E969

GOVERNMENT OF KYRGYZ REPUBLIC

Agribusiness and Marketing Project Preparation Unit

AGRIBUSINESS AND MARKETING PROJECT

Environmental Impact Assessment

April 2004

John Ambrose Trevelyn Consulting Inc. Mallorytown, Ontario CANADA Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

page Contents i

SUMMARY vi

1. INTRODUCTION AND BACKGROUND 1

1.1 Purpose 1.2 Agribusiness and Marketing Project 1.2.1 Development Objective 1.2.2 Key Indicators 1.2.3 Project Components 1.3 World Bank Environmental Assessment Requirements

2. LEGAL AND ADMINISTRATIVE FRAMEWORK 4

2.1 Background and Framework 2.2 Environmental Law 2.3 International Cooperation 2.4 Presidential Decrees 2.5 Environmental Policy Objectives 2.6 Environmental Management Responsibilities 2.7 Enforcement Responsibilities 2.8 Environmental Impact Assessment Procedure 2.9 Public Involvement 2.10 Monitoring and Environmental Performance 2.11 Capacity for Environmental Management 2.11.1 Government of Kyrygz Republic 2.11.2 Participating Financial Institutions 2.11.3 Consulting Community 2.11.4 Agribusiness

3. METHODOLOGY 12

3.1 Legal Instrumentation and Management Capacity 3.2 Public Involvement 3.3 Determination of Potential Impacts 3.4 Baseline Data 3.5 Scoping and Bounding 3.6 Criteria for Impact Assessment 3.7 Cumulative Effects

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4. THE ENVIRONMENT 17

4.1 The Biophysical Resource 4.1.1 General 4.1.2 Biodiversity and Forests 4.1.3 Water Resources 4.2 The Environment and Agriculture 4.3 Social Environment 4.4 Important Environmental Issues

5. ASSESSMENT 22

5.1 General 5.2 World Bank Safeguard Policies 5.3 Potential Category A and Category B Sub-projects 5.4 Important Environmental Components 5.5 Project Benefits 5.6 Potential Impacts 5.6.1 General 5.6.2 Agro-processing 5.6.3 Livestock Production 5.6.4 Agricultural Production 5.7 Potential Cumulative Impacts 5.8 Mitigation 5.9 Potential Residual Impacts 5.10 Environmental Risk

6. ANALYSIS OF ALTERNATIVES 36

6.1 Project Design 6.2 ‘No Project’ Alternative

7. ENVIRONMENTAL MANAGEMENT GUIDELINES 38

7.1 General 7.2 Category A and Category B Sub-projects 7.3 Management 7.4 Monitoring 7.5 Environmental Capacity Development 7.5.1 General 7.5.2 ABMPIU and Consultative Council 7.5.3 PFI Loan Officers 7.5.4 Agribusiness Entrepreneurs

8. REFERENCES 47

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`ANNEXES

Annex A: Brief Description of Some of the Relevant Environmental Laws

Annex B: Impacts, Causes, Consequences and Mitigation – Agribusiness (Agro-processing and other)

Annex C: Impacts, Causes, Consequences and Mitigation - Agriculture

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List of Tables

Table 3.2: Agro-processing Industries Table 3.3: Probable Use of Farm Credit Table 3.4: Level of Significance of Potential Impact Table 5.1: Relevant World Bank Safeguard Policies and Risk of Application Table 5.2: World Bank Categories for Environmental Assessment Purposes Table 5.3: Important Environmental Components Table 5.4: Benefits – Farm Inputs Table 5.5: Potential Impacts of Agro-processing Activities Table 5.6: Summary of Potential Major Environmental Impacts – Farm Inputs Table 5.7: Summary of Probable Residual Effects – Agro-processing and Other Table 5.8: Summary of Probable Residual Effects – Agriculture Table 6.1: Some Agricultural Good Practices – Towards a Protected Environment and Sustainable Agriculture Table 6.2: Summary of Environmental Capacity Building Requirements

List of Figures

Figure 2.1: Management Structure of the Ministry of Ecology and Emergency Situations Figure 5.1: Schematic Indicating the Relative Residual Impacts of Different Activities

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Acronyms

ABMP Agribusiness and Marketing Project ABMPIU Agribusiness and Marketing Project Implementation Unit ABMPPU Agribusiness and Marketing Project Planning Unit CC Consultative Council CIS Commonwealth Independent States EA Environmental assessment ECA Europe and Central Asia (a World Bank geographical program area) EE Ecological expertise EIA Environmental impact assessment FI Financial intermediary HYV High yielding variety IEC Important environmental component IPM Integrated pest management KR Kyrgyz Republic MAWRPI Ministry of Agriculture, Water Resources and Processing Industry MEES Ministry of Ecological and Emergency Situations MNS Ministry of National Security MoF Ministry of Finance NEAP National Environmental Action Plan NGO Non- government organization PFI Participating financial intermediary

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SUMMARY

 Environmental impact assessment - purpose

The purpose of the environmental impact assessment (EIA) is to examine the effects that the Agribusiness and Marketing Project (ABMP) may have on the environment and to provide solutions for addressing any significant effects that could occur as a result of the Project.

The assessment consists of four main components: i) a review and summary of relevant legislation and the adequacy of the legislation and enforcement mechanisms to ensure environmental protection as it relates to the Project; ii) an analysis of probable impacts, mitigation and residual impacts of various activities that would qualify for Project loan financing; iii) an analysis of the capacity of the Government of Kyrgyz Republic (KR) and lending institutions, to recognize and address impacts of any activity for which a loan may be requested; and, iv) an environmental management outline of the Project.

 The Project

The ABMP development objectives will be to expand the level of activity of processing, marketing, and trade enterprises downstream of the farmgate, to increase the number and economic importance of producer organizations, and to build trade linkages between producers, and primary and secondary level trade organizations. The Project will work directly with private enterprises and commercial organizations to improve the competitiveness of Kyrgyz products. It is important that the Project be responsive to the needs of the private sector in achieving this goal. Best practice from around the world shows a need for an integrated effort along the supply chains in question if real results are to be achieved. If project interventions are not targeted in this manner, the chances of achieving the ultimate objective of increased sales will decline.

The ultimate objective of these efforts will be to increase the amount of value added to Kyrgyz agro-food commodities, to increase sales of those commodities both domestically and abroad, and to improve the operation of agricultural markets.

 Regulatory framework

The Law on Environmental Protection provides the general framework for comprehensive environmental protection and for the use of natural resources. The law covers a wide range of issues including environmental standard setting, the legal regime of specially protected areas, rules and procedures for natural resource use, and procedures for dealing with emergencies. The Law on Ecological Expertise (EE) provides the Ministry of Ecology and Emergency Situations (MEES) and the public with the guidelines and necessary authority to provide comment on environmental assessments and give permission for project development. As well, the Law on EE allows the MEES to issue an EE passport that states the allowable emissions and effluent discharges for a particular project.

The KR is signatory to most of the important international environmental conventions.

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 Enforcement responsibilities and capacity

Enforcement of KR environmental laws is the responsibility of the MEES. Through its head office branch and its representation in the oblasts the MEES has the responsibility to ensure that all new or rehabilitated projects undergo an environmental impact assessment (EIA) (for projects within the category for which EIAs are required) that must include effective public involvement. MEES has the responsibility for EIA review and approval. The MEES also has the important responsibility of monitoring activities for effluent discharges, air emissions and solid waste disposal. A number of other KR government ministries have responsibility for monitoring various aspects of the environment including groundwater, surface water, air quality and health and safety. Aspects of the environment are controled by various state agencies.

 World Bank safeguard policies

A number of project supported activities could have an effect on those areas of concern that are addressed in the Bank’s safeguard policies. Four of the ten World Bank safeguard policies are relevant to the Project but the risks of triggering any of these policies, with the exception of the environmental assessment policy, are relatively low.

 Environmental assessment

Environmental concerns rest with the Credit Component of the Project. In this component funding will be made available primarily to agribusinesses for start-up enterprises and for rehabilitation of existing facilities. Most funding is likely to focus on the agro-processing sector. However, funding could also be made available for other aspects of the supply chain including transportation, warehousing and markets. Agricultural production activities may also be eligible for funding.

Since it is unknown as to which activities will be funded it is necessary to look at a wide range of possibilities in order to conduct this EIA. For the agro-processing sector eight different activities were examined, as well warehousing and markets. These included:

Dairy processing Frozen foods processing Fruit and vegetable processing Abattoirs and meat processing Tanneries Flour mills Cotton ginning Oil processing (including maize) Warehousing Markets

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Twenty farm inputs listed below were examined.

. Seed . Grain drying equipment . Pedigree and HYV seed . Irrigation equipment . Fertilizer . Vehicles (for market and land access) . Pesticides . Farm buildings for stock, machinery, and . Pedigree livestock chemicals . Livestock for finishing . Storage facilities (fuel, grain and other produce) . Land rental . Fencing materials .Tractors . Primary processing equipment (e.g. milking . Farm implements (land preparation, sowing and equipment) harvesting implements) . Fuel, lubricants, spare parts and other operating . Land preparation (tractor hire) requirements . Small equipment . Veterinary services

The ABMP itself is environmentally benign. The overall effect of the sub-projects will be positive. The loans will result in improved agricultural production, improved marketing, and in general, improved socioeconomic conditions of the rural population. The Project will further contribute to the country’s food security, hopefully contribute to the generation of foreign exchange through increased agricultural exports, and most of all, the Project, through the sub- projects, will significantly contribute to the alleviation of rural poverty. However, the Project’s primary objective does not include a contribution to the enhancement of the environment. In the past ten years rates of chemical inputs in agriculture have been significantly reduced, resulting in cleaner watercourses, lower levels of soil contamination and relatively chemical free food. The Project could lead to an increase in the use of farm inputs but mitigation measures and training associated with the Project could minimize any potential environmental impacts. To some extent, it is presumed that some of the industries under the former socialist regime which created significant environmental problems may be refurbished to operate more efficiently and without the major environmental contamination of the past. In theory, current environmental regulations should prevent a return to serious environmental issues.

 Agro-processing impacts

Agro-processing industries generally produce wastes (some more than others) that are disposed of in the form of effluent discharges, air emissions or solid wastes. Effluents flow into surface watercourses and seep into groundwater; emission gases are released into the atmosphere; and solid wastes are disposed of in municipal and unorganized dumps. These wastes include a wide range of gaseous, solid and liquid compounds ranging from water vapor to highly toxic materials and they pose a threat to groundwater supplies, air quality, aquatic ecosystems, and ultimately to human health.

When considering expansion of existing processing plants or the establishment of new ones, loss of biodiversity and impacts on biophysical resources including forest cover losses and soil erosion could be experienced. All of these issues come under different KR regulations and it will be important that these regulations are observed if impacts are to be minimized or avoided.

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 Agricultural production impacts

Increasing pesticide applications can lead to pesticide residue (including heavy metals) build-up in the soil. Pesticides and fertilizers can migrate to both surface waters and groundwater resulting in contamination of these two sources and leading to damaged aquatic ecosystems and threatened health to downstream users. Pedigree seed and HYVs will demand further applications of chemical inputs, thus exacerbating the problem. In the case of the former, public health is at risk, in the case of the latter, aquatic ecosystems and, possibly public health, are both at risk.

Irrigation rehabilitation and new irrigation schemes can lead to salinization and waterlogging – desertification - if drainage is not managed effectively. Tractors and land preparation can promote erosion, particularly if tractors are too heavy and cause soil compaction, and if fields are ploughed (with or without the contour) and left a longtime before the sowing period. Land purchases, where the land is already under agricultural use, do not lead to increased environmental problems. However, where land is under another cover any use such as wetland, or forest cover on steep slopes, there is the potential loss of biodiversity, habitat and species. As well, erosion risks may be increased, particularly on steep sites.

The principal environmental risks associated with intensification of agriculture concern the safe handling and application of pesticides and the appropriate application of fertilizers to avoid excessive runoff and contamination of soils and of surface and ground waters. The Plant Protection Service (MAWPRI) guidelines should be followed regarding the selection, use, storage and application of pesticides. Appropriate training of agricultural workers and monitoring of pesticide residues and runoff should be incorporated in sub-project design and independently monitored during project implementation. With sub-projects involving fertilizer or pesticide applications, monitoring of groundwater and downstream water quality (as appropriate) should be included in project implementation.

If lending is provided for large number of livestock purchases for a single enterprise, it will be important to consider grazing capacities to avoid soil erosion, loss of biodiversity, and waste management.

 Cumulative impacts

The environmental concerns with industries focus on air emissions and effluent discharge. Although each activity may create emissions well within the established national standards, cumulatively, all of the industries in one region (e.g. in a small closed valley with poor air circulation) could significantly contribute to the deterioration of overall air quality, resulting in an impact on human health. Similarly, the impact on water quality of a common river used by several processing plants could be significant.

Pesticide and chemical fertilizer use in agricultural production can have a serious cumulative effect. Many farmers in one small watershed could cumulatively have a significant effect on

ix Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004 surface water bodies, resulting in damaged aquatic ecosytems and affecting water quality for downstream users, sometimes in adjacent countries.

The cumulative effect must also take into account other activities outside of the Project. Although this has not been done in this EIA, other activities should be accounted for when EIAs are conducted for individually financed sub-projects under the ABMP.

 Residual impacts

Assuming that all mitigation is carried out, the residual effects will be minimal. Although ratings are subjective, and only relative to one another, this analysis indicates that only one activity (pesticide application) in the agriculture sector receives residual effects ratings above LOW- MOD. Integrated pest management (IPM) is recommended as a mitigative measure for the impacts from pesticides, it is unlikely that this measure will have widespread application. The same residual effect (LOW-MOD) rating is given for agro-processing enterprises using refrigeration.

 Environmental risk

Overall, the environmental risk is high because effective enforcement of the law is questionable. Risks for those activities that could lead to impacts which can be governed by specific pieces of legal instrumentation would be moderate. Risks for which there is no effective legal instrument would vary, depending upon the nature and level of impact, and the cost of mitigation. However, where full mitigation is either expensive or technically challenging, environmental risk would be rated high. That is, the actual impacts will be much closer to the identified potential impacts than to the residual impacts determined if all mitigation was carried out. Of particular concern would be for those activities resulting in water and air pollution.

 Environmental management

The environmental management plan addresses mitigation (in the form of a series of matrices for each potential activity and indicating for each the potential impacts, causes, consequences and mitigation required). Mitigation will be the responsibility of the sub-project proponent. The plan describes monitoring requirements and indicates the various responsibilities for this activity. Although MEES is officially responsible for environmental monitoring, for the ABMP additional monitoring responsibilities will fall to the Agribusiness and Marketing Project Implementation Unit (ABMPIU), the participating financial institutions (PFIs) and the World Bank.

Finally, the management plan outlines an environmental capacity building program that will focus on ensuring that various stakeholders become more environmentally aware. Some of these stakeholders who have ‘hands on’ responsibilities for Project implementation will be given further training in environmental management, particularly in areas of impact recognition, appreciation of relationships between various components of the environment, recognition of practical mitigative solutions, and monitoring techniques and reporting.

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 Environmental guidelines

An important accompanying document to the EIA is a set of easy to follow environmental guidelines to be used by those stakeholders (ABMPIU, PFIs, MEES, and borrowers) who will have responsibilities for environmental management. The guidelines cover World Bank requirements, EIA formatting, monitoring instructions and various checklists.

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1. INTRODUCTION AND BACKGROUND

1.1 Purpose

The purpose of the environmental impact assessment (EIA) is to examine the effects that the Agribusiness and Marketing Project (ABMP) may have on the environment and to provide solutions for the avoidance of any significant effects that could occur as a result of the Project.

The assessment consists of four main components: i) a review and summary of relevant legislation and the adequacy of the legislation and enforcement mechanisms to ensure environmental protection as it relates to the Project; ii) an analysis of probable impacts, mitigation and residual impacts of various activities that would qualify for Project loan financing; iii) an analysis of the capacity of the Government of Kyrgyz Republic (KR) and lending institutions, to recognize and address impacts of any activity for which a loan may be requested; and, iv) guidelines for environmental management of the Project.

1.2 Agribusiness and Marketing Project1

1.2.1 Development Objective

The direct project development objectives will be to expand the level of activity of processing, marketing, and trade enterprises downstream of the farmgate, to increase the number and economic importance of producer organizations, and to build trade linkages between producers, and primary and secondary level trade organizations. The Project will work directly with private enterprises and commercial organizations to improve the competitiveness of Kyrgyz products. It is important that the Project be responsive to the needs of the private sector in achieving this goal. Best practice from around the world shows that there needs to be an integrated effort along the supply chains in question if real results are to be achieved. If project interventions are not targeted in this manner, the chances of achieving the ultimate objective of increased sales will decline.

The ultimate objective of these efforts will be to increase the amount of value added to Kyrgyz agro-food commodities, to increase sales of those commodities both domestically and abroad, and to improve the operation of agricultural markets.

1.2.2 Key Indicators

Key outcome indicators for the Project will be:

 Increase in sales of enterprises and organizations supported by the Project  Increase in profits of enterprises and organizations supported by the Project  Increase in employment in enterprises and organizations supported by the Project  The repayment performance of loans extended (arrears, default, etc)

Key output indicators for the Project will be:

1 World Bank. 2004.

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 Number of commodity chains evaluated and supported  Number of people completing training programs  Number of enterprises with improved management capacity  The number and volume of loans to agricultural producers, agro-processors and agribusiness

1.2.3 Project Components

The Project will work with commodities for which viable import substitution or export development opportunities have been identified through direct interaction with enterprises and organizations involved in those supply chains. The approach of the Project will be to work with those business opportunities that are relatively closer to achieving higher sales of commodities, rather than to take on higher-risk areas where a greater number of issues would need to be addressed. Working directly with private sector organizations involved in commodity supply chains will ensure that interventions included in the Project are targeted to real business needs rather than to assumptions of what those business needs might be.

Given financing limitations, the Project will be able to deal with only a limited number of commodities. Improvement in the operation of supply chains for these commodities, however, will serve as models for extension further through the economy, and the business skills that are built within KR can serve as the basis for further economic development after the Project. The business orientation of the Project means that it is critical that decision making on resource allocation and specific Project interventions be reserved to professional and objective business organizations and not be subject to political influence.

 Component 1: Market Development

The Market Development Component is designed to address constraints to improved functioning of commodity supply chains through interventions in both the private and public sectors. The critical factors here will be capacity building and establishing a framework for effective interaction among economic agents. Sub-components will include: i) supply chain management, ii) identified public sector investments, iii) consultative council and public sector capacity building,

 Component 2: Access to Credit Component

The Access to Credit Component is designed to address key constraints associated with access to capital by enterprises in the agricultural and food sector of the economy. Except for some of the larger food processors, enterprises in this sector of the economy are not currently able to access credit from financial institutions.

There will be limited lending to agriculture and rural sectors and the reasons for this include: i) perceived high risks related to agricultural/rural lending; ii) lack of good business proposals and lack of business management capacity among potential borrowers; iii) short-term nature of the liquidity in the banking sector; iv) inefficient operations of the commercial banks, and; v) lack of collateral acceptable to banks. This component is comprised of four sub-components: i)

2 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004 investment facility; ii) revolving working capital fund; iii) technical assistance to the participating financial institutions, and: iv) component management.

Although the environmental impact assessment is applied to the entire Project, a focus will be placed upon the first two sub-components above since these are the most likely components that could result in activities leading to environmental impacts.

1.3 World Bank Environmental Assessment Requirements

The Bank undertakes environmental screening of each proposed project to determine the appropriate extent and type of EA. The Bank classifies the proposed project into one of four categories, depending on the type, location, sensitivity and scale of the project and the nature and magnitude of its potential environmental impacts. The four Categories are A, B, C, and FI. Category FI is applied to all proposed projects that involve investment of Bank funds through a financial intermediary (FI) to be used for sub-projects of which the environmental impacts can not be determined during appraisal of the World Bank project. Although the ABMP has a number of features of an FI category project, due to certain aspects of the Project it has been classified as a Category B and as such requires an EIA. Although there are a number of agribusiness activities (specifically agro-processing) that will be financed, like a typical FI category Project it is unknown as to which ones will be financed and to their location. The EIA will be strategic in nature, dealing with groups of agribusinesses (e.g. meat processing, fruit and vegetable processing, dairy processing, oilseed processing) although there will be a number of common features for each group. This does not negate the necessity of an EA for a sub-project for which an EA may normally be required. Not all lending will be for agro-processing activities for which it is clear that EIAs will be required. Accordingly, the participating financial intermediaries (PFI) will be required to ensure that borrowers conduct an appropriate EA, where warranted, for each sub-project. Before approving a sub-project, the PFI will verify that the sub- project meets the environmental requirements of the Bank even though national requirements may have been met.

In appraising a proposed sub-project, the Bank reviews the adequacy of country environmental requirements relevant to the sub-project and the proposed EA arrangements for sub-projects, including the mechanisms and responsibilities for environmental screening and review of EA results. When necessary, the Bank ensures that the project includes components to strengthen such EA arrangements. As part of the process of selecting the project’s PFIs, prospective PFIs will be required to provide to the Bank a written assessment of the institutional mechanisms (including, as necessary, identification of measures to strengthen capacity) for its sub-project EA work. If the Bank is not satisfied that adequate capacity exists for carrying out EA, all Category A sub-projects and, as appropriate, Category B -sub-projects - including EA reports – will be subject to prior review and approval by the Bank.

2. LEGAL AND ADMINISTRATIVE FRAMEWORK

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2.1 Background and Framework

The legislation of the KR has been entirely renewed since its independence in 1991. The Constitution was amended in 1996 and 1998 and it places the system of legal acts in the following hierarchy:

 Constitution  Laws, international treaties and presidential decrees  Government regulations  Ministerial orders and decrees  Regulations and regulatory decisions of local administrations

2.2 Environmental Law

The Law on Environmental Protection provides the general framework for comprehensive environmental protection and for the use of natural resources. The law “covers a wide range of issues including environmental standard setting, the legal regime of specially protected areas, rules and procedures for natural resource use, and procedures for dealing with emergencies. Natural resources can be used in accordance with established limits and environmental standards. Environmental standards include, inter alia, maximum allowable concentrations of pollutants in air, water, soil and sub-soil, maximum allowable effluent discharges, emissions and radiation, rules for the use of chemicals in agriculture, and the maximum allowable concentrations of chemical and biological substances in consumer goods. The Law forbids the use of toxic chemicals that do not decompose, and the import of radioactive wastes and materials for storage, disposal or transit.

The Law lists the principles of environmental protection that form the conceptual basis for the protection of the constitutional right of individuals to a favourable and healthy environment. These principles give priority to measures aimed at guaranteeing the environmental protection rights of individuals, at respecting the sustainable development principle and at a comprehensive approach to regulating environmental protection and economic activities, transparency of decision making and the involvement of non-governmental public organizations in environmental activities”2.

“Environmental legislation is complex and includes both a comprehensive environmental protection law (described above) and natural resource laws (listed below and briefly described in Annex A). This legislation meets the generally accepted standards of law making in this area. Most of the laws are of a framework type and depend for enforcement on the development of sometimes numerous government regulations.”3 Environmental laws should be continually updated to reflect new developments and the impacts that these can have on aspects of the environment.

2 UNCEO. 2000. 3 Ibid.

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From the perspective of securing environmental safety the following laws are considered to be the most important:

 Law On Protection of Population in case of Emergency Situations as of February 24, 2000;  Law On Radiological Safety of Population as of June 17, 1999;  Law On Drinking Water as of March 25, 1999;  Law On Sanitary and Epidemiological Well-being of Population as of April 17, 2000;  Law On Radioactive Waste Treatment as of February 12, 2001;  Law On Mining Waste Tailings and Heaps as of June 26, 2001;  Law On Interstate Use of Water Objects, Water Resources and Water Facilities as of July 23, 2001;  Law On Agricultural Land Management as of January 11, 2001;  Law On Unions (Associations) of Water Users as of March 15, 2002;  Law On Mineral Resources Sharing Agreements as of April 10, 2002;  Law on Mountainous Territories as of November 1, 2002;  Law on Biodiversity Preservation Strategy as of August 3, 2002;  Land Code of the KR as of June 2, 1999; and  Forestry Code of the KR as of July 8, 1999.

Environmental objectives and priorities for KR are outlined in The Concept of Ecological Security, the National Environmental Action Plan (1995-97) and the draft national programme for environmental protection and the rational use of natural resources for the period up to 2005. The country’s most urgent environmental problems define its priorities viz a viz international cooperation. These problems include:

 Disposal of nuclear tailings  Weak pollution control and monitoring  Desertification and land degradation  Water allocation with neighbouring countries

2.3 International Cooperation

KR has signed and ratified the following environmentally related global conventions:

 Convention on Biological Diversity  Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (Basel Convention)  Convention to Combat Desertification  Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade (Rotterdam Convention)  Vienna Convention on Ozone Layer Protection, and Montreal Protocol on Ozone Layer Depleting Substances (ratified by the Law of the KR # 16 as of January 15, 2000)

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 On KR accession to the UN European Economic Commission Convention On Environmental Impact Assessment in a Transboundary Context (ratified by the Law of the KR # 6 as of January 12, 2001)  Convention on Access to Information, Public Participation and Justice on Environmental Issues (ratified by the Law of the KR #5 as of January 15, 2001) Convention on Climate Change and UN EEC Convention on Long-range Transboundary Air Pollution  Convention on Protection of New Plant Species as of January 14, 2000  Convention of Wetlands of International Importance as Habitats for Waterfowl (Ramsar Convention) as of April 10, 2002  Law of KR On Ratification of London, Copenhagen, and Montreal Amendments to Montreal Protocol On Ozone Layer Depleting Substances  Convention on Climate Change (Kyoto Protocol) (currently under review by Parliament) Convention On World Cultural and Natural Heritage Protection  Convention on Persistent Organic Pollutants (Stockholm)

The Ministry of Ecology and Emergency Situations (MEES) is responsible for cooperation in the Inter-State Ecological Council of CIS (Commonwealth of Independent States). Through this Council the KR is involved, however, the following two have significance as they regulate land use:

Norm-setting documents issued by MEES and normative documents of other state institutions are listed in Annex A.

2.4 Environmental Policy Objectives

The overall objectives of environmental policy are determined in the Strategy for Sustainable Human Development. This strategy targets an economic growth that is accompanied by a minimum impact on the environment. The Ecological Safety Concept was decreed in 1996 and it states that sustainable development is a prerequisite for the ecological safety of the nation. It recognizes that the depletion and pollution of natural resources leads to economic recession in the long term and that this fall in turn leads to reduced economic activity resulting in poverty and further demand on the natural resource base.

The National Environmental Action Plan (NEAP) that was adopted in 1995 for the 1995-1997 period stated that environmental protection is viewed as both a tool and a condition for achieving broad development goals. The environmental objectives as stated in NEAP included:

 Reduce urban air pollution  Use water resources efficiently and economically, and improve waste-water treatment  Protect arable lands against degradation  Establish a system of sustainable use of plant resources, including forests  Update the Red Books  Expand the system of specially protected areas and biosphere reserves  Rehabilitate radioactive dumpsites and ensure their safe operation

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 Control the production, treatment, transport and disposal of toxic wastes  Register harmful substances  Improve the environmental monitoring system

2.5 Environmental Management Responsibilities

In 1996 the State Committee on Nature Protection was converted to the Ministry of Environmental Protection. The most recent restructuring was adopted in March 1999.

According to the Presidential Decree of December 28, 2000 the Ministry of Ecology and Emergency Situations (MEES) was established by merger of the former Ministry of Environmental Protection and Ministry of Emergency Situations and Civil Defense. Figure 2.1 below shows the current management structure of MEES.

MEES is a public governance body with statutory responsibilities in the areas of ecological management, prevention and elimination of emergency situations, civil defense, industrial safety and mountain control. The head Division of the Hydro-meteorological Agency in August 1998 became a part of the Ministry of Environmental Protection and later MEES, and is responsible for monitoring meteorological, hydrological, and agro-meteorological conditions, as well as monitoring the overall state of the environment.

This ministry is the key institution in charge of environmental policy and nature protection regulations. It coordinates the system of environmental management within all sectors of the economy, developing and enforcing all environmental standards and regulations. It also assists the government in designing and implementing policies and investment programs for environmental protection. The Ministry’s main operational responsibilities include environmental data collection, pollution control, the granting of permits for the use of natural resources, the management of protected areas, and environmental impact assessments.

The Ministry has approximately 150 employs and is represented at head office in Bishkek as well as in each of the oblasts. It is composed of nine main units, two of which are relative to the activities of ABMP, namely, the Department of Ecological Expertise and the Department of Environmental Monitoring.

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Figure 2.1 Management Structure (relevant to EIAs) of the Ministry of Ecology and Emergency Situations

Minister

National Environmental Fund

Deputy Minister for Ecology

Department for Department of Territorial Ecology and Ecological environmental Nature departments (7 oblast, Management 2 municipal, local environmetnal funds

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2.6 Enforcement Responsibilities

According to Decree # 295 of May 25, 2000 and Decree # 59 as of February 24, 2001 of the Government of the KR the following executive and specially authorized state bodies are responsible for enforcement of constitutional principles and legislative acts in the domains of ecology and environmental protection:

1) Ministry of Ecology and Emergency Situations (MEES) 2) State Forestry Department 3) Ministry of Health (MoH) 4) Ministry of Internal Affairs 5) Ministry of Agriculture, Water and Processing Industry (MAWRPI) 6) State Geology and Mineral Resources Agency under the Government of the KR 7) State Real Estate Registration Agency under the Government of the KR

In line with the decree, Bodies of Public Prosecution, the Ministry of National Security (MNS) of the KR, the Interior Ministry of the KR, and the State Customs Inspectorate under the Ministry of Finance (MoF) of the KR shall assist MEES bodies and other specially authorized bodies on environmental protection in implementing measures aimed at protection and rational use of natural resources, and provision of environmental safety.

The MAWRPI is responsible for water resources management and environmental policy issues concerning soil degradation, the application of agrochemicals and farming.

2.7 Environmental Impact Assessment and Procedure

EIA requirements were established by the 1997 Regulation of the Ministry of Environmental Protection (now MEES) on Procedures of EIA, and, the Law on Ecological Expertise.

A total of 23 types of activities and projects are subject to EIA. Included in this list are agricultural development projects and food processing plants.

The EIA aims to determine the impacts on the environment of the project and to decide on the feasibility of the project. EIAs for large national projects (e.g. mines) and the consequent EE are conducted by government from headquarters. At headquarters the Department of Ecological Expertise (EE) has a staff of four but this staff is supplemented from a roster of experts that can be recruited when an EE is required. No fewer than three experts would be involved in providing an EE. Representatives of the Ministry at the oblast level conduct EEs for smaller projects.

The large projects may also have independent EIAs conducted by NGOs and various experts.

The approval process is conducted in five stages:

. submission of the Declaration of Intent regarding the project to the MEES for approval . submission of the business plan and design plan to the MEES

9 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

. preparation of the EIA . assessment of the expected impacts . statement on impacts . submission of the EIA . decision to approve or not to approve activity (if the decision is negative, the proponent may wish to redesign, with impacts in mind, and resubmit a new proposal)

The EIA will include information on both short and long-term impacts of the activity on various aspects of the environment. These impacts will include those on the natural, social and economic components of the environment as well as in all stages of development and implementation of the activity. The EIA will also report on potential cumulative impacts. By law the public and NGOs are invited to take part in the EIA process.

Once the EIA has been reviewed, completed and approved the Ministry will issue an EE.

2.8 Public Involvement

The Law on Environmental Protection states that citizens have the right to obtain full and accurate information about the state of the environment and the health of the population. Written information can be attained, upon request, at a modest cost, and within six weeks of submitted request. Operators of activities and projects that result in pollution are obligated to inform the MEES and through its weekly radio program4, inform the general public on major environmental issues.

The Government is also obliged to publish a quarterly environmental bulletin. The only obligation of an industrial facility to the public is through the EIA.

2.9 Monitoring and Environmental Performance

The Law states that there be a system of environmental monitoring based on standardized methods and norms. The Department of Hydrometeorology within the MEES is responsible for a network of monitoring stations and gathers data on air, water and land quality. The Department also operates a climate monitoring system. The Department’s observation stations measure chemical pollution in cities, industrial centres and residential areas. Monitored pollutants include dust, sulphur dioxide, nitrogen dioxide and carbon dioxide. As well, other pollutants including phenol, ammonia, xylene, toluene, benzo(a)pyrene and heavy metals (Pb,Cd,Cu) can be monitored.

Industrial activities are not self-monitoring due to a lack of equipment and the legal requirement to conduct such monitoring.

The MEES is responsible for monitoring industrial emissions as well as emissions from mobile sources, but most oblasts lack self-monitoring equipment. During environmental inspection of pollution sources, emission sampling may take place, however, no standardized protocols for monitoring are adopted and inspections are irregular.

4 UNECO. 2000.

10 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

Water quality is regularly monitored by a number of agencies including MEES (water discharges), State Agency for Geology and Mineral Resources (groundwater), the Hydrometeorological Institute (surface waters) and the Sanitary Epidemiological Department (drinking water). MEES examines water for the presence of microbial and chemical contamination (pesticides, heavy metals, nitrates and PCBs).

2.11 Capacity for Environmental Management

2.11.1 Government of Kyrgyz Republic

Environmental assessments at the National level are conducted by licensed external groups. The quality of the EAs prepared meet National requirements and the licensed groups are well trained in various relevant disciplines. The Department of Ecological Expertise, which has the role of reviewing and passing judgement on EAs, has a core staff of four qualified individuals. When necessary the group is supplemented by experts from other relevant ministries and departments. The staff available and the experts from other departments are all well qualified. At the oblast level where EAs are conducted and inspections carried out on less significant projects staff are well qualified, particularly the more senior staff, however, younger staff would benefit from additional appropriate training. The main constraint to the MEES oblast staff is the lack of up-to- date laboratory equipment and supplies, computers and operating budget, particularly that required for field visits.

If agricultural production activities are to be eligible for loans through the ABMP farmers will be directly involved in considering the effects of the loan activities on the environment. Although significant agricultural inputs (e.g. irrigation schemes, major livestock purchase) would be required to undergo an EIA and would be subject to ecological expertise, small farm operations requiring small loans will probably not require an EIA or ecological expertise. Farmers’ general knowledge of environmental requirements and environmentally sound agricultural practices is, for the most part, not extensive and some basic environmental awareness, particularly in areas relevant to the important agricultural inputs, would be useful.

2.11.2 Participating Financial Institutions

Financial institutions have no capacity for environmental management. The financial institution, when considering a loan application from a prospective borrower, will require the necessary permits and permissions, one of which will be environmental permission emanating from the Department of Ecological Expertise. As far as the PFI is concerned, if the proposed project has received a favourable opinion and a permit that states the allowable emissions and discharges, has been issued by MEES, the PFI will proceed to favour the loan (providing that all other regulatory requirements are met).

2.11.3 Consulting Community

11 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

There are independent consulting firms and individuals that provide environmental assessment services. Certainly some of these are well qualified whereas others may lack the knowledge of conducting comprehensive EAs to the extent required by the Bank. 2.11.4 Agribusiness

The level of environmental knowledge within the agribusiness sector varies and much of their current knowledge is based on their contacts with the MEES Department of Inspectorate which conducts frequent soil, air and water quality examinations to ensure that the businesses are meeting the set standards for emissions and discharges. Many agribusinesses ask the MEES for advice in advance in order to avoid downstream problems whereas others, as can be expected, will have knowledge of some of the requirements but will attempt to circumvent the regulations to avoid additional costs. In many cases they are prepared to pay the fines for exceeding the standards, since the fines are a much less costly expense than reducing emissions or introducing new emission and discharge control equipment. It is most likely that many businesses are not aware of the effect that various aspects of their respective enterprises may have on the environment. In this regard they should be made aware of the impacts that can occur and the most practical measures to be taken to avoid these impacts.

3. METHODOLOGY

3.1 Legal Instrumentation and Management Capacity

Reference was made to two main documents; the UNICO 2000 report on the Kyrgyz Republic environment, and the environmental review for the World Bank supported village infrastructure project (2003). As well, MEES staff at headquarters and at the oblast level also provided information.

3.2 Public Involvement

Non-government organizations as well as members of the ABMPPU were invited to a round- table discussion (February 19, 2004) during the preparation of the draft EIA. This roundtable was held to explain the Project. More importantly the discussion was used to allow these organizations to express their views regarding important environmental issues as these relate to components of the Project, particularly agro-processing. The round-table participants included:

Emil Shukurov – Aleine Casimir Karimov – Environmental Protection Fund Gulnar Mamitbekova – Centre for Joint Hygiene and Sanitation Lyudmila Sapozhnikova – Environmental Information Agency Green Women Anna Kirlilenko – Youth Environmental Movement “Biom” Oleg Pechenuk – Independent Environmental Assessment Svetlana Bortsova – Independent Environmental Assessment Tologon Mamatov - ABMPPU Burul Nazarmatova – ABMPPU

12 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

An advertisement was taken out in Bishkek’s main newspaper (March 26 – see front inside cover) to invite interested members of the public wishing to review the draft EIA in the offices of the ABMPPU at the MAWRPI over a one week period. As well, individual invitations were extended to the participating NGOs of the round table to review the draft EIA at the PPU offices in the MAWRPI.

A summary of the draft EIA was circulated to the relevant government ministries and departments for their review and comment.

The final EIA report was submitted to the World Bank InfoShop for public review. As well, the final EIA is available for review at the World Bank Resident Mission office in Bishkek as well as at the ABMPP in the MAWRPI.

3.3 Determination of Potential Impacts

Similar environmental reviews of similar projects in other countries in the Bank’s ECA Region have been conducted over the past five years. In those reviews potential sub-project activities to be financed through the respective projects were identified through a general knowledge of the likely requests from the client base and through interviews with participants in the agricultural and general rural development field. In each of these projects (six similar projects in six different ECA region countries) for the agricultural component a list of 20 potential on-farm inputs was prepared. This list has stood the test of time over the past five years and has been used in this Project. The AFC study identified a number of agro-processing and marketing activities that could be considered for financing and these activities have been adopted here. Field visits to a selection of agro-processing activities, along with knowledge gained from the previous six project environmental reviews, and in addition, input from the NGO round table discussion, provided the basis upon which potential impacts were identified.

3.4 Baseline Data

Only secondary data has been collected for this assessment. Since the review is sectoral in nature the data that has been collected and described in Section 4 includes only descriptive general country-wide information and does not reflect any one particular site where a sub-project may occur. Agribusinesses identified by baseline studies conducted for the Project have been adopted for the EIA. It is likely that additional enterprises will come forward to be considered for loans and these will have to be addressed as they are identified.

3.5 Scoping and Bounding5

5 Scoping: Identification of the potential impacts that are relevant and significant in order to contain the extent of the assessment Bounding: placing a realistic geographic limit on the assessment

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The basis of scoping has been the identification of the Important Environmental Components (IECs). These are the environmental features relevant to the Project and which are deemed important enough for focus during the environmental assessment process in order to protect against negative impacts. The IECs were initially identified using previous similar EA’s, using knowledge based on field observation, during discussions with the stakeholders in the workshop with NGOs, and, giving consideration to the existing important environmental issues in KR. The list of IECs was subsequently modified through the course of the review. The IECs are listed in Section 5.4.

The ABMP, through the PFI, will provide loan money to farmers, agro-processing enterprises and others throughout the RK. Accordingly, for bounding purposes the entire country has been selected. Considering that agro-processing and certain agricultural production activities can have an impact on downstream water resources, regional countries, which receive surface water flows from the KR, have also been considered for bounding purposes. In considering the effects that exported seed and plants (and their packaging) could have on other countries in terms of their potential to harbor diseases and pests, very general bounding includes the countries of the region as well as Russia. It is unlikely that agricultural produce or processed foods would be exported beyond this geographical area (i.e.South Asia, SE Asia or the Europe). As well, importation of raw materials for agro-processing purposes into KR must be considered since these materials could also harbor diseases and pests not indigenous to KR and which could affect national agricultural production as well as indigenous plant and animal communities.

3.6 Criteria for Impact Assessment

Criteria used for determining the significance of an impact includes severity, extent, duration, frequency, possibility of occurrence, and possibility of reversibility of the impact. The extent of each of the criteria was based on judgement and no consideration was given to numerical ranking.

Seven types of agro-processing industries (refer to Table 3.1) have been considered for this assessment. Some have the potential for resulting in serious impacts on the environment whereas most others are generally harmless. Environmental impact matrices have been prepared for each industry type. As well the EIA considers warehouses and markets and impact matrices have been prepared.

Table 3.1: Agro-processing Industries

Dairy processing Frozen foods processing Fruit and vegetable processing Abattoirs and meat processing

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Tanneries Flour mills Cotton ginning Oil processing (including maize)

Of the 20 farm inputs listed in Table 3.2, three of these as indicated by * will not have any impact. The remaining 17 inputs will have varying levels of potential impact and for each of these a matrix has been established that describes the potential impacts that can be expected, the causes and the consequences of these impacts. The mitigative solutions to these are also provided. Each input is given a level of impact significance prior to mitigation and a level of significance (for the residual impact) assuming that mitigation is carried out. All ‘levels of significance’ ratings (Table 3.3), and other ratings, are relative and subjective.

Table 3.2: Probable Uses of Farm Credit

. Seed . Pedigree and HYV seed . Fertilizer . Pesticides . Pedigree livestock* . Livestock for finishing . Land rental .Tractors . Farm implements (land preparation, sowing and harvesting implements) . Land preparation (tractor hire) . Small equipment* . Grain drying equipment . Irrigation equipment . Vehicles (for market and land access) . Farm buildings for stock, machinery, and chemicals . Storage facilities (fuel, grain and other produce) . Fencing materials* . Primary processing equipment (e.g. milking equipment) . Fuel, lubricants, spare parts and other operating requirements . Veterinary services

3.7 Cumulative Effects

A very broad analysis of the cumulative effects has been conducted. Of particular importance is the cumulative effect within individual watersheds where water quality can be significantly affected. The analysis has been based on professional judgement only and the analysis is not

15 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004 sufficiently thorough due to the lack of knowledge of other sectoral activities and future planned activities. As well at this stage there is no way of knowing to which farming areas or agro- processing activities loans will be directed. Thus only general statements can be made regarding the significance of cumulative effects.

Table 3.3: Level of Significance of Potential Impact

Level of Significance Description (examples)* Very High Significance Potential impact of the sub-project** could cause damage to an IEC over a large area affected (e.g. loss of important habitat, loss of biodiversity, loss of large areas of productive land). Mitigation is not possible and the impact is irreversible. High Significance Potential impact of the enterprise could cause irreparable damage to a small area (e.g. on site) of an IEC; or, potential impact could cause damage to an IEC over a large area, but the ecosystem can still function (e.g. surface water contamination causing limited aquatic ecosystem damage). The impact is reversible over a long period of time. Moderate Significance Potential impact damages an ecosystem over a small area but it is still functional and the damage is reversible over a long period of time. Damage to an ecosystem over a large area, still functional, and the damage is reversible over a relatively short period of time. Low Significance Potential impact of the enterprise could cause damage to an IEC over a small area but system still very functional and damage is reversible over a short period. No Impact Non measurable impact.

* Description here is only an example using the biophysical resource base ** Sub-project refers to an agro-processing or farming activity.

16 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

4. THE ENVIRONMENT

4.1 The Biophysical Resource

4.1.1 General

The KR is located in the center of Eurasia. It shares borders with Kazakhstan, China, Uzbekistan and Tajikistan and represents an area of 198,500 sq. km. Altitudes in the country range from 500 – 7,439m above sea level. The mountain systems of the Tien Shan and the Pamirs comprise approximately 90% of the country’s area. Rivers in the country are associated with four non-draining Central Asian basins; the Aral, Tarim, Issyk-Kul, and Balkhash basins. Overall, the annual flow of these rivers is about 50 km3. Of the five Central Asian republics, KR is the richest in water including Lake Issuk-Kul, which is the world’s second largest alpine lake.

The country lies over 3,000km from the nearest ocean and has an arid, continental climate with hot summers and cold, snowy winters. At one extreme is the heat and aridity of the valleys in the foothills with average January temperatures of 0 degrees C (32 F), whilst usually exceeding 26 degrees C (79 F) in July, and precipitation in the same month generally less than 10 mm. At the other end of the spectrum are the cold temperatures and high precipitation of the mountains with average January temperatures below -28 degrees C (-15 F), July temperatures remaining below + 6 degrees C (43 F) and precipitation in July between 100-150 mm. In different parts of the country precipitation throughout the year is generally between 100-1000 mm, and the frost-free period is between 130–310 days. In areas above 3,500–4,000m elevation, snow and glaciers are permanent.

Only 7% of the country is arable and many of these areas require irrigation and/or drainage. Agriculture is concentrated in the low areas. Semi-savannas and savannas represent the main vegetation zones in the hilly areas below the alpine regions and until recently about 45% of the land area was used for extensive sheep and cattle rearing.

Forests cover about 4.2% of the country and most forests are found between 1,300m and 2,800m altitude.

4.1.2 Biodiversity and Forests

The country is comprised of 22 different ecosystems. Forest types include: spruce forest (2,772 sq. km); juniper forest (3,166 sq. km); broad leafed forest, include fruit and walnut forest (464 sq. km); river forest (tugai) (226 sq. km); small-leafed forest (711 sq. km); mid-mountains shrubland (3,287 sq. km); and, almond and pistachio forest (182 sq. km). Other ecosystems and land use include: savanna (6,081 sq. km); criophillic and mid- mountain meadows (36,006 sq. km); criophillic and mid-mountain steppes (39,056 sq. km); dry-farming land (bogara) (2,791 sq. km); criophillic and mid-mountain deserts (4,454 sq. km); foothill desert (8,768 sq. km); cultivated land (12,475 sq. km); and, glacier and sub-glacier (11,527 sq. km).

17 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

All natural ecosystems are to some degree affected by human activities. Some ecosystems such as foothill steppes and deserts have been almost entirely eliminated, whilst the area and species composition of other ecosystems has been drastically altered. A number of ecosystem types are very fragile and threatened by human activity, the most threatened of which are the fruit and nut forests of the south (threatened by overuse); the fragile mountain forest communities; the steppes that are in proximity to human settlements; high mountain meadows; steppes and deserts (threatened by overgrazing); and areas of semi-desert and dry steppe (which are easily degraded through grazing).

Although the biodiversity of temperate regions is generally poor when compared to the tropics, comparison with global indices shows that the biological diversity of the KR is substantial. For a small country (0.13% of the world’s landmass) the KR displays good representation of all terrestrial taxonomic groups. Furthermore, species richness (over 20,000 species, or 0.8% of known species) is higher than expected for a country of this size in this region, with above average species richness for the Central Asian Region.

Records for different taxa are uneven. Species richness of higher vascular plants (about 4000) and vertebrates (about 500) is well known. Lower plants (including fungi) and invertebrates have also been studied intensively. Among all fauna there are 368 types of bird and 83 mammal species, including snow leopard (Uncia uncia), wolf (Canis lupis), dhole (Cuon alpinus), sousliks or ground squirrels (Spermophilus spp.) and unique giant Menzbier’s marmot (Marmota menzbieri). A number of species are found only in the KR. These endemic species and subspecies include over 200 plant species, around 3,240 invertebrate species (including 2,760 endemic arthropods) and 17 vertebrate species, as well as a further 47 sub-endemic vertebrates. Almost 30% of arthropods and nearly 60% of mollusks in KR are thought to be endemic. Among vertebrate species, a number of endemic species have been recorded: 12 fish, two reptiles, two amphibians and one bird. In addition, several mammalian species and sub-species are endemic to the region, including the Tien Shan mouse (Microtus kirgisorum) and the Tien Shan brown bear (Ursusu arctos isabellinus). The globally threatened Menzbier’s marmot (Marmota menzbieri) is also endemic to the Tien Shan region.

Some of the species occurring in the KR have obvious economic or aesthetic importance. For example, the country supports a high diversity of wildflowers, over 70 species; and a range of native and introduced fish species, which form the basis for the country’s fisheries. The KR’s extensive botanical resources also include over 600 species of wild plants that have socioeconomic value including 200 species of medicinal plants. Plants with clear economic value include Plygonum coriarium, Glycyrhiza glabra, Polygonum, Berberis, Pheum wittrockii, Anabasis aphylla, Ferula, Euphorbia ferganica, Onosma and Thymus.

There has been a decline in the population of many species and 9.5% and 18.1% of the bird and mammal species respectively in 1994 were considered to be at risk of extinction. It was stated in that same year that a number of rare and valuable ecosystems had nearly disappeared and forest cover had more than halved in the previous 50 years and most of

18 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004 this removal occurred in the period 1930 to 1950. Forest protection began in 1947 as a result of heavy harvesting and in the period of the 50’s to the 90’s overgrazing became a serious threat to the forests as well. Since 1982 all felling, with the exception of sanitary cuttings, has been banned although today there is continuing pressure on the forest as a result of rural poverty and high-energy prices.

Another cause for biodiversity loss is a result of past grazing practices. Biodiversity was affected in the past under the former Soviet practice of transporting cattle herds into the mountains for summer grazing. Today this is not economically feasible and as a result of the past impact, alpine grasslands were invaded with weeds. Ironically, the only practical way of controlling the permanent weed population is to reintroduce grazing and on a sustainable basis. This would control weeds and allow for the successful re-establishment of the original plant community as well as its related faunal population.6

Walnut forests on the northern slopes of west Tien Shan are unique and extremely rich in biodiversity. These forests are considered to be the source of domestic nut and fruit trees all over the world. Spruce forests containing the unique blue Tien Shan spruce, grow mainly in the north of the country. The largest forest in the country is Arslanbob and covers an area of 600,000ha. Over 1500 tonnes of walnuts are harvested annually in the Arslanbob valley in addition to 500 tonnes of pistachios, apples, cherries and plums.

4.1.3 Water Resources

KR is comprised of six main catchment basins and its mountainous region contains the headwaters of more than 3,500 rivers that feed into the transboundary waterways flowing into other Central Asian countries. Two of these rivers are the key waterways that drain into the Aral Sea. On average the KR’s annual allocation of this water is 11.6 billion m3 and although this water has been fully utilized in the past, due to the reduction in agriculture, KR abstracted less than 9 billion m3 in 1998.

KR also has large reserves of groundwater. Potential proven annual reserves are 44.5 billion m3.

85% of the country benefits from a positive water balance. The remaining area experiences a negative balance with water losses through the recharging of underground aquifers, irrigation and evaporation.

4.2 The Environment and Agriculture7,8

Agriculture is important to the Kyrgyz economy as it accounts for about 35% of GDP. Associated processing and the service and trade industries bring this contribution up to over 40% of GDP. Agriculture contributes to approximately one-third of the country’s employment. An additional 10 percent of the labor force is employed in agriculture-

6 Emil Shukurov, Biodiversity Project. Personal communication. 7 World Bank. 2004 8 IDA and GoKR. 1999.

19 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004 related industries, mostly agribusiness enterprises. However, there is little value added downstream of the farmgate. Supply chain linkages are weak and unreliable and it is estimated that only about 15% of agricultural produce by value go to manufacturing sub- sectors. There is limited aggregation of product in marketing.

Agricultural land, including all rangeland, covers 53.1% of the country. Arable lands cover 1.3 million ha and this includes irrigated areas. Perennial cultures cover 44,800 ha, hayfields cover 159,500 ha, pastures cover 9.1 million ha and leys cover 18,500 ha. Livestock breeding (sheep, horses, cattle) generates 60% of gross agricultural income and crop production (grains, cotton, tobacco, fruits, sugar beet) 40 %. Agriculture is considered the basis of the country’s economy.

About 1.06 million ha or over 80 percent of arable land is irrigated. The main crops grown include wheat, barely, maize, cotton, tobacco, sugar beet, sunflower, potatoes, vegetables, fruits, and fodder crops. Winter wheat is the dominant cereal crop, accounting for over 40 percent of the area usually under grains. The major livestock products are meat, milk, wool and eggs. Yields from irrigated land are about 2 –5 times higher than those on non-irrigated lands.

Livestock rearing is an important component of the agricultural sector due to the country’s considerable grazing resource. This resource includes a pasture area of approximately 8.8 million hectares and forage areas of some 600,000 hectares (of which 400,000 hectares is irrigated alfalfa and other legumes). However, past government policy that focused solely on increasing livestock numbers has resulted in considerable degradation of the resource (e.g. biodiversity loses in alpine areas).

During the 20 year period between 1975 and 1995 the reduction in cultivated land per capita is attributed to a number of causes including soil erosion (5.6 million ha affected), destruction of soil cover (mudslides, landslides, avalanches), salinization (1.17 million ha affected), waterlogging (89,200 ha affected), loss of humus, weed growth, exposure of rocky surfaces (3.8 million ha affected). These losses are as a result of a number of poor agricultural practices including overgrazing, poor crop management, and poor irrigation design and management. As well, urbanization, road construction, hydro engineering and various industrial enterprises have contributed to the loss of agricultural lands.

Degraded soils has resulted in lower crop productivity, lower pastureland productivity and thus lower animal productivity, and a necessary increase in the amounts of chemical fertilizer required to maintain previous crop yields.

About 1.06 million ha of the cultivable area are irrigated. Fodder crops and cereals are the main irrigated crops and their yields are generally about two to five times higher than yields on non-irrigated land.

Since 1991the application of agricultural chemicals has sharply declined. Although this has had positive effects on the environment, nevertheless, soil organic matter remains low, as does general soil fertility. The dramatic reduction in fertilizer application and the

20 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004 reduction in pesticides down to a low of 0.3kg/ha in 1998 have dramatically reduced crop yields. On the other hand, the decrease in the concentration of pesticides in food and the environment in general has been dramatic.

On the positive side, agricultural policy supports and encourages the application of biological pest and disease control (in 1999 KR produced biological means sufficient for control on about 70,000ha of cultivated land) as well as improving organic content of the soil. However, target yields can only be met with increased soil fertility and the policy stipulates the use of chemical inputs.

4.3 Social Environment9

KR’s population in 1999 was 4.8 million and the country’s fertility rate is twice that of Western Europe. The average population density is 24/km2, which is 71% of the Central Asian average and 20% of the European average. About 35% of the population live in urban areas and there is a trend for this percentage to increase as rural people migrate to cities in search of employment.

Life expectancy in 1998 was 67.1 years. Expectancy declined between 1991 and 1995 and the most significant impact on the decline in life expectancy was the increased mortality in the older groups of the population. Since that time it has been slowly increasing. Infant mortality is more than twice the European average and this mortality varies greatly within the country.

Diseases of the circulatory system and the respiratory system are the most common causes of death in the country. Diseases of the digestive system and infectious diseases also count for a significant number of deaths at rates considerably higher than those of Europe. These trends in mortality due to these two latter causes may be associated with poor sanitary conditions and a deteriorating quality of drinking water and food.

Most of the drinking water for Bishkek is sourced from deep groundwater supplies and several locations in the Bishkek area being polluted with nitrates and petroleum products. Many villages in the rural areas source their water from surface waterways including irrigation canals. The risk of this latter source was demonstrated by the outbreak of typhoid in the Osh region in 1998. Water treatment is not consistent and leakage in distribution lines is a common occurrence. Breakdowns in the water distribution network in Bishkek are frequent and replacement of faulty pipes is at a slow rate. As well, the city’s sewage system is in poor condition, a situation that can lead to secondary contamination of drinking water.

Only 30% of the country’s 350 wastewater treatment plants meet sanitary standards and the discharge of wastewater constitutes a significant burden on the environment and poses a significant health risk.

9 UNECO. 2000.

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Ambient air pollution constitutes a significant risk to the health of urban populations. Population exposure to particulate matter is high and may lead to increased incidence of acute respiratory infections, particularly amongst children. It may also contribute to the aggravation of chronic cardio-respiratory diseases and increased mortality.

Chemical contamination in food is not common as a result of the reduction of the use of agrochemicals in food since independence. In 1998 pesticides were found in 2.6% of food samples taken in the Osh area and the figure was as high as 6.9% for vegetable oil. The most frequent pesticide contamination is the chloro-organic and phosphoro-organic compounds. Bacterial contamination was found in 11.5% of tested food products in 1998, however in some locations the level reached 46%.

Over 30,000 people in KR are employed in work places with polluted air and excessive noise.

4.4 Important Environmental Issues

The country’s primary environmental issues, as they relate to agriculture and land resources in general, are natural forest and pasture land degradation, and soil degradation, all of which contribute to desertification. Soil cover losses can result in a modified hydrological regime. Erosion results in reduced water quality and sedimentation in water reservoirs and irrigation schemes. Due to altered hydrological regimes, the threat of flooding and mudflows is increased. Land degradation has resulted in the loss of soil cover on mountain slopes. Losses reach 30-50 tons per ha per year.

The other major environmental concern is soil and water pollution. These occur in cultivated areas and in the vicinity of mining operations. Soil and water pollution can lead to health problems. Both of the processes, degradation and pollution, lead to a loss of biodiversity and destabilization of the general environment, which in turn can threaten the future of the country. Environmental health concerns are related to unsafe drinking water and air pollution.

5. ASSESSMENT

5.1 General

The ABMP has two components and several sub-components. The investment facility sub-component will provide access to investment capital for the emerging producer organizations and private businesses in the areas of production, processing and marketing of agricultural commodities. The main activities in the supply chain will be beyond the farmgate (although agricultural production has not been excluded from this EIA) and up to, and including, product marketing. Most financing will be directed to the agro- processing industries and their related activities, and marketing facilities. The revolving working capital fund sub-component will support producer organizations, agro- processing companies and marketing companies.

22 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

The ABMP itself is environmentally benign. The overall effect of the sub-projects will be positive. The loans will result in improved agricultural production, improved marketing, and in general, improved socioeconomic conditions of the rural population. The Project will further contribute to the country’s food security, hopefully contribute to the generation of foreign exchange through increased agricultural exports, and most of all, the Project, through the sub-projects, will significantly contribute to the alleviation of rural poverty. However, the Project’s primary objective does not include a contribution to the enhancement of the environment. In the past ten years rates of chemical inputs in agriculture have been significantly reduced, resulting in cleaner watercourses, lower levels of soil contamination and relatively chemical free food. The Project could lead to an increase in the use of farm inputs but mitigation measures and training associated with the Project could minimize any potential environmental impacts. To some extent, it is presumed that some of the industries under the former socialist regime which created significant environmental problems may be refurbished to operate more efficiently and without the major environmental contamination of the past. In theory, current environmental regulations should prevent a return to serious environmental issues.

5.2 World Bank Safeguard Policies

Funding will be used to support a variety of activities (refer to tables 3.1 and 3.2). A number of these activities could have an effect on those areas of concern that are addressed in the Bank’s safeguard policies. Table 5.1 provides a brief description of each of the relevant policies (four of the ten policies) and the risk of application on each of these policies as a result of the ABMP.

5.3 Potential Category A and Category B Sub-projects

The World Bank requires environmental impact assessments to be conducted for any projects that fall into either Category A or Category B. Table 5.2 lists the types of projects that fall within these two categories.

There are a large number of currently operated agro-processing activities in KR and these would fall within the two categories listed above. If a loan application from an existing or newly planned rural enterprise falls into one of these categories, it will be incumbent upon the proponent to conduct an EIA. The EIA would be conducted on the entire enterprise regardless of the size of the loan or the specific nature of the loan, and the lending institution would have to be satisfied that the enterprise does not and would not present a threat to the environment. Although the environmental regulations of KR require environmental impact assessments to be conducted, for those projects that would fall within one of the above categories, any such study would have to meet World Bank requirements and standards as well.

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Table 5.1: Relevant World Bank Safeguard Policies and Risk of Application

Safeguard Description Risk Policy Environmental EA to be conducted for all projects that High: On-lending could support various Assessment fall into either Category A or Category B activities (e.g. irrigation, agro-processing) that would require Bank quality EAs. Natural The conservation of natural habitats is Moderate: Loan applications for agro- Habitats essential for long-term sustainable processing and agricultural production could development. The Bank supports, and lead to habitat conversion or loss. These expects borrowers to apply, a could include various agricultural activities precautionary approach to natural such as land preparation (into new areas), resource management to ensure irrigation and livestock expansion. As well, opportunities for environmentally agro-processing could have effects on both sustainable development. The Bank terrestrial and aquatic habitats. does not support projects that involve the significant conversion or degradation of critical natural habitats. Pest In Bank-financed agricultural operations, Moderate to High: On-lending could be Management pest populations are normally controlled used in many cases for supporting annual through IPM approaches, such as operating costs of agricultural enterprises. biological control, cultural practices, and Some of these costs may include pest the development and use of crop management through the purchase and varieties resistant or tolerant to the pest. application of pesticides without any specific The Bank may finance the purchase of farm IPM framework. To support these loan pesticides when their use is justified applications each potential borrower should under an IPM approach. provide an outline of an IPM program that is consistent with MAWRPI guidelines as well as the MEES and with the World Bank rule that pesticides are only used as a last resort and in combination with non-chemical control. Cultural The Bank supports the preservation of Low to Moderate: If new agro-processing Properties cultural properties, which includes sites enterprises are supported they could be with archaeological, palaeontological, developed on sites containing important historical, religious and unique natural cultural features. values. It seeks to avoid impacts on such sites.

24 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

Table 5.2: World Bank Categories for Environmental Assessment Purposes

Category A Projects Category B Projects (projects/components which (projects/components which may have diverse and may have diverse and significant impacts – normally significant impacts – more require EA) limited environmental analysis appropriate) . dams and reservoirs . agroindustries (small scale)* . forestry production projects . electrical transmission . industrial plants (large scale) . irrigation and drainage (small and industrial estates, scale)* including major expansion, . renewable energy rehabilitation, or modification* . rural electrification . irrigation, drainage and flood . tourism control (large scale)* . rural water supply and . aquaculture sanitation . land clearance and leveling . watershed projects . reclamation and new land (management or rehabilitation) development . protected areas and . resettlement biodiversity conservation . river basin development . rehabilitation of highways or . manufacture, transportation rural roads and use of pesticides or other . rehabilitation or modification hazardous and/or toxic of existing industrial facilities materials* (small scale) . new constr. or major upgrad. . energy efficiency and energy of highways or rural roads conservation

* indicates activities likely to be considered for loans under ABMP

For farms, of the 20 probable inputs to farming, only two (relating to pesticides and irrigation) would likely fall into either of the two above categories. Although there is a concern for environmental damage on the farm (e.g. health effects with the use of pesticides) the major concern would be the cumulative effect. This is of particularly concern where a number of farms in the same watershed could be borrowing for the same purpose (e.g. pesticides and / or irrigation).

5.4 Important Environmental Components

A number of broad environmental issues have been identified through an NGO roundtable discussion, discussions with officials and field visits. This resulted in the compilation of a set of important environmental components (IECs), relative to the rural environment, agriculture and agribusinesses. IECs are those components of the environment which society generally feels are worthy of protection in light of the general activities likely to occur. Table 5.3 lists the IECs identified.

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Table 5.3: Important Environmental Components

Physical Components Biological Components Socioeconomic Components  Soil quality  Forests  Culture  Soil fertility  Flora  Employment  Soil erodibility  Fauna  Income  Soil organic content  Forest habitat  Poverty  Hydrological regime  Aquatic ecosystems  Health  Groundwater quality  Germplasm  Migration  Surface water quality  Waste disposal  Land  Domestic water  Air quality  Markets and marketing

5.5 Project Benefits

The Project and its sub-projects provide a number of benefits. Overall, the Project will increase sales of KR agricultural and food commodities both in domestic and external markets. This in turn will improve the income of farmers, improve rural socioeconomic conditions, and provide jobs and higher profits in the agro-processing and marketing sectors. Specifically, each of the input groups for the small farms will provide a number of benefits as indicated in Table 5.4. Generally, the agro-processing industry will become more efficient and competitive, providing secure jobs, and contributing to the country’s general economy including the improvement of foreign exchange reserves through export earnings.

Table 5.4: Benefits – Farm Inputs

Input Benefits Seed Production; increased farm income; improvement of rural economy; contribution towards national food security Pedigree seed Increased production; increased farm income; rural economy improved; contribution towards national food security Fertilizer Increased production; increased farm income; rural economy improved; contribution towards national food security Pesticides Increased production; increased farm income; rural economy improved; contribution towards national food security Pedigree animals Fewer animals required for same production; or, improved production and higher quality product for marketplace; improved farm income; rural economy improved; stock available for export and increasing foreign exchange Animals for Improved farm income; rural economy improved; contribution finishing towards national food security Land purchase Improved land use efficiency; improved farm profits based on (farm expansion) economy of scale principle Land preparation Increased production; increased farm income; rural economy (tractor and improved; contribution towards national food security machinery hire) Tractors Reduces labor burden on farm family; improves farm efficiency; improves profits and rural economy Other farm Reduces labor burden on farm family; improves farm efficiency;

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implements improves profits and rural economy Small equipment Reduces labor burden on farm family Grain drying Reduce grain spoilage and improve farm profits equipment Irrigation Improved farm production leading to improved profits and general equipment and improvement in rural economy; contribution towards national food maintenance security Vehicles Improved farm efficiency leading to improved farm profits; reduces the labor load on the farm family Farm buildings for Improved management of livestock; protection of machinery, thus stock, machinery improving farm net profits; prevention of chemical spills and loss and chemicals of agricultural chemicals Storage facilities Ease handling of fuels and petrochemicals, avoidance of fuel (fuel, grain and spills and reduce wastage; reduce spoilage of crops and grains other produce) leading to improved economic efficiency and higher farm incomes Fencing materials Reduce boundary disputes; containment of livestock; improved management of livestock Primary Value added stays in rural areas leading to improved local processing economy through provision of jobs; improved farm income; equipment reduction in transportation costs and fossil fuel consumption Fuel, lubricants Ability to run machinery for improved crop production and farm incomes Veterinary Healthy livestock, improved production and farm incomes services

All but two (farm buildings and storage facilities) of the benefits are socioeconomic. Generally, as economies improve through expansion and growth in all economic sectors, the biophysical environment suffers. The only biophysical benefit (or environmental enhancement) is the storage of agricultural chemicals (including fuel) and yet it is the biophysical resource base that supports much of the rural economic activity. Regardless of the number of socioeconomic benefits that may result, they will not offset the biophysical impacts that can be expected. As agro-processing activities add more emissions and effluents (despite ‘point of pollution’ standards being met) to the air and waterways, the biophysical environment is affected. As farmers become wealthier through effective marketing and various farm improvements, an increase in the application of agro-chemicals leading to soil and water contamination can be expected. This ultimately can result in damaged ecosystems and human health problems. As local socioeconomic conditions improve, including an improved education of the public, it is hoped that the biophysical environment will benefit.

As the rural economy grows the onus will be on the Government of KR to ensure that relevant environmental regulations are in place, maintained and enforced. Economic development must be sustainable, and the very resources (soil, water, and natural vegetation) that provide the basis for this development must be protected and managed.

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5.6 Potential Impacts

5.6.1 General

Impacts (potential and residual) in this assessment are rated on a scale ranging from LOW TO HIGH. A HIGH impact is only relative to other impacts within this analysis. A HIGH impact in the tanning industry can not be equated to a HIGH impact for a mine or a large hydroelectric dam. Figure 5.1 provides a schematic showing the relative potential impacts of various activities within this Project and with a few other types of activities that are outside of the Project.

Impact matrices that include the potential impacts, causes, consequences and mitigative responses are provided for ten agro-processing and related activities and twenty agricultural activities in annexes B and C, respectively. In Annex B for agro-processing and related activities, there are common potential impacts for each during location (of new facilities), construction and refurbishment, and decommissioning of new and existing facilities. These common potential impacts are indicated in Table B1 of Annex B.

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Figure 5.1 Schematic Indicating the Relative Residual Impacts of Different Activities

IMPACT LEVEL OF SIGNIFICANCE

LOW MEDIUM HIGH

Warehouse Mining

Flour mill Hydro electric dam

Cotton gin Frozen food Large scale irrigation

Market Abattoir

Fruit Tannery processing

Oil processing

Dairy

29 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

5.6.2 Agro-processing

It is envisaged that the bulk of the credit line and revolving working capital funds will be used in the agro-processing sector with perhaps some of the funds made available for warehousing and market infrastructure.

The agro-processing industries generally produce wastes (some more than others) that are disposed of in the form of effluent discharges, air emissions or solid wastes. Effluents flow into surface watercourses and seep into groundwater; emission gases are released into the atmosphere; and solid wastes are disposed of in municipal and unorganized dumps. These wastes could include a wide range of gaseous, solid and liquid compounds ranging from water vapour to highly toxic materials and they pose a threat to groundwater supplies, air quality, aquatic ecosystems, and ultimately to human health.

When considering expansion of existing processing plants or the establishment of new ones, there could be losses of biodiversity and impacts on biophysical resources including forest cover losses and soil erosion. All of these issues come under different KR regulations and it will be important that these regulations be observed if impacts are to be minimized or avoided. Table 5.5 summarizes the potential impacts from these agro- processing activities.

Table 5.5: Potential Impacts of Agro-processing Activities

Processing Type Impacts during operation Abattoir* Carcass waste; meal for feed (BCE); odours; manure; water consumption for cleaning; disinfectants; worker safety; Meat packing* Soldering cans (lead); metal waste; emissions; contamination; worker safety; noise; water consumption and disinfectants Vegetable processing and canning* Effluent into surface water systems; soldering cans; metal waste; emissions; noise; worker safety; contamination; water for washing and disinfectants Tanning* Effluent (chemicals from tanning ) into surface water systems; waste; odour; health and safety Dairy processing* Effluents (acid); emissions, Freon Frozen food production* Freon, importing of raw material (pest introduction); worker safety Cotton ginning Noise; dust inside and outside; energy consumption for creating hot air and steam for adding humidity to the cotton; safety and health Oil processing (including maize) Heat; water Flour milling* Dust; noise; safety and health

* indicates type of facilities visited

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5.6.3 Livestock Production

The experience with the Rural Finance II Project is that 75% of the loans were made available to farmers wishing to purchase livestock. In some cases these loans were substantial and as many as 50 animals per farm have been purchased for both finishing and breeding purposes.

The reduction in livestock numbers that has occurred since the KR became independent has resulted in some recovery of natural pastures (although it has been detrimental to alpine pastures where the country’s greatest biodiversity is found)10 from the effects of previous overgrazing. Although livestock numbers could easily be increased without further degradation to grazing lands, it will be important to consider carrying capacity of natural and improved pastures and incorporate appropriate stock movement and rotation schedules to avoid overgrazing. The extension service of the MAWPRI can provide appropriate guidance on stocking rates, pasture rotation and pasture management methods to achieve modest increases in production while avoiding land degradation and accomplishing rehabilitation of previously degraded lands. Any livestock production sub- projects should include pasture improvement and rehabilitation work as an integral component of project implementation. Reliable monitoring of grazing lands to ensure timely interventions to avoid soil erosion and avoid overstocking should be incorporated into sub-project design.

Intensive grazing within the limited forested areas of the country presents risks to the ecological integrity of forest ecosystems and to their ability to regenerate and maintain their biodiversity. Livestock rearing in closed conditions, both on the small farm holding and the large commercial farm, results in a concentration of animal waste that can contaminate both groundwater and surface waters.

5.6.4 Agricultural Production

The major potential impacts associated with the 18 non-livestock potential agricultural inputs relate to water and soil quality, soil erosion, salinization and resource loss.

Increasing pesticide applications can lead to pesticide residue (including heavy metals) build up in the soil. Pesticides and fertilizers can migrate to both surface waters and groundwater resulting in contamination of these two sources and leading to damaged aquatic ecosystems and threatened health to downstream users. Pedigree seed and HYVs will demand further applications of chemical inputs, thus exacerbating the problem. In the case of the former, public health is at risk, in the case of the latter, aquatic ecosystems and, possibly public health, are both at risk.

Irrigation rehabilitation and new irrigation schemes can lead to salinization and waterlogging – desertification - if drainage is not managed effectively. Tractors and land preparation can promote erosion, particularly if tractors are too heavy and cause soil compaction, and if fields are ploughed (with or without the contour) and left a longtime

10 Emil Shukurov, Biodiversity Project. Personal communication.

31 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004 before the sowing period. Land purchases, where the land is already under agricultural use, do not lead to increased environmental problems. However, where land is under another cover any use such as wetland, or forest cover on steep slopes, there is the potential loss of biodiversity, habitat and species. As well, erosion risks may be increased, particularly on steep sites.

The principal environmental risks associated with intensification of agriculture concern the safe handling and application of pesticides and the appropriate application of fertilizers to avoid excessive runoff and contamination of soils and of surface and ground waters. The Plant Protection Service (MAWPRI) guidelines should be followed regarding the selection, use, storage and application of pesticides. Appropriate training of agricultural workers and monitoring of pesticide residues and runoff should be incorporated in sub-project design and independently monitored during project implementation. With sub-projects involving fertilizer or pesticide applications, monitoring of groundwater and downstream water quality (as appropriate) should be included in project implementation. Potential impacts, causes, consequences and mitigation are described in Annex C. A summary of the potential major environmental impacts of farm inputs it provided in Table 5.6.

Table 5.6: Summary of Potential Major Environmental Impacts - Farm Inputs

Farm Input Potential Impacts Level of Significance Seed Water and soil contamination Low-moderate through chemical inputs Pedigree seed purchase Biodiversity loss; chemical inputs Moderate-high Fertilizer Water pollution Moderate-high Pesticides Ill health; water pollution High Pedigree animals None None Animals for finishing Overgrazing; forest degradation High Land purchase Loss of biodiversity; soil erosion High Land preparation Soil erosion Moderate-high Tractors Soil compaction and erosion Moderate-high Other farm implements None None Small equipment None None Grain drying equipment High energy use Low Irrigation equipment and Water extraction and salinization High irrigation maintenance Vehicles CO2 emissions Low-moderate Farm buildings for stock, Reduction in productive land Low machinery and chemicals Storage facilities (fuel, Reduction in productive land Low grain and other produce) Fencing materials Social barriers Low Primary processing Water pollution Moderate equipment Fuel, lubricants, etc. Water and soil pollution Low-moderate Veterinary services Hormones and chemicals in meat Moderate and animal products

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5.7 Potential Cumulative Impacts

Assuming that all mitigation is carried out on all projects for which loans are provided, there will still be residual effects, that when considered in total, could have an overall significant effect on the environment. The major environmental concerns, as described in Section 5.6 are water pollution and land degradation.

Cumulative effect can be associated with both agro-processing and agricultural input activities. In the former, it is more obvious due to the nature of industrial activity where many of the agro-processing activities clearly result in impacts, particularly with effluent discharges and air emissions. However, the effect is subtler in the latter. For instance, it is anticipated that small farmers will request modest loans for the purchase of basic farm inputs of seed, fertilizers, pesticides and fuel, and for livestock. Such a loan to a single farmer would present little environmental concern and a large number of such small loans spread throughout the country would have a relatively negligible effect. However, if by chance a large number of requests for loans originated from the same area, and particularly within the same watershed, the cumulative effect of all of the small (negligible) effects could be significant.

Cumulative effect is important in temporal terms as well. For instance, a small loan for pesticide purchase in itself has little negative impact, and in fact, has much the opposite with an increased production and return to the farmer. However, the same loan for the same purpose provided for a number of years could result in a detrimental build-up of pesticide in the soil. Over time the cumulative effect could be very significant.

Farmers should not be denied loans on the basis of their location, but if patterns appear to show concentrations of loans (e.g. fertilizers or pesticides) in one watershed, the responsible loan officers should alert the local MEES office for special monitoring of the situation.

Another example is the application of loans for agro-industry rehabilitation or for the start-up of new industries. With industries, the environmental concerns usually focus on air emissions and effluent discharge. Although each activity may create emissions well within the established national standards, cumulatively, all of the industries in one region (e.g. in a small closed valley with poor air circulation) could significantly contribute to the deterioration of overall air quality, resulting in an impact on human health. Similarly, the impact on water quality of a common river used by several processing plants could be significant.

In a comprehensive examination of cumulative effects, analysis would be made of all of the other various activities occurring that have an impact on the environment. For instance, other industrial development (donor assisted or otherwise), an increase in motor traffic, and the burning of fossil fuels for energy, could all, cumulatively, result in serious air quality problems. Although the ABMP can not be concerned about the effects of other projects, it is important to place the project and the effects that it does have on the environment within the context of overall development.

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In order to prevent the risk of adverse cumulative environmental effects, a brief analysis will be made of the portfolio every year and reported to the MEES.

KR has a number of rivers that originate in the country and flow into adjacent countries. Effluents meeting national standards and discharged into a river in KR would be cumulative to those discharged in the same river in an adjacent country. This could result in a significant cumulative effect in the adjacent country.

5.8 Mitigation

Specific design criteria will be met prior to loan approval. Operational criteria will be met and operations monitored to ensure that impacts do not occur beyond acceptable levels (e.g. within national standards for effluent discharges and air emissions).

For agricultural activities mitigation should not necessarily entail expensive inputs and much can be achieved towards the minimizing of residual impacts through applying efficient and safe farming techniques. MAWRPI is in a position to advise farmers on the proper handling and application of pesticides and fertilizers, including application rates and timely application. As well, they can advise on effective cultivation techniques that will reduce the threat of soil erosion. Irrigation schemes can be well planned in order to avoid the loss of productive land through salinization and waterlogging.

Water and air will be monitored by MEES against national water and air quality standards. However, monitoring is not conducted on a regular basis by local environmental agencies to ensure that these environmental components are protected.

5.9 Potential Residual Impacts

Residual impacts are those impacts that remain following mitigation (e.g. effluent discharges from a processing industry, but which meet national standards). These are the trade-offs for the benefits to be gained through the Project. Assuming that mitigation is carried out, residual effects could still be significant, particularly when considering the cumulative effect. A summary of residual effects is provided in Tables 5.7 and 5.8. For ABMP, assuming that all mitigation is adhered to, the residual effects will be minimal. Although ratings are subjective, and only relative to one another, this analysis indicates that only one activity (pesticide application) in the agriculture sector receives residual effects ratings above LOW-MOD and the same residual effect rating is given for those agro-processing industries (three of them) using refrigeration. Although integrated pest management (IPM) is recommended as a mitigative measure for the impacts that pesticides will produce, it is unlikely that this measure would have widespread application.

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Table 5.7: Summary of Probable Residual Effects – Agro-processing and Other

Agro-processing Type Probable Residual Effects Significance Abattoir Effluent discharge; solid wastes; Low – Medium air emissions (refrigerants) Meat packing None None Vegetable processing and canning Effluent discharge; solid waste Low Tanning Effluent discharge; solid waste Low - Medium Dairy processing Effluent discharge; air emissions Low - Medium (refrigerants) Frozen food production Effluent discharge; air emissions Low – Medium (refrigerants) Cotton ginnery Air emissions None-Low Oil processing (including maize) Effluent discharge; solid waste Low Flour mills Solid waste; dust None-Low Warehousing None None Marketing None None

Table 5.8: Summary of Probable Residual Effects - Agriculture

Sub-project Group Probable Residual Effects Significance Seed Water pollution from chemical Low inputs Pedigree seed purchase Water pollution from chemical Low inputs Fertilizer Water pollution Low Pesticides Water and soil pollution Moderate Pedigree animals None None Animals for finishing None None Land purchase Loss of forest cover; reduced None biodiversity; soil erosion Land preparation Soil erosion and Low sedimentation Tractors Soil compaction and erosion; Low water and soil pollution Other farm implements Soil erosion Low Small equipment None None Grain drying equipment High energy consumption via Low fossil fuels - contribution to greenhouse gases Irrigation equipment and irrigation maintenance Groundwater losses; surface Low-mod water extraction; salinization and waterlogging Vehicles Fossil fuel consumption – Low contribution to greenhouse gases Farm buildings for stock, machinery and Loss of productive land Low chemicals Storage facilities (fuel, grain and other produce) Loss of productive land Low Fencing materials Cultural and social systems Low Primary processing equipment Water pollution; occupational None

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hazards Fuel, lubricants, etc. None None Veterinary services Some chemical residuals in Low meat and animal products

5.10 Environmental Risk

Overall, the environmental risk is high because effective enforcement of the law is questionable. Risks for those activities that would lead to impacts which can be governed by specific pieces of legal instrumentation would vary depending upon the effectiveness of environmental inspections and the willingness of entrepreneurs (agro-processing) to invest in equipment and processes that will mitigate environmental problems. Risks for which there is no effective legal instrument would vary, depending upon the nature and level of impact, and the cost of mitigation. Generally, however, where mitigation is costly or technically challenging, environmental risk will be high. That is, the actual impacts will be much closer to the identified potential impacts than to the residual impacts determined if all mitigation were to be carried out. Of particular concern would be for those activities resulting in water and air pollution.

6. ANALYSIS OF ALTERNATIVES

6.1 Project Design11

Early on in the Project preparation stage the Task Team considered building the Project around a more traditional set of public sector interventions. It was soon apparent that this approach would not have sufficient impact on the set of challenges being faced to be able to deliver the intended outcomes and results.

The Task Team also reviewed a number of small and medium enterprise development and export promotion projects that were based on contracting out key management functions to international consulting firms, and which were successful in delivering anticipated Project results. This model could not be applied to KR without modification due to its relatively high costs and the priority expressed by Government for development of local consulting capacity.

The Task Team had wanted to push for greater specificity with respect to the commodities to be handled by the Project and to the public sector constraints that were impacting on competitiveness of Kyrgyz suppliers. Deeper analysis showed, however, that these questions could be adequately answered only on the basis of fairly intensive interaction with private sector actors, and in any case should be kept flexible to allow for new information and changing economic circumstances.

The alternatives above focused on methods of implementation and not on different concepts or target groups. In each of the cases considered, the main objectives of the Project remained the same and the target recipients of funding (i.e. primarily,

11 World Bank. 2003.

36 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004 agribusinesses) remained unchanged. This being the case, the alternative implementation designs would have resulted in the same set of funding recipients, and thus the environment impacts would have been similar to those identified with the current design.

6.2 ‘No Project’ Alternative

The ‘no Project’ alternative would certainly mean that the Bank would not have to be concerned about meeting any of its environmental requirements. However, without a Project there would be two main negative consequences on the environment.

First, the social and economic benefits that can be derived from the Project would not be realized. Farmers would not prosper because there would be a weak and disrupted supply chain link for their farm produce. This would result in continued depressed conditions in the agriculture sector. However, on the positive side, it could be argued that such a depressed agriculture sector would also mean a continued lack of chemical inputs to the farm, resulting in few concerns over soil contamination and water pollution from pesticide and fertilizer run-off.

A Project that ultimately improves the socio-economic conditions in the agriculture sector (by improving the supply chain) will result in the desire to improve productivity. With an improved cash flow, the farmer would be in a position to reach increased production levels through the purchase and application of chemical inputs, thus increasing pressure on important environmental components. The Project’s environmental capacity building activities will lead to more understanding of the effects of agricultural chemical inputs on the environment and hopefully through a better understanding by all stakeholders, will result in lighter impacts.

Without a Project, the agribusiness sector would continue to operate as usual, many with antiquated and inefficient equipment. Such physical plant not only results in inefficient productivity but also is environmentally unfriendly. Without new capitalization for modern equipment (much of which is environmentally friendly – e.g. refrigeration units that use non-ozone depleting refrigerants) industries will continue to have negative effects on the environment. World Bank requirements would ensure that any business supported through the Project would be required to meet national and Bank environmental standards.

In general terms, the environmental impacts will be greater without the Project than with the Project.

7. ENVIRONMENTAL MANAGEMENT PLAN

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7.1 General

The environmental management plan will be the guiding document to ensure that impacts likely to be encountered by any of the activities that are supported by the lending program will be avoided, mitigated or minimized to an acceptable level. The plan describes the mitigative procedures to be considered and provides best practice guidelines to avoid impacts in the first place. The plan normally provides a monitoring schedule and a process to follow for monitoring the effectiveness of environmental management. As well, the plan normally indicates responsibilities, scheduling and indicative costs for plan implementation. However, costs are not possible to provide in this plan since the sub- projects to be financed are unknown at this stage. Table 7.1 can only provide monitoring responsibilities at this stage.

Finally, the plan outlines an environmental capacity building program that will contribute to a better understanding of environmental issues amongst the various agencies and private sector actors and ultimately will result in an overall program that will result in minimal impact on the environment.

The World Bank requires that any sub-project that would normally fall within Category A or Category B would require an EIA. The onus of recognizing sub-loan applications for sub-projects that may fall into one of these categories rests with the ABMPIU12 and the PFI loan officers of the various lending institutions.

7.2 Category A and Category B Sub-projects

The majority of sub-projects anticipated will involve the renovation or improvement of agro-processing industries. Some of the sub-projects may involve transportation, warehousing, marketing and agricultural production. It is likely that only the agro- processing activities would fall within the World Bank's Categories A or B.

Adequate and appropriate environmental review is normally assured by MEES (most likely through the oblast offices). However, to ensure that the World Bank’s environmental requirements are not overlooked it will be necessary for ABMPIU to establish an adequate and appropriate environmental review and monitoring procedure. ABMPIU will establish procedures for screening and scoping of sub-project proposals including, as appropriate, consultation with local state environmental inspectors (MEES) and the public. Based on preliminary review of the potential impacts and the scale of sub- projects (screening and scoping) and in consultation with MEES experts at raion or oblast level, the ABMPIU would provide advice to sub-project proponents in determining the level of environmental analysis required.

12 ABMPPU would likely become ABMPIU (Agribusiness and Marketing Project Implementation Unit) once implementation starts.

38 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

It must be remembered that ‘‘....it is the extent of the impacts, not the sector, that determines the extent of the environmental assessment and, hence, the category.13’ and as such it will be important that the ABMPIU and PFI loan officers have sufficient knowledge to recognize the significance of any impacts that may occur for any particular sub-project being assessed for a loan.

7.3 Management

The ABMPIU will be responsible for Project implementation. This Unit should have a staff member or a consultant with an environmental background (through training) to ensure that projects being supported are not ones that would unduly affect the environment. The individual would be responsible for screening the sub-project (although the PFI would also provide screening recommendations) that would result in designating the sub-project a World Bank category (A, B or C). Guidelines for screening sub-projects are provided in Annex E. The individual should also be in close collaboration with relevant MEES staff and concerned NGOs.

Mitigation of any environmental effects will be the responsibility of the sub-project proponent. However, it will also be the responsibility of the lending agency, the MEES, concerned public and the ABMPIU to ensure that mitigation is carried out successfully.

The most appropriate good practices for agribusinesses relate to safety and health. Agro- processing activities must maintain high hygiene standards and all businesses must ensure safety instruction to their employees as well as the provision of protective clothing where appropriate. Those businesses requiring cold storage facilities (e.g. abattoirs, dairy plants and some warehouses) must ensure that all new purchases of refrigeration equipment are ozone friendly.

Table 7.1 provides some suggested good practices related to agricultural production.

Table 7.1: Some Agricultural Good Practices – Towards a Protected Environment and Sustainable Agriculture

Activity Good Practices Seed . selection of seed with lowest agro-chemical input requirements to achieve high yields . selection of seed with minimal level of pest and disease vulnerability . rigorous sanitation facilities and procedures for imported seed . rigorous sanitation facilities and procedures for exported seed . extension services provide advice on appropriate fertilizer and pesticide applications . where possible, extension service to promote sustainable agricultural practices including IPM, minimum tillage, contour ploughing, crop rotations, and green manuring Fertilizers . selection of best fertilizers for crop and prevailing soil 13 World Bank. 1998.

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conditions . application levels as per recommended by manufacturer and extension service Pesticides . IPM is a priority and pesticides to be applied sparingly and only where absolutely necessary . careful handling of pesticides; protective clothing and equipment to be used Pedigree livestock N/A Livestock for finishing . manure handling facilities designed to ensure zero runoff Land rental/purchase . land to be rented or purchased not to be environmentally sensitive – check with MENR before finalizing agreement Tractors . purchase of engine efficient tractors that provide highest ratio of power and work to fuel input . tractors with high efficiency emissions control . tractors no larger than necessary for the most extensive work anticipated Farm implements . implements suitable for minimal tillage and others which are applicable to organic farming methods Land preparation . contour ploughing, minimum tillage, grassed waterways, etc. Small equipment . energy efficient equipment Grain drying equipment . energy efficiency to be a prime concern Irrigation equipment . highest efficiency equipment . equipment that assists in the use of irrigation water in an efficient manner Vehicles . low emission vehicles/vehicles with high efficiency engines Farm buildings for stock, . location of buildings where least disturbance of resources machinery, and chemicals required . energy efficient building design including heating, ventilation . building design to minimize materials and use of environmentally friendly materials Storage facilities Same as above Fencing materials N/A Primary processing equipment . high efficiency equipment including low emission fuels (e.g. gas, solar) Fuel, lubricants, spare parts and . safe storage of fuels, lubricants and chemicals other operating requirements Veterinary services . zero use of hormones and minimal use of drugs . alternative medicine

To ensure timely and effective mitigation, an effective monitoring system will be implemented and guidelines for developing a monitoring system are discussed in Section 7.4.

7.4 Monitoring

The project’s PFI loan officers will be responsible for ensuring that sub-projects comply with Bank environmental requirements and Kyrgyz environmental legislation. However, loan officers are not environmental specialists. With some basic training (see Section 7.5 and Table 7.4) they will be able to monitor the sub-projects but often they will have to rely on consultations with the ABMPIU environmental specialist (assuming that one of

40 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004 the Unit’s officers will receive appropriate training) and/or MEES staff for guidance and advice. If there are to be a large number of sub-projects monitoring will likely be conducted on a sample basis. From an environmental viewpoint, those groups of sub- projects which have the potential for creating the most serious environmental problems should be given highest priority for sampling. For monitoring to be effective, results must be acted upon, and as such, monitoring results will be considered when loan applications are reviewed and conditions are placed on subsequent loans.

Although the legal authority and responsibility of monitoring rests with the MEES and other civil authorities (e.g. MoH, MAWPRI) the capacity for monitoring and enforcement of these agencies is limited. The ABMPIU will need to ensure that an effective monitoring program is built into the sub-projects. For sub-projects with potential for significant impacts, a monitoring plan would be required as part of the documentation for sub-project approval. The results of monitoring would be taken into account in consideration of subsequent requests for financing.

Loan officers of PFIs will be responsible for:

. monitoring all sub-projects (with assistance from MEES) that have required an EA to ensure that mitigation is carried out as planned and to ensure that no unanticipated effects have occurred . randomly reviewing, with field visits, projects that have not required EAs, to ensure that they are environmentally acceptable (he/she will use a checklist to determine whether or not the borrower is complying with the environmental requirements) . where necessary, prescribing corrective actions to be taken, without which the loan will be cancelled/not renewed . taking into account the cumulative effect of a number of projects in a small area, particularly within a critical watershed

Bank supervision missions should consider including an environmental specialist once a year to audit monitoring procedures and results and as well, provide an assessment of the effects, if any, that the Project may be having on cumulative impacts.

Table 7.2 provides a summary of monitoring and reporting responsibilities for ABMP.

7.5 Environmental Capacity Development

7.5.1 General

To ensure that all elements of the ABMP management structure (ABMPIU, CC, PFIs and MEES) are fully aware of the environmental screening, assessment, management and monitoring activities that are incorporated in ABMP implementation, the project will need to invest in appropriate training for each of these links in the management chain.

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Table 7.2: Summary of Monitoring Responsibilities

Monitoring Requirements Responsibility Frequency Ensure borrowing enterprises MEES (head office or oblast Monthly – unannounced visits. are in compliance with EE staff) Scientific measurements passport requirements required. (dealing with discharges, emissions and solid wastes). Make recommendations where appropriate. Review of EE passport ABMPIU Bi-annually, to ensure that monitoring results. Ensure monitoring is regular and that follow up on borrower is meeting recommendations. environmental requirements Examine environmental PFIs with ABMPIU Bi-annually – unannounced aspects (other than visits (no measurements discharges, emissions and required) solid wastes) as indicated in enterprise’s environmental management plan, for compliance. Make appropriate recommendations. Examine environmental effects PFIs Bi-annually of enterprises that did not require EIAs and make recommendations. Review of PFI monitoring ABMPIU Bi-annually reports (see above) and ensure follow up of recommendations. Review efficiency and World Bank Annually effectiveness of overall monitoring – process and results. Investigate selected World Bank Annually enterprises for compliance and make any necessary recommendations. Review selected EIAs of World Bank Annually borrowing enterprises for completeness re: WB requirements. Visit selection of enterprises to test accuracy of EIA. Examine the cumulative effect ABMPIU Annually of selected enterprises.

6.5.2 ABMPIU and Consultative Council

The ABMPIU staff needs to be generally aware of the procedures established for environmental screening, scoping, assessment, review, management, mitigation and monitoring. They also need to be aware of types of projects that are ineligible for financing under World Bank guidelines and the general procedures and costs that may be

42 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004 associated with carrying out environmental assessment of potential Category A or B sub- projects.

To ensure compliance of ABMP financed sub-projects with existing environmental regulations and those that may be promulgated in the future, the ABMPIU should have an environmental specialist on staff or arrange a contract with a qualified non-governmental organization to: provide guidance on initial project screening and review; develop terms of reference for sub-project review or assessment; review environmental management and monitoring plans submitted as part of the sub-project appraisal process, and; periodically determine that monitoring is being carried out to appropriate standards.

Activities to be carried out by the environmental specialist or contractor would include:

 review of applications for sub-project financing (whether or not these require permits from MEES) to identify potential environmental impacts and carry out field inspections as needed;  review of sub-projects requiring an environmental assessment under MEES or World Bank guidelines;  develop terms of reference for environmental assessments for sub-projects for which these are required;  review environmental assessments, environmental management and monitoring plans for sub-projects requiring them;  provide guidance to sub-project proponents on environmental mitigation that can be incorporated into project implementation;  monitor all sub-projects requiring an environmental assessment to ensure that mitigation is being carried out as planned and no unidentified effects have occurred;  selectively undertake field visits to sub-projects for which environmental clearance permits were required to monitor compliance;  randomly carry out field visits to sub-projects that do not require environmental clearance permits to ensure that acceptable environmental standards are being met.

The environmental specialist or contractor will ensure that applicable national standards and guidelines are being achieved or followed. Where multiple sub-projects are being carried out in geographical proximity, assess the possible cumulative effects on the environment (in particular natural habitats, forests, soil, air and water quality).

The environmental specialist or contractor will provide guidance and backstopping to PFI loan officers on the application of project environmental screening procedures to sub- project proposals.

In addition to having an environmental specialist on staff, or the use of an environmental consultant, the staff should be generally environmentally aware and have a general knowledge of the potential impacts of various types of sub-projects, the types of sub- projects that are ineligible for financing, and the requirements of MEES for environmental clearance.

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At the minimum, ABMPIU staff should attend a two-day environmental awareness and analysis workshop that will demonstrate how sub-projects financed by project sub-loans can affect the environment and the steps to be taken to avoid impacts.

The Consultative Council (CC) will have little or no training in environmental matters. In its position of providing guidance it should have a general awareness of some of the environmental problems that can be encountered. The CC should attend a half-day general environmental awareness workshop.

7.5.3 PFI Loan Officers

Participating private retail banks are not in the environment business. Their main function will be to approve and administer loans. These organizations do not have the knowledge, or the official responsibility for environmental protection. The PFI loan officers will need to be familiar with the sub-project screening methods and criteria, and project requirements for including appropriate mitigation and monitoring in the costs to be financed. They will also need an understanding of the content of environmental management and monitoring plans and the general nature of mitigation requirements for "typical" sub-project investments. They need to be generally aware of MEES requirements for environmental clearance and the permitting process for waste discharge. They need to be aware of the MAWRPI and MoH roles in monitoring and enforcement of water quality standards.

PFI loan officers need to be familiar with the environmental screening procedures for initial sub-project review that will determine the level of environmental assessment a given sub-project may require. They should also be generally aware of the kinds of environmental problems that may be associated with different types of projects and the kinds of mitigation options that may be required to address them. They need to be familiar with the structure and general content of environmental management plans (including monitoring activities) that may be required for some types of sub-projects. They need to be aware of MEES procedures for environmental review and clearance of those projects requiring environmental review as well as any reporting or monitoring responsibilities of the project proponent to assure compliance with national permit requirements for waste discharge or conformance with other environmental standards.

Key personnel from the organizations should attend a half-day environmental awareness workshop and all loan officers should attend an environmental awareness and analysis workshop.

A user friendly environmental review manual would be helpful in providing loan officers (as well as ABMPIU staff) in determining the World Bank category of projects and the impacts that can be expected for various types of sub-projects.

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7.5.4 Agribusiness Entrepreneurs

Agribusiness entrepreneurs are businessmen first and foremost. They generally meet government environmental requirements but in all likelihood are not always aware of the consequences of not meeting these requirements. With a better understanding of the environment and how their particular activities can cause impact on the environment, they may become more pro-active in their business planning and actions. It is recommended that they attend an environmental awareness workshop.

Table 7.3 summarizes the environmental capacity building requirements for the ABMP.

Table 7.3: Summary of Environmental Capacity Building Requirements

Target Audience Type of Capacity Description Inputs Required Building 1. ABMPIU director, CC Environmental awareness Half day seminar 1.5 days of international members, senior PFI staff workshop discussing the importance consultant time and 1.0 of the environment and the days of local consultant consequences for not time. addressing issues. 2. Participating agro- Environmental analysis One-day workshop on Four days of international processing borrowers workshop environmental awareness consultant time (extra time but with additional depth required to further research related to their specific environmental effects of operations. Beyond specific operations (e.g. environmental awareness tanning, abattoirs); Four with emphasis on impacts days of local and their consequences, environmental legal and mitigation; outline of consultant. relevant legal requirements. 3. PFI staff (loan officers) Environmental analysis Three day workshop on Eight days of international as well as ABMPIU staff including environmental environmental analysis consultant time for first and selected MEES impact assessment and impact assessment group of 24 officers; four (young field professionals) procedures with emphasis (i) on days of consultant time for national and World Bank each additional group of requirements for 24. environmental assessment, mitigation, monitoring and reporting; (ii) screening and scoping procedures including checklists (iii) the generic procedures for environmental assessment required by the World Bank and national authorities (MEES); (iv) management plan content; (v) monitoring and reporting requirements of the World Bank for sub- project supervision. Field

45 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

studies will be included. 4. PFI loan officers and User friendly manual A manual describing, step Nine days of manual others by step, how to screen preparation plus cost of (categorize) projects and manual production to provide impacts to be expected and how to mitigate such impacts 5. Loan officers, ABMPIU Basic environmental Three day workshop on Eight days of international staff and junior MEES monitoring techniques monitoring techniques and consultant time field staff systems

46 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

8. REFERENCES

AFC Consultants, Bonn, Germany and MNT Consulting, Bishkek, Kyrygz Republic) Ambrose, J.E. and E. Shukurov. 1999. Environmental Review. Second Rural Finance Project. Christian,Konrad. 2001. Abfallwirtschaft in der ledererzeugenden Industrie. Biologische Behandlung von nichtchromhaeltigen festen Gerbereiabfaellen. (Waste management for the tanning industry – biological treatment for non-chrome containing solid tannery waste). (unpubl. dissertation thesis) Creighton, K. 2003. Environmental Review, Village Investment Project. Ministry of Agriculture, Water Resources and Food Resources Industry. 2003. Proposed Outline for Agro-business and Marketing Project World Bank Credit Line. (prepared by UNECO. 2000. Environmental Review. Kyrgyzstan. World Bank. 2004. Project Approval Document (draft). Agriculture and Marketing Project.

47 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

Annex A

Brief Description 14of Some of the Relevant Environmental Laws

The Law on Wildlife

This law regulates the use and protection of wildlife. It establishes the general framework rules for habitat protection and it obliges authorities to take requirements for habitat protection into account in decision making. Economic activities are not allowed to damage animal habitats. Provision is made for listing rare and endangered species in the Red Data Book.

The Law on Fisheries

The Law regulates commercial fishing and procedures for allocating water bodies for this purpose. The users are obliged to take fish protection measures, including measures to prevent harm to fish habitats, to keep account of fish resources, and to conduct monitoring.

The Law on Waters

This Law regulates the use and protection of waters including reservoirs, canals and other man-made water bodies. It also establishes measures for the prevention of floods and other harmful impacts. Provision is made to ensure that waters are used according to the respective license, which is allocated on the basis of a concession or lease for specified purposes. Drinking water or communal water supply purposes have priority. Water bodies are protected against depletion, pollution or littering through such mechanisms as standards, permits for the discharge of effluent and the establishment of water protection zones.

The Law on the Protection of Ambient Air

The Law mainly applies historical instruments to air protection and specifies the conditions and methods in which provisions specified in other laws (maximum allowable concentrations, maximum allowable emissions, environmental impact assessment, etc.) are applied to air management.

The Forest Code

The Forest Code regulates the protection and use of forest resources, including trees and plant life. It embodies an ecosystem perspective. According to the Forest Code, forests are important in general nature protection and therefore cannot be allocated to commercial timber logging. Only sanitary and forest management logging is allowed and can be performed on the basis of State permits, which are given to individuals for leased forest areas. State permits are also required for other uses such as grazing, haymaking,

14 UNCEO. 2000.

48 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004 hunting, mushroom picking, recreation and other. The Code provides for forest protection measures to be taken by both the forest management authorities and the users.

The Law on Specially Protected Areas, and the Law on Biosphere Territories

These laws establish legal requirements for the protection and use of all natural objects within certain areas. Their legal regime corresponds to the types of protection areas specified in the laws. An ecosystem approach is also taken with these laws.

The Law on Subsoil

This law obliges users to ensure that safe exploitation of the subsoil and the rehabilitation of the lands and other natural objects.

The Law on Radioactive Safety of the Population

The Law aims at guaranteeing public safety and the protection of the environment against the harmful effects of radiation. These guarantees include permit procedures, social security measures, the right of individuals to information on the impacts of radiation, and other measures.

Norm-setting Documents

The following norm-setting documents (issued by MEES) define regulations associated with environmental protection:

(1) Atmospheric Air Protection Rules (approved by the Minister as of January 24, 2001, coordinated with the Ministry of Health and Interior Ministry of the KR, and registered by the Ministry of Justice of the KR);

(2) Guidance on accomplishing state control over atmospheric air protection against vehicle emissions in the KR, registered with the Ministry of Justice of the KR as of December 16, 1999 #104;

(3) Guidance on accomplishing state control over the standard sources of atmospheric air pollution, registered with the Ministry of Justice of the KR as of December 28, 1999 #114;

(4) Guidance on an order of norm-setting for waste treatment in the KR, approved by the Decree #3 of the Board of the Ministry on Environmental Protection as of September 17, 1999, and registered with the Ministry of Justice of the KR as of October 1, 1999 #73.

(5) Guidance for acquiring, selling, storing and transporting strong poisonous substances, permitted by the Ministry of Ecology and Emergency Situations of

49 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

the KR, approved by the Decree of the Government of the KR #513 as of September 21, 1999;

(6) Guidance for accomplishing environmental impact assessment (EIA) of an intended activity in the KR, approved by the Decree of the Minister of Environmental Protection as of July 27, 1997, coordinated with the Ministry of Health and Ministry of Architecture and Construction, registered with the Ministry of Justice of the KR as of as of July 4, 1997 # 386;

(7) Guidance for accomplishing state environmental expertise of pre-project, project and other documents in the KR (approved by the Minister of Environmental Protection of the KR as of October 15, 1997);

(8) Rules of cooperation between bodies of public prosecution, Ministry of National Security, Interior Ministry, State Customs Inspectorate, and Ministry of Ecology and Emergency Situations of the KR to prosecute violations of environmental legislation (coordinated with the Ministry of National Security, Interior Ministry, Customs Inspectorate, and General Office of Public Prosecutor as of 2001);

(9) Guidance on determining emission (from stationary points), discharge and waste disposal fees (approved by Decree #4 of the Board of the Ministry on Environmental Protection of the KR as of September 17, 1999, and registered with the Ministry of Justice);

(10)Guidance on determining vehicle emissions’ fee (approved by Decree #4 of the Board of the Ministry on Environmental Protection as of September 17, 1999, and registered with the Ministry of Justice);

(11)Guidance for conducting environmental audits of economic entities (approved by Decree #19 of the Ministry of Environmental Protection as of February 15, 2000).

Normative documents of other state institutions

 Documents of the Health Ministry of the KR, Sanitary norms and regulations on radioactive waste treatment (2000) approved by the Decree of the Chief State Sanitary Doctor of the KR # 8 as of February 12, 2000;

 Documents of the Ministry of Agriculture, Water and Processing Industry (MAWPI) of the KR, Guidance on Safety Pesticide Use and Storage in Agricultural Production (approved by the MAWPI Decree # 309 of November 26, 2001); List of pesticides and agrochemicals permitted for use in the KR for 2000-2004 approved by Decree # 180 of the Ministry of Agriculture, Water and Processing Industry of June 10, 2002, registered by the Ministry of Justice on June 26, 2002.

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 Documents of the State Architecture and Construction Inspectorate (SACI) Construction norms and regulations of the KR on basic provisions for putting completed structures into operation (approved and enforced by the SACI Decree # 8 of June 27, 2000).

 Documents of the State Real Estate Property, Instructions on drafting and issuing documents certifying the land ownership rights approved by Decree # 61 of the State Real Estate Agency as of August 10, 2000.

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Annex B

Impacts, Causes, Consequences and Mitigation Agribusiness (agro-processing and other)

52 Kyrgyz Republic ABM Project Environmental Impact Assessment April 2004

Table B1 For Planning and Construction of all New Enterprises, Rehabilitation of Existing Enterprises and De-commissioning of all Enterprises

Potential Impacts Causes Consequences Mitigation Required Remarks Planning Phase: Loss of biodiversity Poor location analysis not Loss of flora and fauna. Location in areas that are not taking into account important high priority for biodiversity biophysical values. protection. Loss of cultural features Poor location analysis not Loss of important cultural Location in areas of little or Public participation is a providing consideration to sites and structures. no cultural significance. requirement for all EIAs and cultural values. if properly conducted during EIA will ensure input required to select appropriate alternative sites. Socially unacceptable Poor location analysis not Nuisance factor to local Location in areas where noise, Public participation is a taking into consideration local communities; loss of peace odour or aesthetics will not be requirement for all EIAs and communities’ lifestyle, and quiet; loss of access to a problem; location to be if properly conducted during movement patterns and other areas or sites (e.g. school selected which doesn’t EIA will ensure input values. children may have to walk interfere with important access required to select appropriate greater distances due to loss of (e.g. to schools). alternative sites (and modus direct route to school. operandi) for enterprise. Construction Phase : Soil erosion Vegetation and topsoil is Further soil erosion off-site Ensure awareness by workers; If possible construction removed for initial and downstream; increased adopt appropriate soil should occur in dry periods construction and access, sediment loads in receiving protection techniques; ensure or seasons, particularly in exposing bare soil that is streams resulting in aquatic exposed soil surfaces are kept situations where soil erosion vulnerable to erosion, habitat changes. to a minimum and for short could be a problem. particularly in rainy periods. periods of time; conserve topsoil, recover and replant when construction is completed. Soil contamination Spilled and dumped fuels, and Loss of soil productivity. Environmental awareness; other chemicals. Contaminated groundwater. training in handling and Ineffective on-site sewage storage of fuels, lubricants and treatment during construction chemicals; provision of proper phase. on-site storage facilities.

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Water pollution Spilled and dumped fuels and Contaminated groundwater Same as above. other chemicals. and surface water resulting in Provision of waste containing contaminated drinking water toilets which waste can be and in the case of surface transferred to a municipal water, damaged aquatic treatment facility. ecosystem. Noise and dust Vehicles and construction Nuisance factor to Operations during normal machinery; dirt access roads. neighboring communities. working hours only; access roads to be watered during dry periods. Solid waste Littering of unused Unsightly and remnant Effective disposal of materials construction materials and construction materials could and garbage in designated workers personal garbage. pose a safety hazard. waste disposal sites. Loss of access Construction site may have Nuisance and possibly During planning phase ensure Public participation during formerly been used as an economic hardship. that local people are aware of planning phase should access for local population restrictions during identify this and similar (and vehicles) for various construction and alternative conflicts. sections of the community. arrangements for access are provided. Injuries Inadequate safety procedures Injury / death resulting in lost Ensure construction workers for workers; inadequate work days (for construction are given safety instruction; signage and construction workers and general public; ensure safety officers on site; activities exposed where lost income. ensure effective signage for public can interface with such. the public and ensure that all exposed construction areas are barricaded from public access. Decommissioning Phase: (it is unlikely that any of the enterprises will undergo decommissioning in a 25-50 period from initial start up or refurbishment but if such should occur then the listed impacts should be considered). Same as above for See above See above See above construction plus:

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Waste Concrete, blocks, steel, glass Public safety hazard. Removal and recycling or will result from demolition; Waste of resources. effective disposal of all toxic old equipment will be materials; complete dismantled. demolition after recycling useful materials; removal to a designated and environmentally safe disposal site and burial of clean and inert materials. Aesthetics Unsightly site (as are many Following removal of all industrial sites from former materials (see above), site to Soviet times). be formed (topsoiled where relevant and feasible) and landscaped, where appropriate, to suit surrounding areas. Soil erosion As for construction phase above. Safety As for construction phase above.

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Table B2 Abattoir Overall Potential Impact: HIGH (due to threat to human health threat) Potential Impacts Cause Consequences Mitigation Required Remarks Contaminated meat Poor sanitary conditions Consumers become ill; lost Provision of protective Government inspections can including lack of protective work days; lost productivity clothing; effective use of be erratic and perhaps not clothing and ineffective and income; abattoir’s disinfectants; effective always effectively maintenance; processing of reputation leads to lost sanitary inspections leading to conducted. Residents of sick and diseased animals. business. required standards being met; Bishkek are very cautious effective regulatory animal with meat purchases because and meat inspection. of faulty meat inspections and record of people becoming ill and dying. This however is mainly related to small farm slaughter and not the commercial abattoirs. Contaminated groundwater Improper disposal of animal Contaminated drinking (E. Ground waste bone, meat and Current ban on using such and surface water manure and offal as well as coli) water resulting in illness offal into flour for animal feed flour as animal feed in other bones and other non-useable (possibly death), lost (see remarks); blood can be countries due to threat of animal parts including blood. productivity and income. used for blood sausage; other spongiform encephalitis water and blood waste must be (BCE-mad cow disease) collected and treated before which can result in deadly proper disposal into municipal Jacob Kreifeldt disease in waste treatment systems; humans for those consuming manure should be recycled or meat of infected animals. allowed to mature in an impervious containment – mature manure can be applied as fertilizer for crop production or on pastures.

Odour Manure; refrigerants (NH3); Nuisance to nearby residents. Avoid escaping NH3; maintain animals and carcasses. good sanitary conditions; dispose of manure in a timely fashion.

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Ozone depletion Refrigeration and freezing Increase in UV rays resulting Convert refrigerants from KR is signatory to the units utilizing Freon or in skin cancer if proper ozone depleting substances Vienna Convention and the

ammonia. protection is not taken; can (NH3 and Montreal Protocol re: ozone- also affect plant health. chlorofluorocarbons) to a depleting substances. hydrofluorocarbon. Groundwater depletion Large volumes of water used Lowering of water table and Water apportioning; efficient Of particular concern when in washing. depletion of water resources use of water including planning a new abattoir that required by others. recycling. water resources are sufficient to meet needs of present and future users. Injuries Knives and saws used in the Lost productivity, work days Safety instructions; safety processing; large and heavy and income. clothing where appropriate animal carcasses can fall and (e.g. hard hats). cause injury.

Residual Impact Assuming Full Mitigation: LOW Environmental Risk: MODERATE

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Table B3 Meat Packing (This activity is often combined with the abattoir) Overall Potential Impact: HIGH (due to threat to human health threat) Potential Impacts Causes Consequences Mitigation Required Remarks Contaminated meat Poor sanitary conditions Consumers become ill; lost Provision of protective Government inspections can including lack of protective work days; lost productivity clothing; effective use of be erratic and perhaps not clothing and ineffective and income; disinfectants; effective always effectively maintenance; processing of Meat packing enterprise loses sanitary inspections leading to conducted. contaminated meat from reputation resulting in lost required standards being met; abattoir. sales, lost revenue and loss of effective regulatory animal job. and meat inspection; assurance that carcasses and meat joints delivered are free of contamination and have been refrigerated adequately. Contaminated groundwater Improper disposal of bones Illness Ground waste bone and fat Current ban on using such and surface water and fat. into flour for animal feed (see flour as animal feed in other remarks). countries and other places due to threat of spongiform encephalitis (BCE-mad cow disease) which can result in deadly Jacob Kreifeldt disease in humans for those consuming meat of infected animals. Disease Improper disposal of wastes Lost workdays and income. Appropriate disposal of waste. into municipal disposal sites providing ideal habitat for vermin. Illness Canning uses lead solder for Lead (Pb), a carcinogen, is Use tin (Sn) for soldering or can seams. cumulative in humans. adopt other appropriate sealing methods. Solid waste Canning material scrap. Wasted resource. Recycle back to processor.

Residual Impact Assuming Full Mitigation: NONE Risk: MODERATE

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Table B4 Vegetable Processing and Canning Overall Potential Impact: LOW Potential Impacts Causes Consequences Mitigation Required Remarks Damage to aquatic Residue from vegetable and High organic content leading Compost vegetative waste. ecosystems. fruits allowed to be dumped to oxygen depletion and into surface waters. habitat destruction. Illness Canning uses lead solder for Lead (Pb), a carcinogen, is Use tin (Sn) for soldering or can seams. cumulative in humans. adopt other appropriate sealing methods. Solid waste Canning material scrap. Wasted resource. Recycle metal back to metal processor. Injuries Open machinery. Lost productivity, work days Safety instructions; safety and income. clothing where appropriate (e.g. hard hats); protective guards on all machinery.

Residual Impact Assuming Full Mitigation: NONE Risk: LOW

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Table B5 Tanning Overall Potential Impact: HIGH (primarily due to toxic chemicals in effluent discharge) Potential Impacts Causes Consequences Mitigation Required Remarks Modification of aquatic A variety of chemicals is used Receiving water bodies Containment and treatment One tannery in Bishkek does habitats in the tanning industry become highly polluted and facilities to ensure that not use the Cr process

including Cr, NH4, Ti, toxic, rendering them unfit for effluent discharges are within because it does not have the Na2SiF6, Na2S, CaO, Na3OH4, other uses and destroying the regulated limits. facility for treating the Na2SO4, (CH2)6N4, existing fauna and flora; loss Chemicals should be stored chemical after it has been 15 AlNH4(SO)2. These chemicals of biodiversity. and handled in such a manner used. Christian suggests can be found in waste effluent Organic wastes can deplete as to prevent spillage. separating effluents into four or they can reach the effluent oxygen levels surface waters, wastewater streams: low discharge as a result of resulting in damaged habitat polluted, high polluted, spillage. As well there is waste and aquatic communities. chromium bearing and including leather and hair sulphide bearing from the hides that can find its wastewaters. Solid way into the aquatic habitat. wastes16might be separated into three fractions: spent salt, non-chromium containing solids, and chromium solid wastes. Aerobic biological treatment (composting) is suggested as proper technology for the non-chromium containing solid waste since this can represent up to 80% of all of the solid waste generated at a tannery17.

15 16 17 Christian, K. 2001.

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High energy consumption Aging high production Depending on source of For new tanneries building The large Bishkek tannery tanneries use large amount of energy, could contribute to design and construction has to close during the energy, particularly in winter. greenhouse effect (if fossil should be compact and energy coldest months due to high fuel derived) or if hydro efficient. cost of heating. derived, could result in pushing high demand on limited supply that would result in additional energy sources to be found. Injuries Tanneries use heavy Lost productivity, work days Safety instructions; safety machinery, which, if not fitted and income. clothing where appropriate with protective shields, can (e.g. hard hats); protective cause injury. guards on all machinery.

Illness A number of chemicals have Lost productivity, work days Effective training in the to be handled in the tanning and income. Long term illness. handling of chemicals; process. Some of these can be protective clothing (e.g. dangerous to the health of respirators, gloves of inert workers if not properly stored material); proper storage for and handled. highly volatile compounds. Solid waste and Hair and small quantities of Small quantities of leather do Minimize amount of waste; See remarks for modification contamination of skin and leather waste during not present a problem. Hair of treat hides before removal of of aquatic habitats, above. groundwater and surface the tanning process. hides often contains parasites hair (or treat hair after water. and disease. Unknown as to removal). whether or not these could find their way into groundwater and surface water and pose a threat to health. High water consumption Large tannery uses large Drawdown of water table Ensure proper water One tannery in Bishkek uses amounts of water. which could affect other users. apportionment with other approximately 10,000m3 of competing users; efficient water monthly. water use and recycling.

Residual Impact Assuming Full Mitigation: LOW - MODERATE Risk: MODERATE - HIGH

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Table B6 Dairy Processing Overall Potential Impact: HIGH (primarily due to human health threat) Potential Impacts Causes Consequences Mitigation Required Remarks Surface water contamination Effluent discharge containing Waterways become opaque Effective collection and whey (waste from cheese and display high protein levels treatment of whey before making); discharge of acid resulting in damaged or discharge; make available all from milk processing as a destroyed aquatic ecosystem. whey to farmers for feedstock. result of cleaning of equipment. Ozone depletion Refrigeration and freezing Increase in UV rays resulting Convert refrigerants from units utilizing Freon or in skin cancer if proper ozone depleting substances

ammonia. protection is not taken; can (NH3 and also affect plant health. chlorofluorocarbons) to a hydrofluorocarbon. Food contamination Pasteurization process not Consumers become ill (could Origin of milk should be effective; workers in contact be very serious as milk could known; pasteurization process with milk and milk products. come from cows with must be effective; workers brucilosis or tuberculosis); must be protected with workers could infect milk effective clothing and workers products during handling. should not come in direct contact with milk products; veterinary diligence to ensure healthy animals. Injuries Open machinery. Lost productivity, work days Safety instructions; safety and income. clothing where appropriate (e.g. hard hats); protective guards on all machinery.

Residual Impact Assuming Full Mitigation: NONE Risk: MODERATE

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Table B7 Frozen Food Production Overall Potential Impact: MODERATE (primarily due to human health threat) Potential Impacts Causes Consequences Mitigation Required Remarks Ozone depletion Refrigeration and freezing Increase in UV rays resulting Convert refrigerants from units utilizing Freon / or in skin cancer if proper ozone depleting substances

ammonia. protection is not taken; can (NH3 and also affect plant health. chlorofluorocarbons) to a hydrofluorocarbon. Food contamination Poor sanitary conditions Consumers become ill; lost Provision of protective Government inspections can including lack of protective work days; lost productivity clothing; proper washing up be erratic and perhaps not clothing and ineffective and income; enterprise’s with disinfectants; effective always effectively maintenance; contaminated reputation leads to lost sanitary inspections leading to conducted. raw materials. business. required standards being met; effective inspection of raw materials. Injuries Open machinery. Lost productivity, work days Safety instructions; safety and income. clothing where appropriate (e.g. hard hats); protective guards on all machinery.

Residual Impact Assuming Full Mitigation: NONE Risk: MODERATE

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Table B8 Cotton Ginning Overall Potential Impact: LOW Potential Impacts Causes Consequences Mitigation Required Remarks Injuries Open machinery. Lost productivity, work days Safety instructions; safety and income. clothing where appropriate (e.g. hard hats); protective guards on all machinery. Illness Cotton fibre dust. Respiratory problems resulting Provide workers with in lost productivity, work days respirators. and income. Solid waste Short fibres (motes) that are Waste disposal required. Use as cattle feed. not useful for spinning.

Residual Impact Assuming Full Mitigation: NONE Risk: LOW

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Table B9 Oil Processing (including maize) Overall Potential Impact: LOW Potential Impacts Causes Consequences Mitigation Required Remarks Polluted surface water Biomass waste allowed to Degraded aquatic ecosystem. Effective disposal of biomass migrate to surface waters. waste (composting or use as animal feed). Solid waste Biomass waste. Compost or use as animal feed. Illness Cold pressed oil contains high Serious illness resulting in lost Use alternative pressing amounts of fatty acids and productivity, work days and process. pesticide residues. income. Injuries Open machinery. Lost productivity, work days Safety instructions; safety and income. clothing where appropriate (e.g. hard hats); protective guards on all machinery. Residual Impact Assuming Full Mitigation: NONE Risk: MODERATE

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Table B10 Flour Milling Overall Potential Impact: LOW Potential Impacts Causes Consequences Mitigation Required Remarks Solid waste Wheat husks left from milling Wasted resources. Recover bran; use for animal dumped at municipal disposal feed. site. Injuries Open machinery. Lost productivity, work days Safety instructions; safety and income. clothing where appropriate (e.g. hard hats); protective guards on all machinery. Illness Flour dust. Respiratory irritation. Provide masks to workers.

Residual Impact Assuming Full Mitigation: NONE Risk: LOW

Table B11 Storage (warehousing) Overall Potential Impact: LOW Potential Impacts Causes Consequences Mitigation Required Remarks Only those during siting, construction and decommissioning phases.

Residual Impact Assuming Full Mitigation: NONE Risk: LOW

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Table B12 Markets Overall Potential Impact: MODERATE Potential Impacts Causes Consequences Mitigation Required Remarks Illness Vermin (rats). Spreading of disease resulting Regular inspection of markets Market stall keepers in in lost workdays, sales and and extermination of vermin; Bishkek mention presence of income. maintenance of high sanitary rats due to unsanitary standards. conditions. Unrefrigerated meat and dairy Lost workdays and income. Refrigeration of meat and products. dairy products. Ozone depletion Refrigeration and freezing Increase in UV rays resulting Convert refrigerants from units utilizing Freon / or in skin cancer if proper ozone depleting substances

ammonia. protection is not taken; can (NH3 and also affect plant health. chlorofluorocarbons) to a hydrofluorocarbon.

Residual Impact Assuming Full Mitigation: NONE Risk: LOW - MODERATE

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Annex C

Impacts, Causes, Consequences and Mitigation For Agriculture

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Table C1 Seed Overall Potential Impact: MODERATE Potential Direct Impacts Causes Consequences Mitigation Required Remarks Positive impact; increased yields and food security for the small holder farmer. Risk of introduction of Use of chemical fertilizers, Same consequences as determination and application MAWRPI extension services genetically modified plant and pesticides. described for chemical of optimum quantities and should work with farmers to seed (see below for pedigree fertilizers and pesticides (see scheduling for fertilizers and provide input management seed) tables C - 3 and 4) other inputs; use of only those advice. MAWRPI should pesticides approved by UN ensure coordination with agencies; introduction of an MEES. On the matter of integrated pest management GMOs, there are positive and program (IPM). negative effects of the use of these and both should be considered.

Residual Impact Assuming Full Mitigation: LOW – MODERATE Risk: LOW

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Table C2 Pedigree seed Overall Potential Impact: MODERATE – HIGH Potential Impacts Causes Consequences Mitigation Required Remarks Positive impact through increased yields and improved farm economy. .Risk of introduction of Genetic drift into other areas Policies and legislation to KR has to decide if the genetically modified where GMOs are not wanted; prevent importation of GMO potential gains of GMOs organisms leading to inputs Development of pesticide plant seeds outweigh the impacts of pesticides resistant weeds; Soil contamination and water contamination. Water and soil pollution Increased use of high levels of Soil and water contamination . determination and In general terms, high chemical fertilizers and leading to modified aquatic application of optimum yielding varieties (HYV) pesticides. ecosystems. quantities and scheduling for require large inputs to fertilizers and other inputs; achieve expected results – introduction of an integrated plant species and varieties pest management program would have to be examined (IPM); on a case by case basis; close Adoption of organic farming liaison with MAWRPI techniques required. Organic farming techniques are currently practiced in other areas of the FSU and some of these could be adopted. Residual Impact Assuming Full Mitigation: LOW - MODERATE Risk: MODERATE

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Table C3 Fertilizer Overall Potential Impact: MODERATE TO HIGH Direct Impacts Causes Consequences Mitigation Required Remarks . reduction in soil organic Reliance on chemical Modified soil structure and Fertilizer application in Extension workers should content fertilizers which do have an reduction in soil moisture conjunction with crop rotation work closely with farmers to organic component – less holding capacity. In the long practices. develop application rates and reliance on compost material run, possible loss of Further reduce chemical best land husbandry and crop and manure for meeting soil productivity as a result of fertilizer use through rotation plans. fertility requirements. insufficient soil moisture; loss incorporation of various of soil’s natural fertility. organic cultivation practices. Air pollution Emission of greenhouse gases Contribution to global Optimum fertilizer quantities from chemical fertilizers. warming resulting in climate and application schedules change. should be planned and implemented. Water pollution Nutrient enrichment of water Eutrophication of water Optimum fertilizer quantities Work closely with extension bodies from fertilizer runoff. bodies; modified aquatic and application schedules workers to develop best land ecosystems. should be planned and and crop management plans Contaminated potable water implemented. sources. Organic farming techniques should be introduced.

Residual Impact Assuming Full Mitigation: LOW - MODERATE Risk: LOW – MODERATE

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Table C4 Pesticides Significance of Overall Potential Impact: HIGH Potential Impacts Causes Consequences Mitigation Required Remarks Illness Improper handling, . increased health costs; lost Training in the proper MAWRPI should develop application and storage of work time; lost family handling and use of application certification pesticides. income. pesticides; proper storage of programs. Consumption of crops with pesticides. It should be determined if pesticide residues. . introduce an IPM MAWRPI is developing an (integrated pest management IPM program. program) Public education is required Use only UN approved and this could be done pesticides. through MAWRPI and the Health warnings to wash NGO community foods. Soil contamination Residual pesticides in soil. Loss of soil productivity; Use of appropriate pesticides Difficult because long term loss / altered soil that do not have residuals or agrochemical companies micro-fauna important to in which residuals do no promote their products soil / plant relationships. harm to soil. amongst farmers and farmers will generally adopt the least cost chemical that does the job. Loss of biodiversity Pesticide ingestion by fauna. Loss of fauna. Use UN approved pesticides. ‘Silent Spring’ by Rachel Carson. Water pollution Ground and surface water Impaired health of local and Use of least harmful international waters contamination. downstream water pesticides as approved by UN consumers; increased health agencies costs; lost work time; lost Apply IPM techniques. family income. Aquatic ecosystems damaged; biodiversity losses.

Residual Impact Assuming Full Mitigation: MODERATE Risk: MODERATE

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Table C5 Pedigree livestock Significance of Overall Potential Impact: NONE Potential Impacts Causes Consequences Mitigation Required Remarks Positive input Leading to better quality and increased production of meat and wool and dairy products; increased yields and increased farm incomes. None None None None

Residual Impact Assuming Full Mitigation: N/A RISK: N/A

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Table C6 Livestock for finishing Significance of Overall Potential Impacts: MODERATE TO HIGH Potential Impacts Causes Consequences Mitigation Required Remarks Loss of ground cover and soil Carrying capacity of pasture Reduced productivity; loss of Develop pasture carrying Work closely with erosion. is exceeded. soil; sedimentation: capacities and ensure that agricultural extension hydrological regime these are not exceeded. services to determine and modified resulting in flooding maintain pasture carrying and drought conditions. capacities.

Loss of biodiversity In high altitude areas stock Possible loss of species Ensure that grazing does not Work closely with may threaten forested or other endemic to KR occur in protected or other agricultural extension protected areas; reduced Sedimentation; hydrological important areas. services. vegetation cover leading to regime modified resulting in Livestock should be soil erosion and loss of water flooding and drought reintroduced to alpine grazing holding capacity. conditions. areas (but under strict control) in order to eliminate weed population (resulting from former Soviet grazing practices) and as a way of rehabilitating original communities and ultimately of protecting biodiversity Water pollution Livestock in a confined area High nutrient loading in Introduce effective waste produce high concentration of runoff waters leading to poor management; design and concentration of manure. water quality and threat to implement alternative to human health (E. coli). confined quarters.

Residual Impact Assuming Full Mitigation: NONE Risk: MODERATE

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Table C7 Land Purchase Significance of Overall Potential Impact: HIGH Potential Impacts Causes Consequences Mitigation Required Remarks Biodiversity loss Lands purchased for Loss of flora and fauna and Land not already being used Loans could be rejected if agriculture are rich in possibly species endemic to for agriculture and which has land purchase and agriculture biodiversity. KR. watershed or biodiversity will lead to purchase of values should not be converted ecologically sensitive areas or to agriculture. to non-sustainable practices. Loss of livelihood Lands may be private or state Poverty and dependence on Lands currently required for Farmers will make the held but currently supporting the State. subsistence farming should decision to sell on their own. subsistence farmers. remain as such unless No one is going to give them compensation is sufficient to advice on how to manage guarantee improved and their money. State should sustained lifestyle. look after the small subsistence farmer and not sell off lands upon which he is dependent.

Residual Impact Assuming Full Mitigation: NONE Risk: MODERATE

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Table C8 Tractors Significance of Overall Potential Impact: MODERATE TO HIGH Potential Impacts Causes Consequences Mitigation Required Remarks Soil and water pollution Contamination from machine Loss of soil productivity; loss Good practices to be carried This is a minor impact and fuels and lubricants. of crop production. out by equipment operators. awareness to operators to Loss of potable water. Agricultural machinery should refuel under safe conditions is be kept in good repair and all that would be required. fuels and lubricants stored and Agriculture extension service handled in appropriately can educate farmers, as well designed areas. as loan officers.

Air pollution. CO2 releases from Contribution to greenhouse .ensure all fossil fuel engines machinery. gasses and global warming. are efficient and well maintained. Mitigation will be difficult. Soil compaction Heavy machinery. Erosion and sedimentation; Ensure equipment of a size Large farms require large loss of water. that suitable for soil machinery appropriate for the conditions. magnitude of the job.

Residual Impact Assuming Full Mitigation: LOW Risk: HIGH

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Table C9 Land Preparation Significance of Overall Potential Impact: MODERATE TO HIGH Potential Impacts Causes Consequences Mitigation Required Remarks Soil erosion Preparation during rains; Loss of topsoil and Contour ploughing required. Should be conducted in cultivation against the productivity; loss of soil Optimal ploughing schedules conjunction with other good contour; long fallow periods moisture; stream to ensure minimal time for husbandry practices including following ploughing. sedimentation; aquatic exposed soil. maintenance of cropping ecosystem modified; Organic agricultural practices residues (i.e. no burning). modified hydrological adopted (e.g. shallow tilling Coordinate with agricultural regime; flooding and drought and minimum tillage). extension field services. conditions increased.

Residual Impact Assuming Full Mitigation: LOW Risk: HIGH

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Table C10 Other farm implements Potential Overall Impact: LOW – MODERATE Potential Impacts Causes Consequences Mitigation Required Remarks Same as in Table C9

Residual Impact Assuming Full Mitigation: LOW – MODERATE Risk: HIGH (traditional farming techniques are not likely to change)

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Table C11 Small equipment Potential Overall Impact: NONE Potential Impacts Causes Consequences Mitigation Required Remarks

NOT APPLICABLE

Residual Impact Assuming Full Mitigation: NONE Risk: NONE

Table C12 Grain drying equipment Potential Overall Impact: LOW Potential Impacts Causes Consequences Mitigation Required Remarks High user of electrical energy Heat required for grain Energy consumption Not known drying. requiring use of more fossil fuels.

Residual Impact Assuming Full Mitigation: LOW Risk: HIGH

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Table C13 Irrigation equipment and irrigation maintenance Potential Overall Impact: HIGH Potential Impacts Causes Consequences Mitigation Required Remarks Water losses Extraction of groundwater; Loss of water to other current Water sharing plan to ensure Water sharing plan will be extraction of surface water. and potential users; equitable distribution; No challenging to prepare and modification of aquatic extraction from important implement habitat. aquatic habitats. Loss of soil productivity Salinization, waterlogging. Loss of productive land. Appropriate drainage system installed and operational activities designed to eliminate causes of impacts.

Residual Impact Assuming Full Mitigation: LOW - MODERATE Risk: MODERATE

Table C14 Vehicles Potential Overall Impact: LOW Potential Impacts Causes Consequences Mitigation Required Remarks Air pollution CO2 emissions Contribution to global Efficient engines and Not likely that efficient warming. conservation of use. engines will be used and conservation will not be a priority.

Residual Impact Assuming Full Mitigation: LOW Risk: HIGH

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Table C15 Farm buildings for stock, machinery and chemicals Potential Overall Impact: LOW Potential Impacts Causes Consequences Mitigation Required Remarks

Residual Impact Assuming Full Mitigation: LOW Risk: LOW

Table C16 Storage facilities (fuel, grain and other produce) Potential Overall Impact: LOW Potential Impacts Causes Consequences Mitigation Required Remarks Loss of productive land. Improper location of Reduced income from lower Location of buildings on sites This is not likely to be a buildings. total crop production. with low productivity; major consideration. efficient design to minimize space required. Water pollution. Leakage of fuel and Pollution of ground and Construction to include chemicals into surface and surface water leading to impermeable flooring and groundwater. contaminated drinking water bunds to prevent runoff. and irrigation water as well as affecting aquatic ecosystems.

Residual Impact Assuming Full Mitigation: LOW Risk: LOW

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Table C17 Primary processing Significance of Overall Potential Impacts: MODERATE – HIGH Potential Impacts Causes Consequences Mitigation Required Remarks

See Tables for agro-processing (Annex B)

Residual Impact Assuming Full Mitigation: NONE Risk: HIGH

Table C18 Fencing materials Significance of Overall Potential Impacts: MODERATE TO HIGH Potential Impacts Causes Consequences Mitigation Required Remarks Social disruption Exclusion of certain people Prolonged legal procedures Consultation with affected This is not likely to be a or groups from land to which and ill feelings within groups or people; problem. Public participation they have had traditional community. Where required, establishment exercise should identify any access either for use or for of easement conditions. potential problems. passage.

Residual Impact Assuming Full Mitigation: NONE Risk: LOW

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Table C19 Fuel, lubricants, etc. Significance of Overall Potential Impacts: HIGH Potential Impacts Causes Consequences Mitigation Required Remarks Soil contamination Improper storage and Loss of soil productivity. Proper storage and handling of handling of fuels and Lost revenue. fuel; containment of fuel lubricants; improper disposal containers within concrete of waste lubricants. bunded area; proper disposal of waste lubricants. Water pollution Improperly disposed of used Loss of domestic and Proper storage and handling of lubricants and improper irrigation water supplies; fuel; containment of fuel handling of fuels and illness to humans and containers within concrete lubricants find their way into livestock; lost revenue; bunded area; proper disposal of surface and ground water altered and damaged aquatic wastes lubricants. sources. ecosystems.

Residual Impact Assuming Full Mitigation: NONE Risk: LOW – MODERATE

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Table C20 Veterinary services Significance of Overall Potential Impacts: HIGH Potential Impacts Causes Potential Consequences Mitigation Required Remarks Human illness Ingestion of meat products Lost work and income. Organic methods of livestock Only approved drugs and containing hormones and husbandry could be used; hormones should be used but other chemicals. minimal application of only even these could have some necessary drugs. long term, and yet unknown, effects on humans. Soil and water contamination. Insecticides used in diptanks. Contaminated soil and water Proper containment and not useable for cultivation disposal of diptank liquids to Potable water or water for avoid soil and water irrigation is contaminated; contamination. downstream aquatic ecosystems affected.

Residual Impact Assuming Full Mitigation: NONE Risk: LOW

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