The World Bank RESTRUCTURING ISDS : Rural-Urban Integration Project (P132775)

Public Disclosure Authorized

Integrated Safeguards Data Sheet Restructuring Stage Public Disclosure Authorized

Restructuring Stage | Date ISDS Prepared/Updated: 18-Sep-2018| Report No: ISDSR24598

Public Disclosure Authorized

Regional Vice President: Victoria Kwakwa Country Director: Bert Hofman Senior Global Practice Director: Jose Luis Irigoyen Practice Manager/Manager: Binyam Reja Task Team Leader: Yang Chen

Public Disclosure Authorized

The World Bank RESTRUCTURING ISDS China: Gansu Rural-Urban Integration Project (P132775)

Note to Task Teams: The following sections are system generated and can only be edited online in the Portal.

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I. BASIC INFORMATION

1. BASIC PROJECT DATA

Project ID Project Name P132775 China: Gansu Rural-Urban Integration Project Task Team Leader(s) Country Yang Chen China Approval Date Environmental Category 31-Mar-2015 Full Assessment (A) Managing Unit Is this a Repeater project? GTR10

PROJECT FINANCING DATA (US$, Millions)

SUMMARY-NewFin1

Total Project Cost 227.49 Total Financing 227.49 Financing Gap 0.00

DETAILS-NewFinEnh1

World Bank Group Financing International Bank for Reconstruction and Development (IBRD) 150.00 Non-World Bank Group Financing

Counterpart Funding 77.49

Borrower 77.49

2. PROJECT INFORMATION

The World Bank RESTRUCTURING ISDS China: Gansu Rural-Urban Integration Project (P132775)

Current Project Development Objective The project development objective is to provide residents in Wuwei Municipality and Linxia Prefecture with improved connectivity between rural and urban areas.

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3. PROJECT DESCRIPTION The US$150 million loan for the Gansu Rural-Urban Integration Project was approved by the Board on March 31, 2015 and was signed on May 25, 2015. The loan became effective on August 14, 2015 and has a closing date of June 30, 2021. The Project development objective (PDO) is to provide residents in Wuwei Municipality and Linxia Prefecture with improved connectivity between rural and urban areas. The project comprises three components: Wuwei Road Network Improvement, Linxia Road Network Improvement, and Technical Assistance and Project Management. The main civil works of the project includes new construction and rehabilitation of 15 rural or urban roads in Wuwei and Linxia of Gansu Province.

During project implementation, 2 out of 15 project roads were moved out of the project and one road has a reduced scope due to duplication with recent domestically-funded road construction works. Wuwei and Linxia proposed three new roads as replacement. Therefore, at the restructuring stage, we focus on the three newly proposed roads: two in of Wuwei Municipality and one in Linxia County. In Gulang County of Wuwei, an existing 6m-wide urban road from the Gulang Town to Shuangta Industrial Park will be rehabilitated to 26m-wide urban arterial road. The total length is 6.02 km. This rehabilitation work will be implemented within the existing right-of-way. A 17m-wide new urban road will be built on the southern edge of Tenggeli Desert to improve access of resettled high-poverty population to two main roads. Its total length is 6.424 km. In Linxia County, a new road will be built largely on an existing rural road in its southern mountainous region connecting poor villages to industrial parks. The total length of this road is 13.61km with a width of 11 m to 12 m.

Note to Task Teams: The following sections are system generated and can only be edited online in the Portal.

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4. PROJECT LOCATION AND SALIENT PHYSICAL CHARACTERISTICS RELEVANT TO THE SAFEGUARD ANALYSIS (IF KNOWN)

The project sites are in Wuwei Municipality and Linxia County, Gansu Province. Wuwei Municipality, located at the eastern end of the Gansu Hexi Corridor, is a prefecture-level city in northwest central Gansu Province. Wuwei Municipality has one urban district and three counties with a land area of 33,000 square-km and a population of 1.9 million. The project area in Wuwei Municipality is in the alluvial and fluvial plain in front of the Qilian Mountain. The area belongs to arid zone of cold temperate zone, with precipitation of 60-610 mm and evaporation up to 3,000 mm. Linxia County is located in the middle of Gansu Province, the transition zone of the Qinghai-Tibet Plateau and . Linxia County of the Linxia Hui , consists of 19 townships with a population of 389,000 and a land area of 1,212 square-km. It has a

The World Bank RESTRUCTURING ISDS China: Gansu Rural-Urban Integration Project (P132775)

mountainous climate with continental and monsoon features. Annual average temperature is -12.7oC – 26.0oC. Annual precipitation is 628.5 mm, and evaporation is 541.9mm. The rural roads to be upgraded in Linxia are all existing roads along the flood plain and terrace of small valleys. Under the restructuring, two roads are in the outskirt of Wuwei, and one road is in the rural area of Linxia County. In Wuwei, a new road will be built on the southern edge of the Tenggeli Desert, the 4th largest desert of China, characterized by torrential wind and dry weather with annual precipitation of 102.9 mm and evaporation of 2258.8 mm. Another proposed road is the rehabilitation of an existing road which was altered from a railway to an asphalt paved road several years ago, thus the road base is much higher than the roofs of the residential houses along this road. Good engineering design has been adopted in the road works to collect the rainwater on the road surface to protect the houses. In Linxia County, the proposed rural road is in its southern mountainous area, along the middle-downstream Huaishuguan River which provides a relatively flat topography. The catchment area of the Huaishuguan River is 238 km2 and the annual flow rate averages 1.49 m3/s with most occurring in summer. The catchment is narrow, consisting of landform made up of mixture of stone and forests. To use its good potential for electricity generation due to the large drop of river level, there are four small diversion conduit type hydropower stations on the river section within the project area.

5. ENVIRONMENTAL AND SOCIAL SAFEGUARDS SPECIALISTS ON THE TEAM

Youxuan Zhu, Social Safeguards Specialist Yongli Wang, Environmental Safeguards Specialist SAFEGUARD_TABLE 6. SAFEGUARD POLICIES TRIGGERED Safeguard Policies Triggered Explanation The proposed project will improve local transport infrastructure, rural-urban connectivity and rural accessibility to urban public services in project area. In Wuwei, part of the existing road (A9 road; width:7.5 meters) to be rehabilitated is within the boundary of a Class II Zone (buffer zone) drinking water source protected area of the Dajingxia Reservoir and Liujiatan in Dajing Town. In Linxia County, partial alignment of the rural road (road Environmental Assessment (OP) (BP 4.01) Yes width: 7.5 meters) to be rehabilitated runs along the bank of the . These existing roads currently pose risks to the drinking water sources due to the deteriorated road conditions and inadequate safety facilities. Rehabilitation of these roads would significantly reduce risks to these water sources because of the improved road conditions and the provision of safety facilities. The EA proposes both engineering measures and specific mitigation measures, such as provision of

The World Bank RESTRUCTURING ISDS China: Gansu Rural-Urban Integration Project (P132775)

surface runoff and accident spill collection and storage tanks along the sections close to water source protection areas, drainage system, anti- crash barriers, warning signs, and speed control measures, etc.

Most of the adverse environmental impacts of the project are related to construction activities, such as nuisance of dust and noise, wastewater, borrow and disposal sites, soil erosion, disturbance to local traffic, communities and irrigation system. During operations, adverse impacts include vehicle noise and emission, road safety, and the potential leakage of fuel and chemicals from vehicles, etc. The EA concludes that these potential adverse impacts and risks can be mitigated with the engineering design, good construction management practice, and other proposed mitigation measures.

With respect to the cumulative impacts, key Valued Ecosystem Components (VECs) under consideration include soil, acoustic environment, water quality and air quality. The EA shows that the project will have very limited contribution to the cumulative impacts given that (i) the project only accounts for 0.06% (in terms of new road length) of the total roads in Linxia; and 1.5% of the total roads in Wuwei; and (ii) 57% of the road investments (in terms of road length) of the project are for the rehabilitation of existing roads. To minimize the potential impacts such as soil erosion and traffic noise, a specific water and social conservation plan has been developed for Wuwei and Linxia respectively. Noise monitoring and noise abatement measures have been proposed in the ESMP.

To the date of the restructuring, the EMP is being satisfactorily implemented. Although at the beginning of the implementation, there are some drawbacks, i.e. inclusion of ECOP into contracts, environmental monitoring quality, found in the environmental performance in 2016 which result in an MS rating, the PMOs of Wuwei and Linxia took prompt correction and strengthened their capacity by hiring qualified EA Consultant. In the following

The World Bank RESTRUCTURING ISDS China: Gansu Rural-Urban Integration Project (P132775)

supervision missions in 2017, the environmental performance was found satisfactory.

Among the factors that contribute to achieving the desirable outcome, the high willingness and commitment to the EMP by the PMOs of Wuwei and Linxia, is the most important factor. Adequate resources have been allocated and put into practice by the PMOs to the implementation of EMP, which ensured the strong institutional setup for coordination, training, monitoring, review and implementation of the mitigation measures.

As required by the legal agreements of the project, the PMOs prepared and submitted the bi-annual EMP timely to the WBG, and these reports were found comprehensively and satisfactorily reflect the status of the implementation. The site visits by the task team confirmed the above conclusions.

For the new proposed roads in the counties of Gulang and Linxia, the PMOs will continue to keep its strong commitment to the environmental management.

The proposed three roads under the restructuring stage are well aligned with the objective of the project. The two proposed roads are in the outskirt of Wuwei and the other is in the rural area of Linxia. Most of the adverse environmental impacts of the proposed three roads are related to construction activities, such as nuisance of dust and noise, wastewater, borrow and disposal sites, soil erosion, disturbance to local traffic, communities and irrigation system. During operations, adverse impacts include vehicle noise and emission, road safety, and the potential leakage of fuel and chemicals from vehicles, etc. The three proposed roads will not affect the Dajingxia Reservoir and Liujiaxia Reservoir, nor the drinking water sources. The EA concludes that these potential adverse impacts and risks can be mitigated with the engineering design, good construction management practice, and the proposed mitigation measures.

The World Bank RESTRUCTURING ISDS China: Gansu Rural-Urban Integration Project (P132775)

EIA and EMP have been prepared which contain the traffic management measures, borrow pits and spoil disposal site management measures, labor camp management plan, soil erosion management plan, and noise monitoring plan, etc.

Performance Standards for Private Sector No Activities OP/BP 4.03 The project is located in areas that have been disturbed by intensive human activities. In Linxia, approximately 89% of total land affected (158ha) are farmland, existing roads, land for economic trees (e.g., planted fruit or timber trees) and residential land. The remaining 10.9% are grassland and green belt along the existing roads. In Wuwei, approximately 56.6% of the total land affected (235ha) are farmland, residential land, and existing roads; while the remaining 43% is wasteland in desert area. Wuwei is facing desertification problems, with 39% of its land being desert. The EA confirms that there are no endangered species in the project area that could be affected by project interventions.

Road investments include 40 bridges (25 in Linxia and 15 in Wuwei) with bridge length varying from 15-155m and width varying from 8-28m. Natural Habitats (OP) (BP 4.04) Yes Construction activities for 25 bridges in Linxia are expected to affect river systems-seasonal streams or perennial streams; i.e., and its branches. Soil erosion caused by the construction activities may increase the sediment concentration in Daxia River and cause deposits in the lower stream of the river. If no mitigation measures are taken, project construction may increase soil erosion by 78,427 tons in Linxia and by 92,172 tons in Wuwei during five year construction phase and three years after the construction.

Daixa River and its small branches have been influenced by human activities. Natural Habitats policy (OP4.04) was triggered for precautionary purpose. Mitigation measures for construction have been proposed in the ESMP.

The project will affect 29,969 trees in Wuwei and 18,087 trees in Linxia. The affected trees are

The World Bank RESTRUCTURING ISDS China: Gansu Rural-Urban Integration Project (P132775)

timber/fruit trees planted by farmers in the land close to their villages or houses, or green belt along the existing roads. Compensation for the trees has been specified in the RAP. The project will not have any impacts on the health and quality of forests, nor affect the rights and welfare of people and their level of dependence upon or interaction with forests. Forests policy (OP4.36) is not deemed triggered.

Under Linxia County, the proposed road will be built along the Huaishuguan River, with two new bridges to be built over this river. The water quality in this river is fairly good as high as Grade II, but its hydrology has already been altered by the tail water discharged from some small hydropower stations without dams. This river is not a critical natural habitat, its ecology is simple and common, dominated by common benthic species, such as loach. There is neither rare/endangered species, nor areas for breeding, overwintering and feeding. In addition, drinking water intakes will not be involved. This new road will involve construction of two bridges on the Huaishuguan River, one is 126 m long and the other is 19 m long. Construction of the bridges may cause water pollution by wastewater and solid waste. With typical measures used in bridge construction, such impact will be adequately mitigated so that will not cause significant conversion or degradation of this river.

The project will not have impacts on the health and quality of forests, nor affect the rights and welfare of people and their level of dependence upon or Forests (OP) (BP 4.36) No interaction with forests, nor aim to bring about changes in the management, protection, or utilization of natural forest or plantations. This policy is not triggered. The project will not include any procurement of pesticides or pesticide application equipment; nor introduce any new pest management practices, or expand/alter existing pest management practices; Pest Management (OP 4.09) No nor lead to substantially increased pesticide use and subsequent environmental and health risks. Road maintenance in the project area will not involve the use of pesticides due to the elevation

The World Bank RESTRUCTURING ISDS China: Gansu Rural-Urban Integration Project (P132775)

and climate conditions in Wuwei and Linxia. This policy is not triggered. Physical Cultural Resources (OP4.11): Ten mosques and one Taosim temple are identified in the vicinity of the alignments of four existing rural roads in Linxia County. These mosques are recent buildings built between 1982-2010 and serve religious services for about 5,000 Muslim people. The temple (Guodongshan Temple) was built over 200 years ago and serves the Taoism community of about 2,000 people in the area. Neither the mosques nor temple are registered as cultural relics. However, they are considered as PCRs due to their religious and cultural significance to local communities.

The completion of the road renovation will provide better road condition and safety for the local communities to access these religious services. All Physical Cultural Resources (OP) (BP 4.11) Yes the mosques and temple are outside the right-of- way of the projects roads, with distance between 10-180m. The road construction will not directly acquire the land nor encroach the property of these mosques and the temple. However, construction will likely cause short adverse impacts, including noise impact on religious events, and disturbance to accessibility to these places. Mitigation measures have been specified in the ESMP. In addition, total 345 household graves will be relocated due to the project. Based on field survey and public consultation, it is concluded that these graves are with insignificant archaeological and historical value.

The three newly proposed roads under this restructuring will not involve any physical cultural resources. Linxia is a Hui autonomous county. In the project sites, there are 23 project villages with concentrations of and 6 villages with concentrations of Dongxiang. They account for 49.6% and 56.3% of the total villagers in the project Indigenous Peoples (OP) (BP 4.10) Yes sites, respectively. These ethnic people meet the definition of the Bank IP term. On the other hand, in Wuwei Municipality, there are only 196 ethnic minority people (0.17 % of local total villagers) living scattered throughout 41 villages, and in the

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project areas, they are well integrated with the majority-Han People. They are very similar to Han people in terms of social welfare, rights, social security, language, cultural and living customs. Thus OP4.10 is not applicable to these people in Wuwei. Overall, the task team concludes that the Bank’s OP4.10 policy on Indigenous People is triggered. A Social Assessment as required by the policy has been conducted with a report, and an Ethnic Minority Development Plan has been prepared by the client.

For three new roads under the Project restructuring, one is located in Linxia County, which involves acquisition of 542 mu farmland and relocation of 13 households. A total of 420 households and 1758 persons would be affected, with one third being Hui people. Following the practice of project preparation, a social assessment and an EMDP has been prepared along with a supplement RAP for the new road in Linxia County.

Land acquisition caused by project construction is unavoidable in Wuwei Municipality and Linxia County. The main involuntary resettlement impacts will include ground structure demolition, temporary and permanent land acquisition. Two Resettlement Action Plans (RAPs) have been prepared in both English and Chinese for Wuwei and Linxia. In the project preparation phase, locations of some subcomponents might not be determined or might change during project implementation; therefore both Wuwei and Linxia have prepared a Resettlement Policy Framework Involuntary Resettlement (OP) (BP 4.12) Yes (RPF) as an annex in their RAPs.

Linkage projects: The Golden Avenue (Jinse Dadao Road) in Wuwei is identified as the only linkage project as defined by the OP4.12. Given that resettlement of the road has been completed, a due diligence study on its resettlement was done and included in the Wuwei RAP. There is no legacy issue about this project land acquisition.

To the date of the restructuring, the RAP is being satisfactorily implemented in general. One issue is that the compensation rates implemented for

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acquiring farmland are lower than those in the original RAPs. County governments adopted compensation rates based on Gansu Provincial Government approved compensation rates to avoid different rates being applied in local areas. The implemented compensation rates were either the same or higher than the approved provincial compensation rates, and the monitoring reports confirmed that affected people were pleased with the compensation received. The project team considered they are acceptable by the Bank, while additional assessment is ongoing to make sure this standard can fully restore income and livelihood for the affected people.

For the three new roads proposed under the Project restructuring, two of them involve additional land acquisition. One is located in Gulang County in Wuwei Municipality and one is located in Linxia County. For the one in Gulang County, a total of 62 mu of farmland will be acquired affecting 56 households. For the one in Linxia County, a total of 542 mu farmland will be acquired, affecting 420 households and 1758 persons, including 13 households and 85 persons to be relocated. For such impacts, two separate additional RAPs have been prepared. The project will not finance construction or rehabilitation of any dams as defined under this Safety of Dams (OP) (BP 4.37) No policy.

Not applicable Projects on International Waterways (OP) No Not applicable (BP 7.50) Projects in Disputed Areas (OP) (BP 7.60) No Not applicable

KEY_POLICY_TABLE II. KEY SAFEGUARD POLICY ISSUES AND THEIR MANAGEMENT

A. SUMMARY OF KEY SAFEGUARD ISSUES

1. Describe any safeguard issues and impacts associated with the Restructured project. Identify and describe any potential large scale, significant and/or irreversible impacts. Environmental Environmental Impacts (OP4.01): The project will improve local transport infrastructure, rural-urban connectivity and rural accessibility to urban public services in project area. For the three replacement roads added at the restructuring

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stage, the impacts in construction stage will include the dust, noise, wastewater, solid waste, soil erosion, labor camps, borrow and disposal sites, traffic disturbance and road safety; impacts in operation stage include the noise and vehicular emission, road safety and accident of water pollution. The EA concludes that the potential adverse impacts are moderate and have been minimized and can be adequately mitigated with good engineering design, management practice and mitigation measures.

With respect to the cumulative impacts, key Valued Ecosystem Components (VECs) under consideration include soil, acoustic environment, water quality and air quality. The EA shows that the project will have very limited contribution to the cumulative impacts given that (i) the project only accounts for 0.06% (in terms of new road length) of the total roads in Linxia; and 1.5% of the total roads in Wuwei; and (ii) 57% of the road investments (in terms of road length) of the project are for the rehabilitation of existing roads. To minimize the potential impacts such as soil erosion and traffic noise, a specific water and social conservation plan has been developed for Wuwei and Linxia respectively. Noise monitoring and noise abatement measures have been proposed in the ESMP.

Natural Habitats (OP4.04): The project is located in areas that have been disturbed by intensive human activities. The replacement road proposed in Linxia will potentially affect the Huaishuguan River by wastewater and solid waste discharge, particularly during the construction of two bridges on it. Although the Huaishuguan River has fairly good water quality, its hydrology has been largely influenced by tail water discharged from small hydropower stations without dams. The Huaishuguan River is not a critical natural habitat. Mitigation measures have been carefully designed, including construction in low flow season, and incorporated into the ESMP.

Physical Cultural Resources (OP4.11): The three proposed replacement roads at the restructuring stage will not involve any physical cultural resources.

Social The project will have social impacts related to the need for land acquisition and demolition of a number of structures. For the three replacement roads proposed under the project restructuring, two of them involve additional land acquisition: one in Gulang County of Wuwei and one in Linxia County of Linxia Prefecture. For the road in Gulang County, a total of 62 mu of farmland will be acquired affecting 56 households. For one road in Linxia County, a total of 542 mu farmland will be acquired, affecting 420 households and 1758 persons, including 13 households and 85 persons to be relocated. For such impacts, two separate new RAPs have been prepared. For the new road in Linxia County, since one third of the people affected by land acquisition and all people to be physically displaced are Hui ethnic minorities, one supplement EMDP is prepared.

2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area. The drainage and sewer pipelines constructed as part the project roads will improve wastewater collection efficiency of the urban areas of the project cities, thus contribute to the improvement of water environment. With the improvement of transport infrastructure, future investment will likely be increased in the project area, providing local residents with employment opportunities.

3. Describe any potential alternatives (if relevant) considered to help avoid or minimize adverse impacts. The EA includes a review of the alternatives for the road alignments and a “with vs without project” analysis. Proposals that may cause significant adverse impacts on PCRs or natural habitats were dropped as a result of the EA and the

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feasibility study. Some engineering designs that do not have significant environmental and social impacts are not discussed in the EA, but covered in the detailed feasibility study. Efforts also were made to minimize resettlement impact and negative impact to Hui communities as much as possible.

The EAs for the three proposed roads undertake a comprehensive analysis of the alternatives to avoid , minimize and mitigate the potential adverse impacts, including the “ with and without project” , road alignment, location of borrow and spoil sites, location of labor camps, noise mitigation techniques, etc. for the road proposed under Linxia County, the number of bridges to be built on the Huaishuguan River has been reduced from three to two with the cooperation of EA team and the feasibility study team, so as to minimize the impact on the water quality in Huaishuguan River. For the roads under Wuwei, no alternative alignment is developed given that a straight line road on the edge of the Lenggeli Desert is obviously the best without involving sensitive receptors and thus at the lowest cost and the least environmental and social impacts, while the other is the solely rehabilitation work on the existing road within its rights-of-road without involving land occupation and resettlement, thus obviously the best alignment at environmental, social, technical and financial aspects.

4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. Environmental (OP/BP4.01): A stand-alone Environmental and Social Management Plan (ESMP) has been prepared for Linxia and Wuwei, based on the above environmental assessment. For the three proposed replacement roads, stand-alone supplemental ESMP also have been prepared. The ESMP includes, but is not limited to: a) Environmental Code of Practices (ECOPs) for contractors for inclusion in the bidding documents and civil work contracts; b) Specific mitigation measures during design and construction phases, such as (i) road drainage system and road safety design, and provision of road safety facilities; (ii) balance of cut and fill for construction activities; (iii) management of borrow and disposal sites, camps, nuisance of dust, noise, waste, and wastewater; (iv) specific soil erosion management plan; (iv) mitigation measures to avoid or mitigate disturbance to local communities, traffic, religious activities, utilities and irrigation system; c) Specific measures proposed for the operation phase including (i) road maintenance (e.g. road safety, drainage system); (ii) noise monitoring and noise mitigation measures; (iii) measures to protect water sources/streams; and (iv) emergency measures for the potential leakage of chemicals and fuel; d) Water sources protection measures including: (i) provision of surface runoff and accident spill collection and storage tanks along the sections close to water source protection areas; (ii) drainage system; (iii) anti-crash barriers; and warning signs, and speed control measures etc.; and e) A social management plan based on the major findings and recommendations from the Social Assessment.

Natural Habitats (OP4.04): Mitigation measures for the bridge construction have been proposed in the ESMP. A Soil and Water Conservation Plan, as part of the ESMP, has been developed for Linxia and Wuwei respectively including mitigation measures, monitoring plan and the budget. With these mitigation measures, soil erosion caused by construction activities can be substantially reduced.

Physical Cultural Resources (OP4.11): To protect PCRs, consultation with local communities (especially Muslim communities) has been conducted and necessary mitigation measures incorporated into the ESMPs, which include (but not limited to): training of construction workers to respect local culture; provision of temporary access to ensure accessibility; prior notice of construction activities and schedule; use of low noise equipment in the vicinity of the mosques and temple; and optimizing construction time and activities to avoid disturbance to religious events. For the relocation of household graves, compensation measures have been included in the RAPs. Chance Find Procedures for PCRs are included in the ESMP.

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The ESMP specifies environmental monitoring plans, institutional arrangement, capacity building activities, and the budget for the ESMP implementation.

Gansu Province has worked with the Bank since 1980s. At present, it has four ongoing projects financed by the Bank. The province is familiar with the Bank’s procedures and requirements. Under the provincial level, project implementation and coordination will be carried out by Wuwei Municipality and Linxia County. Wuwei and Linxia have established their Project Leading Group (PLG) with a vice mayor or a county governor as the head of the PMOs, assisted by a number of government agencies. PMOs have been established under the guidance of the PLGs. The PMOs consist of departments responsible for financial, engineering, procurement, social and environmental management. ESMP implementation will be managed by Wuwei PMO and Linxia PMO. An environmental management unit will be established in the PMOs respectively with designated environmental staff. The contractors and supervision engineers will be required to assign qualified environmental staff to their team to ensure effective implementation of the ESMPs. As per the ESMP, PMO will receive more training during project implementation.

Involuntary Resettlement (OP4.12) In accordance with local laws and Bank requirements, Resettlement Action Plans (RAP) and Resettlement Policy Frameworks (RPF) for the two project sites of Wuwei and Linxia were prepared in Chinese and English by the Wuwei and Linxia PMOs, with assistance from house demolition offices, local land bureaus, affected villages and communities, potentially displaced persons, and a consultative team from Hehai University.

RAPs were prepared in line with relevant Chinese laws and regulations, and World Bank OP 4.12 on Involuntary Resettlement. Key principles, compensation standards and salient activities in project design and RAP preparation included: • Acquisition of land and other assets, and relocation of people, will be minimized as much as possible. • A socio-economic survey will be conducted to determine baseline conditions, especially of project affected persons. • Compensation for houses or other properties will be determined at full replacement value. • Compensation will be provided to all project affected persons, including those who lack house registration or other documents, such as legal documents. • Basic infrastructure and service facilities will be provided in areas where project affected persons will be resettled. • Affected persons will be consulted during planning for acquisition of land and other assets, and provision of rehabilitation. • Financial and physical resources for resettlement and rehabilitation will be made available when required. • Special consideration will be given to vulnerable groups. • Institutional arrangements will be established to ensure effective and timely design, planning, consultation and implementation of the RAP. • Effective and timely supervision, monitoring and evaluation of project implementation will be executed.

Two RPFs for Wuwei and Linxia were developed as Annexes in the RAPs according to relevant local laws and regulations as well as World Bank’s OP/BP 4.12 on Involuntary Resettlement for components that might change their location during project implementation. The RPF describes the overall legal framework, planning principles, procedures, compensation and rehabilitation approach, consultation and participation requirements, grievance redress mechanisms, organization and monitoring arrangements.

A Due Diligence Review had been conducted for involuntary resettlement practices for Linkage project identified. The Report showed that there is no legacy issue in terms of involuntary resettlement.

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Indigenous People (OP4.10): A social assessment (SA) has been carried out during project preparation, with a focus on positive impacts, negative impacts, and actions for project design and construction. Hui ethnic minority groups were identified as IP group in 23 project villages and Dongxiang ethnic minority group as IP group in 6 villages of Linxia. The social assessment (SA) was conducted by a qualified team including economists and sociologists, who carried out intensive fieldwork in selected sample villages. The villages/communities fully understood the potential risks and opportunities associated with the project, and expressed their interest, enthusiasm and broad support to the project activities.

Key findings of the SA include: ethnic minority people of Hui and Dongxiang live concentrated in 29 project villages in Linxia and the Bank IP policy (OP 4.10) is triggered. The project faces some risks and negative impacts such as land acquisition, tomb relocation, house demolition, dust and noise pollution, temporary and partial road blocks, and traffic jams during project construction. The project has a range of positive benefits, such as improving roads accessibility, safety and transportation efficiency, bringing opportunities of employment and income for local people. Road supporting facilities, road maintenance and traffic management are essential. Public publicity and participation are critical to optimize project design and smoothen project implementation. The SA report suggests a social management plan with measures to address social risks and benefits with roles of relevant project stakeholders. The SA report was shared with the FS, EA and design teams to ensure the SA findings and action plan are reflected in the project feasibility study report, and separate social safeguards instruments of RAP and EMDP.

Based on the findings of the SA, an Ethnic Minority Development Plan (EMDP) was developed to ensure that project activities on roads development in Linxia are offered to these communities in the same way as other project beneficiaries and that their participation in the Project would be encouraged.

For the three new roads proposed under the Project, two of them involve additional land acquisition. One is located in Gulang County in Wuwei and one is located in Linxia County. A total of 604 mu of farmland will be acquired for the construction of these two roads and 13 households will be relocated. For such impacts, two separate new RAPs have been prepared. The new RAPs adopted the Gansu Provincial Unified Compensation Standards as compensation rate for acquiring farmland in Gulang and Linxia, which are lower than the compensation rates set in the original RAPs. Based on team's initial assessment and external monitoring reports, the Provincial Unified Compensation Standards are adequate for mitigating the impacts and meet the Bank's safeguard policy. The client and external consultants are currently carrying out additional assessment on the compensation standards, which will be completed by September 2018. Based on the outcome of the assessment, the RAPs might be updated to ensure the proposed compensation rates will be able to restore income and livelihood for the affected people.

For the new road in Linxia County,since one third of the people affected by land acquisition and all people to be physically displaced are Hui ethnic minorities, one supplement EMDP is prepared.

5. Identify the key stakeholders and describe the mechanism for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The main stakeholders are project affected people in local communities. In accordance with the Bank’s OP4.01, public consultations were conducted during the EA process, including questionnaire surveys and public meetings with project affected people and relevant stakeholders (e.g., mosques/temple management committees). Information about the project, potential environmental and social impacts, and planned mitigation measures were provided to the public during consultation. Their concerns have been addressed in the project design and in the EAs and the ESMPs.

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The EA document for Wuwei was disclosed at local villages and the government’s website on January 4, 2014; while EA document for Linxia was disclosed at local villages and the government’s website on December 26, 2013. Updated EA documents were re-disclosed locally on August 15, 2014. The EA documents in Chinese and English were disclosed in the Bank Infoshop on August 19, 2014, and re-disclosed in September 2014. The social safeguards documents for Linxia were locally disclosed on August 11, 2014 and for Wuwei on August 15, 2014. The social safeguards documents in Chinese and English were disclosed in the Bank Infoshop on August 18, 2014. For three replacement roads, RAP and EMDP for Linxia was locally disclosed between March and April 2018, and for Gulang, RAP was locally disclosed between October and December 2017.

For the three proposed replacement roads, two rounds of information disclosure and public consultation were conducted for the supplemental EA. For the proposed road under Linxia County, local water resource bureau and EPB were consulted on the ecological significance of the Huaishuguan River and the proposed mitigation measures. The draft supplemental EA document has been disclosed at local government websites and the affected villages, with the advertisements published on local prime newspaper on December 26, 2017 for Linxia and July 26, 2017 for Gulang. Both draft supplemental RAPs and EMDP have been disclosed at local government websites and local project areas, with advertisements published in local prime newspaper for Linxia between March and April 2018, and for Gulang County, RAP was locally disclosed between October and December 2017.

DISCLOSURE_TABLE B. DISCLOSURE REQUIREMENTS

ENV_TABLE Environmental Assessment/Audit/Management Plan/Other

Date of receipt by the Bank Date of submission for disclosure 16-Apr-2018 17-Apr-2018 For Category ‘A’ projects, date of distributing the Executive Summary of the EA to the Executive Directors

“In country” Disclosure

Country Date of Disclosure China 18-Apr-2018 Comments for the newly added roads at restructuring stage

RESETTLE_TA BLE Resettlement Action Plan/Framework Policy Process

Date of receipt by the Bank Date of submission for disclosure 12-Sep-2018 12-Sep-2018

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“In country” Disclosure

Country Date of Disclosure China 13-Sep-2018 Comments RAP for Linxia newly added road was revised after RSS review and disclosed again.

INDIGENOUS_TA BLE

Indigenous Peoples Development Plan/Framework

Date of receipt by the Bank Date of submission for disclosure 29-Mar-2018 30-Mar-2018 “In country” Disclosure

Country Date of Disclosure China 01-Apr-2018 Comments for the newly added roads at restructuring stage

COMPLIANCE_TABLE C. COMPLIANCE MONITORING INDICATORS AT THE CORPORATE LEVEL

EA_TABLE OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? Yes

If yes, then did the Regional Environment Unit or Practice Manager (PM) review Yes and approve the EA report?

Are the cost and the accountabilities for the EMP incorporated in the credit/loan? Yes

NH_TABLE OP/BP 4.04 - Natural Habitats

PCR_TABLE OP/BP 4.11 - Physical Cultural Resources Does the EA include adequate measures related to cultural property? NA

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Does the credit/loan incorporate mechanisms to mitigate the potential adverse NA impacts on cultural property?

IP_TABLE OP/BP 4.10 - Indigenous Peoples Has a separate Indigenous Peoples Plan/Planning Framework (as appropriate) Yes been prepared in consultation with affected Indigenous Peoples?

If yes, then did the Regional unit responsible for safeguards or Practice Manager Yes review the plan?

If the whole project is designed to benefit IP, has the design been reviewed and NA approved by the Regional Social Development Unit or Practice Manager?

IR_TABLE OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/process framework Yes (as appropriate) been prepared?

If yes, then did the Regional unit responsible for safeguards or Practice Manager Yes review the plan?

Is physical displacement/relocation expected? Yes

Provide estimated number of people to be affected. 85

Is economic displacement expected? (loss of assets or access to assets that leads Yes to loss of income sources or other means of livelihoods)

Provide estimated number of people to be affected. 1,926

PDI_TABLE The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank for Yes disclosure?

Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups Yes and local NGOs?

ALL_TABLE All Safeguard Policies

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Have satisfactory calendar, budget and clear institutional responsibilities been Yes prepared for the implementation of measures related to safeguard policies?

Have costs related to safeguard policy measures been included in the project Yes cost?

Does the Monitoring and Evaluation system of the project include the monitoring Yes of safeguard impacts and measures related to safeguard policies?

Have satisfactory implementation arrangements been agreed with the borrower Yes and the same been adequately reflected in the project legal documents?

III. APPROVALS

Yang Chen Task Team Leader(s) Ji You

Approved By

Safeguards Advisor Peter Leonard 17-Sep-2018

Practice Manager/Manager

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Note to Task Teams: End of system generated content