Sichuan Urban Development Project

RP360 v 4

Resettlement Action Plan For Panzhihua Municipality

Sichuan Province Urban Environment Project Office Panzhihua City Urban Environment Project Office February 2006

CONTENTS

OBJECTIVES OF RESEETLEMENT PLAN AND DEFINITION OF RESETTLEMENT TERMINOLOGY...... ERROR! BOOKMARK NOT DEFINED. 1. GENERAL...... 0

1.1 INTRODUCTION...... 0 1.2 INTRODUCTION TO PROJECT BACKGROUND...... 0 1.3 PROJECT INTRODUCTION...... 2 1.4 COST ,SOCIAL AND ECONOMIC BENEFITS...... 5 1.5 PROJECT IMPACTS...... 5 1.6 MEASURES TO ALLEVIATE PROJECT IMPACTS...... 6 1.7 PROJECT SCHEDULE...... 8 1.8 PREPARATION FOR RESETTLEMENT, MONITORING AND EVALUATION...... 8 1.9 POLICY FRAME AND TARGETS OF RAP...... 11 2. PROJECT IMPACTS...... 13

2.1CONFIRMATION OF THE SCOPE OF PROJECT IMPACTS...... 13 2.2 INVESTIGATION OF PROJECT IMPACTS...... 13 2.3 MATERIAL INDEX OF PROJECT IMPACTS...... 14 2.4. ANALYSIS ON PROJECT IMPACT...... 19 3．SOCIO-ECONOMIC CHARACTERISTICS...... 21

3.1 BASIC SITUATION OF THE CITY AND DISTRICT INFLUENCED BY THE PROJECT...... 21 3.2 SOCIO-ECONOMIC SURVEYS...... 22 3.3 SOCIOECONOMIC CHARACTERISTICS OF THE AFFECTED POPULATION...... 22 4. POLICY FRAMEWORKS FOR RESETTLEMENT...... 33

4.1 POLICY BASIS...... 33 4.2. RELEVANT LAWS AND REGULATIONS...... 34 5. RESETTLEMENT AND RECOVERY PROGRAM...... 56

5.1 TARGET AND TASK...... 56 5.2. PRINCIPLE AND POLICY FOR RESETTLEMENT...... 57 5.3 OVERALL SCHEME OF RESETTLEMENT...... 58 5.4VULNERALBLE PEOPLE SETTLING MEASURES...... 66 5.5 ANALYSIS FOR ENVIRONMENTAL CAPACITY...... 68 5.6 RESETTLEMENT PLAN...... 69 6. COMPENSATION ESTIMATE...... 74

6.1. BASIS FOR ESTIMATE...... 74 6.2. COMPENSATION PRINCIPLES...... 75 6.3. COMPENSATE STANDARD AND COMPENSATION COST...... 75 6.4. TOTAL BUDGET OF COMPENSOATION...... 83 7. IMPLEMENTATION PLAN...... 85

7.1. IMPLEMENTATION PROCEDURES...... 85 7.2. SCHEDULE...... 87 7.3. FINANCIAL ALLOCATION PLAN...... 88 8. IMPLEMENTATION ARRANGEMENT...... 91

8.1INSTITUTIONAL FRAMEWORK...... 91 8.2RESETTLEMENT ORGANISATION...... 91 8.3ACCOUNTABILITY...... 91 8.4 CAPACITY BUILDING AND STAFF TRAINING...... 94 9.PUBLIC PARTICIPATION AND APPEAL...... 96

9.1IDENTIFICATION OF PROJECT RELEVANT PEOPLE...... 96 9.2CONSULTATION DURING PROJECT PREPARATION...... 96 9.3PUBLIC PARTICIPATION AND CONSULTATION PLAN...... 98

9.4 DISCLOSURE OF THE RP...... 98 9.5. PARTICIPATION DURING IMPLEMENTATION OF RAP...... 101 9.6GRIEVANCES AND REDRESS...... 102 10.MONITORING, EVALUATION AND REPORTING SYSTEM...... 105

10.1INTERNAL MONITORING...... 105 10.2EXTERNAL MONITORING AND EVALUATION...... 106 10.3REPORTING AND DISTRIBUTION...... 109 11. REPORTING...... 110

11.1RESETTLEMENT ACTION PLAN (RAP) REPORT...... 111 11.2INTERNAL MONITORING PROGRESS REPORT...... 111 11.3INDEPENDENT M&E REPORT...... 112 12．ENTITLEMENT MATRIX...... 113 ANNEX ABBREVIATED RESETTLEMENT PLAN FOR THE LINKED QINGXIANGPING WASTEWATER TREATMENT PLANT ...... 115

ABBREVIATIONS

WB World Bank APs Affected Persons AAOV Average Annual Output Value CMEDRI Chengdu Municipal Engineering Design & Research Institute CRO Districts Resettlement Office DMS Detailed Measurement Survey FS Feasibility Study LA Land Acquisition HD Housing Demolition IA Implementation Agency LAB Land and Resources Bureau LAR Land Acquisition and Resettlement M&E Monitoring and Evaluation RP Resettlement Plan PRA Participatory Rural Appraisal SMEDI Southwest Municipal Engineering Design &Research Institute SWJU Southwest Jiaotong University TOR Terms of Reference TRO Township Resettlement Office SUEP Sichuan Urban Environment Project VG Village Group CNY Also “Yuan”, Chinese currency, with US$1.00 = CNY 8.30 Mu Unit of area, with 1 hectare = 15 mu

RAP Purposes, Terminologies & Definitions

This Resettlement Action Plan (RAP) is prepared in accordance with the national and local laws and regulations of the People’s Republic of China (PRC), and the World Bank Resettlement Guidelines (i.e., Operational Directive for Involuntary Resettlement of OP 4.12). The purpose is to set out an action plan for the resettlement and restoration of the Affected Persons (APs) to ensure that those affected will be benefited from the project, and their living standards be improved or at least restored to the pre-project situations after the project implementation. Acquisition of a land and the associated properties to enable project implementation would adversely affect the residents and other persons living or working on the land as acquired. The term of APs is defined as those whose income or livelihoods are to be adversely affected by the land acquisition activities of the Project. APs may be any of the following categories:

1) those whose land (including housing land, utilities land, and land for agricultural, forestry, livestock breeding, fishery and sidelines), structures (including private buildings and attachment, enterprise buildings and public buildings, etc.), entitlement or any other properties that will be acquired or occupied, in full or in part, permanently or temporarily;

2) those that use the above structures, lands or properties; or those whose business, vocations, working, residences or habitat will be adversely affected; or

3) those whose living standards are to be adversely affected due to the land acquisition and/or resettlement activities.

Definition of APs

“Affected Persons” means those that, because of the project execution, are to be suffered in living standards are or otherwise adversely affected; or those whose building ownership, the entitlement or interest, lands (including house lands, agricultural and grazing lands) or any other fixed or movable assets thereof that are to be acquired or possessed, temporarily or permanently; or those whose business, occupation, working or residences or habitats that are to be adversely affected. “Affected Persons” imply either individual person(s) or such legal persons as enterprises or public organizations. The definition of APs does not limit or restrict the associated legal registration or permission to live or conduct business in the affected location, nor does it limit the compensation for the property. Thus, they are to include:

4) all affected persons regardless of their legal entitlement or absence thereof to the assets being taken; and

5) persons without residential permit to live in a defined area.

Therefore, all such persons who are affected will need to be considered and recorded as the APs, regardless of their legal relationship to the assets, land or location. For a land or property to be acquired, if it is used by or to be compensated for one and more individuals or households, the associated compensation and restoration will be based on their losses, their entitlements, and the impacts on their living standards. Disregarding the legal entitlement or interest, definition of the APs will be directly related to the adverse impacts of the project. All APs shall be compensated to improve or, at least, restore their standards of living, including compensation for their property losses. The compensation to the loss of properties shall be based on the replacement values with no deduction or discount on account of depreciation or other reason(s). The APs shall have entitlements for what they suffer due to the project impacts. Not only should they be provided with compensation for property losses, they should also receive economic subsidy as well for restoration of their living standard. For those affected who run business, cultivated land or conduct construction with no property ownership, entitlement, or legal residential permission, they are eligible for restoration of their livelihoods and compensation for their lost properties on an equal footing with those owning lawful properties, entitlements or permissions.

Definition of “Resettlement”

“Resettlement” is arrangement for the APs on production and living, so that they will be benefited from the Project. Resettlement activities usually include, 6) relocation of living quarters; 7) provision of new and acceptable employment for people whose working engagement is affected;

8) restoration of (or compensation to) the affected productive resources such as land, working places, trees and infrastructures;

9) restoration of those affected whose living standards (qualities of life) are adversely affected (such as affected by hazardous emission) due to land acquisition and/or relocation;

10) restoration of or compensation to the affected private and public enterprises;

11) restoration of cultural or common properties that are adversely affected.

Definition of “Restoration”

“Restoration” implies to reinstate the APs in their capacity and capability so that they can continue their production activities, and/or to reinstate their living standards to at least those of the pre-relocation status, or higher levels. The purpose of this RAP is to provide an action plan for the potential resettlement and restoration activities so that the APs will be compensated for their losses and their living standards will be improved or at least restored to the pre-project levels. In order to attain

these objectives, restoration measures are included in the RAP to enable income restoration for the APs for sustainable livelihoods. Similarly, business and production resources (including shops, enterprises), public properties, infrastructures, and cultural properties as affected will also be improved or at least restored to the pre-project status and levels. 1. General

1.1 Introduction

This Resettlement Plan (RP) addresses the land acquisition and resettlement aspects of the Sichuan Panzhihua Urban Environmental Project to be financed by the World Bank. It has been prepared in accordance with the WB's policies on Involuntary Resettlement, and other social safeguards and guidelines on social dimensions, the PRC’s laws and regulations, local by-laws relating to land acquisition and resettlement. It outlines the policy framework on remedial measures for mitigation of adverse impacts of the proposed Project (the Project), and the rehabilitation strategies for all affected people (APs) and seriously affected villages including how and when these measures must be implemented.

For both the PRC and the WB, the over-riding objective of resettlement planning is to ensure that persons unavoidably losing land or property as a result of a development project attain equal or better livelihoods and living standards than if the project had not occurred. All policies, proposals and compensation measures contained in this RP are designed to meet this objective.

The preparation of this RAP was based on: (i) Project Feasibility Study; (ii) discussions with the principal authors of the above document; (iii) field visits along the proposed alignment; (iv) consultation with various levels of local government, village leaders and APs; (v) meetings with representatives from seriously affected villages to discuss and determine preferred compensation and income restoration strategies. 1.2 Introduction to Project Background 1.2.1 Background of Riverside Environment Renovation Project A. Urban Sustainable Development Situation The urban sustainable development level of Panzhihua City is not high, and it is calculated by Peking University that the Social Development Index of Panzhihua is just about 42%. The Along river Environment Renovation project will have active influence to the improvement of urban sustainable development level, which is embodied as follows. In the aspect of system coordination, ecological environment RAP of SPUEP

will be improved; the ratio between the use of pollution control funds and GDP will be increased; the ratio of the two growth rate of pollutant discharge and GDP will be reduced, and the contribution of technological progress and increased employment to economic and social development will be strengthened. With promotion of quality index of air and water body, the ecological environment quality will be improved. B. Urban Economic and Social Development Situation Although Panzhihua is young, it is well known abroad and at home. In 2004, its per capita GDP reached RMB 16,500 Yuan, placing in the second position within Sichuan, just inferior to Chengdu. However the incomplete infrastructure and poor quality of local environmental conditions have restricted, in some degree, the sustainability of employment growth and economic development. The construction of this project can beautify the city, change the city features, improve the city traffic, and play an active role in skills development, attractiveness to business and investment, and accelerate the active development of the society. C. Construction Background of “Landscape Garden City” Panzhihua City has complied General Plan of Panzhihua for Landscape Garden City, and this project is the detailed implementation of this general plan, and an important step to realize this plan. 1.2.2 Construction Background of the End Section of Bing-ren Line A. Liquidize land assets and quicken the pace of modernization The construction of end section of Bingren Line can drive the land development of an area of 6.5 square kilometres of Ganbatang and Zongfa etc., and the development of this new area will promote the transformation of rural population to urban population, thus accelerating urbanization. B. Create conditions for the development of the tertiary industry and improvement of economic structure Panzhihua City is a city of heavy industry, with the composition of the tertiary, secondary and primary industries in 2004 of 5.4: 71:4: 23.2. Among the top 10 steel producing cities in China, the proportion of the secondary industry in Panzhihua is the largest, with the smallest proportion of the tertiary industry. In order to strengthen the development of the tertiary industry, including construction of new buildings along

SPUEPO World Bank Financed9 Project Declaration RAP of SPUEP

the roads, the area surrounded by the circular highway will become an important development area of Panzhihua after completion of the urban transport system. 1.3 Project Introduction Sichuan Panzhihua Urban Environment Project includes two sub-items of Riverside Environment Renovation and end section of Bingren Line. 1.3.1General Situation of Riverside Environment Renovation Project The renovation is mainly focused on the two banks in the South and North of Xinzhuang Bridge to Jinjiang, with a distance of 30 x 2 km. The construction scheme is divided into three aspects in the primary stage: A. Bank revetment renovation The bank revetment can be divided into four types: Slag-yard, Masonry, hydrophilic and natural. The detailed renovation scheme is:  The Section from Dukou Bridge to Midi Bridge, the distance of the two banks is 8 x 2 km; the average height of the bank revetment is about 10 m, with 2/3 of hydrophilic section and 1/3 of masonry section.  The Section from Midi Bridge to Jinjiang, the distance of the two banks is 2*15 km; the average height of the bank revetment is about 8 m, with 1/5 of hydrophilic section and 4/5 of masonry section  The Section from Dukou Bridge to Xinzhuang Bridge, the distance of the two banks is 2*7 km; the slope height of the slag-yard is about 100 m; the average height of the bank revetment is about 10 m, with 1/4 for each of the four types of section.  The Section from Xinzhuang Bridge to Dashuijing, the distance of the two banks is 2*6 km; the average height of the bank revetment is about 10 m, with the most of hydrophilic section.  The Section from Dashuijing to Geliping, the distance of the two banks is 2*16.4 km; the average height of the bank revetment is about 20 m, with the most of natural section. B. Landscape renovation The landscape renovation in this project includes three parts: leisure greenbelt, road and greening.  Leisure greenbelt: there are four sites for construction of broad bank slopes or bench land along the Jinsha River, i.e. on the riversides of Dukou Bridge in the west, southern bank of the access towards the river, then the riversides at confluence of Jinsha and Yalong rivers, and the front area of the railway station

on the southern bank of the Jinsha River. The works include: site leveling, platform on the water, lighting and leisure supporting facilities.  Road: Mainly are roads between the Greenland and pedestrian path in the green land .  Greening: Mainly are greening along the river and for the conservation of soil and water. C. Sewage intercepting works The preliminary scheme includes interceptors in 31 km for domestic sewage and 40 spots of on-line water quality monitoring system along both sides of the Jinsha River. Further,  Completion of the sewage system for the completed Bingcaogang WWTP;  Completion of the sewage system for the to-be-built Qingxiangping WWTP. An Abbreviated Resettlement Action Plan is attached to this RAP as the coming Qiangxiangping WWTP is linked to the Bank-supported project.

D．Up-line of Bin-jiang Road The Bin-jiang Road starts from the narrow point of Yanjiang Road (where the four lanes become two) at the west of Panzhihua Hydrological Station, passes through the 501 Power Plant, the No 2 Bus Terminal, the Jinsha Park and Dukou Bridge along the southern bank of the Jinsha River. It ends in connecting with the No4 Jiangnan Road with a total length of 2.204km.

1.3.2General Situation of the Construction of End Section of Bingren Line It goes from Airport Road Crossing to No 49 km via Ganbatang (6.78 km) and connects West Duren Line, including Dusongshuliangzi and Basijin tunnels, K 49 interchange and bridges across the river at Chonggou. See figure 1 for the detail information about the project.

Picture 1 map of the SPUEP

SPUEPO World Bank Financed Project Declaration 12 1.4 Project Cost and Socioeconomic Benefits 1.4.1 Cost The total cost is estimated to be in the order of CNY1.22083 billion, including the World Bank will provide a loan amount of $US69.8 million( CNY 579.34 million, Unit of Chinese currency: US$1.00= CNY8.30), domestic assorting funds CNY641.4964 million($US77.2887million). 1.4.2 Social and Economic Benefits Expected social and economic benefits of the project are as follows: A. Social Benefits  The riverbank renovation regulates the flood channel section of Jinsha River, and is designed to protect the urban zone of Jinsha River from a fifty year flood event in order to safeguard the government property and the life and property of the people.  The construction of the end section of Bingren Line will form ring double tracks, which can divide the traffic volume in the downtown, to alleviate the traffic pressure in downtown, meanwhile, strengthen the connection between Renhe and the new area, and Bingsan Area and Airport. B. Economic Benefits  The river bank renovation is designed so the elevation of the top of the flood prevention bank will be 1 meter greater than the predicted flood level of a 50 year flood event, to avoid losses of riverbank land to floods. Riverbank renovation means reduction of losses, thus leading to clear economic benefits.  The construction of the end section of Bingren Line can improve access to new urban space, alleviating the pressure on land use in the central urban area, with the increased development of land of 6.5km2; accelerate the development of the districts, like Zhoujia Sinus, Chenjia Pass, Ganbatang, and the expanding urban area. The economic benefits of this development area alone will be much more substantial than the cost of the loan for this project. When the road is put into service, the value of the land along the line will be increased, and the economic benefits of the road are considerable.

1.5 Project Impacts

The only resettlement issues arise with respect to the Bin-jiang road and Bin-ren road; the following is the basic impact of the project: No. Item Bin-jiang Road Bin-ren Road Total

13 1. No. Of villages 0 2 2 No. Of village groups 3 3 2. Acquisition of collective-owned land 2.1 Size (mu) 0 558.29 558.29 2.2 Affected households 0 171 171 2.3 Affected people 0 648 648 3 House demolished 3.1 Rural houses (sq.m) 3.1.1 Floor space (sq.m) 0 33529.55 33529.55 3.1.2 Affected households 0 116 116 3.1.3 Affected people 0 325 325 3.2 Urban houses 3.2.1 Floor space (sq.m) 4143.04 9729.96 13873 3.2.2 Affected households 111 118 229 3.2.3 Affected people 145 155 300 4 Enterprises and institutes 4.1 Quantity 4 5 9 4.2 Demolished space (sq.m) 6355.49 19082.71 25438.2 4.3 State-owned land (mu) 100 20 120 4.4 Affected people 1436 2787 4223 5. Temporary land use (mu) 55.44 64.56 120 6. Trees 0 3587 3587 7. Resettlement cost (Ymillion) 5.8637 30.2469 36.1106

1.6 Measures to Alleviate Project Impacts

1.6.1 In Project Planning and Design Stage The project construction will require land acquisition, house relocation and inhabitant displacement, and will unavoidably affect the existing living and productive conditions of the local inhabitants. During project planning and design stage, the designer and project owner have envisaged some measures to alleviate project impacts to local social and economic conditions, including:

A. In design scheme optimization and comparison, due considerations have been made in project impacts to local social and economic conditions and the project impacts were taken as key factors in the optimization and comparison of the design scheme. B. In order to reduce the quantity of requisitioned land and number of displaced inhabitants, the designer follows the principle of “keeping the project site away from the densely populated area and reduce quantity of house relocation where possible, and minimizing the area of requisitioned land and farmland as well”.

14 C. Efforts were made to optimize the construction design, shorten the construction period, and reasonably schedule the house demolishing and rebuilding and construction time. D. Consultation meetings were held in 2004 and 2005. It gave people information and preparation psychologically for the move. The information was disseminated as a measure to alleviate project impacts during the project planning stage. Consultation will be continued during resettlement implementation.

1.6.2 In Project Implementation Stage A. Enhance the public participation mechanism. In addition to the extensive consultations, before project construction, public notices are distributed, stating the construction commencement date, and planned construction schedules, and publicizing the compensation criteria for resettlement, house relocation and land reuisition. This is aimed at encouraging public acceptance and oversight of the project at the affected sites. B. Adopt dust-reducing measures. In order to keep the project construction sites in a clean and neat environment condition and to reduce the impact of construction on the surroundings, water spraying is done to prevent dusts from spreading from the construction access roads in the densely populated areas. The contractors are required to remove the excavated soil and rock in a timely fashion through the well-planned mucking routes, prevent overloading of the vehicles and adopt measures to avoid rock and soil spilling out of the vehicles along the access roads. C. Treatment of wastes produced at construction sites. As the project construction period is long, there will be a large number of construction staff and workers, and a large quantity of living rubbish and wastes of various kinds will be produced at the construction sites, the project owner and contractors should clean off the rubbish and wastes in a timely fashion according to the local environmental and sanitation regulations so as to keep the sites clean and prevent health risks. D. During project construction, the local construction materials should be given priority for use and the local transportation services and laborers should be used first so far as technically feasible, so that the PAPs can benefit from the project construction. E. If noise or strong lights affect people to sleep in the evening; restrictions will be taken to stop construction at night.

1.6.3 In Resettlement Action Planning and Implementation Stage In cases when the house relocation and land requisition are unavoidable, the following measures should be adopted to reduce the project impact on the local population and conditions.

15 A. Strengthening the basic socioeconomic data collection, in-depth analysis on the existing and future development of the local social and economic conditions, to be used as the basis for a realistic RAP to be worked out with due consideration of the local reality, so as to safeguard that the living standard of the PAPs will at least be maintained if not improved as a result of the project construction. B. Establishing effective communication mechanisms and channels. Efforts should be made to shorten the time it takes to respond to queries or grievances from local people and make sure the problems encountered are handled in a timely manner. C. Enhancing the internal and external monitoring mechanisms. The external monitor shall report objectively and accurately the progress and problems found during implementation to the project owner and the Bank. D. Effective measures should be adopted by the contractors to minimize the impacts of project construction on the local productive systems.

1.7 Project Schedule

According to the general project schedule, the project construction commenced in March 2006 and will be finished in December 2009. The planned construction period is about 4 years. The consttruction is scheduled to start after Octorber 2006 in the villages with large land acquisition and housing demolition, so the affected households have enough time to rebuild their new houses. The resettlement implementation will start in June 2006. All the resettlement work will be finished before December 2006.

1.8 Preparation for Resettlement, Monitoring and Evaluation 1.8.1 Impact Inventory Survey According to the information on land needed for the project in the Feasibility Study prepared by Chengdu Municipal Engineering Design & Research Institute, an inventory survey was undertaken by the Urban Inspection Team entrusted by the project owner and trained by the resettlement specialists from July to September 2004. The inventory includes all the affected people, houses, land and special facilities etc. The Inventory Survey can be divided into: (1)land requisition survey, (2) the land requisition and house dismantled affected persons survey, (3) house dismantled and their accessory facilities survey, (4) affected self-employment business survey (5) assorted trees and plants survey, (6) rural production and living facilities survey and (7) special infrastructures survey etc. The concrete survey methods are as follows: A. Land requisition survey: The survey assesses the present conditions of land used, the plough, vegetable garden, garden plot, forest land, the site of a house and grassland

16 will be registered separately. Various lands survey will be done by the Design Unit using GPS positioning systems, the results will be registered and counted up as every village and every piece of land, by 1: 2000 actual survey topographic map. B. Affected population survey: It should be registered and counted up as numbers of actual project affected persons, affected persons of land requisition will be registered and counted up as real number of land requisition households. The parameters include relationship with the head of the household, sex, age, ethnic minority, occupation, level of education and technical training, etc. C. Demolished house and auxiliary survey: The survey records house property certificate, land-use certificate and is combined with an actual site condition survey. All accessory facilities belonging to resettlers must be registered and counted up one by one. D. Affected self-employment business survey: surveyed and registered household by household, main items including number of employee, turnover and profit, etc. E. Scattered tree survey: It will be registered and counted up as kinds of trees and their size and number. F. Rural living and production facilities survey: All of the living or production facilities affected by the project have been surveyed and registered by species. G. Special infrastructures survey: Surveying and counting up items including water conservancy, power facilities and communication apparatus dealing with the project.

1.8.2 Social and Economic Survey In order to analyze the project impact and draw up feasible RAP, the housing demolition office entrusted by the Project Construction Unit with the training of the resettlement specialists surveyed socio-economic conditions of country and city, township (town, farm), village and resettlers in project impact areas and resettlement areas,. The survey adopted the methods of collecting present statistical data and surveying samples on field sites. According to the survey results, local socio-economic and inhabitants' actual production and living conditions were analyzed carefully. A. Basic conditions of area affected by project, social-economic present situation and development plan: Collecting related documents and statistical data from the departments of planning, statistics and price of local government including total output value, national income, gross output value of industry and agriculture, revenue, income level of people's living, agriculture product and by-product and kinds of price information needed, planting structure of agriculture, seeded area, per mu yield and

17 having conditions of plough. The information on various indexes will show the local, but overall social - economic conditions. B. The present condition of production and living for local residents in the area of land requisition and house dismantling: Determined various indexes to judge production and living for local residents in the project impact area, and surveying all the affected people and assets due to land requisition and house dismantled.

1.8.3 Resettlement Plan

The resettlement planning of the project was carried out under the leadship of the Sichuan province urban environmental office(SPUEPO) and operated by the SPUEPO, which was based on the project affected scope, and quantity of the affected inventory. The plan was prepared based on the opinions of the villagers and resettlers and the actual conditions of the affected townships, (towns, farms, development districts) and villages. The main measure to resettle the affected people is to convert the affected people from rural to urban residency and a secondary strategy is to redistribute land within the original villages and village groups, improving the infrastructures, developing the secondary and tertiary industies, economic compensation and procuring endowment insurance. It is to carry out the principle of production-developable reseettlement so as to ensure that the host sites possess the basic materially living conditions and the potential for future development, and to combine the resettlement with the regional economic development so that the PAPs can restore their living standard or even better than that before resettlement.

1.8.4 Preparation of Resettlement Monitoring and Evaluation The project owner has entrusted Researching Institute of Foreign Capital Introduction & Utilization of Southwest Jiaotong University to carry out the independent resettlement monitoring and evaluation for the project. The preparation of resettlement plan was organized by the project owner and participated by the project design unit, monitoring and evaluation unit and local governments at all levels. The monitoring and evaluation unit provided the technical consulting service, the design unit defined the resettlement scope and the local governments were responsible for formulating the specific schemes for land requisition and house relocation and inhabitant resettlement. Since September 2005, a great deal of work has been completed, including successive establishment of resettlement organizations, determination of project affected scope, work outline of the the RAP, survey of the project affected inventories, social and economic survey, research work for policy adoption, formulation of the resettlement schemes, cost estimate for resettlement compensation, etc..

18 The RAP of the project was finalized and preparation for resettlement monitoring and evaluation was completed.

1.9 Policy Frame and Targets of RAP 1.9.1 Policy Frame This RAP is prepared mainly based on the current state laws and statutes, relevant implementation regulations of relating provinces, the safeguard policy of the World Bank, and the design documents of this project, which mainly include: (1) The Land Administration Law of the People’s Republic of China (effective as of January 1, 1999); (2) The Management Statutes of Housing Demolition and Resettlement of People’s Republic of China (2001); (3) “ The Implementation Measures of The Law of Land Management of People’s Republic of China made by Sichuan province” (1999); (4) “ The Management Statutes of House Demolition and Resettlement of People’s Government of Sichuan Province ” (Dec., 2001); (5) “ No 54 document of Panzhihua city government ”(“Panzhihua City for Compensation and Resettlement for the Land Requisition” ) December 3rd ,2002; (6) “document of Panzhihua city price bureau No280[2003]”; (7) Non-Voluntary Resettlement, Operational Policy OP 4.12 of the World Bank; 1.9.2 Policy Objectives (1) Adopting engineering, technological, economical measures to avoid and reduce land requisition and house relocation; however, when land requisition and house relocation is unavoidable, effective measures should be adopted to reduce impacts on production activities and living conditions of local residents. (2) In the preparation stage of the project, social economic investigation should be conducted and relevant resettlement plans should be compiled. (3) Resettlement plan should be based on the affected assets and compensation standards to improve, and at least to restore the original living standard of resettlers. (4) Promoting developmental resettlement. Resettlement of rural part should be based on the land, and supported on advanced local second and third industries to seek more employment. (5) Encouraging resettlers and original residents in the resettlement area to take part in the resettlement plan. (6) Resettlers will be first settled in the original communities

19 (7) Resettlers and original residents in the resettlement area will benefit from the project.

20 2. Project Impacts

2.1Confirmation of the Scope of Project Impacts 2.1.1 Land Acquisition for the Project Panzhihua Urban Environment Project is a comprehensive engineering activity and it includes road and transportation, landscape and afforestation and road transportation management systems. All the land requisition area and the areas where the resident's living and production conditions will be affected by the project will be included in the project impact scope. Based on the feasibility study prepared by Chengdu Municipal Engineering Design & Research Institute, the land acquisition area for this project was determined by field meterage, and the housing demolishing area was determined according to the land requisition area and the actual conditions. 2.1.2Temporary Land for Construction The temporary land for the project includes land occuppied by the stocking ground, excavation waste dump, production and living area during construction and temporary road for construction, etc.. The temporary land use areas are about 120 mu for the project.

2.2 Investigation of Project Impacts During the inventory survey, the survey team, comprised by the staff from the Urban Inspection Team of Panzhihua City entrusted by the project owner with the training of the resettlement specialists, investigated all items affected by the project, including the population, housing demolishing, land requisition and special facilities. After confirmation, all of the survey results have been signed by village leaders, resettlers and investigators. The survey contents and methods of demography, land requisition housing and auxiliaries demolishing, scatter tree cutting and special facilities are described as follows: A. Demography: The population affected by the project was divided into three categories, those affected only by land requisition, those affected only by housing relocation and those affected by both land requisition and housing relocation. Based on the actual population of survey time, the affected population was divided into agricultural and non-agricultural categories, survey on the affected population character including nationality, age, culture and employment, etc. Survey was made household to household, and the statistics was made village to village. B. Land survey: According to the land requisition layout in the preliminary study report and land requisition boundary by site measurement, the land survey was carried out based on the

21 land data of local land department and the actual cultivating condition. And the statistics was made according to the ownership and land types (including cultivated land. garden plot, vegetable land, forest land and house plot, etc.). C. House and auxiliary survey: To all the house in the affected area, the survey and register was carried out by site measurement, according to different ownership such private house and collective house, and different structures such as brick-concrete, brick-wood, earth-wood. etc. The statistics of private houses was made village to village, and the statistics of collective houses was made unit to unit. Meanwhile, all the auxiliaries affected by the project was surveyed and statistic. D. Self-employment business survey: The survey and register of self-employment business was made household to household, the survey item including number of employed persons, total volume of business and net income, etc. E. Scatter tree survey: All the scatter trees (including the fruit trees and other economy trees) in the project affected area has been surveyed by site count, and statistic by categories and size. F. Rural living and production facilities survey: All the assets belonging to the collective of the village or village group are registered. G. Special infrastructures survey: Based on the data offered by the districts administrative department, the survey and register of all the special facilities including water conservancy, power supply and telecom was carried out through site-check by survey team and local administrative department.

2.3 Material index of Project Impacts There are 2 districts, 2 townships, 2 villages, 3 groups. There are 558.29 mu of land which will be expropriated and affect 171 households and 648 persons; there are 72840.75m2 housing demolition areas of which 33529.55㎡belonging to 116 rural households, 13873 m2 belonging to 229 urban households, and 25438.2 m2 are non-residential houses for 9 enterprises and units. Moreover, 120 mu of land to be used on a temporary basis, as well as 3578 scattered trees to be cut. In addition there are some special facilities belonging to the collective and special infrastructures belonging to the State.

The detail of survey results are described as below:

22 2.3.1 Land Acquisition

The gross land area of all kinds required to be requisitioned for this project is 558.29 mu，including farmland area 517.02 mu，orchards area 3.73 mu，forest area 1mu, other land 36.54 mu. The investigation results of land acquisition quantiites of all kinds of the city are shown respectively in Table 1.

Table 1 Land Acquisition Statistics of SPUEP Items units Bin-jiang road Bin-ren road Total (mu) Paddy field Mu 0 157.01 157.01 Irrigated land Mu 0 342.26 342.26 Dry land Mu 0 17.75 17.75 Orchard Mu 0 1.00 1.00 Forest Mu 0 3.73 3.73 Other land Mu 0 36.54 36.54 Total Mu 0 558.29 558.29 State land 100 20 120 Source: Feasibility Study and Field Survey data

Table 2 Land Acquisition Statistics of Villages and Groups

Source: Feasibility Study and Field Survey data Districts Towns villages groups Land acquisition(mu)） Dongcheng Yinjiang Shaba Shaba 179.18 Renhe Renhe Renhe Yuejin 224.09 Huaguo 155.02 Total ：2 2 2 3 558.29

2.3.2 Temporary Land Using There is 120 mu temporary land used for dumping of excavated soil from the tunnels and storing of building materials along the Bing-ren Road according to the Feasibility Study.

2.3.3 Project Affected Population There are totally 345 households and 625 persons affected by housing demolition by the project according to FS and field survey including 116 peasant households and 325 persons and 229 city and town dwell households and 300 persons. There are 9 enterprises and units will be demolished and affected 4223 persons. So the total affected persons by structure demolition are 4848 persons. There are 171 households and 648 persons affected by land acquisition. Because there are 75 households and 247 persons affected both by land acquisition and housing demolition. So the total affected persons are 5334. See table 3 for the detail of the countryside population. Table3 Project Affected Population by LA&HD of SPUEP in the Countryside

23 Groups Total Only Affected by LA Only Affected by HD Affected by LA & HD Households Persons Households Persons Households Persons Households Persons Yuejin 78 280 51 155 12 18 15 22 Huaguo 61 270 45 246 16 24 Total 139 550 96 401 28 42 15 22 Shaba 2 73 261 13 36 60 225 Total 212 811 96 401 41 78 75 247 Source: Feasibility Study and Field Survey data 2.3.4. Housing Demolition The total housing demolition areas are 72840.75 m2 of the project including farmer houses areas 33529.55 ㎡ , urban dwell house demolition areas 13873 ㎡ and enterprises and units areas 25438.2㎡. No illegal houses are identified. Refer table 4 for detail housing demolition information and table 5 for the affected enterprises and units.

Table 4 Housing Demolition of SPUEP

Districts Towns Villages Groups Houses structure (m2) Total (m2) Brick-concrete Brick-wood Earth-wood Others Renhe Renhe Renhe Yuejin 2508.7 2096.65 3270.42 7875.77 Huaguo 3994.31 1143.59 8731.32 13869.22 Dongcheng Yinjiang Shaba No 2 7303.59 2027.06 1024.72 1429.19 11784.56 Peasant house 13806.6 5267.3 13026.46 1429.19 33529.55 City and town dwell Bin-jiang road 4143.04 4143.04 houses Bin-ren road 9729.96 9729.96 Total 13873 13873 Enterprises and units Bin-jiang road 4645.99 1185.31 524.19 6355.49 Bin-ren road 11177.41 6594.61 1310.6 19082.71 Total 15823.4 7779.92 1834.79 25438.2 All in Total 43503 13047.22 13026.46 3263.98 72840.75 Source: Feasibility Study and Field Survey data

Table 5 Housing Demolition of the Affected Enterprises and Units of SPUEP

Names Nature Areas(m2)

total Brick-concrete Brick-wood others Bin- Bus company State 1848.5 1478.8 369.7 Jiang Nantai company Individual 2562.39 1537.44 563.73 461.22 road Hydrology station Institution 1259.4 944.55 251.88 62.97 Jinsha park in Panzhihua Institution 685.2 685.2 Total 4 6355.49 4645.99 1185.31 524.19 Bin- Panzhihua bureau of the Yangtse River State 2720.8 1904.55 761.83 54.42 Ren forestation bureau road West of Panzhihua biont medicine factory State 2977.71 1339.97 1191.09 446.65 No 19 smelt machinery plant State 7976.79 4786.08 2632.34 558.37 Branch machinery company of Panzhihua State 5023.36 2762.85 2009.35 251.16 steel Company Lunan community of Dahe north road Institution 384 384 Total 5 19082.71 11177.41 6594.61 1310.6 All in total 9 25438.2 15823.4 7779.92 1834.79 Source: Feasibility Study and Field Survey data

Among the 9 non-residential units showed in Table 5, 5 of them are State-owned enterprises, 3 are institutes and only 1 is in the private sector. The Nantai Company is one of the business companies under No.501 Power Plant which was closed down in 1999 due to its heavy

24 pollution and readjustment of location in Panzhihua City. Most of the workers and staff of the No.501 Power Plant were transferred to other two power plants in the city and a few staff remained in Nantai Company for hotel management, house leasing, logistic work, etc. Both the affected renter and tenant will be subsidized during relocation. For house leasing, details are tabled below: Renter Space Structure Rent Period Valid Purpose Jiangbian 825 Brick-concrete Y14000/year One year 12/01/2006 Production Glass sq.m Company Detianduhou 1100 Brick-concrete Y4800/month One year 12/01/2006 Staff Restaurant sq.m dormitory Window 650 Brick-concrete Y3000/month Temporary - Production Frame sq.m Factory

2.3.5. Scatter Trees and Tombs Trees to be cut are mainly those scattered in front of and behind the demolished houses, in the fields and along the roads, by counted one by one, the total number of scatter trees to be cut will be 3587 trunk. Nine tombs in the villages need to be relocated.

2.3.6. Special Facilities and Infrastructures The special infrastructures include the electric power transmission lines, the telecommunication lines and water pipes. The special facilities owned by the villages are underground structures, low-voltage transmission lines, bio-gas pits and stoves, etc. See table 6 for the details. Table 6 Affected Special Facilities of SPUEP Items Units Huaguo Group Total Underground structures M 38 38 Tombs One 9 9 380V transmission lines One 33 33 Water pipes M 68398 68398 Methane-generating pits One 15 15 Stoves One 39 39 Source: Feasibility Study and Field Survey data

2.3.7. Vulnerable People Affected Vulnerable groups are defined as those who, due to various reasons, lack income, political and social opportunities and are thus socially disadvantaged. A vulnerable group is not a homogeneous group but a general form for those members who are socially disadvantaged. In this project, the vulnerable groups are defined as those already experiencing hardship (e.g. particularly those who live below the poverty line, landless, aged, women, children and

25 minority ethnic groups, and those households with members suffering long time sickness and with heavy burden to pay for children’s education fees, etc) or those whose loss of land/ property could lead to such hardship and risk of impoverishment. Basically the vulnerable groups can be divided into the following two categories: (i) socially vulnerable group, including national minority, women and poverty population. This can be attributed to the social structural limitation, i.e., inappropriate social institutional arrangement, which resulted in that some social members lack entitlement and skills; (ii) psychologically vulnerable group, including aged, widows/widowers and orphans. This is the direct reason for being vulnerable population, which is related to the physical handicaps or mental handicaps.

During the project impacting survey, the conditions of nationalities, age structures, cultural levels and employment for family members in households involved by land requisition are surveyed and accounted by each village. By comparing the family member structures and information in the local administration department, the vulnerable people will be decided.

This Panzhihua Project mainly involves Community 2 of Shaba village Yinjiang town Dongcheng district, directly affecting 146 people in 51 families of ethnic minorities, including 30 Yi-Han families, 20 Yi-Yi families and 1 Bai-Han families. As they have lived for many years in the inhabit area of Han nationality, the living custom, culture and religion even including their food and dress styles of these families have already become assimilated with Han nationality, but not kept in the styles and custom of ethnic minorities. Yet their production capability and income condition is not different from other local Han people. The surveyed information also shows: There are 24 households vulnerable people and 13 female headed households who will be affected by the project. During the process of land acquisition and relocation, their concerns will be emphasized and their difficulties will be surmounted by specific measures provided by the project owner and local government. See Table 7 for detail information.

Table 7 Vulnerable People Affected in SPUEP Villages Groups Sick Deformity Single Single Minority Female in old young nationality charge of family Rehhe Huaguo 1 3 2 1 1 Yuejin 2 4 1 2 2 Shaba No 2 2 3 1 2 146 10 All in total 5 10 4 5 146 13 Source: Field Survey data Among the 37 households with vulnerable family members, 32 of them are economically

26 poor with an annual average income of Y900 and less per person. And 5 households among the total relocated 116 rural households in the three village groups are still living in the earth- wood houses.

2.4. Analysis on Project Impact There are 2 districts and 2 townships and 2 villages and 3 groups affected by the SPUEP. See table 8 for the changing of the cultivated land after land acquisition Table 8 Change of Cultivated Land in the Affected Groups after Land Acquisition Agricultural Before LA LA After LA Rate of Nam population Cultivated Land-holding (mu) Cultivated Land-holding reduction e of land capacity per land capacity per (%) groups (mu) person（mu/pe (mu) person rson）（mu/person） Huagu 270 318.60 1.18 155.02 149.98 0.61 51.6 o Yuejin 280 285.00 1.02 224.09 60.91 0.22 78.4 No2 of shaba 261 241.82 0.93 179.18 62.64 0.24 74.2 Source: Feasibility Study and Field Survey datas

The quantity of cultivated land does not include the land taking out for afforestation. It is farmland presently used for food grain. We can see from the table that the reduction in cultivated land is large among the Yuejin, Huaguo and No 2 group of Shaba by the land acquisition affected. The rate is 78.4%, 51.4% and 74.2%. The cultivated land area is 0.22- 0.61 mu for the affected groups after land acquisition. The cultivated land area in Yuejin group is the least and it is 0.22mu/person and it is 0.24mu/person in No 2 groups of Shaba Village, so the level of production will not be sufficient for food security. When the land- holding capacity falls below 0.4 mu per person, a certain number of villagers will convert from rural residents to urban residents. The remaining land will be redistributed among the remaining rural population in the village group in a principle of keeping the land-holding capacity as it is before land acquisition. In order to keep sufficient land for food grain supply, 219 persons in Yuejin Group will be turned into urban residents and 61 persons will have the remaining land redistributed; 208 persons in Shaba 2 Group will be turned into urban residents and 62 persons will receive more land after land redistribution. For Huaguo group the rehabilitation strategy is land redistribution, since the land-holding capacity will be 0.61 mu per person after land acquisition..

The land requisition will affect a certain part of the income of the peasants. Non-agricultural income will not be affected. Additional, combined with the overall developing plan of the town (ship)s and the villages, the affected population will be resettled in the area with a better

27 communication and social condition, the original condition of living and production will soon be rehabilitated.

28 3．SOCIO-ECONOMIC CHARACTERISTICS

3.1 Basic Situation of the City and District Influenced by the Project

(1) Panzhihua City

Panzhihua is the only city named after a flower nationwide, and one of the youngest cities in the history of the Republic, established in 1965. Located in the junction of Jinsha River and Yalong River in the Southwest Sichuan Province, it is an important base of steel, energy and vanadium titanium.

The city covers an area of 7434 square kilometer, including 831500mu farmland, dominating 3 districts, 2 counties, 78 townships and towns. Its total population is 1.1 million, including 480 thousand of rural population. The abundant resources like sunlight and heat provide the agricultural production with favorable natural conditions. Because of the tri-dimensional distribution of climate, it is suitable for growth of varied kinds of tropical and temperate plants, with grain, vegetable and sugarcane not only having high output, but also having high quality; and with the thermophilic vegetable cultivable all year around. Meanwhile it has the conditions for the growth of tropic, subtropical and temperate fruits of banana, pomegranate, grape, mango, papaya. It makes the rural of Panzhihua light green everywhere, fruits and sugarcane growing into forest, melon and fruit drifting fragrance; and also creates conditions for the development of tourist industry.

(2) Renhe District

Renhe District covers an area of 1727.07 square kilometer, dominating 6 townships and 8 towns and 1 subdistrct office. Its population at the end of 2003 is 198000. In 2003, the economic growth in Renhe District had been increased quarterly, and the main social and economic aim had been realized on the whole, the GDP of the district reaching RMB 2.36 Billion Yuan; the total agricultural output value reaching RMB 430 Million Yuan; the total industrial output value reaching RMB 2.668 Billion Yuan; at the end of 2003, the per capita net income of the farmers reaching RMB 3,178 Yuan; the 14 townships and towns around the district reaching the aim of realization of relatively comfortable life.

(3) Dongcheng District

Dongcheng District is the downtown district of Panzhihua. The area of Dongcheng District is 167 square kilometer, with 223.53 hectare of farmland, 1 town, 9 subdistrict offices, 9 villagers'

29 committees and 61 community urban residents’ committees under its jurisdiction. Dongcheng District is the political, economical and cultural center of Panzhihua City, and the People’s Government is located at No. 103, North Dahe Road (Dadukou). The total population of Dongcheng District at the end of 2002 is 306004, with males of 162846 and females of 143158, including the urban population of 297218 and rural population of 8786.

3.2 Socio-Economic Surveys This Section presents information on the socio-economic characteristics of the population likely to lose land or property to the Project. The information comes from the following sources: 1. CMEDRI field survey investigations undertaken in parallel to the surveys for the project Feasibility Study, carried out in 2004; 2. The socio-economic survey undertaken by urban monitoring team with the training of resettlement specialist during July-September 2004, it took about 40 persons and 57 days to do this survey; 3.2.1 The Socioeconomic Survey (2004) The survey involved collecting primary data from selected 3 groups and 212 households on the proposed project. Two survey instruments were used: (1) a village questionnaire, administered to village leaders, and (2) a household questionnaire administered to individual households. The survey team included members of 40 survey staff from two affected districts. The districts and township officials provided full cooperation. A strict purposive sampling frame was designed and applied using data collected in the survey, according to the map prepared for the feasibility study. They had surveyed all the affected households. The household’s interview with the following distribution: land acquisition only (96), house relocation only (41) and both land acquisition and resettlement (75), total 212 households.

3.3 Socioeconomic Characteristics of the Affected Population 3.3.1General The data collected during the 2004 socioeconomic survey have been analysed using the Household Livelihood Framework. The framework involves consideration of four different aspects of household socioeconomic characteristics: Human Resources: demographic and education/skill characteristics; Natural Resources: land, forests and access to water supply; Physical Resources: ownership of productive and consumer assets;

30 Financial Resources: household incomes and expenditure (access to credit). The following sections examine each of these in turn. An additional section describes the survey findings in respect of APs attitudes towards the project. 3.3.2Human Resources The average household size of the population surveyed was 3.825 persons (See table 9). A high proportion of households (82%) have 3 to 5members and there are 11% households that have 1-3 members. Only 7% households have above 7-9 members. Around 20% of the population is aged below 18 years and 10% are over 60 years. 70% of the population is aged 18~35 years. Of the population over 18 years nearly 84% is employed; 5% are students and the remainder are either retired, sick or disabled. The overall dependency ratio is 1.5 (persons per worker/labor); this ratio varies little with household size indicating that larger households reflect extended families under one roof (e.g., two or more nuclear families with one common elderly parent). The survey data on occupation indicated the high female participation rate. Virtually all households are of rural residency, although a few of them are registered as urban residents [Hu Kou] such as school teachers and enterprise workers. Among all the people interviewed, 45% of them are farmers relying on farming only, 20% are farmers but having another job in addition to farming, (58% of the farmers in this group interviewed having a job in the urban areas while the 42% having non-agricultural jobs in their hometown) and 4% are fully engaged in non-agricultural occupations. Men are more likely than women to have a second occupation or work outside agriculture. However, compared with men, women make up the majority of those working exclusively in agriculture. Other occupations are varied with a preponderance of small business, transportation, and crafts persons including carpenter and silversmith. Overall, one in two households interviewed had at least one migrant labour either work for short or long time in the urban areas each year. Migrant workers include people that travel outside the prefecture for employment for seasonal or year-round employment. Local officials estimate that 20% of migrant workers are away 1-3 months during periods when farm labour is minimal, 20% are away 4-9 months; and 60% are away from 10-12 months (permanent employment outside or return only for harvest). Over 95% of the population aged 7 years and over have at least primary education; 50% have been to middle school but only 6% have been to high school or college. Over half of households have at least one member with high school or tertiary education. Proportionately more women have no education at all but the incidence is low and the situation is improving (i.e. most illiterate people are elderly).

31 Amongst the adult population, illiteracy (no formal education) is concentrated amongst those aged between 40 and 60 years and over 60 years. In contrast, most of those aged from 17 to 39 years have been to middle school or beyond. The household data suggest that for most villager groups on the alignment, around half of the adult APs have completed middle school education or more. This represents a considerable foundation on which to strengthen the skills-base through vocational and technical training, or simply facilitating off-farm opportunities. Allied to the prevalence of rural households engaged in non-agricultural activities (about 50%), and despite the relatively low proportion with high school or tertiary education, the results suggest that a large proportion of APs have the skills and education to assimilate improved cultivation techniques and to engage in off-farm employment opportunities. Some basic training would make this transition quite effective. Table 9 shows the outcome of the census survey. The last item is the present occupation of the able-bodied people in the three village groups. Among the total population of 811, 645 are above the age of 18 and 101 people do not work out of their own houses due to various reasons. Within the 544 able-bodied, 96% are doing agricultural activities full time or part time, while 4% are doing non-agricultural activities full time.

32 Table 9 Structures of PAPs of SPUEP

Unit: households, persons

Item Renhe district Total Dongcheng district Total Huaguo group Yuejin group No 2 groups of Shaba Households 61 78 139 73 212 Population 270 280 550 261 811 1.sex 1）male 136 156 292 118 410 2）female 134 124 258 143 401 2、age 1）<18 39 44 83 83 166 2）18~35 87 95 182 82 264 3）36~55 77 89 166 59 225 4）56~60 40 26 66 13 79 5）>60 27 26 53 25 78 3.nationality 1）han 270 280 550 115 665 2）yi 145 145 3）buyi 4）dai 5）bai 1 1 6）other 4.Residence registered character 1）agriculture 270 280 550 261 811 2）non-agriculture 5.education level 1）preschool children 24 27 51 15 66 2）kindergarden 11 10 21 13 34 3）elementary school 108 103 211 98 309 4）junior middle school 102 103 205 102 307 5) senior middle school 19 19 9 28 6) at or above secondary technical school 10 8 18 18 7) illiterate or semi-illiterate 15 10 25 25 50 6. Present occupation 1) Farmer 170 192 362 162 524 2) Herdsman 3) Enterprise worker 5 6 11 4 15 4) Office staff 5) Teacher 2 3 5 2 7 6) Doctor 7) Private business man 8) Army man Source: FS and Social-economic Survey, 2004

33 3.3.3 Natural Resources 3.3.3.1 Land Tenure In the mid-1980s, the collective form of agriculture introduced in the 1950s was replaced by the household responsibility system, which divided land equally amongst households on the basis of their size. Where there were marked variations in the quality of land within the same village, households were allocated plots in each category; many households therefore have fragmented land holdings. Households were given contracts (originally for 15 years but since 1998 contract were for 30 years) giving them user rights to cultivate this land; ownership of the land however remained with the original land owning group – administratively the land owning group is also called villagers’ group. In some villages, 430mu land was not allocated to individual households but was held in reserve, and is farmed based on annual agreement. The original distribution of land was equitable in the extreme. However as time passes, the household situation changes – people die, others are born, some leave to marry out, others marry in, reserve land can be used to accommodate new arrivals. However, given the fact that population is increasing (albeit slowly), the general trends are: (1) for land per capita to decrease; and (2) a growing mismatch between household size and the amount of cultivable land – in the survey nearly half of households had per capita land holdings below the average, and total 56 new born and married-in persons (6%) who have no cultivated land in wealthy, intermediate and poor households due to that they have to wait in a queue to get land after 1- 3 years when the land adjustment taking place (i.e., redistribution in a small scope and basically keep the 30-year land contract unchanged). 3.3.3.2 Cultivated Land, Orchard/Economic Forest The households surveyed cultivated a total of over 832 mu land. Almost all households had paddy, irrigated land and some dry land. In addition, most of the surveyed had some self- reclaimed dry land or slope land. Only 5% of the households have limited orchards or land for economic trees. The land recently reclaimed for afforestation on the steep slopes is not included. 3.3.3.3 Forest Land Of the total surveyed households, there is little mu forest land. 3.3.3.4 Water Resources All land in the valleys has sufficient water resources for agriculture. However, in the mountainous areas, it is expensive to develop irrigation to the farmland, thus land is classified as dry land. For dry land, precipitation is normally inadequate to support a good harvest (usually only maize). Instead, irrigated land particularly the paddy land is considered to be the most valuable land.

34 3.3.4 Physical Resources 3.3.4.1 Housing and Fixtures About half of the housing in the affected villages is in wood-earth structure, reflecting the traditional building styles. Now people are living in the brick-concrete or brick-wood houses (which takes 45% of the total housing space) and leave the earth-wood houses for their livestock and domestic properties. Infrastructure provision is however good: all houses have electricity and 16% have tap water into the house or yard. About 62% households have home telephone and 35% have mobile phone. 3.3.4.2 Productive Assets The ownership of productive assets is not significant within the affected villages except nearly 22% of households have handcarts and 94% haves threshers. 12 households have a tractor, 3 households have a power engine (diesel or electric), and 21% households have a motorcycle. There is little evidence of capital equipment related to off-farm/ non-agricultural activities. This means there is a potential for these equipment after the transportation situation improved. 3.3.4.3 Household Durables Ownership levels of selected household durables are good indicators of relative wealth. Color TV ownership is nearly 73% (many are connected to the cable network), and 36% have a VCD or similar video equipment. Around 23% households have washing machines. 21% households have refrigerators. See table 10 for details.

Table 10 Physical Resources of SPUEP Major Housing Conditions Water Supply Water Supply Material households % Pattern households % Concrete/brick 43 20 Tap water--in room 32 15 Brick-wood 53 25 Tap water --in yard 33 16 Clay-Wood 106 50 Well in yard 92 43 Other (wood) 10 5 Other sources outside 55 26 All surveyed households 212 100 All surveyed households 212 100 Household Durables Productive Assets Item % households owning Item % households owning Washing machine 23 Agricultural Truck 5 Refrigerator 21 Tractor 12 Home telephone 62 Thresher 94 Mobile phone 35 Power engine 3 TV-colored 73 Handcart 22 TV-black & white 24 Pump 27 VCD.etc 36 Tricycle 14 Electric fan 88 Motorcycle 21 Solar water heater 35 Car/taxi 2 Source: Social-economic Survey, 2004

35 3.3.5 Financial Resources 3.3.5.1 Household Incomes Income data provided by the village leaders indicates that around 70 % of the households have annual net incomes above Y1,500 per capita, 15% of the households have annual net incomes between Y900-1,500 per capita, around 13% have annual net incomes of less than Y900 per capita and 2% are absolutely poor families with an annual average net income of less than Y625 per person. 3.3.5.2 Income Sources Villages affected by the project derive their income from a wide variety of sources. The relative importance of these is shown in Table 11. The grain production and animal husbandry is not the most important income source in the great majority of villages. The off- farm activities and migrants labor in are the most important income sources of 50% households. The cash crops grown vary considerably within the project area. The most common are fruit and vegetable production, particularly plum, pear, and other fruits are grown. Grain (rice and corn) is of vital importance to the local economy, virtually every household cultivates it, but it is used mainly for domestic consumption (and to help fatten pigs) rather than as a cash crop in its own right. Animal husbandry mainly includes poultry, pig, cattle and goat raising along the project alignment. The off-farm activity includes local transportation service and businesses are frequently mentioned. Table 12 shows the different income sources in the surveyed households. The Table reinforces the variety of economic activity carried out in the proposed project range. In the gross income of the sample households, income from the second and tertiary industries accounted for nearly 36 %; plus the migrant labor income, the non-agricultural incomes accounted for over 50%. Incomes from grain and cash crop production are 26.7 %, plus the fruit production. The income share from cropping is just nearly 30%. Looking at the net income, the share from cultivated land would be even less. This has a significant implication for income rehabilitation of affected households, i.e., the income from cropping accounted for just nearly 30 % of their household gross income, even if the affected households lose 20 % of their cultivated land, the impact on gross income loss would be only 6 %（20%*30%=6%）.

Table 11 Relative Importance of Income Sources in Surveyed Villages (2004 figure) Towns villages Groups Grain Cash crop Animal Migrant Off-farm

36 husbandry labor activities Renhe Renhe Yuejin 3 5 4 2 1 Huaguo 3 5 4 2 1 Yinjiang Shaba No 2 3 5 4 2 1 Note: 1=ranked first, the highest rank. Source: Social Economic Survey, 2004

Table 12 - Income Sources and Per Capita Net Income of Surveyed Households Income (gross) per household in Sample Renhe Dongcheng % 2004(CNY) Average district district Grain and cash crops 4,175 26.7% 4,655 3,398 Fruit 453 2.9% 506 369 Animal husbandry 3,128 20.0% 3,487 2,545 Migrant labor 2,283 14.6% 2,546 1,858 Second and tertiary industries 5,614 35.9% 6,260 4,689 Total 15,638 100% 17,436 12,726 Production cost1 3,550 - 3,552 3,458 Per capita net income (Yuan) (4 persons in one family) 3,022 - 3,471 2,317 1 includes costs for chemical fertilizers, seeds, pesticide, tax and fees and other costs for animal husbandry and non-farm activity costs. Source: Household Survey, 2004, 2 persons of one family. 3.3.5.3Expenditure Patterns and Savings Based on data of the expenditure of the affected households, each member in sampled families spent an average of CNY 2,233 in 2004. As is shown in Table 13, great discrepancies in expenditure per capita exist in different areas. The average expenditure in Dongcheng district is CNY 1,744 per capita and it is CNY800 less than that in Renhe district. The largest single item in the APs’ average consumption pattern is for basic needs, e.g. food, and housing, which represent nearly 61% of total consumption expenditure. The highest expenditure for housing is further confirmed by the field visit - local people spent more money to improve their housing conditions. This does not hold for people living in traditional clay-wood houses who do not worry much about their house relocation. The per capita net income less the per capita expenditure (3,022 – 2,233 = 789) equals to the per capita savings, which varied from household to households. Among the total surveyed households, 23 households borrowed credit from banks or cash from friends and relatives in a total amount 0.23 million Yuan. 13 households borrowed more than 10,000 Yuan each, mainly for off-farm activities; they accounted for about 80 % of total amount borrowed. Finally, 10 households borrowed less than 10000 Yuan each, mainly for farming activities. Over the 3 surveyed groups, 2groups (60 %) have conducted Micro-credit programs or poverty alleviation projects.

Table 13 Per Capita Expenditure Distribution of Sampled Households Renhe district Dongcheng district Sample

37 Huaguo VG Yuejin VG Shaba 2nd VG H.H. Living Per Total Total Per Total Per Per Expenditure capit % (yuan) (yuan) capita (yuan) capita capita a 235200 840 104400 400 588 26% Food 216000 800 Clothes 71550 265 79800 285 35235 135 217 10% Housing 121770 451 140280 501 140679 539 568 25% Education 69390 257 57960 207 54549 209 280 13% Healthcare 82620 306 82880 296 64206 246 264 12% Traffic cost 26730 99 27720 99 23490 90 87 4% Others 112320 416 88480 316 40455 155 229 10% Total 700380 2594 71232 2544 463014 1774 2233 100% Source: Calculated based on household survey data, 2004

3.3.6 Project Related Issues 3.3.6.1 Knowledge of and Attitude to the Proposed Project By the time the socio-economic survey was undertaken, only a small proportion of households (12 %) did not know of the proposed project. The information has been widely diffused in the related regions through meetings of the local officials at various levels, local newspapers and the TV stations, and field survey conducted by CMEDRI. About 80 % of the surveyed households recognized that the SPUEP Project is necessary. Amongst the beneficiaries, the Project traversed collectives together with individuals will generally benefit from the project. The construction of the project will accelerate the flow of people, material and information as well as bring tremendous economic and social benefits. Of those surveyed, only 10 % worried that they would lose land or properties; nearly 68% thought that the Project would create some negative impacts but that they would be minor compared with the benefits generated, and around 10 % thought they would be purely beneficial. 3.3.6.2 Resettlement Information Needs The surveyed households were asked to rank their information needs in respect of the land acquisition and house demolition process. They were asked to choose only one out of seven options. Table 14 provides the results of their preferences mentioned.

Table 14 Resettlement Information Needs

Districts Total Information Needs Renhe Dongcheng households % Huaguo VG Yuejin VG Shaba 2nd VG 1. Compensation rates 63 49 58 170 80% 2. Timing of land acquisition 4 3 4 11 5%

38 3. Process of land acquisition 4 3 4 11 5% 4. Timing of compensation payment 1 0 1 2 1% 5. House relocation help 1 0 1 2 1% 6. Income restitution help 0 1 1 2 1% 7.irrigated system resuming 2 2 2 6 3% 8.temporay land using 1 2 1 4 2% 9.others 2 1 1 4 2% Total 73 212 100 78 61 %

By far the highest needs for APs were knowledge about the compensation rates specifically applicable to them: 80 % households mentioned this as the most important need. The only other item mentioned by more than 1 % of the respondents as their most important requirement was information on the timing of land acquisition. The timing of compensation payments and the house relocation help were equally 1 % of all respondents.

3.3.6.3 Preferences regarding Compensation, Relocation and Income Restoration Measures Individual households were also asked about their preferences for action that would mitigate the effects of losing productive land and or housing. Table 15 summarises the responses of those households. In short, their responses were:  50% of the sample households preferred to receive cash compensation for the loss of land and convert to urban residents. Among these people, 31 % of the total households preferred to receive full land compensation fee and have all the family members been converted to urban [Hu Kou]; while 19 % of the respondents proposed to have new land reclaimed for the remaining population;  Another 50 % of the total preferred to keep some farmland and continue farming, while they don’t mind to have some members in the family to be converted;.  If compensation were to be paid directly to those losing land or property, excluding those who would necessarily use at least part of the funds for building/rebuilding their houses following its demolition, most potential APs prefer to invest in small businesses, e.g. retail trade, shops and transportation as well as purchasing endowment insurance. A small proportion (3%) said that they would use the money to pay for miscellaneous items, e.g., the living cost before they can find a new job in the coastal area or during the period of receiving technical training.

Table 15 Sampled AP Preferences for Mitigation Measures Item Renhe district Dongcheng Total % district Huaguo Yuejin Shaba 2nd

39 1. Payment of land compensation fee a. Fully and directly to AP 24 19 23 66 31% 106 50% b. Land redistribution in the VG 39 31 37 15 11 13 40 19% 2. Preferred Use of Compensation Paid Directly to AP a. Improve housing condition 23 17 21 61 29% b. Improve housing conditions + business 16 12 15 43 20% c. Establish small-scale businesses 16 12 15 43 20% d. Improve agro-production conditions 22 17 20 59 28% e. Miscellaneous items 2 2 2 6 3% 3. Rehabilitation Strategy a. Household conversion 39 31 36 106 50% b. Land redistribution 39 30 37 106 50% Source: Social Economic Survey, 2004.

3.3.7 Land Availability Any land for land compensation strategy depends on the availability of more land for cultivation and on the feasibility of redistributing the existing land amongst all members of the land-owning groups. Discussions and field observations clearly indicate that, in most cases, there is little available cultivatable land that has not already been distributed to individual households. Among the three surveyed groups, there is one group in which the average cultivated land area is above 0.4mu after land acquisition, they will adjust land after land acquisition; there are two groups in which the average land areas below 0.4 mu, some of them will be turned into non-agricultural population and some of them will be resettled by surplus land after land acquisition. As planning guidelines, it was decided that land distribution would be feasible only when: (i) No more than 20 % of arable land was redistributed with any single village or as agreed by villagers (ii) The average land per capita after redistribution should be larger than 0.4 mu and the income from land should be equal or higher than the income from land before land acquisition if no other income sources from non-land activities are provided. .

4. Policy Frameworks for Resettlement

The preparation of RAP and implementation of resettlement for this project shall strictly carry out according to relevant requirements in Operational Manual-OP4.12. The implementation of resettlement shall strictly carry out according to compensation standards in RAP and must have approval of World Bank if there is any change during implementation.

40 4.1 Policy Basis The main laws and policies for the land acquisition and resettlement are as follows. A. Land Administration Law of the People's Republic of China (which was approved in the Forth Meeting of the Standing Committee of the ninth National People' Congress on Aug. 29, 1998) B. Implementation Regulations of Land Administration Law of the People's Republic of China (Decree No. 256 of the State Council of the People's Republic of China) C. Protection Regulations of Farmland (Decree No. 257 of the State Council of the People's Republic of China) D. Temporary Regulations of Tax for Farmland Occupation of the People's Republic of China (No. 27 (1987) Notification of the State Council of the People's Republic of China) E. Implementation Regulations of Forest Law of the People's Republic of China (Decree No. 278 of the State Council of the People's Republic of China) F. Implementation Method of "Land Administration Law of the People's Republic of China “of Policy Basis G. Management Regulations of Village and Township Planning and Construction (Decree No. 116(1993) of the State Council of the People's Republic of China) H The Implementation Measures of The Law of Land Management of People’s Republic of China made by Sichuan province” (1999); I “The Management Statutes of House Demolition and Resettlement of People’s Government of Sichuan Province” (Dec., 2001) J. “No 54 document of Panzhihua city government”(“Panzhihua City for Compensation and Resettlement for the Land Requisition” ) December 3rd ,2002; K. “panzhihua city land bureau document(PGTF(2002)No100)” L. “document of Panzhihua city price bureau No280[2003]”; M. Non-Voluntary Resettlement, Operational Policy OP 4.12 of the World Bank;

4.2. Relevant Laws and Regulations

4.2.1. The Relevant Specifications of "Land Administration Law of the People's Republic of China" Ownership of Land and Right to the Use of Land Article 8 Land in the urban areas of cities shall be owned by the State.

41 Land in rural and suburban areas shall be owned by peasant collectives, except for those portions which belong to the Slate as provided for by law; house sites and private plots of cropland and hilly land shall also, be owned by peasant collectives.

Article 10 Land owned by peasant collectives that belongs lawfully to peasant collectives of a village shall be operated and managed by collective economic organizations of the village or by villagers' committees; land already owned by different peasant collectives that belong to two or more different collective economic organizations in the village shall be operated and managed by the rural collective economic organizations in the village or by villagers' teams; land already owned by peasant collectives of a township (town) shall be operated and managed by rural collective economic organizations of the township (town).

Article 11 Land owned by peasant collectives shall by registered and recorded by people's governments at the districts level, which shall, upon verification, issue certificates to confirm the ownership of such land.

Land owned by peasant collectives to be lawfully used for non-agricultural construction shall be registered and recorded by people's governments at the districts level, which shall, upon verification, issue certificates to confirm the right to the use of the land for such construction. State-owned land to be lawfully used by units or individuals shall be registered and recorded by people's governments at or above the districts level, which shall, upon verification, issue certificates to confirm their right to the use of such land. The specific organs for registration and issue of certificates for State-owned land to be used by central State organs shall be determined by the State Council.

Ownership or the right to the use of forest land or grassland and the right to the use of water surfaces or tidal flats for aquaculture shall be confirmed respectively in accordance with the relevant provisions of the Forestry Law, the Grassland Law and the Fisheries Law of the People’s Republic of China.

Article 12 Any change to be lawfully made in land ownership, in the right to the use of land or in the purpose of use of land shall be registered.

Article 13 The lawfully registered ownership of land and right to the use of land shall be protected by law and may not be infringed upon by any units or individuals.

42 Article 14 Land owned by peasant collectives shall be operated under a contract by members of the economic organizations of the peasant collectives for crop cultivation, forestry, animal husbandry of fishery. The duration of such contract is 30 years. The party that gives out a contract and the party that undertakes it shall sign a contract in which to stipulate the rights and obligations of both parties. A peasant who undertakes to operate a piece of land under a contract shall have the obligation to protect the land and rationally use it in conformity with the purposes of use provided for in the contract. The right of a peasant to operate land under a contract shall be protected by law.

Within the duration of the contract for operation of land, any appropriate readjustment of the land between individual contractors shall be made with the agreement of at least two-thirds of the members of the villagers assembly or of the representatives of villagers and submitted to the township (town) people's government and the agriculture administration department of the people's government of the districts for approval.

Overall Plans for Land Utilization Article 19 Overall plans for land utilization shall be drawn up in accordance with the following principles: (I) to strictly protect the capital farm land and keep land for agriculture under control lest in should be occupied and used for non-agricultural construction; (2) To increase the land utilization ratio; (3) To make overall planning for the use of land for different purpose and in different areas; (4) To protect and improve ecological environment and guarantee the sustainable use of land; and (5) To maintain balance between the amount of cultivated land used for other purpose and the amount of land developed and reclaimed.

Article 22 The amount of land to be used for urban construction shall conform to the norm set by State regulations. Attention shall be paid to making full use of the existing land for construction and using little or no land for agriculture.

43 The overall plans of cities and the plans of villages and towns shall be dovetailed with the overall plan for land utilization, and the amounted of land to be used for construction fixed in the former shall not exceed the amount fixed in the latter for the cities, villages and towns. In the areas covered by the plans of cities, villages and towns, the amount of land to be used for construction shall conform to the amount as is fixed in such plans.

Article 24 People's governments at all levels shall exercise close supervision over the plans for land utilization and keep control over the total amount of land used for construction.

Article 26 Any revision of an approved overall plan for land utilization shall be subject to approval by the organ that originally approval the plan; without such approval, no change may be made in the purposes of land use as prescribed in the overall plan for land utilization. Where a change needs to be made in an overall plan for land utilization to meet the demand of land for the construction of such large infrastructure projects as energy, communications or water conservancy projects that have been approval by the State Council, it shall be made in accordance with the document of approval issued by the State Council.

Where a change needs to be made in an overall plan for land utilization to meet the demand of land for the construction of such infrastructure projects as energy, communications or water conservancy projects that have been approved by people's governments of provinces, autonomous regions or municipalities directly under the Central Government and the plan is under the approval authority of a people's government at the provincial level. The change shall be made in accordance with the document of approval issued by such government.

Protection of Cultivated Land

Article 31 The State protects cultivated land and strictly controls conversion of cultivated land to non-cultivated land.

The State applies the system of compensation for use of cultivated land for other purposes. The principle of "reclaiming the same amount of land as is used" shall be applied to any unit that, with approval, uses cultivated land for construction of non-agriculture projects, that is, the unit shall be responsible for reclaiming the same amount and quality of the cultivated land it uses. If conditions for such reclamation do not exist or if the reclaimed land fails to meet the requirements, the unit shall pay expenses for reclamation in accordance with the

44 regulations set by people's governments of provinces, autonomous regions and municipalities directly under the Central Government and the money shall exclusively be used for reclamation.

People's governments of provinces, autonomous regions and municipalities directly under the Central Government shall formulate plans for land reclamation, see that the unit that uses cultivated land reclaims land according to plan or arrange reclamation according to plan, and conduct inspection before acceptance.

Article 32 Local people's governments at or above the districts level may require the units that wish to use cultivated land to remove the arable layer of cultivated land to the reclaimed land or to land of inferior quality, or to other cultivated land for improving soil.

Article 33 People's Governments of Provinces, Autonomous Regions and Municipalities directly under the Central Government shall strictly implement the overall plans and annual plans for land utilization and take measures to ensure that the total amount of cultivated land within their administrative areas remains unreduced, where the total amount of cultivated land is reduced, the State Council shall order the government concerned to reclaim land of the same quality and amount as is reduced within a time limit, and the land administration department together with the agriculture administration department under the State Council shall inspect the land reclaimed before acceptance, where individual governments of provinces or municipalities directly under the Central Government, for lack of land reserves, cannot reclaim enough land to make up for the cultivated land they used for additional construction projects, they shall apply to the State Council for approval of their reclaiming less or no land within their own administrative areas but of their reclaiming land in other areas.

Article 36 In non-agricultural construction, attention shall be paid to economizing on the use of land. Where wasteland can be used, no cultivated land may be used; where land of interior quality can be used, no land of superior quality may be used.

Article 41 The State encourages land revitalization. Districts and township (town) people's governments shall make arrangements for rural collective economic organizations to conduct, in accordance with overall plans for land utilization, all-round improvement of the fields, water conservancy, roads and forests and development of the villages in order to improve the

45 quality of the cultivated land, increase the efficient area of cultivated land and better the conditions of agricultural production and the ecological environment. Local people's governments at all levels shall take measures to transform the medium- and low-yield fields and improve idle and waste land.

Article 42 Land users that cause damage to land as a result of digging. subsiding or crumbling under heavy weight shall be responsible for re-cultivating the land in accordance with the relevant regulations of the State. Where conditions do not permit such re-cultivation or the land re-cultivated does not meet the requirements, the user shall pay charges for re- cultivation. which shall exclusively be used for the purpose, The land re-cultivated shall first be used for agriculture.

Land to be Used for Construction Article 43 All units and individuals that need land for construction purposes shall, in accordance with law, apply for the use of State-owned land, with the exception of the ones that have lawfully obtained approval of using the land owned by peasant collectives of their own collective economic organizations to build township or town enterprises or to build houses for villagers and the ones that have lawfully obtained approval of using the land owned by peasant collectives to build public utilities or public welfare undertakings of a township (town) or village.

"The State-owned land" mentioned in the preceding paragraph includes land owned by the State and land originally owned by peasant collectives but requisitioned by the State.

Article 44 Where land for agriculture in to be used for construction purpose, the formalities of examination and approval shall be gone through for the conversion of use.

Where land for agriculture is to be converted to land for the construction of road, pipeline or large infrastructure projects, for which approval has been obtained from people's governments of provinces, autonomous regions and municipalities directly under the Central Government, or for the construction of projects for which approval has been obtained from the State Council, the conversion shall be subject to approval by the State Council.

Where land for agriculture is to be converted to land for construction of projects in different periods in order to carry out the overall plan for land utilization within the limits of the

46 amount of land fixed in the plan for the construction of cities, villages or towns, the conversion of use of land shall, in accordance with the annual plan for land utilization, be subject to approval in batches by the organ that originally approved the overall plan for land utilization. Approval for the use of land for construction of specific projects within the limits of the amount of land for agriculture, conversion of the use of which has been approved, may be obtained from people's governments of cities or counties.

Where land for agriculture is to be converted to land for construction projects other than what is provided for in the second and third paragraphs of this Article, the conversion shall be subject to approval by people's governments of provinces, autonomous regions and municipalities directly under the Central Government.

Article 45 Approval shall be obtained from the State Council for requisition of the following land: (1) Capital farm land; (2) Cultivated land, not included in capital farm land, that exceeds 35 hectares; and (3) Other land that exceeds 70 hectares.

Requisition of land other than that provided for in the preceding paragraph shall be subject to approval of the people's governments of provinces, autonomous regions and municipalities directly under the Central Government and be submitted to the State Council for the record.

Land for agriculture shall be requisitioned after conversion of use of the land is examined and approved in accordance with the provinces of Article 44 of this Law. Where conversion of use of such land is subject to approval by the State Council, requisition of the land shall be examined and approved at the same time, and there is no need to go through the formalities of examination and approval for the requisition separately. Where conversion of use of land is subject to approval by people's governments of provinces, autonomous regions and municipalities directly under the Central Government within the limits of their approval authority over the requisition of land, requisition of the land shall be examined and approved at the same time, and there is no need to go through the formalities of examination and approval for the requisition separately; if the land to be requisitioned is beyond the limits of their approval authority, it shall be examined and approved separately in accordance with the provisions of the first paragraph of this Article.

47 Article 46 Where land is to be requisitioned by the State, the requisition shall, after approval is obtained through legal procedure, be announced by people's governments at or above the districts level, which shall help execute the requisition.

Units and individuals that own or have the right to the use of the land under requisition shall, within the time limit fixed in the announcement, register for compensation with the land administration department of the local people's government by presenting their certificates of land ownership or land-use right.

Article 47 Land requisitioned shall be compensated for on the basis of its original purpose of use.

Compensation for requisitioned cultivated land shall include compensation for land, resettlement subsidies and attachments and young crops on the requisitioned land.

Compensation for requisition of cultivated land shall be six to ten times the average annual output value of the requisitioned land for three years preceding such requisition. Resettlement subsidies for requisition of cultivated land shall be calculated according to the agricultural population needing to be resettled. The agricultural population needing to be resettled shall be calculated by dividing the amount of requisitioned cultivated land by the average amount of the original cultivated land per capita of the unit the land of which is requisitioned. The standard resettlement subsidies to be divided among members of the agricultural population needing resettlement shall be four to six times the average annual output value of the requisitioned cultivated land for three years preceding such requisition. However, the highest resettlement subsidies for each hectare of the requisitioned cultivated land shall not exceed fifteen times its average annual output value for the three years preceding such requisition.

Standards of land compensation and resettlement subsidies for requisition of other types of land shall be prescribed by provinces, autonomous regions and municipalities directly under the Central Government with reference to the standards of compensation and resettlement subsidies for requisition of cultivated land.

Standards for compensation for attachments and young crops on the requisitioned land shall be prescribed by provinces, autonomous regions and municipalities directly under the Central Government.

48 For requisition of vegetable plots in city suburbs, the land users shall pay towards a development and construction fund for new vegetable plots in accordance with the relevant regulations of the State.

If land compensation and resettlement subsidies paid in accordance with the provisions of the second paragraph of the Article are still insufficient to help the peasants needing resettlement to maintain their original living standards, the resettlement subsidies may be increased upon approval by people's governments of provinces, autonomous regions and municipalities directly under the Central Government. However, the total land compensation and resettlement subsidies shall not exceed 30 times the average annual output value of the requisitioned land for the three years preceding such requisition.

The State Council may, in light of the level of social and economic development and under special circumstances, raise the standards of land compensation and resettlement subsidies for requisition of cultivated land.

Article 48 Once a plan for compensation and resettlement subsidies for requisition land is decided on, the local people's government concerned shall make is known to the general public and solicit comments and suggestions from the collective economic organizations, the land of which is requisitioned, and the peasants.

Article 49 The rural collective economic organization, the land of which is requisitioned, shall accept supervision by making known to its members the income and expenses of the compensation received for land requisition.

The compensation and other charges paid to the unit for its land requisitioned is forbidden to be embezzled or misappropriated.

Article 50 Local people's governments at all levels shall support the rural collective economic organizations, the land of which is requisitioned, and the peasants in their efforts to engage in development or business operation or to start enterprises.

49 Article 51 The standard of compensation for requisition of land to build large or medium- sized water conservancy or hydroelectric projects and the measures for resettling relocated people shall be prescribed separately by the State Council.

Article 52 During the feasibility study of a construction project, land administration department may, in accordance with the overall plan for land utilization, the annual plan for land utilization and the standard amount of land for the use of construction, examine the matters related to lane for construction and offer its comments and suggestions.

Article 53 Where a construction unit needs to use State-owned land for construction of its approved projects, it shall apply to the land administration department of the people's government at or above the districts level that has the approval authority by presenting the relevant documents as required by laws and regulations, The said department shall examine the application before submitting it to the people's government at the corresponding level for approval.

Article 54 A construction unit that wishes to use State-owned land shall get it by such means of compensation as assignment. However, land to be used for the following purposes may be allocated with the approval of a people's government at or above the districts level: (1) For State organs or military purposes; (2) For urban infrastructure projects or public welfare undertakings; (3) For major energy, communications, water conservancy and other infrastructure projects supported by the State; and (4) Other purposes as provided for by laws or administrative regulations.

Article 55 A construction unit that obtains right to the use of State-owned land by such means of compensation as assignment shall, in keeping with the standards and measures prescribed by the State Council. pay among other charges compensation for use of land such as charges for the assignment of land-use right, before if can use the land.

As of the date of implementation of this Law, 30 percent of the compensation paid for the use of additional land for construction shall go to the Central Government and 70 percent to the local people's governments concerned, both of which shall exclusively be use for developing cultivated land.

50 Article 56 A construction unit that uses State-owned land shall use the land in agreement with the stipulations of the contract governing compensation for the use of land such as the assignment of the land-use right or the provisions in the documents of approval for allocation of the land-use right. Where it is definitely necessary to change the purposes of construction on this land, the matter shall be subject to agreement by the land administration department of the people's government that originally approved the use of lane. Where the land the purposes of use of which need to be changed is located in the area under urban planning, the matter shall be subject to agreement by the urban planning administration department concerned before it is submitted for approval.

Article 57 Where land owned by the State or by peasant collectives need to be used temporarily for construction of projects or for geologic prospecting, the matter shall be subject to approval by the land administration departments of people's govemments at or above the districts level. However, if the land to be temporarily used in located in the area covered by urban planning, the matter shall be subject to agreement by the urban planning administration department concerned before it is submitted for approval. The land user shall, depending on who owns the land and who has the land-use right, enter into a contract for the temporary use of the land with the land administration department concerned, or the rural collective economic organization, or the villagers committee and pay compensation for it in accordance with the provisions of the contract.

The temporary land user shall use the land for purposes stipulated in the contract for temporary use of the land and may not build permanent structures on it.

Generally. the period for temporary use of land shall not exceed two years.

Article 58 Under any of the following circumstances, the land administration department of the people's government concerned may, with the approval of the people's government that has originally approved the use of land or that possesses the approval authority, take back the right to the use of the State-owned land: (1) The land is needed for the benefits of the public, (2) The use of the land needs to be readjusted for renovating the old urban area according to urban planning; (3) At the expiration of the period stipulated in the contract for use of the land by such means of compensation as land assignment, the land user has not applied for

51 extending the period or, if he has applied for such extension, the application is not approved, (4) The use of the originally allocated State-owned land is terminated because, among other things, the unit that uses the land is dissolved or moved away; or (5) The highways, railways, airports or ore fields are abandoned with approval. The user granted with the land-use right shall be compensated appropriately when its right to the use of State-owned land is taken back according to the provisions of sub-paragraph (1) and (2) in the preceding paragraph.

Article 61 Where land to be used for the construction of township (town) or village public utilities or public welfare undertakings, the matter shall be subject to examination and verification by the township (town) people's government, which shall submit an application to the land administration department of the local people's government at or above the districts level for approval by the said people's government within the limits of approval authority as defined by the province, autonomous region and municipality directly under the Central Government. However, if land for agriculture is to be used for the purpose, the matter shall be subject to examination and approval in accordance with the provisions of Article 44 of this Law.

Article 62 For villagers, one household shall have only one house site, the area of which may not exceed the standard set by provinces, autonomous regions and municipalities directly under the Central Government.

Villagers shall build residences in keeping with the township (town) overall plan for land utilization and shall be encouraged to use their original house sites or idle lots in the village. Land to be used by villagers to build residences shall be subject to examination and verification by the township (town) people's government. However, if land for agriculture is to be used for the purpose, the matter shall be subject to examination and approval in accordance with the provision of Article 44 of this Law.

Approval for other house sites shall not be granted to villagers who have sold or leased their houses.

Article 63 No right to the use of land owned by peasant collectives may be assigned, transferred or leased for non-agricultural construction, with the exception of enterprises that

52 have lawfully obtained land for construction in conformity with the overall plan for land utilization but have to transfer, according to law, their land-use right because of bankruptcy of merging or for other reasons.

Article 64 No building or structure built before the overall plan for land utilization is drawn up and at variance with the purposes defined in such a plan may be rebuilt or expanded.

Article 65 Under any of the following circumstance, a rural collective economic organization may, with the approval of the people's government that originally approved the use of land, take back the land-use right: (1)The land is needed for constructing township (town) or village public utilities or public welfare undertakings; (2)The land is used at variance with the approved purposes; or (3)The use of land is terminated because, among other things, the unit concerned is dissolved or moved away.

The user granted with the land-use right shall be compensated appropriately when the land owned by the peasant collective is taken back according to the provisions of subparagraph (1) of the preceding paragraph of this Article.

4.2.2. The relevant rules of "Temporary Bylaw of Farmland Possession Tax of the People's Republic of China" Article 2: The farmland called in this regulation means the land used for planting crops. The land to be occupied that was used for planting crops three years ago is also regarded as farmland.

Article 3: The units or individuals who occupy the farmland for non-agricultural construction is the duty person for payment for land possession(hereinafter called as the taxpayer), shall pay the land possession tax according to stipulations of this regulation.

Article 4: The land possession tax is computed with the actual area of land occupied by the taxpayer and the tax shall be collected by one time.

Article 5: The land possession tax is stipulated as the following:

53 1. The average land per capita within the districts area(as the same hereinafter) is below I mu(including I mu), the land possession tax is 2-10 Yuan per square meter; 2. The average land per capita is between 1-2mu(including 2mu), the land possession tax is 1.6-8 Yuan per square meter; 3. The average land per capita is between 2-3mu(including 3mu), the land possession tax is 1.3-6.5 Yuan per square meter; 4. The average land per capita is above 3mu, the land possession tax is 1-5 Yuan per square meter;

Article 9: The financial department shall levy the land possession tax. Land management department should inform in time the financial department after approval to the unit and individual. The unit or individual who got the approval to take over for use or occupy the land shall report to the financial department to pay taxes, presenting the authorized file from the land management department above districts level. The land management department shall transfer the land according to the tax receipt or approval files.

4.2.3 Stipulation of Measures of Panzhihua City for Compensation and Resettlement for the Land Requisition Article 5 Land shall be requisitioned pursuant to the area recognized in actual measurement, based on which various compensation and subsidies will be calculated. The annual production value of the cultivated land to be requisitioned will be executed in accordance with the stipulated standard.

Article 6 Land compensation for the cultivated land requisitioned shall be six to ten times of the average annual production value during the three years prior to the requisition, specific times distributed as follows: land compensation equal to ten times of annual production value for the land requisitioned with per capita cultivated land area lower than 0.3mu (including 0.3mu); land compensation equal to eight to nine times of annual production value for the land requisitioned with per capita cultivated land area lower 0.3mu to 0.8mu (including 0.8mu) and land compensation equal to six to seven times of annual production value for the land requisitioned with per capita cultivated land area more than 0.8mu. Land compensation for any other lands will be half of the compensation for the cultivated land.

54 Article 7 The agricultural population needing to be settled after the requisition of the cultivated land shall be granted the resettlement subsidies, equal to four to six times of the average annual production value during the three years prior to the requisition for every agricultural population. The specific times are distributed as follows: resettlement subsidies equal to five to six times of the annual production value for the land requisitioned with per capita cultivated land area 0.6mu (including 0.6mu); resettlement subsidies equal to four to five times of the annual production value for the land requisitioned with per capita cultivated land area 0.6mu to 1mu (including 1mu); resettlement subsidies equal to four times of the annual production value for the land requisitioned with per capita cultivated land area more than 1mu. The highest resettlement subsidies for cultivated land per hectare cannot exceed 15 times of the average annual production value during the three years prior to the requisition. Resettlement subsidies for any other lands will be half of the subsidies for the cultivated land.

Article 8 The ground buildings requisitioned will be compensated according to the legal area registered in the Collective Land-use Right Certificate and Rural House Ownership Certificate, and structures will be compensated according to the actual area.

Article 9 For the ground buildings having not been registered for Collective Land-use Right Certificate and Rural House Ownership Certificate but with other legal source of land-use right, the compensation area will be calculated as per the regulations as follows: (1) Subject to the area encircled by the external wall line of the house (2) Building area for concave balcony and half building area for bay balcony. (3) Half building area for the house without wall.

Article 10 No compensation for the following attachments: (1) Cropper, woods and nursery planted as well as the buildings (structures) constructed in a hurry up on the date of publishing the Requisition Announcement; (2) Buildings (structures) constructed on the land illegally occupied;

55 (3) Buildings (structures) on temporary land that has exceeded the approved time limit for use or have been used for more than two years even without definite time limit for use; (4) Natural wild plants.

Article 11 Compensation on facilities such as power supply, communication, pipeline and roads involved in the land requisition will be implemented in reference to the relevant standard in this field.

Article 12 Various compensation and subsidies for the requisition of land shall be fulfilled in full amount within three months since the date of approval of Compensation and Resettlement Plan, and will be managed and utilized as per the following regulations: (1) Land compensation shall be paid to the units whose lands are requisitioned and will be used to develop production and arrange the employment of the redundant labor force as well as the living subsidies for those unemployed caused by the requisition of land. The villagers meeting or villager representative meeting shall decide the utilization of the compensation and the report it to township (town) people’s government for approval and execution. (2) Resettlement subsidies are for the production and living resettlement of the members of rural collective economic organization whose lands are requisitioned. In case that it is the rural collective economic organization who arrange the resettlement of the populations needing to be resettled, the resettlement subsidies will be paid to the rural collective economic organization, by whom the funds will be managed and utilized; in case that it is the other units who arrange the resettlement, the resettlement subsidies will be paid to these units, by whom the funds will be managed and utilized; in case that it is unnecessary to make uniform resettlement, the resettlement subsidies will be paid directly to the people to be resettled or used as the payment of their insurance up on their approval. (3) In case that all the land of rural collective economic organization have been requisitioned legally and all the agricultural population need to be resettled, the land compensation and resettlement subsidies will be used by the units who carry out the resettlement for the resettlement of the people after the

56 land requisition. The property of the original rural collective economic organization shall be registered for file, published to the farmers and used to the resettlement of the staffs of this organization. (4) Land attachments and green shoots possessed by individuals will be compensated to individuals and those possessed by the collectivity will be compensated to the collectivity.

Article 13 Buildings and structures on the land requisitioned shall be removed within the stipulated time limit by the householder once the property owner obtains the compensation.

Article 14 Up on the legal approval of Land Requisition Plan, the People’s Government in charge of the land requisition shall make an announcement in the township (town) at which the land to be requisitioned located. Since the date of the announcement, newly moved-in people will not be settled except for the following people: (1) People get married or born legally; (2) Soldier return to original place at the expiration of service; (3) Students studying in colleges or technical secondary school; (4) Forced labor for reeducation under fixed-term imprisonment; (5) People adopted legally or moved in through marriage legally.

Article 15 After the land requisition, the per capita cultivated land of grain community is less than 0.4mu (including 0.4mu) and the per capital cultivated land of the vegetables community is less than 0.3mu (including 0.3mu), therefore, some rural residents will be transferred to be urban residents according to the ratio of population to land.

Article 16 The age of the people to be resettled shall be subject to the age published on the date of announcement.

Article 17 Rural labor force becoming urban residents (male citizen from 18 to 60 and female citizen from 18 to 50) shall look for jobs by themselves, except that the units using the land or any other units intend to employ them as per the current employment system to meet their requirements in production and operation and

57 these people also accept the arrangement. Any units employing these people shall handle the formalities for labor using according to the regulations, in addition, the resettlement subsidies will be paid to the units.

Article 18 The rural residents becoming the urban residents will be compensated for their self-job-hunting, RMB 10,000 Yuan to RMB 15,000 Yuan per person. The self- job-hunting compensation shall be listed in the item of land compensation and resettlement subsidies.

Article 19 The resettlement of the other rural residents becoming urban residents shall be carried out by following means: (1) People under full age of 18 will be granted living subsidies based on the lowest living security fees in the region, with accumulated amount of RMB 12,000 Yuan to the maximum. RMB 2,000 Yuan will be paid if it is less than that. (2) The males aged over 60 and the females aged over 50 will be granted endowment insurance or a pension of RMB 12,000Yuan once and for all. (3) Households enjoying the five guarantees, orphans and disabled people above Grade B of Class-2 who have been verified by the local people’s government or civil affairs administrations shall be adopted or resettled by the local civil affairs administration. Moreover, each person shall be granted subsidies of RMB 500 Yuan to RMB 10,000 Yuan once and for all.

Article 20 Housing for the rural residents becoming urban residents shall be solved by the means combining uniform construction and self-construction, in which the latter will be controlled strictly. The administrative department in charge of land will determine the specific resettlement way based on the actual situation

Article 21 In case that uniform construction for resettlement of the rural residents becoming urban residents is necessary, the organization in charge of uniform land requisition shall organize and implement the program only after having gained approval from the people to be resettled and reached agreement.

Article 22 The rural residents becoming urban residents after the land requisition can purchase the uniformly-built house at the price of similar economically

58 affordable housing in the same district for 25m2 for each person, the part exceeding this area shall be bought at the price of the similar commercial house in the district.

Article 23 Agricultural population of the removed household after land requisition will resettle through building houses by themselves, encouraging to build in the central village and small towns. The homestead area of the self-built house shall be executed in accordance with the stipulated standard for land use of rural homestead.

Article 24 The household and members of the removal household shall be subject to the freezing time of household transfer. In case of any one of the following circumstances, the homestead area will be calculated as one household: (1) The elders aged more than 60 (including 60) will be included in the household of their children if they have children; and will be combined for the couples without any children; (2) Children under 18 (including 18) whose parents (or only mother/father) are alive will be contained into the household of his/her parents (or only mother/father); (3) Independent couples in the age of labor force (except for the couples, who have several children and more than one child having been through normal labor force household distribution and one side of the couples transferred with their children with labor force) will combined as one household; (4) Soldiers under service will be calculated together with his/her linear relatives or the spouse; (5) People under fixed-term imprisonment and reeducation through labor will be calculated together with his/her linear relatives or spouse.

Article 25 In the arrangement of housing, the following lineal family members of the rural people becoming urban residents after the land requisition can be considered: (1) Those having been transferred to be urban residents because the land of the collective economic organization had been requisitioned, but still live together because of having not been resettled and without any other house; (2) The retired cadres and workers whose household transferred back to the original place and live together, having not any other houses;

59 (3) Soldiers under service recruited from the collective economic organization; (4) Original members of the collective economic organization and are now under fixed-term imprisonment and reeducation through labor; (5) Students admitted from this collective economic organization and are now studying in colleges or technical secondary schools; (6) Children without family planning and born before the freezing of household transfer but have finished all the formalities for family planning during the period of fulfilling housing resettlement; (7) Other people meeting the requirements for housing resettlement.

Article 26 People still have no dwelling even after the removal of their own house will be granted lodging allowance of RMB 60 Yuan per person each month, for six months at most. Half-month allowance for those less than half month and one- month allowance for those more than one month will be paid.

Article 27 Households to be relocated shall be compensated subsidies of RMB 200 Yuan for their removal once and for all.

4.2.4 Relevant Regulations on OP4.12 of WB

1. Bank experience indicates that involuntary resettlement under development projects, if unmitigated, often gives rise to severe economic, social, and environmental risks: production systems are dismantled; people face impoverishment when their productive assets or income sources are lost; people are relocated to environments where their productive skills may be less applicable and the competition for resources greater; community institutions and social networks are weakened; kin groups are dispersed; and cultural identity, traditional authority, and the potential for mutual help are diminished or lost. This policy includes safeguards to address and mitigate these impoverishment risks.

2. Involuntary resettlement may cause severe long-term hardship, impoverishment, and environmental damage unless appropriate measures are carefully planned and carried out. For these reasons, the overall objectives of the Bank's policy on involuntary resettlement are the following:

(a) involuntary resettlement should be avoided where feasible, or minimized, exploring all

60 viable alternative project designs. (b) Where it is not feasible to avoid resettlement, resettlement activities should be conceived and executed as sustainable development programs, providing sufficient investment resources to enable the persons displaced by the project to share in project benefits. Displaced persons should be meaningfully consulted and should have opportunities to participate in planning and implementing resettlement programs. (c) Displaced persons should be assisted in their efforts to improve their livelihoods and standards of living or at least to restore them, in real terms, to pre-displacement levels or to levels prevailing prior to the beginning of project implementation, whichever is higher.

4. This policy applies to all components of the project that result in involuntary resettlement, regardless of the source of financing. It also applies to other activities resulting in involuntary resettlement, that in the judgment of the Bank, are (a) directly and significantly related to the Bank-assisted project, (b) necessary to achieve its objectives as set forth in the project documents; and (c) carried out, or planned to be carried out, contemporaneously with the project.

9. Bank experience has shown that resettlement of indigenous peoples with traditional land- based modes of production is particularly complex and may have significant adverse impacts on their identity and cultural survival. For this reason, the Bank satisfies itself that the borrower has explored all viable alternative project designs to avoid physical displacement of these groups. When it is not feasible to avoid such displacement, preference is given to land- based resettlement strategies for these groups that are compatible with their cultural preferences and are prepared in consultation with them.

12. Payment of cash compensation for lost assets may be appropriate where (a) livelihoods are land-based but the land taken for the project is a small fraction of the affected asset and the residual is economically viable; (b) active markets for land, housing, and labor exist, displaced persons use such markets, and there is sufficient supply of land and housing; or (c) livelihoods are not land-based. Cash compensation levels should be sufficient to replace the lost land and other assets at full replacement cost in local markets.

13. For impacts covered under para. 3(a) of this policy, the Bank also requires the following: (a) Displaced persons and their communities, and any host communities receiving them, are provided timely and relevant information, consulted on resettlement options, and offered

61 opportunities to participate in planning, implementing, and monitoring resettlement. Appropriate and accessible grievance mechanisms are established for these groups.

(b) In new resettlement sites or host communities, infrastructure and public services are provided as necessary to improve, restore, or maintain accessibility and levels of service for the displaced persons and host communities. Alternative or similar resources are provided to compensate for the loss of access to community resources (such as fishing areas, grazing areas, fuel, or fodder). (c) Patterns of community organization appropriate to the new circumstances are based on choices made by the displaced persons. To the extent possible, the existing social and cultural institutions of resettlers and any host communities are preserved and resettlers' preferences with respect to relocating in preexisting communities and groups are honored.

14. Upon identification of the need for involuntary resettlement in a project, the borrower carries out a census to identify the persons who will be affected by the project, to determine who will be eligible for assistance, and to discourage inflow of people ineligible for assistance. The borrower also develops a procedure, satisfactory to the Bank, for establishing the criteria by which displaced persons will be deemed eligible for compensation and other resettlement assistance. The procedure includes provisions for meaningful consultations with affected persons and communities, local authorities, and, as appropriate, nongovernmental organizations (NGOs), and it specifies grievance mechanisms.

20. The full costs of resettlement activities necessary to achieve the objectives of the project are included in the total costs of the project. The costs of resettlement, like the costs of other project activities, are treated as a charge against the economic benefits of the project; and any net benefits to resettlers (as compared to the "without-project" circumstances) are added to the benefits stream of the project. Resettlement components or free-standing resettlement projects need not be economically viable on their own, but they should be cost-effective.

21. The borrower ensures that the Project Implementation Plan is fully consistent with the resettlement instrument.

22. As a condition of appraisal of projects involving resettlement, the borrower provides the Bank with the relevant draft resettlement instrument which conforms to this policy, and makes it available at a place accessible to displaced persons and local NGOs, in a form,

62 manner, and language that are understandable to them. Once the Bank accepts this instrument as providing an adequate basis for project appraisal, the Bank makes it available to the public through its InfoShop. After the Bank has approved the final resettlement instrument, the Bank and the borrower disclose it again in the same manner.

5. Resettlement and Recovery Program

The Resettlement Action Plan of SPUEP was prepared by the Project Implementation Office, based on the resettlement schemes proposed by each village affected and present policies, laws and regulations and the resettlement requirements of the World Bank.

5.1 Target and Task 5.1.1 Target The overall objective of the resettlement program is that all the affected labor force will be appropriately rehabilitated by receiving opportunity to earn a living, hence the improvement or at least restoration of the production and livelihood compared with the level before land acquisition and relocation.

Because most of the affected persons are peasants According to the living standard of resettlers in 2004, the11th five-year plan for national economy and social development and the future goal till 2015 of Panzhihua City, the resettlement goal is as: 1) The mean net income per capita of all the affected households shall be recovered to the standard before land acquisition and relocation. . 2) The public infrastructures, school, hospitalize, social welfare level, natural environment and traffic condition etc. shall be improved than before settling.

5.1.2Resettlement Task

Based on the inventory survey and analysis, there are 212 households and 811 persons to be resettled or rehabilitated in the countryside, in which 116 households and 325 persons will need house relocation, and 171 households and 648 persons shall be provided economic rehabilitation for their partial farmland losses (there are 75households and 247 persons will need both house relocation and economic rehabilitation). There are 229 households and 300persons affected by housing demolition of the city and town dwell.

63 5.2. Principle and Policy for Resettlement

5.2.1. Policy for Resettlement

The resettlement policy of SPUEP is: Respect and attend the production and living habits of local resettlers, considering fully ressettler's wishes, not changing resettler's original production, living and mores mode. Combine the land resource and natural resource within the original village and town jurisdiction, the land-based arrangement will be realized and do not carry out the non-agriculture residence policy, with planting production mainly; Combining with local village and town construction, the more opportunity for the second and third industry will be created. The average cultivated land areas below 0.4 mu and part of the affected persons will be turned into non-agricultural population and part of them will be resettled by surplus land .The resettlement shall be firstly based on. the basic material survival and have a long-term development potential, and fully use local land resource advantage to get the purpose of a long time stable condition.

5.2.2. Resettlement Principle

(1) The resettlement plan will be based on inventory for land acquisition and demolition, the compensation standard and subsidies standard. (2) The resettlement shall be combined with the local construction, resource development, and economical development and environment protection. It shall also consider the local conditions, work out a practical and feasible measure for recovery and development of resettler' production and living level, and creating necessary condition for self-development of resettlers. (3) According to the principle of "favorable production and convenient living", the program will be prepared. (4) The re-construction standard and scale shall be based with the principle of recovery to the original standard and original scale. Combining the local development, the cost for enlarging the scale, raising standard and future plan shall be solved independently by local government and relevant department. (5) Making overall plans and take all factors into consideration, correctly handling the relations between the state, collective and individual. (6) With the method by compensation and subsidy at the early stage and production support at the later stage, utilize fully local natural resource advantage to build water conservancy

64 facility, carry out land reclamation, increase land quantity, raise land irrigation condition, strengthen agricultural reserve strength and make the resettler' living standard reach or exceed the original level step by step.

5.3 Overall Scheme of Resettlement The nature of SPUEP impacts of houses and lands and have great influence for the original production and living system of each village. The discussion meeting will be held in the affected village and town and the scheme will be determined according to the resettler's opinion and the actual condition there. Project affected person will be settled down within original community, so that the habit of production, living and social relation can be maintained, which is helpful for resettlers to resume and raise own production and living level after relocation. In order to reduce the project construction impact on production and living of resettlers, the project impacted houses will be dismantled only after the new houses are built. The affected persons by land acquisition will be turned into non-agricultural population and they will get living fees from the project per month. See following for the detail resettlement plan. 5.3.1 Resettlement Plan of Land Acquisition There are two rehabilitation measures to the people affected by land acquisition in the countryside. One is land redistribution and the other is conversion of some of the rural population into urban residence and reapportioning the land to the remaining rural population. Where the average cultivated land area after land acquisition is above 0.4 mu per person, land redistribution will take place to reallocate land and the funds paid for the acquired land will be shared among those who have lost land and/or used by the village committee for the good of the village. This will be the approach taken for the Huaguo Village Group whose land-holding capacity will be 0.61 mu per person after land acquisition.

Where the average land per capita drops below 0.4 mu after land acquisition, some will be turned into urban residents and some will be reallocated surplus land – this affects two groups under the project: Yuejin and No. 2 Shaba. The land-holding capacity before land acquisition is 1.02 mu in Yuejin and 0.93 mu in Shaba 2nd VG.. This target of about 1 mu/person is the base for calculation of how many people shall be converted to urban residents and how many people will remain in the rural areas and receive land redistribution for farming. As a result, 219 people (280-61) will be converted and 61 people will remain as rural residents for the 61 mu of farmland in Yuejin; 199 people (261-62) will be converted

65 and 62 people will remain as rural residents for the 62.64 mu of farmland in Shaba 2nd VG.. Totally, 418 people (219 + 199) will be converted to urban Hu Kou and 123 people (61 + 62) will keep the rural Hu Kou in the two VGs.

The calculation will be done and proposed by the local Land Resource department. This proposal shall be discussed by the villagers meeting chaired by the village head. The outcome of the meeting will be the proportion of the people to be converted in various age distribution, e.g. below 18, between 18 and 55, above 55. Then the affected household will discuss among the family members who shall be converted this time. Generally speaking, the aged and children will be converted first, as the aged may receive pension and the children may go to good schools in the urban area. Also households with less land than others in the village will be first considerated for conversion. The namelist of the candidates shall be posted in the village and discussed at the villages meeting if needed. The namelist will be submitted by the head of the Village Group to the Villagers Committee, then to the township (town) government and district government for clearance, and the Municipal Land Resources Bureau for filing. The conversion procedure shall be transacted by the public security organ.

Among the labor force who will transfer from rural residents into urban residents (for male peasants between 18 and 55 years old and female peasants between 18 and 50 years old), some of them already have jobs in the cities, but most people need to receive vocational training and then find jobs in the cities. The labor and social security department of the local government organizes an Employment Fair a least twice a year and mobilizes labor force to work in the coastal areas. The local enterprises are encouraged to recruit ex-farmers with preferential policies (e.g. receiving Y120/person/month). In case no appropriate jobs are found, the affected person may apply to receive the lowest living allowance of the city and/or rent cultivated land in the neighboring village. Moreover, the affected people are encouraged to join the city’s social and medical insurance system in which the government and community will share 80% of the insurance fee.

Where the average land per capita remains above 0.4 mu after land acquisition, farmland will be redistributed in the village group 6 months after land acquisition. The land acquisition fund will be used for reclamation of new land and improvement of existing land by the collective of the village group. The Huaguo VG plans to reclaim 50 mu of wasteland and improve 20 mu of dry land by installation of irrigation facilities. In addition, agro-technical training will be provided, so that farmers may change the crop patter and increase the

66 production value. Details of rehabilitation are listed in the table below:

67 Table 16 Resettlement Plan of Land Acquisition VG Detailed Measures Huaguo  Redistribution of farmland: Farmland will be redistributed in the village group 6 months after land acquisition. The land acquisition fund will be used for reclamation of new land and improvement of existing land by the collective of the village group;  Reclamation of wasteland: 50 mu of wasteland will be opened to dry land for agricultural purpose, hence an increase of the land-holding capacity from 0.61 to 0.75 mu per person. The new land will be available in June 2007 and be distributed in September 2007;  Increasing output and value of agricultural products: The VG will improve 20 mu of dry land with irrigation facilities and raise the production output and value on the newly developed irrigation land. The work will be finished by June 2007 with an investment of 50,000 yuan;  Training the affected households and improving their technical ability 1) Through agro-technical training, extend technology of growing special species of crops and raising special species in breeding industry; 2) Through vocational training, learn how to do housework, cleaning, gardening, etc. for job opportunities in the cities. The living standard will be improved after land acquisition by all the above measures. Yuejin  Some land will be remained after land acquisition in the two village groups. The land will be redistributed among those who prefer to continue farming with a rate of about 1mu per Shaba capita. Since the land-holding capacity is not reduced, the livelihood of the 123 people will No 2 not be adversely affected;  Conversion from rural to urban residency: 418 persons will be turned into urban residents and most of them are old people and young children. Each of them wll receive a cash compensation of Y13,000..The additional assistant measures for the able-bodied in particular are mainly the following: (1) Insurance: The affected people are encouraged, but voluntarily, to participate in the social insurance and medical treatment insurance mobilized by the municipal government for the converted urban residents. The government and local community will pay the big proportion (government pays 70% and the community pays 10%), while the person pays the small part which is 20% of the total fee. About 80% of the affected people have showed their willingness to buy these insurances; (2) Training a. the local labor and social security department will provide free training on haircut, hairdressing, cooking, entertainment management, etc. for the converted people to open barbershop, beauty salon, home stay, restaurant.etc..About 50% of the AP will choose this option. Training is planned to be finished before June 2007; b. the local labor and social security department will provide free training on household chores, sanitation, service at aged house, kindergarten, clinic, and other places. The Renhe Industrial Development Park is under development along with completion of the infrastructures. The job opportunities are opened to these people. About 30% of the AP choose this option. Training is planned to be finished in June 2007; (3) Job opportunities outside of the province The labor and social security department of the local government will recommend job opportunities to the trained people in other cities out of Sichuan Province. About 15% of the AP personnel will choose this option which is planned to be finished in June 2007; (4) Minimium living allowance The AP may apply the minimum living allowance in case he can not get income from other

68 VG Detailed Measures sources. The minimum living allowance for the urban residents in Panzhihua in 2005 is Y170/month/person. In addition, the person may rent land in the nearby villages and continue farming if he wishes. The rent will be possibly waived. About 5% of the AP showed their unwillingness to find jobs in the cities due to various personal reasons. This option is planned to be finished in December 2006. The options mentioned above will be changed and combined during implementation. However, it ensures that PAP will choose employment types at their own will and take themselves as part of the urban residency in the shortest possible time. It also ensures that the income of the affected households will be increased and their livelihood will be improved.

5.3.2 Resettlement Plan of Housing Demolition In order to minimize disruption from housing demolition under the project ，the old houses will be dismantled after completion of new houses. The relocation strategy will be different for different categories of affected people. （1） Housing demolition for urban households The affected houses and buildings in the urban areas are the living quarters for staff and workers of the affected enterprises (see Table 17). They were built in the 1970s with limited floor space of about 20-30m2 per household. There are 229 households and 300 persons affected by housing demolition. These houses and buildings are in brick and concrete structure with out-of-date design and incomplete facilities and infrastructure. See Table 17 for detailed information. The following are the basic relocation options:  Cash compensation: 15% of the affected households will use the compensation fees to purchase new houses themselves. In addition, the poverty households will purchase the second-hand houses or rent houses to live in. About 3% of the affected households will purchase second-hand houses and 2% of the total affected will rent houses;  Relocation in residential buildings: Sufficient economic apartment buildings will be built in Renhe Residential Area which is only 2 kilometers from the downtown. The residential area has convenient transportation, complete service facilities and comfortable, environment. About 80% of the households prefer to take the new apartments in exchange for their old houses. By moving into the new apartments, each person receives 25 m2 free, so a three member household has a right to 75m2 free. If the affected household wants extra floorspace they can pay extra for it, or, if they receive less floor space than in their original house they can take payment for the difference at the rate established for the kind of construction of the old house. While the average value of the floor space in the older houses is about Y350/m2 , the market price for the apartment is about Y1500/m2.

69 Table 17 Housing Demolition of Urban Households Names of Enterprises and Number of House Floor Space Institutes Households Structure (m2) Bus company 38 Brick-concrete 1320 Nantai company 41 Brick-concrete 2705.84 Hydrology station 40 Brick-concrete 1117.2 West of Panzhihua biont medicine 32 Brick-concrete 2396.27 factory No 19 smelt machinery plant 30 Brick-concrete 3935.69 No 2 construction company 48 Brick-concrete 2398 Total：6 229 13873 Resource: 2004 survey

（2）Housing demolition for rural households There are 116 households affected by housing demolition in the countryside. The following is the basic relocation options:  Scattered relocation within the village: The government will provide house-plots in a rate of 200 m2/household and the affected households will build new houses themselves; About 50 households choose this option. The old houses will be demolished after completion of the new houses. In case transition is needed, compensation will be paid. By now, the affected household are selecting the house-plots they like. There are 5 households who are poor and live in the earth-wood structured houses. The village group will provide labor force and building materials to support construction of the new houses for these households. The compensation equals to Y2000/household or Y100/m2,  Concentrated relocation in another site next to the village: The government will open a new site by land-leveling and completing the infrastructures in the new site. The affected households will build new houses themselves. The new site for each village group is located in the most convenient place close to the highway. The first floor can be opened for shops. About 66 affected households selected this option. Construction of the three sites will be started next year. All the old houses will be therefore demolished before completion of the new houses and infrastructures which cost Y599,000. A transitional compensation will be paid to the affected households. Further consultation will be done on details of execution.

5.3.3 Resettlement Plan of Enterprises and Institutes There are 9 enterprises and institutes affected by the project. The five State-owned

70 enterprises and three institutional units will be relocated with all the workers and staff. No one will lose his/her job due to the relocation. The Nantai Company purchased the houses and structures belonging to the Panzhihua Thermal Power Plan which was closed some years ago. The Nantai Company then leased these houses and structures to private enterprises and those who used to be workers in the thermal power plant.

When the leased house is to be dismantled, the project owner shall compensate the house owner and the tenant if the house owner is to cancel the lease relations with the tenant or if the house owner is to relocate the tenant. When no agreement can be reached between the house owner and the tenant on canceling the lease relations, the project owner shall find another similar house for exchange. The original house owner will take the exchanged house as his ownership and sign a new housing lease contract with the original tenant. The project owner will pay relocation subsidies to the house owner or the tenant. Within the transitional period the project owner shall pay the house owner or tenant a compensation for finding temporary sites on their own. The project owner shall not pay them such compensation if they are provided with turnover housing owned by the project owner. The affected enterprises and households shall be informed one month before the physical relocation, and be subsidized by relocation compensation provided by the project owner through Manta Company, the house renter.

Table 18 Enterprises Relocation Names Nature Relocation Plan West of Panzhihua biont medicine State 1. The 5 State-owned enterprises will factory move into the Nanshan Industrial Park No 19 smelt machinery plant State in Renhe District which is in the center Bus company State of the District, the west of Duren Road Nantai company Individual and 6 km away from the downtown. . Hydrology station Institution 2. The 3 affected institutes will be Jinsha park in Panzhihua Institution rebuilt near the original places. Panzhihua bureau of the Yangtse State 3. The leased houses owned by Nantai River forestation bureau Company are rented by two private Branch machinery company of State enterprises and one restaurant. One Panzhihua steel company enterprise has found place to move and Lunan community of Dahe north Institution the other two are looking for new places road to move. Total 9

5.4 Vulnerable People Settling Measures There are 24 households who have the old, weak, sick and disabled members in the family

71 and 13 households who have the female as household heads in the project area. The 5 households who are living in the earth-wood houses are included in the 32 households whose annual income is less than Y900. The 32 poverty households are included in the 37 (24 + 13) vulnerable households mentioned above. In addition, there are 146 people in 51 families of ethnic minorities in the project area. Special policies and thoughtful measures will be applied during resettlement implementation. Following is the detailed policies and measures towards the poor, vulnerable people and ethnic minorities who will be converted as urban residents:  Reduction and exemption of some administrative fees Exemption of three charging categories, namely administration fee, certification & license fee and registration fee, for qualified vulnerable people operating private business and community employment units.  Tax reduction and exemption policy Exemption of four taxation categories, namely operating tax, urban construction maintenance fee, education additional tax and income tax, for vulnerable people operating private business and community employment units. Reduction or exemption of income tax for qualified existed service enterprises who employ vulnerable people and for big and middle sized enterprises who establish economic entities to recruit people affected by resettlement.  Social insurance subsidy policy Grant of social insurance subsidies for qualified service enterprises employing vulnerable people and social communities developing commonweal posts to arrange employments for elder-aged staff of original state-owned enterprises who are difficult to be employed.  Post subsidy policy Grant a certain amount of post subsidy for enterprises employing aged staff who have difficulties in finding jobs.  Small credit policy Provide small credit for vulnerable people being employed or self-employed.  Free vocational training policy One time free vocational training for every vulnerable person with labor ability and wish to be trained  Free employment reference policy Recommending job opportunities for every vulnerable person until he/she successfully finds a job;  Other supporting policies Such as：(i) providing sites for vulnerable people establishing businesses by themselves;

72 (ii) implementing one-stop employment service; (iii) continuing social insurance connection; (iv) focus support for fragile groups including elder-aged staff who are difficult in finding jobs, “zero employment” households and so forth. There are also some other measures as following:  Not to convert to urban residency if the vulnerable people don’t choose to do so; try to first recruit them, especially women, to do unskilled work for the project;  The local government will organize the labor force to help vulnerable people build their replaced houses and pay a subsidy fee 2000 yuan /household for the building materials;  For relocation, the resettlement department will arrange the house plots near the road so they can build houses and open shops on the first floor. It will increase their income. For land acquisition, land in good quality and adjacent to the house will be redistributed to them. If possible, remaining land for the vulnerable will not be redistributed. For conversion to urban residents, simple work such as cleaning of public areas and planting grass and tree, etc. will be arranged. All in all, their production and livelihood shall not be adversely affected, but improved as far as possible;  To the women headed households, vocational training and small credit of 3000-5000 yuan will be provided, so that they can invest the money on farming and breeding undertaking and increase the household income;  Support social insurance and/or living allowance to the single old men. Households enjoying the five guarantees, orphans and disabled people above Grade B of Class-2 who have been verified by the local people’s government or civil affairs administrations shall be adopted or resettled by the local civil affairs administration. Moreover, each person shall be granted a one-time subsidies of RMB 500 Yuan to RMB 10,000 Yuan;.  Execute preferential policies to the ethnic minorities in land acquisition and relocation; in addition: (1) granting additional scores in the entrance examination for universities and colleges; (2) reduction/exemption of schooling fee, incidental expenses and tuition; (3) receiving annual subsidizes of several hundred Yuan for each student. Households enjoying the five guarantees, orphans and disabled people above Grade B of Class-2 who have been verified by the local people’s government or civil affairs administrations shall be adopted or resettled by the local civil affairs administration. Moreover, each person shall be granted subsidies of RMB 500 Yuan to RMB 10,000 Yuan once and for all.

73 5.5 Analysis for Environmental Capacity 5.5.1 Natural Condition and Land Resource The project affected area is located at the suburb of Panzhihua city and the topography and geography will not become the bottle-neck for resettlement and rehabilitation.. 5.5.2. Resettlement Characteristic and Relations between Population and Land The peasants’ relation is harmonious living here. Therefore, the project resettlement program goes to develop the resettlement in a land-based way, encouraging resettlers to engage in their original professions and creating conditions for the secondary and tertiary industry, and the overall productive and living environment of the area will improve significantly. 5.5.3 Infrastructure Condition for Production and Living (1) Traffic situation The construction of the project gives local residents better access to services, markets and the urban area in general, speeds up the circulation of goods and people and promotes greatly the development of local economy. With the implementation of the resettlement plan, the residential environment and basic facilities/infrastructure of resettlers will also be significantly improved. With iproved roads and transport, traffic will not become a lmiting factor in the development of the area. (2) Water supply situation The project area has a relatively high water table. The water supply in the rural area has mainly been through wells, and the town residents were mainly through tap-water. The water supply system in the newly built houses and apartments will be completed before relocation. Therefore, the water quantity and supply will not be limiting factors in the development of the area. Along with the economic development in the project affected area, the productive and living conditiosn will also be improved steadily. (3) Power supply situation The electric power supply system in the newly built houses and apartments will be completed before relocation. The electric transmission and distribution facilities affected will be reconstructed according to original standard, and the power supply of residents will be not impacted due to road construction. (4) Medical, cultural and educational situation This project does not directly affect the medical, educational and social service facilities. The original medical and educational facilities of each village and town will be available continuously throughout implementation. The passageway will be set near the medical

74 station and school and it will not be an obstacle to local residents going to and from the hospital or school. (5) Fuel supply The major fuel of local people is currently coal. The leel of land acquisition is relatively small scale for indivivudal villages and towns, so the impact on the supply of firewood will be minor. As the project results in the improvement of traffic in the affected area, the ease of procurement of coal and other fuels will be improved.

5.5.4 Economic Development and Potential in Project Influence Area The rural economy in project influence area is mainly agricultural, and the ecnonmic condition of the people is average. Their future economic development will be facilitated by the improvements in traffic and transportation and the development such improvements bring. Adjusting measures to local conditions, creating production wavs. strengthening input of science, technology and intellectual development. raises the productive technical level of the masses in order to promote overall development of agriculture, forestry, side occupations, industry, trade and transportation;

5.6 Resettlement Plan 5.6.1 Recovery Plan for Production and Living During the project influence survey and resettlement, the Resettlement Plan Group held symposiums about resettlement scheme in the involved counties (city), towns (township) and villages, participated in by cadres from counties (city), towns (township) and villages, resettlers and villager representatives. The resettlement schemes of all villages are approved by the local governments and resettled households. According to the relevant requirements in Operational Manual- OP4.12, by analysis of environmental capacity after land requisitioned in each effected village, it is decided that all resettlers will resettle in this region so as to maintain their original production and living way after resettlement, and the original social relations are not interrupted.

Production recovery plan: Each Village Resettlement Team, by analysing of the geographic location for each village, including quantity/quality of land resources and income of local residents, and fully soliciting opinions of resettled households and representatives of villagers and preferences of those to be resettled, will decide whether it is to directly have cash compensation or adopt other productive recovery measures, and will develop a suitable and practicable production recovery scheme together with the local government.

75 According to relevant specifications in Article 39 and 40 by Sichuan province implementing " Land Management Laws of Chinese People's Republic", the resettlers who have the cash compensation will have all subsidies for the land requisition, but the land compensation will be paid to the village collective and used for the constructing infrastructures such as countryside path in fields and water channel and other collective welfare facilities. As the resettlement scheme for each village is determined according to opinion of the most resettlers, if any resettler disagrees on his village resettlement scheme and wants to have other resettlement arrangements, the Project Office will work with all parties to come to a solution. If individual resettlers from the village having cash compensation are willing to have land for agricultural production and developing agricultural production, each County (city) Project Office will help them to substitute the land from the farmer households not willing to engage in agricultural production. Otherwise, if the resettler is willing to abandon farming and have cash compensation he can get corresponding cash compensation in order to, for example, establish a business or small enterprise.

Living resettlement plan: According to resettlers' opinion and the actual conditions in project affected area, unfavorable influence on local residents from removal shall be decreased as far as possible. The project affected resettlers will resettle in a newly opened residential area of their own village, and the house construction will be done in coordination with the local village and township's plan. The old houses will be dismantled after completion of new houses and transitional compensation will be paid if needed. In particular, transitional compensation shall be paid for those who will move into the new residential area of the three villages as their old houses will be dismantled firstly and new houses will be completed later. During land adjustment, no land adjustment will be made in poor households so as to ensure their original production and living not being impacted. The influence by land acquisition of each village is different and the reconstruction scheme according to actual land and house quantity of each village as well as opinions from resettlers and governments are also different. See 5.3 for detail resettlement plan.

5.6.2. Infrastructure Plan in the Resettlement Area a. Land leveling The house-plots in the village are gentle and leveled, and the foundation condition is good. The work for foundation treatment is simple, generally, 0.5m deep for the brick-concrete and brick-wooden house and a simple treatment for earth-wooden house. The rural houses to be

76 built are scattered in the village and in a small quantity. Therefore, land leveling for these households will be undertaken by themselves during construction of the new houses. The land leveling of the newly opened residential areas in the three villages will be undertaken by the project.. b. Public works Water supply: In the project affected area, the township residents have running water, and most of rural residents take their water from wells or storage waterpits. During survey on project influence, the detailed survey on production and living facilities was carried out. The farmer households will get corresponding compensation.for the facilities in their old homes The resettlers will be settled down in the same region, the newly built houses for resettlers are in the same area and the water supply mode is same as the original. The newly built houses for residents having running water before resettlement is 20m away from the main water- pipe, and it is easy to connect. with the main pipe.

Power supply: The existing power supply capacity of each village can meet the demand after the resettlement. Only one 220V line is necessary to enter each household and the linkage distance of each spot is between 50-200m.

Broadcasting and TV: The broadcasting and TV line will be connected with the line from adjacent residents. The existing receiving facility could be installed again. c. Access and external traffic According to the wishes expressed by residents, all resettlers hope to resettle near the original resident area in the village. Convenience of access is the main factor for most resettlers in choosing the site for the newly opened residential area. Thus most residential areas are selected near the new road and near the original resident houses, which both reduces problems of continued access for the resettlers and also helps maintain productive and living standards after resettlement. Only a short pavement about 5-30m distance is needed to link the road with the residential area.

The cost for land leveling of house-plots in the residential areas, construction cost for footpath leading to each house, and investment cost for connecting to water and power system, broadcasting and television network will be paid by the project in an estimation of Y1,000/household.

77 5.6.3. Social and Service Facilities in Resettlement Spot The project construction does not relocate school, medical service station and other social service facilities. Since the new residential areas are located within the administrative areas of the three village groups, the resettlers can use the original school, medical room and commercial network, and do not need to build other one. After relocation, the distance from resident spot to the original social service facility is basically the same as before. 5.6.4. Community Management and House Construction No rural resettler will be moving outside of their village. The existing administrative system is not changed and is still under the jurisdiction of original town, farm, township and villages. For the house construction, both the local living habits and the requirement of large space shall be considered. The house demolition and construction will be carried out by themselves at their own wishes. According to the area and structure of original house, compensation equivalent to house replacement price will be provided and the compensation fee will be paid in stages based on the material preparation and construction progress. The resettlers settle in the same community and the distance is within 500m from the old house to the new house.

The old houses will be demolished after completion of the new houses. The transition of staying in the third place before the new house is completed and the old house is demolished will be avoided and minimized.

5.6.5. Implementation and Organization Management The management and oversight of the resettlement process will be under the leadership of the districts and the City Leading Group. The project resettlement office will be set up by the relevant department from the Districts and City, to work out resettlement policy and will take the responsibility for publicity, mobilization and organization and enforcement of relocation and resettlement. At the same time, the resettlement office is the major channel of resolution of problems. The resettlement office shall fully listen to, collect and help resolve problems and comlaints by resettlers in a timely fashion or report such concerns to the higher levels or to the relevant department, and provide feedback to resettlers concerning the resolution of those problems.

In order to further raise the skill levels of resettlers, and increase their science and technologic strength on agricultural production and animal husbandry, the Resettlernent

78 Office will organize science and technologic activities with relevant department of district (city), regularly have lectures on knowledge about laws and plant and livestock breeding, and carry out the guidance for technical skills of resettlers by providing free training and visits to relevant sites and productive enterprises.

79 6. Compensation Estimate

The total budget for SPUEP is 36,110,600 Yuan. Among them, the resettlement compensation is 33,218,800 Yuan accounting for 91.99% of total, The reconstruction compensation for special items in the village is 300,000 Yuan accounting for 0.83% of total, contingency fee is 1,845,800 yuan accounting 5.11% of total, other fee is 506,000 yuan accounting 1.4% of the total, temporary land using fee is 240,000 yuan accounting 0.67% of the total. See Table 19 for details.

Table 19 Summary or Compensation and Investment Budget

for Land Acquisition and Relocation

Bin-jiang Bin-ren Rate（% No Item Fees(10000yuan) road road ） 1 Resettlement compensation fees 536.13 2785.75 3321.88 91.99 1. Land acquisition compensation 0 829.17 829.17 1 and resettlement subsidy 1. 483.91 1872.00 Compensation for houses and ground attachments 2355.91 2 1. 2.22 4.68 Moving fees 6.90 3 1. 0 59.90 Infrastructures and transitional compensation 59.90 4 1. Others (enterprises, moving and lost compensation) 5 50.00 20.00 70.00 2 Temporary land use 11.09 12.91 24.00 0.67 3 Special facilities of the village 0 30.00 30.00 0.83 4 Others 8.20 42.40 50.60 1.40 5 Contingencies 30.14 154.44 184.58 5.11 Total investment 586.37 3024.69 3611.06 100.00 * Land used for Binjiang Road is State-owned which is free as a grant. Source: “Interim Measures of Panzhihua City for Compensation and Resettlement for Uniform Expropriation of Collective- owned Land” and field survey

6.1 Basis for Cost Estimation 1. "Land Administration Law of the People's Republic of China" (for the practice in Jan. 1, I999) 2.“ The Implementation Measures of The Law of Land Management of People’s Republic of China made by Sichuan province” (1999); 3. “No 54 document of Panzhihua city government ”(“Panzhihua City for Compensation and Resettlement for the Land Requisition” ) December 3rd ,2002; 4. Inventory Index for Land Acquisition and Resettlement of SPUEP 5. “Panzhihua City land bureau document(PGTF(2002)No100)”;

80 6.2 Compensation Principles (1) The land acquisition cost. resettlement subsidy and young crops compensation will be computed with the relevant rules of “ The Implementation Measures of The Law of Land Management of People’s Republic of China made by Sichuan province” (1999) , (2) The compensation of house and affiliated facility is based on the relevant rules of “No 54 document of Panzhihua city government ”(“Panzhihua City for Compensation and Resettlement for the Land Requisition” ) December 3rd ,2002 and “panzhihua city land bureau document(PGTF(2002)No100)”; (3) The compensation of special items shall be estimated with "three originals"(original scale, original standard, original function). (4) The compensation standard of scattered trees shall be determined according to its actual value or actual cost for transplanting.

6.3 Compensate Standard and Compensation Cost

6.3.1. Rural Resettlement Compensation Cost A. Land acquisition compensation cost and resettlement subsidy a. cultivated land acquisition cost and resettlement subsidy The production mode in the affected area is mainly of two crops per year. According to the statistical report and the market purchasing price of main crops of Panzhihua city in 2003, the average output of relevant crops during the most recent 3 years were: 1000 yuan/mu of grain, 1200 yuan/mu of economic plant, 630 yuan/mu of corn and 650yuan/mu of wheet. There is one season of grain and one season of corn for paddy field. There is one season of corn and one season of wheat for dry land. In order to standardize the compensation criteria, and to adjust prices so they favor the resettlers, 1650yuan/mu will be the product value of paddy land and 1280 yuan/mu will be the product value of dry land.

By the rules of “No 54 document of Panzhihua city government ”(“Panzhihua City for Compensation and Resettlement for the Land Requisition” ) December 3rd ,2002: The farmland compensation fee shall be 6 – 10 times of the average output per mu of previous three years. It is 10 times of the average output with the average cultivated land area below 0.3 mu; It is 8-9 times of the average output with the average cultivated land area between 0.3-0.8 mu, It is 6-7 times of the average output with the average cultivated land area above 0.8 mu. The resettlement subsidy shall be computed with actual agriculture population who needs to resettle. The agriculture population computation is that the quantity of land to be

81 requisitioned divides the mean land occupation per capita before the land acquisition. For the administrative village with average land per capita over 1 mu, the resettlement subsidy for each agriculture population is 4 times of the average output per mu of previous three years. For the administrative village with average land per capita between 0.6 mu and 1.0 mu, the resettlement subsidy for each agriculture population is 6 times of the average output per mu of previous three years. For the administrative village with average land per capita below 0.6 mu, the resettlement subsidy for each agriculture population is 10 times of the average output per mu of previous three years. According to the amount of average land per capita of each towns(ship) and village, the farmland compensation standard was computed. Based upon the above policy, the land compensation per mu in each village group is the following: Table 20 Calculation of Land Acquisition Compensation Groups Item Output (yuan/mu) Times Compensation Standards(yuan/mu) Huaguo Paddy field 1650 12 19800 (the per capita Irrigated land 1500 12 18000 cultivated land Dry land 1280 10 12800 area is 0.62mu) Garden land 2500 10 25000 Wood land 400 10 4000 Other land 300 Yuejin (the per capita cultivated land area is 0.22 mu and the 13000 yuan/one person affected 219 persons will be turned into urban population and 61 persons will be resettled with the remaining land) No 2 group in Shaba village (the per capita cultivated land area is 13000 yuan/one person 0.24 mu and the affected 208 persons will be turned into urban population and 62 persons will be resettled by the remaining land) Source: “Panzhihua City for Compensation and Resettlement for the Land Requisition” December 3rd ,2002 and field survey b. Compensation cost and resettlement subsidy of orchards The garden-plot acquisition compensation cost and resettlement subsidy shall be computed with the standard of average land compensation of this city c. Compensation cost and resettlement subsidy of forest land The compensation of woodland shall be computed with the standard of average farmland compensation of these districts. The woods compensation has been listed in the scattered tree compensation cost. B. Compensation cost for house and affiliated building In order to prepare compensation standard correctly and let the relocated household get the compensation equivalent to the house replacement price, a detailed survey of replacement price of brick-concrete house, brick-wood house and earth-wood house(only for the first floor)was made while carrying out the inventory investigation. The replacement price of brick-concrete house is 287.11 Yuan per square meter. brick-wooden house 163.67 Yuan per square meter, and earth-wood house 63.44Yuan per square meter. (Table 21, Table 22 and Table 23 for details). Refer to the house compensation standard of the Panzhihua city,

82 considering the discrepancy of material transportation and material quantity and determination of unified standard, the replacement price of brick-concrete house is 320 Yuan per square meter, brick-wooden house 180 Yuan per square meter, and earth-wood house 70 Yuan per square meter. The resettlement department undertakes house plot leveling, power, broadcasting and television, running water, etc.

Five households are living in the earth-wood houses. To help these poor households moving into the new houses in better quality, e.g. brick-wood, the government will purchase the building materials in Y2000/household, which equals to Y100/m2. With the house compensation of Y70/m2, Y170/m2 (70 + 100) for the earth-wood house will be compensated. Most of the earth-wood houses are used for breeding livestock or storing domestic goods in the village. The compensation rate is generally accepted by the villagers.

Auxiliary structures: brick fence 10Yuan/ m2, earth fence 8 Yuan/ m2 , methane-generating pit 30 yuan/ m3, concrete ground 10yuan/ m2 , brick dung pit 8yuan/ m3, earth dung pit 5 yuan/ m3 . See Table 24 for details. Table 21 Analysis List for Single Floor Brick-concrete House Per m2 Quantity Per Unit Cost Sub-total Item Unit Remarks Unit (yuan/unit) （yuan） I. Main materials 201.98 1. steel Kg 11.904 4.2 4.99 2.wood M3 0.0396 1000 39.6 3.concrete Kg 135.3 0.4 54.12 4.brick One 230.2 0.18 41.44 5.stone M3 0.0238 0.35 0.01 6.sand M3 0.476 0.35 0.17 7.concrete floor One 0.341 145 49.45 8.glass M2 0.182 13 2.37 9.steel window 9.83 II. Other materials 10.10 5% of total from item I to III III. Labor fees 55 IV. infrastructure According to 150m2 and 1000 yuan of per 6.67 fees household V.contingency 13.36 5% of total from item I to III Total 287.11 * Y320/m2 will be taken Source: construction cost budget and field survey

Table 22 Analysis List for Single Floor Brick-wood House Per m2 Quantity Per Unit Cost Sub-Total Item Unit Remarks Unit (yuan/unit) （yuan）

83 I. Main materials 104.30 1.wood M3 0.0612 1000 61.2 2.concrete kg 23.00 0.4 9.2 3.brick One 174.6 0.18 31.43 4.stone M3 0.0223 0.35 0.01 5.sand M3 0.253 0.35 0.09 6.glass M2 0.182 13 2.37 II. Other materials 5.22 5% of total from item I to III III. Labor fees 40 IV. infrastructure According to 150m2 and 1000 yuan of per 6.67 fees household V.contingency 7.48 5% of total from item I to III Total 163.67 * Y180/m2 will be taken Source: construction cost budget and field survey

Table 23 Analysis List for Single Floor Earth-wood House Per m2 Quantity Per Unit Cost Sub-Total Item Unit Remarks Unit (yuan/unit) （yuan） I. Main materials 31.55 1.wood M3 0.028 1000 28 2.concrete Kg 3.56 0.4 1.42 3.stone M3 0.0221 0.35 0.01 4.glass M2 0.163 13 2.12 II. Other materials 2.52 8% of total from item I to III III. Labor fees 20 IV. infrastructure According to 150m2 and 1000 yuan of per 6.67 fees household V.contingency 2.70 5% of total from item I to III Total 63.44 * Y70/m2 will be taken Source: construction cost budget and field survey

Table 24 The Unit Price for Affiliated Building Compensation No Items Units Price (yuan) 1 Houses m2 1.1 Brick-concrete m2 320 1.2 Brick-wood m2 180 1.3 Earth-wood m2 70 2 Wall m2 2.1 Brick wall m2 10 2.2 Earth wall m2 4 3 Concrete ground m2 20 4 Stove One 150 5 Dung pit M3 5.1 Concrete, brick dung pit M3 30 5.2 Earth pit M3 10 6 methane-generating pit M3 30 7 Well one 300 8 Fence M3 8.1 Concrete fence M3 80 8.2 Stone fence M3 60 9 Tomb One 9.1 Earth tomb One 300

84 No Items Units Price (yuan) 9.2 Concrete tomb One 600 9.3 Huagongshi tomb One 800 Source: appendix 3 of “Panzhihua City for Compensation and Resettlement for the Land Requisition” December 3rd ,2002

C. Relocation compensation cost The relocation compensation cost includes transportation fee, material lost fee and work delay subsidy. Most of the resettlers will be settled down locally and transportation distance is within 1000m. The moving fee is 200 Yuan/household.

D. Compensation cost for infrastructures and transitional compensation The 66 households will move to the newly built residential areas in the villages. Infrastructures including land leveling, the water and power supply system will be completed when the houses are built for the new comers. The total cost is estimated as Y599,000. These people will demolish their old houses firstly and build the new houses afterwards. The transitional compensation cost is 60 Yuan/person/month within 6 months.

E. Other compensation cost a. Compensation for scattered trees: see Table 25 for details. b. Compensation cost of young crops: It is computed with the average output of previous three years. The compensation will be paid according to the actual condition during land requisition. c. Tomb moving cost: compensating according to standard d. Enterprise compensation includes the replacement cost of the structures, the moving cost of all equipment and facilities, the compensation to the workers according to the income of the affected enterprises due to suspension of production, and the subsidies to the tenants of houses belonging to the Nantai Company. The compensation rates will be based on negotiation with the affected entities and the market rates at the time of relocation, although a budget of Y700,000 is estimated.

85 Table 25 Compensation Standards of Trees Item Fruits Bearing Unit Compensation Rates (Y) Remarks mango、apple、 Above 50kg One 100 granada、grape 5 yuan for without fruit Below 50kg One 50 Above 50kg One 60 Plum、peach 5 yuan for without fruit Below 50kg One 40 Small tung trees Without consider numbers Crowd 5 Above 50kg One 30 Red heart tree 5 yuan for without fruit Below 50kg One 15 Big tung trees With fruit One 15 Above 20 Cage 40 Banana Below 5 Cage 15 Above 50kg One 40 Oblonga 5 yuan for without fruit Below 50kg One 20 Above 50kg One 150 Longan、leechee 30 yuan for without fruit Below 50kg One 80 Above 50kg One 50 Orange 10 yuan for without fruit Below 50kg One 20 Radius above 12cm 10 Eucalyptus Radius below 1 chi 20 Radius above 1 chi 50 Radius above 3 chi 300 Panzhihua trees Radius below 1 chi 80 Radius above 1 chi 200 Source: “Panzhihua City for Compensation and Resettlement for the Land Requisition” December 3rd ,2002

6.3.2. Temporary land occupation compensation According to the Article 57 of "Land Administration Law of the People's Republic of China", "if the project construction and geological prospecting needs temporarily to use the state- owned land or peasant collective land, the land user shall sign temporary-use land contract with the relevant land administrative responsible department or rural collective economic organization and village committee according to the land jurisdiction, and pay the compensation cost for temporary-use land according to the contract. The user shall use the land according to the temporary-use land contract, and must not construct permanent structure in the temporary land. The time limit for temporary-use land is not over two years normally." Though the stipulation of the land law "The time limit for temporary-use land is not over two years normally", this project is a infrastructure project with long construction period and long-term use the temporary land. The land ownership of temporary land does not

86 occur shift, and the temporary land shall be reclaimed after completion of service period according to the law. All output or income from this land shall be compensated to the land owner according to the annual output and occupy period, the rural labor that manages this land can attend project construction or other labor output in construction period; and the temporary land shall be reclaimed after completion of service period by the construction unit. The compensalion payment standard of temporary land and requirement will be stipulated clearly in the project construction contract. And the cost will be listed in the lump sum of contract. The compensation for temporary land using will be calculated in the construction contract budget, and will be paid to the villages by the construction unit according to the actual occupied amount. So compensation fee is listed here with 240,000 yuan.

6.3.3. Reconstruction compensation for special facilities in the village Along the Bin-ren Road, underground structures, low-tension transmission lines, bio-gas pits and stoves owned by the villages will have to be relocated. The cost is estimated in the budget. Moreover, some special infrastructures, e.g. the electric power transmission lines, the telecommunication lines and water pipes owned by the State enterprises will be affected during construction. The project office will require the construction unit to protect the public infrastructures through temporary facilities setting. The infrastructures damaged will be rehabilitated. The cost incurred will be included in the contract.

6.3.4. Other Costs A. Technical training cost It is 0.1% of the sum of 6.3.1 - 6.3.2. It is used for raising the production ability, cultural diathesis of resettlers and management level of cadres. B. Implementation management fee It is 1% of the sum of 6.3.1 - 6.3.3. It is used mainly for the resettlement organization to purchase equipment, housing, wages, official business, travel and administration fee, etc. C. Monitor and evaluation cost It is 0.1% of the sum of 6.3.1 - 6.3.3. It is used mainly for the external monitoring uftit during the implementation period. D. Administrative fee for land requisition

87 0.3% of the total of land compensation, subsidy, young crop and other attachment compensation will be list. It will be used to pay the department cost during the process of land requisition.

6.3.5. Contingency A. Physical contingency It is 10% of sum of 6.3.1 - 6.3.3.

6.3.6. Relevant tax All the relevant tax will be exempted by the local government.

6.3.7 State-owned land There is no compensation fee for state land according to the policy, so the cost is without the fee.

6.4. Total Budget Combining with 6.3.1 - 6.3.6 above, the total investment for resettlement and land acquisition is 36,110,600 Yuan, including 5,863,700yuan of Bin-jiang road and 30,246,900yuan of Bin- ren road, See Table 26 for details.

Table 26 Compensation Investment Budget for Resettlement of SPUEP

88 Source: FS and “Interim Measures of Panzhihua City for Compensation and Resettlement for Uniform Expropriation of Unit Quantity Unit Total (10000yuan) No Item Bin-jiang Bin-ren Total Cost Bin-jiang Bin-ren Sub-Total road road (yuan) road road Resettlement and 536.13 2785.75 3321.88 A Rehabilitation Land acquisition and 0 829.17 829.17 I resettlement compensation 1 Collective-owned land 0 829.17 829.17 1.1 Huaguo Paddy field mu 50 50 19800 0 99 99 group Dry land mu 100 100 18000 0 180 180 Irrigated land mu 3.02 3.02 12800 0 3.87 3.87 Forest land mu 1 1 4000 0 0.4 0.4 Orchard land mu 1 1 25000 0 2.5 2.5 Yuejin group(conversion to 219 284.7 284.7 1.2 men / 219 13000 0 urban population) No 2 group in Shaba 199 258.7 258.7 1.3 village(conversion to urban men / 199 13000 0 population) 2 State-owned land mu 100 20 120 0 0 0 0 II House and attachments 483.91 1872 2355.91 1 Rural houses M2 483.91 1850.37 2334.28 1.1 Brick-concrete M2 4645.99 24984.01 29630.00 320 148.67 799.49 948.16 1.2 Brick-wood M2 1185.31 11861.91 13047.22 180 21.34 213.51 234.85 1.3 Earth-wood M2 0 13026.46 13026.46 70 0 91.19 91.19 1.4 Other M2 524.19 2739.79 3263.98 60 3.15 16.43 19.58 2 Urban houses M2 4143.04 9729.96 13873.00 750 310.75 729.75 1040.5 3 Attachment 20.63 20.63 3.1 Methane-generating pit M3 15 15 30 0.045 0.045 3.2 Stove set 39 39 150 0.59 0.59 3.3 Other attachments 20.00 20.00 Compensation for earth- 5 5 2000 0 1 4 Hh 0 1 wood houses III Moving fees hh 111 234 345 200 2.22 4.68 6.90 Transition and 66 66 9075 0 59.9 IV hh 0 59.9 infrastructure fee Other fees(including 9 20 V enterprises moving and lost unit 4 5 50 70 of profits due to relocation) B Temporary land using fee mu 55.44 64.56 120 2000 11.09 12.91 24.00 C Special facilities for VG 0 30 30 D Other fees (A+B+C)% 1.5% 8.2 42.4 50.6 1 Technology training fees 0.1% 0.6 2.8 3.4 2 Implementation Management fees 1% 5.2 28.4 33.6 3 RAP compiling and Resettlement M&E fee 0.1% 0.6 2.8 3.4 4 Management fees of land acquisition 0.3% 1.8 8.4 10.2 E Contingency fees 5.5% 30.14 154.44 184.58 Total 586.37 3024.69 3611.06 Collective-owned Land” and field survey

89 7. Implementation plan

7.1. Implementation Procedures

A. Land requisition and compensation The land acquisition and compensation will be completed under the coordination with relevant organizations, the typical procedures refer to as followings: a. The CMEDRI is in charges of the preparation of the applicable drawings for permission of the land acquisition. On these drawings shall be defined the scales and areas of the land acquisition and houses removal; b. The Project Owner will apply for planning license and red-line map to planning departments, and apply for approval to land administration bureau; c. Application for approva made to land administration unitl; d. All matters concerned about land acquisition compensation, signing the compensation agreement for land acquisition and conducted the land utilization will be charged by the Project Office consultation with the land administrative departments; e. The acquisition range and areas shall be defined by the special staff designated to the site by land administration in relevant districts, relevant town(ship) and villages; f. The land administration of relevant districts will sign the "Land Acquisition Agreement" with each relevant town (township) and villages; g. Transferring the compensation fees; h. Legal formalities; i. Project land acquisition.

B. Production resettlement and restoration The typical matters for productive resettlement and restoration shall be implemented by the village committee, the procedures is as followings: a. Holding the villagers' representatives' conference, to study and compile the land reclamation, land adjustment measures and the overall plan for production restoration; b. Timely issue the overall plan for land reclamation, land adjustment and production restoration and collect the opinions came from the whole villagers;

90 c. disbursing the living subsidy;

C. Houses relocation and inhabitants resettlement The procedures for relocation of resettler's homes and their resettlement should be implemented as followings: a. The Project Design Unit CMEDRI provides the scope of housing removal; b. Investigation for houses quantities and qualities will be carried by the Districts Resettlement Office coordinated with the each relevant town(ship) and villages; c. The Project Resettlement Office is in charges of compensation standards of the houses and its appendages, and sign compensation agreement for houses relocation after consultation with the relevant town and villages; d. The Project Resettlement Office works with every village to develop a plan announcing the quantity, compensation criteria and the time schedule for removing and rebuilding houses, and solicits comments from the PAPs; e. The Project Resettlement Office signs compensation agreement on houses and auxiliaries with the resettlers; f. Town and village shall be responsible for determining the practicality of the new house plots for resettlers and shall collect the opinions of settlers concerning the convenience of the locations; g. Resettlers receive the compensation fees; h. Resettlers built new houses; i. Removal into the new house; j. Demolition of the old houses.

D. Restoration of Special Facilities a. The Project Design Unit provides impact scopes of special facilities; b. PRO, together with authorities of special facilities, conducts investigation about classes and quantities of special facilities; c. PRO requests relevant departments in charge of special facilities to make restoration plans for special facilities taking into account the resettlement plan; d. PRO consults and decides compensation standards of special facilities with relevant departments in charge of special facilities, and signs "Compensation Agreement of Special Facilities Restoration"; e. PRO consigns relevant departments in charge of special facilities to conduct reconstruction of special facilities;

91 f. Special Facilities put back into service.

7.2. Schedule The schedule for land acquisition and inhabitant resettlement on the basis of project construction will be controlled as the following principles: (1) House demolition will be carried out by stages; prior to the construction of the project, the houses demolition shall be finished. . (2) Housing removal date will be informed to the resettlers at least 3 months ahead of the date. Three months will be allocated to the resettlers to build new houses from that date to the deadline of relocation. The PAPs can stay in their old houses until completion of the new one; (3) The relevant authorities shall fully consult with the resettlers about the time required to build the house and this time shall be prolonged, if necessary. (4) The land acquisition shall be completed before the construction commencement of the sub-projects. (5) Land redistribution shall be undertaken at the time between the two cropping seasons. (6) Construction of the special facilities shall be completed before the construction of the project and resettlers removal. The schedule of land acquisition and housing relocation is shown in table 27.

Table 27 The schedule for land acquisition and housing relocation Item Planned Schedule I. Land requisition 1. Determination of land requisition objectives August 2004 2. Preparation of inventory survey on the land to be requisitioned, and August –October 2004 conducting survey 3. Consultation and determination of compensation criteria of land requisition December 2004-December2005 4. Payment of land requisition compensation June 2006 II. Production restoration and rehabilitation 1. Consultation on re-allocation and land distribution December 2005 2. Re-allocation and land distribution May 2006 III. House demolishing and rebuilding 1. Determination of house relocation objectives April 2004 2. Survey of data of houses to be demolished June-August 2004 3. Consultation and determination of house compensation criteria May 2005-December 2005 4. Selection of house plots June 2006 5. Official formality of using house plots June 2006 6. Payment of house compensation June 2006 7. Land leveling of house plots June 2006 8. Building new houses June 2006 9. Moving into new houses December 2006 10. Demolishing of old houses June 2006 IV. Restoring and rebuilding special items 2006-2008

92 Source: project offices and FS

7.3. Financial Allocation Plan 7.3.1. Allocation Principle A. All costs related to the acquisition and removal will be listed in the general estimate. The Owner shall pay the compensation fees for land acquisition and relocation to the relevant units and individuals through the City Project Office (CPO) and District Coordination Offices (DPO). B. Prior to construction of the new houses, the compensation fees shall paid to removal households; if this payment is made in an installment method, the final payment shall be paid prior to the houses completion. C. The other compensation fees for land acquisition and other facilities shall be paid to relevant individuals three months before the acquisition. D. In order to ensure a smooth implementation of the resettlement, PRO will set up supervisory mechanism in the resettlement offices at all levels, so as to guarantee all the money to be paid to the PAPs is paid as specified.

7.3.2. Departments responsible for resettlement finances A. The Project Resettlement Office (project office), districts and City Coordination Office, and villager committees will be the departments in charge of finances at different levels for land acquisition compensations. B. For houses removal comnpensations, the responsible departments will be the Project Resettlement Office (project office), districts and City Coordination Office. C. In order to guarantee compensation fees are transferred in a timely fashion and properly used, the resettlement compensation fees shall be transferred from higher level to lower level; and at each level the relevant department or agency shall strict financial accounting and auditing controls. The utilization and transfer of compensation fees shall be periodically checked and reported, and any irregularities shall be reported and specific steps implemented to correct them. The cash flow is shown in Fig.2.

7.3.3. Funds Flow Procedures

A. Based on the compensation policy and standards stipulated in the resettlement plan, the project office shall sign "House Demolition Agreement" and "Land Acquisition Agreement” with districts and City Coordination Office"

93 B. The Districts and City Coordination Office (project resettlement office) shall sign the compensation agreement for land acquisition with the village committees concerned. C. In accordance with the contents, quantities and time stipulated in the removal compensation agreement, the compensation fee will transfer through the banks to the districts and city coordination offices (project resettlement office), then through the districts and city coordination office(project resettlement office) to individuals in stages. D. According to the relevant policy stipulations, the land compensation fee and subsidy will be paid to the districts and city coordination office (project resettlement office), then through the districts and city coordination office (project resettlement office) to the districts land administration and the districts land administration will finally pay to the affected people as living subsidy. The flow of funds procedures are as follows:

94 Figure.2 Flow of cash flow for land acquisition and housing demolition

City Districts Pay to affected people as living Land compensation fee → project coordination → subsidy office offices CPO Pay to affected people as living Resettlement subsidy → DCO → subsidy Compensation fee for CPO Villages and Affected young crops and → DCO → → groups households attachments CPO Housing demolition affected Compensation fee for → DCO → house and attachments households Compensation fee for → CPO DCO → Affected households temporary land-use Compensation fee for → CPO DCO → Houses demolished households house and attachments Compensation fee for → CPO DCO → Affected households scattered trees CPO – Cost for business stop of → DCO Businees households individual business man → Compensation fee for CPO infrastructure, → DCO – Responsible deparments transportation and others Design & Planning fee → CPO DCO Design unit → Monitoring and → CPO DCO External monitoring institute evaluation fees Technical training fee → CPO DCO → Technical training units CPO Resettlement impletion Management fee for → DCO → implementation organizations Supervision fee → CPO DCO → Supervision units

95 8. Implementation arrangement

8.1 Institutional Framework In order to accomplish the land acquisition, building demolition, and resettlement tasks for the Project, a resettlement network has been set up. Horizontally, the network includes two parties, SEPPD and ETDD project units and its contractors and subsidiaries, and local government authorities. These organizations include the land acquisition and resettlement working offices/groups of each contractor, and under each level of the local government. In addition, the land administration bureaus of local governments will participate in the implementation of land acquisition for the Project.

8.2 Resettlement Organization Conventionally, all the land acquisition and resettlement tasks for project construction will be entrusted to local governments for implementation. The project owner will coordinate and supervise the resettlement implementation and ensure grievances of APs are redressed. Based on the features of the project and though extensive discussions with project implementers and local government, the LAR organization with detailed tasks will be established as shown in Figure 3.

A land acquisition and resettlement (LAR) coordinator will be designated by SPUEP, and a SPUEP office will be established (with 2-4 persons). Further, LAR Office will be established in each affected district. The Office will be headed by 1 district leader and shall consist of 5-6 members from different government departments like the communications bureau, land administration, environment protection and forestry bureau, usually one from each department. Each affected township shall nominate four persons and each village committee shall nominate at least one person to LAR Office. The person so nominated will be responsible for all resettlement-related work and carry out economic rehabilitation plan together with the township government and villager committee.

96 Figure 3 - Project Land Acquisitions and Resettlement Organisation

SPUEP office Independent External Monitoring Agency

City Level Land Administration Bureaus Panzhihua urban construction and Investment Company

Districts Level Land Land acquisition and Administration Bureaus resettlement staff under company

Land acquisition and Districts Level Land resettlement staff of construction Administration Bureaus, LAR units Offices

Land acquisition and resettlement Groups under each townships

Land acquisition and resettlement Groups under each village

8.3 Accountability

SPUEP office will perform the duty of the project owner on behalf of project implementer and have close contact and cooperate with the affected districts and towns and villages. They will instruct their subordinate units that are responsible for land acquisition, housing demolition and relocation to deal with the affairs of land acquisition, housing demolition and relocation as well as resettlement in close cooperation with the LAR offices at all levels.

8.3.1 Role of Resettlement Division of Pazhihua Urban Construction & Investment Company The Resettlement Division within the districts will take the following responsibilities:  To organize and coordinate, following the decision made by the project owner, the land acquisition and resettlement work and compensation payment, and sign resettlement agreements with LAR working offices at local level.

97  To investigate and study the resettlement assignment, and consult the comments from affect agencies and individuals, deal with various grievance and appeal, and make quick responses.  To supervise and inspect the payments and utilization of resettlement fund.

 To provide guidance to the prefecture, districts/counties, townships and villages on the preparation of rehabilitation plans.

8.3.2Responsibility of Districts Level LAR Office The Districts level LAR Office (CRO) is primarily responsible for RP implementation and supervision. Principal tasks of the LAR Office include:  Checking, based on the assignment and requirement set by the SPUEP, the volume and number of affected land, houses, infrastructure and special purpose facilities, etc.  Appraising the value of the land and houses to be acquired and demolished and making compensation rates.  Signing land acquisition and resettlement agreements with affected enterprises and individuals.  Payment of compensation to affected families/units.  Carrying out the specific implementation of land acquisition and resettlement and ensuring timely construction of new houses and timely resettlement progress.  Supervision and inspection of the payment and utilization of resettlement fund.  Monitoring execution of RP in township and villages.  Reporting to the LAR Division of the SPUEP on resettlement situation periodically, and submit statistics/data as required.

8.3.3Responsibility of Township Resettlement Office Township Resettlement Offices (TROs) have the following responsibilities:  Survey, monitor and record all resettlement activity within its jurisdiction;  Supervise acquisition of land, houses, other buildings and structures, public utility infrastructure and enterprises as well as the relocation and reconstruction of houses and non-residential buildings;  Supervise the employment and training of the APs in township enterprises.  Collect the needs of vulnerable groups and provide assistance during their relocation period, and attend to their grievances in order to solve them in time or forward to districts level resettlement offices.

98 8.3.4 Responsibility of Village Committee Village Administration Committee and Villagers’ Groups have the following responsibilities:  To report on: Quantity of land acquired; Ownership and use rights of land and property; The ratio of land to labor force  Participate in surveys;  Hold properly constituted meetings to decide (i) land redistribution, (ii) allocation of compensation between the community and individual APs, (iii) how to use compensation not handed directly to APs, (iv) details of conversion from rural to urban residency;  Select relocation sites and undertake land redistribution;  Communicate and help address grievance issues;  Report on the progress of resettlement.

8.4 Capacity Building and Staff Training A variety of measures will be taken to support capacity building and ensure effective implementation and control of the RP. These include: 1. Vertical linking agencies will set up reporting system, to report once a month. 2. Horizontal linking agencies will hold coordinating meetings quarterly to enhance information exchange. 3. Issues put forward by the APs will be reported and disseminated through the resettlement offices at each level. 4. Issues which occur during construction will be reported by the resident engineer, first to his/her organizational level and then, if necessary, upwards through each of the hierarchical levels; 5. Issues of the APs and contractors will be forwarded to the Village Committee, local construction coordination groups at township-districts-prefecture levels, and, if serious, also to Panzhihua Urban Construction and Investment Company.and the City Project Office. 6. Both the Panzhihua urban construction and investment company and the local governments have carefully chosen persons experienced in land acquisition and resettlement with managerial skills and data processing skills to train the resettlement institutions of all levels. These persons should be stable along the whole construction period. 7. At the preparation stage, both Panzhihua urban construction and investment company and the local governments should invite the consulting units to train their major staff members engaged in land acquisition and resettlement and to help them to learn and have a good grasp of China’s resettlement policies, the Bank’s requirements and the successful cases of other administrative sectors in China and learn to master the skills of collecting and processing data. The following is the detail plan:

99 A、 The city project office will organize two training sessions by inviting the consulting units to train their major staff members engaged in land acquisition and resettlement B、 The city project office will organize the relevant staff to study the other relevant projects with resettlement components to learn good practice.; 8. Internal monitoring, evaluation and problem solving skills will be reinforced when judged to be weak.

100 9. Public Participation and Appeal

9.1 Identification of Project Related People Primary related people are identified as those directly adversely affected and those who purely benefit from the project, it mainly includes: (1) people directly affected by land and property losses; (2) social and public institutions affected by land acquisition and resettlement; (3) all villager groups and villages; (4) all institutions and companies directly involved in the project construction and operation, such as construction contractors, passengers.

The secondary relevant people include the indirect beneficiaries such as the construction material suppliers, government organizations involving in the project processing as well as those who are interested in the project and participate in the project related activities.

The purpose of identifying the project related people is to ensure extensive public participation of and consultation with APs particularly those adversely affected in order to ensure the smooth implementation of the proposed project without negatively affecting APs livelihood. The following paragraphs describe what has been done and what has to be done in the process of achieving this goal.

9.2 Consultation During Project Preparation 9.2.1 Public Consultation The public consultation process for the Project began in March-May 2004 with a series of surveys by CMEDRI. These included the first transect survey by the Design Team and an initial socio-economic survey conducted by housing demolition offices entrusted by the projector in August-October 2004. The transect survey served principally to alert villages in the proposed project area that the project was being planned. This survey also served to make the design team aware of local conditions and of farmers' concerns including the needs to provide adequate crossing points and the importance attached to ensuring that irrigation systems were maintained. The majority of the affected population become aware of the project at that time.

The socio-economic survey revealed a high degree of support for the scheme. Major concerns raised by the villagers related to (i) fair compensation; (ii) adequate land allocation, and (iii)

101 assistance for livelihoods. Six major consultation meetings (four at the district/districts level and two at the township level) were held in the project area. Among others, local officials/APs attended the meetings from district/districts and township governments (including the Land and Resources Bureau). A summary of the key consultations/meetings and issues discussed is contained in Table 28.

Table 28 Relevant People Participation and Consultation Record

Venue No. of Agency Date Participants Purpose Responses/Main Issues Discussed/Concerns People Panzhih 3-5, Resettle- Farmers, 170 Prepare  conduct consultation meetings with local government and related ua plan 2004 ment Div. village for the sectors (about 80 officials attended the meeting). Introduce the and leaders, engineerin project orientation, major technical standards and justification of design local govt. g the project, and design issues and planned implementation institute officials feasibility schedule, etc.. Local government has reported the consultation study, meeting via TV, Radio, news paper to local masses in order to basic inform local people on this project. informatio  During the project selection, if possible, the village/building has n been avoided in order to minimize resettlement. collection  During the field survey, the villages/buildings to be traversed were and surveyed in detail, and discussions with local government consultati institutions have been conducted in order to select the project on with through comprehensive consideration among alignment local orientation engineering feasibility and resettlement reduction. officials  The cultivated land in the project area is relatively scare resource; thus during the project selection, cultivated land/farmland occupation were avoided as much as possible.

Res. Div. Farmers,  Participants included village and villager group representatives. EA, IA, 6-9, Preparatio and villagers,  EA and local governors preside the meetings. Technical 2005 n for RP Villagers local govt. 200 suggestions and assistance had been provided by LAB, EA and SE survey, Committee officials other governmental institutions RP plan s  Advantages and disadvantages of compensation options and land and redistribution had been discussed. income  The consultation meetings were participatory and transparent; restoration villagers participated in the meeting had expressed their plans preference and attitudes towards compensation options against land redistribution.

 All the participants expressed that they support this project.

 Local governmental officials explained the view on their economic development after the project implementation.

 Reasonable compensation will be adopted in order to ensure APs can restore their livelihoods.

Local 6-9, Villagers Farmers, 290  Know the attitude of local Aps govt. 2004 Committee villagers,  Complete the questionnaires containing multiple choice questions local s local govt. on resettlement and environmental issues. Affected officials  Conducted group interviews at 44 affected by the project. househol  Conducted households interviews in 44 groups ds  Water/soil conservation, compensation and resettlement issues were discussed with APs. Total consultation persons 660660

*NB. In addition to the above, numerous meetings were held (during June-September 2005) between PPDRI and local officials to discuss details of the RP including WB policy and requirements, information needs, relocation and income restoration policies and the implementation programme.

102 The policies and entitlement matrix contained in this RAP have been heavily influenced by the results of these meetings and surveys. This applies particularly to the derivation of the compensation rates and the formulation of an income restoration strategy based around land redistribution, cash compensation, and livelihood/training programs.

9.3 Public Participation and Consultation Plan Notwithstanding the amount of public consultation already carried out, the projectors and local government fully accept that additional consultative meetings will be required during the implementation of the resettlement and land acquisition process. The principal activities to be undertaken are:

 Using standard Chinese to print resettlement booklets, propagating the policy, rights, compensation standards, appeal channels and resettlement action plan to the affected people;  Formal village meetings to ratify the options relating to land re-distribution and compensation disbursement.  Detailed Measurement Survey in the field to measure and agree the final requirements for land, property and other acquisition, from each affected household/enterprise. Table 29 contains a schedule and activity of the consultation plan. Table 30 and 31 are the Public Opinions surveyed in Aug. 2004 (1988 persons) and June 2005 (1580 persons). For instance, people who were worried about reduction of income due to land acquisition decreased from 37% of the total people surveyed in 2004 to 3% in 2005.

9.4 Disclosure of the RAP Resettlement is a critical social activity. The information dissemination work will be performed well in advance to ensure that all people concerned understand the purpose of the project and the policies and procedures regarding land acquisition, resettlement, compensation, payment, and provision of grievance redress and appeal procedures. The RAP will be published on the “ Panzhihua Daily” and “Panzhihua Evening Paper” on October 8-10 for 3 days, they can go to Panzhihua city library to see the detail information. The EA will distribute a RAP Information Booklet between June 15 and 30, 2005. The RAP will be disclosed to all affected villages by October 2005.

Table 29 Policy Disclosure Plan Implementing Purpose of Event Task Timing Participants Remarks Agencies

103 1. Publicizing of Resettlement June 15- 30, IA, District/ City and All APs To be distributed to all APs RAP program Booklet 2005 Township Resettlement Agencies 2. Disclosure of Distribution October, IA, District/Districts All APs Distribution of final RP to all RAP, including of Chinese 2005 and Township affected villages compensation version of RP Government Public notice of compensation rates rates to affected people 3. Conduct Face to face August- EA, IA, Resettlement All APs (i) inventory of all assets and Detailed meetings with October,200 Offices at district and land holdings; (ii) Creation of Measurement APs 5 Townships levels and definitive list of APs; (iii) Survey (DMS); township officials Prepare basis for household Disclosure of compensation contracts. updated RP 4. Village level Village Dec. 2005 District/Districts and All APs (i) Identification and allocation RP finalization meetings onward, Township level of new housing sites; (ii) and (involving Resettlement Offices Finalization of land implementation several and village leaders redistribution and compensation meeting to disbursement options in each deal with all village; and (iii) Discussion of RP issues) and decisions on how to invest/use compensation funds not distributed to individual APs 5. Establishment Posters and Oct. 2005 IA, District and All APs (i) Provide procedure for APs to of mechanisms leaflets Township air their grievances; (ii) Provide for addressing Resettlement Offices, system for grievance resolution; grievances and local officials and (iii) Publicize in affected information villages. publicizing Source: project offices and FS

Table 30 Resettlers’ Opinions Survey in 2004 Results No Investigation Content Answer (1) (2) (3) (4) (5) Do you know this Project will （1）yes（2）a little （3）no 1230 413 345 1 be constructed? Are you in favorable to have （1）yes （2） no（3）so,so 1624 231 133 2 the Project construction?

104 Who will be interested by the a) state (1) yes (2) no 1063 Project construction? (available 3 b) collective (1) yes (2) no 725 for multiple choice) c) individual(1) yes (2) no 200

（1）economy lost 547 635 256 378 172 （2）living environment What will the environment 4 （3）people’s heath damage to you? （4）investment （5）image of the city to the foreign world （1）no 831 623 489 45 How the environment （2）no serious 5 affected you? （3）serious （4）very serious （1）improving living environment 1256 249 332 151 What goodness will the project （2）improving work environment 6 take to you? （3）increasing the employment opputinity （4）good to health （1）without bad affection 256 234 598 741 159 （ 2 ） affected the transportation by the What disadvantage will the construction 7 project bring to you? （3）economy lost by housing demolition （4）decreasing income for land acquisition （5）other bad affection Do you know the compensation （1）yes 1256 478 254 8 policies of land requisition and （2）a little resettlement for the Project? （3）no If your legal right is interfered, （1）yes 1436 552 9 do you know you can lodge an （2）no appeal? Note: There are 1988 persons (including workers and peasants) surveyed by the team. They surport the project and think it is good for the construction of the project

105 Table 31 Resettlers’ Opinions Survey in 2005 Results No Investigation Content Answer (1) (2) (3) (4) (5) Do you know this Project will （1）yes（2）a little （3）no 1 1430 100 50 be constructed? Are you in favorable to have （1）yes （2） no（3）so, so 2 1420 30 100 the Project construction? Who will be interested by the a) state (1) yes (2) no 1055 Project construction? (available 3 b) collective (1) yes (2) no 125 for multiple choice) c) individual(1) yes (2) no 400 （1）economy lost （2）living environment What will the environment 4 （3）people’s heath 520 650 250 80 80 damage to you? （4）investment （5）image of the city to the foreign world （1）no How the environment （2）no serious 5 438 222 885 35 affected you? （3）serious （4）very serious （1）improving living environment What goodness will the project （2）improving work environment 6 1150 250 100 80 take to you? （3）increasing the employment opportunity （4）good to health （1）without bad affection （ 2 ） affected the transportation by the What disadvantage will the construction 7 550 860 56 44 70 project bring to you? （3）economy lost by housing demolition （4）decreasing income for land acquisition （5）other bad affection Do you know the compensation （1）yes 8 policies of land requisition and （2）a little 1420 100 60 resettlement for the Project? （3）no If your legal right is interfered, （1）yes 9 do you know you can lodge an （2）no 1480 100 appeal?

9.5. Participation During Implementation of RAP All resettlers will be encouraged to participate in the whole process of implementation of the RAP.

A. Participation in House Reconstruction a. Housing compensation criteria The compensation criteria for housing will directly affect the interests of the resettlers. Before the houses relocated, the relevant resettlement authority will consult and sign an agreement with the resettlers on the compensation criteria for the houses. The consulting results will be declared publicly before the agreement signed, so as to put the resettlement under public supervision.

106 b. Resettlement house sites and house reconstruction During the preparation and compiling of this RAP, the relevant unit has carried out a survey on the house relocation site and construction mode. According to the survey, most of the PAPs are willing to have the resettlement host site current village and house rebuilt by themselves. The local governments at all levels will give a hand at different stage for house relocation. c. Disposal of Old House; All the old houses to be relocated will be compensated at replacement cost. Within a specified time period, resettlers can, on their will, demolish their old houses first and then rebuild the new houses or vice-versa. The salvageable material from the old houses can be used by resettlers themselves without deduction from compensation. B. Participation in Productive Rehabilitation The land re-adjustment and redistribution will be include the participation of all the affected individuals. C. Participation in Using Land Compensation The land compensation belongs to the village collectives, and the usage will be supervised by District Government or level above the district. No unit or individual is allowed to take the compensation for other purposes or misuse the money. D. Participation in Project Construction The project construction will cause certain impact on the local community. In order to ensure the PAPs to get benefit from the project construction. the local people will be encouraged to take part in the construction, and preference will be given to using local labor and local suppliers of equipment and materials wherever feasible.

9.6Grievances and Redress

During the actual implementation of the land acquisition and the resettlement of displaced population, if the affected population have any problems, grievances and discontent regarding land acquisition, housing demolition, compensation payment and resettlement, they may appeal to either (1) the project owner, (2) the external independent monitoring institution, (3) the township and the districts land administration department, (4) the districts government or (5) take legal action.

1) Appealing to the Project Owner Unit

107 The project owner is the eventual user of the land acquired, and has the duty to resolve problems arising from land acquisition, housing demolition and resettlement. The project owner of this project is Panzhihua Urban Construction and Investment Company functioning in its capacity during the project engineering and the Panzhihua Urban Construction and Investment Company executing the managerial duty after the project engineering is completed. Therefore, appeals to the project owner go to :Panzhihua urban construction and Investment Company 2) Appealing to the External Monitoring Institution The external monitoring institution conducts follow-up investigation on the productive status and activities of affected villages several times in the year during the monitoring period, evaluates the resettlement consequences and submits its M&E reports to the project owner, the local institutions conducting land acquisition and housing demolition and the WB. The affected persons, therefore, may express their discontent and grievances to the external monitoring institution, which is obligated to listen to and fully explore and report the discontent and grievances.

3) Appealing to the Township and the Districts Land Administration Department According to the administrative procedure of the local government, the discontent and grievances rising from acquisition and resettlement should first be handled by the land administration department. This should be facilitated by township leaders in the service of assisting vulnerable groups and dealing with AP’s grievances. In case the land administration department is unable to resolve the grievances, the appealer may turn to other avenues. These include the following land administration departments:  the municipal land administration bureau;  the districts land administration bureau; and  the township land administration bureau.

4) Appealing to the City/ Districts Government If the discontent can not be resolved by the land administration department, it can be appealed to the “correspondence and visitation department” of the local governments, set up by various levels of government organs to handle letters and visits from the masses. The appealer may express his discontent orally or in writing to the correspondence and visitation departments, which may coordinate departments concerned to have the matter resolved. If again the discontent cannot be resolved in this way, the correspondence and visitation departments will report the matter to the leaders of the local government.

108 5) Legal Action

If discontent and grievances can not be resolved through the above 4 conduits, the appealer may resort to legal action by asking legal support and bringing the case to the civil court or administrative court.

109 10. Monitoring, Evaluation and Reporting System

In order to ensure that the implementation of the land acquisition and resettlement plan is in accordance with requirements, monitoring of implementation, both “internal” and “external”, will be carried out during and after the implementation of the Project.

The “internal” and “external” elements will be combined to provide an assessment of both the process of RAP implementation (eg. disbursement of funds, settlement of grievances, progress on house relocation and land redistribution and the extent to which the primary objective of the RAP, i.e. the maintenance or enhancement of the current social and economic conditions of all APs, are achieved in the years following the acquisition of their land or property).

10.1 Internal Monitoring The overall objective of internal monitoring or supervision is to ensure that resettlement implementation is in accordance with the approved RAP. Specific objectives are to: (i) check the achievement of milestones in the acquisition and resettlement process, including preparatory phases, against the planned time schedule and budget; (ii) ensure that the channels of communication and consultation between the administrators and affected persons have been established and operated; (iii) ensure that compensation payments due to affected persons are paid in full and in a timely manner; (iv) verify that the processing of grievances has taken place within the set time limits; and (v) closely watch the adherence to lawful, approved allocation of acquisition and resettlement money so as to ensure the absence of corruption.

Internal monitoring/supervision will be the overall responsibility of the resettlement implementation agency. It will be undertaken by the Resettlement Officers at village, township, districts, and prefecture level.

Because prompt action reduces escalation of problems, and in the longer run saves money, the emphasis will be on promptly resolving issues at local level with interventions by higher level officers only when absolutely necessary. Village and township level reports will be prepared on a monthly basis so that prompt action can be taken, if necessary, by higher-level officials without adversely affecting the resettlement execution. Districts Resettlement Officers will provide quarterly reports to the internal monitoring section of the Resettlement

110 Division under SPUEP office, who, in turn, will report to their leadership. Copies of these reports will be submitted to WB. These reports should include: name of reporting agency, date of reporting, details on the implementation of the resettlement programs scheduled for that year, reasons for any delays, problems encountered, corrective actions and their results, and problems that need to be resolved at a higher level.

In addition to the above arrangements, the traditional financial watchdog - the Audit Bureau - will at each level of Government be monitoring and auditing the fund use in the compensation program.

10.2 External Monitoring and Evaluation The objectives of the external monitoring and evaluation are to: (i) evaluate whether resettlement has met the objectives of the RP; (ii) if not, identify why not; (iii) assess the overall efficiency, effectiveness, impact (including behavioural responses) and sustainability of the policy and practice of land acquisition and resettlement on this project; (iv) deduce lessons for future project projects in Panzhihua city.

10.2.1 Methodology and Content The general methodology will involve a mix of one-on-one questionnaires administered to households, and participatory rapid appraisal techniques (PRA) repeated on a six-monthly or yearly basis during the resettlement and construction activities associated with the project. The household surveys will concentrate on the changes in economic activity, incomes and other social conditions of individual households. Key indicators will include: household composition, ethnicity, education and skill levels, experience in positions of influence, pre- acquisition rights over land, size and condition of house, accumulated assets, annual income, relative mix of productive activities, marketing channels, access to utilities and services (including social services and irrigation systems), and nature and frequency of major social and cultural activities. This survey will provide a series of socio-economic indicators which can subsequently be monitored in order to evaluate the success of the resettlement and income restoration process.

In addition, the baseline survey, undertaken as soon as possible after the DMS will ask questions on:  household plans to do when confronted with the impending loss of land and/or housing,

111  the extent and effectiveness of the dissemination of information on compensation standards and options, acquisition processes and restitution measures.

The baseline survey will also ask an open-ended question about the farmers' anticipations and apprehensions regarding the impending land acquisition and resettlement process. The baseline survey should give the complete socioeconomic profile of the sampled APs with gender-disaggregated data and details of losses.

The PRA surveys will be conducted at the village level and will include similar indicators to those described above but focussing on the village as a whole. The objective is to provide a wider assessment of the effectiveness of the resettlement process than is possible from the surveys of individual households. These surveys will involve focus group discussions and key informant interviews. Experience shows that these surveys can provide a greater understanding of changes in socio-economic conditions than can be obtained from household interviews. In contrast, the household interviews are more suitable for providing a set of quantifiable indicators which can be compared over time.

Subsequent surveys will use the same format but with greater emphasis given to the changes that have occurred since the baseline survey was undertaken, the actual timing of compensation related activities (signature of contracts, disbursement of funds, identification of new housing sites, construction of new buildings, effectiveness of grievance procedures, and on general levels of satisfaction/ dissatisfaction with the resettlement process. Both household and PRA surveys will be designed to distinguish between changes that are attributable to involuntary resettlement and loss of land and those that result from external factors, e.g. a slump in vegetable prices, the opening of a new factory, etc. The surveys will be completed by interviews with owners or directors of the non-residential establishments affected, eg. schools, enterprises.

10.2.2 Sampling As required by the WB, the baseline survey for launching monitoring and evaluation (M&E) activities should cover 10 percent of the APs. The baseline survey should give the socioeconomic profile of the sampled APs with gender-disaggregated data and details of losses. By the time the ROW is marked and the DMS commences the exact identity of the APs and the extent of their individual losses and the losses of the land owning groups will be

112 known. At this stage, it is anticipated that around 212 households will be affected giving a total sample size of around 20.

A two-stage stratified random sample should be used. The first stage sampling will be one third of the affected village groups. The initial selection of village groups should involve those receiving the heaviest loss in land and properties. This selection can be modified if it is considered that it omits any village groups with particular characteristics that are significantly different from those originally selected: e.g. higher proportions of ethnic minorities, poor people, different cropping patterns or non-agricultural activity.

Around 10 households should be sampled in each selected village. The sample will be chosen randomly from the schedule of affected households obtained during the DMS with consideration of stratification in income. In order to improve comparability, households selected for the baseline survey will be interviewed in all subsequent surveys.

10.2.3Survey Timing The schedule has been designed to provide, as required, six investigations throughout the implementation of the project (one baseline survey, two yearly evaluation surveys, two semi- annual monitoring surveys and a post-construction evaluation survey). The household surveys would be repeated every year starting with the baseline survey implemented as soon as possible after the DMS. The PRA-type surveys would be repeated every 6 months within two year after the start of the land acquisition and resettlement. All selected villages would be visited at this time and annually when the household surveys are being carried out. The baseline survey will establish the pre-resettlement socio-economic conditions of APs and the affected villages against which subsequent changes can be evaluated.

The monitoring survey during the land acquisition and resettlement implementation will concentrate on the extent to which the procedures laid down in the RP have been followed, the effectiveness of these processes and the level of satisfaction/ dissatisfaction of APs with these processes.

Subsequent, yearly evaluation surveys will provide a quantification of the changes in the social and economic conditions of APs together with a more qualitative assessment of these changes and the reasons for them.

113 Subsequent monitoring survey will provide interim assessments of the changes taking place in the villages most affected by loss of land and/or property. Village level indicators will be collected but the emphasis will be on qualitative information.

The final post project construction survey should take place approximately one year after the construction is completed. Its main objective is to assess whether the objectives of the RP were achieved, i.e. whether the restoration of income and welfare has been efficiently and adequately restored, and whether the land acquisition and resettlement process has been effective. This survey will also probe sample households and key informants on how the whole process might be better done next time.

10.2.4 Independent Monitoring Organization An institute or organisation totally independent of the both parties of EA, and independent of the local governments of the project, to be contracted as the lead agency to carry out the external monitoring and evaluation work under this RP. The SUEP and SPUEP offices had taken Research institute of foreign capital introduction& utilization of Jiaotong University (SWJU) in Chengdu to do this work.

10.3 Reporting and Distribution

The results of the M&E survey shall be reported to the SUEP and SPUEP offices and the WB twice in the first year and once in the following years. Copies sent to the WB should be in English.

The baseline survey should be reported in full. Subsequent reports should provide summaries of principal findings, tabulations of key indicators, qualitative and quantitative descriptions of main changes in socioeconomic changes of APs and affected villages and conclusions and implications, if any, for additional action/ assistance.

The report on the post-construction survey will constitute a final assessment report on the resettlement process and detail the extent to which the compensation paid and other measures have enabled APs to maintain or enhance their pre-project social and economic living conditions.

114 11. Reporting

11.1 Resettlement Action Plan (RAP) Report In September. 2005, the report of RAP was submitted to the WB for pre-review through Project Implementation Office.

11.2 Internal Monitoring Progress Report A. Periodicity After starting of the resettlement implementation, resettlement progress tables will be submitted at least once every three months from the lower resettlement offices to the higher resettlement offices; the intrnal monitoring report will be submitted to the WB twice in the first year, i.e. 15 days after Jun. 30 and Dec. 31, then once a year, i.e. Jan. 15 starting from the next year. B. Format and Contents The format of the resettlement progress report by the PRO will be prepared to meet the requirements of the WB. The format of the report usually comprises of two parts: a) the context describing in detail the resettlement progress and payment and use of compensation, the progress, problems and difficulties met in the implementation, and the corresponding resolution and measures; and b) forms and lists mainly showing statistical data of previous six (6) months, which reflect the progress by comparison of the actual and planned land requisition, house removal, reconstruction and use of compensation. Some formats are provided in Tables 32 and 33.

Table 32 Progress Report of Land Requisition and Resettlement Department:______Deadline for Reporting Contents: Date Month Year Fill-up Date: Date Month Year Items Unit Planned amount Completed Accum. total Proportion Fund allocation Private houses rebuilding PAPs moved to new housing Old houses demolition Reconstructed public buildings Electric line reconstruction Communication lines recovering Land requisition Land readjustment Reporter: Signature (Person-in-charge)： Official seal：

Table 33 Implementation Progress of Resettlement Fund Usage Districts (City) Township______Data up to: Date Month Year

115 Fill-up Date : Date Month Year Affected unit Description Unit/Quantity Investment required (￥) Compensation /Subsidy received (￥) village

Reporter: Signature(person-in-charge): Official seal： Notes: “Description” will be filled with such as construction of irrigation facilities (canal (m), pump station (no.)), domestic animals farming (such as pigs, chickens, ducks ), land improvement (dry land to paddy field (mu)), establishing of enterprises and labor force employment, etc.). 11.3 Independent M&E Report A. Periodicity In accordance with the WB’s requirement, after commencement of the resettlement, the monitoring and evaluation investigations will be carried out twice a year during the first year of implementation and once a year afterwards, although updating socioeconomic surveys would be done annually. Parts of work for land requisition, housing demolition and resettlement of this project will be completed before 2007, so the work for independent monitoring and evaluation will be conducted for 6 times in three years, the M&E outline will be submitted. Selection of the samples and collection of base-line data for the samples will also be completed by the end of 2005, and the information systems for the M&E will be established at the same time. B. Contents (1) Resettlement base-line survey (2) Land requisition, housing relocation and resettlement schedule (3) Production restoration and rehabilitation (4) Housing demolition, relocation and reconstruction (5) Resettlers’ living standards (6) Availability and utilization of the resettlement funds (7) Evaluation of operation and efficiency of the resettlement implementation institutions (8) Support to vulnerable group (9) Problems and recommendations (10) Follow-up on previous problems and mitigation actions.

116 12．Entitlement matrix The obligation and responsibilities of the project owner, as well as the entitlement of the project affected people are showed in Table 34，Table35.

Table 34 Resettlement Policy and Project Owner's Responsibility

Responsible The land acquisition and resettlement policy and project owner's responsibility people 1. Try to create conditions as far as possible to improve or resume at least the living level Department of affected population and carry out reasonable compensation for the material loss suffered of the project. The property loss shall be compensated with replacement price, and should no underestimate, or deduct and make a discount because of any other reasons. Assist the Autonomous production for those do not get economic benefits because of influence to land and other Region property, and give reasonable compensation of property losses. 2.Carry out social economic survey in the affected area of project: For: the location, type, area of land acquisition; the location, type, area and unit price of buildings relocated; the location, type, quantity of land attachments; the location, type, quantity, settling measures and ownership of power and communication facilities; the population (including relationship with head of household, sex, age, nation, occupation, educational level and technical skill, etc.), property, house, income and outcome condition of family; the basic and detail condition of enterprises; the public opinions and suggestions along the line; the basic condition of villages affected; the statistical information of all counties and cities along the line and local relevant policy and regulations for land acquisition and resettlement. 3.The compilation of resettlement acting plan and enforcement hereinafter shall strictly follow relevant rules of business guideline OP4.12 of the World Bank. The realization of RAP will also strictly follow the compensation standard in the plan and if there is any changes it will be agreed by the bank in advance. 4.The resettlement compensation fees will be directly paid to the resettlement office at districts level, and this office shall open accounts in the local construction bank for each village and each resettler for land and property compensation, thus the compensation fees of land and property of resettlers will be protected from Panzhihua city occupied and peculated. Project offices 5. The compensation of land and property will be publicized by meeting and announcement as "three opens" i.e. open of land acquisition quantity. open of compensation standard and open of compensation amount. Offer information handbook to each village affected and resettlers. Main content of information handbook is; Project brief introduction. relocation policy and compensation standard, number of influenced objectives, compensation standard and compensation amount, right and interests of affected person, project owner's obligations, address and appeal telephone of resettlement office at different levels. The RAP will be translated into the acceptable language for local people and piled in the library of the autonomous region and districts or resettlement office for reading. 6. Vulnerable family will get a certain difficult subsidy capital and the village team will give some help for labor force needed for house relocation, and its cost will be borne by the Communication Department of the projector. The vulnerable Communica- family that gets indirect influence does not attend to the land readjustment after the land acquisition to avoid its normal production and production to get project influence. 7. Invite the external Institute to do the independent monitoring of resettlement, trail and monitor the enforcement condition, help the World Bank. owner and resettlement department to fully find out the progress of resettlement activity, quality and result of fund use, and monitor the implementation condition of resettlement policy, the operation of resettlement organization, arrangement of labor force, house rebuilding and living condition, recovery of income and production level, complain and appeal, public participation, negotiation and information publication, etc. Submit two external resettlement monitoring reports every year to the World Bank.

117 Table 35 Rights and Interests of Affected People

Affected Rights and The land acquisition and resettlement policy and standard types interests 1. The project needs to relocate building of 72840.75 square meters, in which: Brick and concrete house 43503 square meters, brick and wooden house 13047.22 square meters, earth and wooden house 13026.46 square meters. Other house 3263.98 square meters. The steel house is 102420 square meters. There are 3459 households and 35 enterprises affected. 2. All houses will be compensated with replacement price without depreciation. The old house material belongs to the resettler. The price is:. Brick-concrete 320 Yuan/m2, brick-wooden 180 Yuan/ m2, earth-wooden 70 Yuan/ m2;brick fence 10Yuan/ m2, earth fence 8 Yuan/ m2 , methane- generating pit 30 yuan/m3, concrete ground 10yuan/ m2 , brick dung pit 8yuan/ m3, earth dung pit 5 yuan/ m3 Houses 3.The resettlers will receive house construction notice 3 months before the construction and have Affected and at least 3 months for construction time. The construction time shall be consulted fully with households Attachment village and resettlers and select possibly in the idle season. 1he resenlers will get 200Yuan/person of transportation fee (including materials truckage. materials loss cost, delay work subsidy, etc.). 4.A compensation handbook will be distributed to each household, the resettlement office at districts level will open accounts in the local construction bank for household for land and property compensation, and the compensation fee will be paid one month before the house construction. If the payment is in installment way, the final fund shall be paid before finishing the house construction. Therefore, the compensation fees of land and property of resettlers will be protected from occupied and peculated.

1.the compensation for paddy field is 19800 yuan/mu, 18000yuan/mu for irrigated land, 12800 yuan/mu for dry land, 25000 yuan/mu for fruit land and 4000 yuan/mu for wood land after negotiation with the relevant department. 2.The compensation cost of young crops is computed with crop type and seasons, the trees of forest land have been compensated according to land attachment, and wasteland and desolate Land sands is 300 yuan/mu. Acquisition 3.The compensation of temporary land is computed by use time and one year is as a calculation And Affected unit. If the use year is over 1 year and less than 2 years, it is counted as 2 years, and the rest may Temporary Households be deducted by analogy. The rent cost of temporary land will be paid by construction unit to the Land local authority, and the local authority will pay it to the affected person. The use of temporary using land may destroy land topsoil, original irrigation facility and production condition, etc. and affect agricultural and animal husbandry output after returning, therefore, the topsoil and original production supplemental facility must be recovered before returning the land. Try the best to adopt measures actively to occupy wasteland most and use less farmland and grassland for temporary land requisition. The owner of all scattered trees will get the compensation cost equivalent to trees actual value or Scare trees owner cost for trees transplanting, All special facilities affected by the project shall be rebuilt. The project office will facilities Special property compensate it with the sum discussed with responsible department and pay it to right property facilities the person with property right before the land acquisition and relocation of special facilities.

118 Annex

Abbreviated Resettlement Plan for the

Linked Wastewater Treatment Plant

The Qingxiangping Wastewater Treatment Plan (WWTP) is the linked project of Qingxiangping pipe-line project that is the sub-project of the Panzhihua urban environment project financed by the World Bank. Following is the Abbreviated Resettlement Plan (ARP) for the linked project: 1. General situation and census servey The Qingxiangping WWTP will be built at No 4 Dashuijing Village Group, Pingjiang Town, West District of Panzhihua City. It will be located at the west side of the Dukou branch line of Chengkun railway line (the 150-300m from the Xinzhuang tunnel to Hemenkou direction) and the north bank of the Jinshajiang River. It is about 500m from the project to the Hemenkou Water Plant. It is about 25mu. The total project investment is Y42 million.

The land will be acquired is collective-owned land. It is 10mu of dry land and 15mu of waste and slope land. There is no housing demolition involved. The land acquisition affects the No 4 Dashuijing Village Group. There are 156 people in 40 households at the group. There is 125 mu of cultivated land and the per capital land is 0.8 mu. The land acquisition for the WWTP will affect 13 people. 2. Compensation policy and standards The compensation of the land acquisition is based on the “Details on Land Compensation and Rehabilitation Arrangement in Pazhihua City” and document issued by Panzhihua City Land Resources Bureau in document (PGTF(2002)No100)”. The compensation standard is 12,800 yuan/mu for dry land and 300 yuan/mu for waste land. 3. Rehabilitation plan after consultation

Land will be redistributed within the group one month after land acquisition. The total land compensation fund 12800*10=128,000yuan. Part of the fund (50,000yuan) will be used for the interests of the collective and the remaining fund of 78,000 yuan will be distributed among all the villagers of the group with Y500 each. The collective-owned fund will be used for improvement of irrigation facilities of the 20 mu of dry land. The land compensation for waste land is 4500 yuan which is calculated on Y300/mu x 15mu. This money will be deposited for public interests in the future.

119 4. Institution

The projector owner of the Qingxiangping WWTP is Panzhihua Urban Construction and Investment Company. Staff from Dashuiji Village, Pingjiang Town and Xiping District will take part in the resettlement implementation.

5. Time table

The construction of the Qingxiangping WWTP will be started in June 2006 and finished at the end of 2008 according to the confirmation of Pazhihua Government in its document of No 41[2005]PFH to the World Bank on June 24th ,2005. The resettlement will be finished in May 2006.

6. Resettlement cost

The resettlement cost is limited because there is no housing demolition and the land acquisition area is small. The total resettlement cost is 200,000yuan, out of which land acquisition is 13250yuan and other fees are 67,500 yuan (including management fee and contingencies, etc.).

7. Conclusion

The compensation policy and standards, the rehabilitation plan, and organization of the Qingxiangping WWTP are consistent with the RAP prepared for the Panzhihua urban environment project financed by the World Bank. It will follow the policy of the World Bank during the period of project construction. No resettlement issues will be remained.