Draft Resettlement Plan

September 2011

NEP: Integrated Urban Development Project - Nepalgunj Municipality

Prepared by the Government of Nepal, Ministry of Physical Planning and Works for the Asian Development Bank.

CURRENCY EQUIVALENTS (as of 5 August 2011) Currency unit – Nepalese rupee (NRs/NRe) NRs1.00 = $ 0.01391 $1.00 = NRs 71.874

ABBREVIATIONS

ADB – Asian Development Bank BPL – below poverty level CBO – Community Based Organizations CDC – Compensation Determination Committee CDO – Chief District Officer CFC – Compensation Fixation Committee CPR – Community Property Resource DDC – District Development Committee DOR – Department of Roads DSC – Design and Supervision Consultants DUDBC – Department of Urban Development and Building Construction GON – Government of Nepal GRC – Grievance Redress Committee LA Act – Land Acquisition Act LACFC – Land Acquisition and Compensation Fixation Committee MoPPW – Ministry of Physical Planning and Works NGO – Non-Government Organizations NRs – Nepalese Rupees PCO – Project Coordination Office PIU – Project Implementation Unit PLI – Poverty Level Income PM – Project Manager PPTA – Project Preparatory Technical Assistance PSA – Poverty and Social Assessment R&R – Resettlement and Rehabilitation TA – Technical Assistance ToR – Terms of Reference WHH – Women Headed Households VDC – Village Development Committee

WEIGHTS AND MEASURES

cm – centimeter dbA – decibels dia. – diameter ha – Hectare kg – kilogram km – kilometer l – liter m – Meter

m2 – square meter m3 – cubic meter mg/l – Milligrams per liter ml – milliliter MLD – million liters per day mm – millimeter sq. km. – square kilometers sq. m. – square meters μg/m3 – micrograms per cubic meter

GLOSSARY

Land Acquisition - the process whereby land and properties are acquired for the resettlement plan of the project construction Baseline Socio-economic - the resettlement plan of the baseline socioeconomic Sample Survey sample survey is to establish monitoring and evaluation parameters, it will be used as a benchmark for monitoring the socio-economic status of APs. The survey will cover 10% of affected people and 20% of seriously affected people. The survey will also collect gender-disaggregated data to address gender issues in resettlement. The survey will carry out the following: (i) preparation of accurate maps of the subproject area; and (ii) analysis of social structures and income resources of the population. Census - the resettlement plan of the census is to register and document the status of potentially affected persons within the subproject impact area. The census will cover 100% of affected persons. The census will provide a demographic overview of the population, and will cover people’s assets and main sources of livelihood. Compensation - payment in cash or in kind of the replacement value of the acquired property. Land Acquisition and - the committee established under the chair of Chief Compensation Fixation District Officer as per Land Acquisition Act 2034 Committee (LACFC (1977) for the determination of compensation rate and implementation of compensation taking into consideration replacement value of the properties as guided by the resettlement plan and the use of community valuation methods. Grievances Resolution - the committee established under each sub- project to Committee (GRC) resolve the local grievances. Project Affected Person - includes any people including encroachers/ squatters, households, or firms who, on account of changes that result from the project will have their (i) standard of living adversely affected; and/or (ii) right, title, or interest in any house, land (including residential, commercial, agricultural, forest, and/or grazing land), water resources, or any other moveable or fixed

assets acquired, possessed, restricted, or otherwise adversely affected, in full or in part, permanently or temporarily Replacement Cost - the method of valuing assets to replace the loss at market value before the project or dispossession, or its nearest equivalent, plus any transaction costs such as administrative charges, taxes, registration, and titling costs. Resettlement - all the measures taken to mitigate all or any adverse impacts of the project on the APs property and/or livelihoods including compensation, relocation (where relevant), and rehabilitation. Relocation - the physical relocation of APs from their pre-project place of residence. Rehabilitation - the measures provided under the resettlement plan other than payment of the compensation of acquired property. Vulnerable Groups - Social categories whose livelihoods may be particularly vulnerable to disturbances created by the project. This means any people who might suffer disproportionately or face the risk of being marginalized from the effects of resettlement including: female-headed households, marginalized ethnic groups (Dalits, Freed Kamaiya), Muslims/religious minorities, elderly, disabled, indigenous people (margilized IPs), below poverty line,1 landless or households losing 50% of total landholdings (particularly those totally dependent on agriculture for livelihood).

NOTE In this report, "$" refers to US dollars.

This resettlement plan is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be

3 preliminary in nature.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

1 The poverty line in current terms is NRs 12,457 per capita/year. The national average household size in Nepal is considered 5.27 (Poverty Trends in Nepal. National Planning Commission Secretariat, 2005). Therefore, it is assumed the poverty line is NRs 65,648 per household/year.

TABLE OF CONTENTS

EXECUTIVE SUMMARY

Page

I. PROJECT DESCRIPTION 1 A. Overview 1 B. Subproject Description 1 C. Resettlement Plan Preparation 2

II. SCOPE OF LAND ACQUISITION AND RESETTLEMENT 3

III. SOCIOECONOMIC INFORMATION/PROFILE 4

IV. CONSULTATION, PARTICIPATION, AND DISCLOSURE 5 A. Summary of Public Consultation 5 B. Continuation of Public Consultations 5 C. Disclosure of Resettlement Plan 6

V. GRIEVANCE REDRESS MECHANISMS 6

VI. LEGAL FRAMEWORK 9 A. Government of Nepal Laws 9 B. ADB Safeguards Policy Statement 10

VII. ENTITLEMENTS, ASSISTANCE AND BENEFITS 11 A. Eligibility 11 B. Entitlements 11

VIII. INCOME RESTORATION MEASURES 17

IX. RESETTLEMENT BUDGET AND FINANCING PLAN 18 A. Implementation Schedule of Nepalgunj Resettlement Plan 18

X. INSTITUTIONAL ROLES AND RESPONSIBILITIES 21

XI. MONITORING AND REPORTING 21 A. Need for Monitoring 21 B. Internal Monitoring 22 C. Reporting Requirements 23

APPENDIXES 1. Comparison of GoN and ADB’s SPS, 2009 24 2. Participants of the Meeting held at Nepalgunj Municipality, 04 May 2011 27 3. List of Participants in Resettlement Plan Consultation Meeting 28 4. Monitoring Indicators and Sample for Status Report 29

EXECUTIVE SUMMARY

1. Overview. The Integrated Urban Development Project (IUDP) aims to improve the quality of life, promote socially inclusive and environmentally sustainable development, and support increased economic growth in Nepalgunj municipality. These goals will be achieved through improvements in the effective and efficient provision of affordable basic municipal services. These improvements will focus on storm water drainage, solid waste management, urban roads and lanes, and community development programs and together will constitute integrated urban development package for each municipality. This is a resettlement plan to address social safeguard impacts under the project, and was prepared to be consistent with the ADB's Safeguards Policy Statement (SPS, 2009), and Government of Nepal (GON) policies.

2. Impacts. The project is classified as Category B as per ADB’s SPS, 2009. The proposed drainage canals and road improvements will be constructed within the road public right-of-ways (RoW) and do not require land acquisition, however, impacts to encroachers (non-titled households [HH]) include the following: (i) 1 HH in Paraspur VDC losing portion of a residential structure encroaching into the public ROW (about 10 sq.m with compound wall); (ii) 1 HH in Paraspur VDC one losing a hand-pump and septic tank; and (iii) an estimated 200 mobile vendors/hawkers would potentially experience temporary income loss during linear construction works. For developing the sanitary landfill site, the project will acquire 7.41 hectares (ha) of private land with no structures (some crops) divided into seven (7) parcels and owned by four (4) land owners. This report was prepared to be consistent with the ADB's Safeguards Policy Statement (2009), and Government of Nepal (GON) policies.

3. Methodology. Preparation of this report involved a process of impact assessment through land survey, socio-economic survey and public consultation with affected people and stakeholders in planning and developing mitigation measures to avoid, minimize and/or mitigate adverse social impacts. It contains a time-bound implementation plan and budget, institutional arrangements for implementing the plan, and monitoring arrangements. The assessment of losses and land acquisition is based on the preliminary design. The RP will need to be updated based on the detailed engineering design.

4. Disclosure. For the benefit of the APs, the Nepali version of a Summary RP will be made available to them with a copy maintained by the Project Coordination Office (PCO) and the Project Implementation Unit (PIU) in the Nepalgunj municipality office. A copy of the RP (draft and final) will be disclosed in ADB’s website. A Grievances Redress Mechanism (GRM) is also outlined to address any grievances and to guide corrective actions where necessary.

5. Implementation Arrangement. The PIU within the municipality will have a social development officer assisted by social safeguard specialist from the Design Supervision Consultants, who will facilitate the implementation of the resettlement activities. A local Non Government Organization (NGO) will be hired by the municipality to link APs to relevant government programs related to social and economic rehabilitation, as well as provide necessary training for livelihood development. Internal monitoring will be the responsibility of the social development officers of the PIU and the Department of Urban Development and Building Construction (DUCBC) PCO and will start early during the project when the implementation of the RP starts and will continue until completion of the subproject.

6. Costs. The resettlement cost estimate for this subproject includes eligible compensation for land, standing crops and trees, assistance for shifting, and training allowance. These costs will be shared by the government and municipality with the DUDBC ensuring all costs are met.

The PCO is to ensure that APs are compensated prior to displacement. Negotiation with land owners and payment of compensation will be witnessed by a third party. A detailed indicative budget is provided in this report, which includes cost of land and resettlement rehabilitation allowance for affected persons, including vulnerable households.

I. PROJECT DESCRIPTION

A. Overview

1. The project aims to improve the quality of life, promote socially inclusive and environmentally sustainable development and support increased economic growth in Nepalgunj, Siddharthanagar, Janakpur and Dharan. This goal will be achieved through improvements in the effective and efficient provision of affordable municipal services by the target project municipalities. These improvements will focus on water supply, drainage system, solid waste management facilities, and urban roads and lanes and together will constitute integrated urban development packages for each of the four municipalities. In Nepalgunj, these improvements will focus on storm water drainage, solid waste management, urban roads and lanes, and community development programs and together will constitute integrated urban development package for each municipality.

2. Nepalgunj, located on the flat land of Terai,2 suffers from chronic water-logging problems caused by inadequate capacity of drainage channels due to ad-hoc construction of the drainage system, poor maintenance of drainage facilities, and worsened by solid waste dumping. Stormwater drainage systems will be improved and upgraded. The municipality is one of the major industrial centers in Banke district of Nepal, with 32 currently operating industries within Nepalgunj Industrial Estate.3 There are also 726 commercial establishments, 74 hotels, and 40 educational institutions, present in the area and are contributing significantly to the waste generation,4 aside from domestic sources.

B. Subproject Description

3. In Nepalgunj municipality, the following sub-project/components are proposed: (i) stormwater drainage; (ii) roads and lanes improvements and (iii) solid waste management. About 25% of the waste generated by the municipality is from the industrial, commercial, tourism, and public institutional sources, with an estimated combined total of 7.2 tons of wastes per day. The total waste generation from households, on the other hand, is about 28.7 tons per day. Table 1 provides a summary of the proposed components in Nepalgunj municipality.

2 The Terai is the southern plain area bordering India. 3 Nepalgunj Industrial Estate, 2010. 4 Nepalgunj Municipality’s Brochure, 2009.

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Table 1: Nepalgunj Project Components Stormwater Drainage Rehabilitation of the existing system Improvement in the cross-sectional area of the Dondra Nala (L=11 km) Improvement of 3.2 km of earthen drain from Karkanda to Dondra Nala Construction of 1.8km of lined drain up to Dondra Nala on the road to Paraspur. Lining of 1.06 km of earthen drain from Ganesh Man Chowck Downstream improvement of the main drain from Bageswori Temple (L= 0.9 km) Improvement of 3 nos. of culverts Phultekra and Water park water retaining ponds improvement (Area = 14ha) Cleaning of the existing drain (L = 16 km) Covering of the open lined drains within the city core (L=4.2 km) Ganeshpur-Bageswori natural watercourse improvement (L= 2.5 km) Improvement of Rataihiya Nala (L=5.3 km) Construction of new drains Construction of 4.1km of open lined diversion drain to Amila Khola Construction of 4.2km of diversion drain to Dundawa Nadi Construction of 2.8 km of new drains in ward no. 12 and 17 Construction of 6 km of lined drains within the settlements area.

Solid Waste Management (SWM) a town waste transfer station improvement of 1.5 km site access road sanitary landfill cells for 5 years including liner system, leachate and gas collection, treatment and disposal systems. A pilot compost plant (with necessary equipment) for co-composting organic SW with septage sludge (capacity up to 3 tons/d), recycling area with sorting platform, shredding, pelleting etc., and Site development works (weighbridge, internal roads, drainage, lighting, fencing, etc.) Municipal Roads Road Improvement Work Eklaine-Ganeshpur Road (Base & Surface): 1.5km L & 10 m W Ramnagar Road (Base & Surface): 1.8km L & 10 m W Hospital Road (Base & Surface): 1.2km L & 10 m W DDC Road (Base & Surface): 1.4km L & 10 m W Stadium Road (Base & Surface): 1.2km L & 10 m W Rapti Path (Base & Surface): 1.5km L & 10 m W Inner City Road Stretches (Base & Surface for 2.0km L & 8 m W) Community Development Program Water Supply Tubewells Paving of lanes Drainage Public toilets Private toilets Composting centre Waste dustbin (basket) Scrap materials collection centre

C. Report Preparation

4. This resettlement plan is prepared through direct consultation with the affected persons, and other key stakeholders from the municipal government. The resettlement plan preparation involved a process of impact assessment through the following methods: (i) review of relevant documents, laws, policies and practices on involuntary resettlement, particularly the Government of Nepal and ADB’s SPS, 2009 (ii) meetings and discussions with concerned officials of the municipality; (iii) field visits; (iv) focus group discussions with the project affected people in relation to land acquisition and compensation; and (vi) census survey of affected

3 persons in relation to land acquisition, and a sample survey of 15% of the potential temporary affected persons likely to be affected by temporary loss of income or livelihood during linear construction/improvement works. A questionnaire was designed for collecting information on project affected person/families. The assessment of losses is based on preliminary project designs. The resettlement plan will need to be updated based on the final detailed engineering design that will be prepared later.

II. SCOPE OF LAND ACQUISITION AND RESETTLEMENT

5. The project is classified as Category B as per ADB’s SPS, 2009. The proposed drainage canals and road improvements will be constructed within the road public right-of-ways (RoW) and do not require land acquisition, however, impacts to encroachers (non-titled households [HH]) include the following: (i) 1 HH in Paraspur VDC losing portion of a residential structure encroaching into the public ROW (about 10 sq.m with compound wall); (ii) 1 HH in Paraspur VDC losing a hand-pump and septic tank; and (iii) an estimated 200 mobile vendors/hawkers would potentially experience temporary income loss during linear construction works. For developing the sanitary landfill site, the project will acquire 7.41 hectares (ha) of private land with no structures divided into seven (7) parcels and owned by four (4) land owners. Table 2 summarizes the impacts. Table 3 provides an inventory of affected persons.

Table 2: Summary of Resettlement Impacts in Nepalgunj Storm Water Solid Waste Road and lanes Resettlement Impacts Drainage Management improvement*** Permanent land (private) to be acquired Not required 7.41 ha Not required Affected land owners (total ) 0 4 0 Affected persons (total ) 12 30 0 Affected household/family (total) 2 4 0 Loss of livelihood Households losing agricultural income from farming 0 1 0 their own land Loss of livelihood ( jobs, business ,etc) 0 0 0 Vulnerable Affected households Below Poverty Level 0 0 0 Disability 0 0 0 Female-headed household 0 1 0 Losing more than 50% of total landholdings 0 1 0 Indigenous People 0 0 0 Muslim 2

Affected Structures 3

Permanent residence 1 0 0 Temporary structures – mobile vendors/hawkers 200* 0 0 Other assets (hand-pump and septic tank) 1 0 0 Affected Trees/Crops Fruit trees 0 0 0 Timber trees 0 0 0 Affected Common Property Resources 0 0 0 Temporary Impacts Temporary loss of income – mobile vendors/hawkers 200* 0 0 Average family size 5.5 7 0 Average household annual income (based on total 13,000 43,250 0 crop production and other income )** Primary source of income Kiosks Agriculture, and 0 shops/vendors business Source: Census of Land owner (s) and 15% sample survey of likely to be affected persons

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*Figure based on 15% sample survey of potential APs **The number is an estimate based on observations during field visits. ***Temporary impacts to mobile vendors/hawkers would be same as drainage component

Table 3: Inventory of Affected Landowners, Nepalgunj Percent of Area to be Total land total land Name of Land Current land S.N Parcel Acquired holdings holdings to be owner use (in sqm) (in sqm) acquired for the project 1 Hirminiya 7,71 Ashim B. Shah 4,240 32,5086.00 Mostly vacant 12% 2 Hirminiya 7,72 Ashim B. Shaharaf 905 do do 12% 3 Hirminiya 7,74 Kanchan B. Shrestha 600 11,000.00 do 40% 4 Hirminiya 7,75 Kanchan B. Shrestha 600 11,000.00 do 40% 5 Hirminiya 7,161 Kanchan B. Shrestha 2,035 11,000.00 do 40% 6 Hirminiya 7,8 Ashim B. Shah 1,330 325,086.00 do 12% 7 Hirminiya 7,9 Ashim B. Shah 2,260 325,086.00 do 12% 8 Hirminiya 7,11 Usha Shah 11,700 257,359.94 do 4.56% 9 Hirminiya 7,12 Ashim B. Shah 30,015 325,086.00 do 12% 10 Hirminiya 7,15 Kanchan B. Shrestha 1,950 11,000.00 do 40% 11 Hirminiya 7,16 Mo. Rijban Ansari 18,430 33,863.15 do 54% 12 Mustak Ali Shiekh 10 50.00 Homestead 20% 13 Nandu Darji 10 50.00 do 20% Total 74,085

III. SOCIOECONOMIC INFORMATION/PROFILE

6. According to the 2001 census, the total population of this municipality was 57,301 with 10,592 households. The 2011 projected population is 65,000 with a 3% annual population growth rate. According to the Poverty Profile Survey conducted by Nepalgunj municipality, about 18 percent of the households are female headed households.

7. The four affected landowners are engaged in business and some agriculture. The annual income of the four landowners averages Rs. 519,000. The landowners are willing to sell their land for the purpose of landfilling. One household will lose more than 50% of their total land, and another is female-headed, both who are considered vulnerable. The two households losing a portion of their house and the hand-pump and septic tank are muslim with an annual household income of Rs. 156,000. These two households are considered vulnerable. The remaining portion of the house would be viable after partial demolition. The households are aware of the project and the need for partial impacts to their residence and septic tank and hand pump.

8. Of the estimated 200 persons who will likely to be temporarily affected by the proposed drainage construction activities, a sample survey of 15% was carried out to assess the affected persons socio-economic status. The salient features of the APs are as follows:

(i) About 13.3% are female headed households (ii) One household is noted to be living below poverty level (iii) The average family size of the affected persons is 5.5. (iv) Except for the four private land owners whose land will be affected by the proposed SLF, the average monthly income of the affected HHs is Rs. 20,148, and the average monthly expenditure is Rs.13,000. The average monthly income of the private land owners is about Rs. 43,250.

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(v) The economically active population, ages 18 to 60 years old, is at 57.6%

Table 5: Socioeconomic Details of Affected Households Address Family Population Affected S.N Name Ward Location Size Male Female Assets 1 Kanchan Shrestha 2, Gharbari Tole, Nepalgunj 4 2 2 Land 2 Mohammed Rijvan 10, Tribhuvan Chowk, 9 5 4 Land Ansari Nepalgunj 3 Asim Bikram Shah 10, Bulbuliya, Nepalgunj 3 1 2 Land 4 Usha Shah 10, Bulbuliya, Nepalgunj 2 1 1 Land 5 Mustak Ali 7,Paraspur VDC 8 3 5 Structure Shiekh/Muslim 6 NanuDarji/Muslim 7,Paraspur VDC 3 2 1 Structure

IV. CONSULTATION, INFORMATION DISSEMINATION AND DISCLOSURE

A. Summary of Public Consultation

9. Consultations were conducted with primary (e.g., affected persons) and secondary stakeholders (e.g., municipality and DUDBC). Series of meetings were organized with the municipality to share project information as well as safeguard policy related matters (see Appendix 3 for list of persons consulted and minutes of the meeting). Informal discussions were also held with affected person during site visits (see Appendix 3 for list of persons interviewed).

Table 6: Summary of Consultations with Affected Persons S. Place, date and no of Participants Key issues discussed How addressed No. participants 1. Municipality (13-14 Municipal board Reconfirmation of priority 1.Apprise IUDP and March, 2011), 35-40 members and officials plans, safeguard issues of safeguard policies participants and other stakeholders the govt. and ADB policy 2.Site visits 2. Municipality (3-4 May, Municipal board Presentation of IR and 1.Solicited 2011), 45 participants members and officials findings of the issues participants and other stakeholders identified comments 2.Site visits 3. Municipality/sites (23- Municipal key personnel, SLF site, socioeconomic SLF site visit, 24July,2011)35-40 land owner, interviewers, sample survey, project interviews, informal participants temporary impact APs impacts discussion with potential APs

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4. Municipality (17 August, Municipal board Presentation and Briefing on content of 2011), 32 participants members, officials, other discussion on RP the RP, discussion stakeholders and and solicit comments vendors

B. Continuation of Public Consultations

10. The DSC and PIU will continue consultations, information dissemination, and disclosure. RPs will be made available in the PIU offices. ADB review and approval of the resettlement plan is required prior to the awarding of civil works contracts, and compensation/assistance of Affected Persons is required prior to displacement. The consultation process will be carried out throughout the entire project cycle.

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C. Disclosure of Resettlement Plan

11. A Nepali version of a summary resettlement plan will be prepared for the benefit of the affected persons, with a copy to be maintained by the PIU and made available to affected persons. The full resettlement plan will be made available in the PIU office. A copy of the resettlement plan (draft and final) will be disclosed in ADB's website. Project information will be continually disseminated through disclosure of resettlement planning documents. The documents will contain information on compensation, entitlement, and resettlement management for the subproject, and will be made available in the local language and distributed to affected persons.

V. GRIEVANCE REDRESS MECHANISMS

12. Government Grievance System. As per the Local Self Governance Act 1998, the Municipal Council is responsible to evaluate the development and construction works within the Municipality and give necessary direction. The Municipality is empowered to hear and settle at first instance for complaints relating to compensation for damage of crops, forced labour and wages, water bank (ghat) and security of public properties, hidden and unclaimed properties, forcefully entering and staying into others’ house, pasture, fodder and fuel wood. It can form an arbitration board to hear and settle the case filled in the Municipality for the complaints mentioned above. The Municipality shall form an arbitration board to hear and settle the cases filed in the Municipality and appoint three persons as agreed upon between the parties to a case from amongst the persons enlisted in the list of arbitrators. For the purpose of hearing and settling the cases filed under this Act at first instance, the Municipality shall, immediately after the constitution of the Municipality, prepare a list of arbitrators, setting out their names, surnames and addresses as well, comprising such persons from among the local persons, social workers and legal experts, as are deemed appropriate, with the consent of such persons, and shall publish it in the Municipality Office for public information. The three arbitrators shall collectively exercise the jurisdiction of arbitrators and the opinions of the majority shall be deemed the decision of the arbitrators. The arbitrators shall, to the extent possible, negotiate with each other on the case submitted to them and have the case compromised. In case the arbitrators fail to compromise, they shall exercise their powers and decide the case. Any party not satisfied with a decision made may appeal to the concerned District Court within 35 days of the hearing or knowledge of the decision.

13. Project Formulated Grievance Mechanism. The project formulated grievance mechanism complements the government system and will be split into three phases to quickly address any complaints during construction. If the complaint cannot be addressed immediately by the contractor or PIU, then the three phases are activated. The system is illustrated in the figure below.

14. First phase. In the first phase, a GRC chaired by EO will come up with remedial measures. Only if the complainant is not satisfied with this decision, the issue will be brought up to the municipal board, as the second phase.

15. Second phase. The project manager of the Project Implementation Unit (PIU) is to activate the project GRC. This process is not to supersede or impede on the country's formal grievance processes. The GRC will meet as needed to determine the merit of each grievance, and resolve grievances within a month of receiving the complaint. The GRC with a minimum of three members will be headed by the Executive Officer (EO). Members of the committee may

7 also include local government representative (VDC, DDC), representatives of Affected Persons (APs), Affected Group (AG) with one male and one female, a representative of vulnerable people’s organisations active in the area concerned, social safeguards consultant, the NGO, and a representative from the Project. The Committee thus appointed should be sanctioned by the municipal board. The time bound GRC process is illustrated in the figure below.

16. Complaints should be addressed to the PIU or Municipality. The PIU will keep records of all grievances received including: contact details of complainant, date the complaint was received, nature of grievance, agreed corrective actions and the date these were affected, and the final outcome. The GRC should provide the concerns of the complainants on issues relating to negative and physical impacts that they conceive would occur by the implementation of the particular project sub-component. All complaints should be signed with complete information on name, contact address, phone number if any so that the person can be contacted when required. An acknowledgement to the effect that the complaint has been received by the coordinator’s office should be promptly sent to the complaints. All complaints received should be first registered, categorized and prioritized. They should be analyzed and assessed the concerns raised by the affected parties and have discussion and consultation with them. Records of all such proceedings should be maintained, for future reference, and the attendance of all participants with their signature, in particular the complaints and affected groups should be recorded. If grievances cannot be addressed, the matters are brought to higher authorities (which could be the municipal board, court or central government).

17. Third phase. If the person is still not satisfied, then he/she can go to either the court or MPPW, as a third phase.

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Figure 1: Flow Diagram for Conflict Resolution and Grievance Redress Mechanism D

A Affected Party/Group Y

S Complaint addressed immediately by tractor and PIU (0 Days)

(0 Days) 7 Initial Assessment by GRC Phase 1 chaired by EO (7 Days)

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Discussion with AP and AG (7 Days)

Finalize the Initial Inform the AP/AG Ineligible Assessment about Ineligibility

(7 Days) (7 Days) Eligible Complaint 21

Formulating Remedial Cases beyond Jurisdiction of Measures (7 Days) Municipality (7 Days)

Discussion with APs to Inform Decisions (3 Days)

28 Municipal Board Consideration (7 Days) Phase 2

Cases beyond Jurisdiction

Remedial Refer the Case Refer the Case Action Phase 3 & to Higher to Higher Monitoring Authorities Authorities (2 Days) 31 (2 Days) (2 Days)

------Keep Municipal Board Informed

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VI. LEGAL FRAMEWORK

A. Government of Nepal Laws on Land Acquisition

18. The Land Acquisition Act, 2034 (1977) is the core legal document to guide tasks related to land acquisition and resettlement activities in Nepal. There is provision in Clause 3 of the Act to acquire land for any public purpose, subject to the award of compensation. According to Clause 4, institutions seeking land acquisition may also request GON to acquire the land under the regularity provisions subject to be compensated by such institutions' resources. Clause 27 of the Act provides for land acquisition through the mutual agreement with the plot owners, where the process of land acquisition as per Act is not required. The Act grants the plot owner the right to choose between a mutual agreement process, or the formal process for land acquisition (as described below). Where Clause 27 is enacted, and the plot owner is not satisfied with the compensation agreement offered, Clause 18 (sub-clause 2) states that the owner can file a complaint with the Ministry of Home.5

19. As per the regulatory provision, while acquiring land, GoN forms a Land Acquisition and Compensation Fixation Committee (LACFC) under the chairmanship of Chief District Officer (CDO) of the restrictive districts. The other members to be included in the Committee comprise of the Chief of Land Revenue Office (LRO), an Officer assigned by CDO, representative from District Development Committee (DDC), Concerned Project Manager, and VDC representative. The Project Chief functions as the Member Secretary of the Committee. In addition, it has become the practice to include representatives from the Affected Persons (APs).6 This practice of fixing compensation is known as Community Consensus Valuation (CCV). LACFC determines the amount of compensation considering the following factors: current price of land value, value of standing crop, houses, walls, sheds or other structures, loss incurred as a result of shifting residence or place of business, and consider relevant acts and periodic guidelines of GoN. According to Clause 6, if the land has to be acquired for institutions other than the local governance bodies and institutions fully owned by the government, the Committee has to consider the following in fixing the compensation amount: (i) Price of land prevailing at the time of notification of land acquisition; (ii) Price of standing crops and structures; and (iii) Loss incurred by the AP by being compelled to shift his or her residence or place of business in consequence of the acquisition of land.

20. As revealed in Clause 9 sub-section 3 of the Act, the duration of compensation days will be determined by LACFC. Clause 37 of the Act illustrates that the Committee may extend the period of additional three months, if compensation are not collected by those affected. After

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termination of extended three months period the amount will be deposited to the Government account.

21. The compensation to be provided for land acquisition should generally be in cash as per current market value. However, there is also a provision under Clause 14 to compensate land- for-land provided government land is available in the area. The Act also envisages the possibility of two separate rates of compensation, distinguishing between families who lose all their land and those who lose only some part of their landholdings. As stipulated in the Clause 10 there is provision for the affected households to take the crops, trees and plants from land

5 Under the Project, a Grievance Redress Committee (GRC) will be set up for each subproject to address any complaints regarding the land acquisition process, therefore offering the AP another venue to express grievances. 6 Under the Project, a representative from the affected persons is required to be a member of the LACFC to ensure compensation for assets is at replacement value.

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and salvageable from the structures. Clause 39 indicates options to allow the affected households to take all salvageable assets without deduction of any costs from the affected households.

22. Any grievances and objections will be referred to the Grievances Redress Committee (GRC) as per Clause 11 of the Land Acquisition Act, 2034 (1977). The Act assigns the CDO as the sole responsibility to chair land acquisition activities and to address the grievances related to the RP implementation activities.

23. Clause 20 of the Act authorizes the legal tenant of land to receive 25% of total compensation cost. The tenant is entitled 100% compensation for the structure built on the land with the permission of the land owners. Clause 68 (1) of the Forest Act 2049 states that the government may permit the use of forest land for projects under the national priority. According to the clause 68 (2), if any loss to persons or community is involved while permitting use of such land, it is required to compensate the loss.

24. The typical process of land acquisition is indicated in Table 7 below.

Table 7: Process for land acquisition as per Land Acquisition Act S.No. Steps outlined in the Land Acquisition Act 1 Sectoral agency decides to execute a development project at a certain location 2 Sectoral agency requests the Government to acquire land specifying objectives and committing payments of compensation and other expenses 3 GoN approves and orders the initiation process and LACFC is formed 4 Public notification is made at public places in the project area, VDC offices and to the affected households 5 Necessary preliminary survey including boundary demarcation, agricultural production valuation and social census of affected families takes place 6 Land Revenue Office report on the area and location of land to be acquired including likely compensation and amount of loss 7 The local officer (CDO) issues notices including purpose of acquisition and detail of land to be acquired 8 Land transactions are banned within the notified area 9 Owner can file complaints within 7 days through the local officer 10 Resolution of grievance within 15 days of complaint 11 Acquisition of land and payment of compensation LACFC= Land Acquisition and Compensation Fixation Committee.

B. ADB Safeguards Policy Statement (2009)

25. The three main elements of the ADB Safeguard Policy Statement (2009)are (i) compensation to replace lost assets, livelihood, and income; (ii) assistance for relocation, including provision of relocation sites with appropriate facilities and services; and (iii) assistance for rehabilitation to achieve at least he same level of well-being with the project as without it. In addition, the absence of legal title to land should not be a bar to compensation. Vulnerable groups are entitled to special assistance. Appendix 1 compares GoN and ADB's SPS.

26. There are several significant policy gaps between the Nepali legal framework (policy /act/regulation) and the ADB SPS Guidelines with respect to LAR. According to Nepali law/acts/regulations or practice:

(i) Non-titled occupants of land (without ownership or possession certificate), including lessees of land and structures, are not eligible for compensation and rehabilitation entitlements.

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(ii) Compensation for affected land is based on a government compensation tariff and also the market rate, although there is room for negotiation with individual APs. (iii) A depreciation coefficient is applied in the valuation of affected structures. (iv) Income and livelihood rehabilitation is not normally considered in local LAR practice. (v) Transaction costs are not included in compensation payments. (vi) There are no project internal grievance procedures preceding dispute resolution by the district administration office and the courts; each project has set up their own grievance mechanism. (vii) An eligibility cut-off date is not clear cut in the laws. But EIA regulations of 1997 have set up the procedures for the cut –off- date.

27. The above gaps are addressed in this resettlement plan.

VII. ENTITLEMENTS, ASSISTANCE AND BENEFITS

A. Eligibility

28. All affected persons who are identified in the project-impacted areas on the cut-off date (survey date) will be entitled to compensation for their affected assets, and rehabilitation measures sufficient to assist them to improve or at least maintain their pre-project living standards, income-earning capacity and production levels. The cut-off date for titleholders will be the date of notification under the land acquisition act and for the non-titleholders will be the census date. People moving in the area where the lands are to be acquired in subproject area after the cut-off date will not be entitled to any kind of compensation or assistance as per provision made herein. They, however, will be given sufficient advance notice, to vacate premises/dismantle in the case of affected structures prior to project implementation.

B. Entitlements

29. For this project, the entitlements listed in the table below for this subproject are derived from the Land Acquisition Act, 2034 (1977), the Land Reform Act 2021 (1964), and ADB Safeguard Policy Statement (2009). Following detailed design, the detailed measurement survey (DMS) of AP's land and/or non-land assets and detailed census survey will be used for determining actual impacts, and replacement cost surveys (or asset valuation) will be carried out. This information will be used to inform the LACFC cost determination, or used to inform the 11 negotiation of land value between the municipality and plot owner. Under the Project, a representative from the affected persons is required to be a member of the LACFC to ensure compensation for assets is at replacement value. Where the replacement cost of the LACFC is lower than the market determined value, the municipality and/or government is required to pay the difference. In cases where plot owners directly negotiate compensation amounts with the municipality (as per the LAA), then the PIU will verify the satisfaction of the owner with the final amounts. In cases of disputes such as where land records are not updated or where the APs are unable to produce the desired documents, then the compensation amount will be deposited with the CDO (in an escrow account) till the case is disposed.

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Table 8: Entitlement Matrix Type of Application Entitled Entitlement Implementation Issues Responsible Loss Person Institution(s) 1a Loss of land Full/partial Owner(s) with Land-for-land arrangements, if government land As per the LAA, Municipality/PIU, permanent loss legal title available, of equal productive capacity satisfactory compensation for land DSC/ of homestead, to AP, or; determined through either (i) LACFC/NGO agricultural, mutual agreement with plot vacant land Cash compensation equivalent to current market owner, or (ii) the option to rate/replacement value including provision for all allow Land Acquisition and fees (documentation fee, etc.), taxes, and other Compensation Fixation charges as applicable under relevant laws. Committee (LACFC) determination of 30 days advance notice to harvest standing compensation. To be seasonal crops, if harvest is not possible, determined by plot owner. compensation for share of standing crops at market rates Under the Project, a representative from the Cash compensation for perennial crops and timber affected persons is required valued trees based on market value to be a member of the LACFC to ensure If no replacement land is available, HH members compensation for assets is involved in farming eligible for skill development at replacement value. training based on their need at the rate of NRs 10,000/person/HH7 If decided through mutual agreement, PIU to verify APs prioritized for project employment satisfaction of plot owner with compensation amount. If owner not satisfied, then can raise with GRC.

Harvesting prior to acquisition will be accommodated to the extent possible.

PIU and municipality to assist farmers in finding suitable replacement land to continue farming.

7 The training cost includes the cost of training allowance for affected households for the short term training on income generation for a period ranging 4 – 6 days @ Rs. 500 a day, which is Rs. 3000. Other costs include the costs for training fee and logistic cost, where the cost of groups of trainees will be involved. The cost is therefore lump sum given as Rs. 10000. This is to be updated based on census at detailed design stage.

Table 8: Entitlement Matrix Type of Application Entitled Entitlement Implementation Issues Responsible Loss Person Institution(s) Value of crops/timber valued trees to be negotiated between landowner and municipality or determined by LACFC with advice from Agriculture Department

A list of working members of the affected family will be maintained by PIU. Contractor to be encouraged to hire APs in project works.

NGO to provide skill training.

2c Loss of Residential/ Encroacher(s) 60-day advance notice Municipality/PIU, structure commercial and squatter(s) DSC, LACFC structure and Rights to salvage materials from structure other assets (e.g. fences, Replacement value of structure and lost physical gates, posts) assets. structure Transfer/shifting allowance to cover the cost of moving structures (transport plus loading and unloading) and materials to be paid on actual cost basis or on current market rates.

Assistance in finding alternative land/living arrangement

APs eligible for project employment

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Table 8: Entitlement Matrix Type of Application Entitled Entitlement Implementation Issues Responsible Loss Person Institution(s) 3a Loss of Livelihood/ Business owner Compensation of lost income to business owner, NGO to provide skill training Municipality/PIU, livelihood/ income (s), tenant (s), leaseholder/tenant, hawkers, vendors etc. based DSC, Income leaseholder(s), on the nature and type of losses assessed on a LACFC/NGO employee(s), case-to-case basis. agricultural worker(s), For employees: one-time financial assistance hawker(s)/ equivalent to 30-days minimum wage rates to be vendors(s) within District for respective categories.

Those losing main source of livelihood are eligible for skill development training based on need at the rate of NRs 10,000/person/HH.

APs eligible for project employment 4 Loss of Standing crops Owner(s) with 30 days’ advance notice to harvest standing Harvesting prior to Municipality/PIU, crops and and trees legal title, seasonal crops, if harvest is not possible, cash acquisition will be DSC, LACFC trees tenant(s), compensation for crops (or share of crops) accommodated to the extent leaseholder(s), equivalent to prevailing market price possible. sharecropper(s), encroacher(s), Cash compensation for perennial crops and fruit Value of crops/fruit trees to squatter(s) bearing trees based on annual net product market be negotiated between value multiplied by average fruit production for next sharecropper and 15 years (or such period as set out in the prevailing municipality or determined law) by LACFC with advice from Agriculture Department Compensation for loss of wood-trees at current market value of wood (timber or firewood, as the case may be). 5 Impacts on Permanently Vulnerable APs Additional subsistence allowance equivalent to Vulnerable households to be Municipality/PIU, vulnerable affected (see Glossary NRs 30,000/HH8 for restoring or enhancing their identified during detailed DSC, APs vulnerable for definition of livelihood. measurement surveys LACFC/NGO persons vulnerable conducted as part of the RP. groups) Eligible for skill development training based on need at the rate of NRs 10,000/person/HH A list of vulnerable people will be maintained by the Vulnerable households will be prioritized in any PIU. Contractor to be project employment encouraged to hire project affected people for non-

8 NRs 30,000 is based on common practice in Nepal for providing seed money to initiate income activities. The amount is valued at more than two months income at minimum daily wage rate (@500/day).

Table 8: Entitlement Matrix Type of Application Entitled Entitlement Implementation Issues Responsible Loss Person Institution(s) Assistance in finding replacement land skilled labor, prioritizing vulnerable APs.

PIU to assist those losing 50% or more of their total land holdings in finding replacement land

NGO to provide training. 6 Temporary Land temporarily Owner(s) with Contractor to negotiate a contract agreement on Municipality/PIU, loss of land acquired for the legal title, the rental rate with the owner for temporary DSC, LACFC for the use Project acquisition of land. of contractors Project and the contractor to ensure that persons during other than the owner affected as a result of construction temporary acquisition are compensated for the temporary period.

Land should be returned to the owner at the end of temporary acquisition period, restored to its original condition or improved as agreed with the AP. 7 Temporary Temporary loss Owner(s) with 30 days’ advance notice Municipality/PIU, loss of of access to legal title, DSC, LACFC access land, structure, tenant(s), Provision of temporary access (e.g. planks across utilities, common leaseholder(s), pipe trench) where possible; property sharecropper(s), resource encroacher(s), Restoration/enhancement of affected land, squatter(s) structure, utilities, common property resource 8 Temporary Temporary loss Owners of 30 days advance notice PIU to ensure temporary Municipality/PIU, loss of of temporary alternative locations found DSC/PIU livelihood livelihood/source kiosks, mobile Provision of alternative sites for continued during construction for (i.e., of income vendors, with or economic activity (e.g., within available ROW or continuation of business. vendors without across road) inside ROW acceptable temporarily proof of Use of Project dump trucks to haul goods and impacted ownership over relocate shops. due to the land; with or construction) without building Restoration of affected land, structure, utilities, and permit common property resource For construction activities involving disruption for a period of more than a month, provision of

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Table 8: Entitlement Matrix Type of Application Entitled Entitlement Implementation Issues Responsible Loss Person Institution(s) alternative sites for hawkers and vendors for continued economic activities. If not possible, allowance based on minimum wage rate for 1 month or the actual period of disruption whichever is more. 9 Loss of Schools, Community Replacement or restoration (requiring adequate Municipality/PIU, cultural & community cash compensation to complete these activities) of DSC, LACFC community centers, IPs who the affected community facilities – including public structures markets, places traditionally water stand posts, temples, shrines, bus shelters /facilities of worship, used water from etc. public trees, the source for natural irrigation Enhancement of community resources resources (including water Households For irrigation water, continued provision of water at used for using the water quantities that will not adversely affect productivity irrigation and from the source and other output, and/or project benefits given to other livelihood for different affected users through consultation and purposes.) livelihood, and negotiation. other purposes. 25 trees sapling and growth care support per tree in the case of public trees 10 Any other Unanticipated involuntary impacts shall be Municipality/PIU/ loss not documented and mitigated based on the principles DSC, identified provided in ADB’s SPS (2009) LACFC/NGO

DSC= design and supervision consultants, LACFC= Land Acquisition and Compensation Fixation Committee, PIU= project implementation unit.

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VIII. INCOME RESTORATION MEASURES

30. Temporary disturbance to income generating activities is anticipated for mobile hawkers/vendors during linear drainage works. The following are the income restoration measures for the temporary affected persons as indicated in the entitlement matrix:

(i) Compensation of lost income to business owner, leaseholder/tenant, hawkers, vendors etc. based on the nature and type of losses assessed. (ii) Affected persons eligible for project employment

31. Temporary shifting may also be required for mobile vendors/hawkers. The following are measures for the temporary affected persons as indicated in the entitlement matrix:

(i) 60-day advance notice (ii) Rights to salvage materials from structure (iii) Replacement value of structure and lost physical assets if not salvageable. (iv) Transfer/shifting allowance to cover the cost of moving structures (transport plus loading and unloading) and materials to be paid on actual cost basis or on current market rates. (v) Assistance in finding alternative arrangement (vi) Affected persons eligible for project employment

32. One landowner will lose agricultural livelihood and entitled to the following:

(i) 30-day advance notice to harvest standing seasonal crops, if harvest is not possible, compensation for share of standing crops at market rates before construction activity begins (ii) Cash compensation for perennial crops and timber valued trees based on market value (iii) If no replacement land is available, HH members involved in farming eligible for skill development training based on their need at the rate of NRs 10,000/person/HH9 (iv) Affected persons prioritized for project employment

33. Vulnerable persons losing livelihood who experience permanent impacts are entitled to the following:

(i) Additional subsistence allowance equivalent to NRs 30,000/HH10 for restoring or enhancing their livelihood. 17 (ii) Eligible for skill development training based on need at the rate of NRs 10,000/person/HH (iii) Vulnerable households will be prioritized in any project employment (iv) Assistance in finding replacement land

34. During the construction stage the affected household working members will be given preference over others in being engaged in activities suitable to their skills. In order to make the

9 The training cost includes the cost of training allowance for affected households for the short term training on income generation for a period ranging 4 – 6 days @ Rs. 500 a day, which is Rs. 3000. Other costs include the costs for training fee and logistic cost, where the cost of groups of trainees will be involved. The cost is therefore lump sum given as Rs. 10000. This is to be updated based on census at detailed design stage. 10 NRs 30,000 is based on common practice in Nepal for providing seed money to initiate income activities. The amount is valued at more than two months income at minimum daily wage rate (@500/day).

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APs employable, the PIU and DSC will identify the required skills for the construction activities prior to the commencement of the construction and provide the required training to them. The contractor will be encouraged by the PIU to hire APs. Accordingly, the list of APs will be provided to the contractor, for consideration in the project.

IX. RESETTLEMENT BUDGET AND FINANCING PLAN

35. The resettlement cost estimate for this subproject includes the following:

(i) Compensation for land (ii) Compensation for structures and assets (iii) Training allowance (iv) Additional allowance for vulnerable persons (v) Compensation for temporary loss of livelihood for mobile vendors/hawkers

36. Costs will be updated during implementation. All costs will be borne by the counterpart funds (i.e., no ADB funds will be used for resettlement related costs). The PCO is to ensure that affected persons are compensated prior to land acquisition and commencement of civil works. A detailed indicative budget is given below.

Table 9: Indicative Resettlement Cost for Nepalgunj Subproject Sl. Item Unit Rate per Unit (In Quantity Cost (In No. NRs) NRs.) A LAND Compensation 1 Estimated cost for loss of land Per 6,000,000 7.41 ha 44,460,000 ha. Subtotal A 44,460,000 B NON LAND 2 Estimated cost for loss of structures and assets11 Per 10,000 20 sq.m 200,000 sq.m Assistance/Allowances Shifting assistance Per 3500/kmx10km 100 350,000 truck Shifting assistance (intercity shift) Per 500 200 100,000 kiosk 3 Training allowance to the affected persons LS 10,000 40 persons 400,000 4 Additional assistance for vulnerable households LS 10,000 10 100,000 * 5 Assistance for loss of temporary income LS 5000 200* 1,000,000 Subtotal B 1,700,000 Total A+B 46,160,000 USD 659,428 * Provisional amount in the event of unanticipated impacts during implementation.

A. Implementation Schedule of Nepalgunj Resettlement Plan

37. The resettlement plan will be updated based on the detailed engineering design. The ADB, MPPW (through the Project Coordination Office in DUDBC), and municipality will approve

11 1. a) Land = NRs.1000/sq.m x 10sq.m = 10,000 b) Mud wall = NRs. 3000/sq.m x 10 sq.m = 30,000 2. a) Land = NRs.1000/sq.m x 10sq.m = 10,000 b)Septic tank/hand pump = NRs. 15000/sq.m x 10 sq.m = 10 sq.m = 150,000

19 the updated resettlement plan prior to contract award. Upon the approval, the resettlement plan will be disclosed to affected persons and arranged to finalize compensation mechanisms through the LACFC or by the municipality as per the LA Act 2034.

38. The resettlement disbursement includes the issuance of identity cards (IDs), payment of all eligible assistance, and resettlement costs. The resettlement compensation must be paid prior to land acquisition and commencement of civil works.

39. Internal monitoring will be the responsibility of the PCO and the PIU and will start early during the project when the implementation of the resettlement plan starts and will continue until completion of the subproject. The PIU and DSC will confirm payment of compensation to resettlement plans to the PCO prior to construction (in sections ready for construction) and will ensure smooth execution of the resettlement plan.

40. The implementation of resettlement plan will be scheduled in line with the subproject implementation. The schedule is subject to modification depending on the progress of the project activities.

41. In accordance with the LA Act 2034, the owners of the property to be acquired must be given minimum 15-day notice to allow them to claim for resettlement compensation and assistance (this does not apply if owner engages in mutual agreement with municipality according to the LAA). Taking into the consideration the time for each activity for the small number of affected households, the time for completion of resettlement plan implementation is planned for a period of minimum 2 to 3 months after updating of the resettlement plan . A tentative implementation schedule is given in Table 11 below.

Table 10: Institutional Roles and Responsibilities Activities Agency Responsible Subproject initiation stage Finalization of sites/alignments for sub-projects PIU/DSC Disclosure of proposed land acquisition and sub-project details by issuing Public Notice PIU/DSC Meetings at community/ household level with affected persons of land/property PIU/DSC Formation of valuation committees PIU

RP preparation stage Conducting Census of all affected persons PIU/DSC Conducting FGDs/ meetings / workshops during SIA surveys PIU/DSC Computation of replacement values of land/properties proposed for acquisition and for LACFC/PIU associated assets 19

Categorization of affected persons for finalizing entitlements PIU Formulating compensation and rehabilitation measures PIU Conducting discussions/ meetings/ workshops with all affected persons and other PIU/DSC stakeholders for this Fixing compensation for land/property with titleholders LACFC /PIU Finalizing entitlements and rehabilitation packages PIU Disclosure of final entitlements and rehabilitation packages PIU/DSC Approval of resettlement plan PCO/ADB Compensation prior to displacement and relocation PIU

Sale deed execution and payment PIU Taking possession of land

RP implementation stage Implementation of proposed rehabilitation measures PIU/RO

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Activities Agency Responsible Consultations with affected persons during rehabilitation activities PIU/RO Grievances redressal PIU/RO/GRC Monitoring PIU/RO

FGD=focus group discussions, GRC = Grievance Redress Committee, PIU = state-level investment program management and implementation unit. LACFC = Land Acquisition and Compensation Fixation Committee; RO = Resettlement Officer in the PIU.

Table 11: Time Bound Schedule for RP Implementation12 Award for Feasibility Detailed Contract Civil Work Construction Study Design Bidding Contracts 1Q 2Q 3Q 4Q 5Q 6Q 7Q 8Q 9Q 10Q 11Q 12Q 13Q 14Q 15Q Resettlement Planning Approval of RP by ADB, municipality, and by MPPW Disclosure of RP Distribution of RP Report and summary Recruitment of NGO Socio-economic survey by DSC consultant and list of APs Issue of identity cards by PIU Identify and confirm poor and vulnerable APs Form Grivance Redress Committee Grivance Redressing Activities

Land Acquisition and Resettlement Announce start date of RP implementation through public notification Disburse compensation payment and assistance for relocation Handing over of lands for construction13 Livelihood and Income Restoration

13 For components not involving land acquisition, the handing over of project sites to the contractor will be possible from the first quarter. For the other components involving land acquisition and resettlement, the project sites will be handed over for civil works by the sixth quarter.

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Award for Feasibility Detailed Contract Civil Work Construction Study Design Bidding Contracts 1Q 2Q 3Q 4Q 5Q 6Q 7Q 8Q 9Q 10Q 11Q 12Q 13Q 14Q 15Q Disburse livelihood restoration assistance Organize skill development training for vulnerable APs Capacity All through the RP implementation period Building Internal All through the RP implementation period monitoring by PIU/PCO

X. INSTITUTIONAL ROLES AND RESPONSIBILITIES

41. The Ministry of Physical Planning and Works (MPPW) will be the Executing Agency (EA), working through its Department of Urban Development and Building Construction (DUDBC), which will establish a project coordination office (PCO) for the Project headed by project director. The PCO will appoint one staff to oversee the monitoring of social safeguards implementation. With assistance from the Resettlement Specialist in the PMSC, the PCO will: (i) conduct internal monitoring of the resettlement process to ensure smooth implementation; (ii) ensure PIUs update Resettlement Plans during the detailed design stage and prepare new Resettlement Plans for any new subprojects in accordance with the Resettlement Framework; (iii) ensure timely payments of compensation and other entitlements as per the Resettlement Plans are made before displacement occurs; (iv) consolidate quarterly PIU monitoring reports into semiannual monitoring reports and submit to ADB. The monitoring reports should record the progress of resettlement activities and any compliance issues and corrective actions taken.

42. The four PIUs will each be staffed with one staff to oversee the monitoring of social safeguards implementation with the assistance of the Resettlement Specialist on the DSC team. The PIUs will be responsible for the following: (i) ensure all Resettlement Plans are updated based on detailed designs, if required, and that new Resettlement Plans are prepared in accordance with the Resettlement Framework; (ii) engage in ongoing meaningful consultations with stakeholders and affected persons; (iii) implement Resettlement Plans with support from consultants and support staff; (iv) provide timely payments to affected persons before displacement occurs in sections ready for construction; (v) ensure all training and capacity

21 building activities are provided to affected persons by linking them to relevant local government

training programs and institutions; (vi) ensure all grievances are addressed and when necessary activate the Grievance Redress Committee; (vii) take corrective actions where necessary; and (viii) submit quarterly monitoring reports to PCO and clearly communicate the implementation status of Resettlement Plan implementation throughout the project period.

XI. MONITORING AND REPORTING

A. Need for Monitoring

42. Monitoring is a major part of the resettlement management system to ensure its goals are met. RP implementation will be monitored internally. The resettlement plan implementation activities will be closely monitored internally by the PIU and PCO. This will involve: (i)

22 administrative monitoring to ensure that implementation is on schedule and problems are dealt with on a timely basis; (ii) socio-economic monitoring during and after any resettlement impact utilizing baseline information from sub-project preparation; (iii) overall monitoring to assess affected person status; and (iv) preparation of quarterly progress reports to be submitted to PCO by the PIU, reporting actual achievements against the targets fixed and reasons for shortfalls, if any.

43. The PIU will prepare quarterly progress reports on resettlement activities and submit to PCO. The PCO will with assistance from the PMSC consolidate their reports into semiannual monitoring and submit to ADB. These reports are to describe the progress of the implementation of resettlement activities and any compliance issues and corrective actions. Reports to ADB should clarify whether or not resettlement goals have been achieved, more importantly analysis of whether livelihoods and living standards have been restored/enhanced (especially for vulnerable APs) is mandatory and suggestion of suitable recommendations for improvement must be made. Any problems or issues identified are followed-up (including recommendation of mitigation measures and supplementary budget); and learning from such issues must be recorded which would help to deal with issues such as these more effectively.

B. Internal Monitoring

44. The DUDBC through its PCO will be responsible for internal monitoring. The PIU will provide necessary oversight and monitor the resettlement plan implementation at the ground level and submit quarterly progress reports to PCO. Correct actions to be taken, if necessary. This will be done in coordination with the municipality.

45. The PIU will maintain a record of all transactions in their resettlement database, followed by entitlement records signed by affected person and survey based monitoring of resettlement / land acquisition progress on a monthly basis. Monitoring will ensure:

(i) That all internal training of relevant safeguards staff occurred; (ii) Verification that there are no outstanding or unresolved land acquisition issues with respect to the project and that property valuation and economic rehabilitation has been carried out in accordance with the provisions of the plan; (iii) Information campaign and consultation has been carried out with affected persons; (iv) Status of land acquisition and payments on land compensation; (v) Value of entitlement received is equal to that of original structure or land acquired; (vi) Effective utilization of entitlements received; (vii) Compensation for affected structures and other assets; (viii) Relocation of affected persons; if applicable; (ix) Payments for loss of income; (x) That all economic rehabilitation measures are implemented, as approved; (xi) Effective operation of both the Grievance Committees; (xii) Funds for implementing land acquisition and economic rehabilitation activities are available in a timely manner, are sufficient for the purposes, and are spent in accordance with the plan.

46. PIU will also be responsible for carrying out field level monitoring through: (i) Review of census information for all affected persons; (ii) Consultation and informal interviews with affected persons;

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(iii) In-depth case studies; (iv) Informal sample survey of affected persons; (v) Key informant interviews; and (vi) Community public meetings.

47. A performance data sheet will be developed by PCO to monitor the project at the field level. Quarterly monitoring reports will be prepared by PIU and submitted to the PCO for overall project level monitoring. Semi-annual reports will be sent to ADB which report the progress of all aspects of resettlement activities. Monitoring and evaluation reports documenting progress on resettlement implementation and the completion report will be provided by the MPPW to ADB for review.

C. Reporting Requirements

48. The PIU will submit quarterly14 progress reports to the PCO, who will then review and take corrective actions if necessary. The PCO will with assistance from the PMSC consultants consolidate their reports into semiannual monitoring and submit to ADB. These reports are to describe the progress of the implementation of resettlement activities and any compliance issues and corrective actions. Any problems or issues identified are followed-up (including recommendation of mitigation measures and supplementary budget); and learning from such issues must be recorded which would help to deal with issues such as these more effectively.

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14 DSC to submit monthly reports to PIU; PIU submits quarterly reports to PCO; PCO submits semi-annual reports to ADB.

24 Appendix 1

APPENDIX 1: COMPARISON OF GON AND ADB’S SPS, 2009 LAR issues Provisions of Nepali Acts/Rules/Regulations ADB policy requirements Involuntary LAR Invoking eminent domain is only legally Eminent domain is generally recognized recognized when taking land for special needs of and subject to policy provisions aiming at the State (Land Reform Acts 1964, LAA 1977, avoiding and minimizing LAR and Town Development Act 1998, Land Act 1997 and replacement of lost assets and Local Self Governance Act (998). These rehabilitation of livelihoods. affected acts/rules do apply for any project where the land persons to be at least as well-off as is acquired involuntarily. without project( Safeguard Policy Statement, 2009) Property Rights Constitution of the Kingdom of Nepal 1990 and Clearly asserts rights of property of a Interim Constitution 2007 guarantees the property person living in the particular rights of a citizen domain/area regardless of official tenure Negotiated LAR The Civil Code of Nepal is the legal basis for Official recognition of negotiated LAR, contractual agreements on the transfer of land where there is a willing buyer and a from APs to the government. willing seller. Eligible APs Only registered land owners and tenants can Lack of formal legal title to land by any transfer their titles to other persons recognized APs is not a bar to entitlements. Titled, under the Land Acts/regulations. legalizable and non-titled affected Non-titled occupants of land as illegal possessors persons are eligible to receive different are not eligible to transfer the land occupied or entitlements. Titled and legalizable receive compensation. affected persons are entitled to . compensation and rehabilitation. Non- titled APs are entitled to livelihood restoration, but may also receive replacement land. Non-titled APs are eligible for entitlements such that they are no worse off than before the project. All APs are entitled to compensation at replacement cost of non-land assets. affected persons without possession or ownership certificate but occupying land in areas designated for land allocation or possession can be recognized as legalizable and thus are eligible for fair compensation and rehabilitation entitlements under the SPS. Compensation for Contractually agreed payment for land transferred Land compensation at replacement cost land to the government. Local practice applies the based on land valuation at average government land valuation tariff but negotiation market value within 1 year before the with with APs goes as well. A Compensation delivery of compensation or replacement Determination Committee is formed under the land of similar size and quality. chairmanship of CDO to determine the price of the land acquired for the project. Replacement land may be provided if AP’s entire land or large part thereof is acquired. Compensation for Contractually agreed payment for transfer of Valuation of structures is based on structures structures. The value of structures is determined current market value, i.e. replacement at market rates, with depreciation deducted from cost of new construction of the structure gross value of the structure. without deduction of depreciation. affected persons can be permitted to salvage materials. Joint property The Civil Code recognizes common property No conflict with SPS. Joint signatures are ownership ownership and family property rights. encouraged. Common property ownership requires permission of other owners to dispose of part of the property. Family property includes ‘other properties accrued since the marriage, notwithstanding in which the name of spouses or family members the property

Appendix 1 25

LAR issues Provisions of Nepali Acts/Rules/Regulations ADB policy requirements is registered. Easement Legal provision for easements or property No conflict with SPS. (property servitude) servitude, allowing the use of another person’s property for specific public or private purposes is permitted under local law; mutual agreement and payment of a fee are required. Rental of land or Rental of land or other property is agreed between Lessee is considered a non-titled affected house the owners and the tenant. Mutual agreement person and eligible to receive regulates the lease of property. If ownership is entitlements based on the type and transferred the new owner incurs all rights and degree of impacts. obligations of a lesser. No provisions for lessee rights in case of land acquisition for a project, except that termination of a lease requires 1 month’s notice Community and Affected community and public assets can be Common property resources or public public resource transferred through contractual agreement under structures and infrastructure affected by losses the Civil Code. LAR are eligible for compensation. The cost of moving affected infrastructure is included in cost of civil works under the Project. Income and No provisions in contractual agreements for Assistance for economic and social livelihood transfer of property; project specific contractual rehabilitation due to loss of jobs, incomes rehabilitation agreement is made such as the Melamchi Water and livelihoods, including (i) income Supply Project. compensation or support for the period of interruption of business or employment, and (ii) priority employment in project civil works, especially to poor and vulnerable households. Relocation and The Nepali Law on Property Allocation Rights and Relocation and transfer expenses, Transaction costs other related rights requires payment of including fees for the registration of registration duties and service fees for the properties and other administrative registration of immovable property with the State charges, are part of the replacement cost Land Revenue Office (Mal) in the respective of lost assets and included in district. compensation. All registration and other fees, as well as cost of relocation, are responsibility of parties to a contract and can be included in a contract. Grievance The LAA 1977and other acts deal with disputes An adequate grievance redress procedure over land. A Grievance Committeee will be be mechanism for affected people is formed in the municipality office for settling required. disputes . If decision is not favorable to the client he /she can move to the courts for justice.

LARP information There is a provision in the government’s IEE and APs are to be fully informed and closely 25 disclosure and EIA regulations (1997) for public consultation and consulted on compensation and

public consultation information disclosure mechanisms. resettlement options. Draft, final and revised LARPs are to be discussed, as well as published on ADB’s website. Cut-off date It is fixed considering the different components of An eligibility cut-off date is to be set when land acquisition procedure including the cut off the project is officially notified, the project date for compensation area is delineated or the census of the AP population is taken, to prevent influx of non-eligible persons and land speculation. Right- of- way Local area main streets require a 3.75m width for No conflict with SPS each lane as well as a sidewalk for each side (Construction Standard and Procedure of the DoR); in addition the ROW of local main streets is determined by-laws of each municipality. Supply of water drainage and sewerage system and their

26 Appendix 1

LAR issues Provisions of Nepali Acts/Rules/Regulations ADB policy requirements utility is also fixed by- laws of the municipality. Notification period Time period for vacating a property may be Cash compensation and/or replacement for vacating defined in the contract document. of assets must be completed before property and Civil works commence in parallel with acquisition displacement; LAR procedures, except commencement of of property, but without defined waiting period. for rehabilitation measures must be works completed before commencement of civil works. IEE- initial environmental examination.

Appendix 2 27

APPENDIX 2: PARTICIPANTS OF THE MEETING HELD AT NEPALGUNJ MUNICIPALITY, 04 MAY 2011 S.No. Participants Position Organization 1 Ram Lal Shrestha Acting Officer Nepalgunj Municipality 2 Krishna Man Shrestha District President Nepali Congress 3 Hira Lal Loniya Chairperson Ma. Ja.Fo. Nep.(Loktantrik) 4 Prakash Subedi Chandukanta Incharge CPN(Maoist) 5 Amir K.C. Representative CPN(Maoist) 6 Bir Bahadur Oli Representative CPN(Maoist) 7 Krishna Raj Panday Representative Rastriya Jana Morcha 8 Hajijam Mohamad Shekh Representative Madeshi Jana Adhikar Forum, Loktantrik 9 Daman Kumar Shrestha Representative RastriyaPrajatantra Party, Bakey 10 Datta Prashad Acharya Representative CPN(UML) 11 Indra BahadurThapa Representative CPN(UML) 12 Bhomina Khatun Leader Rastriya Jana Morcha 13 Ramesh Sigdel Consultant IUDP 14 Dharma Bhattarai Consultant IUDP 15 Dr. Kiran Kumar Bhattarai Consultant IUDP 16 Rajendra Das Shrestha Engineer TDF 17 Prayag Lal Joshi Deputy Team Leader IUDP 18 Padma Kumar Mailalee TA Director DUDBC-IUDP 19 Michael L Green Team Leader IUDP 20 Ratna Mehar Bajracharya Consultant IUDP 21 Chotaylal Kharik Secretary Nepali Janata Dal 22 Ohm Prakash Aajad Chief RastriyaPrajatantra Party, Bakey 23 Mohan Singh K.C. Chief Ra. Pra. Pa. Nepal 24 Warish Representative Ra. Pra. Pa. Nepal 25 Hari Bhandari Representative CPN(United) 26 Karna Bahadur Division Engineer Nepalgunj Municipality 27 Sunil Kumar Sharma Chief Ne.Ga.U.Ta. Sangh 28 Bhim BahadurRaut Secretary CPN(Marxist) 29 Bijaya Kumar Gupta Former Mayor TaraimadeshLoktantrik Party 30 Rajendra Biswokarma Representative Ya. Ja. Fo. Nepal 31 Sushil Sharma Press Advisor Nepalgunj Municipality 32 Narahari Nath Yogi Representative Nepal MajdurKishan Party 33 Saran Karmacharya Bureau Chief ABC tv 34 Kajim Baksh Pathan Representative Sa. Ja. Pa. Nepal 35 Hemlata G.C. Journalist ABC tv 36 Kaushal Kumar Mishra Representative Madeshi Jana Adhikar Forum, Nepal 37 Nijamuddin Representative Nepali Congress 38 Chandra Shekhar Pandey Representative Ra. Ja. Pa. 39 Saru Lama Representative Nepalgunj Municipality 40 Nibesh Kumar Sharma M.F. Nepalgunj Municipality 27

28 Appendix 3

APPENDIX 3: LIST OF PARTICIPANTS IN RP CONSULTATION MEETING

Date: August 17 2011

S.N Name Organization/Position 1 BirendraDevBharati Acting Officer, Nepalgunj Municipality 2 RatnaMeharBajracharya IUDP Consultant 3 KarnaBahadur K.K D.E (Planning Head) 4 Amir K.C CPN-Maoist 5 NijamuddinSiddikki Nepali Congress 6 BirBahadurOli CPN-Marxist 7 DattaPrashadAcharya CPN-UML 8 Mohan Hamal 9 Krishna Raj Pandaya RastriyaJanamorcha 10 HariBhandari CPN-United 11 Saru Lama CPN-Malay 12 Daman Kumar Shrestha RastriyaPrajatantra Party 13 BachenLal Gupta TaraiMadeshLoktantrik Party 14 BhupatiKhatery Revenue Division, Nepalgunj Municipality 15 Sailendra Kumar Maharjan E, Planning Section 16 Suraj Kumar Gupta E, Planning Section 17 Maya Sharma Junior Officer 18 Rita Chauddhary Section Officer 19 SarwshotiParajuli Section Officer 20 Taiya Vendor 21 Amir Aahamad Vendor 22 Tanku Vendor 23 GulMohomad Vendor 24 PremPrashadUppadhaya Nepalgunj-14 25 Anita Khanal 26 Rukmani Gupta 27 Ashok K.C 28 KarnaBahadur K.K Planning Head, Nepalgunj Municipality 29 Chandra ShekharPanday RastriyaJanasakti Party 30 Haji Jan MohomadSekh Forum Loktantrik 31 ChotayLalKhatik Nepali Janatadal, Bakay 32 Kaushal Kumar Mishra MadeshiJanaadhikar Forum Nepal

Appendix 4 29

APPENDIX 4: MONITORING INDICATORS AND SAMPLE FOR STATUS REPORT No. Resettlement Tasks Target Responsible Completion Status Agency Deadline and Additional Deadlines 1. Disclosure 1.1 Information booklet # of copies 1.2 Resettlement plan distribution to # of copies resettlement offices/municipalities/APs 1.3 RP placed on ADB website 2. Detailed Measurement Survey (DMS) 2.1 Updated RP based on DMS # of copies Distribution to resettlement offices/municipalities/APs 2.2 Updated RP based on DMS 3. Detailed Rehabilitation Plans 3.1 Initial municipality rehabilitation plans (if # of applicable) municipalities 3.2 Refined municipality rehabilitation plans (if # of applicable) municipalities 3.3 Farmland adjustment agreements(if applicable) 3.4 Assistance for Vulnerable Groups # of APs 3.5 Technical training plan for AF # of APs 4. Resettlement Plan and Budget # of APs 4.1 Complete redline survey (map) 4.2 Approval of RP & budget 4.3 Approval of compensation rates 4.4 Staking survey 5. Compensation Agreements 5.1 Municipality agreements # of municipalities 5.2 Enterprise agreements # of businesses 5.3 Household agreements # of APs 6. Implementation Capacity 6.1 # of staff 6.2 Designate municipality representatives # of staff 6.3 Training of staff # of staff 6.3 Setting up grievance redress # of staff committees 7. Monitoring and Evaluation 7.1 Baseline survey Sample

7.2 Set-up internal supervision As per RP 29

7.3 Contract external monitor (though external monitoring As per RP not relevant in this project) 7.4 Internal monitoring reports Quarterly 7.5 External monitoring reports Semi-annual 7.6 Evaluation reports (tracer surveys) Annual 7.7 Resettlement Completion Report 8. Documentation of Consultation As per RP 9. Documentation of Grievances As required 10. Flow of Funds / Compensation 10.1 Executing or Implementing Agency 10.2 Project Implementation Unit 10.3 To affected households # of APs 11. Commence Resettlement 11.1 Land acquisition # of hectares 11.2 House removal # of APs