and procedures of the institutionsbeing examinod. Consultants are uwlly employedto carry out the analysis. Thes methods are likely to be wel-suit to EA work on specificproject. 166

36. Process methods are advisablewhen issues are ambiguousor complex,and when the perceptions of involved individualsare essential. The "process" is a joint one, in which members of the institutions themselves (and often other stakeholders, such as consumers of the institutions"services) participate jointly with the project designers and are encouraged to offer their views as contributions to the understandingof the issues. The act of participatingin identificationof issues and problems, and the shared understandingthat may result, can facilitate acceptanceof change, or even build a constituency for it. If senior managers are involved, process methods may also elicit commitmentof leadership to institutionalstrengthening.

RECOMMENDATIONSFOR STRENGTHENING ENVIRONMETAL CAPABILITIES

37. The TM should identify and evaluate needs and opportunitiesfor institutionalstrengthening that may arise in the EA process. Possibilitiesare manifold, and the approach to any particular situation is likely to be specificto country, sector, and type of loan. Nevertheless,there are some useful principles and typical activities.

Guidelines for Designing Implementable Solutions

38. Human resources are often the most critical element; they need to be developed and retained through education, training and opportunitiesfor professionalgrowth; support in the form of equipment and information;and compensationby means of adequate salaries, incentives,and career paths.

39. Existing organizationalstructure and procedures are the logical starting point for institutional strengthening. It is often tempting to create new agenciesto conduct EA and oversee environmental management,but it will almostalways be more difficultto implementsuch dramatic changes. Moreover, it is often the case that existing organizations are already able to conduct EA, perhaps with some modificationsand additional resources. Existing laws and regulations may provide adequate authority to begin with; they may be strengthenedgradually as needed or improved quicldy throughadministrative orders or sub-sidiarylegislation. The analyticalwork discussed above is therefore especiallycritical, to ensure that the existing capabilities are fully considered in the design of institutional stregthening components(see Table 5.3).

40. It is desirableto design organizationaland proceduralchanges in concert with country officials and representativesof affectedagencies. Their participationprovides the benefitof local knowledgeand may facilitate acceptanceof change and commitmentby leadership.

41. If new laws are needed, this may be an area for policy-basedlending or dialogue.

42. When dramatic or complexorganizational changes are necessary, it is preferable to implement them incrementally,allowing personnel and systemsto assimilate the impacts of change gradually and providing time for funding,staffmg and training so that the new functionsbegin as smoothlyas possible (Paul 1989b). 167

Table S.3. Institutional Strengthening In Mauritius

In 1988 the Bank sent a team to assist the Mauntian Govemnmentin preparing a Nationdl Envinmental Action Plan (NEAP). The result was a report entitled *Econonic Developmentwith Envinental Management: Strategiesfor Mauritius. At the same time, the Governmentstarted an informationand educationcuamagn which led to intensepublic debate on the environmentand quality Of lif.

The study's findings were nrporated into the NEAP, vhich was then endorsed by the Cabinet. Implementaionbegan with the creationof a free-tnding NationalEnvironment Commission (NEC), as well as an EnvironmentalProtection Department(EPD) within the Ministry of Housing, Lands and the Environment. Respondingto popular demandfor environmentalaction, the Govenment organizedan internadonal conferencein September1988, with help from the Bank and UNDP. Ihe participantsdiscussed key environmentalissues in Mauritus and assessedthe tochnicalsoundness of the NEAP. Followingthe seminar, Govermmentofficials and a Bak team prepared an Environmentd InvestmentProgram (EIP), which includesa comprehensivelist of environmentalprojects to implement the NEAP.

The NEAP and EIP formed the basis for discussionsat a donors' meetingorganized by the Govermnmentin Paris in 1989. The estimatedcost of the EIP is USS 109 million, of which donors and internationa organizatons pledged approxmaty USS 85 million. The Mauritian Governmentwill provide the rest.

Since the Paris meeting, the Government has begun staffing the EPD and has recruited expatrit technical advisors under a UNDP technical assistance project executed by the Bank. A number of meres to protect the environmentwere announced,and a comprehensivelegal framework waS drafted. In June 1990, the Governmentapproved a white paper on a National Environmental Policy. A projectconsiting of prioritycomponents of the EIP that ae criticalto implementationof othercomponents and that ae not beingfunded by other donorswas identifiedfor Bankfunding. At the Governmt's request,the Bankha beenassisting in donorcoordination to speedimplementatsin of tho EIP.

43. Avoid overloadingan organization(or a project)with so many goals, or such ambitiousones, that it cannot realisticallyachieve them. Success in achievinga part of the overall objectivereinforces further progress, while failure in the attempt to reach the ultimate target all at once leads to frustration and disillusionment.

44. Emphasizethe sustainabilityof insdtudonalcomponents, so that measures taken to strengen local capabilitieswill endure. This implies paying attention to political and managementcommitment, rdiable and predictable sources of funding for operation and maintenance,and provisions for support services.

45. Government agencies have limited budgets and may have ceilings on the sizes of their $taff, Rdtaig current employeesmay be the only way to introduceor augment environmentalcapab ity. 168

46. When consultants are needed, involve local experts as much as possible, in association with Internationalconsultants where appropriate. This provides the benefits of local knowledge, supportsthe strengtheningof countrycapabilities in the private or academicsectors, and constituteson-the-job training for the individualsemployed.

47. Review of Bank projects with institutionalstrengthening components has shown that success is directdyrelated to the degree of supervision(Paul 1989 and 1990). It is importantthat adequateresources be allocatedto supervisionof the institutionalcomponents, with special attention to:

• maintainingcontinuity of Bank personnel assigned;

. conducting periodic meetings with participants to review progress, adjust and fine-une schedules, identifynew problems and formulate solutions; and . requiring evidence of real commitment by the borrower and government, in terms of leadership, staffing, and allocationof funds and other resources.

48. Project design should provide for flexibility in implementation. Design of institutional components is a process-orientedtask, and there must be flexibility to adapt to contingencies(Paul 1989).

Recommendations for Strengthening the Environmental A_essment Process

49. The actualpreparation of an EA is ordinarilyundertaken by consultants,in accordancewith TORs prepared by the borrower and reviewedby the Bank. The TM and the Bank EA specialistshould ensure that the implementingagency has the capacity to oversee the consultant's work, to review the EA and to follow-upon its recommendations(see Table 5.4). For Category A projects, an environmentalunit is normally needed at the project site (and is highly recommendedby the Bank) to carry out the monitoringand supervisionrequired for follow-up. It is the TM's responsibilityto ensure that such units are adequatelyfunded, staffed and equipped, as part of the project if necessary.

50. Ideally, local consultantsshould conduct the EA, using internationalexperts only to meet special needs. However, experienced internationalconsultants may be needed initially to manage EAs in countries where the capabilityis not yet well developed. To help develop that capability,TMs should ensure that local experts are includedin the EA team, not only to provide specializedInowledge but also to benefit from on-the-jobtraining in EA preparation.

51. Where multipleprojects are anticipatedin a sector or region, or wherethe project is an increment of a larger one, such as a segment of a highway or one of several wastewatertreatment plants, the TM and/or EA specialist should explore options for strengtheninglocal capacity to undertake the EAs and Implementtheir findings. One option to be evaluated is the creation of an environmentalunit with EA capabilitywithin the implementingagency.

52. Regardless of the option chosen, the TM should ensure that the institution responsible for implementingthe project has personnel asigned during the EA and design phases to work on the preparation, review and applicationof environmentaldocumentation. Otherwise, they will miu the opportuoityany project provides for invaluableon-the-job training. 169

Table 5.4. Review of Environmental Aesment Procedures In India

Indiahas enviroImental legisldation ad env mntal managementprocodures at bothnational and state levels. The adoptionof the EA OD and preparationof the Sourebook provideduseful opportnties to identifydiffeces betweenBank and Indian procedures and to furtherexplore those aras whereIndian officials themselves have felt the needfor improvement. In an initialmeeting between Bak staff9nid Indian officials in late 1989,thrde useful aes for investigationwere identified: (a) a portfolioreview of plannedprojects to ensurethat the Bmk's osdaids for EA prepartion andreview could be met by followingniMan procedures

(b) a sector-by-sectorreview of key environmentalissues and the relevantBank and Indian guidelines

Follow-updiscussions are still in their eady stages, but a number of usefid steps have already been taden. Tle portfolio eview indicated a very elaborate set of national and state guidelinesand legislaton, of which the Bank was only superficially aware. To address this, a stdy has been commissionedwhich compars Indian requirementswith Bank guidelines.

Prelimina sctor reviews revealed that strong guidelineshad been promlga olform sectors, such as mining and thermal power generation, but that less attention had been devoted to sectors which include some of the Bank's largest lending operations, irrigation in particular. An overview of the envi mntal and sociologicalconcers in irrigation developmenthas since been cartied out.

Finally, senior officiadsi the Ministy of Envirment indicated that they themselveswer concernedabout the quality of consultantscaying out EA and about the standardsand guidelins for BA review. Consltant training will be included in trining progms supported by the Bank. Standardsand guidelinesare the subjectof continuingdiscussion.

53. In establishing or strengthening in-house environmental units at the project, implementing agency or ministy, two factors deserve special attention. First, die units must be empowerednot only to carry out EA work but also to use EA findingsto influencethe design and implementationof projects. Second, there is a tendency for such units to become isolated from other agencies involved in the developmet procem; lines of communicationand operatingprocedures should reinforce integration. 170

54. A primary objective of the Bank's EA process is integrationof EA with project planning, design and implementation,and other related functions:

e Institutionalarrangements that promote informationexchange across sectoral and agency boundaries are desirable.

* Provisionsfor feedbackfrom EA to project design and to planning for future projects arm essential.

* Coordinationwith local and state permit-issuingagencies is especiallyimportant: permit applicationprocedures may substitutefor some EA components, and issuance of some permits may depend on completionof an EA.

55. Where appropriate, direct NGO involvementin EA is encouragedby the Bank. NGOs can be effective in providing local information, managingor assisting in the preparation of assessments, and monitoringaspects of EA implementation.

56. Emphasize the use of environmental assessments to identify institutional requirements for monitoring and managementduring project implementation. Findings of the assessmentregarding (a) staffing, training and equipment needs of operating and oversight agencies and (b) required technical, financial and administrativesupport for operation and maintenance should be used in designing the project.

57. Note that certain training needs are likely to become obvious early in the EA process. In particular, the need for trained personnel to staff environmentalunits at the project site and to manage or monitor environment-relatedaspects of project implementationshould becomeobvious at the time of scoping. The project shouldprovide for timely training, includingadvanced degrees for professionals, in order to have those staff members availablewhen constructionbegins.

58. It may be helpful to provide EA trainingcourses for local officialsand consultants. These should cover EA methodsin general and the requirementsof the EA OD in particular.

59. Consider the needs of local governments. EA and project implementationand operation may impose burdens directly or indirectlythat local officials are ill-equippedto assume, yet their roles may be critical to project success. Local governmentsmay be called upon to:

* participatein EA e participatein project planningand design o issue required permits * monitorconstruction activities and impacts v implementcertain mitigationmeasures v monitorproject operationafter construction • operate public works constructedas part of the project 171

They may also have responsibilityfor managingindirect impactsof projects, such as:

* control of induced development * participationin resettlementprograms * satisfactionof higher demand for municipal services

Additionalstaff, training, equipmentand sourcesof funds may be calledfe)r to support local governmental agencies in these areas.

60. The concept of 'twinning"-creating a working partnership between two institutions-can be applied to EA and other aspects of environmentatmanagement. It provides the opportunityfor staff of a developingcountry institutionto participate in the work of a similar organization,thus exchangingnot only skills but also managementand organizationalexperience. It is also more flexible than technical assistanceby consultants, in that it creates a frameworkfor solvingnewly-arising problems that may not have been envisionedwhen a technicalassistance (TA) componentwas designed. (See Cooper 1984 for more details on Bank experience with twinning.)

Recommendations for National and Sectoral Levels

61. Strengtheningof the existing legal framework may be necessary to provide authority for EA preparation and implementationof EA findings. Certain national agencies may need to be established or strengthened. In cases where the needs are limited, preciselyknown, and related to projects, a specific project can serve as a vehicle for such strengthening. In other cases involvingneeds for more extensive institutionalchanges, a project EA may not be an appropriatevehicle. Policy-basedlending and dialogue at the national or sectoral level, technicalassistance projects for institutionalstrengthening at the national level, and country environmentalaction plans may serve the purpose better. Free-standingenviromnental projects can also be excellentvehicles for strengtheningcapacity at all levels of government(see Table 5.5). It is important that any EA findings regarding needs for institutionalstrengthening beyond the limits of the project be brought to the attentionof Bank staff working on country and sectoral issues and strategies so that they can be incorporatedin appropriatelending and credit operations.

62. National policies,laws, sanctionsand incentivesshould be consistent. A situationin which there are strong incentives for industrial expansion, inadequatelaws to conserve sensitive natural areas, and weak penalties for failure to implementEA recommendationsor control pollutionis one in which it will be difficult to effect compliancewith environmentalpolicy and standards.

63. Ensure that the institutionsresponsible for review and monitoring of projects have adequate resources to perform their functions and procedures to communicatetheir findings to decision-makers.

64. Assist with clarification or redistribution of environmental assessment and management rosponsibilitiesand authoritiesto eliminate vertical and horizontalfragmentation and redundancy. 172

Table .SS.Poland: Environmental e Proje

Polution from the industi and energ sctr is wve n Poland. TM fundamentalcaus is ititutidon: fin an lower than control costs;the ae no stron incentivesfr municipelitis andindustry to drm poiution; and regulatory agecies bave limited auihoity, a weak mitoring system, nd poor lao y equipment. This prject will aist Polad in im g its enionmental capacity through te c asstance, trig, twinnng, cas studies nd model project i the followingaur:

(a) progamming/budseting in Miistry of EnvironmentalProtection, Natursl Resou and Forsty (MOE)

(b) developmentof a country-widemonitoring sategy

(d) peparation of onmentalregultons

(e) tran for govePnmet, industry, and consultantsi industrialpollutio management

(t) regnl aurquality management

(g) water r trce magement on a basin-wide scalo

Resosbility for project implementtio es with MOE, which has cated a Project Iplentatio Unit An inter-minis ProjectSteerng Committ with local vnm ep ttives adise MOE. Prqjet componen at the field levelae manged by new Loca Implenet aon Units, except for the water raescs component which is oveore by the Water Man Council for the Upper VistulaRiver Bi Th implementaon units are expectedto continueopert after project complotin. To reiforce ths, their funds ae obtined from reslr budgoets.

This type of proect requires a high level of supervision, especially st the outs, to ene tht obeie impltatio rrngements ae clearly undesood. Th Bnk ha prpared a supervision plan, aried to by tho borower, which shows the schedule for Bank supervisory inputs, the spities rquired for thnical review, the project elemnts qiing special atention from th Bank during supvisin, and the monitoring,rporfing and other pervisoy respoibilities of the govaent of Polan

65. Promotedevelopment of sectoralguidelines for environmental sessment. 'Me EAprocess may be mademore efficientand effectivethrough the use of guidelinesthat are specificto boththe kindsof project the Secoa agenciescarry out, support or oversee, and to the issues that are commonly eaw,untere in thiem. The guidelinesshould be reviewedby the nationl agencyresponsible for EA policyand procedure. Theymay include: 173

* baseline data collection requirements (parameters, frequency, duration, analytical techniques)

* specialstudies normally required (e.g., air emissiondispersionmodel, water qualitymodel, traffic generationprojections)

* ecosystem types and sociocultural elements warranting special emphasis because of particular sensitivityto projects

* required or recommendedmitigation measures

* monitoringand reporting requirements

66. Establish environmentaleducation programs at all academiclevels. It is clear in both developed and developingcountries that it will be difficult to establish sustainablepattern of resource use as long as the general population is unaware of the opportunitiesand limitations of their ecosystems. This awarenessis best started in elementaryand secondaryschools and through communityoutreach programs. In addition, it may often be necessary to strengthen curricula in universitiesand tehical institutesto train professionalsand technicians in environmentalfields. In a given project, two or three academic institutions might be selected for strengthening in the areas of ecology, environmental science, nvironmental engineeringand management. For Category A projects, the training componentshould also includefunding for advanceddegrees for a significantnumber of professionalsin environment-rdated fields, to further strengthen project, sector and country capacity, as appropriate. 174

References

Environmental Management Institutions

Israel, A. 1987. InstitutionalDevelopment: Incentives for Performance. Baltimore, Maryland: IThe Johns Hopkins UniversityPress and the World Bank.

Kamugasha, B. B. N. 1989. 'Developing Institutional and Legal Capabilities for Dealing with Environment in Sub-SaharanAfrica." Africa Technical Department, Environment Division Technical Note 3. World Bank, Washington,D.C.

Analyzing Institutional Capabilities

Paul, S. 1989b. 'Institutional Analysis in World Bank Projects." Paper presented at the Conference on InstitutionalDevelopment and the World Bank. World Bank, Washington, D.C.

1990. "InstitutionalDevelopment in World Bank Projects: A Cross-SectoralReview." Policy, Research and External Affairs Working Paper 392. World Bank, Washington, D.C.

1989a. "InstitutionalReforms in SectoralAdjustment Operations." Policy, Research and External Affairs Working Paper 227. World Bank, Washington,D.C.

Roeommendations for Strengthening Environmental Capabilities

Cooper, L. 1984. The Twinning of Institutions: Its Use as a Technical AssistanceDelivery System. World Bank TechnicalPaper 23. Washington,D.C.: World Bank.

Paul, S. 1989b. 'Institutional Analysis in World Bank Projects." Paper presented at the Conference on InstitutionalDevelopment and the World Bank. World Bank, Washington, D.C.

1990. "InstitutionalDevelopment in World Bank Projects: A Cross-SectoralReview." Policy, Research and External Affairs Working Paper 392. World Bank, Washington,D.C.

1989a. 'InstitutionalReforms in SectoralAdjustment Operations." Policy, Research and External Affairs Working Paper 227. World Bank, Washington,D.C. 175

ANNEX 5-1

Common Institutional Problem

Ehmn Resou * limited facilitiesand resourcesfor educationand trainingof professionaland techical personnel . low statusaccorded to employmentin certain positions(e.g., wastewatertreatmet plants, localgovernment) * inadequatesalary scales, benefits and incentives • lack of career pathsfor technicaland professionalstaff lack of supportin termsof equipment,technical information, and continui education * civilservice hiring restrictions included in economicreform programs inadequateoperating budgets * informalprocesses that allowcircumvention of formalrqiemet in EA and development decision-making * 'hands off' publicadministators, lacking in localknowledge * lack of commitmentto environmentallaws and policies * weakleadership in institutions,caused by lack of autonomyand accountiliy

FavlrmumentalPoHlcy, Laws, and Regulations

e absenceof environmentalconcerns in nationalpolicy formuation - lack of clear environmentalpolicies and/or commitment to them - lack of legalauthority for EA as part of resourcedevelopmt decisio * weak or nonexistentenvironmental laws regarding resourco use, resource protcdon, environmentalquality, pollutant discharge, waste disposal, fiity siting,occupaonal sfety and health * lack of legalauthority for communityinvolvement in developmentdeciions • absenceof regulationsto implementthe lawsthat exist * unrealisticregulations that are unenforceable * weakenforcement of laws and regulations * lack of incentivesfor compliance * existenceof legaland financialdisincentivas for susinable use of natud raloucs * localregulatory agencies unable to enforcecompliance by large,governm -oe industra operations

SOl tur

* lck of entitiesto perfom one or more key functions * vatal or horizontalfrm n of ronmnt poility ad ahory * environmentaagency(les) isolated, not iegrted Ito ownomicdevoput plang ad decsion-making 176

* nationalenviromnental agency limited in authorityto influenceresource developmentdecisions by individualline agenciesor to resolve conflictsamong them * structure not conduciveto intersectoralcoordination * no agency to perform objective review of EA * implementingagencies without EA capabilities iimplementingagencies not well-staffedfor operation, maintenanceand monitoring over life of project inadequateprovision for collection,analysis and utilizationof monitoringdata llocal governments not prepared or equipped to cope with burdens imposed directly or indirectly by developmentprojects centralized decision-makingand political interferencerestrict authority of regional and local agency managers

Environmental Assessment and Environmental Management Procedures

• lack of procedures for project screening, EA preparationand review * lack of effective monitoringprograms to provide baseline data for EA * lack of national and internationalinformation exchange i low public confidencein EA process and developmentplanning process - lack of interagencycoordination in project planning,EA, and project implementation - no procedure to identify and resolve intersectoralissues or pursue integratedplanning across sectors or within regions • weak follow-up or supervision of projects, especially mitigating measures, during implementationand subsequentoperation e no feedback of results of monitoring and supervision to agencies responsible for taking remedial action or to those who could use the informationto improve future projects * failure of environmentalprojects or project componentsbecause of inadequateoperation and maintenance - deficient planningprocesses * inconsistentenforcement procedures * no procedures to take into account in project planningand design the needs of or impactson affected local governments * no procedures for involvementof affected groups and NGOs . procurement processes insufficient to meet needs for spare parts, equipment, supplies to sustain enviromental managementcomponents * no comprehensiveenvironmental education programs

lmnal lOuel

* lack of funding for the EA process and for follow-up functions (supervision, monitoring, measurementof impacts, feedback) * eavironment not given priority in economicplanning and budgets * unreliable or ineffectivecost recovery systems for public inhstructure and service project. * inadequate provision for project operating and maintenancecosts in plaming and budgetn procese CHAPTER6 SECTOR AND FINANCIALINTERMEDIARY LENDING AND ENVIRONMENTALREVIEW

1. Operational Directive 4.00, Annex A: "EnvironmentalAssessment" (the EA OD) statesthe purpose of environmentalassessment: "to ensure that the developmentoptions under considerationare environmentallysound and sustainable, and that any environmentalconsequences are recognized early in the project cycle and taken into account in project designp (para 3). Later on, in paragraph 14, the directive's requirementsare appliedto sector investmentloans and loans through financialintermediaries as well; it carries a brief statement of special options for these loans. This chapter will explore those coisiderations and options in depth.

2. For convenience,key terms to be used in this discussion(and previouslydefined in Chapter 1) will be repeated here. Environmentalreview will be used to indicate the complete procedure fbr screening, evaluatingand supervisingprojects and sectoralactivities from the standpointof environmental soundness. Environmental assessment (EA) will indicate a specific study, a component of the environmentalreview process. An environmentalassessment report is the documentthat is produced by an EA.

3. The trend in Bank lending is toward greateruse of financial internediary (FI) lendingand toward more onlending independence for the intermediary; however, Fl lending presents some spocial considerationsto environmentalreview. At identification,the TM often knows litto about subprojcts other than perhaps their sector. Subproject details may not be available even at appraisal. Funds are often onlent in smallamounts and not alwaysfor specificprojects; intermediatecredit is commonlyused, with other funds, to support expansionor continuingoperation of existingenterprises. The TMand other Bank staff usually have little or no contact with the ultimateborrowers. Thus the TM may be able to screen the loan only on the basis of assumptionsabout the types of subloans likelyto be made by the Fl. Therefore, while screening of individual subprojects will normally be necessary and additional environmentalstudy may be required, these tasks are defined by the EA OD, in paragraph 14, as responsibilitiesof the 'project implementingInstitutions."

4. Implementinginstitutions, themselves,are a diverse group. Intermediariesinclude public and privately-ownedinstitutions: central banks, sectoral credit agencies, commercial banks, development finance corporations, rural credit cooperativesand nongovermnentalorganizations (NGOs). Ultimate borrowers includemunicipalities, cooperatives, government-owned industrial and agriculturaloperations, NGOs, and public and private ventures. Their capabilitiesand interestsregarding the environmentrano from extensiveto nonexistent,and they operatein contextsof environmentalpolicy and regulationwhich vary widely from country to country, and sector to sector.

S. To provide a basis for ensuring that Bank participationIn Fl operations results In projects that are onvironmentallysound, this chapter will cover the followingissues: 178

special considerationsfor screening financial intermediaryloans (FILs); institutionalresponsibility for environmentalreview; guidelinesfor appraising institutionalcapacity to meet EA OD objectivesfor Fls; * options available for meeting EA OD requirements; * options for strengtheninginstitutional capacity and/or national policy; and * options for financingthe environmentalreview process.

6. Annex 6-1 contains examples of approaches recently applied in Bank projects. Table 6.1 diagrams the environmentalr,sview components in Fl credit operations and options for considerationby the TM.

Screening of Loans to Fiancial Intennediaries

Screening Criteria

7. The TM will screen FILs loans at identificationand categorizethem as A, B, C or D based on available informationabout the sector involved and/or the range of subprojectsthat could be financed. (SeeEA OD provided in Annex 1-1 for definitionsand examplesof categories.) Where there is complete uncertainty, it is sensible to assign the loan to Category B. Ihis will give participants flexibility in reviewing a variety of subprojects and keeping the level of environmentalanalysis of each subprojectin proportion to the significanceof potential impacts. The followingadditional guidelines may be helpful:

(a) Category A: Any subproject that might be supported under the loan that would be categorizedas an 'A' project if it were financeddirectly by the Bank (e.g., land clearing that will affect tropical forest, thermal power development). A collection of subproje3s whose cumulativeimpacts warrant an "A", althoughthe individualsubprojects are of a scale that would place them in a lower category.

(b) Category B: Any subprojects classified individuallyas "B" projects, or that have a cumulativeimpact on a particularresource whichwould require the environmentaltreatment appropriate for "B' projects. Subprojects amenable to applicationof design criteria or performance standards, and will this environmentalmanagement approach be effective in the particular regulatoryand institutionalcontext.

(c) Category C: Subprojectswhich normallydo not result in significantenvironmental impact, and the same conclusioncan be reached about the cumulativeimpact of the subprojects.

(d) CategoryD: Subprojectswhose major objective is environmentalimprovement.

RecommmndingType of Environmental Analysis

8. TMs are obliged to identify not only the project category but also the type of environmental aaysis recommended. There are a number of possibilities,depending on circumstances. Tabl 6.1. OptIons for Environmental Review In Financial Intermediary Lending

prooet lIdartificatimI OOrvi to PrSeft Aiu Envininnr Screenn an R Ceeraoro Co tr n X . ~~~~~~Divlslon(Mf) by E ppeo Audit by ScloCn DavironmentnlStudieslAaesasmentsimtieaDmcitv Asse ntp lepeo ntonnt Ev aluation InitAxmntionalforti rExr1. yesing e n unit 1 A Nult t ut 1.wDd By i Dnc rntm E ~~~~ProjectSu uurt(I:E~P$) Rqpor SR Supervision (OED)

r ^tD A,CD

Opdoos for Nolect OpfiJ frPreain 4pr ScgoeZ aondUmmt ReXiw of ftc Enionmental OIptionr for Prqojct buoml Ccittv 1nionobSuWue Assessments (EA) Monitorint and Evaluation

1. Asss mfio r"knf o 1. By exisf eo _trm Unit 1. EA by COnlUUtantsto ultimate I1. By finwanciintermediary envirmmeal revi_w aid within finaial intrmediary borrower(subprojects) 2. By consultantsor research _memmed 2. By new environmentalunit 2. EA by consultants to the financial institutions '0 2. Amise iona environmental within financial intermediary intermediary 3. By nongovernmental bIsgii end record of 3. By govenmnt onvironmenta 3. BA by governmentagency organiation _enixummu agency or reevant eactoral 4. By governmenta agenics 3. Asess p NA to u.s.I and 2 aboveo 4. By cootnUtsr 4. Ev8am_ capilty of the S. By a local, non-govermental finaniasediary to amteen, ina iation Beview, meoaier, eot. 6. Dy Wecimrpoe organization S. DIsnlne advidily of 7. Reviewby DBak developing (fr wq,bilhyno. 4)

6. Assesseqiabiliy of UNlii borewa for snviroomatal evie ads amemant of z V_iwo. 7. Damhe awvdMl*Uyin doe Sammtyat uxertoim n arsl 7. D __n 11my L 1_Fef e In -I untryMor 180

(a) CategoryA or B Classification Based on Nature of Individual Subproject(s). In this situation, the EA OD requires the Fl to screen subprojects and perform approprie environmentalanalyses as described in the directive.

(b) Category A or B Classification Based on Estimated Cunulative Impact. In these cases, the subprojectshave limited impacts individually. An efficient approach is to have the FI contract for a regional or sectoral environmentalassessment, or a more restricted study, followingthe guidelinesin Chapter 1 on regional and sectoral EAs and alternativesto EA. Bank staff will participate in scoping the study and will review it as a part of project appraisal. Ihe study or assessment will provide an understanding of the major environmentalissues and impacts, a set of measures to avoid them or to mitigate those which are unavoidable,and the estimatedcosts of those measures. The Bank can require the financialintermediary to includemeasures as conditionsfor subprojectsloans; however, in many cases additional environmental studies of individual subprojects will not be necessary.

(c) Category D Clssification. These projects typically do not require special environmental studies. However, dependingon the nature of the loan, it may be necessary to establish a review and supervision procedure to ensure that subprojects financed are ones which actually do produce the intendedenvironmental benefits.

Planning Institutional Responsibility for Environmental Review

General Considerations

9. One of the TM's primary tasks during preparationis to formulatearrangements whereby EA OD requirements will be met. Delegation of Bank decision-makingand loan administrationauthority represents one of the main advantagesto FIL operations. If procedures for subloan approval are too restrictive or if they require a great deal of Bank involvement,this advantagewill be diminished. TMs should therefore seek a balance of independentaction and Bank oversight that minimizesthe risk of approving subloans for environmentallyunsound projects. This will vary with country, sector, loan amount, lending institution, and type of borrower, and thus necessitatesa flexible approach.

10. The most desirable context for intermediary lending, from an environmental management perspective, is one in which:

national policy and legislationrequire environmentalimpacts to be taken into account, regulations(or inducements)have been enactedto protect the environment, * competentinstitutions exist to administerregulations, and * enforcementis consistentand sufficientlystringent, and incentivesare sufficientlyattractive, to ensure compliance.

To th. xtent that a given situation depart from that ideal, environmentalmanagement will be more difficultto achieve. 181

11. When environmentalrequirements are attachedonly to Bank loans (and those of other internationaldevelopment agencies), Bank funds will be perceivedas morecostly than finds withno such conditionsattached. This creates two particularlyundesirable situations in intermediarylending: intermediariesusing Bank funds for a large fraction of their portfolioswill be at a competitive disadvantage,and individualintermediaries will be onlendingfunds both with and withoutenvironmental requirements. Borrowers and intermediarieslikely will seek other sources of financing, and environmentallyunsound projects could be implementedwith the unrestrictedfunds. 12. EachBank loan should be regardedas an opportunityfor incrementalimprovement in a country's overallmanagement of its resources.The strategy for Fl lending,therefore, should include some linkage betweendemonstrated progress in overallenvironmental management and continuedlending. Thelong- term objectiveis to make enoughprogress that special considerationsfor enviromental review proceduresare unnecessary.Until that objectiveis reached,each loan willrequire procedures to meet the Bank'senvironmental objectives.

Considerationsfor FormulatingInstitutional Arrangements

13. Variousarrangements exist for implementingenvironmental review - screening,scoping, developingterms of reference, conductingthe assessments,reviewing the results, and monitoring subprojectimplementation (see paras 23-25). Exceptin the ideal case where environmentalreview proceduresare establishedand enforcedin the borrowingcountry, some project-specific arrangements consistentwith the EA OD willhave to be made. A primarytask for the TM duringproject preparation will be to decidewhat will be effectiveand efficientin the particularcircumstances, so that subloan processingis not undulycostly or delayed,and acceptableto the Bankand borrower.

14. It is importantthat there be consistencyin the approachto intermediarylending in a particular country. Procedureschosen should be welldefined and the guidelinesfor their applicationclear, so that eachtime a similarset of circumstancesarises in one country,the environmentalreview approach applied to the loan will be essentiallythe same. Clear definitionin the loan documentswill also facilitate monitoringto evaluatethe effectivenessof the selectedapproach and the extentto whichimplementing agenciesare followingit.

15. The level of effort devotedto environmentalreview should be commensuratewith risk. For instance,greater potential risks to the environmentare posedby loansfor certainsectors or subsectors and by projectsof largersize (see descriptionsof categoriesin paras 7-8). Less obviousvariables are the overallregulatory climate in the countryand the resourcesand experienceof the Fls involved. 16. The approachchosen should be appropriatein the demandsit placeson participants.It should allowthe TM to takeadvantage of the strengthsand missionsof the organizationsinvolved.

Guidelines for AppraIsIng InstItutional Capacity

17. TMs shouldconsider the followingin orderto appraiseborrowers' capabilities to meet the EA OD requirements: 182

* the statusof nationalrequirements for environmentalreview; the status of nationalenvironm legislationand regulationsand the record of iheir enforcement; * where applicable,tle status of intnational treatieson the environmentsigned and the recordof compliance; * the statusof national,regional or local regulationsand proceduresrelevant to the project (e.g., facilitiessiting, pollutant discharge limits, performance stadards, constructionand operatingpermits and licenses,building and plumbingcodes, erosion controls, monitoring programs,etc.); * the existenceof governmentagencies with responsibilitiesfor me assessmet preparationand/or review and for alministrationof environ regulationsor funto describedin (a) through(d), above; * the effectivenessand consistencyof administion of environmentalfunctions and enforcementof environmentallaws and regulations; * the existingcapabilities of the Fl to screensubprojects, develop TORs for assessments, reviewassessments and monitorimpleof sessmentarecommndation; * the advisabilityof developingsuch capacityfor the Fl (in terms of its primarymission, resourcesto attractand retin qualifiedstaff, worldoadfor the unit, degreeof inerest in havingsuch capacity,and existenceof alternativessuch as qualifiedconsulting firms and agenciesof localgovernment); - the capacityof ultimateborrowers to conductassessment or other studies; uthe availabilityelsewhere in the country of expertisein environml review, e.g., consultingfirms, NGOs,academic and researchinstitutions, govanment agencies; - the recordof Bankexperience with environmentalissues in projectsin same countryor sector; the recordof Bankexpcrience with the implementinginstittions; and - the projectsector and likely subprojectcharacteristics (i.e., higher risk categorieswill requiremore environmentalcapability).

18. Findingsin these areas will be the basis for reom environmentalresponsibilities ad guidelinefor carryingthem out. Issuesrelated to nationalenvironmental policy and its managementwil emerge,as will needsfor institutionaldevelopment and technicalassistance.

Options for Strengthenng National Poliy or Izuttutlons

Ntion Policy 19. The Bankmay lend in situationswhere cVcity to deal withenvironmental concrns is not wel developedbecause of weaknessesin nationalpolicy and its exocution. In additionto supporting developmentin sectorsfor whichsubloans are to be madeand strengtheningFls, the Bankshould also work withthe governmentto improveenvironmental planning overall. However,to overloada sigle intrmediaryloan or creditoperation with conditions, covering a widerange of concerns,may jeopardize projectsuccess. Thus,while a projectmay contain a componentof institutionalstreinthening, isues of naDonalpolicy probablyshould be kept separate as much a possible from those specificto the inermediaryuand the loan. :iB3

20. Progressin policy formulationmid institutionalstrengthening will be gradual and may require tecdical assistance,and a flexible approaO is called for. For example, a multiyearloan commiment, wih an emphasison strengtheninginstiuti'na! and po3Icy areas, couldbe formulated.In sucha case, evidenceof overallprogress in environrmentnmanagement in the country couldbe a conditionof continuedBank lending to Fls in the count-V.Thus, environmentallysound management of resurces in all developmentprojects would be addressed, not just those that are Bank financed.

21. Insome cases, FI operations may beinappropriate altogether. Bank appraisal may reveal that the climatefor environmentalmanagement m a given countryis and will continueto be suchthat Fls are unlikelyto pay adequateattention to negativeimipacts in appraisingor implementingprojects. TheBank mustthen makea specialeffort to avoidsuppozing through FIL projectsthat have high enviromental risk,and to worktoward policy change it wiillmake such lending possible.

Institutions

22. The various environmentalfnciotas associated with Fl lending many times will entail using existing environmentalagencies or units, or creating new ones. The Bank can provideguidelines for capabilitiesand resourcessuch groups snouid have. It should also be prepared to includetechnical assistanceas a project component,and may rnAe Tprovement of eapabilitya determinantof the degree of decision-makingflexibility to be grantedto the FL. In multi-yearloans, a mid-termreview could be required,with adjustment of loanconditions cntingent on demonstrationof satisfactoryprogress (e.g., diminishingBank involvement in enviionnentalreview could be a result).

Options for Meet Environmental es nt Operantom DM_tive Requirements

Optionsfor SubprojectScreening &nde RaAwr ae /Imssments

23. An organizationwith capacityfor -,creang car probably also undertakereview of environmental assessments,hence both functionsare grouped iere. It is certainlypossible to assignthese responsibilities separately,and it may be necessary when review is required by a governmentagency.

(a) By government agency. Whtie there are well-establishedenvironmental regulations and responsible agencies for knplea-ing them, screening and/or review of assessmentsby those agenciesmay be requiredor customary,and probablyis the best optionfor Fl lending. Appraisal should include identifying the requirements, determiningthei consistencywith the Bank policy, and developingsupporting procedures. If environmental review is not a requirement, the mission can identify this as a national policy issue. If a sectoral ministryother than an environmentalagency performs reviews, whetherand how it addresses intersectoralissue$ should be determined. Ideally, certificationby a reviewing governmentagency would be the only proof needed thatsubprojects are environmentally sound.

(b) By odsting prccedure thdn F.L A large Fl may have in-houseenvironmental capability to screen projects, identifyiss tes, determineappropriate studies needed,and review results. Bankappraisal of such capabilih shouldfocus on: procedures, experience,staff and re- 184

sources relative to worldoad, access to specialists when needed, and ability to influence decisions - especially decisions of project approvAl, modifications in design and implementation,and environmentalperformance conditions in loan contract documents.

(c) By new procedure within FI. The loan may provide the opportunity to develop environmentalreview capacity. This is sensible for large developmentfinancing agencies and may be appropriatefor large baoks active in developmentfinancing. It is inappropriate for most small institutionsor for any in which developmentprojects or other activitieswith environmentalimplications represent a minor fraction of business. Appraisalshould focus on the intermediary's degree of commitment to active involvement in environmental managementof developmentlending and the resourcesaccessible to it for that purpose. The Bank can provide advice on the staffing needs and appropriateprocedures.

(d) By environmental consultants. An FI may contractreview services by consultants. This is perhaps the most practicaloption for smaller commercialbanks and other purely financial institutionswhere establishingin-house capabilitywould not be cost-effective. It is also potentiallyuseful as an interim measure while capacity is being developedunder one of the preceding alternatives. The Bank should review the consulting agreement. (For a discussionof procuring consultantsfor EA, see Chapter 1 [paras 59-71J.)

(e) By local, sdentific institution. An Fl might arrange for screening and review by a local- university or environmentalresearch institution. This would be much the same as working with a consultingfirm. Advantagesto such an arrangementare that the institutionmay be a repository of informationon the local environmentand may be perceived as responsible and unbiased. Disadvantagesinclude: risk that an academicor research organizationmay not be sufficientlydiversified to deal with the full range of potential environmentalissues; incompatibility of academic and research work schedules with the demand for rapid responseon subprojectproposals; and political alignmentsof some institutionswhicb may bias findings.

(f) By special-purpose organization. In the case of an apex loan or other situation in which a relatively large number of commercial banks or similar financial entities will be intermediaries,it may be cost-effectivefor them to cooperate in establishingand fumding an organizationto review their projects. The Bank should assess whether the organization would have sufficientinfluence over subproject approval and preparation.

(g) By the Bank. Where capacity of the Fl needs strengthening,or where country regulations and institutions may not provide environmental review consistent with the EA OD requirements,or where the Bank simplyhas not had sufficientexperience with a particular intermediary,the Bank may wish to review results of screening and EA reports of projects which pose significantrisk to the environment.Criteria for determiningwhich subproject would require Bank concurrence prior to approval can be developed to suit the circumstances(see Annex 6-2 for sample). The loan agreement might include provisions for graduallyreducing Bank involvement. 185

Optiom for ConductingEAs

24. TMs may discuss with the Fl the following alternativeswhen decidingwho will be responsible for conductingEAs:

(a) By ultimate borrower. This parallels typical arrangementsfor Bank project lending. The borrower would typically rely on consultantsor academic/researchinstitutions to conduct the assessments. Subproject approval would be contingentin part upon submissionof the study. Bank and/or national guidelinescould be used by the Fl in assistingthe borrower.

(b) By financial intermediary. The regional/sectoralassessment approach has already been discussed (para 8[b]). It is particularly attractive for multiple, relatively homogeneous subprojects. It offers the possibilityof "generic" assessment, leading to developmentof guidelinesor standardsfor subprojects (including,for example, reliance on local licensing and permitting functions). The Fl would use the guidelines in subloan agreements, and subprojects would be exempt from further study provided they were in conformance. Again, consultantsor academic/researchinstitutions would be used to carry out the work.

(c) By government agencies. In countries where assessments are routinely conductedby agenciesof the central or regional governments,FIs may be able to take advantageof such arrangements, or may be required to do so. Questions which may arise are whether the environmentalstudy process is sufficientlyindependent of developmentpolicy-making to allow for unbiased analysis and conclusions,whether NGO and communityinvolvement would be possible, and whetheradequate resources are availableto the agency to sustainthe worldoadwhich would be producedby the loan.

Options for Subproject Monitoring and Evaluation

25. Similaralternatives are availablefor monitoringsubprojects during operationand evaluatingtheir adherence to environmentalconsiderations.

(a) By government agencies. Environmentaland sectoral ministries may have monitoring responsibilities,especially with regard to operation of subprojects. They should be taken into accountin developingmonitoring procedures in order to avoid duplication. There may be cases where a governmentagency monitoringprogram is sufficientlycomplete that no additionalenvironmental information is required. Again, this is the preferred circumstance as it affects all developmentin the country, not just Bank lending.

(b) By financial Intermediary. When FIs have capabilityto screen subprojects and review environmental assessments, they also should be able to monitor subprojects for implementationof mitigatingmeasures, guidelinesand standards, and other environmental protection features. They could compile information needed by the Bank to evaluate projects after completion, as well. Monitoring and evaluation can be carried out In pat through reporting requirementslevied on the borrower, but the FI will need trained staff to make periodic inspectionsof activitiesin the field. (c) By consultantsor researchinstitutions, Efth intermediariesor borrowerscan make use of outsideconsulting assistance in monkoTrmxsubprojects, as they would for screeing, environmentalstudies, and reviews.

(d) By mngovernmentalorganizations. N-GO-can be helpful in monitoringcertain aspects of projectimplementation, especially whef. isSuesidentified by affectedcommunities have resultedin incorporationof specialmeaur m s-ftnroject designsor implementationplans. For example,a3n NGO might monitor and reort on progressin resettlement.

FTiamcingEnvironments' Pwtew .d sm ents

26. Thereare four areas in financial intermediary E Ierding where cost may be associatedwith environmentalreview:

* subprojectscreening, assessment review Fsid iSuMisionprocesses; * environmentalassessments or other studies of subprojects; * institutionalstrengthening to support tie environmnentalreview process for specific intermediaryloans; and * institutionalstrengthening at the nationai level.

27. None of these cost categoriesis extraordinarily lue. For instance,a single qualified environmentalexpert, with a modestamount of consultamtsuppo to deal withspecial issues, can screen at least SOsubprojects per year, develop terms of reference for those requiringfurther studies, and superviseimplementation from an environmentalstdpolat. Environmentalassessments themselves rarelyamount to even I percentof project capital costs, Xcept in the case of complexprojects unlikely to be finmcedthrough intermediary lending. Developingreview procedures and conducting training programsare not costly items either.

28. Institutionalstrengthening, such as retrainig ezisting staff or establishingan environmental review unit, can be financedas technicalassistance components of loans. Alternatively,environmental trust fimds and bilateral donor agencies may make grant monies available for these purposes. Routine operatingcosts will become the responsibilityof the F'I or tha iiplementing agencyafter the technical assistanceis complete. Similarly, institutionalstrengthening at he national level can be supportedas technicalassistance or public administrationtraining component of project loans. Again,grant fuding mayalso be possible.

29. Althoughfinancing EAs is normally the responsibllityof the ultimate borrowers,a case can be madefor consideringregional/sectoral assessments by e FI as projectpreparation costs, eligiblefor supportunder the loan. 187

Cocuilon

30. As stoed in tke introduction,Fl leadingand environmentalreview presen sitions tha can becomecople. lhere I little experie alable a reforence,so care mustbe takento formult p_oure areunburdemome but effective. Suchefort can be expectedto yieldbnefits not only to tdespocfic circumstance of Fl lendingbut to the environmtl reviewprocess as a whole. FI lenin may prest an Inuable opporunityfDr significat progress in the mangement of a ountry's roces. It shouddbe expcted, however,that as proceduresare beingdeveoped a flexibleapproach wi be requird. Aain, the long-termobjective is to attaininstidonal capacitysuch at specialBank involvnuD in enronment review of subprojectsis no longer necessary. 188

ANNEX6-1

Examples of Arrangements for Environmental Reviews in Financial Intemediary Credit Operations

Agriculturl Credit 1. The Pakistan Agcultural Credit Project (FY90) provides an exampleof institutional strengtheningin the contextof an intermediatecredit operation. Bank loan funds of $148.5million are to be on-lent by the governmentof Pakistanto the AgriculturalDevelopment Bank of Pakistan and five nationalizedcommercial banks. Theseintermediaries will in turn lend for a variety of agricultural improvementpurposes, such as farm mechanization,livestock production, and inland fisheries development.Included in the project'simplementation provisions are measuresto increaseenvironmental awareness: developinga trainingcourse for credit officerscovering safe use of pesticides,pesticides restrictedor not recommended,integrated pest management,effects of excessivefertilizer applications,and soil conservationpractices; * establishinglinkages to extensionservices and increasingthe emphasison the environment in their trainingforums; and * providingfour staff-monthsof environmentalspecialist services to design courses and recommendpolicy measures to intermediariesand the centralgovernment.

2. The sectionof the SARon agreementsand recommendationsspecifies among the assurancesto be sought duringnegotiations that all participatingbanks would "establishtraining courses regarding environmentalconcens in lending"an "formalizelinkages with the extensionservice through creation of CECC [CreditExtension Coordinating Committee]."

Industrial Development 3. The Nepal Flnandal InutltutionsDevelopment Project (FY91)is an exampleof institutionbuilding and nationalenvironmental policy and regulationdevelopment within the contextof an intermadiatecredit operation. It is aimedprimarily at improvingthe efficiencyof Nepal'sfinancial sector but includesa componentfor environmentalreview of industrialprojects. It consists(a) an IDA credit of US$10-1smillion to the Govement of Nepal,to be on-lentas credit lines to eligiblefinancial lnstitutions,ad (b) technicalasistance of USS1-3million to financerestructuring programs for the government-cntrolledfinancial institutions and to supportthe Introductionof environmentalimpact guidelinesfor Industry. Participatinginstitutions ore Nepal Industrial Development Corporation, two state-controlledbank, and two or three commorcialbanks. Tho line of creditIs to be used to finance private sector investmentsthat meet technical,financial, economic and onvironmentalcriteria in the industrial,agro-industrial, and servicessctors. 189

4. As part of project appraisal, a procedure for obtainingenvironmental clearance within Nepal for proposed subprojectsis to be developed. The Govermnenthas agreed in principleto go beyond this, by incorporatingin the project an enviromental componentcovering the industrialsector as a whole. IDA is considering the option of supporting the creation of a unit in the appropriate ministry to conduct environmentalassessments of industrialprojects. IDA's support would include assistancein developing and formulating assessment guidelines and staff training in impact assessment and monitoring. All subloans in this project would require prior clearancefrom the new environmentalunit, regardlessof size, originating institution,and whether or not they fall within the free limit for IDA approval.

5. The India Cement Industry Restructuring Project (FY91) is an example of a Category A industrial intermediatecredit operation in a country in which environmentalregulations and institutions are well established. IBRD will loan US$300million to the Governmentof India (GOI). US$298million will be relent to Industrial DevelopmentBank of India and Industrial Credit and InvestmentCorporation of India Limited, which will on-lend for subprojects to modernizethe cement industry and associated transport system and expand capacity. US$2 million will be allocatedto the budget of the Office of Development Commissionerfor Cement Industry to finance employee training and studies of sectoral policy options and environmentalprotection and pollutioncontrol measures.

6. National pollutioncontrol standardsexist for the Indian cement industryand are being enforced by the states (although poor control equipment operation and inadequate monitoring systems lead to particulate emission problems at many plants). Cement is also one of the industries for which 001 requires environmentalclearance as a conditionof project approval. Environmentalclearance must be received from state pollution control boards before a Letter of Intent for Industrial License is issued. When constructionis completed, the state board must certify that installedpollution control equipment is appropriateand adequatebefore an IndustrialLicense is granted. BothGOI and state governmnts may demand comprehensiveenvironmental assessments for quarries and plants.

7. At the time of appraisal, five major subprojects had already been identified. The appraisal mission met with their sponsors and consultants and agreed on environmentaldesign and operating requirements for the plants and quarries (generally consistentwith Indian regulations,except for more stringent air emissionstandards, and with additionalmeasures for noise abatement)and on the scope and schedule for comprehensiveenvironmental impact assessment reports to be prepared for each subproject and reviewed by the Bank.

8. The loan agreementspecifies that all subprojectsmust be equippedto meet Indian environmental protection standards. Completionof satisfactoryEAs and receipt of clearance by the concernedstate pollution control board and, where applicable, GOI are conditions for subproject approval. For subprojects exceedingUS$20 million, the Bank will reviewthe IDBI/ICICIappraisal report and the EIA, to be prepared accordingthe scope agreed-on during the appraisalmission. 190

ANNEX 6.2

Example of Critera for BDakReview of Subproject Propoa

Theborower (financialintermediary X) shallnot approveCategor A subprojecsinvolving the followingactivities wihout prior concurrenceby the Bank:

* Manufacture,rnsportation, storage, use or disposalof hazrdous or tDXiCmntras.

* E ncroachmenton wildlands of regional,national or iseadond significac. * Conversionof wetlandsor foresttracts of 10 hectues or moreto otheruses. * Clearingor levellingland areasof 100hectares or more. - Involuntaryresettlement of 50 householdsor more. Wthdraws from or dischargesto surfacewaters or gundwaer in excessof 5.0Iie per secod. CHAPTER 7 COMMUNITYINVOLVEMEMT AND THE ROLE OF NONGOVERNMENTALORGANIZATIONS IN ENVIRONMENTALASSESSMENT

WORLD BANK POLICY

1. "The Bank expects the borrower to take the views of affected groups and local NGOs (nongovernmentalorganizations) filly into accountin project designand implementation,and in particular in the preparation of EAs."j/ The purpose of taking the views of the affected people into account is to improve project viability. The Bank has found that where such views have been incorporatedin the design, the projects are more likely to be successful. The Bank has not found communityparticipation to be an impedimentto project execution. On the contrary, projects in which affectedpeople's views have been excludedsuffer from more frequent delays and poorer quality.

2. The EnvironmentalAssessment Operational Directive (EA OD) clarifiesBank policy, which for more than a decade has encouragedcommunity participation in Bank-supportedprojects. Sociological considerationshad been added to the Bank's operationalmanual statement on projectdesign and appraisal in 1984 (OMS 2.20), specifyingthat when effectiveproject implementation requires the beneficiaries'fiIl commitment, appraisal should verify that they were involved in project identificationand preparation. More recently, instructionsabout participationhave been added to guidelineson, for example, cultura property (OD 4.50), rural development(Briscoe and de Ferranti 1988), and monitoringand evaluation (OED 1985).

3. The operational directive on collaborationwith nongovernmentalorganizations also urges Bank staff "as a matter of Bank policy" to develop contacts and operational collaborationwith NGOs (OD 10.70). The directive defines NGOs as 'private organizationsthat pursue activitiesto relieve suffeing, promote the interests of the poor, protect the environment,or undertake communitydevelopment.'

4. At identificationof EA category A projects, or as soon as the project becomes a category A, borrowers declining to consult local NGOs, to seek the informed views of the affected people, and to release relevant EAs, are not complyingwith this policy. It seems unlikely, in such cases, that the Bank would accept the invitationto continue with that project. EA requirementsshould be reviewed with the governmentin a general way well in advance of any project, and to seek a general agreementwith the principles outlined in the EA OD, and in the two "Instructionsto Staff" from the Senior Vice President for Operation of 10 April 1990 and 21 November 1990, on Borrower's consultationswith affected groups, and tie release of EAs to ExecutiveDirectors.

1/ World Bank's OperationalDirective 4.00, Annex A: "EnviromnentalAssessment," October 1989, (para 12). 192

S. The EA OD's provision for public consultation reflects a larger trend. Many forces are convergingto make both governmentsand developmentagencies more interestedin popularparticipation. In some countries, the change has been motivatedby a shift to democracy. Experience and literature on "people-centered"development are growing and winning respectability and attention. The theme is repeated in statementsby the Bank's senior managementand emphasizedin Bank reports, such as S Saharan Africa: From Crisis to SustainableDevelopment (1989). Public participationhas also emerged as an importanttheme among U.N. agenciesand at meetingsof the DevelopmentAssistance Committee of the Organizationfor EconomicCooperation and Development(OECD).

ROLES AND RESPONSIBIUTIES

6. This chapter offers practical guidancefor all involved in the EA process: Bank staff, especially task managers (TMs), affected people, local NGOs, and members of the EA team. Since borrowing membergovernments are responsiblefor EA, and for taking the views of affectedgroups and local NGOs fully into account, government's EA specialistswill find this chapter important. This chapter may be usefully handed out early in the oonsultationprocess to government, potentially affected people and NGOs. TMs shouldensure that the Bank's requirementsare followed, and should be aware of what the EA team is doing. Training courses for EA in general and for communityinvolvement in particular are often essential. These can be arranged through the REDs, SociologyAdvisor (AGR), ENV, POPTR or EDI.

7. The Bank's primary responsibility is to appraise project proposals and to supervise project implementation,including the community involvementaspect of EA. However, because EA and its public participationrequirements are new and sometimessensitive, Bank staff should be more active in providing advice than in other aspects of project preparation and implementation. Bank staff also need to be involved in EA to assess its quality and to learn from it. In countries where the government engages consultants to carry out the EA, it is important that the Bank ensures that the short-listed consultantshave the knowledgeand experiencenecessary to deal adequatelywith communityinvolvement requirements. Governmentsmay request the Bank to assist with the preparationof TOR for the EA, and with selection criteria for EA specialists.

S. The Bank relies heavily on the good sense and judgmentof the individualTMs and the officials with whom they work to ascertainhow best to involve people from different cultures and backgrounds, and from countries with varying degrees of commitmentto the full participationof its citizens, in what are often very technical EAs. The Bank and its member governments are gaining experience and developingprocedures in this difficult and importantsubject for which there are few absolutes and little written history. Innovationand flexibilityare essential. The next few years will be a learningexperience in how best to involve affected communities,in evaluatingwhich approaches work well and which do not. Later editions of this Sourcebookwill reflect the results of that experience.

9. The Borrower's primary responsibilityin this regard is to arrange for the EA to be carried out as is the case with the feasibilitystudy of whichthe EA is normallyan integralpart. Thus, the Borrower draws up TORs, selects the EA team, and provides the means for the team to undertake the EA. TMe Borrower ensures that national laws, regulationsand Bank procedures are followed by the EA team. 193

Although some parts of a feasibility study can be acceleratedif necessary, this is much less so for the social aspects of the EA. Therefore, the social and cultural aspects of the EA shouldbe started as sOOn as possible. The other two major parts of the EA - physical and biological - are preferably synchronizedwith the social components. And all three should maintain close collaborationwith the feasibility study of which EA is an integral part. The Borrower submits the final EA to the Bank, together with or as part of the feasibility or detailed design study, to enable the Bank to appraise the project.

10. It is essentialfor the EA team to gain quickly a working knowledgeof the area and of the people possiblyto be affected. For all projects requiring an EA, the team should know most of the answers to the questionslisted in Table 7.1 aboutthe affectedcommunity early duringpreparation. Generalanswers can be sought from the project agency and by on-site observation of the affected area itself, in order to be able to assign the appropriateEA category for the IEPS, and more comprehensivelyby the EA tean as soon as the EA process starts.

THE P1UBLIC CONSULTATION PROCESS

Two Levels of Public Consultation

11. Informedpublic participationin the environmentalreview process encompassesconsultation with those both directly and indirectly involved. In the first case are the groups that would be directly affected by the project, for examplefisherfolk downstream from a dam. It is importantto rememberthat the most critical effects may occur some distancefrom the project itself, that the informed views of the potentially affected communitiesshould be taken into accountin the pre-designstages of the project, and that these communitiesshould be involved in the EA.

12. The second group to be involved in public consultationconsists of those who, because of their particular concern or expertise, may have relevant information regarding the nature, scope, and particulars of potential environmentaleffects. Obvious examplesare societies of consultingengineers, experts on cultural property, environmental NGMs, or grassroots organizations concerned with environmentalquality. Less obvious,but frequentlyimportant because of the perspectivesthey can bring, are educators or human rights, anti-povertyor religious groups.

13. The distinction in the groups cuts across two axes: one is the degree to which a group will be affected by the proposed project; the other is the kind of knowledgethe group can bring to the EA. Local and external groups at various points along these axes shouldbe consulted in the EA process. By far the most important point here is that such consultationshave to start very early on if they are to be meaningfuland in order that such views can influencedecisions which will affect their lives. The views of the potentiallyaffected people and the local NGOs should be solicited no later than the start of the scopingprocess. This informationhelps the Bank in assigningthe project to the appropriateEA category. This means that at least preliminary contacts are best begun before the IEPS is finalized. This is easily accomplishedby a reconnaissanceof an experiencedsocial scientist during the identificationmission. 194

Table7.1. GeneralSocial and CulturadAspects

(a) Who are the peoplewho might be affectedby the project? (Numberad sizeof familios, dwellingsand villages.) (b) What are the broad socialgroup structures(communities, classa, castes,tribes, enc.) throughwhich the peopleorganize?

(c) What are the authoritystructures of the groups? Is the authoritybased on irip, seniority,consensus, or democraticvoting?

(d) Which of the groups are responsiblefor accessto or managementof envromnal resources(e.g., grazingrights, water and fishingrights, forest extrction rights)?

(e) Whatis the annualcycle of activities?When and wheredo groupsassemble? How are decisionsreached? (f) Arethere sacredsites or importantarchaeological or historicalsites that mightbe affected by the project?

(g) Whichof thesegroups are awareof the proposedproject and of any problemsthat might be associatedwith it? (h) Whatproportion of the affectedcommunity can read? Do they have accessto radios, newspapers,or other media? Do they speakthe nationallanguage?

(i) Whatgrassroots organizations exist in the areasto be affectedby the project?

0;) What NGOsare alreadyin directcontact with the affectedpeople and whatis the atue of their relationship?Have the local NGOsadequate resources to undertakethe rolos expectedof them in the EA process? Are the NGOsstrong enough to be effective? (k) Hownegotiable is the projectconcept (e.g., by how muchcan the dam sitebe movedor the damheight lowered, and canthe projectbe cancelled)?

14. In manycases during the identificationphase, it is advisableto have somepreliminary contacts with affectedpeople. Most work on publicparticipation begins as part of the EA, at the start of preparation,and at the same time the feasibilitystudy begins. The EA lasts about s long as the feibility studyof whichit is an integralcomponent. Public participation is usuallyfostered by the socia scets membersof the EA team, althoughthe other two EA disciplines- physicaland biological- coopeto fully, as needed. Where social impactsare large in scale or severityor whoetey are pardcuay complex,a locallyresident social science team may be requiredat severalintervals over the perio of projectfeasibility and preparationstudis. Wherea few peopleare affected,a singlesocial 195 scientistcan in most instancesreside in the area for a few monthstotal time spreadover a year, so studies will encompassthe full annual cycle.

Although the bulk of the work is during preparation, there is still a great deal of social input needed during construction,less during operation and thereafter. The affected people and local NGOs and the public at large should participate in monitoringduring operation and assist in post hoc evaluation.

A Challenging Task

15. It is rarely easy to 'take the views of affectedgroups.. fully into account....' as the Bankenjoins. For example, rural people may be unable to offer informed views about a proposal because of unfamiliaritywith the technicalterms or processes involved:they may not Inow what a hydroprojectis, much less its implications for them. Therefore, much of the challenge is in developing effective communicationin order to apprise people fairly about their role in decisionsthat will affect them.

16. Ensuringthat the EA OD mandateis met requires new expertisein both the Bank and the project agencies. It also requires significant effort and the budgeting necessary within the Bank and project agencies to support it.

17. Consultationswith affectedpeople and local NGOs can take several forms and involvedifferent approachesand methods. Suitabilitywill vary with the social and culturalcontext. Where public officials and ordinary citizens are accustomedto interacting freely and having their statements and opinions challenged and debated, the process of consultationcan take place in open public meetings. However, in many of the Bank's member countries, public meetingsof this kind are unfamiliar or uncomfortable for both citizens and public officials. In such settings, public meetingsmay produce counterproductive results, such as passive hostility, or the appearanceof unanimitywhere none exists.

18. Moreover, even in countrieswith democraticpolitical processes, there may be social groups that are not free to participatein public meetingson sensitiveissues. For example, ethnic,religious and racial boundaries may make it difficult, if not impossible, for members of traditionally antagonisticsocial groups to interact in public. Members of political, racial or religious minorities may be restricted in opportunitiesto express their views publicly. In some countries,women are powerlessand excludedfrom participation. Indigenous, tribal and lower caste people may lack the necessary language skills and knowledge of the dominant culture to express themselves publicly without feeling shame or guilt. Finally, in some countries, NGOs or local social groups which express opinionsthat are at odds with those of governmentofficials may arouse suspicionsof disloyaltyor subversion,sometimes with severe consequences.

19. Informed views of diverse segmentsof the affectedpopulation are critically importantto the EA process because different groups use and are familiar with differentparts of the environmentand will be affected to different degrees by the project. For example, men are usually ignorant of environmental resources women use for income or domestic purposes. The rich are usually ignorant of the environmentalresources upon which the poor and powerless depend for their livelihood. Shopkeepers, farmers and traders in contactwith indigenouspeople may appear Inowledgeableto an outsider, but only the indigenouspeople themselveshave accurate informationabout social changeswhich affect them and the natural resources they use. 196

20. Where open public mestingsare not appropriate,participant-observation study, openended interviewswith key persons,and structuredsmall-group discussions can be used to obtainthe viws of affectedgroups. All these methodsgenerally require an experiencedanthropologist or sociologistwho speaksthe languageof the group whoseviews are sought. Also, each requiresinvestment of sveal monthsof field work to ensure that accurateand representativeinformation is gatheredthroughout a broad area of projectimpact. Schedulingmonths for their completion,rather than weeks,is criticaily importantto allow timefor the anthropologistsor sociologiststo establishrapport with different soci groupsand NGOswho may be initiallyreticent to sharetheir opinionsand knowledgewith unfamilir outsiders.In general,the moresensitive the environmentaland socialissues in a regionor community, the greaterthe timeneeded for fieldwork. 21. Socialscientists (anthropologists, sociologists, social workers, etc.) fromthe borrowingcountry, have a greatdeal of expertiseregarding their ownpeople, languages, and cultures. Theseprofessionas shouldbe consultedin their areasof expertiseon how best to involvepeople. In countrieswhere social sciencemay not be sufficientlydeveloped to play this kind of expert role, the EA team may need internationallyexperienced anthropologists or sociologistswith knowledge of the affectedcultre.. IL the unlikelyevent that neitherindigenous nor internationalexpert socialscientists can be found, the informedviews of the affectedpeople may be impossibleto ascertain. 22. Questionnairescan be useful instrumentsin orientingan EA team to demographicand social variables(Table 7.2). Theyare lessuseful for elicitingin-depth views of diversegroups. Questionnaire surveyshave mostpractical use if they are conductedafter the ineviews withkey persons,structured small-groupdiscussions and/or participant-observation studies have elicited how localpeople define the issuesand have identifiedtheir generalsocial context. Consultationat the CommunityLevel 23. A communitymay be large or small. It could be definedby easilyrecognized geographical boundariesin eitheran urban or rural area, or it may encompassscores of villagesover a large area. Thepeople of an affectedarea may be homogeneous,that is, they mayspeak the same language,be at roughlythe same economiclevel, sharethe same customsand valuesand maketheir livingin smiar ways. Conversely,they may be highlydifferentiated in language,culture, occupation and incomelevel. If the conmunityis far-flungand the peopleheterogeneous, the consultativeprocess will be particularly demanding.

24. Publicconsultation is nowaccepted as an essentialpart of the EA processin industrialcous, but the EAs performedthere providelittle guidancefor involvinglocal communitiesin developing countries. Ihe premiseof public consultationin most industrialcountries is: (a) if the citizensar informedabout a projectand the opportunityto discussits environmentalimplications, those citizen most interestedwill respond;(b) mostcitizens have accessto newspapers,radio and televisionand can roed and understandnotices; and (c) citizes who participateare accustomedto the frank give-and-takeof democraticdiscussions, an do rn run nmor pe. or poltical risk in questioningproposed government actions. In manydevelopig Ea'z2rEA 2n 4rL operate on thesepremise. hereobre, It caumotfunction in the reactive,responsive stance suitableto industrialcountries, but must take a proactive,initiatory approach to encourageand to promotecitizen participation. This moanssh whateverinformation is availabloabout the projectso that informedviews can be obined. 197

Tabe 7.2. Cbheldiston Community*b ole mnt in EnvironmmntalAuesmmnt

BankInfowmadn 1. Fromwihin Bank. * H checkdBeak sourc(Cout Ofcr, Rscn vome Divs, SW I fravaabl io tioron NOs ad foranyh y of Ban nov n wit te? K may oueup wre dw ReuidentMbisso wht infmdont absand whetft rding NGos an th communtyit my be wiln to gate beir th anof EAproes? 2. Fromother agences: * Hav yo checkdwth UNDPRiden Mi ? * Hav youcocked with ohr UN an bilatl agenciein county(especlly wi UNIC, LO, end]AD) tht mighthave conac with gresroworganatios in ffctd ar? 3. Fromothwr sourosa: * amyou idef NOOewi kwlbdg of andexperno in the ficed are? * Do you knowth envroa l NOKs in thecony andthir technicalcaity to aist inth A poes? * Doyou knw th preetat of gavenme OOrelations? * Has a'e of th tee_eplotrd th couty's lawson h abjectof environmentad ohwr publc paticipio? * Do knowth structureof nal an localgonment tatloal andtribal mcse, tbhdege of decentraa, adtbe we of political

* Doyou knw bowthe ongrobile ofoter m risesand agencies inspigp on the ubject? CommunityConsultation . Doyou knw If th peopleof theponiay affctedar ar awareof theproect and of an problemthat mIt be asociaewitt? * 1 theRA em in cota selbcd ibnourt reseache, socialworke, or extensionwoker whomight helpb th socialscientist In the coimuanity-levelconatato? * Has tIh task nage bee pesonay inolvod in at at somevsi withthe pople of the poenay effectedar? * Areth ocial ci he BArEsmm prepard to lv fora peiod of m in tw affetedco mn ie? * Ato youcoaet thatthe A tm undead rvadn socialand cutr vale of th people? * Ha thepanicipaaobsrv arach beencosded? * Doeswhaever approach bein usd atth communitylevel ensu theissues for stin theminds of th peopleare being aticulat and recoded? * Ar youconfidet thit heinfarmed views of affcatdgoups andloaa NOOs ben tan lUyitnto account? GeOeaPubi CAultato * Doyou hav enoughbsic fact for eninital bier-agcymeing? * Doyou know wbo fiom outside th governmentbtould be invid? * Hasa sociologicalmenmb of th BAtm hadonet-one weenp withkey partcipant before the metig? . Hoeen adept ciitator been chon? * Ar you atfied tht thefacilta is capableof handi conflictin open,consmudve way? * Doyou find te socalsen dataon th feted peopleequally rerlable? V.1kw-up * Areyou atsiedwih pla for fedk to th comndty dubgth IA proce? * Asthe A ODrquirs, isthe r cotdof people inerviwed, iv to allpubli metings,ad of thos wh alsdeld? * For te edoootheSDakafndr otheseof IAteAam,havyuedertem's ric for obting oomunity involvement aN whatyour tm lend o yourpI workon ths ne ad difficultpr ? 198

25. In the urban areas of many ank membercounries, such as India, Thailand, and Eastern Europe, the print and electronicmedia are importantin providingeffective informationand influencingopinion. Even in rural areas of many developingcountries, people have access to radios. The EA team should use whatever media are available. The team and the implementingagency can, in many cases, form worldng relationshipswith the media throughoutthe EA process.

26. Althoughthe extent of consultationshould be commensuratewith the expecteddegree of impacts of a project on different communities,it should be initiatedno later than the end of the identification phase. For a major infrastructureproject, for example, there needs to be intensive consultationwith communitieswhich may be affectedby resetdlement- particularlyhow to avoid or minimizethe necessity for relocation. The Operational Directive on Involuntary Resettlement" (OD 4.30, June 1990) specificallyreminds TMs that moving the dam or lowering its height may be essential in this regard. After consultationwith the affectedpeople, where relocation has been determinedto be necessary and is fly justified, their views should also be sought on how to minimizethe numbersof people affected, how to carry out the resetdement, and how to prevent, mitigate or compensatefor impacts.

27. A primary objectiveof consultationwith a communityis to encouragepeople to air all issues and concerns. To this end, the challenge is to provide means that are congruent with local cultures and customsand that provide safe and comfortablesettings for them to voice the issues as they see them. If the sociologistsor anthropologistsattached to a multi-disciplinaryteam are expatriates, the team will need membersfrom the countrywho are very familiar with the people and languageof the affectedarea. In many cultures, women specificallywill be needed to talk with the women involved.

28. Selectingteam members in this way, who speak the languageand are culturally acceptableto the communitiesis crucial to the project's success. Advice on recruitmentcan be soughtfrom local staff of developmentagencies or from NGOs with long experiencein the area. The recruits may be researchers from collegesand universities,staff of local NGOs, or social workers or extensionworkers with ties both to governmentministries and to the coMMUnities.

29. Explorationat the communitylevel shouldnot be rushed. The TM shouldbe involved at varous stages, includingthe early step when the official and informalleadership of the communities- all the key figures in the authoritystructure - are briefed on the project and invited to participateand express their views (see para 39). Ihe sociologicalmembers of the EA team should live in the area while gathering infirmation. Often, this is the only way to achieverdiable consultation.

30. Large meetings are sometimesinappropriate forums for public consultationat the community level. A number of small meetingsand some individualinterviews could be more usefil, although it is impotant to avoidthe appeaance of "divideand conquer." All communitieshave social groups through which they normallyorganize activities, such s work groups, savings societies,schools or cooperatives, or small enterprisegroups. Groupsthat primarilyinvolve womenshould be soughtout. Religiousgroups may also provide useful forums. The structure of the small meetingswill vary accordingto country and cultre; but in general, nw orgtio fom with which people are unfamiliar(e.g., commite) shouldbe avoided in preferencefor existingsocial groups within which people feel comfortable. 31. -Moefaty ie vandti wfM lo whomay be affectedis the iabity of may either io Megm l «(1 3,5-'e"I''xft,)2 tsom v5|firomm &L6}3¢ whatit iS,@or to envisagerealistically what their real De$& ~,n'] '7,,`hzxe $ibFi,ga-Vhic ilnu's=Uons &hMud be used to daff i~ ~ s (, &&sowing villagesand the project are generallybetter under aoe. cantwcm be us in presentingthis sort of information.Posters, illuswI =!X3me" MMOV OUl12 e proved effecdeti in literate communities;they can be diSn&,tL ts ,c4-r com.!`,F-UmOyKKuk.b)n s clinics,cooperatives and other centes of community

D3;&9 UFVffi c'haaja ex mples,cost ad benefitsare functionsof the social I,w cab d-v~"k~ o the people ed(-f aand Sammy 1988). Clearly,it is importantforthe EA .+itq wA=mi -'ov-. ocid ! values. he procedureused tolea theviews of tie i bez>Ldavdoy7Wf; wAin thao.contet in order for the resultingdata to reflect them

33e it;n rkIff.".ad p o I,p acpi I Iy the poor,often requires additional expenditures. The costs inclllueXdav maDbsirme for atte-ndaceat meeng, translations,expert advice the communityneeds to lhes; e, .£ 71g 9 Iropons@tothe pmp1a f,etc.Such costs shouldbe systically budgeted. Thn,EA',t 'raind th,t Lqsuca in fu communitiesare communicateo the other par2dd An* A rA in indin vaious publicagencies and NGOsthat maybe involvedin the ISe 2 f4uq ji mM spiEmgz 37)3.

.M. 'M1!3t , prep.da,the pplpe i tlheaffectedarea should be kept informed outinelyand $11>~hR0tg=tWI1n, Mint. 1 into local languages.Where manyare unableto read, M-9Aft cLuwX.-'a, Fa2d vluj prmeadontoseaMions (often, by the residentsocial promoters or faciitators) &WOMM-WU. ISoS*3baged=%uunte

3$. SLic,&A res eeM,man a d'.ed by the project,the Bank's operationaldirective on invovo' ? f;229.mmt ( .30 . em requires extensivean long-terminvesteat of e-ran y bath the Dolt va te govemamt. The Bank'sSociological Advisor (AGR) is a

35. Tlbvsaglr5Ti@i dhnquev3! a N"tt9B iin Table 7.3 providebasic informationuseful for both the -c3=wai -"Ap.--,V^d-~enXlo. yds$edPoeadfor the broaderpublic consultation in the EA proces 6!1+gr>em5 qvotioa to do withthe nationalsetting for an EAprocess. 200

Table 73. Othw Basic Facts Needed

(a) What are the country's national and regional' laws regarding the environment and public participation? From both a legal and public administrationviewpoint, how will current governmentorganization and legislativeauthority affect the EA and its public participationaspects?

(b) How decentralizedis the country's public administrationand how will this affect the EA process?

(d) How do governmentministries communicatewith villagers in rural areas and with the urban poor?

(e) How are the interests of traditional social structures (e.g., tribal) communicatedand taken into accountin the administrationof programs?

(f) What role do political parties play?

(g) How effective are the print and electronic media likely to be in informing the public about the project?

ph) What is the capacityof governmentor party structuresto participatein the EA process?

(i) What is the relevant experience and technical capacity of the government agency that will be involved in the consultationprocess?

=U)' What national and internationalNGOs in the country are involved with environmentalissues and/or environmentaladvocacy? Have they had any direct experience with the people in the affected area? What are the technical capacitiesof the NGOs that are likely to be involved in the EA? What is the current state of government/NGOrelations in the country?

37. The Bank's RegionalEnvironmental Divisions (REDs), supported by the EnviromnentDepartment (ENV), and by the office of the SociologicalAdvisor (AGR), may be able to provide informationabout the current governmentorganization and legislativeauthority and how they may affect environmentalreview and its public consultationaspect. These units may also know of work that has already been done with NGOs active on environmentalissues. The country officer and resident representativeoften are familiar with others. The Bank's InternationalEconomic RelationsDivision of the External Affairs Depatment (EXTIE) has overall responsibilityfor the Bank's relations with NGOs and maintains a library of NGO directories, and a databaseon NGOs around the world. 201

38. Some resident missionsof the United Nations DevelopmentProgramme (UNDP) collect information on NGOs. The goverwnent, NGO coalitions(national, international and regional), and other UN agencies and bilateral agenciesare also sources of informationon NGOs and communitygroups. Aid agencies such as the United Nations Children's Fund (UNICEF), the InternationalLabour Organization (ILO) and the InternationalFund for AgriculturalDevelopment (IFAD), whose programsbring them into frequent contact with villagers are useful sources for both informationand counsel.

39. Public participationshould be as systematicas possible. Experience shows that participation between identificationand final EA decreases tension and grievanceslater. A firm schedule, linked to the project cycle, is necessary (Table 7.4). Five key participationevents in the EA process have been found to be useful in many projects: informationsharing before identificationends; the scopingsession as the EA process begins; public commentson the draft backgroundEA studies; a comprehensiveout- reach process to obtain comments(written and oral) on the draft EA itself (both on its adequacyand on the project design); and hearings and commentsto be includedin the final EA. The resultsof such public participationshould be routinelytransmitted to the Bank. TMs shouldattend enoughkey eventsto ensure that the process has been reliably followed, and to become familiar with the contents of the EA, so as not to be faced with evaluatingvoluminous final EA reports in a rush just before appraisal.

40. The early interagency meeting recommendedin the EA OD should normally be held in the affected community,but some meetingsmay be arranged in the capital city where the relevant ministries are located. In such cases, there shouldbe later meetingsin provincial centers and towns in the affected area. About five general public meetingsduring the EA process have been found to be effectivein many cases. These are usefully synchronizedwith the five key eventsnoted above. Some detailsof the process of consultationin affected communitiesare outlinedin Annex 7-1.

41. Financial and institutionalsupport shouldbe provided for in the EA budget in order to facilitate the process. Public participationneeds resources if it is to be meaningful,and shoud be budgeted for in advance. In some cases, the proponenthas successfullyset up a modest fund for such purposes. For example, in Canada, 'intervenor costs" are mandatedby federallegislation and paid by proponents. Most countries are less formal in this regard. Grievanceresolution mechanismsshould be built in from the start, and not added when the first grievance occurs. Proponents are responsible for facilitating due process - which of course varies from country to country. The right to appeal to an impartialthird party should be available.

42. The consultationprocess shouldremain open throughoutproject preparation and implementation. It should include continuedfeedback to those consulted, with particular attention to discussingchoices and tentativeconclusions of studies and EA drafts, explaininghow they are being incorporatedinto project feasibility design and implementationplans. The first six months or so after IEPS is the best time for communityinputs. Any "no-go" conclusionsfrom the EA team need to be communicatedas early as possible, and certainly no later than three monthsor so after EA begins. The next year or more, until the completionof the EA and feasibilitystudy, is mainlyfor the necessarystudies, mitigatorydesigns and iterative checkingthat public views have indeed been accommodated.Individuals and groups who have involved themselvesin the EA need to see that they are being heard, that their participationis ma-ing a difference. Generally,feedback to those consultedis best accomplishedby systematicdistribution of 202

Table 7.4. Timing of Project Cydes wth C&r%mm-,Ay

Anoroximate Bank's ProjectCYcler Duration Brrower'sPr - e yClie

3 Master Plans Sectoral ln tEvnr,Y Pla

Identification 0.5 Diasernnaiq Od$ m EA Categorization sat-ffe.K,: xi

Prepaation 2-3 Pre-feasibility epSing Feaibility stu y bbegkns Ceeezn of a d'i EA study begs

EA study ends dffifi,raz UUd% DraftEA -E.

Pre-Appraisal 0.1 Feasibilitystudy conipk o "u linalr EAstudy complcto sn EA ztudiy,3,

Appraisal 0.2 kP,Sis aBt - c

pomqih. affcw Imnplementation 5 Construction Czymmcn-hyu L n LE4A§2c,r k

Operation 30 oparation -a

Completion - Soon 0.2 Project conlpktiofE after last disbursement Reort iiPCR) vv dux;->"fs

the list of background studies and then their drafs, andthe f F. dr. I

planningand designprocess may provide mechanismsfor ongoin oo2 ltaJfon ( c X S- review committeethat includeslocal NGOs and communityretrosetoiven). 1Kvo ' , 203 local NGOs in some countries is to intermediatebetween the proponentsand the affected communities. In other countries, the NGOs shouldbe consultedfor their specialknowledge such as expertisein social organization, indigenoustechnology etc. The Bank resident mission should be involved in continuing discussions.

43. Over time, project EAs should help to develop a network of institutions, governmental and nongovernmental,that can interact with increasingease and effectivenessto raise and resolve environmental issues and facilitate consultationwith affected communities. For example, the Bank maintains country lists of experienceswith communityinvolvement in previous projects to increase government awareness and encourage other communitiesto participate (especially the office of the Sociological Advisor; see also Cernea 1988, 1991). UNDP intends to provide technical assistanceto help develop such networks. Just as project EAs should generate and be supported by sectoral EAs and national enviromnental plans, the public consultation process for individual projects should encourage the developmentof institutionsto maintainpublic consultationroutinely and on a wideningscale.

MAXIMS AND CAVEATS

44. There is danger in applying this policy so zealouslythat conflict is created where none existed before, or in assumingthat the authoritariannature of a given country makes it impossibleto listen to certain groups or to adopt an open process.

45. TMs shouldbe aware that if communityparticipation was not part of the earliest conceptualization and design phase of a project, the EA will be more difficult. It is one thing to ask people to comment on the environmentaleffects of a proposed large infrastructureproject; it is quite another to ask if they think there should be such a project in the first place. The less participatory the governmentof the country involved, the less likely it will be that the public has been consulted early and, therefore, the greater will be the importanceof consultationsduring the EA. Conversely, the more participatorythe country, the more likely it will be that the press and public are aware of plans for the project, and the easier it will be to maintain open participationand communicationthroughout the EA process.

46. However useful the input of national and internationalNGOs may be - and indeed, of various public and private voices in a country's capital -- none of these should substitutefor time and effort in elicitingthe fully informed views of people in the areas affected and integratingthese views into project design.

47. Some NGOs in the industrial countrieshave strong ties to local NGOs, and may be effective as outside advocatesfor the poor, and for people who cannot speak freely within their own countries. However, some actions by internationalNGOs may not be beneficialto local NGOs; governmentsmay hold the local NGOs accountable, and penalize them, for views expressed by their international colleagues. Althoughsome NGOs take a negativeview of the Bank, TMs will find that many NGOs are neither negative nor positive. Most have never been asked to comment on a proposed development project. 204

48. Inteatnal NGOswith projects in the countryalso can be usefil sourcesof informationand advice. Envimt NGOsIn industrialcountries should be respectfiUllyheard. In addition,they may be utilized n preparingEAs and in monitoringproject. The Bankoperational directive on NGOsstates tat "staffshould be responsive,and encouragegoverments to be responsive,to NGOsthat requat informationor raise questionsabout Bank-supported activities...." 49. In somecountries, NGOs are goingto involvethemselves in EAs whetheror not theyhave been invitedto participate.TMs are advisedto take an inclusive,open stance and establish good relationships with all who expre interost. It shouldbe kept in mind that the Bankhas declaredthe doors of its headquarts and its residentmissions open to NGOs. "Wehope new partnersfor development,new alliesagainst poverty, will cometo see us.... The Bankand NGOsmust work together. "2/ 50. Duringthe EAproces, proponentsshould not in the interimundertake any majoraction which couldprejudice the ultimatedecision of the EA or the feasibilitystudy.

2J Moon A. Qureshi,Senior Vice Presidentfor Operations,"The World Bank and NGOs:New Approaches,"(Speech, 22 April 1988). 205

References

CommunityInvolvement and the Role of Nongovenmental OrganizationsIn EnvironmentalAssessment

Bamberger,M. 1986. "Role of CommunityParticipation in DevelopmentPlaning and Project Management." EconomicDevelopment Institute Policy Seminar Report 13. World Bank, Washington,D.C.

Briscoe,J., and D. de Ferranti. 1988. Water for Rural Comnunities:Helnij Peopleto Help Ibemselves. Washington,D.C: WorldBank. Brown, L. D., and D. C. Korten. 1989. 'UnderstandingVoluntary Organizations: Guidelines for Donors." Policy, Planningand ResearchWorking Paper 258. PublicSector Management and PrivateSector Development. World Bank, Washington, D.C.

Cernea, M. M. 1983. SocialMethodology for CommuniuqParticipation in LocalI smt: The Experienceof Mexico'sPIDER Program. WorldBank Staff Working Pa 598. Washington, D.C.: WorldBank. Chauhan,S. K., and Z. Bihua. 1983. WhoPuts WaterIn the Ins? Community in ITird WorldDevf&ment of Water. Washington,D.C.: IED.

Esman, J., and N. T. Uphoff. 1984. Local Organizations- Intetmediariesin Rural Deveopment Ithaca,New York: CornellUniversity Press. Qureshi,M. A. 1988. "The WorldBank and NGOs:New Approaches."Speeh to the Societyfor Intrnational Development.Washington, D.C.

Salmen,L. F., and A. P. Eaves. 1989. WorldBank Work with Non. Washington,D.C.: WorldBank.

WorldBank. 1989. "EnvironmentalAssessment." Operational Directive 4.00, AnnexA. WorldBank, Washington,D.C.

1989. "InvolvingNongovernmental Organizations in Bank-SupportedActivities." Operaonal Directive14.70. WorldBank, Washington, D.C.

. 1989. Sub-SaharanAfrica: From Crisis to SustainableGrowth. WorldBank, Wahington, D.C.

The PublieConsultation Plroces Ahmad,J. J., and 0. K. Sammy. 1988. PublicInvolveent: GuIdelhmeto nvrnmentl mp Au=manUn1fing Countie. London:Hodder and Stoughton. 206

Cernea, M. M. 1985. Putting People First: SociologicalVariables in Rural Development. New York: Oxford University Press.

1988. Involuntarv Resettlementin DevelopmentProlcts: Policy Guidelines in World Bank- Financed Projects. World Bank TechnicalPaper 80. Washington, D.C.: World Bank.

Clark, B. D. 1989. Public Particinationand AwarenessRaising. Scotland:Aberdeen University, Centre for EnvironmentalManagement and Planning.

Driver, C. A. 1990. People's Participationin EnvironmentalProjects in DevelopingCountries. London: IIED.

Manring, N., West, P. C. and Bidol, P. 1990. 'Social Impact Assessment and Environmental Conflict Management:Potential for Integrationand Application." EIA Review 10:253-265.

Federal AssessmentReview Office. 1990. Manualon PublicInvolvement in EnvironmentalAssessment: Planning and ImnlementingPublic InvolvementProram. 3 Volumes. Quebec, Canada.

Hance, B. J., Chess, C., and Sandman,P. M. 1989. Improving Dialog with Communities: A Short Guide for Government Risk Communications. Trenton, New Jersey: Department of EnvironmentalProtection.

Kamagusha, B. B. N. 1990. "LocalParticipation in EnvironmentalAssessments in Africa." Africa TechnicalDepartment, EnvironmentDivision, TechnicalNote 10. World Bank, Washington, D.C.

Mazmanian, D.A., and Nieneber, J. Can OrganizationsChange? EnvironmentalProtection, Citi,ze Participationand CorMsof Engineers. Washington,D.C.: BrookingsInstitution.

Nagle, W. J., and S. Ghose. 1990. 'Community Participationin World Bank SupportedProjects." StrategicPlanning and ReviewDepartnent DiscussionPaper 8. World Bank, Washington,D.C.

Paul, S. 1987. CommunityParticipation in DevelogmentProjects: 'Me World Bank Experience. World Bank DiscussionPaper 6. Washington,D.C.: World Bank.

World Bank. 1990. "InvoluntaryResetflement." Operational Directive 4.30. World Bank, Washington, D.C.

1990. The World Bank and Popular Participatio. World Bank, Washington,D.C.

Public Consultation In the Environmental Assesment Process

Ahmad, J. J., and G. K. Sammy. 1988. Public Involvement: Guidelinesto EnvironmentalImpc Assessmentin Develo2ingCountries. London: Hodder and Stoughton. 207

Beanhands,G. 1988. Scoping Methods and Baseline Studies in EIA. Environmentl lmact Asement: lheor and Practic. P. Wathern,ed. London:Unwin Hyman. Berger,T. R. 1977. NorthernHomeland: The Reportof the MacrenzieValley PiDeine. 2 Volumes. Ottawa:Ministry of Supplyand Services.

Bramble,B. 1981. ScopingGuidance.' U.S. Councilof Enviro lQuality. Wahinton, D.C. Fisher, R., and W. Ury. 1983. Gettingto Yes: NegotiatingAgreemen Without Givin In. The HarvardNegotiation Project. Cambridge,Massachuset: Penguin Book.

Nakashima,D. J. 1990. Aimlicationof NativeKnowledge in EIA:InuiPt. Eiden and HudsonBay Oil. Quebec,Canada.

Salmen, L. F. 1987. Listen to the Peonle. New York: Oxford UniversityPress.

Cenral Reading

Attir, M. O., B. Holzna, and S. Zdenek,eds. 1981. Directiomof Cn": hM Idglbeory Research.and Realities. Boulder,Colorado: Westview Press. Berger, I. J. 1988. EnvironmentalRestoration* Scien and Stagis for the Earth, Berkdely,California: University of California.

Bregha,T., and others. 1990. ITe Integrationof EnvironmentlConcerns into Policy. Quebec,Canada. Cernea,M. M. 1991. UsingKnowledp fromSocial Science in Devomehn Proje. WorldBak DiscussionPaper 114. Washington,D.C.: WorldBank. Elli, D. 1989. Enviromentxat Risk: CaseCountries of Im=actAssesment. New York:Springer PublishingCompany.

Word Bank. 1985. SuoldBnabilnkof Pashngt: First Review Bac Wao op,Wodd D.C. 208

ANNEX 7-1

Public Consultation in the Environmental Assessment Process

1 In the literature and practice of EAs, the term 'scoping" is used worldwideto describe a quick and cost efficient way to identify the range and magnitude of enviromnentaltopics that need to be addressed in the EA. The main aim of scoping is to agree upon the issues and alternativesthat will be examinedin detail and, simultaneously,those that will receive less time and attention. The expectation that scoping will be open to the public has becomean importantpart of the term's definition. The EA OD suggests that an initial interagencymeeting be expanded into a 'forum' or 'scoping session' with representativesof affectedgroups and relevant NGOs. If the basic facts have been gathered,the EA team will know whom to invite to this session.

2. The "right-to-know"of any communitythat may be affected by a project should be respected. The overall objective of the proposed project is the first item to be clearly stated. For example, the projected national electricitydemand will exceed supplyin six years time, and measureshave been taken to reduce demand. The objective of the project is to help meet that demand. Coal, gas, nuclear and hydro are alternatives. The governmenthas concludedthat hydro is the least environmentallyand financiallycostly, and that the next hydro site is somewhereon river X, but neither the site nor the dam height have been ascertained. The feasibilitystudy and the EA are designedto determine the dam site, height etc. in consultationwith the people.

3. People likely to be affected also need informationon the project cycle (Table 74), on the decision-makingprocess, and on national and other laws. They need to know how and when they may intervene, and how they can influence the project cycle. Everyone invited - whether government officials, conununityrepresentatives, affected people or local NGOs - should all receive the same basic informationabout the project. This has to be receivedwell in advance(30 days or so) in order to be able to participate effectively. Because the project has only just been identified, such informationmay be scanty. However, this is greatly preferableto providingfinal designs too far advancedto be influenced by the people who will be affectedby them. Normally, a team memberwill hold individualconversations with many key participantsbefore the first session, to brief them on the process and to get a preliminary idea of their views.

4. It is not always easy to share whatevr information is available. Publication in the Federal Gazette or equivalent, while mandatory, is inadequate. Some projects have found that widely disseminating a detailed poster for all schools, clinics, post offices, community centers, religious buildings, shops, bus stops, utility poles, cooperatives,etc. is effective. Ibis is often usefully reinforced with an invitationletter providingdetails of the scopingmeeting schedulesand asking if the recipient is concerned, and if not, requestingthat the letter and poster be passed along to all interestedparties, and stating that additionalcopies of letter and poster will be provided free. Normally, the social participation specialistsof the EA team will hold individualconversations with many key participantsbefore the first sessionto brief them on the process and to get a preliminaryidea of their views. The usefulnessof scale models and videos has been stressed. 209

5. Properlyconducted, such public meetings help to lay a firm foundationof openness,agreemeat and trustfor all the deliberationsthat follow. The meetingsare crucialto buildingpublic confidence in a fair environmentalanalysis and ultimately,in a fair decision-makingprocess. The designof a new projectalways involves much uncertainty. Excessive secrecy makes people fear the worst;openneu and admissionof uncertaintyengenders cooperation. Publicconsultation and the whole scopingexercise shouldbe a continuousprocess in whichnew issues are allowedto emergeand insignificantones are set aside. The wholeprocess usually involves a seriesof meetings,including discussions with small groups, personalinterviews and writtencomments from interestedparties. With publicparticipation, the main lessonlearned is that the meaningfulnessof the exerciseis proportionalto the scope for influencing decisionswhich may affectthe participants.The affectedpeople cannot discuss specific site issues in the absenceof details. Theunderlying theme is participatorydecision-making. Participation in EA design, ranking of alternatives,(including the "no-go" option), and the selectionof studiesare ways of accomplishingthis underlyingobjective.

6. The scopingsession itself should be designedwith respect to localcustoms, procedures, etc. As practicedin industrialcountries, the sessionis usuallychaired by an impartialhearing officer whose role it is to solicit viewsand transmitthem fran!dy. The chair sets the ground rules and promotescivic responsibilities. The jeopardy of degeneratinginto a public relations exerciseshould be avoided. Eveningand weekendmeetings are needed,in additionto weekdaymeetings, if comprehensivenessis to be achieved.Sign up sheetsare usefuland transcriptsessential. A preliminarylist of issuesis normally extractedfrom the transcriptsand then consolidatedand prioritized. Scopingshould be providedfor writtencomments. The scopingsession can includequestions, clarifications and statements,as well as objections. The main purposeof the scopingsession is to obtainfeedback. Whileproject proponeat agenciesshould attend and respondif necessary,they shouldnot be majorplayers. Proponentsshould avoidpropagandizing, and shouldnever disputewith contenders. The communityis the majorplayer. It shouldbe encouragedto dialogamongst itself, to hear whatcommunity members have to say. The sessionis less for informationand more to recordviews. Whileconsensus is not the main objective,a workingrelationship should start to be created at this stage, and some steps achievedtowards a convergenceof views. 7. It is importantto the successof the EA processthat fromthe beginningpublic consultation be conductedsystematically and accordingto soundprinciples of research. The leadersof the EA process shouldbe able to say to all the peopleinvolved (other government agencies, the affectedcommunity, municipalgovernment, NGOs, tribal peoples, etc.) thatthe dataprovided is reliablefor makinginformed decisions.If non-Bankresearchers provide the dataand analysis,the TM mustdetermine whether they warrantBank approval. 8. The socialscience elements of an EA processmust be similarlyrigorous and credible. For example,interviews should be conductedwith representative samples of keypopulation groups of the area of concern,and the samplesize should be large enoughto be consideredsignificant by decision-makers. In this way, socialscience assists the EA teamto understandthe peopleto be affectedby the process: i.e., their community,how differentiated the communityis, wherethe authoritystructures and formal and informalleadership lie, and withwhom communication should occur. Culturalaspects of the EA process must also be examined. The role of womenin a communitydeserves special attention, as does the presenceof any minorities,including indigenous or tribalethnicities. 210

9. The EA OD mandates public consultationsoon after a decision is made at the IEPS stage to prepare an EA. Communityrepresentatives and NGOs may be invited to an initial interagencymeeting to help identify issues, types of analysisrequired, sources of relevant expertise, responsibilitiesand the schedule for the EA. The meeting can identify other governmentalor nongovernmentalagencies that shouldbe invited to help designthe EA consultativeprocess. People may feel alienatedand deceived if important decisions already have been made before consultationis initiated, and it will be much more difficultto achievemeaningful and constructivepublic involvementonce negativeinteractions have begun. Although, in some cases, a coherentpicture of the project and the environmentalissues it poses can be presented at the initial meeting, in many others the project will not yet be fully defined. Areas of uncertaintyshould be acknowledgedopenly.

10. The literatureon public participationlisted at the end of this chapter describesthe facilitatorskills necessaryfor successfulpublic meetings. The person chosen to run public meetingsfor the EA should possess those skills and might well be from the permittingor licensingagency or another nationalagency (other than the project agency itself), or from a university or other institutionoutside the government. Generally, the facilitator should be guided by the rules for any good meeting: for example, creating an open atmosphere.

11. One variant found useful on occasion is the mobile commissionor hearing panel. This panel of impartial experienced citizens travels throughout the project region to obtain views. In one very successfulcase, the panel consistedof a single well-respectedindividual, who spent a couple of days in a hundred or so villages (Berger 1977).

12. Other suggestionsare more specificto the EA process. For example, the goal of initialmeetings should be to ensure that there will be a thoroughEA in the course of an environmentalreview process. The first part of an initial meeting shouldbe devoted to a discussionof the project in general, covering its purpose, funding, proposed location and any other aspects that can be presented orally with the aid of maps and other visual aids. The EA process, the mechanismswhereby community views will be taken into accountin decision-making,and the avenuesthat exist for appealsby those who feel their views have not been adequatelyattended to should also be explained. A question-and-answerperiod should follow. Then the meeting can break into small discussiongroups. (Always, constraintsof the culture [paras 13- 171 shouldbe honored.)

13. The object of the initial meeting is not to resolve issues but to ensure that major issues surface early so that they can be addressedin the course of the EA process. The task of each small group is to discuss the project and prepare a list of what its members feel are the issues of significance to the communitiesinvolved. An agency official or a member of the EA team may join each group, as a resource person, to listen to participants' concerns and to answer questions. Groups may choose their own discussionleaders or they may be pre-selected,provided they are not proponents. A projectofficial might be perceived as unduly influencingthe opinions of the others.

14. It is often useful in both the small group discussions and in the plenary meetings to have the issues recordedon a large pad or b:ackboard. Thus, all can see that the views expressedhave been heard and understood. Specialefforts always shouldbe made to includethe illiterate and reticent elements of the society, especially if they are numerous. The group may be asked to discuss the relative merits and 211 importance of each listed item and assign priority to them; discussiongroups then return to the large meetingto report on the results of their ranking. In other situations,the sole purpose of the first meeting may be to make sure that all concerns are noted.

15. After the meeting the EA team must evaluate commentsfrom the cooperatingagencies and the affected community,and decide which ones to pursue further. However, every issue someonenames as a priority during general meetings or in communityconsultations should be addressed in some manner in the EA: by an in-depth analysis, or by a justificationof why the issue was consideredbut not explored further.

16. The meeting facilitatoror hearing officer shouldbe prepared to handle the conflictwhich nearly always will be present to some degree. Conflictoften revolves around power: who has it, who wants it, and who needs even a little of it in order to participate in an EA process with those who alreadyhave it. People will naturally have different views about their own interests and what they perceive to be the interests of their community. Conflictarises, for example, when one group believesthat the net benefit of a project comes at its expense while another gains. Some will see themselvesas "losers," others as "winners."

17. It is the task of the meeting facilitatornot to avoid conflict, nor cover it up, nor minimizeit, but rather to articulateclearly the varyingpositions and interests- to bring them out into the open. A useful, positivefunction of conflict is as a safety valve wbere the interests of different groups are in opposition. It is usually mismanagedconflict that becomes a destructive force. Behind every violent protest is a group which feels that its views are being suppressed and ignored. The main purpose of the first EA meeting is to ensure that participantshave a chanceto express their views.

18. A helpful reference for the EA process is Fisher and Ury's book, Getting to Yes: Negotiating Agreement Without Giving In. The authors usefully distinguish between "positions"and 'interests". Positions are people's prepared answers; interests are the reasons people take particular positions. Frequently, during conflict, many people express their differences with positions that are mutually exclusive. Fisher and Ury, and now others in the field, urge the facilitator/negotiatorto focus on interests, to keep asking the question, "Why?" EA professionalsspecializing in consultationswith affected communitiesmay want to participate in Fisher/Ury or other negotiationtraining beforehand.

19. During the discussion phase, differences in perception, feelings of frustration and anger and difficultiesin communicationare expectedand shouldbe acknowledgedand addressed. Each side should come to understand the interests of the other. Both can then generate options that are mutually advantageousand can begin to seek objective standards for resolving opposed interests. If EA leaders clearly understandthe interests (as distinct from the positions)of the opposingsides, they can enlist the advice of technicalexperts to propose approachesthat address the differencesand possiblyresolve them.

ABBREVIATIONS/ACRONYMS

ADB African DevelopmentBank (see AfDB) and Asian DevelopmentBank (see AsDB) AfDB African DevelopmentBank (see ADB) AGR SociologicalAdvisor AID (United States) Agency for InternationalDeveopment (see USAID) AsDB Asian DevelopmentBank (see ADB) ASEAN Associationof SoutheastAsian Nations BOD BiochemicalOxygen Demand BOD, BiochemicalOxygen Demand Over Five Days BTO Back-To-OfficeReport C Carbon °C (Centigrade)Celsius CBA Cost-BenefitAnalysis CD Country Department CECC Credit ExtensionCoordinating Committee CFC Chlorofluorocarbons CGIAR ConsultativeGroup on InternationalAgricultural Research CH4 Methane CIDA CanadianInternational Development Agency CrES (UN) Conventionon InternationalTrade In Wild Flora ad FP a C0 2 Carbon Dioxide COD ChemicalOxygen Demand Country OperationsDivision CSP Country Strategy Paper DANIDA Danish InternationalDevelopment Agency DCCI DevelopmentCommission for Cement Industry (Ini) DFI DevelopmentFinance Institution DMG Drylands ManagementGuidelines DNA DeoxyribonucleicAcid EA EnvironmentalAssessment EAR EnvironmentalAssessment Report EA OD EnvironmentalAssessment Operational Directive EAPs EnvironmentalAction Plans EBRD European Bank for Reconstructionand Development EC European Communities ECU European currency unit EDF European DevelopmentFund EDI EconomicDevelopment Institute of the World Bank EDP Environmentally-adjustedNet Domestic Product EEC European Economic Community EIB European InvestmentBank 214

EPA (United States)Environmental Protection Agency (see USEPA) EPD EnvironmentalProtection Department EPS Executive Project Summary ERL EmergencyRecovery Loan EmergencyReconstruction Loan ER EnvironmentalReview ERR EconomicRate of Return ESCAP Economic and Social Commissionfor Asia and the Pacific ESMAP Energy Sector ManagementAssistance Program EXTIE InternationalEconomic Relations Division of the External Affairs Department FAO Food and AgriculturalOrganization of the United Nations FEPA (Nigerian)Federal EnviromnentalProtection Agency FEPS Final ExecutiveProject Summary Fl Financial Intermediary FIL Financial IntermediaryLoan FINNIDA Finnish Departmentof InternationalDevelopment Cooperation FMWH Federal Ministryof Works and Housing FY Fiscal Year GATIT (UN) General Agreementon Tariffs and Trade GDP Gross DomesticProduct GEF Global EnvironmentFacility GNP Gross NationalProduct GOI Goverment of India GOR Goverment of Rwanda GTZ Germar, Agencyfor TechnicalCooperation ha hectare HABITAT United Nations Centre for Human Settlements IADB Inter-AmericanDevelopment Bank IBRD InternationalBank for Reconstructionand Development ICICI Industrial Credit and InvestmentCorporation of India Limited ICCROM InternationalCentre for the Studyof the Preservationand the Restoration of Cultural Property ICOMOS InternationalCommittee of Monumentsand Sites IDA InternationalDevelopment Association IDB Inter-AmericanDevelopment Bank IDBI Industrial DevelopmentBank of India IEPS Initial ExecutiveProject Summary IFAD (UN) InternationalFund for AgriculturalDevelopment IFC InternationalFinance Corporationof the World Bank IIED InternationalInstitute for EconomicDevelopment ILO (UN) InternationalLabour Organization IMF InternationalMonetary Fund IPCC IntergovernmentalPanel on ClimateChange IPM IntegratedPest Management IRR Internal Rate of Return llTO InternationalTropical Timber Organization 215

IUCN InternationalUnion for Conservationof Nature and Natural Resources ]km kilometer kma2 square kilometer mm millimeter MIGA MultilateralInvestment Guarantee Agency of the World Bank Miniplan Ministryof Plan MOE Ministryof EnvironmentalProtection MOP Memorandumof the President MOS MonthlyOperational Summary NEAP NationalEnvironmental Action Plan NEC National EnvironmentCommission NGO NongovermmentalOrganization NORAD NorwegianAgency for InternationalDevelopment NO. Oxides of Nitrogen NPV Net Present Value N2 0 Nitrous Oxide 0,. 02, 3 Oxygen OD OperationalDirective ODA OverseasDevelopment Administration (United Kingdom) OECD Organizationfor Economic Cooperationand Development OED OperationsEvaluation Department O/G Oil and Grease OMS OperationalManual Statement OPN OperationsPolicy Note OPNSV Senior Vice President, Operations PCR Project CompletionReport pH measurementof acidity and alkalinity(on log. scale 0-14, 7 = neutral, S 7 = increasingacidity, 2 7 = increasingalkalinity) PB Project Brief PEPA Pakistan EnvironmentalProtection Agency PIDs ProvincialIrrigation Departnents PI/ER Public Investment/ExpenditureReview PIP Public InvestmentProgram PIR Project ImplementationReview POPTR Personnel OperationsDepartment, Training Division PPF Project PreparationFacility PPR Project PerformanceReport PR President's Report PRE Policy, Research, and External Affairs RED RegionalEnvironment Division ROW Right-of-Way RVP RegionalVice President SAL StructuralAdjustmnent Lending StructuralAdjustment Loan SAR Staff Appraisal Report 216

SCBA SocialCost BenefitAnalysis SDC SwissDevelopment Corporation SECAL SectorAdjustment Loan SIDA SwedishInternational Development Authority SNA Systemof NationalAccounts SOD SectorOperations Division S0 Sulfur Dioxide SPPF SpecialProject Preparation Facility SPRIE InternationalEconomic Relations Division of the Strategic PlanningDepartment TAL TechnicalAssistance Loan TFAP TropicalForest Action Plan TM Task Manager TOR Termsof Reference TSS TotalSuspended Solids UNDP UnitedNations Development Programme UNDRO UnitedNations Disaster Relief Organization UNEP UnitedNations Environment Programme UNESCO UnitedNations Educational, Scientific and CulturalOrganization UNICEF UnitedNations Children's Fund UNIDO UnitedNations Industrial Development Organization UNSO UnitedNations Statistical Office USACE UnitedStates Army Corps of Engineers USAID UnitedStates Agency for InternationalDevelopment (see AID) USEPA UnitedStates Environmental Protection Agency (see EPA) WAPDA Waterand PowerDevelopment Authority WHO WorldHealth Organization WMA WildlandsManagement Area WUAs WaterUser Associations ENVRONMENTALASSESSMENT

- A Guide To FurtherReading -

Abel, N., and M. Stocking. 1981. "The EnvironmentalAssessment Experience of Underdeveloped Countries." In Project Apraisal and Policy Review, edited by T. O'Riordan and W. R. D. Sewell. Chichester, United Kingdom:John Wiley and Sons.

1990. Environmental Risk Assessment: Dealing with Uncertainty in Environmental act Assessmen. EnvironmentPaper 7. Manila, Philippines:Office of the Environment.

Ahmad, Y.J., and G. K. Sammy. 1985. Guide to EnvironmentalInmact Assessmentin Deveping Countries. London: Hodder and Stoughton(for the United NationsEnvironment Programme).

1987. OrientacionesRara la Evaluacion del Impacto Ambiental en los Paises en Desarrollo. Nairobi, Kenya: PNUMA (also in French).

American ArbitrationAssociation. 1980. ImprovingEIS Scoping. WashingtonD.C.

Andrews, R. N. L., and others. 1977. SubstantiveGuidance for EnvironmentalInpact Assessment:An EzpIoratlorStudv. Indianapolis,Indiana: Butler University, Holcomb Research Institute and the Instituteof Ecology.

Anon, 1988. "The International Development of Environmental Impact Assessment." fU Environmentlis 8(2):143.

1988. "TransportationElements of EnvironmentalImpact Assessmentsand Reports." lnstitut of .ranrtation EngineeringJournal 58(6):69-76.

Asian DevelopmentBank. 1986. EnvironmentalGuidelines for SelectedInfrastructure Projects. 1 Volume. Manila, Philippines:Infrastructure Department, EnvironmentUnit.

Associationof SoutheastAsian Nations. 1985. Report of Workshopon the Evaluationof Environmental Imact AssessmentApplications in ASEAN countries. Bandung, Indonesia.

Ayanda, J. 0. 1988. "IncorporatingEnvironmental Impact Assessment in the Nigerian Planning Process: Need and Procedure." Third World PlanningReview 10:51-64(U.K.).

Barbier, E. B. 1990. "AlternativeApproaches to Economic-EnvironmentalInteractions." Ecology Economis 2:7-26.

. 1989. Economics. Natural Resource Scarcity and Development: Conventionaland AIternative Yiew. London: EarthscanPublications Ltd.

1988. "EconomicValuation of EnvironmentalImpacts." Project Apras 3:143-150. 218

1991. "EnvironmentalSustainability and Cost-BenefitAnalysis." Environment swing 22:1259-1266.

Barbier, E. B., A. Markandya,and D. W. Pearce. 1990. "SustainableAgricultural Development and Project Appraisal." European Reviewof Agrarian Economics 17(2): 181-196.

Barrett, B. P. D., and R. Therivel. 1990. EnvironmentalPolicy and Impact Assessmentin JaOan. London, United Kingdom:Routledge (in press).

Bartlett, R. V., ed. 1989. Policy Through Impact Assessment:Institutionalized Analysis as a Policy Stategy. New York: Greenwood.

Bauchum, R. G. 1985. Needs AssessmentMethodologies in the Developmentof Impact Statemen=s. Monticello,Illinois: Vance Bibliographies.

Becker, D.S., and J. W. Armstrong. 1988. "Developmentof RegionallyStandardized Protocols for Marine EnvironmentalStudies." Marine PollutionBulletin 19(7):310-313.

Becker, H. A., and A. L. Porter, eds. 1986. Methodsand Experiencesin Impact Assessment. Atlanta, Georgia: InternationalAssociation for Impact Assessment.

Bendix, S., and H. R. Graham, eds. 1986. EnvironmentalAssessment: Aproaching Maturit. Ann Arbor, Michigan: Ann Arbor Science.

Bregha, F. and others. The Integrationof EnvironmentalConsiderations into GovernmentPolicy. Hull, Quebec: CanadianEnvironmental Assessment Research Council.

Bisset, R. 1980. "Methodsfor EnvironmentalImpact Analysis: Recent Trends and Future Prospects." Journal of EnvironmentalManagement 11:2743.

1984. "Post DevelopmentAudits to Investigate the Accuracy of Environmental Impact Predictions." Zeitschrift fur Umweltpolitik7:463-484.

Biswas, A. K., and Qu Geping [Chu, Ko-Ping], eds. 1987. EnvironmentalImpact Assessment for DevelopingCountries. Oxford, United Kingdom:Tycooly International(for the United Nations University).

Bochniarz,Z., and A. Kassenberg. 1985. EnvironmentalProtection by Integrated Planning. Warsaw, Poland: Economic and Social Problemsof EnviromrnentalPlanning and Processing.

Bojo, J., K-G Maler, and L. Unemo. 1988. Economic Analysis of EnvironmentalConseauences of DevelopmentProjects. Stockholm,Sweden: The EconomicResearch Institute, Stockholm School of Economics.

Bowden, M-A, and F. Curtis. 1988. 'Federal EIA in Canada: EARP as an Evolving Process." EnvironmentalImpact AssessmentReview 8(1): 97-106. 219

Bowonder, B., and S. S. Arvind. 1989. 'EnvironmentalRegulations and Litigationin India." Proje Appraisal4:182-196.

Burkhardt, D. F., and W. H. Ittelson, eds. 1978. Environmental Assessmentof Socioeconomic Systems. New York: Plenum.

Cable, T. T., V. Brack, and V. R. Holmes. 1989. "Simplified Method for Wetland Habitat Assessment." EnvironmentalManagement 13:207-13.

Cairns, J., and T. V. Crawford, eds. 1991. Integrated Environmental Management. Chelsea, Michigan:Lewis Publishers.

Campbell, M. J. 1990. New Technologyand Rural Development:The Social Inmact. London, United Kingdom:Routledge.

Canter, L. W. 1977. Environental Ipact Assesmen. New York: McGraw-Hill.

1985. Environmentallmact of WaterResources Projec. Chelsea, Michigan:Lewis Publishers.

1982. The Status of EnvironmentalImpact Assessment in Developing Countries. Norman: Universityof Oklahoma, Environmentand Ground Water Institute.

Canter, L. W., and L. G. Hill. 1981. Handbook of Variables for EnvironmentalImpact Assessment. Ann Arbor, Michigan:Ann Arbor Science.

Carley, M. J., and E. 0. Derow. 1983. Social Impact Assessment:A Cross-Disci]linaryGuide to the Literaitur.Boulder, Colorado: WestviewPress.

Carley, M. J., and E. S. Bustelo. 1984. SocialImpact Assessment:A Guideto the Literature. Boulder, Colorado: Westview Press.

Carpenter, R. A., and J. E. Maragos. 1989. How to Assess EnvironmentalImpacts on Tropical Islands and Coastal Areas: A Training Manual. Honolulu, Hawaii: East-WestCenter, Environmentand Policy Institute.

Center for EnvironmentalManagement and Planning. 1986. The EEC EnvironmentalAssessment Dircive: Towards Impementation. Scotland: Aberdeen University and the United Kingdom Departmentof Environment.

Clark, B. D. and others. 1981. A Manual for the Assessmentof Major DevelopmentProposals. London, United Kingdom:HMSO.

Clark, B. D., R. Bisset, and P. Wathern. 1980. EnvironmentalImpact Assessment:A Bibliorahy wiNM Abstacts. London, United Kingdom: Mansell Publishers. 220

Clark, B. D. and others, eds. 1984. Perspectiveson Enviromental Impact Assessment. Dordrecht, The Netherlands:Riedel.

Clark, M., and J. Herrington, eds. 1988. The Role of EnvironmentalAssessment in the Planning Prcess. London, United Kingdom:Mansell Publishers.

Cohrssen, J. J., and V. T. Covello. 1989. Risk Analysis: A Guide to Principles and Methods for Analyzing Health and EnvironmentalRisks. Washington D.C.: Council on Environmental Quality.

Conway, G. 1986. AgroecosystemAnalysis for Research and Development. Bangkok, Thailand: Winrock InternationalInstitute for AgriculturalDevelopment.

Conway, G. R., ed. 1986. The Assessmentof EnvironmentalProblems. London, United Kingdom: Imperial College, Centre for EnvirownentalTechnology.

Cook, P. L. 1983. A Review of the Recent Research on the Utility of Environmental Impact Assessment.Chania, Crete: EnvironmentalImpact AssessmentSymposium.

1979. Costs of Environmental Impact Statements and the Benefits they Yield to Imrovements in Proiectsand Opportunitiesfor Public Involvement. Villach, Austria: Economic Commissionfor Europe.

Covello, V. T. and others, eds. 1985. EnvironmentalImpact Assessment and Risk Analysis: Contributionsfrom the PsychologicaIand Decision Sciences. New York: Springer Publishing Company.

Daly, H. E., and J. B. Cobb. 1989. For the Common Good: Redirecting the Economy toward Community.the Environment,and a SustainableFuture. Boston, Massachusetts:Beacon Press.

Davies, G. S., and F. G. Muller. 1983. A Handbook on Environmental Assessment for Use in Dveloping Countries. Nairobi, Kenya: UNEP.

DeJongh, P. E. 1985. EnvironmentalImpact Assessment:Methodologies. Prediction and Uncertainty. Utrecht, The Netherlands:IAIA Congress.

1985. Technical Aspects of Training in EnvironmentalImpact Assessment, with Emphasis on Ecologicl Impacts. Maastricht,The Netherlands:European Institutefor Public Administration.

Derman, W., and S. Whiteford. 1985. Social Impact Analysis and DevelopmentPlanning in the Third WWI Boulder, Colorado: WestviewPress.

Dixon, J. D. and others, eds. 1988. EconomicAnalysis of the EnvironmentalImDacts of Development . London/Manila:Earthscan Publications Ltd. and Asian DevelopmentBank. 221

Draggan, S., J. J. Cohrsson, and R. E. Morrison, eds. 1987. Envirgnental Monitoring. AssessMent and Management. New York: Praeger.

Duinker, P. N. 1989. 'Ecological Efforts Monitoringin EnvironmentalImpact Assessment:What Can It Accomplish?" EnvironmentalManazeMent 13:797-805.

Eberhardt, L. L. 1976. "QuantitativeEcology and Impact Assessment." Journal of Environmental Managemen4:27-70.

Economic Commissionfor Europe. 1990. Post-ProjectAnalysis for EnvironmentalInpact Analy. New York: United Nations.

Elkin, T. J., and P. G. R. Smith. 1988. "What is a Good EnvironmentalImpact Statement? Reviewing ScreeningReports from Canada's NationalParks." Journalof EnvironmentalManagement 26(1): 71-89.

Elking-Savatsky,P. D. 1986. Differential Social Impacts of Rural Resource Development. Boulder, Colorado: Westview Press.

Erikson, P. A. 1979. EnvironmentalImpact Assessment:Princigles and Applications. New York: AcademicPress.

Evers, F. W. R. 1986. 'Environmental Assistance and DevelopmentAssistance: The Work of the OECD." In Methods and Experiencesin ImpactAssessment, edited by H. A. Becker and A. L. Porter. Atlanta, Georgia: InternationalAssociation for Impact Assessment.

Food and Agricultural Organization. 1982. Environmental Impact Analysis and Agnrcutura Development.FAO EnvironmentPaper 2. Rome,Italy.

1982. "EnvironmentalImpact of Forestry." ConservationGuide 7:1-85.

Finsterbusch, K., J. Ingersoll, and L. G. Llewellyn. 1990. Methodsfor Social Analysis in Developing Countries. Boulder,Colorado: Westview Press.

Finsterbusch,K., and C. P. Wolfe, eds. 1977. Methodologyof SocialInmact Assessment.Stroudsberg Pennsylvania:Dowden, Hutchinsonand Ross.

Fortlage, C.A., 1990. EnvironmentalAssessment: A Practical Guide. Aldershot, United Kingdom: Gower.

Frideres, J. S., and J. E. DiSanto, eds. 1986. Issues of ImpactAssessment: DevelMen of Natr Roe=s. Atlanta, Georgia: InternationalAssociation for Impact Assessment.

Gamman, J. K., and S. T. McCreary. 1988. "Suggestionsfor Integrating EnvironmentalImpact Assessmentand Economic Developmentin the Caribbean." Environmentalm t Assessment Rgyif& 80):43-62. 222

Go, F.C. 1987. EnvironmentalImpact Assessment:An Analysisof the Methodologicaland Substantive Issues Affecting Human Health Considerations. London, United Kingdom: Monitoring and AssessmentResearch Centre/WHO/UNEP.

1988. EnvironmentalImpact Assessment: OperationalCost Benefit Analysis. London, United Kingdom: King's College, Monitoringand AssessmentResearch Center.

Golden, J. and others. 1979. EnvironmentalImpact Data Book. Ann Arbor, Michigan: Ann Arbor Science.

Gooden, P. M., and A. I. Johnstone. 1988. 'Environmental Impact Assessment: Its Potential Applicationto AppropriateTechnology in DevelopingCountries.' The Environmentalist8(1): 57-66.

Goodland,R. 1989. "The Enviromental Implicationsof Major Projects in Third World Development. In Major Projects and the Environment,edited by P. Morris. Oxford, United Kingdom: Major Projects Association.

ed. 1990. The Race to Save the Tropics. Washington,D.C.: Island Press.

Goodland,R., C. Watson, and G. Ledec. 1985. EnvironmentalManagen in Trical Agcul Boulder, Colorado: Westview Press.

Gough, J. D. 1989. Strategic Approach to the Use of EnvironmentalImpact Assessmentand Risk AssessmentWithin the Decision-MakingProcess. Center for Resource ManagementPaper 13. New Zealand: Universityof Canterbury and Lincoln College.

Gunnerson, C. G. 1989. Post-Auditsof EnvironmentalPrograms and Projects. New York: American Society of Civil Engineers.

Hall, A. L., and J. Midgley, eds. 1988. Develg=ent Policies: Sociologic Perpeciv. Manchester, United Kingdom: ManchesterUniversity Press.

Hipel, K. W. 1988. "NonsparametricApproaches to EnvironmentalImpact Assessment." Wae Resource Bulletin 24(3):487-492.

Holling, C. S., ed. 1978. Adaptive Enviromental Assessmentand Management. New York: John Wiley and Sons.

Horberry, J. A. J. 1984. 'Development Assistance and the Environment." Ph.D. Dissertation, MassachusettsInstitute of Technology. Cambridge, Massachusetts.

1987. "EnvironmentalImpact Assessmentfor Development." ATAS Bulletin4:59-60.

Horstmann, K., comp. 1985. Enviro aInact Assessment for Develdoment,ed. K. KIennert. Feldafing, Federal Republic of Germany. 223

Hufschmidt,M. M., and R. A. Carpenter. 1980. NaturalSystems Assessment and Benefit-CostAnalis for EconomicDevelopment. Honolulu, Hawaii: East-WestCenter.

Huf&chmidt,M. M. and others. 1983. Environment,Natural Systemsand Development:An Economic DevelopmentGuide. Baltimore, Maryland: The John Hopkins University.

Hunsaker, C. T. and others. 1990. "AssessingEcological Risk on a Regional Scale." Environmental Management14:325-332.

Hyman, E., and B. Stiftel. 1988. CombiningFacts and Values in EnvironmentalImpact Assessment: Theories and Techniques. Boulder, Colorado: Westview Press.

Inter-AmericanDevelopment Bank. 1990. Proceduresfor Classifyingand Evaluating Environmental Impacts of Bank Operations. Washington, D.C.

InternationalCommission for EnvironmentalAssessment. 1990. Final Report of the Working Group on an InternationalCommission for EnviromnentalAssessment. Utrecht, The Netherlands.

Janicke, M. and others. 1989. "Economic Structure and Environmental Impacts: East-West Comparisons." Environmentalist9: 171-83.

Janikowski, R., and A. Starzewska. 1986. "EnvironmentalImpact AssessmentProject in Poland." 1yi[onmenal IactWorlletter (May-June):1-4.

Khan, S. A. 1987. 'Social Impact of Agricultural Developmentin Bangladesh:A critique of the Differentiation/PolarizationThesis." Journal of Social Studies37: 15-29.

Kneese, A. V., and J. L. Sweeney, eds. 1985. Handbookof Natural Resource and Energy Economics. 2 Volumes. New York: North-Holland.

Lang, R., and A. Armour. 1980. Environmental Planning Resourcebook. Ottawa, Canada: Envirownent Canada, Lands Directorate.

Lavine, M. J. and others. 1978. "Bridgingthe Gap between Economic and EnvironmentalConcerns in EnvironmentalImpact Assessment." Evironmentalmnact AssessmentReview 2. New York: Elsevier Science PublishingCompany.

Lee, N. 1987. EnvironmentalImpact Assessment:A TrainingGuide. Departmentof Town and Country Planning Paper 18. Manchester, United Kingdom: Universityof Manchester.

1982. "The Future Development of Environmental Impact Assessment." Journal of Environmoz Management 14:71-90.

1984. Trainingfor EnvironmentalImpact Assessment. Brussels,Belgium: Economic Commission for Europe. 224

Loe, N., and C. M. Wood. 1985. "Trainingfor EnvironmentalImpact Assessment within the Economic Commissionfor Europe." Journalof EnvironmentalManagement 21:271-286. Lee, N., C. M. Wood,and V. Gazidellis. 1985. Affangementsfor Environental Impac Assemet andTheir Training Implications in the EuropeanCommunities and NorthAmerica. Departmet Departmentof Townand CountryPlanning Paper 13. Manchester,United Kingdom: University of Manchester. Loistritz,F. L., and B. L. Ekstrom. 1986. SocialImpact Assessment and Management:An Annotated Bjk1iography.New York:Garland Publishers. Leistritz,F. L., and S. H. Murdock. 1981. The SocioeconomicImpact of ResourceDevelopment. Boulder,Colorado: Westview Press. Leopold,L. B. and others. 1971. A Procedurefor EvaluatineEnvironmental Impact. U.S. Geological SurveyCircular 645. Washington,D.C. Lichfield,N. 1989. "EnvironmentalImpact Assessment in Project Appraisalin Britain." Pait ARRraisal3:133-141. Macrory,R., and M. Lafontaine. 1982. Public Enguiryand EnguetePublique. London,United Kingdom:Institute for EuropeanEnvironmental Policy. McCracken,J. A., J. N. Pretty, and G. Conway.1989. An Introductionto RapidRural Apraisa AgculturalDevelgm n. London,United Kingdom: International Institute for Environment and Development. McEvoy,J., andT. M. Dietz. 1977. Handbookfor EnvironmentalPlanning: The SocialConsequences of EnvironmentalChange. NewYork: John Wileyand Sons. Mills,J. S., and S. Diamond. 1988. "EnvironmentalImpact Statements." Enl Sc Technology22(6):618&620. Mitsch, W. J., and S. E. Jorgensen,eds. 1989. EcologicalEnaineering: An Introductiontl EcotLchnology.New York: John Wileyand Sons. Murdock,S. H. and others. 1982. "AnAssessment of Socio-EconomicAssessments: Utility, Accuracy and PolicyConsiderations." Environmental Imact Assessment3(4):333-350. Murthy,K. S. 1988. NationalEnvironmental Policy Act Process. BocaRaton, Florida: CRC Pres. Nato, Z. F. do Laerda. 1989. "EnvironmentalImpact Assessmentin Brazil."' ninm Educationand Information8(2):96-99.

OverseasDevelopment Administration. 1989. Manualof EnvironmentalAppraisal. London,United Kingdom. 225

Organisation for Economic Co-Operation and Development. 1986. "EnvironmentalAssessment and DevelopmentAssistance." EnvironmentMonograph (4):103.

1990. "GoodPractices for EnvironmentalImpact Assessment of DevelopmentProjects." Meeting of the Working Party on DevelopmentAssistance and Environment,May 10-11. (Restrictedto Participants). Paris, France.

Ofori-Cudjoe, S. 1990. "EnvironmentalImpact Assessmentin Ghana. An Ex-Post Evaluationof the Volta ResettlementScheme: The Case of the Kpong Hydro-ElectricProject." Environmentalist 10:115-126.

O'Riordan, T., and W. R. D. Sewell, eds. 1981. Project Appraisal and Policy Review. Chichester, United Kingdom:John Wiley and Sons.

O'Riordan, T. 1989. "The Impact of EnvironmentalImpact Assessment on Decision-Making." In EnvironmentalImpact Assessment,edited by V. T. Covello. Heidelburg, Federal Republic of Germany: Springer.

Pearce, D. W., E. Barbier, and A. Markandya. 1990. SustainableDevelopment: Economics and Environment in the Third World. Aldershot, United Kingdom:Elgar.

Pendse, Y. D., R. V. Rao, and P. K. Sharma. 1989. "Environmental Impact Assessment Methodologies:Shortcomings and Appropriatenessfor Water ResourcesProjects in Developing Countries." InternationalJournal of Water ResourcesDevelopment 5(4):252-259.

Pimentel, D. 1989. "Agricultureand Ecotechnology." In EcologicalEngineering: An Introductionto Ecotechnolgy, editedby W. J. Mitsch and S. E. Jorgensen. New York: John Wiley and Sons.

Porter, A. L. and others. 1980. A Guidebookfor TechnologyAssessment and ImpactAnalysis. New York: North Holland.

Prieur, M. 1984. "Les Etudes d'Impact en Droit Francais." Zeitschrift fur Umweltpolitik4:367-388.

Pryde, P. R. 1987. "The Soviet Approach to EnvironmentalImpact Analysis." In Environmental Problemsin the SovietUnion and Eastern Europe, editedby F. B. Singleton. Boulder, Colorado: Lynne Rienner Publishers.

Rau, J. G., and D. C. Wooten, eds. 1980. EnvironmentalImpact Analysis Handbook. New York: McGraw-Hill.

Roberts, R. D., and T. M. Roberts, eds. 1984. Planning and Ecology. London, United Kingdom: Chapmanand Hall.

Ross, W. A. 1987. "Evaluating EnvironmentalImpact Statements." Journal of Environmental Management25(2):137-148. 226

Rossini, F. A., and A. L. Porter, eds. 1983. Integrated Impact Assessment. Boulder, Colorado: Westview Press.

Sadler, B., ed. 1987. Audit and Evaluationin EnvironmentalAssessment and Management:Canadian and InternationalExperience. 2 Volumes. Hull, Quebec: EnvironmentCanada.

1980. Public Participation in Environmental Decision Making: Strategies for Change. Edmonton,Alberta: EnvironmentCouncil of Canada.

Sammy, G. K. 1982. "EnvironmentalImpact in Developing Countries." Ph.D. Dissertation, Universityof Oklahoma. Norman, Oklahoma.

Shrader-Frechette,K. S. 1985. SciencePolicy. Ethics. and Economic Methodology:Some Problems of TechnologyAssessment and Environmental-ImpactAnalysis. Boston, Massachusetts:Riedel.

Sigal, L. L., and J. W. Webb. 1989. "The ProgrammaticEnvironmental Impact Statement:Its Purpose and Use." The EnvironmentalProfessional 11(1):14-17.

Sonntag, N. C. and others. 1987. CumulativeEffects Assessment:A Context for Further Research. Ottawa, Canada: Ministry of Services and Supply.

Suter, G. W. and others. 1987. "Treatment of Risk in Environmental Impact Assessment." EnvironmentalManagement 11:295-303.

Tharun, G., N. C. Thanh, and R. Bidwell, eds. 1983. EnvironmentalManagement for Developing Countries. 3 Volumes. Bangkok,Thailand: Asian Instituteof Technology.

Tidsell, C. 1986. "Cost-BenefitAnalysis, the Environmentand InformationalConstraints in LDCs." Journal of Development11:63-81.

Tomlinson, P., ed. 1987. "EnvironmentalAudits: Special Edition. " EnvironmentalMonitoring and Assessment8(3):183-261.

United Nations. 1990. EnvironmentalAssessment Procedures in the UN System. London, United Kingdom:Environmental Resources Limited.

United Nations EnvironmentProgramme. 1982. The Use of EnvironmentalImpact Assessment for DevelopmentProject Planning in ASEAN Countries. Bangkok, Thailand: Regional Office for Asia and the Pacific.

United Nations and the United NationsAsian and Pacific DevelopmentInstitute. 1980. Environmental ImpactStatements: A Test Model Presentation,comp. C. Suriyakumaran. Bangkok,Thailand.

United States Council on EnvironmentalQuality land] Fish and Wildlife Service. 1980. Biglogical Evaluation of EnvironmentalImpacts. Report FWS/obs-80/26. Washington,D.C. 227

Vlachos, E. 1990. "Assessing Long Range Cumulative Impacts." In Environmental Impact Assessment,edited by V. T. Covello. Heidelburg, Federal Republicof Germany: Springer.

Wathern, P., ed. 1988. EnvironmentalImpact Assessment:Theory and Practice. London, United Kingdom: Unwin.

Wandesforde-Smith,G., and I. Moreira. 1985. "SubnationalGovernment and EnvironmentalImpact Assessment in the Developing World: BureaucraticStrategy and Political Change in Rio de Janeiro." Brazilian EnvironmentalImpact AssessmentReview 5:223-238.

Ward, D. V. 1978. BioloeicalEnvironmental Impact Studies:Their Theory and Methods. New York: AcademicPress.

Warner, M. L., and E. H. Preston. 1974. Review of EnvironmentalImpact Assessment Methodologies. WashingtonD.C.: United States EnvironmentalProtection Agency.

Wathern,P. 1984. "Methodsfor AssessingIndirect Impacts." In Perspectiveson EnvironmentalImpact Assessment, edited by B. D. Clark and others. Dordrecht, The Netherlands:Riedel.

Wathern P. and others. 1987. "Assessing the EnvironmentalImpacts of Policy: A Generalized Framework for Appraisal." Landscapeand Urban Planning 14:321-330.

Westman, W. E. 1985. Ecology, Impact Assessmentand EnvironmentalPlanning. New York: John Wiley and Sons.

Wenger, R. B., W. Huadong, and Ma Xiaoying. 1990. "EnvironmentalImpact Assessmentin the People's Republicof China." EnvironmentalMana,eement 14:429-439.

Wood, C. M., and V. Cazidellis. 1985. A Guide to Trainin, Materials for EnvironmentalImpact Assessment. Department of Town and Country Planning Paper 14. Manchester, United Kingdom:University of Manchester.

World Bank. 1991. Country Capacityto Conduct EnvironmentalAssessments in Sub-SaharanAfrica. TechnicalDepartment, AfricaRegion. EnvironmentalDivision Working Paper 1. World Bank, Washington,D.C.

Wramner, P. 1987. Proceduresfor EnvironmentalImpact Assessmentof FAO's Field Proiects. Rome, Italy: Food and AgriculturalOrganization.

Yates, E. D. 1989. EnvironmentalImpact Assessment:What it is and Why InternationalDevelopment OrganizationsNeed it. Washington,D.C.: Councilon EnvironmentalQuality.

Young, K., ed. 1988. Women and EconomicDevelopment: Local, Regional and National Planning Strategies.New York: Berg (for Oxford and United NationsEducational, Scientific and Cultural Organization). Distributors of World Bank Publications

ARGENTINA FINLAND M:1XICO SOUTH AFRICA. IOTSWANA CAem HSi. SRL Aki.in4 Kbjs.ka'p N P OrEc FwO.kIIlI CoI.4. Ome. P.O.So, in Apart.doPsehl 22-560 O.1w4UdwU1.t4YPSouthkrn Fh d 165, 4sh1 w-Ok. 453/465 SF4010I '40wThIPs Mmo2 P. Ahkac 1333 BuS3w.oAim Hdinkh 10 P.O. Bo 1141 MO0ROCCO CpeTown S= AUSTIRAUA, PAPUA NEW GUINEA, FRANCE Sodd d'Elodo Market6 Maxicne FIUL SOLOMON I LANDS, World 6Bnk Poblcasom 12 co M-E ,d. d'Afh Fr ooo4ie VANUATU, AND WESTERN SAMOA 66, nue d'lo muoh SobecS SCvia D.A. Sooke & journll 75116 Pis P.O. Box 410PS 645Whilek...Road NETMI65LANDB Crihall Mldh 3132eR GERMANY, F6DIRAL REPUPLICOF IETOrPublketia b.v. jC rumbo1.o2024 Vicoral UNO-Volg P.O. Box 14 Pppedofr AU/ SS 7240 PA Lodow SPAIN AUSTRIA D-S15 Bonn I Mod-I'oso uLs SA. Geold end Co. NEW ZEALAND CakeloV37 Grobk 31 GREECE H1. Ubnry esd woomumdop Shvoe 2511 Modid A-1OlI Win. KME prosv DM 24, IppodoowuS S PbFl. P rloe N Market U l lornadml AEDOS BAHRAIN AtIhww11635 Aud.wAd Co-a_l'deCoes 32 BPdoo1 ReOd, amd Corusultany 6565 erOdo Arociate Lad. GUATEMALA NIGERIA PO Pbx 2210 Ubrid Pved"oSPool UnL lty Ps_ Uminled SRI LANKA AND THE MALDIVES Meoase Town 317 So.Cal7l5x Tl-0Creessii igJdo LAO House Booke zaorm1t FeMad E.EN5 P.O.8oo244 5ANGCADESH Guaem.liCiy rbad. IO10 S4irCtroS,A. G wdin,w Miere b,dtte Development Moedt. Ati_e Soely 0MDAS) HONG KONC. MACAO NORWAY Cobko 2 HorAe S. Rood 16 Ad 7DW Ltd. Nervos Weardon Cwtf 2lumoumodlR/Ar. 6PI. 146 P65. Bdwwd Beek Dy.rt..A SWEDEN D1ake 127 Rload W. P.O. B61256tlwed FWrs1 1kt1W Kowloon N40i2 OMo 6 Pild FtackoAmweld -h, offi Hons ICo Regwft6u12. Pox 16356 156 Nu Ahmed Saxk OMAN 5.103 27 StorSbeh Cbitleq,r INDIA MEMRB IafrmaoS tvia Alled PublXh, Pate LAd. P.O. ho 1613,SeebAhpot FwmkA*Iimaodt 76, KDA. Acx 751 Mo-t Road Muscal Warmar.WliliooeAl ."UI. Memirms.60122 Soo2EDM PAKISTAN 5.10412 Sokthalmn BELGIUM P.o..,'. Me. Book AgSqy J)n De Lwnory 1SJN. Hrodis Mnr 65f horek..Qualdc4Atsm SWITZERLAND Av. du R 202 Ballard EBliE P.O. Box No. 7N FtrwmsgiliU 1060Bn_e B4baey 40D0 Ldo 3 UbrOxke Pa*oy

CANADA 13/14AndAU Rood PERU C_3pool.oS L Diw.w New DtW 110E02 EdilelD mDo SoSA CH1211 Ctall C.P 15XInroeAmpe.I5 Apdo 3524 Powd.IG QuaI 17 Cdttatonn Av4numeLm Unu rd: J4E516 CIculte. 76 072 Ubeaie hyot PHILIPPNES SuvOdmdoAoAIasee., CHINA J yode HcAlBue db1RWuoomi 1oak CPIW Cme po;o 3312 Chhe Finondol & Eo nicPuMohdg 5thMMaineRo d Ca.diaSyr PmFlow,Pp LUeBulldg CHiD2 L _emuw House SBalo 56o009 AyoI Aveum Mkeli IDa FoS DongJIe MdroMm.iLo TANZANIA BujI 3.S1121 Keddid Crsa_ Rood Oxford Unavued Plan HydakeXd - MD027 POtD P.O. Pomg COLOMBIA ORPAN D. a Salmam h,miaooLaUds. ralrhan Raw 2d PreFo Palme xuluyi NldNI Apatdo Aeo 3420 Ner ThmkmrsBaP Nweqpuro 65-401Wa,eow. THWLAND BoEoLoD.E Ahnedesbd .3900 C*eWl De S PORTUGAL 15bbd COTB D'IVOIER PoEoJ House POUi;a Pih% IANIhok C1n1 d'sciftionat de Dlhfcn 16.AAokokMwg Ru Do CUUo7D.74 Aidul,r (CEDA) Ludbow.226 M1 12X Uh6m TRINIDAD &TOAGO, ANrIGUA 04 BP. 541 SARSUDA BARADOS, Abid jn 04 Plt., INDONEIA SAUDI ARABIA. QATAR DOMINICA CENADA. GUYANA. Ft bn U1| Book Se JAMAICA. MONTKRRAT. ST. CYPRUS JILSimRip372 P.O. Bo 3196 KITT R NBVIB fT. WCIA. MUR5Wno4don Sori. P.O. PoxD iyd4I ilST.VINCENTD ACEBMADINil P.O. an ES ld I 11471_ U Nid.. 16363 blou.omoxs.yl 45waItweedo iTALY IMP,.,b 05 DENMARK Licn Co cedismrlsSm.d SPA NAie SWa T,ldedWac 41b Seoahmdsligatw Via hoalleFwo"130/10 Al D Ca R _ioAneAIM It Cdla Poe SeU patPAw UNID ARAB EMIRATE DKi17FrCimfoP k"s C S125ZlFkut P.O.hB:71" MRMRBCuMCe wyadh ~~~~~P.O.hom w DOMINICAN RWBUC JAPAN Shdr* EdiAeorTller, C po A. S m Bock SwEn l Abdu A l Rael.weddo onbabelaIsCoflc, 30 37-4 Hwe4 342mme, Bwkrk113 Klu mW i& Seet UN1mWX INGDOM Apado Pool 2140 Tokyo P.o. box 3ae 1laiMdo LAd. SPto Din.o Dom.. P.O. uo 3 KMNYA AI.. HIu9dd*.0W4 ZI ELSALVADOR AMlca BokoSw.(KA.) lid. 31, Mahmomed Hoes Awed P1I. Be _Cai.d Furodn PA hox 45245 ?, ho. 511 Aveuide Manual bEnqeAruujo 03CU Naei. ,1dd11 VENElILA EdiRldoSSrA. kr P. UFeIAdd Bl Sh Pel,ado XOKRE RaEUBLIC Or SINGAIOPO TAIWAN, MYANMAJ. Apis. O3W Pm ReesmSook Coepersem CRUrsemA1to" EGYPT, ARAB RUW'UUC OF P.O.hm 101, Kwawrwvam_ rom P i_ A AlAhrm S,hod PVAU d VUCDOAVIA AlGala. great U-CSla R. Pal-Ik hbduigh JusedwoymolCBV Caa XUWAIT 314 PO.hmSS MAMX bigUI SU5 24 New dui ooi Tl Te MWidd Beg D_e.w r.o. ho SW5 -lpr 1en Y1912 * O wwari 94d Ciro MALAYSIA Ur _uila rMey.aerd x P.O.=JAlPmBu Rod.Q m1 ai"J b lEd Lum pur RECENT WORLD BANK TECHNICAL PAPERS (continued)

No. 107 ElectricPower Research Institute and EMENA, The CurrentState of AtmosphericFluidized-Bed CombustionTechnology No. 108 Falloux, LandInformation and RemoteSensing for RenewableResource Management in Sub-Saharan Africa:A Demand-DrivenApproach (also in French, 108F) No. 109 Carr, Technologyfor Small-ScaleFarners in Sub-SaharanAfrica: Experience with FoodCrop Production in Five Major EcologicalZones No. 110 Dixon, Talbot, and Le Moigne, Damsand the Environment:Considerations in World BankProjects No. 111 Jeffcoate and Pond, LargeWater Meters: Guidelines for Selection,Testing, and Maintenance No. 112 Cook and Grut, Agroforestryin Sub-SaharanAfrica: A Farmer'sPerspective No. 113 Vergara and Babelon, The PetrochemicalIndustry in DevelopingAsia: A Review of the Current Situationand Prospects for Developmentin the 1990s No. 114 McGuire and Popkins, Helping WomenImprove Nutrition in the DevelopingWorld: Beating the Zero Sum Game No. 115 Le Moigne, Plusquellec, and Barghouti, Dam Safetyand the Environment No. 116 Nelson, DrylandManagement: The "Desertification"Problem No. 117 Barghouti, Timmer, and Siegel, Rural Diversification:Lessons from East Asia No. 118 Pritchard, Lending by the WorldBank for AgriculturalResearch: A Review of the Years1981 through1987 No. 119 Asia Region Technical Department, FloodControl in Bangladesh:A Planfor Action No. 120 Plusquellec, The GeziraIrrigation Scheme in Sudan:Objectives, Design, and Performance No. 121 Listorti, EnvironmentalHealth Components for WaterSupply, Sanitation,and UrbanProjects No. 122 Dessing, Supportfor Microenterprises:Lessons for Sub-SaharanAfrica No. 123 Barghouti and Le Moigne, Irrigationin Sub-SaharanAfrica: The Developmentof Public and PrivateSystems No. 124 Zymelrnan, Science,Education, and Developmentin Sub-SaharanAfrica No. 125 van de Walle and Foster, Fertility Declinein Africa:Assessment and Prospects No. 126 Davis, MacKnight,IMO Staff, and Others, EnvironmentalConsiderations for Port and Harbor Developments No. 127 Doolette and Magrath, editors, WatershedDevelopment in Asia:Strategies and Technologies No. 128 Gastellu-Etchegorry, editor, SatelliteRemote Sensing for AgriculturalProjects No. 129 Berkoff, IrrigationManagement on the Indo-GangeticPlain No. 130 Agnes Kiss, editor, Living with Wildlife:Wildlife Resource Management with LocalParticipation in Africa No. 131 Nair, The Prospectsfor Agroforestryin the Tropics No. 132 Murphy, Casley, and Curry, Farmers'Estimations as a Sourceof ProductionData: Methodological Guidelinesfor Cerealsin Africa No. 133 Agriculture and Rural Development Departrnent, ACIAR, AIDAB,and ISNAR,Agricultural Biotechnology:The Next "GreenRevolution"? No. 134 de Haan and Bekure, Animal Healthin Sub-SaharanAfrica: Initial Experienceswith Alternative Approaches No. 135 Walshe, Grindle, Nell, and Bachmann, Dairy Developmentin Sub-SaharanAfrica: A Study of Issues and Options No. 136 Green, editor, CoconutProduction: Present Status and Prioritiesfor Research No. 137 Constant and Sheldrick, An OutlookforFertilizer Demand, Supply, and Trade,1988/89-1993/94 No. 138 Steeland Webster,Small Enterprises under Adjustment in Ghana The World Bank Headquarters European Office Tokyo Office 1818 H Street, N.W. 66, avenue d'lena Kokusai Building Washington, D.C. 20433, U.S.A. 75116 Paris, France 1-1 Marunouchi 3-chome Chiyoda-ku, Tokyo 100, Japan Telephone: (202) 477-1234 Telephone: (1) 40.69.30.00 Facsimile: (202) 477-6391 Facsimile: (1) 40.69.30.66 Telephone: (3) 3214-5001 Telex: MCI64145 WORLDBANK Telex: 640651 Facsimile: (3) 3214-3657 mCI248423 WORLDBANK Telex: 26838 Cable Address: INTBAFRAD WASHINGTONDC

Cover design by Walton Rosenquist ISBN 0-8213-1843-8