Southern Gansu Roads Development Project

Social Monitoring Report

Semi-Annual Report 30 March 2015

PRC: Southern Gansu Roads Development Project

Prepared by Beijing Zhongfachengmei Consultants for the People’s Republic of China and the Asian Development Bank.

External Monitoring Report on LAR of Liwu Highway

Southern Gansu Roads Development Project

External Monitoring Report on Land Acquisition and Resettlement for Liwu Highway

(No.2)

Beijing Zhongfachengmei Consultants 30 March 2015

Table of Contents 1 INTRODUCTION ...... 1

1.1 LIWU HIGHWAY AND ITS CONSTRUCTION STATUS ...... 1 1.2 THIS MONITORING REPORT ...... 1 2 FINDINGS ...... 2

2.1 LAR PROGRESS ...... 2 2.1.1 Permanent Land Acquisition ...... 2 2.1.2 Temporary Land Occupation ...... 2 2.1.3 House Demolition ...... 3 2.1.4 Agreements with APs ...... 3 2.1.5 Identification of New House Plots and Construction of New Houses ...... 4 2.1.6 Relocation of Affected Public Facilities ...... 4 2.2 COMPENSATION STANDARDS ...... 4 2.3 PAYMENT PROGRESS OF LAND COMPENSATIONS ...... 4 2.4 DETAILED COSTS ...... 5 2.5 CONSULTATION AND PARTICIPATION ...... 6 2.6 LEVEL OF SATISFACTION OF AFFECTED PEOPLE ...... 7 2.7 CLEARANCES WITH MINE EXPLORING COMPANIES FOR LAND USE APPROVAL ...... 7 2.8 TRAINING ON AGRICULTURAL PRODUCTION TECHNIQUES ...... 8 2.9 EMPLOYMENT OF AFFECTED PEOPLE...... 8 2.10 GRIEVANCE REDRESS MECHANISM AND ITS FUNCTIONING ...... 8 3 ISSUES AND SUGGESTIONS ...... 9 ANNEX 1: LAND ACQUISITION BY TYPE BY TOWNSHIP...... 10

A. ACTUAL LAND ACQUISITION BY TOWNSHIP BY 31 DECEMBER 2014 ...... 10 B. LAND ACQUISITION PROGRESS BY TOWNSHIP BE DECEMBER 2014 ...... 10 ANNEX 2: GRIEVANCE REDRESS MECHANISM ...... 11

Lists of Tables TABLE 1: LAND ACQUISITION PROGRESS ...... 2 TABLE 2: TEMPORARY LAND OCCUPATION BY DECEMBER 2014 ...... 2 TABLE 3: HOUSE DEMOLITION PROGRESS BY DECEMBER 2014 ...... 3 TABLE 4: RELOCATION OF PUBLIC FACILITIES BY DECEMBER 2014 ...... 4 TABLE 5: COMPENSATION RATES FOR AFFECTED HOUSES ...... 4 TABLE 6: PAYMENT PROGRESS OF LAND COMPENSATIONS ...... 5 TABLE 7: DETAILED COSTS FOR LIXIAN COUNTY ...... 5 TABLE 8: DETAILED COSTS FOR WUDU DISTRICT ...... 6 TABLE 9: C&P DURING IMPLEMENTATION ...... 6 TABLE 10: EMPLOYMENT OF LOCAL UNSKILLED LABORS IN 2014 ...... 8 TABLE 11: ISSUES AND SUGGESTIONS ...... 9

List of Figures FIGURE 1: LIWU HIGHWAY ...... IV FIGURE 2: PROJECT CONSTRUCTION PROGRESS ...... IV FIGURE 3: RIVER BED AS ACCESS ROAD ...... V FIGURE 4: A PARTLY DEMOLISHED HOUSE AND ITS NEW HOUSE PLOT IN WUDU ...... V FIGURE 5: A RETAINED HOUSE IN WUDU...... V

FIGURE 6: NEW HOUSE UNDER CONSTRUCTION IN LIXIAN ...... VI FIGURE 7: RESETTLEMENT AGREEMENTS MADE IN JULY 2014 ...... VI FIGURE 8: NEGOTIATED COMPENSATION STANDARDS ...... VII FIGURE 9: BANK TRANSFER RECORD FOR XIABA VILLAGE, WUDU ...... VIII FIGURE 10: COMPENSATIONS TO TWO HOUSEHOLDS IN WUDU ...... VIII FIGURE 11: CLEARANCE DOCUMENTS WITH MINE EXPLORING COMPANIES ...... IX

iii

Li-Wu Highway

Figure 1: Liwu Highway

Figure 2: Project Construction Progress

Figure 3: River Bed as Access Road

Figure 4: A Partly Demolished House and Its New House Plot in Wudu

Figure 5: A Retained House in Wudu

Figure 6: New House under Construction in Lixian

Figure 7: Resettlement Agreements Made in July 2014

Figure 8: Negotiated Compensation Standards

vii

Figure 9: Bank Transfer Record for Xiaba Village, Wudu

Figure 10: Compensations to Two Households in Wudu

viii

Figure 11: Clearance Documents with Mine Exploring Companies

1 INTRODUCTION

1.1 Liwu Highway and Its Construction Status 1. Liwu Highway, shown in Figure 1, is a component of the Southern Gansu Roads Development Project. This component is to rehabilitate/build a Class III highway from the county seat of Lixian to national highway 212 (G212) at Liangshui Township of Wudu district (Figure 1). The total length of the road is 142.9km, including (i) rehabilitating 104km of gravel roads of Class III, IV and non-classed to Class III paved road (km0+000~km60+920; km81+640~124+900); (ii) rehabilitating 16km of paved but extremely deteriorated road of Class III with minor alignment widening (km124+900~km140+818); and (iii) constructing about 20.7km of new road (km60+920~km81+640). 2. The Liwu Highway traverses 59 villages in Lixian County and Wudu District and it will directly benefit over 100,000 local people. 3. The construction of the Liwu highway started in September 2013. From September 2013 to December 2014, the subgrade was basically completed (see Figure 4 and Figure 3), and preparations for pavement for the first 50km of the project road in Lixian County, a long section where there were no house demolition and resettlement, is undergoing.

1.2 This Monitoring Report

4. This report, the second external monitoring report, presents the monitoring results on land acquisition and resettlement implementation status over the period of July-December 2014. It also presents issues identified, as well the recommendations to solve the problems. 5. To carry out this monitoring, consultant from the external consultant visited the two project counties during 12-27 Jan 2015. Methods used for this monitoring include review of project ddocuments, site visits, interviewing staff of resettlement office, county and township government officials, affected people and the Wudu Rural Credit Cooperative (the bank that directly transferred compensations to affected people on behalf the district coordination office). Again, the visited townships are Leiba and Wangba in Lixian County and Maying in Wudu District where project LAR are concentrated; the visited villages are Heya and Xiaoba in Lixian County, and Sidixia and Xiaba in Wudu District. However, the consultant missed the planned Shangqing village in Lixian County due to heavy snowing.

2 FINDINGS

2.1 LAR Progress

2.1.1 Permanent Land Acquisition 6. By December 2014, all construction needed land that totaled to 848.9mu was acquisitioned, accounting for 109.0% of the planned 779.0mu of the RP. As given in Table 1 below, land acquisition of during the period of July-December 2014 was basically limited. The increases of land acquisition is due to the claims of ownerships of unused land on the existing right-of ways, while no one will make such claim if no road rehabilitation. 7. The land acquisition in July-Dec 2014 was concentrated in Maying Township in Wudu District (19.0mu dry farmland and 7.1mu house plots) and Wangba Township of Lixian County (4.1mu house plots). Total land acquisitions in each affected township were presented in Table 6 in the following section; while detailed land acquisition by type by township are given Annex 1. 8. The impact of farmland loss on individual household is rather limited,1 and the impact was analyzed in the previous monitoring report already. Table 1: Land Acquisition Progress RP (mu) Land acquisition Total as Land Type By June 2014 July-Dec 2014 Total % of RP Wudu Lixian Total Wudu Lixian subtotal Wudu Lixian subtotal Irrigated land 6.9 1.6 8.4 7.4 1.7 9.1 - - - 9.1 108.3 Farmland Dry land 254.1 139.2 393.4 263.2 144.6 407.8 19.0 - 19.0 426.8 108.5 Sub-total 261.0 140.8 401.8 270.6 146.3 416.9 19.0 - 19.0 435.9 108.5 Waste mountain - 229.1 229.1 - 236.8 236.8 - - - 236.8 103.4 land (forestland) Wasteland 6.3 58.6 64.9 6.9 57.6 64.5 - - - 64.5 99.4 Other Waste river bed - 17.3 17.3 - 29.9 29.9 - - - 29.9 172.7 land Forestland 1.1 54.5 55.6 10.1 56.5 66.6 - - - 66.6 119.8 Threshing ground 2.7 1.3 4.0 2.7 1.3 4.0 - - - 4.0 99.5 House plot 5.3 0.9 6.2 - - - 7.1 4.1 11.2 11.2 180.6 Sub-total 15.4 361.8 377.1 19.7 382.1 401.8 7.1 4.1 11.2 413.0 109.5 Total 276.4 502.6 779.0 290.3 528.4 818.7 26.1 4.1 30.2 848.9 109.0 Source: Liwu Highway PMO and county coordination offices

2.1.2 Temporary Land Occupation 9. Temporary land occupation remained unchanged as compared to figures in the previous monitoring report. As being mentioned in the previous report, the river bed had been used to a maximum level as access roads (see Figure 3). The highway temporarily occupied 610mu of land, which is 105.7% of the planned area of 557mu, but farmland occupation reduced from 222.5mu to 115mu, while river bed occupation significantly increased to an actual of 145mu from the planned area of 45mu. Table 2: Temporary Land Occupation by December 2014 Actual area in both June RP (mu) Actual (as % of RP) Land type and Dec 2014 (mu) Lixian Wudu Lixian Wudu Total Total Lixian Wudu Total Dry farmland 196 26.5 222.5 130 25 155 66.3% 94.3% 69.7% Wasteland 162.4 147 309.4 180 130 310 110.8% 88.4% 100.2% Waste river bed 3.4 41.9 45.3 85 60 145 2500.0% 143.2% 320.1% Total 361.8 215.3 577.1 395 215 610 109.2% 99.9% 105.7% Source: PMO

1 Majority HHs lost less than 0.3mu (about 180 square meters) each. The maximum loss is 1.8mu, limited to only 1 HH, but still less than 10% of total HH farmland holdings.

2.1.3 House Demolition 10. Following the advice of the consultant during the first monitoring and using the template provided by the monitor, the project (i.e., coordination offices of Wudu and Lixian) signed agreements with affected households in July 2014 (see Figure 7). Instead of using the stipulated compensation standards, negotiated standards were adopted in both Wudu and Lixian counties. Of course, as will be further discussed in the following section, the negotiated standards were much higher than that of the RP standards. 11. By December 2014, all affected houses totaling to 8,099m2 were demolished, accounting for 98.1% of the RP estimate of 8,258m2. The balance of 159m2, belonging to two houses, were avoided for the sake of minimizing house demolition and reducing resettlement cost. Figure 4 shows the current status of a partly demolished house and Figure 5 shows an avoided house. In the case of Figure 5, a concrete house of 120m2 was retained by slightly realigning the road through cutting the hill on the left side. Details of house demolition progress are given in Table 3. As a result of avoiding the house demolition in Figure 5, the relocation household reduced by one in Wudu District. 12. All house demolition took place during Sept~Nov 2014. As a result, there was hardly any new house construction as of Jan 2015 when the consultant visited the project area because of cold winter season. Table 3: House Demolition Progress by December 2014 House type Unit Lixian Wudu Total

Earth-wood house m2 2,116 2,880 4,996 Simple shed m2 419 32 451 Actual 2 Concrete house m 128 890 1018 Demolition during Brick-wood house m2 490 769 1,259 July Dec. 2014 Portable house m2 0 375 375 Total m2 3,145 4,946 8,099 Earth-wood house m2 2,116 2,919 5,035 Simple shed m2 419 32 451 Concrete house m2 128 1010 1,138 RP Brick-wood house m2 490 769 1,259 Portable house m2 0 375 375 Total m2 3,145 5,105 8,258 Earth-wood house m2 0 -39 -39 Simple shed m2 0 0 0 Concrete house m2 0 -120 -120 Difference Brick-wood house m2 0 0 0 Portable house m2 0 0 0 Total m2 0 -159 -159 Source: Liwu Highway PMO

2.1.4 Agreements with APs 13. For land acquisition, each township has detailed lists of affected HHs and land acquisition areas by village, and these lists were notified in the villages (see Appendix 2 in the No.1 monitoring report). Given that majority individual HHs lost very limited farmland, they accepted the method of signing payment sheets for land compensations (a payment sheet for all affected HHs in a villagers’ group). 14. As for house demolition and resettlement, agreements with affected HHs were made in July 2014 by following the advice of the consultant during the first monitoring. Figure 7 presents some agreements. The consultant visited 7 resettlement households during this monitoring, and they all showed the formal agreements. In addition, they all are satisfactory with the negotiated compensation standards that were much higher than the given standards of the RP.

2.1.5 Identification of New House Plots and Construction of New Houses 15. As of 30 December 2014, all 59 relocation households, including in 31 in Wudu and 28 in Lixian, had obtained their new house within their own villages. 16. Only one non-relocation household started construction of its new and non-residential house of 12m2 in Lixian County, yet the construction was halted during the consultant’s field visit in Jan 2015 because of winter season coldness (Figure 6).

2.1.6 Relocation of Affected Public Facilities 17. All affected public facilities were compensated and relocated as of 31 December 2014. The relocations were carried out by the relevant companies that are managing the facilities. Actually relocated facilities are the about 50% more than that given in the RP (see also the table below). Table 4: Relocation of Public Facilities by December 2014 Power Supply Facility Telecommunication facility Pipeline Concrete Wooden pole High voltage Transformer Concrete Wooden pole Water pipe

Pole (No.) (No.) Pole (No.) (No.) Pole (No.) (No.) (m) RP Lixian 22 2 9 145

Wudu 29 1 2 3 2 10

Total 51 1 2 5 2 19 145 Actual Lixian 31 2 9 195 Wudu 42 3 5 5 4 15 Total 51 4 3 8 3 26 145 Difference Lixian 9 0 0 50 Wudu 13 2 3 2 2 5 Total 22 2 3 2 2 5 50 Source: Liwu Highway PMO

2.2 Compensation Standards 18. Actual compensation standards for land and standing crops were the same as that in the RP. Actual compensation standards for affected houses, as shown in Figure 8 and in the table below, were much higher than the RP rates. The higher rates were based on negotiations between the coordination offices and affected households. A precondition for negotiated compensation standards was that the project will not provide transitional allowances to affected households, and this precondition was fully accepted by affected households. Table 5: Compensation Rates for Affected Houses Earth-wood Simple Concrete Brick-wood Portable House shed house house house Actual (CNY/m2) 780~800 250 1,000~1,200 900~1,000 250 RP (CNY/m2) 450 150 730 550 150 Difference (CNY/m2) 330~350 100 270~470 450~550 100 Source: RP and signed agreements

2.3 Payment Progress of Land Compensations 19. Table 6 presents the progress on payment of land compensations and it highlights that by December 2014: (i) all land compensations in Lixian County was paid as of 2014; (ii) only 59.1% of land compensations were paid in Wudu District; and (iii) overall 84.7% of the land compensations were paid. 20. The slow progress in Maying Township of Wudu District (55.5% paid) was owing to some unclear land borders in 4 villages. The coordination office assured the consultant that payments

will be fully made the Chinese New Year period in February 2015 when all affected households are available to settle the land bordering issue. Table 6: Payment Progress of Land Compensations Actual land acquisition (mu) Actual compensation payment (mu) County Township RP (mu) By June July-Dec Total By June July-Dec Total Total 2014 2104 (% RP) 2014 2104 Qty % Shiqiao 3.6 4.1 - 4.1 112.9 - 4.1 4.1 100 Jiangkou 19.2 22.2 - 22.2 115.6 - 22.2 22.2 100 Longlin 28.5 30.8 - 30.8 108.2 - 30.8 30.8 100 Lixian Leiba 107.0 111.7 - 111.7 104.4 - 111.7 111.7 100 Wangba 344.3 359.6 4.1 363.7 105.6 - 363.7 363.7 100 Subtotal 502.6 528.4 4.1 532.5 105.9 - 532.5 532.5 100 Maying 253.0 264.9 26.1 291.0 115.0 - 161.5 161.5 55.5 Puchi 19.1 20.8 - 20.8 109.2 - 20.8 20.8 100 Wudu Liangshui 4.3 4.6 - 4.6 106.5 - 4.6 4.6 100 Subtotal 276.4 290.3 26.1 316.4 114.5 - 186.9 186.9 59.1 Total 779.0 818.7 30.2 848.9 109.0 - 719.4 719.4 84.7 Source: PMO and coordination offices 21. Payments for all affected houses, including both relocation and non-relocation houses, were made before September 2014. According to PMO, affected houses could not be demolished if negotiated prices were not fully paid. 22. The payments were made from bank to affected households directly, exactly the same as the RP specified procedure. Figure 9 presents a bank transfer record while Figure 10 presents two received land compensations made in December 2014 in Maying Township of Wudu District.

2.4 Detailed Costs 23. Table 7 presents the resettlement costs for Lixian County and it highlights that: (i) In line with increased land acquisition (6% increase, fully paid), cost for land acquisition increased for 10.6%. Consequently, cost for standing crops increased 12.0%. Similarly, costs for scattered trees, special facilities and household living facilities also increased, but costs for temporary land occupation decreased. (ii) Compensation to affected houses and relocation allowance, as a result of negotiated prices, significantly increased by 33.2%. (iii) Special assistances to vulnerable HHs were paid. (iv) Overall, compensation payments including assistance to vulnerable households increased by 20.6%. Table 7: Detailed Costs for Lixian County No. Items RP Budget Actual Difference (CNY) =(actual budget (CNY) Cost (CNY) Qty % 1 Permanent Land Acquisition 3,074,435 3,400,000 325,565 10.6 2 Temporary land Acquisition 443,510 380,000 -53,510 -14.3 3 House demolition 1,372,150 2,200,000* 547,850 33.2 Relocation allowance 280,000 4 HH living facilities 1,000,000 1,200,000 200,000 20.0 5 Special facility/attachments 330,520 650,000 319,480 96.7 6 Standing crops 535,492 600,000 64,508 12.0 7 Scattered trees 254,070 360,000 105,930 41.7 8 Special assistance to vulnerable 7,000 7,000 0 0 Total 7,297,177 8,797,000 1,499,823 20.6 Source: Lixian Coordination Office

24. The situation in Wudu District, shown in Table 8, are very similar to that of Lixian County: (i) In line with increased land acquisition (14.5% increase, only 59.1% of land compensations paid as of 31 December 2014), cost for land acquisition increased for 16.0%. Consequently, cost for standing crops increased 15.5%. (ii) Compensation to affected houses and relocation allowance, as a result of negotiated prices, significantly increased by 38.6%. (iii) Costs for scattered trees, special facilities and household living facilities also increased, but costs for temporary land occupation slightly decreased. (iv) Special assistance to vulnerable HHs paid. (v) Overall, compensation costs including assistance to vulnerable households increased by 20.7%, but 40.9% of the land compensations were not made as 31 December 2014. Table 8: Detailed Costs for Wudu District No. Items RP Budget Actual Difference (CNY) =(actual (CNY) Cost (CNY) budget Qty % 1 Permanent Land Acquisition 3,196,904 3,710,000 513,096 16.0 2 Temporary land Acquisition 50,537 50,000 -537 -1.1 3 House demolition 2,457,470 3,850,000 1,072,530 38.6 Relocation allowance 320,000 4 HH living facilities 1,500,000 1,350,000 -150,000 -10.0 5 Special facility/attachments 501,170 750,000 248,830 49.6 6 Standing crops 324,830 375,000 50,170 15.4 7 Scattered trees 152,960 180,000 27,040 17.7 8 Special assistance to vulnerable 8,000 8,000 0 0.0 Total 8,511,871 10,273,000 1,761,129 20.7 Source: Wudu District Coordination Office 25. The provincial department of transport allocated CNY 30 million of resettlement funds to the Liwu Highway PMO on 22 Nov 2013; which is 114% of the RP budget of CNY 26.3 million. The Liwu Highway PMO disbursed CNY 15 million to the Lixian coordination office on 16 Jan 2014 and CNY 15 million to the Wudu coordination office on 02 June 2014 respectively.2

2.5 Consultation and Participation 26. A consultation and participation (C&P) plan during RP implementation was included in the RP. The table below gives details on C&P during RP implementation in July-December 2014. 27. Specifically, intensive C&P were carried out in July 2014 compensation standards for affected houses. As a result, negotiated standards that are much higher than the RP standards were adopted (see Table 5). Table 9: C&P during Implementation Date Topics/results Purpose/action Plan Actual Plan Actual (July-Dec 2014) Land acquisition March 2013- Much delayed. i) Agreement on i) No written agreements were and resettlement May 2014 Started in late 2013 and affected land and agreed on affected land limited progress by June non-land assets ii) Negotiations and agreements 2014，but mostly completed ii) Negotiation and made in July 2014 by December 2014, except agreement on relocation of affected HHs. compensation standards and mode of

2 The Wudu coordination office did not accept the disbursement in Jan 2013 because it considered that the budget was too low; but accepted in June 2014.

Purpose/action Date Topics/results payments House plots Feb-March. July-Dec 2014 / Selection made by Dec 2014 selection 2013 Training activities Feb 2013. Routine training on Discussion of training Wangba and Leiba townships in Dec 2014 agricultural techniques needs and Lixian County and Maying Township organized by township establishment of in Wudu District: training on technical station was done. scheme integrated pest management of walnut, once in each affected village Monitoring March 2013~ Limited action. i) Resettlement progress i) Reported in this report Dec. 2014 First internal monitoring report and impacts ii) Payments mostly made, but some submitted in July 2013 then ii) Compensation land compensations in Maying second in July 2014. disbursement Township are still missing iii) Information disclosure iii) Resettlement information sheet iv) Livelihood restoration disclosed and relocation iv) Relocation not mobilized.

2.6 Level of Satisfaction of Affected People 28. The consultant visited 4 villages and interviewed about 25 affected households during this monitoring. All interviewed households are satisfactory with the compensation standards for both affected land and houses. 29. Mr. Liu Hede in Sidixia village in Wudu District is grateful to the contractor who excavated a new house plot for him with some construction stones provided. Mr. Liu Hede’s partly demolished house and the newly excavated house plot is shown in Figure 4. 30. Mr. Liu Hanwu, also from the Sidixia village informed the consultant that he received a compensation of about CNY 100,000 for his demolished houses, while it was CNY 125,000 in his bank saving account. Discussions with Mr. Liu Hanwu and the Wudu coordination office staff suggested that the compensation could only be about CNY 80,000 if adopting the compensation standards of the RP. Mr. Liu Hanwu is currently living in another smaller house of his own and he plans to expend CNY 100,000 to build a new house in March 2015, while the remaining CNY 25,000 will be used for buying new furniture. Mr. Liu Hanwu is very happy about the compensation standards and timely payment. 31. Mr. Pan Shunyi (Figure 6) in Lixian County lost a non-residential brick house of 12m2 and happily received a lump sum compensation of CNY 20,000. The compensation is more than sufficient to rebuild a new house of the same type and same area on the same site. He intends to open a roadside motorbike repair shop or a pharmacy once the new house is built.

2.7 Clearances with Mine Exploring Companies for Land Use Approval 32. The land use application for the Liwu Road had not been approved by the Gansu Provincial Land and Resource Department. The reason was that clearances (commitment letters) from more mine exploring companies were requested after October 2014. By April 2014, the project made clearances with three mine exploring companies, but was told to add another 4 in early November 2014. 33. In China, areas with good mineral resources3 were often contracted to professional mine exploring or survey companies directly by the provincial land and resource department. Once the exploring or survey companies discover the exact of reserves and locations of minerals, the results can be sold to companies for actual mining. The exploring companies have the right to make certain operations on land contracted to them. For this road project, clearances have to be made with these companies to make sure that they will not make any operations on the new right of way

3 All mineral resources are state ownership in China.

of the project road (i.e. giving up mine exploring/surveying operation on the right of way as indicated in Figure 11). 34. As of 2014, the project had made clearances with 6 companies and is expecting to make clearance with the last one in February 2014 or so.4 Figure 11 presents clearance documents of two companies, one obtained in April 2014 and another in November 2014.

2.8 Training on Agricultural Production Techniques 35. The mountainous project area is famous for its good quality and almost every household has some walnut trees. In July 2014, technicians from Wangba and Leiba townships in Lixian County and Maying Township in Wudu District had respectively organized training in all villages on pest management of walnut (placing yellow colored and sticky papers on trees to catch flying insects). 36. In addition, routine training was also carried out in each village on winter wheat and rapeseed productions in Sept~Oct 2014.

2.9 Employment of Affected People 37. Contractors had employed 2,270 of locals for unskilled work 2014, including 644 of women (28.2%) and 1,664 APs (73.3%). The employments generated a total income of about CNY 12.8 million to locals, which is equivalent to CNY 5,650 for each labor/household or 1/3-1/4 of a household total annual income. Table 10: Employment of Local Unskilled Labors in 2014 Locals Locals Local APs Payment to Contractor From to (No.) (pm)* women (No.) locals (No.) (CNY) 01 K 0+000 ~ K10 +240 160 475 34 128 950,000 02 K8 +000 ~ K27+000 250 753 84 139 1,505,000 03 K 27+000~K42+000 280 751 70 173 1,502,000 04 K42+000 ~ K52+000 150 396 39 117 792,000 05 K52+000~ K60+920 310 877 90 254 1,753,000 06 K 60+920~ K70+000 160 467 53 144 933,000 07 K 70+000~K80+000 200 577 54 155 1,153,000 08 K80+000~ K95+000 150 384 39 134 767,000 09 K95+000~ K110+000 180 492 52 136 983,000 10 K110+000~K125+000 220 611 68 162 1,221,000 11 K125+000~ K140+818 210 639 61 122 1,277,000 2,270 644 1,664 12,836,000 Total 6,422 (28.4%) (73.3%) Source: contractors’ estimates; * pm = person-month, counted as a labor working for 20 days a month.

2.10 Grievance Redress Mechanism and Its Functioning 38. The grievance redress system, by using existing administrative set-ups and as defined in the RP, was established and known to APs (Annex 2 presents the system). The system was functioning well at township and county levels.

4 The 7 companies are: (i) Ningxia Jindi Coal Industry Co. Ltd.; (ii) Mingke Mining (China) Co. Ltd., (iii) Baiying Survey Institute of Gansu Non-ferrous Metal Geological Survey Bureau; (iv) Gansu Daye Geology and Mining Co. Ltd.; (v) Longnan Jinquan Mining Co. Ltd; (vi) Taiyuan Mining Co. Ltd.; and (vii) Longgou Coalmine.

39. Regarding land acquisition, there was no complaint in Lixian County, but quite some oral complaints in Maying township of Wudu District due to delayed payment of compensation (as shown in Table 5, 45% of land compensations were not paid as of December 2014). Township officials had explained the reasons for the delay and promised to make the payments during the Chinese New Year period in 2015 (i.e., February 2015). 40. There were a lot of oral complaints both in Lixian County and Wudu District regarding compensation rates for affected houses. The complaints were timely conveyed to the county/district governments, as well as to PMO. Given that almost every affected household was complaining, PMO and county/district governments agreed with affected households to compensate affected houses at negotiated prices rather than the RP rates.

3 ISSUES AND SUGGESTIONS 41. The table below summarizes the outstanding issues proposed counter actions that were discussed and agreed with the PMO. Table 11: Issues and Suggestions Issue Suggestion Note Land use approval by the provincial Obtain clearance from the seventh Report in next progress department of land and resource mine exploring company by report February 2015 Submission of final application in March 2015 Remaining land compensation Disbursement of payments in Ditto payment in Maying Township of Wudu February 2015 District Construction of resettlement houses Close monitoring, continuous Ditto and relocation consultation and participation

Annex 1: Land Acquisition by Type by Township

A. Actual Land Acquisition by Township by 31 December 2014 实际征地 Actual land acquisition 亩 mu 耕地 Arable land 荒山荒滩林地场地宅基地乡镇 Township 合计荒地水地旱地 Waste River Forest Threshing House Total Wasteland Irri. Dry land mountain land course land ground plot Lixian County

石桥镇 Shiqiao 4.1 0.8 1.5 1.8

口镇 Jiangkou 22.2 0.9 11.8 7.5 1.3 0.5 0.18

龙林乡 longlin 30.8 9.5 7.2 14.1

雷坝乡 Leiba 111.7 32.8 34.8 40.6 3.53

王坝乡 Wangba 363.7 89.0 202.0 0.5 11.0 56.0 1.1 4.1

礼县合计 Lixian total 532.5 1.7 144.6 236.8 57.6 29.9 56.5 1.3 4.1 Wudu District

马营镇 Maying 291.0 0.7 265.0 6.0 10.1 2.1 7.1

浦乡 Pochi 20.8 5.2 14.1 0.9 0.6 0 两水 Liangshui 4.6 1.5 3.1 0 武都合计 District Total 316.4 7.4 282.2 6.9 10.1 2.7 7.1

项目总计 Highway Total 848.9 9.0 426.8 236.8 64.5 29.9 66.6 4.0 11.2 B. Land Acquisition Progress by Township be December 2014 实际征地进度 Actual Progressas % of RP 耕地 Arable land 荒山荒滩林地场地宅基地乡镇 Township 合计荒地水地旱地 Waste River Forest Threshing House Total Wasteland Irri. Dry land mountain land course land ground plot Lixian County

石桥镇 Shiqiao 112.9% 105.3% 115.4% 114.6%

口镇 Jiangkou 115.6% 118.4% 111.0% 116.8% 126.2% 277.8% 100.0%

龙林乡 longlin 108.2% 110.5% 121.6% 101.1%

雷坝乡 Leiba 104.4% 101.9% 115.5% 94.2% 230.7%

王坝乡 Wangba 105.6% 0.0% 102.9% 101.5% 31.6% 1358.0% 103.1% 96.5% 455.6% 礼县合计 Lixian total 105.9% 104.9% 103.9% 103.4% 98.3% 172.6% 103.6% 98.5% 455.6% Wudu District

马营镇 Maying 115.0% 127.3% 110.8% 105.1% 901.8% 101.9% 158.8%

浦乡 Pochi 109.2% 103.0% 115.3% 155.2% 100.0% 0.0%

两水 Liangshui 106.5% 120.0% 109.9% 0.0%

武都合计 District Total 114.5% 108.0% 111.0% 109.7% 901.8% 101.5% 133.7%

项目总计 Highway Total 109.0% 106.1% 108.5% 103.4% 99.4% 172.6% 119.7% 100.5% 180.4%

Annex 2: Grievance Redress Mechanism

The basic grievance procedures include the following steps: (i) If any AP is aggrieved by any aspect of the resettlement, he/she can state his/her grievance and appeal to the village committee or the TRO in oral or in written form. If an oral appeal is made, the village will record it on paper and process it. Village committee or TRO will make a decision on or resolve it in two weeks. (ii) If the aggrieved AP is not satisfied with the decision village and/or TRO, he/she can appeal to the D/CPCH after receiving the decision; the D/CPVH will reach a decision in two weeks. (iii) If the aggrieved AP is still not satisfied with the decision of the D/CPCH, he/she will appeal to the PMO after receiving the decision. The PMO a decision in two weeks. At any point in the process that the AP is dissatisfied, he/she can appeal to the civil division of a people’s court according to the court’s procedure. The process and results of grievance redress will be recorded, monitored, and evaluated. If necessary, further measures will be taken to ensure that the problems will be resolved reasonably and satisfactory. The authorities will accept the grievance and appeals of the AP free of charge, and the reasonable expenses incurred will be paid by the PMO from the project’s contingency fund. Usually, small issues are resolved within the villages. The aggrieved person may also express grievance to the external monitor, who would then report it to PMO. If there is more than one household with similar grievances that stemmed from a violation of ADB's safeguard policy, they may appeal directly to ADB in accordance with ADB's Accountability Mechanism (2012).