Social Management Framework for Urban Governance and Development Program:

Public Disclosure Authorized Emerging Towns Project (UGDP: ETP) Public Disclosure Authorized Public Disclosure Authorized

Public Disclosure Authorized (Ba6armalia~ %epaC

July, 2011 Foreword

The Social Management Framework (SMF) was prepared for the Urban Governance and Development Program: Emerging Town Project (UGDP: ETP) to be implemented by the six : ltahari, Mehchinagar, Dhankuta, Lekhnath, Baglung and Tansen. The program is being implemented by MLD, Department of Urban Development and Building Construction (DUDBC), Town Development Fund (TDF) and the municipalities under the financial support from the World Bank and the technical support from GIZI SlTNAG program. The SMF was prepared with the participation of all the above agencies and departments, who deserve special thanks for their support and cooperation.

I would also like to convey my gratitude to the UGDP: ETP and WB Team members, who were always willing and available to assist in conceptualizing the study framework and approach, developing research tools, accessing relevant documents, and providing helpful insights about different issues and thematic areas that needed to be covered under the study. I am particularly thankful to Mr. Hari Prasad Bhattarai, Associate Professor of Anthropology, , who prepared this document. My special thanks are also due to Mr. Puma Kadariya, Secretary, MPPW, Mr. Ashok Nath Upreti, Director General, DUDBC; Mr. Reshmi Raj Pandey, Joint Secretary, Ministry of Local Development; Mr. Sushi I Gyewali, Executive Director, Town Development Fund; Mr. Prakash Raghubanshi, Sr. Planner and Mr. Kiran Giri, Sr. Economist, DUDBC; Mr. Govinda Bahadur Karki, Under Secretary, and Mr. Rishi Raj Acharya, Under Secretary, Ministry of Local Development; Mr. Harka Chettri, Manager and Binod Neupane, Deputy Manager, Town Development Fund; other staff members of DUDBC for their kind support for this study. Similarly, I would like to extend my sincere appreciation to Mr. Bala Menon, Task Team Leader, Tashi Tenzing (Sr. Sanitory Engineer! co-Team Leader), Elisa Muzzuni (Economist), Drona Ghimire (Environment Specialist), Mr. Satya N. Mishra, Social Development Specialist and Silva Shrestha (Research Analyst), of the World Bank for their substantive inputs and insights on different issues for preparing the study. Similarly, Dr. Horst Matthaeus (Program Manager GIZI SUNAG) and GIZ team are due for appreciation for the support to prepare the SMF.

I would also like to acknowledge the cooperation and efforts of the officials of six municipalities, who managed to gather community members-women and men--and their respective organisations, representatives of the political parties, local community structures and government bodies to interact with our Social Safeguards Consultant, often at very short notices, and providing all information required for the study. I appreciate the valuable comments, suggestions and information from all the participants of the central and level stakeholder consultations while collecting the required information and feedbacks on the draft SMF. Similarly, I appreciate the comments provided by the participants of the national workshop before finalizing the report. At the end, I would like to thank all the personnel and organizations who were involved directly or indirectly in preparing this document.

Dr. Mahendra Subba Director General Department ofUrban Development and Building Construction Ministry of Physical Planning and Works Government ofNepal July, 2011

2 Abbreviations

ADB - Asian Development Bank AP- Affected Persons CBO Community Based Organization CBS- Central Bureau of Statistics CDO- Chief District Officer CDC- Compensation Detennining Committee CFC- Compensation Fixation Committee DAG - Disadvantaged Group DDC - District Development Committee DFO - District Forest Officer DFGG- Demand for Good Governance DUDBC Department of Urban Development and Building Construction FNCCI- Federation of Nepalese Chambers ofCommerce and Industries EA - Executing Agency EIA - Environmental Impact Assessment EMS - Environmental Management Section EO - Executive Officer EPA - Environmental Protection Act EPR - Environmental Protection Regulations FY - Fiscal Year GEISI - Gender Equality/Social Inclusion GON - Government ofNepal GRC- Grievance Redress Committee HH- Households lEE - Initial Environmental Examination IP - Indigenous People IPP- Indigenous People Plan IR- Involuntary Resettlement IPF - Indigenous People's Framework LA- Land Acquisition LA Act- Land Acquisition Act LBs - Local Bodies LDO - Local Development Officer LGCDP Local Governance and Community Development Program LSGA - Local Self-Governance Act LSGR- Local Self-Governance Regulation MCPM- Minimum Condition and Perfonnance Measures M&E - Monitoring & Evaluation MLD - Ministry of Local Development MPPW- Ministry of Physical Planning and Works MOEST - Ministry of Environment, Science, and Technology MOF - Ministry of Finance NFIN - National Federation of Indigenous Nationalities NGO - Non Government Organization

3 NPC- National Planning Commission PCO- Project Coordination Office PMT - Program Management Team PWD - Public Works Directive RF - Resettlement Framework RAP- Resettlement Action Plan RP- Resettlement Plan R&R- Resettlement and Rehabilitation Ro W - Right-of-Way RUP- Rural Urban Partnership SA - Social Assessment SMF- Social Management Framework TDF - Town Development Fund TLO- Tole Lane Organization TOR - Terms of Reference UDLE- Urban Development through Local Effort VCDP- Vulnerable Community Development Plan VDC - Village Development Committee WB- World Bank

© This Report remains the sole property ofthe Government ofNepal and cannot be quoted or used by anyone without prior written permission of the Ministry of Physical Planning and Works (MPPW), Government ofNepal except in case ofMr. Hari Prasad Bhattarai, Associate Professor of Anthropology, Tribhuvan University, Kathmandu, who as the author of this report shares the intellectual property rights with the Government ofNepal.

4 Table of Contents Foreword ...... 2 Abbreviations ...... 3 Table of Contents ...... 5 List of Tables ...... 8 1. INTRODUCTION & BACKGROUND ...... 9 1.1 UGDP Objectives and Components ...... 9 1.2 Program Implementing Institutions ...... 10 1.3 Program Location and Likely Activities ...... 11 1.4 The Social Management Framework (SMF) ...... 15 1.5 Purpose and Objective of the SMF ...... 15 1. 6 Development of SMF ...... 16 2. METHODOLOGY ...... 17 2.1 Desk Study ...... 17 2.2 Consultation with Stakeholders and Project Site Observation ...... l7 PART ONE: SOCIAL ASSESSMENT ...... 20 3. SITUATION ASSESSMENT ...... 21 3.1 Socio-cultural Context...... 21 3.1.1 Demographic Composition ...... 21 3.1.2 Civil Society Representation for Marginalized Groups ...... 22 3.1.3 Conflict Scenario ...... 24 3.2 Institutional Context ...... 26 3.2.1 Transitional Arrangements ...... 26 3.2.2 Mechanisms to Ensure Greater Accountability ...... 27 3.2.3 Civil Society Organizations ...... ".... 27 3.2.4 Community Based Organizations (CBOs) ...... 29 3.3 Historical Context ...... 31 3.4 Political Context ...... 32 4. KEY SOCIAL RISKS AND OPPORTUNITIES ...... 34 4.1 Social and Political Economic Risks ...... 34 4.2 Likely Social Impacts and Issues ...... 35 4.4 Stakeholder Analysis ...... 43 5. REVIEW OF LEGISLATIVE AND REGULATORY REQUIREMENTS ...... 48 5.1 Review of Relevant Laws and Polices of Nepal ...... 48 5.1.1 Resettlement Policy and Legal Measures on Land Acquisition ...... 48 5.1.2 GON Policies on Indigenous Peoples (IPs) and other Vulnerable Communities ... 54 5.1.3 Communication, Good Governance & Social Accountability ...... 56 5.1.4 Gaps in Existing Resettlement Policies and Laws ...... 58 5.2 International Policy Guidelines and Conventions ...... 60 5.2.1 World Bank Policy Guidelines ...... 60 5.2.2 International Labor Organization (ILO) Convention (169), 1989 ...... 62

5 5.3 Comparison of Government of Nepal and World Bank Policies ...... 63 6. REVIEW OF EXISTING SOCIAL MANAGEMENT PRACTICES ...... 65 6.1 Review of the Social Management Frameworks ...... 65 6.2 Review the Existing Social Management Practices of Executing Agencies ...... 71 6.3 Comparative Assessment of the SMFs being practiced by GoN and Executive Agencies 73 7. INSTITUTIONAL AND CAPACITY ASSESSMENT OF EXECUTING AND IMPLEMENTING AGENCIES ...... 76 7.1 Implementing Institutions ...... 76 7.2 Institutional Arrangement ofUGDP: ETP ...... 76 7.2.1 Central Level Arrangement ...... 76 7.2.2 Municipal Level Arrangement ...... 80 7.3 Institutional and Capacity Assessment ...... 80 7.3.1 Ministry of Local Development (MLD) ...... 80 7.3.2 Department of Urban Development and Building Construction (DUDBC) ...... 82 7.3.3 Town Development Fund (TDF) ...... 83 7.3.4 Municipalities ...... 85 PART TWO: SOCIAL MANAGEMENT FRAMEWORK ...... 90 8. SOCIAL MANAGEMENT FRAMEWORK (SMF) ...... 91 8.1 Resettlement Policy Framework ...... 91 8.1.1 Key Policy Norms and Principles ...... 91 8.1.2 Social Screening and Categorization of Impacts on IR ...... 94 8.1.3 Social Impact Assessment ...... 95 8.1.4 Entitlement for Various Losses ...... 97 8.1.5 Eligibility of Affected Households/Persons ...... 100 8.2 IPs and Vulnerable Communities Development (IP-VCDP) Framework ...... 102 8.2.1 Relevant Policies on IPs and other Vulnerable Communities ...... 102 8.2.2 Screening and Categorization of Impacts on IPs and Vulnerable Communities .. 103 8.2.3 Strategy for Social Inclusion of Vulnerable People ...... 105 8.2.4 Social Impact Assessment (SIA) and Preparation of IPIVCD Plans ...... 105 8.2.5 Key Issues Raised by IPs and Vulnerable Groups ...... 106 8.3 Framework for Strengthening Good Governance and Social Accountability ...... 108 9. SMF IMPLEMENTATION AND MANAGEMENT ...... 114 9.1 Institutional Arrangements ...... 114 9.2 Consultation and Information Disclosure ...... 116 9.2.1 Public Consultation ...... 116 9.1.1 Information Disclosure and Dissemination ...... 118 9.1.2 The Information and Consultation s.trategy (ICS) .." ...... 118 9.2 Grievances Redress Mechanism ...... 121 9.3 Monitoring and Reporting ...... 122 9.3.1 Monitoring Framework ...... 123 9.4 Contractors Compliance on Social Safeguard Measures ...... 125 9.5 Capacity Building ...... 126 9.5.1 Documentation and Orientation ...... 126

6 9.5.2 Training...... 126 9.5.3 Human Resource Requirement ...... 128 9.6 Budgeting ...... 128 References...... 129 Annex 1. Involuntary Resettlement Impact Screening & Categorization Form ...... , .. 132 Annex 2 IPs & Vulnerable Groups Impact Screening & Categorization Form ...... 134 Annex 3a Voluntary Land Donation Agreement Form (Individual) ...... 137 Annex 3b Voluntary Land Donation Agreement Form (Group) ...... 138 Annex 4 Format for Social Impact Assessment...... 139 Annex 5 Guidelines for Preparation ofa FULL/SHORT Resettlement Action Plan (RAP) ...... 147 Annex 6 Outline Structure of an IP - Vulnerable Community Development Plan ...... 149 Annex 7 Details ofthe Stakeholder Consultations ...... 151 Annex 8 Sub-Projects Implementation Procedure & Major Steps for Socio-Economic Infrastructure Component ...... 173

7 List of Tables

Table 1.1 Priority Investment Areas for the Six Municipalities as Identified by the Local Stakeholders during Prefeasibility Study, 20 I 0 ...... 12 Table 1.2 Sub Project Activities Likely to be Undertaken (Listed on the basis of Pre feasibility Study, 2010) ...... 13 Table 3.1: Percentage Population Distribution of Various Caste/Ethnic Groups ...... 21 Table 3.2 Summary of Demographic Characteristics of the Six Municipalities ...... 22 Table 3.3 Summary of Social and Institutional Characteristics of the Six Municipalities ...... 29 Table 3.4 Total Population by urban-rural residence and urban popUlation as a percent of rural population, Nepal, 1952/54 - 200 1 ...... 31 Table 3.5 Industrial Origin ofGDP, Nepal 1990 - 2000 (in million NRs.) ...... 32 Table 4.1 Likely Nature of the Impacts and Corresponding Affected Population ...... 38 Table 5.1 Comparison between World Bank Policy and the Government Legal Framework ..... 63 Table 8.1 Principles and Corresponding Guidelines to Execute Resettlement Policy ...... 92 Table 8.2 Entitlement & Policy Matrix ...... 98 Table 8.3 Categorization of Impact on IPs and Vulnerable Communities for Sub-Projects ...... 104 Table 9.1 Role and Responsibilities for SMF Implementation in Sub Project Cycle of UGDP 115 Table 9.2 Information and Consultation Strategy (rCS) for UGDP: NETP ...... 118 Table 9.3 Monitoring Parameters, Methods, Schedule and Location ...... 123

8 1. INTRODUCTION & BACKGROUND

1. Nepal is emerging as a rapidly urbanizing country. In 1971, there were only 16 municipalities with 0.462 million urban populations and today there are 58 municipalities, with 3.28 million urban populations comprising of 13.9 % of the national population (CBS, 2002). By 2005, the estimate was 16%, by 2010 nearly 18%, by 2020, the ADB expects that nearly 25% ofthe population will reside in urban areas, and by 2030, the corresponding figure is likely to be in excess of 30% (Prefeasibility Study, 2010). The high rate of urbanization is exerting immense pressure on urban environment and municipal mangers often do not have sufficient expertise and resources to deal with the rapid growth. With the enactment of the Local Self­ Governance Act, 1999, municipalities have been given many responsibilities but there have not been adequate measures to enhance their capacities. As a result, many cities are facing environmental problems such as inadequate basic physical infrastructure, solid waste management, air pollution, and wastewater management, and with continued growth, the, problems of urban poverty and informal settlements are also growing. Municipalities also lack adequate financial resources to provide basic urban services.

2. Keeping in mind these circumstances, Government of Nepal has proposed for funding support to World Bank to preparing the Urban Governance and Development Program (UGDP). The overall development goal of UGDP is to guide urbanization in small towns in a manner that makes them centers of economic growth through efforts that strengthen the decentralization/devolution and local governance.

1.1 UGDP Objectives and Components

3. The overall objective of the program is to improve planning, delivery and sustainable provision of basic services and priority infrastructure in six secondary towns. This will be achieved through the channeling of top-up block grants to the towns, the provision of capital financing for the construction and rehabilitation of socio-economic infrastructure and support for institutional development activities. The PD~ is in line with GON's own vision for balanced urban development and strengthened local governance in the country, as outlined in the NUP and the TYIP. At the central level, the program will aim at strengthening the ability of three key agencies, namely the MLD, the Town Development Fund (TDF) and the Department of Urban Development and Building Construction (DUDBC) to make policy, regulate, provide financing, support and monitor urban local governments. The longer term goal is to test local approaches and build national systems and institutions that can enable the Bank to wholesale support, beyond the initial six towns, for municipal governance and service delivery in a decentralized framework.

9 The UGDP has three components:

4. Component 1: Block grants to the selected municipalities. The block grants will top up existing fiscal transfers from the Ministry of Local Development (MLD) to municipalities and will help local authorities maintain minimum service delivery standards, provide adequate O&M support to existing assets, as well as address urgent urban management and service delivery issues. The block grants will be managed by the MLD and channeled through its existing system of intergovernmental fiscal transfers.

5. Component 2: Capital grants {or improving/rehabilitating socio-economic infrastructure. The capital grants will support expansion and/or improvement of essential infrastructure/services which are legally assigned to municipalities -such as local roads, drainage, sewage, solid waste, health & education infrastructure, parks, libraries, creches, street lighting, and so forth. The selection of investment priorities will be undertaken by each municipality based on pre-defined criteria and transparent participatory process. The municipalities will be provided onsite support, as needed, to help manage the socio-economic development program.

6. Component 3: Support {or Institutional Development. The ID component will help the selected municipalities attain greater capabilities in areas such as participatory planning, budgeting and public financial management, service delivery and project management. A key element of ID support will be the formulation of comprehensive socio-economic development plans in the selected municipalities. At the center, this component will aim to strengthen intergovernmental systems that support efficient and accountable urban local governments. The 10 component will also strengthen existing M&E systems that track the performance of municipalities. Beside, this component also will support project coordination and management activities, both at the center and in the selected municipalities. Specifically, this will finance consultants in procurement, financial management, safeguards, and other core areas.

1.2 Program Implementing Institutions

7. Department of Urban Development and Building Construction (DUDBC) under the Ministry of Physical Planning and Works, Municipal Management Division of the Ministry of Local Development (MLD), Town Development Fund (TDF), and six participating secondary municipalities, namely , , Municipality, Lekhanath Municipality, Baglung Municipality, and Tasnsen Municipality are directly involved to implement the various activities under UGOP at different levels and in different ways.

]0 Figure 1 Map of Nepal Showing Program Implementing Municipalities

1.3 Program Location and Likely Activities

8. The Program will be implemented in the six secondary municipalities selected through an independent pre-feasibility study. These are: Mechinagar Municipality (), Dhankuta Municipality (), Itahari Municipality (Sunsary District), Lekhanath Municipality (Kaski Distrtict), Baglung Municipality (Baglung District), and Tasnsen Municipality (Palpa District). During the project preparation, although an initial list of potential activities the municipalities may like to implement may be prepared, the exact activities to be financed under this Program in each of the above six municipalities will be decided only during implementation. However, each municipality has selected priority activities on the basis of pre-defined criteria and processes that are transparent and accountable. Majority of the proposed projects can be categorized as physical infrastructure development followed by community development, institutional development and natural resource management (Table 1.1 & 1.2). The Table 1.1 provides key priority areas whereas l Table 1.2 deals with specific activities .

I Disclaimer: this list of activities and impacts is not exhaustive and that based on activities actually proposed social screening will enable the Municipalities to identifY sub-project specific impacts. 11 Table 1.1 Priority Investment Areas for the Six Municipalities as Identified by the Local Stakeholders during Prefeasibility Study, 2010 Municipality Project Nol Project No 2(and 3 as UpfH UP' ,

Drainage Improvement-The central market area of Baglung Ring Road Improvements:. The improvement of the ring road is the ! Baglung suffers from extensive surface runoffs. The existing drains cannot. highest priority project for the Municipality and people of Baghing. The proposed project has two components (a) Diversion Structures The project has remained "dormant" for many years. The condition of surface run-offs at two locations and (b) Improvement of surface of the road at present is extremely poor and the road is often drains within the city core. The project will improve the urban impassable during the monsoon season. Connectivity is severely environment, secure the safety of important areas in the city, and impaired and economic development prospects correspondingly allow the further economic development of Baglung. constrained Heritage Conservation and Tourism Promotion-The projects Water Supply Improvements-One ofthe major causes for the slow Tansen component are (a) City Conservation Plan: Renovation of temples economic growth of the MuniCipality is the paucity of water supply and traditional structures, preservation of typical local houses, system in the town. The technical assistance project will (a) establish reconstruction of handicraft shops and pedestrianization ofselected a Water Supply and Sanitation Management Board and develop the areas of Tansen and (b) Tourism Development Plan: Tourism capacity of the board on effectively managing the existing water Enterprise Development Program, involving, inter alia supply system, and (b) Explore technical options for low cost water strengthening of micro-credit programs and cooperatives, a skill supply system (and implement demonstration projects). development program, women entrepreneurship development program, and increasing the Municipality's capacity to promote economic development. Conservation of the Lakes and Tourism Promotion-The Lakes Effective Land Management-This project seeks to correct the hap­ Lekhnath are a tremendous recreational, tourist and bio-diversity asset of the hazard, speculative and socially and economically damaging land Municipality. Largely because of the lakes and their hilly development that characterizes the Municipality. The approach is to surroundings, Lekhnath is a well knovvn tourist destination consolidate the land, make the provision for the roads, open space attracting both domestic and foreign tourists. All the lakes are and urban services; replot the land parcels and give back re-plotted under threat through siltation, eutrophication, and encroachments land to their original landowners. The concept is similar to the and poor management. The project involves the conservation and process of"land pooling" economic development oflakes, wetlands and surrounding forests. Inner Ring Road Construction-The proposed inner ring road Drainage Improvement-Some portions of the city experience Itahari (IRR) will divert traffic from the core urban area, improve serious water logging during the rainy season because of the absence accessibility to the outlying settlements, and allow the further of the drainage interceptors along the highway which would take the urban and economic expansion of the Municipality. The inner ring discharge to the nearby river. The existing drainage is under capacity road would also help increasing the capacity utilization of the and not networked properly. The proposed drainage project is existing bus park. Itahari Municipality considers access and strategic important and will improve the sanitation environment of connectivity improvements fundamental for the development of the the city, and allow the future expansion of the town Town, and particularly if the Municipality is to playa major role in the and Industrial Growth Corridor City Enhancement, Traffic Improvement and Economic Agricultural DevelopmentThe project is to develop land for Mechinagar Development-The project involves constructing improvements to agriculture that could accommodate the expansion of the urban built main spine road of Mechinagar town in order to (a) create a city environment in the future. This development is proposed for ambience attractive to visitors entering Nepal, particularly from ltabhatta where most of the land remains in agricultural use and the ; (b) to reduce traffic congestion in Mechinagar, and (c) to parcels a

12 Water Supply Improvement-Both Dhankuta and have been Dhankuta suffering from a number of issues e.g.; drying up ofexisting NIA(only one priority project was identified by the Municipal source, absence ofperennial gravity source in the vicinity, stakeholders) inefficient distribution network and poor management. The main objectives of this project are to (a) upgrade and expand the systems in Dhankuta and Hile (b) explore options for low cost water supply system, (c) encourage rain water harvesting on the community and household levels, (d) assist the Municipality in establishing an Integrated Water Supply and Sanitation Management Board and (d) develop the capacity ofthe board on effectively managing the existing water supply system.

,

Table 1.2 Sub Project Activities Likely to be Undertaken (Listed on the basis of Prefeasibility Study, 2010) Municipalities Priority Pro.iects Subpro.iect Activities Mechinagar l. City Vestibule • 6 Lane Highway with plants in the centre and sides Development and Traffic • Separate lanes for heavy and light vehicles Enhancement Measures • Offroad structures (retaining walls, cross drainage) • Footpath pavement, fencing, overhead foot bridge • Landscaped garden on the hillocks beside the road at the entry • Development ofgarden on the north beside Kali River • Wide and convenient entry to the dry port, bus park and bus terminal • Construction of Interceptor Drain of surface runoffs along both side ofroad • Street Lights, Information Centre, Traffic Control Recentl! I!rol!osed nroject bv Mechinaaar : Construction ofDevkota Park with Ghanta Ghar and Mini Market 2. Urban Agriculture Land • Delineation of area but keeping Itabhatta Junction in the middle with the support Development from the landowners • Survey and planning of the area by considering the existing buildings, structures and roads • Development of low cost bio-engineering technique for river protection works (to be carried out through community mobilization I participation) • Temporary amalgamation ofland, and the design and planning ofroads • Construction ofroads (gravel) along the peripheries ofthe blocks • Agricultural land re-plotting and re-distribution Recentl! I!ronosed I!roject b! Mechinaaar : Black topping ofGokul Road (from Itabhatta to Antu, Ham), Integrated project( Ninda Tmai River training, Patal Ganga Development Dhankuta l. Water Supply • Improvement ofHile WS System Augmentation & • Improvement ofDhankuta WS System Management • Promotion ofRainwater Harvesting • Water Supply Management and Institutional Capacity Development I Itahari 1. Detailed designed and Bridge at Tengra ( Ward 2) Construction of Inner Ring · Bridge at Vyarvyare ( Ward3) Road (IRR) ·• River Training Works • Cross Drainage Works • Miscellaneous Works • 2. Construction of Surface • Inceptor A ( Both side along ) Drainage in the Core City • Inceptor B ( Both side along ) Area • Secondary Drains I • Demolition & reinstatement ofStructures. Electrical Poles 13 • Footpath Pavement • Outfall Structures • Miscellaneous Works Lekhanath 1. Conservation of Lakes Component A : Physical Infrastructure Development Plan and Tourism Development • Construction ofembankment dyke (earthen), retention wall with sluice gate at Dipang, Khaste, Neureni and Maidi Lakes • Construction offootpath along the bank of Begnas and Rupa Lake • Construction ofhiking track linking lakes • Construction of information center and development of recreational area at Gude Lake Component B : Bio Diversity Conservation Plan • Preparation of Detailed Bio-diversity Conservation Plan encompassing land use bye laws, environmental, watershed management, social and economical aspects • Demarcation of lakes and forest boundaries • Development ofBio-diversity Nurseries, Trees Plantation • Development ofBotanical Garden and Herbs Plantation • Community Forest Development Program • Lake Water Quality Monitoring (Laboratory Establishment) • Watershed Management • Cleaning oflakes and checking of weed growths due to nitrification • Fishery Farming Component C: Pro-Poor Tourism Development Plan • Preparation of Comprehensive Sustainable Pro-Poor Tourism Development Master Plan Establishment of Micro-credits and Cooperative Groups Tourism Enterprise · Development Program (TEOI') and Market Linkages Promotion ofParticipatory Planning in Tourism for sustainable tourism development ·• Detailing ofDestination Mix encompassing SA's Principles • Environmental Awareness and implementation of Community Led Total Sanitation (CLTS) • Development of foot tracks through mobilization of community groups Development ofAlternative Energy • Tourism led orientation program and skill development training program 2. Effective Land • Land pooling, block planning and re-plotting Management • Neighborhood Roads construction ofcommunity structures Construction ofcommunity parks Baglung I. Improvement to the Ring • Road Construction Road • Road Side Drains, Cross Drainage • Retaining Structures, Breast Walls • Miscellaneous Works 2. Run otIDiversion and City • Diversion Structures ofsurface run-otIs at two locations Drain Rehabilitation • Improvement ofsurface drains within the city core (wards 1,2,3,4 and 11) Tasnsen 1. City Conservation and • City Conservation Plan: Renovation of temples and traditional structures, Tourism Development preservation oftypical local houses, reconstruction of handicraft shops and I pedestrianization of selected areas of Tansen • Tourism Development Plan: Tourism Enterprise Development Program, involving, inter alia strengthening ofmicro-credit programs and cooperatives, a skill development program, women entrepreneurship development program, and I--______-=-_-:--+-___-=in:.:c.=..re:..:.aco-si:...;n""-'gt;.-:-he'--'-M.:..u...:.n=--ic:.:i"-p,a=litis capacity to promote economic development 2. Water Supply Optimization ofExisting Water Supply System Optimization and. Establishment ofWater Supply Management Board and Capacity Development Management • Promotion on the Economic Consumption of Water, Low Water Consumption Accessories, Control on Misuse of Water • Control on Water Leakage and Unaccounted for Water • Customer Verification Survey • Review ofExisting System and Optimization Study • Exploration oflow cost water supply system Promotion ofRaimvater Harvesting • Community Rainwater Harvesting (20 HH one system: Total 1000 HH) • Grant to Individual Rainwater Harvesting I • Study, Awareness and Training

14 1.4 The Social Management Framework (SMF)

9. Social Management Framework (SMF) is the instrument that provides the necessary guidance to identify and address the potential social concerns or impacts of a project right from the planning stage to its implementation and post-implementation operations.

1.5 Purpose and Objective of the SMF

10. The main purpose of preparing the SMF is to formulate appropriate social safeguard principles and provide technical guidelines to identify impacts, prepare safeguard plans, and mitigate adverse impacts likely to arise from the activities financed by this ProgramlProject during implementation. The SMF spells out the potential social impacts in the project municipalities due to the planning, design, implementation and operation of the UGDP projects and outlines the management measures required for an effective addressal of the same. Appropriate institutional arrangements towards implementing the measures proposed andthe capacity building efforts required will be detailed in the framework. The adoption of this framework shall ensure that the projects meet the national and local level social requirements and are also consistent with the applicable safeguards policies and provisions of the World Bank.

11. The overall objective of this assignment is, therefore, to prepare a Social Management Framework (SMF) for the Nepal Urban Governance and Development ProgramlProject, which will provide (a) Resettlement Policy Framework as per World Bank's OP 4.12; (b) Indigenous People and Vulnerable Development Planning Framework with guidelines for dealing with vulnerable communities including Dalits and Janjatis (indigenous people) as· per the World Bank's OP 4.10; and (c) guidelines for strengthening people's participation and social accountability. In addition to make use of the findings of the preliminary social analysis done as part of the Pre-feasibility Study, the specific objectives of the assignment are to:

1. carry out a rapid review of social issues involved and make broad-based social assessment of the program/project (focusing on components and likely activities listed in the pre-feasibility study), highlighting potential positive and negative impacts of the program/project;

2. review policy and acts/ regulations of Nepal and the World Bank (OP 4.10,4.12) in order to identify applicable provisions in the proposed program/project and suggest ways to fill any gap between Nepal and World Bank requirements;

15 3. assess the capacity of the institutions involved in the Program/Project, including the roles and responsibilities, and offer guidelines for capacity development to address any gaps; and

4. develop a Social Management Framework (SMF) for the Program/Project implementation (fulfilling requirements for RPF, Indigenous People's Policy Framework (IPPF) and integrating participation and social accountability guidelines). The Consultant will summarize the SMF for inclusion in the Project Implementation Manual (PIM).

1.6 Development of SMF

12. The (sub) project activities proposed ( Table 1.1&1.2) by the participating municipalities during project pre-feasibility study will be analyzed along with inputs from review of literatures, stakeholder's consultation and field visits to assess the potential social impacts. The SMF spells out strategies and principles for identification of project affected individuals, families, communities, and to investigate potential social effects and issues related to these and suggest appropriate measures to avoid/minimize and manage any potential adverse impact resulting from the implementation of the project.

13. The SMF will be used by the project authorities for incorporation of social safeguards in the planning, execution and operation stages of each sub-project activity. A step-by-step methodology will be provided that can be followed along with engineering and institutional interventions required for the sub-project activities.

16 2. METHODOLOGY

14. The methodology adopted for the preparation of the SMF includes: review of relevant social policies, acts, regulations and guidelines of aON, social safeguard policies of World Bank, and interactions and consultations with all concern stakeholders. The findings of the preliminary social analysis done as part of the Pre-feasibility Study (20 I 0), Institutional Assessment have been taken as the primary sources of information required for SMF preparation. Therefore, the SMF is primarily based on the reviews of available relevant literatures and consultations with national level and municipal level stakeholders.

2.1 Desk Study

15. The review of literatures was mainly concentrated to the past similar studies related to social and environmental assessment for urban development. Existing policies, legislation and guidelines related to the social management issues of urban development and WB's policies and guidelines have been reviewed and documented in the appropriate sections of SMF report. Similarly, available published literature, WB study reports particularly Pre-feasibility Study, 2010; Institutional Assessment and the Political Economy Studies, 2010 and documents related to the project have been reviewed and documented. Municipal level demographic data on the various ethnic/caste groups, including demographic information on vulnerable groups, have been collected from secondary sources published by the participating municipalities and Central Bureau of Statistics (CBS). In similar vein, published or unpublished documents, records, profiles and reports available at municipality offices have been collected and reviewed to cross-check and solicit site specific information.

2.2 Consultation with Stakeholders and Project Site Observation

Central Level Stakeholders 16. Consultations with central level stakeholders (MLD, DUDBC and TDF) were conducted to understand the overall design, components and corresponding activities of the program. The consultation was mainly focused on institutional, human resources and past experiences of social management practices of these organizations in terms of land acquisition, R&R policies and IPs and vulnerable community development plans. The consultation also assessed the institutional capacity of MLD, DUDBC and TDF to implement and monitoring the compliance of social safeguard measures reflected in the SMF. The consultation was concentrated in assessing their abilities to manage social issues likely arise while implementing UaDP: NETP to support municipalities-and identify areas and actions for improving their capacities and performance, both in the short and long term. It primarily focuses on the existing institutional mechanism in each of the involved institution for social management, existence of units/ focal points; human and financial resources, functions and

17 effectiveness of their roles and responsibilities. The details of the stakeholder consultations are presented in Annex 7. The concerns of the stakeholders have been contextualized and reflected in various sections ofthis report.

Municipal Level Stakeholders 17. Consultations with municipality staff ( executive officer and section heads) and municipal level stakeholders ( representative of political parties, government line agencies, CSOs, private sectors, organizations of women, Dalits, Janajatis, Madhesis) have been carried out to know the existing social situation and to identify likely impacts due to the various project structures and activities and corresponding mitigation measures. In addition, consultations with the beneficiaries and local stakeholders have been conducted in the (sub) project sites of the selected municipalities to comprehend urban social environmental and concerns of beneficiaries and key stakeholders particularly information on land acquisition and preferred mode of compensation. Besides, the consultation also assessed the institutional capacity of the municipalities to implement and monitoring the compliance of social safeguard measures reflected in the SMF. The consultation was focused in assessing their institutional abilities to manage social issues likely arise while implementing the program and to identify areas and actions for improving their capacities and performance, both in the short and long term. The details of the stakeholder consultations are presented in Annex 7. The concerns of the stakeholders have been contextualized and reflected in various sections of this report.

18. Consultation meetings in each participating municipalities have been conducted by giving a prior verbal notice and written letter to the participants through the participating Municipal offices. The purposes ofthe focus group discussions are:

• To provide factual information on the (sub) project location, particularly the main (sub) project structures and project related activities. • To clarify the objective of the SMF development for UGDP and its procedures • To discuss on the likely potential impacts of the project from technical considerations during project construction and operation in the project area's social, socio-economic and cultural domain. • To collect information related to socio-economic and cultural environments of the project areas • To collect general and broad opinion, perception and attitudes of the people towards UGDP • To get feedback on the likely impacts of the project from local people's perspective particularly on the cultural traditions, customary practices, self identity and attachment to the land and territory, social norms and values of the indigenous people and other groups ofthe project areas. • To get basic information on the cultural, religious, recreational and livelihood dependence of the local people on the (sub)project sites and corresponding likely impacts due to project development

18 • To solicit opinion of the local people on the alternative mitigation measures to abate, or avoid the potential impacts • To solicit opinion of the local people with regard to the development aspiration of the project.

Project Site Observation

19. The consultant carried out observation tours to all priority project sites to comprehend the ground reality and to obtain supplementary information about different socio-economic and cultural activities in the proposed (sub) project sites. This includes recording of physical surroundings, religious sites/structures, ongoing cultural religious activities, processes, and discussions.

Debriefing Workshop

20. The consultant debriefed the preliminary findings of the stakeholder consultations with members of the PCO and representatives of World Bank. The comments and suggestions gathered during the debriefing have been incorporated into the SMF report.

National Stakeholder Workshop

21. A national stakeholder workshop on the finalizing UGDP program activities including social and environmental frameworks was held in Kathmandu on February 21, 2011. The workshop was attended by Secretary of MLD, Joint Secretaries of MLD, DDG-DUDBC, ED of Town Development Fund (TDF), GiZIUDLE, and the Executive Officer and Engineer from all the six selected municipalities, the World Bank (WB) Team, ESMF consultants, focal persons of DUDBC and GiZIUDLE. The draft SMF was presented to the participants highlighting the RR policy and entitlements, IPs-VCDP framework, demand side governance and social accountability framework, social impact screening process and procedures, grievance redress mechanism, project implementation structure and requirements for capacity enhancement of executive and implementing agencies of UGDP to address social safeguard issues. Relevant comments and suggestions provided by the participants have been included in to the final SMF report.

19 PART ONE: SOCIAL ASSESSMENT

20 3. SITUATION ASSESSMENT

3.1 Socio-cultural Context

3.1.1 Demographic Composition 22. The demographic composition of the six municipalities included in the Urban Governance and Development Program (UGDP) is quite varied, as the table below indicates:

Chhetri 15 17 13 Umbu 3 4 3 Rai 4 9 8 Magar 3 2 5 21 7 10 4 6 15 15 3 7.8 Tharu 1 11 Tamang 3 3 10 Gurung 1 1 16 Dalit 6 5 3 12 15 20 5 15 21 7 31* 6 10 3

Source: CBS, 2001 Note: - means that either the percentage population of these groups is negligible or do not reside in the concerned municipalities. * Includes Aathpahariyas, who comprise 23.4 percent of the total population in Dhankuta. ** Limbus, Rais, , Newars, Tharus, Tamangs and Gurungs are all classified as Adivasi-janajatis [indigenous nationalities] by the Government of Nepal. 23. As in most parts of Nepal, upper-caste groups, particularly Bahuns (Brahmin), possess a strong influence numerical, social and political in all six municipalities. Bahuns are over­ represented in the All Party Mechanisms (APMs) in all municipalities, except for Dhankuta where the Janajati representation is relatively significant. Similarly, the Executive Officers in all the municipalities are Bahuns, except for Dhankuta where he is a Janajati. The same is true for civil society groups and community-based organizations across all municipalities. The other upper-caste group, the , is also quite prominent in leadership positions. In areas where there are concentrations ofNewars, as in Tansen, Baglung and Dhankuta, they, too, enjoy great influence. While there are fewer Janajatis in leadership positions, they are nevertheless quite active in public life particularly since various groups have been organizing along ethnic lines. Dalits, on the other hand, have almost no representation at all either in the

21 APMs or in other organizations such as NOOs and CBOs. Similarly, there are very few women in positions of power in all of the municipalities (World Bank, 20 I 0).

24. The World Bank (20 10) study clearly mentioned that the exclusion of Janajatis, Dalits and women from government structures in Nepal continues to have an impact on the level of development of these communities and the opportunities open to them. In many municipalities, in Tansen and Itahari, for example, it can be clearly seen that mostly upper­ caste groups live in the developed areas and thus have access to municipal resources.

25. The estimated population of the participating municipalities in 2010 shows a growing trend. The current annual popUlation growth rate is estimated to be around 7.5% for Itahari and the popUlation is expected to increase more than three times by 2020 in Lekhanath. The popUlation growth for Tansen and Mechinagar is, however, around or below the average for the urban sector as a whole. The hill municipalities are low density cities in comparison to the municipalities in the Tarai and Itahari has the highest density inner core, with population density of 8000 persons/sq.km. The municipalities have fairly high literacy rates ranging from 78% for Itahari and 88% for Mechinagar in 2009 (Table 3.2).

Table 3.2 Summary of Demographic Characteristics of the Six Municipalities

Source: Prefeasibility Study, 20 I 0

3.1.2 Civil Society Representation for Marginalized Groups

26. Since 1990, and especially since 2006, there has been a great acceleration in demands for political representation and other rights on the part of organizations representing marginalized groups. Such organizations are active in each of the six municipalities that are included in the UODP project.

27. In all the municipalities, it is the Nepal Federation of Indigenous Nationalities (NEFIN) that advocates for the rights of Janajatis. Its major activity currently appears to be lobbying the local government for resources for Janajatis and raising awareness regarding the rights of the indigenous people as enshrined in the International Labor Organization (ILO) Convention

22 169i [hereafter, ILO-169]. and other international protocols and conventions the Nepal government has signed on the rights of indigenous people. Various organizations that serve as constituents of NEFIN or are loosely affiliated to it, representing specific Janajati groups (the Magar Samaj in Baglung, Kirat Rai Yayokha in Dhankuta, for example) also have a presence in the municipalities.

28. Although NEFIN is generally considered to be resource-rich in Kathmandu, fieldwork in the six municipalities shows that their resources have not percolated effectively to the local levels. As a result the district/municipal chapters of NEFIN are constrained in their scope of activities. In general, the district chapters do receive occasional, often one-time support from the headquarters in Kathmandu, but they generally rely on the DDCs, municipalities, membership fees and other support from members for their functioning. Consequently, the effectiveness of NEFIN is varied according to time and place. In Dhankuta, NEFIN representatives pointed out that in addition to holding seminars to raise awareness amongst the Janajatis regarding the rights of indigenous groups, which is what there are currently doing, there is a dire need to also work towards the economic upliftment of some of the Janajati groups like the Aathpahariyas. However, in the absence of sufficient funding either from NEFIN headquarters or local governments, the NEFIN district chapter has not been able to make much of an impact. On the contrary, in Baglung, NEFIN, other than raising awareness, acts as a pressure group in local government affairs and serves as a forum where various community-based activities, such as the creation of cooperatives for Magars, are discussed and implemented. The effectiveness of NEFIN in Baglung appears to be largely due to the fact that Magars there include a significant number of the relatively wealthy individuals.

29. Although an umbrella organization similar to NEFIN called the Dalit NOO Federation (DNF) exists in Kathmandu and other areas to provide representation to Dalits, its activities are quite limited compared to NEFIN. Rather, a proliferation of small organizations representing Dalits exists across Nepal, and in the six municipalities under study. For the most part, however, they are exceedingly weak and crippled by a lack of resources and fragmentation due to the affiliation of members to different political parties.

30. The exception is Baglung where the Datit movement is quite strong as a result of which activities geared towards. the upliftment of the Dalits have also been fairly significant. Datit organizations in the district have been successful in raising awareness regarding discriminatory laws and policies, assisting Dalits overcome discrimination in access to schools, forests and other public resources, and participating in the DDC coordination committees that take decisions on disbursement of district funds earmarked for the development and awareness of Dalits and other marginalized groups. In addition, all of the

23 Dalit organizations and the Dalit wings of political parties are represented in the Utpidit Dalit Samudayako Sanjal [Network of the Oppressed Dalit Community], which provides the Datit community with a unified voice and some immunity from political cooptation.

31. The major political parties also have their own fraternal organizations representing Janajati and Dalit groups. From the perspective of independent Janajati or Datit activists, however, these bodies are more responsive to the interests of their parent parties than to the ethnic/caste groups they are meant to represent.

3.1.3 Conflict Scenario

32. The spillover effects of the conflict (1996-2006) have been limited in all six municipalities. In four municipalities - Tansen, Baglung, Lekhnath and Dhankuta violent clashes between Maoists and cadres of other political parties continued into the years of the peace process, but have declined since the April 2008 Constituent Assembly elections in which the Maoists emerged as the largest political party.ii In addition, Mechinagar and Itahari experienced a large influx of people displaced during the conflict and its aftermath though a large percentage ofthose displaced have been Pahadis [people of hill-origin] who fled the southern areas of the Tarai after the Madhesh movement of 2007. The major exception to the relatively peaceful environment in the UGDP-targeted municipalities appears to be Dhankuta, where tensions between the Maoist-affiliated youth group, YCL, and the UML­ affiliated youth group, YF, are still unresolved and have the potential to turn violent in the future. iii Given the suspicion that most of the 4008 disqualified Maoist combatants have joined the YCL, there are fears that tensions between the YCL and other parties could escalate and lead to violence in Dhankuta as well as in other districts (World Bank, 20 I 0).

33. In addition to issues related to the Maoists, the post-conflict environment in Nepal has witnessed a significant increase in political mobilization along ethnic/caste/regional lines over the past four years, with almost all caste/ethnic groups forming organizations of their own, some of which are involved in armed activities, particularly in the Tarai districts and eastern hills. iv Despite the increase in lawlessness and violence in the Tarai, in the aftermath of the Madhes Andolan of 2007,v two of the six UGDP-targeted municipalities, namely, Mechinagar and Itahari, which are located in the Tarai districts of Jhapa and Itahari respectively, have not witnessed the kind of violence other Tarai districts in the central and eastern Tarai have experienced.

34. The municipalities of Mechinagar and Itahari, while in the Tarai, have very low Madhesi populations and are generally perceived as non-Madhesi cities. They are surrounded by areas with significant Madhesi populations, however. As no Madhesi towns are included in the

24 UGOP, significant resentment towards the project may arise on the part of the Madhesi population. This may augur badly for the implementation of the UGOP (World Bank, 20 10).

35. It is also important to note that in the aftermath of 's [Indian State] Chief Minister Nitish Kumar's efforts to curtail criminal activities in his state, the southern areas of Tarai districts have witnessed a visible increase in criminal activities vi and with a strong nexus currently evolving between criminal groups, smuggling rackets and business entrepreneurs, particularly in Mechinagar, it is p~ssible that armed/criminal groups will infiltrate Mechinagar and Itahari (ibid).

36. In addition to the Tarai conflict, the eastern hill districts (Ohankuta lies in the eastern hills) have also experienced significant violence, with looting, arson, murder, kidnapping, seizure of property and extortion carried out by armed. groups and ethnic outfits clamoring for an autonomous state in Eastern Nepal.vlI

37. While Ohankuta Municipality has for long been identified as being part of a future Limbuwan state, first by the Maoists and later by groups such as the Federal Limbuwan State Council (FLSC), it should be noted that in its concept note, the State Restructuring Committee has recommended placing Ohankuta Municipality in the proposed Kirat Autonomous Province instead of Limbuwan Autonomous Province. Similarly, in the case of Mechinagar and ltahari, too, while the State Restructuring Committee has placed these two municipalities in the MithiIa-Bhojpura-Koch-Madhes Province, these have been claimed to be part of Limbuwan by various Limbu outfits. These differences in claims by different groups are likely to be a source of tension when such matters begin to be seriously discussed by political parties at the centre, as part of the process of drafting a new constitution (World Bank, 2010).

38. Finally, although overt conflict is very limited in the municipalities of the Western corridor, latent tensions exist between groups over the issue of federalism along ethnic lines and that could raise tensions and possibly lead to violence in the future. According to the proposed federal units by the State Restructuring Committee, among the UGOP-targeted municipalities in the western region, Tansen and Baglung would belong to the Magarant Autonomous State and Lekhnath to Tamuwan. This has created significant resentment among non-Gurungs in Lekhnath and non-Magars in Baglung and Tansen, leading them to create organizations like the Khas Brahman Samaj and Khas Ekta Samaj that advocate specifically the rights of Bahuns and Chhetris. During the course of the fieldwork, representatives of these groups even threatened "bloodshed" if autonomous provinces based on the concept of ethnic homelands become a reality. In addition, the proliferation of groups like the Samyukta Jatiya Mukti Morcha (SJMM) has also been a source of violence and fear in areas like Baglung. The SJMM, an underground outfit clamoring for Janajati rights and apparently willing to use violent means has been threatening VDC secretaries in Baglung district, among others, to resign.viii Thus far, the SJMM is not active in the UGOP-NETP-targeted municipalities, their

25 stated intention of causing violence and disruption could potentially have ripple effects there as well (ibid).

3.2 Institutional Context

3.2.1 Transitional Arrangements

39. In the absence of elected local bodies, the Ministry of Local Development (MLD) has issued guidelines regarding the functioning of local bodies. According to these, in municipalities, it is the Executive Officer, a centrally appointed civil servant, who possesses all executive and decision-making responsibilities (previously, this role was taken up by elected representatives in the municipal council). Additionally, in each municipality, there exists an All-party Mechanism (APM), consisting of representatives of political parties that participated in the Constituent Assembly election that is meant to provide an advisory role to the Executive Officer. ix The three large national parties - the , the Communist Party of Nepal-United Marxist-Leninist (CPN-UML) and the Unified Communist Party ofNepal-Maoist (UCPN-M), dominate the APMs in all municipalities.

40. In practice, with the exception of Dhankuta, all decisions regarding the municipality are undertaken by the APM and the responsibility of the Executive Officer is relegated to mediating competing claims of the parties and ensuring that the municipal office implements their decisions. In Itahari and Lekhnath, political parties have even taken steps to ensure their total autonomy regarding decision-making from the municipality by setting up an 'apex committee' of political parties from which municipal officials, including the Executive Officer, are excluded. It is in these 'apex committee' meetings that crucial decisions are taken and later conveyed to the Executive Officer for implementations. In Dhankuta, in contrast to the other municipalities, the Executive Officer and the municipality office is exceptionally strong and often overrides the demands of the political parties (World Bank, 2010).

41. These arrangements have led to a situation where local governments, contrary to the great decentralization that was envisaged in the 1999 Local Self Government Act, have been subject to increasing encroachment by the centre. The fact that Executive Officers are the chief authority in municipalities and that the Ministry of Local Development in Kathmandu appoints them all attests to this. Further, the municipalities (as well as various civil society organizations present there) are heavily dependent on resources provided by the centre (both from the government and donors) and this has fostered a culture of paternalism and dependency.

42. Government officials and the political parties are wholly in control of the municipal office

26 and mechanisms to allow for public oversight over them are nearly nonexistent. As the political representatives are nominated rather than elected to the All Party Mechanism (APM), there is a tendency among them to consider themselves as representing their interests and constituencies and not representing the municipality as a whole. This has had ramifications on planning. When the APM meets to decide how to spend available resources, significant competition occurs among the parties. There is a tendency among parties to distribute projects in the annual plan as favors to supporters or in ways that benefit themselves.x This tendency has a harmful affect on attempts towards large-scale and long­ term projects. Sections of the population that do not have direct links with representatives of the political parties appear to be politically apathetic. As they have not participated in elections to choose their representatives, they were often unaware of whom to approach if they required the services of the municipality. xi

3.2.2 Mechanisms to Ensure Greater Accountability

43. In some of the municipalities, some measures have been taken towards encouraging greater public oversight over the municipality. Notably, in recent years, Itahari has taken a number of measures to improve its governance mechanism through increased people's participation, transparency and information sharing. These include: nomination of a nodal officer, the provision of a suggestion box, a notice board, citizens' charter on hoarding boards, and a website of the municipality. xii In Lekhnath, the APM holds office hours at the municipal office where locals can come and voice their grievances. In Tansen, the NOO REDA has been successful in bringing municipal officers and highly deprived sections of public together through public interactions, with the objective of educating the latter in how to solicit the municipal office for funds. Similarly, in Baglung, interest groups representing specific communities, such as NEFIN, have achieved their demand for greater role in the spending of funds earmarked for the empowerment of the communities they represent. In the absence of elected representatives, however, these measures have had little impact in the face of growing powers enjoyed by political parties and continued executive control of the municipality by civil servants (World Bank, 2010).

3.2.3 Civil Society Organizations

44. The presence and level of vibrancy of civil society groups varies from municipality to municipality. NOOs, interest groups and the media are particularly strong in Baglung, Tansen and Dhankuta, which also serve as the district headquarters or Itahari, which is an important transit point at the intersection of two national highways. Because of their location, district- and regional-level civil society organizations work out of these municipalities. The objectives and related activities of these civil society groups are diverse and range from youth clubs and human rights groups to those geared towards improving rural livelihoods and democratic governance. Further, national-level interest groups like the Nepal Federation of

27 Indigenous Nationalities (NEFIN) and major publication houses also have their district offices in these municipalities which are also district headquarters.

45. Based on the fieldwork, it is evident that NGOs and interest groups in Baglung, Dhankuta and Itahari also have particularly deep relations with the municipality and are regarded as integral partners in municipal governance. In general, these NGOs and interest groups receive a modicum of support from their respective municipal offices and District Development Committees (DOC), and they are often invited to participate in municipal affairs while discussing annual and periodic plans, and the budget (though mostly only after the parties and the municipal office have already taken the decisions).

46. In contrast, NGOs and interest groups are quite weak in Lekhnath and Mechinagar. In the case of Lekhnath, this is due to the fact that civil society groups like the NGOs, interest groups and media outlets are based in the nearby district headquarters, , and have a limited interest in Lekhnath. In the case of Mechinagar, it is because of the dominant role played by political parties and business groups have left very little room for civil society organizations. As a result, most of the active NGOs in Mechinagar are relegated to activities that do not directly challenge the local government such as issues of single women or youth programs.

47. All the participating municipalities have fairly good numbers of educational institutions with at least one college in each municipality. Mechinagar, Lekhanath and ltahari have no hospital with CIS facilities whereas Tansen, Buglung and Dhankuta possess hospital with CIS facilities with 1100, 45 and 25 beds respectively. All the municipalities have of TLOs. The TLOs are the lowest level organization in a municipality focusing on grass-level community development issues. Each municipality has squatterlunmanaged settlements. Itahari has the highest number of squatter settlements (33) having more than 11000 squatter households followed by Lekhanath and Mechinagar municipalities having 10 settlements each with 922 and 2977 squatter households respectively. Baglung municipality has only 3 settlements of squatters comprising of 60 households altogether (Table 3.3).

28 Table 3.3 Summary of Social and Institutional Characteristics of the Six Municipalities

Baglung Y·45 121 3 60 HS(10+2)=12 School =36 Lekhanath College =3 177 10 922 HS(IO+2) =9 1 Itahari College =3 N More HS(10+2) =9 total 56181 HHs School=39 Dhankuta College= 1 Y·25 165 7 141 HS(10+2) =5 Schoo1=31 Mechinagar College =3 N 144 10 2977 HS(10+2)= 6 Schoo1=29 Source: Prefeasibility Study, 2010

3.2.4 Community Based Organizations (CBOs)

48. Across Nepal, there are two kinds of eBOs that function as extensions of the municipal office when it comes to implementing projects or ensuring public participation in the municipality's activities. These are:

i. Users' Groups (UGs)

49. The Local Self-Governance Act 1999 (LSGA) and the related Local Government Financial Administration Regulations 1999 (amended in 2007) require all local bodies, including municipalities, give priority to users' groups while implementing projects that involve funds less than Rs 6.5 million (LSGA, Article 265).xiii Accordingly, all the six UGDP-targeted municipalities implement most of their projects worth less than that amount through users' groups (UGs) though this figure has been reported as being less in some municipalities (e.g., in Mechinagar it was reported as being Rs 3.5 million). The UGs generally consist of members who are from the locality where the project is being implemented and who take the responsibility of constructing, managing and benefiting from such projects. However, there are exceptions such as in the case of the landfill site in Dhankuta where none of the members of the users' group set up to construct and manage the landfill site, are from the project site vicinity.

50. A provision in the LSGA requires that all users' groups include at least 30 percent women, with one woman in a leading position (chair, vice-chair or treasurer).xiv In addition, participation of Janajatis and Dalits is to be encouraged. Generally, however, these

29 provIsIons are only nominally enforced. Other issues regarding users' groups will be explored in the section on implementation.

51. In general, it is widely acknowledged in all six municipalities that implementation of projects through UGs fosters greater community participation. In most cases, locals of the area also provide matching funds. As the projects implemented in this way benefit the very people responsible for implementing them and as they themselves have contributed their resources and labor to the project, UGs have an incentive to closely oversee implementation and ensure that leakages do not occur. As a result, it was widely agreed across all municipalities that projects implemented through UGs were of a superior quality to those undertaken through contractors, not least because very little was wasted on kickbacks or commissions.

52. Notwithstanding these benefits of implementing projects through UGs, there are also some problems that need careful consideration. Many UGs face problems of limited capacity, and a lack of technical knowledge which limits their ability to execute projects/investments that are of a large scale. While the municipalities do provide trainings to members of UGs, these are usually considered to be superficial and inadequate to the tasks devolved to them. This problem has increased in recent years, as UGs have been handed large-scale and technically complex projects/investments (e.g., roads, bridges). As a result, there is an increasing trend for UGs to sub-contract out the whole project or parts of it to small-time contractors, which is in contravention to stipulations in the Local Government Financial Administration Regulations. This is mostly done without the knowledge of the municipal office, and the monitoring and technical officials at the office find it difficult to keep a close eye on this process. It is widely assumed that kickbacks and other leakages are involved in this process, though not to the degree when the municipality contracts out projects directly.xv

ii. Tole Lane Organizations (TLOs)

53. TLOs are grassroots community organizations formed in each settlement cluster (tole). In the municipalities, TLOs were initially organized through the UNDP's Rural Urban Partnership Programme (RUPP) in 1997. Although RUPP came to an end in 2007 after having completed three phases, new TLOs have either been formed throughout Nepal by replicating the RUPP model of social mobilization, or given continuity by the municipalities after the programme was phased out. In each of the six municipalities under study, there are more than 100 TLOs serving as the main interface between local government and community members. Broadly speaking, these TLOs, developed through the social mobilization process, participate in the integrated Participatory Municipal Development Planning (PMDP) process; mobilize community members for their socio-economic development activities through savings and credit activities, construction and operation of community-level infrastructure projects, etc; and promote responsive service delivery by engaging in development and social activities, especially by promoting rural-urban linkages. xvi

30 54. The level of capacity and participation in TLOs, and the attention paid to them by the municipal office, varies from municipality to municipality. TLOs are particularly active in Lekhnath and the municipality has made m~or efforts to train them and include them in municipal activities.xvii It appears that this is because there is an acute lack of other civil society groups in that municipality. By contrast, only a few TLOs in Dhankuta (approximately 65 percent) and Itahari (15 to 20 percent) are active. In the case of Itahari, it is allegedly the dominant role played by the political parties in the municipality that has marginalized the TLOs. The situation of TLOs in Baglung and Tansen appear to lie between these two extremes.

3.3 Historical Context 55. The number of places classified by the government as "urban" or "municipal" (these terms are regarded as interchangeable, although Article 88 (2) of the 1999 Local Self Government Act considers municipalities to be semi-urban areas) has steadily increased over the past six decades. If the number of designated urban areas was lOin 1952/54, this number went up to 58 in 2001. This is where the number now stands. According to the LSGA, for an area to be considered a municipality it should have a population size of at least 20,000 in the Tarai and 10,000 in the hills/mountains, have an annual revenue of at least Rs. 5 million in the Tarai and Rs. 500,000 in the hills/mountains and have "minimum urban facilities such as electricity, road, drinking water, communication and other similar urban facilities." xviii

56. The increasing importance of urban areas in Nepal can be seen not only by their increasing number, but also by their increasing share ofNepal's total population (Table 3.4):

Table 3.4 Total Population by urban-rural residence and urban population as a percent of rural population, Nepal, 1952/54 - 2001

Total POrllula'tion 8,256,625 9,412,996 11,555,983 15,022,839 18,491,097 23,151,423 Urban population 3.0 3.7 4.2 6.8 10.1 16.2 as percent of rural

Source: Pitamber Sharma, "Urbanization and Development

57. The increasing importance of urban areas to Nepal's economy can be seen in the decline of agricultural production and the increase of industrial production as a total share of GDP. "In the 1960s, over two-thirds of GDP was contributed by the agricultural sector. In 1990/91, 55.5 percent of the GDP originated in agriculture. In 199912000 this has come down to 39.5 percent."xx

31 Table 3.5 Industrial Origin of GDP, Nepal 1990 - 2000 (in million NRs.)

Construction 11078 11.1 26093 10.9 37373 10.2 Trade/Restaurant/Hotel 12902 12.9 28317 11.8 42895 11.7 Other 14393 14.4 76943 32.1 107822 29.4 Total 99702 100 239388 100 366284 100 Source: Sharma, "Urbanization and Development" [MoF (2002), Economic Survey, Fiscal 2001/2002.YXl

58. Despite the gradual increase in the urban areas share of population and its increasing importance to the economy, the level of urbanization is still very low in Nepal. Further, infrastructure and other services have not been able to cope with the influx of migrants into the urban areas. A very large number of migrants move to the Kathmandu valley and other large towns such as Pokhara in the hills and Biratnagar in the Tarai. It is thus necessary to develop infrastructure as well as employment in second-tier municipalities to ensure that the flow of migrants to urban areas across Nepal takes place on a more even and sustainable basis.

3.4 Political Context

59. The regime change of 1990, when autocratic monarchical rule was replaced by a parliamentary democracy, heralded far-reaching changes in the process of decentralization. Local bodies were granted more authority than ever before. All these changes were synthesized and formalized in the 1999 Local Self Government Act. But the architecture of self-governance began to break down soon after the promulgation of the act.

60. Just three years after the LSGA was passed, in 2002, the entire elected leadership of local bodies across the country was dissolved because their elected tenure, gained during the local elections of 1998, had come to an end. Nepal was in no position at the time to hold fresh elections as a result of the Maoist insurgency so, as a transitional measure, representatives from the centrally controlled civil service were initially granted full administrative authority. Political representatives were nominated to local bodies through royal decree. Although then­ King Gyanendra did hold elections to some local bodies in February 2006, these polls took place against the backdrop of countrywide opposition to his regime, as he had seized all executive powers a year earlier. None of the major parties participated, and only 20 percent of the electorate voted, thus compromising the elections' legitimacy.

32 61. By the time the parliamentary parties, along with their new allies the Maoists, returned to power in 2006, it was evident that many political changes had occurred in the intervening years. Demands for self-governance and devolution of power had become so radical that they went beyond anything envisaged in the LSGA. The political class accepted these demands, and it was declared that Nepal would be federalized. The LSGA of 1999 thus lost its authority less than a decade after its promulgation.

62. The Constituent Assembly (CA) that first sat in 2008 is meant to devise the new framework that is to govern Nepal's new federal structure. As an interim 'measure, the political parties have set up transitional arrangements as outlined above in the section "Institutional Context." As mentioned, these arrangements suffer from capture by dominant political parties and a lack of accountability. In the meantime, the CA is nowhere close to producing a framework for the new state structure. Political turmoil at the centre also means that it is highly unlikely that local elections will 'be held in the foreseeable future. When the parties do finally come around to debating the nature of federalism and begin implementing it, conflict may arise at the local levels, the precise form of which it is not currently possible to determine.

33 4. KEY SOCIAL RISKS AND OPPORTUNITIES

This section discusses about the likely social risks, impacts and anticipated opportunities after the intervention of the various (sub) project activities of UGDP: Nepal Emerging Town Project (NETP) as per the prefeasibility study.

4.1 Social and Political Economic Risks

63. The World Bank Study (2010) has identified following social and political economic risks while implementing UGDP: NETP

64. The domination of all municipal activities by the political parties and the Executive Officer, and the extremely limited involvement of civil society, CBOs or the general public, is perhaps the single most important factor that could cause problems in the implementation of the UGDP. This state of affairs encourages the tendency for parties to treat municipal resources as sources of patronage. The mitigation of this risk will require that various safeguard measures be put in place to provide community ownership of the project as well as help nurture democratic institutions at the local level, especially civil society groups, TLOs and users' groups.

65. In addition, there is also a tendency for parties to distribute funds for projects that will bring them partisan benefit. This has, to some extent, led to a situation where projects are selected more for the immediate demands of the parties' constituencies rather than for the long-term requirements. Relying exclusively on the municipalities for the implementation of the project, without effective mechanisms for checks and balances and a strong provision for monitoring from the center, is likely to make these power-holders only stronger instead of reducing the entrenched social inequalities present in the municipalities.

66. Further, when these municipalities receive large sums through the UGDP, it opens the possibilities for municipalities to transgress into activities or arrangements that would cause it to compromise on governance issues and fiscal management. The influx of a large amount of funds through the UGDP could also lead to an increase in tensions and competition between various groups, including political parties, for access to resources. If it is perceived that the resources brought by the UGDP have benefited certain sections of the popUlation, resentment may arise among those from marginalized groups or areas. In addition, there is a possibility of rising corruption with the increase in municipal funds through the UGDP.

67. Another risk factor is the absence of Madhesi towns amongst the six targeted municipalities selected for the project. As mentioned earlier, while Mechinagar and Itahari lie in the Tarai districts of Jhapa and Sun sari respectively, they are dominated by Pahadis and are considered

34 Pahadi towns. These two also experienced a significant influx of Pahadis in the aftermath of the Madhes movement of 2007. With Madhesi parties now well established as one of the important players in Nepal's political landscape, the exclusion of Madhesi towns is also likely to undermine the credibility of the project.

4.2 Likely Social Impacts and Issues

68. While the social impacts and risks identified are preliminary in nature, potential for occurrence has to be ascertained during further stages of project design and implementation. Sub-projects undertaken for development purposes and to overcome infrastructure problems in the urban areas may require forcible relocation of residents especially from slums and other areas of congestion, causing severe adverse social and economic impacts. The problem becomes exacerbated when the rights and entitlements of these people are not recognized in the local laws and resettlement policies. Due to this it becomes the responsibility of the project implementing authorities to see that the sub-project plan takes into consideration the potential social impacts on the people before considering the sub-project for implementation. Poverty related goals would remain elusive unless development planners and municipal administrators address resettlement issues with empathy with no less importance and attention to urban development goals.

69. The prefeasibility studies have identified types of socioeconomic infrastructure that the municipalities are likely to develop and some of these may have negative social· fallout on families and individuals in the form of loss of land, loss of structures, loss of livelihood/income, loss of crops/trees and loss of community infrastructure and public utility lines. Further, issues related to vulnerable groups such as the urban poor, women, socially and historically disadvantaged groups such as Dalits and indigenous people forms another dimension of social risks and problems.

70. An assessment of the likely impacts has been made to determine possible consequences of sub-project interventions by consulting with the local stakeholders. The consultations with the local stakeholders show that physical losses and adverse impacts arising from specific sub-project interventions can be in the form of:

1. Loss of land - agriculturallhomestead/commercial/community Land acquisition leads to loss of land and displacement of people who are affected by the sub-project under implementation. Loss of land refers to several types of impacts and displacements, the commonly discussed impacts are: • Loss of agricultural land that includes loss of arable land, standing crops; this also leads to loss of improvements and crops on land.

35 • Loss of traditional land rights and subsistence income for indigenous or tribal people, which forces them to a vulnerable state, losing their property rights cherished and being utilized for generations 2. Loss of structures - permanent/temporary Loss of built up property would broadly refer to change in housing typology and occupancy level, change in demand pattern, valuation of built up properties. Change in house or living quarters, other physical structures, structures used in commercial/industrial activity, displacement from rented or occupied commercial premises and educational organizations and institutions, loss of community centers, markets and health centers 3. Loss of public facilities/community infrastructure Loss of public utility lines would refer to relocation or realignment of utility lines like water supply lines, sewerage network, and telephone and power supply cables before the start of the sub-project or during sub-project execution phase that may affect the people who are using the services in the form of damage to the public utility lines, variation in supply, blockage or. choking, shift of demand on other systems or network, etc.

4. Loss of livelihood Loss of livelihood would refer to, a person who stands to lose his / her source of income due to the impact of the sub-project. Loss of primary occupation or source of income as recorded in the census. Loss of livelihood through loss ofjob or job opportunities primarily in urban areas affects people such as artisans or service providers like barbers, washerwomen or men, shopkeepers, shop workers and small businesspersons 5. Loss of Productive Assets It includes all assets, which are used in management and utilization ofany economic activity and occupation 6. Loss of access to urban civic services During the construction activities or even during the maintenance phase of certain sub­ project access and also public utility lines along the road corridors or any other subproject site may be limited or disrupted for the time period. There could be change in the probability of accidents and congestion or disruption of traffic or there could be impact on cemeteries, and burial sites causing problems to the public. After losing the common resources the affected people may end up exploiting the host population. This may lead to social tensions and environmental deterioration. 7. Loss of cultural property A cultural property includes properties valued for their cultural, religious or social significance by the local community or any relevant stakeholders or any agency established by law to conserve cultural heritage. Following are the possible impact that leads to the loss of cultural property.

36 • Damage of structures due to movement or due to the collision of heavy machinery I equipment during the construction phase. • Damage of structure from the vibration or due to the air pollution due to the operation of heavy machinery I equipment. Damage of site due to improper waste disposal. • Loss of shrines, other religious symbols or sites, places of worship (church, temple, mosque, stupas ).

8. Loss of Vulnerable Groups Although all sub-project-affected people may face hardships, the various vulnerable groups like women, children and social disadvantaged groups could be more affected as they have been discriminated against and exploited in the past. Vulnerability as such needs to be understood in a larger perspective of social processes of change. One of the main reasons for the vulnerability of the historically disadvantaged groups like the Dalits is that they have very little legal entitlement or ownership of private property. They are mainly dependent on community property resources or natural resources. Therefore consequences of displacement on historically disadvantaged groups include adverse conditions of living due to land alienation, inability to continue their traditional occupation, dismantling of old production systems leading to increased economic hardship and dispossession in social, cultural and political spheres. Under the project, the following groups can be considered as members of a vulnerable group. • Dalit Castes; • Indigenous Population; • Physically Challenged/Handicapped; • Woman-headed households; and • Low income group households below the poverty line • Children and the elderly, who could also be considered as members of the vulnerable groups, may also be eligible for assistance and support mechanisms under the collective category, if found necessary in subsequent stages of investigation.

9. Issues oflndigenous People The term "indigenous people" (adivasi;Janjati ) describes social groups with a social and cultural identity distinct from the dominant society that makes them vulnerable to being disadvantaged in the development process. These are the marginal segment of the population who engage in economic activities ranging from shifting agriculture in or near forests· to wage laborers or even small-scale market oriented activities. Social disorganization may take place with the type of changes that are brought about by the displacement process. The traditional social control mechanisms may be weakened and even lost. Consequently social tensions may increase. These people often experience the

37 loss of self-esteem as individuals and as communities, when confronted with development and modernization. When dealing with these groups it is important to consider the following aspects and plan to avoid any adverse social impacts. • Close attachment to ancestral territories & to natural resources • Self-identification & identification by others as members of a distinct cultural group • Indigenous language, often different from national language • Presence of customary social & political institutions

71. However, with improvement of drinking water schemes, drainages and sanitation services, road and land management, the project is expected to result in improved socioeconomic and health benefits for the local people in general and indigenous and vulnerable peoples in particular. The Table 4.1 summaries the likely nature of impacts and social risks resulted during and after the implementation of the subproject activities in each participating municipalities.

Table 4.1 Likely Nature of the Impacts2 and Corresponding Affected Population Municipalities Projects Likely Nature oflmpactlRisk Benefited I-:-:;----,:-;-----t----:---;::-;:,-:-:;----,-;-;--;-:~ --:-___-+-______--I~.Population Mechinagar 1. City Vestibule Development Not Known Now and Traffic Enhancement Acquisition of private land and (NKN) Measures buildings Removal of squatters and encroachers from the footpaths causing livelihood losses even tho ugh they are illegal Loss of shelter for temporary shops I Recently proposed by Mechinagar : residences of the squatters and encroachers. Construction of Devkota Park with There might be lacking of capacities of Ghanta Ghar and Mini Market municipal administration to address the social issues related to R&R and IPs that may arise due to the project. Ownership Issues ( Land Development Company to Municipality ,Rehabilitation of Mahendra Duwar : Cooperative before construction of i minimarket i Size of the Minimarket determine the requirement ofIEE or EIA

2. Urban Agriculture NKN Land i Land acquisition for transportation and Development other purposes may cause R&R issues Loss ofproductive assets and livelihood ofthe marginal holders

2 Disclaimer: The list indicates a likely pipeline. The social screening will enable the Municipalities to identifY sub­ project specific impacts based on actually proposed activities. 38 A number ofcommunity infrastructures such as irrigation system, foot trails, cattle track, water supply sources and water supply pipes, chautari, temple etc. may be disrupted during Recently proposed by Mechinagar : implementation ofthe sub project Municipal staff may have little or no Black topping of Gokul Road (from exposure to social assessments and ltabhatta to Antu, Ham), Integrated appreciation towards R&R and may project{ Ninda Tmal River training, consider it cumbersome. Patal Ganga development) Acquisition of private land and buildings Removal of squatters and encroachers from the footpaths causing livelihood losses even though they are illegal

Few buildings and small houses of I Rajbanshis ( IP of Jhapa) need to be removed

Dhankuta 1. Water Supply Augmentation & The entire Conflict may arise in terms of water Management population of the using rights and ownership of the municipality except sources between Hele and Dhankuta 8 and 9 wards. user groups Risk of exclusion of vulnerable communities Community participation may be low due to the provision of compulsory contribution of all users Municipal staff may have little or no exposure to social assessments and appreciation towards R&R and may I consider it cumbersome. 2. Construction/rehabilitation of Acquisition of private land buildings in 13 KM black topped road from commerciallocation( entry point) Triveni to Yakchana Ward No 7/8

Itahari I. Detailed designed and The proposed ring Acquisition of private land buildings Construction of Inner Ring road indirectly Road (IRR) Removal of squatters and encroachers benefits the entire from the footpaths causing livelihood population of the losses - even though they are illegal municipality and the passer byes. The Loss of shelter for temporary shops 1 direct beneficiary is residences for squatters and encroachers estimated to be 35 % Risk of exclusion and participation (as of the total the road passes through different types population (75000 in of communities characterizes by 20 10) those who will varying incomes, the same contribution be using the roads by each community may not be regular basis. applicable. There might be lacking of capacities of I municipal administration to address the

39 social issues related to R&R and IPs that may arise due to the project. I The project is expected to enhance the road excess and economic opportunities for the city residents. 2. Construction of Surface The proposed There might be a loss of public utility Drainage in the Core City Area drainage project services due to improper planning indirectly benefits to delays in restoring and reconstruction the entire population of the disturbed and lost public utility of the municipality lines and causing inconvenience in the and the passer byes. tov.'llS The direct Loss of access to urban civic services beneficiary is and common property resources. Such estimated at 33% of impact is often seen in the construction the total population stage. Delays in reconstructing the lost (75,000 in 2010) structures and services after the construction 'The project is expected to enhance the environment of the area and ultimately the image ofthe city. Lekhanath I. Conservation of Lakes and In a true sense, all Removal of squatters and encroachers Tourism Development the population from the vicinity of lakes causing within the livelihood losses - even though they are municipality and illegal surrounding VDCs Loss of shelter for temporary shops / would be benefitted residences of squatters and encroachers through the process. However, the Loss of shrines, other religious symbols directly benefitted or sites, places of worship may occur population is The project expected to promote estimated to be conservation of lakes, wetlands and around 42% of the surrounding forests for tourism total population ( development providing economic 60000 in 20 I 0) opportunities for local people, Municipal staff may have little or no exposure to social assessments and appreciation towards R&R and may consider it cumbersome. 2. Effective Land Management The direct Land acquisition for transportation and beneficiaries of this other land development purposes may project are the cause R&R issues landowners within Loss ofproductive assets and livelihood the project area, The number of A number of community infrastructures landov.ners cannot such as irrigation system, foot trails, be accessed now. cattle track, water supply sources and However, some water supply pipes, chautari, temple etc. rough estimation can may be disrupted during be made by the implementation ofthe sub project number of parcels. A Risk of exclusion and participation (as total of 8,387 people the project will be lunched in a diverse would be directly community setting characterizes by benefitted after the varying income and land holding size, development of 921 the same contribution by each ha with the household may not be suitable.

40 Bag\ung 1. Improvement to the Ring Road Wards 1,2,3,4 and Acquisition of private land and II are the main buildings urban areas where Loss of public utility services due to 2/3rd of the total improper planning delays in restoring municipality and reconstruction of the disturbed and population lost public utility lines and causing (including estimated inconvenience in the towns 10,000 rental population) live. It is Loss of access to urban civic services estimated at 60% of and common property resources due to the total municipal delays in reconstructing the lost population will structures and services after the directly benefit from construction the project. Community participation may be low due to the provision of compulsory contribution (Rs 7400.00IHH) of all users. The project is expected to enhance the environment of the area and ultimately the image of the city. 2. Run off Diversion and City The ring road Removal of squatters and encroachers Drain Rehabilitation indirectly benefits to from the footpaths causing livelihood the entire population losses even though they are illegal of the Municipality Loss of shelter for temporary shops I and many in the residences for squatters and encroachers surrounding VDCs. The direct Risk of exclusion and participation beneficiary is vulnerable section of the society (as the estimated by the road passes through different types of Municipality to be communities characterizes by varying 46% of the total incomes, the same contribution by each population of household may not be justifiable. Baglung. There might be lacking of capacities of • municipal administration to address the social issues related to R&R and IPs I that may arise due to the project Tasnsen I. City Conservation and Tourist The entire Development Loss of incomes and livelihood while municipality shall be shifting of existing shops and offices benefitted by the from Durbar Square Area may come program. The city up. core peopIe shall Loss of shrines, other religious symbols directly benefit or sites, places of worship may occur through the expansion of the There might be a loss of public utility tourism trade, and services due to improper planning the rural people of delays in restoring and reconstruction the municipality of the disturbed and lost public utility shall be benefitted lines and causing inconvenience in the by the increased towns. production and Municipal staff may have little or no selling of exposure to social assessments and agricultural and local appreciation towards R&R and may products to the town consider it cumbersome.

41 2. Water Supply Optimization and The beneficiary Conflict may arise in terms of water Management population is the using rights and ownership of the people of all wards sources except 11 and 12, Risk of exclusion of vulnerable where the communities while selecting the distribution from households for rain water harvesting existing system is available. However, Community participation may be low the rainwater i due to the provision ofcompulsory 'harvesting may be contribution ofall users. extended to the

72. The foregoing description of the impacts portrays a generic picture of the social attributes to be verified during the feasibility and details study of the sub-project. Considering that the scale and size of possible activities to be covered under UGDP: NETP will very likely be small in terms of land acquisition and effects on Indigenous and other vulnerable people, no requirement of preparing full RAP and VCDP is expected. Nonetheless, the list provides sufficient information for social screening. As outlined in chapter 8, if the subproject passes the criteria and no further social impact studies are required to prepare RAP and VCDP, the checklist should be used to identify relevant and social concerns. This information should be used to design the best environmental and engineering practices to avoid or mitigate any adverse environmental and social impacts.

73. Furthermore, this framework made committed the project authorities to minImIze the displacement and to ensure a fair, efficient and transparent way ofdealing all matters relating to land acquisition and involuntary resettlement including loss of assets and other adverse impacts on PAPs due to the socioeconomic infrastructure projects.

4.3 Temporary Impacts3

74. Potential construction period impacts or temporary impacts to residents, government facilities and businesses at the subproject areas of the participating municipalities and their corresponding mitigation measures are discussed below.

75. During construction, motorists and pedestrians on subproject areas would experience some delays and detouring. Some streets would be closed during construction and others would be subject to periodic lane closures. Further delays would occur as construction trucks and equipment use local streets.

76. Similarly, safety and security issues associated with the construction of the physical infrastructure under UGDP include potential disruption of traffic movements. Heavy vehicle movements, possible hazardous wastes excavation and transport, and construction site

3 Disclaimer: The list indicates a likely pipeline. 42 activity would also create potential safety concerns. However, economic activity generated by the proposed construction projects under UGDP is anticipated to benefit the subproject areas and would also generate employment opportunity.

77. In order to minimize the temporary impacts, appropriate construction management practices should be in place to ensure the safety of construction workers, local employees, and residents during the construction activities. Fencing and lighting of construction and staging areas, recognized safety practices for the utilization of heavy equipment, and the movement of construction materials should be implemented to avoid accidents. During construction, the project contractor should be made responsible (See section 9.4 for Contractors Compliance on Social Safeguard Measures) for job-site safety and security. Detours, lane blockages, and truck entrance locations should be well signed. The contractor would apprise police, fire, and other emergency response agencies of construction activities, detours, and road blockages throughout the construction process.

4.4 Stakeholder Analysis

78. Stakeholders are people, groups, or institutions, which are likely to be affected by the proposed project (either negatively or positively), or those which can affect the outcome of the project.

79. Generally a distinction is made between two kinds of stakeholders, the primary and secondary stakeholders. The primary stakeholders are the stakeholders who are directly affected, either positively or negatively by the project. As such, the primary stakeholders of UGDP: NETP include the intended users of the improved service deliveries and developed socioeconomic infrastructures and facilities; in other words the intended beneficiaries of the project. The secondary stakeholders are central government and donors but also include local NGO's, private sector entrepreneurs, local governments and political parties. Thus, the secondary stakeholders are stakeholders, which play some intermediary role and may have an important effect on the project outcome. Overall, the UGDP: NETP has following stakeholders at different levels:

80. Ministry of Physical Planning and Works (MPPW): It acts as lead executing agency of the project. It represents GoN, chairs the project Steering Committee (SC), carries inter ministerial coordination. It works with municipalities through the Department of Urban Development and Building Construction (DUDBC), the Department of Water Supply and Sewerage (DWSS), and Town Development Committees (TDC's). The major responsibilities of the Ministry are: (i) development of the national strategic transport network particularly of the road network, (ii) housing and urban environmental improvements and (iii) increased access to water supply and better sanitation facilities.

43 81. Ministry of Local Development (MLD) is the co executing agency and represents SC as co­ chair at the national leveL It is the focal organization for local development, supervising 75 DOCs, 3913 VDCs and 58 municipalities. MLD's main functions are to implements the LSGA, co-ordinate local governments bodies, and execute administrative and development grants for local development. MLD deputes its staff to municipalities. The MLD will implement the Service Delivery Improvement component of the project, which will top up existing block grants to the municipalities, to help local authorities maintain minimum service delivery standards, provide adequate O&M support to existing assets, and address routine urban management issues. MLD will also be responsible for implementing activities associated with its institutional development.

82. The Town Development Fund (TDF): it is a state-owned corporate body established in 1989 and will manage Socio-economic Infrastructure Development component of the project under its regular product lines and standard operations. It will support expansion/rehabilitation of essential infrastructure/services for which the municipalities are responsible. The selection of investment priorities will be undertaken by each municipality based on a comprehensive socio-economic development plan (periodic plan, where relevant) that is prepared in consultation with local stakeholder groups, including the all party mechanism. The TDF will manage the fund; appraise sub-projects selected by the municipalities for their technical and financial feasibility; and assess the ability of municipality to meet its financial obligations associated with the investments. The TDF has been assisting municipalities in project initiation, feasibility studies, engineering design, and project implementation; it also performs due diligence in project appraisal, disbursement and civil works.

83. Department of Urban Development and Building Construction (DUDBC): Under MPPW, the Department of Urban development and Building construction (DUDBC) hold responsibilities relating to housing and physical planning and building construction. Thc regional offices in the five development regions and in 75 districts are responsible to the DUDBC at the central level. DUBC seeks to develop planned and organized urban settlements with the provision of employment opportunities and basic physical facilities in a cost effective way. For UGDP: NETP, the DUDBC will implement Institutional Development (10) activities for the municipalities and the department itself. A key element of this will be the Municipal Support Team (MST)-a mobile team of experts which will provide on-demand and in-time backstopping support and on-the-job training to the municipalities and will be steered by the responsible 10 Component Manager.

84. The national level stakeholders with indirect responsibilities in the project include the ministry of finance, popUlation and environment, health, education, and industry, commerce and supply, which perform their respective sectoral functions with implication for urban

44 development and management. Nepal Water Supply Corporation, Nepali Electricity Authority and Nepal Telecommunication Corporation are corporate bodies responsible respectively for providing services of water, power supply, and telecommunications.

85. Municipalities: Nepal has a two-tier local governance structure with District Development Committees (DDC-75) on the top tier and, below, municipalities (58) and Village Development Committees (VDC-3913). The Municipalities and VDCs are formed on the basis of popular voting. For UGDP: NETP, the participating six municipalities represent two members to the SC, implement subprojects «design and construction) under its jurisdiction, balance the project with other works of the municipality, select sub-projects and implement, formulate policy and programs, work for the project in the improvement of service delivery, socio-economic infrastructure and institutional development, coordinate with the key stakeholders: all party mechanism, CBOs, UCs, NGOs, private. sectors in effective municipal development; and engage the project municipalities' staff, citizens and key stakeholders in the program and activities. The project will be implemented at the municipality level largely through existing systems, but with a focus on strengthening them.

86. Users' Groups (UGs): The UGs generally consist of members who are from the locality where the project is being implemented and who take the responsibility of constructing, managing and benefiting from such projects. The Local Self-Governance Act 1999 (LSGA) and the related Local Government Financial Administration Regulations 1999 (amended in 2007) require all local bodies, including municipalities, give priority to users' groups while implementing projects that involve funds less than Rs 6.5 million (LSGA, Article 265). A provision in the LSGA requires that all users' groups include at least 30 percent women, with one woman in a leading position (chair, vice-chair or treasurer). In addition, participation of Janajatis and Dalits is to be encouraged.

87. Tole Lane Organizations (TLOs): TLOs are grassroots community organizations formed in each settlement cluster (tole). In the municipalities, TLOs were initially organized through the UNDP's Rural Urban Partnership Program (RUPP) in 1997. Although RUPP came to an end in 2007 after having completed three phases, new TLOs have either been formed throughout Nepal by replicating the RUPP model of social mobilization, or given continuity by the municipalities after the program was phased out. In each of the six municipalities under study, there are more than 100 TLOs serving as the main interface between local government and community members. Broadly speaking, these TLOs, developed through the social mobilization process, participate in the integrated Participatory Municipal Development Planning (PMDP) process; mobilize community members for their socio­ economic development activities through savings and credit activities, construction and operation of community-level infrastructure projects, etc; and promote responsive service

45 delivery by engaging in development and social activities, especially by promoting rural­ urban linkages.

88. Adivasi Janajati People: They are communities having their own territory, own mother tongue, traditional rites and customs, distinct cultural identity, distinct social structure and written or unwritten history. They are considered to be disadvantaged group as their presence in all level of governance is low in terms of their population. Rajbanshi, Kisan, Rai, Limbu, Tamang, Ourung, Magar, Newar, Majhi are the adivasi and janajait communities found in the participating municipalities.

89. Dalits: They are defined as those Hindu castes of who were categorized as untouchables in the Old Civil Code of 1853 until the promulgation of New Civil Code of 1962. The National Dalit Commission has defined the term 'Dalit' as 'those communities who by virtue of atrocities of caste-based discrimination and untouchability, are most backward in social, economic, educational, political and religious fields, and are deprived of human dignity and social justice. Kami, Damai, Sarki, Kusule, Dum, Chamar and Dhobi are the main Dalit groups found in the UODP project sites.

90. Private Sectors: The Ninth Five year Plan and LSOA set out policies to foster the participation of private sector in development activities, including the provision, operation and maintenance of urban facilities, service and infrastructures. The project may involve private sector players to support the efforts of local government in managing and maintaining municipal services and facilities. The private sector represent to the SC from FNCCI, coordinate with trade and commerce sectors which maybe individual and corporate organizations. The private sectors support to implement the project, collaborate with work for the project in the improvement of service delivery, socio-economic infrastructure and own organization development, coordinate with the key stakeholders in effective municipal development.

91. Civil Society: The civil societies represents to the SC for policy input and to the municipalities for implementation of the project components with their cooperation, coordinates with civil society organizations for municipal development, and engage in the project program and activities. The CSOs will cooperate the capacity building of various types of CSOs (CBOs, UCs, NOOs and others) at municipal level under the project components. The CSOs have a great role to play in urban service delivery and governance.

92. General Public and Residents of the Participants Municipalities: These included general people, city residents, user groups, or communities which are likely to be affected by the proposed project (either negatively or positively). Particularly, it includes the intended users

46 of the improved service deliveries and developed socioeconomic infrastructures and facilities; in other words the intended beneficiaries ofthe project.

93. Mass Medias: Local, regional and central level medias can play pivotal role to bring a clear and common understanding on the objective and scope of the Project amongst all stakeholders. They can play an important role in creating awareness, mobilizing people and making the preparation and implementation participatory. They can play a critical role to ensure transparency in implementation of the programs at the field level by promoting the concept of accountability and social audit.

94. Donors (World Bank, GIZ): Provide required financial resources for the project in the forms of loan/grant to GoN. Supervises the overall project implementation and reviews and issues no-objection to procurement and disbursement documents.

47 5. REVIEW OF LEGISLATIVE AND REGULATORY REQUIREMENTS

Land acquisition, compensation and resettlement are crucial issues concerning development projects in general and urban development projects in particular, as the latter are usually justified in terms of the macroeconomic perspective against the local socioeconomic and environmental costs in which they are located. This situation strongly demands for an appropriate resettlement policy and implementation mechanisms. The major objective behind addressing resettlement issues is recognizing human beings as primary stakeholders and ultimate beneficiaries of development projects. This Chapter provides a summary of national legislation and policies and best practice guidelines pertaining to land acquisition, resettlement and rehabilitation.

5.1 Review of Relevant Laws and Polices of Nepal

5.1.1 Resettlement Policy and Legal Measures on Land Acquisition

95. In Nepal, there is legislation covering land acquisition/appropriation and constitutional guarantees to the right to property and the right to compensation for property acquired under the law. In 2006, the country's National Planning Commission (NPC) prepared a policy on land acquisition, compensation and resettlement called The National Policy on Land Acquisition, Compensation and Resettlement in Development Projects in Nepal. However, Nepal does not have legislation that specifically addresses involuntary resettlement. Nevertheless, resettlement has been addressed on a project specific basis as per the guidelines of World Bank since late 1980s and ADB since the beginning of 1995.

The Interim Constitution ofNepal 2063 (2007)

96. Article 19 of the Interim Constitution (2063 (2007», Right to Property, states that (1) "Every citizen shall, subject to the laws in force, have the right to acquire, own, sell and otherwise dispose of the property. (2) The State shall not, except in the public interest, requisition, acquire, or create any encumbrance on the property of any person. Provided that this clause shall not be applicable on property acquired through illegal means. (3) Compensation shall be provided for any property requisitioned, acquired or encumbered by the State in implementing scientific land reform program or in public interest in accordance with law. The compensation and basis thereof and operation procedure shall be as prescribed by law."

National Policy on LandAcqUisition, Compensation and Resettlement, 2006

97. The National Policy on Land Acquisition, Compensation and Resettlement in Development Projects in Nepal was prepared in September 2006 by the National Planning Commission (NPC) with ADB assistance. The Policy was approved by a ministerial working committee

48 and the NPC but its finalization is still awaiting approval from the concerned government agencies, cabinet and the parliament. The Policy has the following guiding principles:

• Appropriate and adequate compensation for the loss of assets or income is a fundamental right of all project affected persons. Physically displaced people must be relocated with basic amenities such as school, health posts and other facilities. • All affected persons should be assisted to restore at least their pre-project income and livelihood sources. • The absence of legal title to land should not be a bar for compensation, resettlement and rehabilitation assistance. • Vulnerable groups such as JanajatilAdivasi, Dalits, landless, women, especially women­ headed households, differently-abled, poverty groups and senior citizens are entitled to special benefit and assistance packages in addition to compensation and resettlement.

98. Drawing upon the provisions of the ADB's and World Bank's involuntary resettlement policies, and building on current resettlement practices in the country, the Policy establishes a range of compensation entitlements for people affected by development projects. Amongst others, this includes:

• cash compensation at full market value (equivalent to replacement value) for all acquired land if the provision of replacement land is not feasible; with the stipUlation that a person who becomes a marginal landholder as a result of land acquisition should be provided with replacement land of equivalent productivity or value; • cash compensation at replacement cost for the loss of all structures (residential, business and other structures), with no deduction for depreciation or for salvageable materials; or provision of a replacement house; • cash compensation for private trees based on the annual value of the produce; • compensation for the loss of income from rented buildings; • cash compensation for the loss of standing crops; and • Compensation to registered tenants and sharecroppers, equivalent to 50% of the compensation for the concerned area of land and lost crops.

99. The Policy states that squatters and non-titled landholders are not entitled to compensation for the land they occupy. However, those who have earned their livelihoods from access to/use of the land for more than three years prior to the project's compensation cut-off date should, wherever possible, be provided with replacement land on a lease basis. They should also be assisted in their efforts to legalize their tenure in order to qualify for compensation.

Rehabilitation measures proposed by the Policy include:

• proper resettlement planning, including developed relocation sites with amenities/easy access to amenities;

49 • for resettled farming communities, homesteads sites of sufficient size for storage of agricultural produce, keeping of livestock and for kitchen gardens; • employment on the project, where possible, to at least one member of each affected household, with half ofthe employment opportunities reserved for women; and • Additional relocation and rehabilitation support measures, particularly to displaced households, severely affected households, women and vulnerable people.

Land Acquisition Act, 2034 (1977)

100. The Land Acquisition Act (LAA), 2034 (1977), first promulgated in 1961 (Land Acquisition Act, 2018) is the core legal document to guide tasks related to land acquisition and resettlement activities in Nepal. There is provision in Clause 3 of the Act to acquire land for any public purpose, subject to the award of compensation. According to Clause 4, institutions seeking land acquisition may also request GON to acquire the land under the regularity provisions subject to be compensated by such institutions' resources. Clause 27 of the Act provides provisions for land acquisition through the mutual agreement with the plot owners, where the process of land acquisition as per Act is not required. The Act grants the plot owner the right to choose between a mutual agreement and the formal process for land acquisition as per the Act. Where Clause 27 is enacted, and the plot owner not satisfied with the compensation agreement offered, Clause 18 (sub-clause 2) states that the owner can file a complaint with the Ministry of Home.

101. While acquiring land, GoN forms a Land Acquisition and Compensation Fixation Committee (LACFC) under the chairmanship of Chief District Officer (CDO) of the restrictive districts as per the Clause 13 of the Act. The other members to be included in the Committee comprise of the Chief of Land Revenue Office (LRO), an Officer assigned by CDO, representative from District Development Committee (DDC), Concerned Project Manager, and VDC representative. The Project Chief functions as the Member Secretary of the Committee. In addition, it has become the practice to include representatives from the Affected Persons (APs). This practice of fixing compensation is known as Community Consensus Valuation (CCV). LACFC determines the amount of compensation considering the following factors: current price of land value, value of standing crop, houses, walls, sheds or other structures, loss incurred as a result of shifting residence or place of business, and consider relevant acts and periodic guidelines of GoN. According to Clause 6, if the land has to be acquired for institutions other than the local governance bodies and institutions fully owned by the government, the Committee has to consider the following in fixing the compensation amount: (i) Price of land prevailing at the time of notification of land acquisition; (ii) Price of standing crops and structures; and (iii) Loss incurred by the AP by being compelled to shift his or her residence or place of business in consequence of the acquisition of land.

50 102. The Clause 9 sub-section 3 of the Act mentions that the duration of compensation days will be determined by LACFC. Clause 37 of the Act illustrates that the Committee may extend the period of additional three months, if compensation are not collected by those affected. After termination of extended three months period the amount will be deposited to the Government account.

103. The compensation to be provided for land acquisition should generally be in cash as per current market value. However, there is also a provision under Clause 14 to compensate land for-land provided government land is available in the area. The Act also envisages the possibility of two separate rates of compensation, distinguishing between families who lose all their land and those who lose only some part of their landholdings. As stipulated in the Clause 10 there is provision for the affected households to take the crops, trees and plants from land and salvageable from the structures. Clause 39 indicates options to allow the affected households to take all salvageable assets without deduction of any costs from the affected households. Legal tenants of the land are entitled for 25% of compensation amount of the acquired land. If the tenant has built house also with the consent of the landowner, then he shall be entitled for full compensation of such house (Clause 20). Unpaid government taxes, if any, could be deducted from the compensation amount (Clause 21)

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

Land Reform Act, 1964

105. Another key legislation in Nepal related to land acquisition is the Land Reform Act (LRA) 2021 (1964). This Act establishes the tiller's right on the land, which he is tilling. The LRA additionally specifies the compensation entitlements of registered tenants on land sold by the owner or acquired for the development purposes. The most recent Act Amendment (2001) established a rule that when the State acquires land under tenancy, the tenant and the landlord will each be entitled to 50 percent of the total compensation amount. Tenants are verified through a record of tenancy at the Land Revenue Office.

Guthi Corporation Act, 1976

106. Land acquisition must also comply with the provisions of the Guthi Corporation Act, 2033 (1976). Section 42 of this Act states that Guthi (religious trust land) acquired for a development must be replaced with other land, rather than compensated in cash.

51 Forest Act, 1993

107. The Forest Act, 1993 recognizes the importance of forests in maintaining a healthy environment. Section 49 of the Act prohibits reclaiming lands, setting fires, grazing, removing or damaging forest products, felling trees or plants, wildlife hunting and extracting boulders, sand and soil from the National forest without prior approval. Clause 68 (1) of the Forest Act 2049 (1993) states that the government may permit the use of any part of government-managed forest, leasehold forest or community forest, if there is no alternative for the implementation of a plan or project of national priority without significantly affecting the environment. According to the clause 68 (2), if any loss to persons or community is involved while permitting use of such land, it is required to compensate the loss.

Water Resources Act, 1993

108. The main objective of the Water Resources Act is to make legal arrangements for determining beneficial uses of water resources, preventing social, environmental and other hazardous effects thereof and also for keeping water resources free from pollution.

109. Section 16 has a provision for land acquisition from government or public for the construction of a water resource projects. If the project has been performed by Government of Nepal or a licensee, Government of Nepal may prohibit to use the premises ofa house or land located in the area where such construction work is performed or the premises of a house or land located in the prescribed distance from such place of construction by any other person for any specified purpose. Government of Nepal or the licensee shall pay compensation, as prescribed under Land Acquisition Act, 2034( 1977) to the concerned person for such damage or loss caused due to such prohibition.

Local Self-Governance Act, 1999

110. The Clause 258 in the Part - 5, General Provisions relating to Local Body Chapter 3, Miscellaneous has provision of land acquisition. The Clause states that in case the Local body has to acquire land to carry out any development and construction works within its area, it may acquire the land required for that work by following the requirements of the prevailing law and providing compensation to the concerned land-owner for the land.

Town Development Act 1988

111. The Town Development Act 1988 provides the legal basis for implementing town development plans. The Act has empowered both the central and local government agencies to carry out the land pooling projects. The Local Self Governance Act 1999 also provides the municipalities and the Village Development Committees to carryout town development plans

52 but it is not comprehensive enough to carry out town planning as compared to the Town Development Act 1988.

112. According to Town Development Act 1988, clause 12.1.1, the government can acquire pieces of land to integrate them to add facilities and services and the Town Development Committee can reimburse its investment by selling the developed plots of land and transferring the remaining land to the original landowners. According to clause 5.2 of the Town Planning Directives 2005, there is a provision to distribute the plots to marginal and excluded communities, with certain conditions.

Public RoadAct, 1974

113. The Public Road Act is the governing legislation for construction and operation of roads in Nepal. The Act prohibits the construction of permanent structures (buildings) in a defined distance from the rural road, Le., the road agency has the authority over everything within the right of way. The act makes provision for cases where road projects temporarily require land and/or other properties during construction, rehabilitation and maintenance. A Compensation Fixation Committee CFC determines compensation in case of loss of assets, business or production. Provisions are also detailed for compensation for the extraction of construction materials. Article 19 of the Act mandates requirement of permission from the Department of Roads to carry out activities within the limits of the road boundaries. As per Article 29, local governmental offices have to give notice to the Department of Road (DoR) prior to the start of activities in the limits of the public roads.

114. The Act empowers DoR to acquire any land on a temporary basis (for storage facilities, construction camps, etc.) during road construction and upgrading. The temporary acquisition of land containing any buildings (e.g. houses, sheds, temples and schools) is avoided wherever possible. The Act also empowers DoR to "lift earth, stone or sand from any adjoining land" during construction and upgrading works.

115. The Act does not provide for leasing of land. However, DoR is required to pay compensation for any damages caused to buildings, crops and trees, where the farming activity of the landowner is interrupted, and where the landowner has to incur expenses to restore the land after its return. Compehsation is determined between DoR and the titleholder, or through mediation, involving officials from the relevant VDC/Municipality and District.

116. The GoN may prohibit, through notification in the Nepal Rajapatra (Government Gazette), the construction of any permanent structure (other than walls) within 6 m of the road formation edge.

53 5.1.2 GON Policies on Indigenous Peoples (IPs) and other Vulnerable Communities The Interim Constitution ojNepal 2063 (2007)

117. The Interim Constitution of Nepal commits the government for the protection and development of IPs and other marginalized communities. Article 21, Right to Social Justice guarantees the rights of the economically, socially or educationally backward women, Dalits, indigenous peoples, Madhesi communities, oppressed classes, poor farmers and labors to take part in the structures of the State on the basis of the principle of 'proportional inclusion'. Similarly, Article 35, Policies of the State (10) states that the State has compulsory obligation to pursue a policy of uplifting the economically and socially backward indigenous peoples, Madhesi, Dalit, marginalized communities, and workers and farmers living below the poverty line, by making a provision of reservation in education, health, housing, food sovereignty and employment, for a certain period of time.

The Three Year Interim Plan (TYIP) (2007-2010) 118. Nepal does not have a standalone policy on Indigenous Peoples and other vulnerable communities, however, in the Tenth Plan significant emphasis has been placed on delivering basic services to the disadvantaged and indigenous people, DaIits, women, disabled and other vulnerable groups including the Adivasi I Janajati. One of the main thrusts of the Tenth Plan is the implementation of targeted programs for the uplift, employment and basic security of Dalits, indigenous people and disabled peoples. The policy provision also outlines that the government should pilot strong and separate package of program of basic security for vulnerable sections of society. The Three Year Interim Plan (TYIP) (2007-2010) includes the following policies for inclusive development of Adivasi/janajatis and other vulnerable groups: I. creating an environment for social inclusion; 2. participation ofdisadvantaged groups in policy and decision making; 3. developing special programs for disadvantaged groups; 4. positive discrimination or reservation in education, employment, etc.; 5. protection of their culture, language, and knowledge; 6. proportional representation in development; and 7. Making the country's entire economic framework socially inclusive.

National Foundationjor Upl(ftment ojAdivasilJanjati Act, 2058 (2002)

119. For the welfare of Adivasi/janjati, the government set up a National Committee for Development of Nationalities (NCDN) in 1997. In 2002, Parliament passed a bill for the establishment of an autonomous foundation named 'National Foundation for Upliftment of Indigenous Nationalities,' which came into existence in 2003 replacing the NCDN.

54 Government of Nepal has identified and legally recognized 59 indigenous communities. They are officially referred to as AdivasilJanjati in Nepali and Indigenous Nationalities in English as per the National Foundation for Upliftment of Adivasi/Janjati Act, 2058 (2002). One can find vast disparities in terms of socio-economic standing among the Adivasi Janajati groups. According to Nepal Federation of Adivasil Janjati (NEFIN) 10 of the 59 Adivasil Janajati are "endangered", 12 "highly marginalized", 20 "marginalized", 15 "disadvantaged" and 2 are "advanced" or better off on the basis of a composite index consisting of literacy, housing, landholdings, occupation, language, graduate and above education, and population size.

120. This Foundation has been working for the preservation of the languages, cultures, and empowerment of the marginalized ethnic nationalities. More specifically, the Foundation has following objectives:

1. To make overall development of the AdivasilJ,anjati by formulating and implementing the social, educational, economic and cultural programs. 2. To preserve and promote the language, script, culture, literature, arts, history of the AdivasilJanjati. 3. To preserve and promote the traditional knowledge, skill, technology and special knowledge of the AdivasilJanjati and to provide assistance in its vocational use. 4. To encourage the AdivasilJanjati to be participated in the mainstream of overall national development of the country by maintaining a good relation, goodwill, and harmony between different AdivasilJanjati, castes, tribes and communities. 5. To provide assistance in building an equitable society by making social, economic, religious and cultural development and upliftment of AdivasilJanjati. Local Self-Governance Act, 1999

121. The Local Self-Governance Act, 1999 commits municipalities for the promotion, preservation, and protection of language, religion, culture of indigenous people and their welfare in the municipal area .. The Act empowers municipalities to formulate and implement periodical and annual plans within their own jurisdiction. Periodic plans integrate different thematic plans according to social, economic, environment, physical, financial, and institutional aspects. The Act provides municipalities to follow planned development programs and prioritize programs that can increase productivity, contribute to upgrading living standards, and generate income and employment opportunities. The Act also requires that local programs provide direct benefits to women and disadvantaged groups, and use community groups in the planning and execution of development programs.

55 5.1.3 Communication, Good Governance & Social Accountability

The Interim Constitution ofNepal 2063 (2007)

122. Article 27 ofthe Interim Constitution (2063 (2007» guarantees the right to information of the citizen. The article states that "every citizen shall have the right to demand or receive information on any matter of his or her interest or of public interest". Provided that nothing shall be deemed to compel any person to provide information on any matter of which secrecy is to be maintained by law".

Right to Information Act, 2064 (2007)

123. The aim of this act is to make the functions of the state open and transparent in accordance with the democratic system and to make responsible and accountable to the citizen. It intends to make the access of citizens simple and easy to the information of public importance held in public bodies and to protect sensitive information that could make adverse impact on the interest of the nation and citizen.

124. The clause 3 of the act ensures Right to Information. It says that every citizen shall, subject to this Act have the right to information and they shall have access to the information held in the public Bodies unless confidentiality has been maintained by laws.

125. The clause 4 of the act describes the Responsibility of a Public Body to disseminate information. It mentions that each Public Body has to respect and protect the right to information of citizen. Public Body shall have following responsibilities for the purpose of protecting right to information of citizen:

1. to classify and update information and make them public, publish and broadcast, 2. to make the citizens' access to information simple and easy, 3. to conduct its functions openly and transparently, 4. to provide appropriate training and orientation to its staffs

126. Public Body may use different national languages and mass media while publishing, broadcasting or making information public. A Public Body shall arrange for an Information Officer for the purpose of disseminating information held in its office.

] 27. The clause 7 of the act prescribes the Procedures of Acquiring Information. It states that a Nepali Citizen, who is interested to obtain any information under this Act, shall submit an application before concerned Information Officer by stating reason to receive such information.

56 Good Governance (Management and Operation) Act, 2064 (2008)

128. This act intends to make legal provision in relation to good governance by making public administration of the country pro-people, accountable, transparent, inclusive and participatory. The clause 25 (1) mentions that every governmental office (public office) responsible for delivering public service or involved in public relation shall maintain Citizen's Charter in prescribed form and locate it in the visible place of the office. The clause 28 (1) spells out that the Government of Nepal may arrange for the provision of operating any project or program with direct participation and ownership ofthe people.

129. The clause 30 of the act has a provision of public hearing. The Chief office-holder at regional, zonal, district and local level involved in delivery of service, shall conduct Public Hearing as prescribed, with the purpose of making the activities of the office fair, transparent, and objective and addressing the lawful concerns of general people and stakeholders. The act also mentions that subject matter expert, stakeholders, and representatives of civil society and officials of the local bodies shall be the participants of the public hearing.

130. The clause 31 ofthe act speaks about Grievance Management. It states that a complaint box shall be maintained at the visible place of every ministry, department, and government agency and office for the management of grievance relating to quality, effectiveness of the work carried out by such ministry, department and agency or office and possible irregularities in them. Every citizen may submit complaint in the complaint box managed by a government agency or office. In order to address the complaint submitted, the responsible officer of the concerned government agency or office shall open complaint box in the presence of other officials in every Three days and if the grievances and suggestions are found to be reasonable, necessary step shall be taken for the proper management thereof. In the case of complaint received is irrelevant to the concerned government agency or office, however relating to the individual conduct of chief of such government agency or office, the detail of such grievances shall be submitted to higher authority thereof. The information of action taken shall be published in the notice board of concerned office.

The Public Procurement Act, 2063 (2007)

131. The main thrust of this act is to make legal provisions in order to make the procedures, processes and decisions relating to public procurement much more open, transparent, objective and reliable, obtain the maximum returns of public expenditures in an economical and rational manner by promoting competition, fairness, honesty, accountability and reliability in public procurement processes. Furthermore, it aims to ensure good governance by enhancing the managerial capacity of procurement of public entities in procuring, or causing to be procured, construction work and procuring goods, consultancy services and

57 other services by such entities and by ensuring the equal opportunity for producers, sellers, suppliers, construction entrepreneurs or service providers to participate in public procurement processes without any discrimination.

132. The clause 3 of the act has made mandatory provision for any procurement to be made as per this Act. It says that in making procurement, a Public Entity shall have to make such procurement by complying with the procedures setout in this Act. It further mentions that any procurement made in contrary to this act shall be void and invalid.

133. It has clearly spells out the provisions relating to Responsibility for Procurement and Procurement Methods in Chapter 2 under clause 4-10. The Chapter-3 prescribes the Provisions Relating to Bid under clause 11-28. Provisions Relating to Consultancy Services are described in Chapter 4 under clause 29-39. Chapter-7 states the Provision Relating to Procurement contract.

Local SelfGovernance Regulation, 2000

134. The Local Self Governance Regulation 2000 empowers local bodies to coordinate and .implement development programs and to rationally utilize local natural resources. Article 7 (68) of the Regulation empowers local bodies to monitor and supervise development works implemented in their jurisdiction. Under Schedule 26 (4) of the Regulation, half the royalty paid to the GoN by a development project will be used for local development: 12% of the total royalty will be provided to the district where the project is located, with the remaining 38% to be distributed to the other districts in the affected development region.

5.1.4 Gaps in Existing Resettlement Policies and Laws

135. The above discussion on the prevailing Acts and Regulations in Nepal indicate a progressive development oflegal framework related to involuntary resettlement of the people affected by the development projects. However, there still exists some confusion, gaps and overlapping of the provisions in various Acts and Regulations in terms of the involuntary resettlement affected people.

136. Even the LAA 1977 has no specific provision for granting compensation to project affected people who do not have legal ownership of land. Squatters do not have automatic right to productive land compensation. Similarly, encroachers with less than three years residence do not have rights to replacement. Furthermore, LAA 1977 does not have provisions to (i) address the difficulties caused by delays in compensation to Project Affected Families (PAF), (ii) ensure that vulnerable groups, ethnic minorities and other people affected by the project are capable of making proper use of compensation money to resettle

58 to a living standard not less than that existed prior to the project, and (iii) provide practical provisions of land for land option despite it being mentioned in the LAA 1977.

137. Similarly, there are no provisions of compensation, resettlement and rehabilitation for traditional users of the property, communal properties, and the users of the properties for generations without legal holdings. Though the LAA 1977 recognizes that the affected people are eligible for compensation of the affected land and property, the mode of compensation is not exclusively defined. In practice, it refers to cash compensation. Further, the property evaluation aspect is rested upon the Compensation Fixation Committee without any guidelines. It is not clear whether the evaluation criteria will be based on the current market price or on the prevailing rates of Land Revenue Office. In Nepal, Land Revenue Office rates are far lower than the current market price. Compensation payments are usually made only after deduction of depreciation, which is against the best practices, adopted by the guidelines of the many international donor agencies such ADB and World Bank.

138. The Town Development Committee under the Ministry of Physical Planning and Works (MoPPW) has been carrying out the Guided Land Development program for several years, but the problem of resettling squatters is not addressed by either the LAA 1977 or the Town Development Act 1988.

139. The practices of fixing compensation amounts and prOVISions for resettlement and rehabilitation assistance in various projects have been widely different. The Surkhet-Jumla highway is one such example which had (i) a 100% Government funded section where the compensation was cash for land, structures and buildings only; (ii) another section was financed by World Bank loan, which provided liberal compensation for land, buildings, vegetation and other assets lost by PAFs due to the project; and (iii) a district road connecting to the highway entailing voluntary contribution of land. Further, there is no common legal reference while determining the status of a SPAF. While some projects determine SPAF status on the basis of loss of 25% or more land, others define it on the basis of loss of 50% or more land and in some cases; families left with less than 11 ropanis of land are also declared SPAF. Such inconsistencies in compensation schemes in the same locality and defining SPAF in similar project can give rise to disappointment and disputes among the project­ affected people. Therefore, it is important to harmonize compensation schemes and definition of SPAF in a given area.

59 5.2 International Policy Guidelines and Conventions

5.2.1 World Bank Policy Guidelines

140. World Bank Policy on involuntary land acquisition and indigenous people are directly relevant for UGDP. The World Bank Policy on involuntary land acquisition recognizes lost assets or income as fundamental right of all project affected persons and that physically displaced people must be relocated with basic amenities like school, health posts etc. Likewise, all affected persons, entrepreneur, or institution should be assisted to restore at least their pre- project income and livelihood sources. The following documents apply to involuntary resettlement for projects under World Bank funding: • Operational Policies OP 4.12 and Bank Procedure BP 4.12 on involuntary resettlement 2001.

• Operational Policies OP 4.10 and Bank Procedure BP 4.10 on Indigenous People July 2005.

• Operation Policy 4.11 of World Bank on Cultural Property

141. Following are the guiding principles of World Bank's policy on involuntary resettlement. a. Involuntary resettlement should be avoided where feasible, or minimized, exploring all viable alternative project designs.

b. When resettlement is unavoidable, resettlement activities should be conceived and executed as sustainable development programs, providing sufficient investment resources to enable persons displaced by project to share in project benefits.

c. Displaced persons should be meaningfully consulted and should be given opportunities to participate in planning and implementing resettlement programs.

d. Displaced persons should be assisted in their efforts to improve their livelihoods and standards of living. In the absence of possibilities to improve their standards of living, it should in the least be restored to levels that existed prior to the project.

e. The borrower prepares a resettlement plan if more than 200 populations are affected and an abbreviated resettlement plan is required if less than 200 families are affected.

f. Absence of legal title to land should not be a bar for compensation, resettlement, and rehabilitation assistance. Vulnerable groups such as indigenous people, women­ headed households, and senior citizens should be entitled to special benefit package in addition to compensation and resettlement.

60 142. Following are the guiding principles of World Bank as per its policies on Indigenous people.

a. This policy states that any the development process under the Bank finance should fully respect the dignity, human rights, economies, and cultures of Indigenous Peoples.

b. For all projects that are requested for Bank financing and affect Indigenous Peoples, the borrower should be engaged in a process of free, prior, and informed consultation.

c. The Bank provides project financing only where free, prior, and informed consultation results in broad community support to the project by the affected Indigenous Peoples.

d. Such Bank-financed projects should include measures to (a) avoid potentially adverse effects on the Indigenous Peoples' communities; or (b) when avoidance is not feasible, minimize, mitigate, or compensate for such effects.

e. Bank-financed projects should also be designed to ensure that the Indigenous Peoples receive social and economic benefits that are culturally appropriate and gender and intergenerationally inclusive.

Special Considerations for Indigenous Peoples 143. Indigenous Peoples are closely tied to land, forests, water, wildlife, and other natural resources, and therefore special considerations apply if the project affects such ties. In this situation, when carrying out the social assessment and preparing the social action plan, the borrower pays particular attention to:

i) the customary rights of the Indigenous Peoples, both individual and collective, pertaining to lands or territories that they traditionally owned, or customarily used or occupied, and where access to natural resources is vital to the sustainability of their cultures and livelihoods;

ii) the need to protect such lands and resources against illegal intrusion or encroachment;

iii) the cultural and spiritual values that the Indigenous Peoples attribute to such lands and resources; and

iv) Indigenous Peoples' natural resources management practices and the long-term sustainability of such practices.

144. According to the United Nations the term "cultural property" includes sites having archeological (prehistoric), paleontological, historical, religious, and unique natural values.

61 Cultural property, therefore, encompasses both remains left by previous human inhabitants (for example, maidens, shrines, and battlegrounds) and unique natural environmental features such as canyons and waterfalls. The Cultural Property Policy of World Bank seeks to avoid harm to significant, non-replicable cultural property, and detailed how background information on all aspects with regard to the management of cultural property. Important aspects of the policy are as follows:

• To assist in preservation and to seek to avoid elimination of cultural properties • A void damage to non-replicable cultural property • Protection and enhancement of cultural properties • Relocation of sites and structures that can be preserved studied and restored on alternate sites • Scientific study, selective salvage, and preservation • Include the training and strengthening of institutions entrusted with safeguarding a nation's cultural patrimony

5.2.2 International Labor Organization (ILO) Convention (169), 1989

145. The ILO Convention no. 169 of 1989 is to date the most comprehensive legally binding treaty on the rights of indigenous peoples. The Convention includes provisions on cultural integrity, land and resource rights and non-discrimination, and instructs states to consult indigenous peoples in all decisions affecting them. The Convention was ratified by the Legislative Parliament of Nepal in 2007. The convention has 40 Articles. The following articles are relevant for UODP: 146. Article 4.1 of the ILO Convention commits government of signatory countries to adopt special measures as appropriate for safeguarding the persons, institutions, property, labour, cultures and environment of the peoples concerned. 147. In applying the provisions of this Convention, the article 6.1 prescribes that governments shall consult the peoples concerned, through appropriate procedures and in particular through their representative institutions, whenever consideration is being given to legislative or administrative measures which may affect them directly. 148. The article 6.2 says about the process of consultation and states that the consultations carried out in application of this Convention shall be undertaken, in good faith and in a form appropriate to the circumstances, with the objective of achieving agreement or consent to the proposed measures. 149. As per the article 7.1 of the Convention, the peoples concerned shall have the right to decide their own priorities for the process of development as it affects their lives, beliefs, institutions and spiritual well-being and the lands they occupy or otherwise use, and to

62 exercise control, to the extent possible, over their own economic, social and cultural development. 150. The article 7.3 mentions requirement to assess the likely impacts of any development interventions on indigenous people. It states that Governments shall ensure that, whenever appropriate, studies are carried out, in co-operation with the peoples concerned, to assess the social, spiritual, cultural and environmental impact on them of planned development activities. The results of these studies shall be considered as fundamental criteria for the implementation of these activities. 5.3 Comparison of Government of Nepal and World Bank Policies

151. The review of legal framework and guidelines presented above reveals that despite some common provisions between the Government legal frameworks and World Bank guidelines related to involuntary resettlement and indigenous community, there are certain key differences between World Bank guidelines and the Government's legal frameworks. The table 5.1 summaries gaps between World Bank guidelines and the Government's legal frameworks.

Table 5.1 Comparison between World Bank Policy and the Government Legal Framework Category World Bank GON Legal Framework Measures to Bridge Gaps Policies Involuntary Compensation for Legal ownership is required, Resettlement land regardless of however, registered tenants with , legal ownership. the Land Revenue Office also acknowledged.

Compensation to Encroachers are not entitled to all affected compensation. However . structures vulnerable families are , including compensated to build houses of encroachers the previous standards. Resettlement framework will be Compensation for (i) Compensation Fixation prepared and implemented following affected assets at Committee (CFC) under CDO all applicable GoN legislators and full replacement will establish the Compensation WB policy guidelines. costs rates.

i or (ii) Clause • 27 ofthe LAA 1977 provide provisions for land acquisition through mutual agreement with the plot owners. Principle of Principle of compensation for lost compensation assets but no undertaking to holds that living improve living standards or standards livelihoods. ! and livelihoods However, vulnerable families will I should be be compensated to meet at least

63 enhanced, or at I the previous livelihood. least restored in real terms relative to pre-project levels; and improved for the displaced poor and other vulnerable groups. r--"" Indigenous Ensures free, prior, Project affected IP individual The Interim Constitution ofNepaJ Community and informed and families including 2063 (2007) and NFDIN Act consultation with already existing vulnerable 2002 commit the government for the affected communities will be protection and promotion of indigenous people addressed by developing indigenous people's knowledge to obtain broad vulnerable group development and cultural heritage. community support guideline to the project. In 1999, Local Self-Governance Social Assessment Act was enacted to give more will be carried out power to the local political Traditional rights to land and other to identity bodies, including authority to natural resources, communal property potential effect and promote, preserve and protect the and specific characteristics of ethnic prepare plan to IP's language, religion, culture groups in relation to land and other ensure that and their welfare. natural resources and subsequent indigenous peoples losses resulting from the project will receive social and The Three Years Interim Plan be assessed and compensated economic benefits Paper (2007 -2010) includes accordingly. that are culturally following policies for inclusive appropriate. development of AdivasilJanajati and other disadvantaged groups: (i) creating an environment for social inclusion; (ii) participation ofdisadvantaged groups in policy and decision making; (iii) developing special programs for disadvantaged groups; (iv) positive discrimination or reservation in education, employment, etc.; (v) protection oftheir culture, language and knowledge; (vi) proportional representation in development; and (vii) making the country's entire economic framework socially inclusive.

64 6. REVIEW OF EXISTING SOCIAL MANAGEMENT PRACTICES

This sections presents an overview of the existing social management frameworks and practices being used by GoN and the institutions involved in the UGDP: NETP with respect to the LA & R&R; vulnerable community development (indigenous people), and social accountability.

6.1 Review of the Social Management Frameworks

6.1.1 Social Management Framework ofLGCDP

152. The Local Governance and Community Development Program (LGCDP), a ADB funded project aims to strengthen local bodies (LBs) in service delivery, local communities in holding to account the LBs for such service delivery, and central level institutions in providing strong support to the work of the LBs and communities.

153. Ministry of Local Development is the Executing Agency (EA) and the District Development Committees (DDCs), Village Development Committees (VDCs) and Municipalities are the Implementing Agencies. This framework has been prepared to set out the policy, screening, and planning procedures that will apply to sub-projects that may be prepared and approved by LBs during ADB grant implementation to ensure that they are in keeping with the relevant laws and policies of Nepal. The SMF of LGCDP is guided by the following principles:

I. The land acquisition, involuntary resettlement, and environmental impacts have been avoided or minimized as much as possible. 2. Any land acquisition and/or resettlement have been carried out and compensation provided in order to improve or at least restore the pre-Project income and living standards ofthe affected people. 3. All information related to resettlement preparation and implementations have been disclosed to all concerned, and people's participation has been ensured in planning and implementation ofthe sub-project. 4. Appropriate grievance redress mechanisms has been put in place to ensure speedy resolution of disputes. 5. All activities related to resettlement planning, implementation, and monitoring have ensured involvement of women; efforts has also been made to ensure that vulnerable groups are included.

65 6. In case of sub-project where impacts on indigenous people (IPs) are identified, LBs need to ensure that IPs shall be informed, consulted, and mobilized to participate in sub-project preparation so as to ensure better distribution of the sub-project benefits and promote development of the IPs in sub-project areas.

154. Social Assessment (SA) has been carried out as per Public Work Directives (2002) since GON has not adopted any specific regulations or guidelines for SA in the manner that EPA and EPR have been enacted and applied in all development projects and sub projects. PWD provides guidelines for carrying out SA applicable to the context of Nepal. PWD recommends that awareness of social dimensions and issues is required in all sub-projects regardless of their size.

155. In LGCDP Social management framework, SA has been considered as an integral part of the sub-project cycle and conducted either as a complementary part of sub-project feasibility study or as a separate study which should be carried out in close coordination with the feasibility study and environmental assessment. The SA has examined cores aspects of the (sub) projects which include: (i) the client population (which includes beneficiaries, and others affected without benefiting from the sub-project), (ii) needs of the client population, (iii) demands of the client population, (iv) absorptive capacity of the client population, (v) gender issues, and (vi) potential adverse impacts, especially on vulnerable groups. The findings of the SA have been utilized in determining the scope of the sub-project, mitigation measures, and implementation arrangements which have been incorporated into sub-project design and implementation plan.

156. The SMF ofLGCDP has prepared a separate Indigenous Peoples Framework (IPF) which provides policy and procedures to screen sub-project impacts on IPs and prepare planning documents in full compliance with GoN's and ADB's Indigenous Peoples Policy for sub­ projects during implementation. The IPF has been formulated to guide the preparation of sub­ projects under the program to ensure better distribution of the benefits and promote development of the adivasi/janajatis along with other disadvantaged social groups in all sub­ project areas of influence. The IPF includes following section: (i) review of applicable policy and legal framework, (ii) screening for impacts on IPs, (iii) conducting relevant Social Impact Assessment related to IPs, (iv) preparation of IP development plans, including consulting, participation, and disclosure procedures (v) implementation, budgeting, and monitoring of IP plan, including capacity building of relevant agencies (including the EA) and sub-project implementing agencies.

157. Similarly, a separate Resettlement Framework (RF) has been prepared to provide the policy and procedures to screen, assess, and plan land acquisition and resettlement aspects of sub-projects that are prepared and approved during implementation of the national program

66 in full compliance with ADB's Involuntary Resettlement Policy as well as applicable national laws. The RF includes: (i) likely scope of land acquisition and resettlement, (ii) review of applicable policy and legal framework, (iii) screening procedures for sub-projects, (iv) resettlement policies, eligibility criteria, and entitlements consistent with ADB Policy, (v) procedures for sub-project planning and preparation of resettlement plans (RPs), (vi) information, consultation, participation, and disclosure arrangement, and (vii) implementation, budgeting, and monitoring of resettlement plan, including capacity building of relevant agencies (including the EA) and sub-project implementing agencies.

158. The SMF enclosed: (i) Format for Indigenous Peoples Impact Categ

6.1.2 Rural Access Improvement and Decentralization Project (RAIDP)

159. RAIDP is the World Bank (WB) funded project with the aim of improving rural accessibility. Department of Road (DoR) is the executing agency of the project. The purpose of the Social Management Framework (SMF) is to provide guiding principles for assessment and management of social aspects of all physical works targeted under RAIDP. The specific objectives are to: • assess the compatibility ofGoN policies and World Bank policies; identify the gaps, and develop mechanism for addressing these gaps; • outline the process for identify potential adverse social impacts due to construction and upgrading of rural roads; • provide guideline for preparing the social mitigation plans to address the adverse impacts; and • Describe the implementation and institutional arrangements for managing social impacts.

160. The Social Management Framework has been the guiding document to address the social issues in the subprojects. The social impact of purposed road corridor, which is defined as formation width of road as fixed by approach manual has been considered for identifying the impacts, especially the losses and damages caused by construction activities.

Social Screening

161. Social screening has been undertaken at an early stage in all subprojects, which has provided necessary. information on the potential social impacts likely to be encountered during implementation. This screening has been carried out in close consultation with various

67 primary stakeholders: beneficiaries; roadside farmers; shopkeepers; women, Dalits and other local key informants.

162. 6.12 On the basis of screening report prepared during feasibility stage, site-specific social impacts have been thoroughly identified along with the appropriate mitigation measures. All the adverse impacts identified during social screening have been worked out in details while preparing site specific Social Mitigation Plan during detail engineering design phase. The plan identifies vulnerable communities, damage and loss of structures, land and community infrastructures and proposes corresponding mitigation measures. A separate cost estimate has been prepared and incorporated in the mitigation plan.

Vulnerable Community Development Plan (VCDP)

163. SMF of the RAIDP included a separate Vulnerable Community Development Plan (VCDP). The VCDP has been prepared for the betterment of vulnerable people within the impact zone of the project. The targeted beneficiaries of VCDP include mainly the following groups of people: • Seriously Project Affected People / Families, • Marginalized groups, • Dalits, ethnic minorities and poorest people, • Single women/ women headed households, and • Landless, old aged and disabled people.

164. The VCDP identifies the needs and priority of vulnerable groups and proposes need­ based programs to uplift their socio-economic condition through appropriate training and skill transfer.

Community Infrastructure Development (CID)

165. Along with VCDP there is Community Infrastructure Development (CID) component in the project, which assists to construct essential infrastructures such as market shed, health post, school, public toilet, community trail, community irrigation etc to create productive and useful community assets based on the demand of the community.

6.1.3 Road Sector Development Project (RSDP)

166. Ministry of Physical Planning and Works, Department of Roads (DoR) is implementing the project under IDA Grant. The SMF was developed following relevant laws and regulations of the Government of Nepal, and environment and social operation policies of the World Bank. The SMF has been applying to this project, as part of the priority investment plan, and guide the planning to address social impacts under the project. 68 167. This Resettlement Action Plan has been prepared following the SMF, a guiding document for safeguard and compliance aspects of social issues related with the Priority Investment Plan (PIP) for Strategic Road Network (SRN) for Nepal. SMF is in harmony to GoN policies and World Bank Policy on Involuntary Resettlement (OPIBP 4.10 and OP 4.12). Both WB policy and GoN legislation emphasize avoiding or minimizing involuntary resettlement. Where the acquisition of private assets is unavoidable, involuntary resettlement should be an integral part of project design and preparation. The SMF is prepared on the basis of following guiding principles:

I. The acquisition of private assets and the displacement of people have been minimized to the possible extent, through the incorporation of social considerations into alignment selection and road design. 2. Community consultation ensures people's views and their concerns and suggestions have been incorporated into implementation procedure. 3. An institutional framework has been developed as an integral part of the project to ensure that appropriate social impact management mechanisms are set up and maintained during implementation. These mechanisms and arrangements will ensure that compensation, resettlement and rehabilitation are carried out timely and effectively. 4. Construction work will commence on road sections only after acquisition procedures are completed.

168. RSDP has prepared a Resettlement Action Plan (RAP) with the aim of providing the policy and procedures of land acquisition, compensation and resettlement of affected persons. It has been prepared based on the findings of resettlement impact assessment conducted during project design period in August 2010. This assessment aimed to identify the impact on property and income sources of affected persons with documentation of loss of land, houses, trees etc. within the Corridor of Impact (COl) of the road.

169. This RAP identifies safeguard measures including compensation, resettlement and rehabilitation assistances to the affected persons consistent with the provisions of the Road Sector Wide Environmental and Social Management Framework (ESMF). Though the social considerations have been incorporated into road design, however, geological and topographical factors, as well as land use and settlement patterns, make the acquisition of private property for road construction inevitable. This RAP particularly addresses the following adverse impacts associated with road improvement and upgrading works:

• Private and community resources affected by the project and the entitlements required for effective households reestablishment;

69 • The likely number of individuals and households affected by the project and the number of households that may be displaced; • Organizational and institutional requirement for the implementation of compensation, resettlement and rehabilitation activities; • Implementation schedules and monitoring mechanisms and • Compensation, resettlement and rehabilitation cost estimate

6.1.4 The Secondary Towns Integrated Urban Environmental Improvement Project

170. The project is implemented by the Ministry of Physical Planning and Works! Department of Urban Development and Building Construction under ADB support. Its aim is to improve quality of life and to help achieve higher and socially inclusive economic growth in key regional centers in Nepal through improved and affordable municipal services delivered effectively, efficiently and reliably by the local bodies. The Project has been implementing measures of urban environmental improvement, on an integrated basis, in the areas of sewerage and drainage, solid waste, and urban roads and lanes in the Biratnagar, and municipalities.

171. The project is Category B for Involuntary Resettlement and Indigenous People. This RPF/IPF is intended to guide resettlement and indigenous people planning for the project activities: (i) small scale-water supply works in Butwal and (ii) public toilet construction in Biratnagar, Birgunj and Butwal municipalities. Land acquisition has been avoided and/or minimized and resettlement impacts, if any, are envisioned to be small scale, consistent with Category B. Category A (significant) activities have not been considered under the subproject.

172. Considering impacts on indigenous peoples are limited to a small number of involuntary resettlement and/or land acquisition due to the nature and small scale of these subprojects, an indigenous people's framework has been combined into the resettlement framework, with special assistance measures for vulnerable groups including indigenous people. The Gender Equality and Social Inclusive (GESI) Action Plan has been prepared which also includes specific actions favorable to indigenous people. Combined resettlement plan/Indigenous People's Plans have been prepared commensurate to the impacts.

173. The combined RF/IPPF includes: • the general anticipated land acquisition and resettlement impacts of subproject to be financed under the Project;

70 • specific requirements to be followed for subproject screening, categorization, assessment, and resettlement and indigenous planning, including arrangements for stakeholders consultation and information disclosure; • details of objectives, policy principles, and procedures for any land acquisition, compensation and other assistance measures for any affected persons (APs), • assessment of adequacy of executing agency (EA) capacity to implement national and state laws, policies, and regulations and ADB's Social Safeguard Policies and identify needs for capacity building; • outline of social impact assessment and census methodologies, • outline specific implementation procedures, including budget, institutional, capacity development, and monitoring and reporting requirements; and • Description of responsibilities of the EA and ADB in relation to the preparation, implementation, and progress review of IR safeguard documents of subprojects. • Finally, all works undertaken are strict to follow as per to all ADB social policies and operational procedures (operational manuals) and Government policies.

6.2 Review the Existing Social Management Practices of Executing Agencies

174. In order to ensure transparency in the local bodies, the Ministry of Local Development is formulating a framework by implementing effective monitoring system in the local bodies. The new provision aims to set up a basket fund that comprises the government grants, donor assistance and supports from lINGOs. The ministry has prepared a Grant Operation Directive to include inclusive development programs, eco-friendly sustainable infrastructure developments, and capacity building, and social mobilization, promotional activities thereby strengthening local democracy, good governance, accountability and transparency. Earlier, there were social, environmental and infrastructure guidelines under the two directives­ government grants and LGCDP.

175. Ministry of Local Development (MLD) along with Local Bodies (DDC, Municipalities and VDq through Community Organizations and Non-Government Organizations has been implementing Local Governance and Community Development Program (LGCDP). It is a national program framework of support for decentralization, local governance, and community development with the intent of working throughout the country and at all levels of the local governments. The program strongly backs MLD's vision of local development and self-governance to bring good governance and development interventions to the people by maintaining fiscal discipline, correcting mismanagement, delays and nontransparent procedures. The program approach ensures inclusiveness and gender equity, community-led local development, rights-based participatory approach, transparency and downward accountability at all levels. To achieve its program outcomes LGCDP focuses on four strategic areas:

71 • Empowennent of citizens and communities for active engagement with local governments and strengthening downward accountability; • Local bodies top-up block grants for community led local development (at DDC, VDC and Municipalities); • Capacity development of local governments for effective service delivery, and • Policy support for decentralization and local governance.

176. Similarly, MLD through LGCDP has prepared basic documents -- the environmental and social safeguard checklist (July 2009), MLD guide on Environmental Monitoring of Infrastructure Projects (April 2010) to allow the environmental and social monitoring of the projects. Moreover, in the current year it is working on IEC messages relating to pro-poor environmental planning, to reach VDCs obtaining the TU grant. It is also seeking to mainstream environmental issues in the MCIPM and general planning guidelines. Following up on the establishment of the Environment Desk (and grant) at DDC level in the past year, the LGCDP foresees providing training for the District Environment Desk Officers.

177. DUDBC has been implementing Urban and Environmental Improvement Project (UEIP) with the aim of supporting the government's efforts to bring about sustainable development in eight urban areas outside the Kathmandu Valley by addressing essential urban and environmental infrastructure and service needs, and strengthening relevant stakeholder institutions. For the persons displaced under this project, a detailed R&R policy has been prepared in accordance with the applicable plan, policies, acts of GoN and guidelines of the ADB and the same has been fully implemented. With a view to mitigate the hardships caused by the involuntary displacement under the project, including loss of income, the modality of the project has been to avoid or to minimize wherever feasible, involuntary displacement and also to explore viable alternatives for restoring the economic situation of the people. Through the UEIP project the DUDBC has developed its capacity and gained experience in the following areas: • Municipal Institutional Strengthening and Revenue Mobilization • Project Implementation Assistance • Project Management • Procurement • Consulting Services • Disbursement Arrangements • Accounting, Auditing, and Reporting • Project Performance Monitoring and Evaluation • Project Review • Land Acquisition and Resettlement

72 178. The TDF currently runs seven donor programs. The current product mix of the TDF includes grants, soft loans, and regular loans. Eligibility depends on a municipality's classification (AlBIC) and the nature of target infrastructure (social or economic infrastructure). Grants are provided for vital services (e.g. health, education); soft loans are available for priority urban services (e.g. drinking water, SWM, drainage); and regular loans support commercial services (e.g. bus terminals, markets). The project will aim to use existing TDF systems, to the extent feasible. TDF has no any inclusive experience of social management in terms of Land acquisition and resettlement and IP related issues.

6.3 Comparative Assessment of the SMFs being practiced by GoN and Executive Agencies

179. The review of some ofthe SMFs being practiced by GoN under donor supported projects reveals that all the SMFs have common generic provisions with respect to the LA & R&R; vulnerable community development (indigenous people), and social accountability.

180. However, Rural Access Improvement and Decentralization Project (RAIDP) under the World Bank (WB) funding has introduced the principle of providing some assistance for land donors if they are small and marginal farmers; it also provides for community based performance monitoring; and for the involvement of local user committees in the land survey and R&R process. Particularly, RAIDP has following specific provisions on voluntary land donors, and these provisions could be adopted while implementing the UGDP: NETP.

A. Provision of Voluntary Land Donation

181. The project envisages acquisition of land through voluntarily donations, which is based on the following donation criteria:

• Voluntary land donation is limited to" Corridor ofImpact" area only; • Impacts on individual households should be marginal limiting up to 10 percent of the productive assets and the remaining assets are economically viable to ensure livelihood or shelter; • The individuals I households making voluntary donation has been considered as direct beneficiaries ofthe project; • The land donation is made freely in public and without coercion and shall not affect household's food security; • In the event of few people's remaining assets becomes unviable, they are provided suitable assistance and support as outlined in the Entitlement Matrix. • Project affected people are fully aware of required procedures and entitlement as well as principle of land donation to the road; and

73 • In case of public or government land, the encroacher cannot claim such land as donation.

182. The project has adopted different methods of social recognition viz; writing names in the hoarding board, and/ or offering letter of appreciation to the owners for voluntary land donation.

B. Provision of Voluntary Donation Impact Mitie:ation Fund CVDIMF)

183. Although the Government of Nepal acquires the land as per the Land Acquisition Act for the national level projects, RAIDP pursues the principles of limited voluntary land acquisition from owners who will be provided with some cash assistance in lieu of their contribution. In response to GoN policies of guarantying property rights and World Bank social safeguard policies, the project has devised the Voluntary Donation Impact Mitigation Fund (VDIMF) to ensure some cash assistance and rehabilitation supports to project affected people of various categories even if the impacts are marginal as a result of voluntary donation. This fund has been used to undertake repair and restore damage and loss of residential structures, rehabilitation of income sources and cash assistance for seriously project affected people / families by voluntary donation of their permanent assets and land transfer process. One percent of total project cost (Additional Financing) has been separated for this fund. The fund has been used as per the Vulnerable Donation Impact Mitigation Plan (VDIMP) and implemented according to the established procedures. The VDIMP includes the total cost required for voluntary donation impact mitigation (which includes repair and restoration cost for damaged structures, assistance for land donors above 10%, livelihood assistance, land transfer cost and vulnerable community development.

C. Voluntary Donation Impact Mitigation Plan (VDIMP):

184. Based on the findings of the Social screening report, the subproject specific Voluntary Donation Impact Mitigation Plans (VDIMP) is prepared to address impacts associated with donation irrespective of the type and scale of impacts that could arise in various forms: (i) loss of land; (ii) loss of houses /structures; (iii) loss of livelihood systems/income sources; and (iv) loss of community property resources.

185. The VDIMP of RAIDP defines the legal, institutional and implementation principle to guide the assistance for loss / damage of social assets, and proposes rehabilitation assistance. The concept of VDIMP was developed after the midterm review of the project, which identified some gaps in the implementation of social safeguard measures to support the livelihood of project affected people.

186. Similarly, the SMF prepared for Road Sector Development Project (RSDP) is in clear line to relevant GoN policies and World Bank Policy on Involuntary Resettlement (OP/BP 74 4.10 and OP 4.12). Both WB policy and GoN legislation emphasize avoiding or minimizing involuntary resettlement. Where the acquisition of private assets is unavoidable, involuntary resettlement should be an integral part of project design and preparation RAP. RSDP offered special assistance for IPs as a part ofthe RAPs. D. Gender Equality and Social Inclusive (GESI) Action Plan:

187. The SMF prepared for the Secondary Towns Integrated Urban Environmental Improvement Project has provision to prepare the Gender Equality and Social Inclusive (GESI) Action Plan which includes specific actions to ensure the participation of women, Dalits, indigenous people and other vulnerable communities.

75 7. INSTITUTIONAL AND CAPACITY ASSESSMENT OF EXECUTING AND IMPLEMENTING AGENCIES

This section examines the institutional capacity of the MLD particularly the Municipal Management Division, DUDBC especially the Urban Development Division, TDF and six participating municipalities-with a view of assessing their abilities to manage social issues likely arise while implementing UGDP: ETP to support municipalities-and identify areas and actions for improving its capacities and performance, both in the short and long term. It primarily focuses on the existing institutional mechanism in each of the involved institution for social management, existence of units/ focal points; human and financial resources, functions and effectiveness of their roles and responsibilities.

7.1 Implementing Institutions

188. Ministry of Physical Planning and Works and Ministry of Local Development (MLD are the executing institutions of the program. Department of Urban Development and Building Construction (DUDBC) under the Ministry of Physical Planning and Works, Municipal Management Division of the Ministry of Local Development (MLD), Town Development Fund (TDF), and six participating secondary municipalities, namely Mechinagar Municipality, Dhankuta Municipality, Itahari Municipality, Lekhanath Municipality, Baglung Municipality, and Tasnsen Municipality are directly involved to implement the various activities under UGDP at different levels and in different ways during implementation of the proposed program. Besides, other government and non-government agencies including civil societieslNGOs may be involved in social management activities in different capacities depending on the issue (Especially in IEC activities).

7.2 Institutional Arrangement ofUGDP: ETP

7.2.1 Central Level Arrangement

Program Steering Committee:

189. At the highest level, a Program Steering Committee (SC) chaired by Secretary, MPPW and co-chaired by Secretary, MoLD will ensure overall program coordination, provide policy level guidance, and monitor progress on a regular basis. The Steering Committee will comprise of Joint Secretary, MPPW; Joint Secretary MoLD; Joint Secretary, FACD, MoF; Joint Secretary (Infrastructure), NPC; Joint Secretary (Local Governance), NPC; Director General, DUDBC, Executive Director, TDF; Project Director; 2 representatives from the participating municipalities (on a rotational basis); representatives from Municipal Association of Nepal (MuAN) and Federation of Nepalese Chamber of Commerce and

76 Industries (FNCCI); and an renowned urban/municipal expert from the civil society. Representatives from World Bank and GIZ will have an observatory status.

Program Coordination Office (PCO)

190. The PCO will serve as the secretariat of the project steering committee. It will comprise of a program coordinator, who will also serve as the secretary of the steering committee, as well as three Component Managers, representing participating national institutions (MLD, DUBCC, and TDF) and in charge of their respective components. The PCO will play a coordinating and facilitating role to all three components. The PCO will receive annual work programs from the three agencies; review them for overall conformity with program objectives; prepare a consolidated work program for review by SC and present this to NPC, the MoF and other ministries/agencies for approval (as needed), facilitate implementation by the respective agencies; facilitate timely release of funds to the respective agencies by the government; coordinate implementation across individual components; provide assistance to remove bottlenecks to implementation at the national level; forward consolidated report to SC, various ministries/agencies, the IDA and the GTZ, and ensure timely processing of fund ' request to donor agencies. The PCO will be supported by a small set of core staff financed partly by the project.

Town Development Fund (TDF)

191. The TDF will manage the socio-economic infrastructure development component, which will support expansion and/or rehabilitation of essential infrastructure/services for which the municipalities are responsible. The selection of investment priorities will be undertaken by each municipality based on a comprehensive socio economic development plan (periodic plan, where relevant) that is prepared in consultation with various local stakeholder groups, including the all party mechanism. The TDF will manage the fund; appraise the investments selected by municipalities for their technical and financial feasibility, and assess the ability of municipality to meet its financial obligations associated with the investment. It will also implement institutional development activities associated with its own institutional strengthening.

Department ofUrban Development and Building Construction (DUDBC)

192. The DUDBC will implement institutional development activities for the municipalities and the department itself. A key element of this will be Municipal Support Team (MST) - a mobile team of experts that will provide on-demand and in-time backstopping support and on-the-job training to municipalities.

77 Ministry ofLocal Development (MoLD)

193. The MoLD will implement the service delivery component, which will top up existing block grants from the MoLD to municipalities, to help the local authorities maintain minimum service delivery standards, provide adequate O&M support to existing assets, and address routine urban management issues. MoLD will also be responsible to also implement activities associated with its institutional development. The designated focal points from TDF, DUDBC and MoLD will be responsible for ensuring implementation coordination of their respective components within each agency as well as with PCO; ensuring reporting to the concerned authorities and the PCO; and manage processing of fund requests to IDA via the PCO.

78 Proposed Institutional Arrangement of UGDP: ETP

Program Executing Agencies MPPW&MLD

UGDP Steering Committee I Chair and co-Chair by Secretaries of MPPW & i MLD

Program Coordination Office (PCO) @ DUDBC (CMl + CM2 + CM3) led by Program Director, DUDBC r

CMl (TDF) CM2 (DUDBC) CM3 (MLD) Socioeconomic ID forUDBC & Block Grants+ ID Infrastructure + ID Mun icipalities (Service delivery)

Municipal Coordination Committee (MCC) (Municipalities+ APM+LA+ CSO)

MUN +APM I StttlctUre· . i Bxistln~ ··1C' ... , ""'~ .. i-.....+ Project Management Team (PMT) f+­ (EO + Section Heads)

79 7.2.2 Municipal Level Arrangement

194. The participating municipalities are responsible for implementing the local level activities including J) socio-economic investment sub-projects, II) utilizing block grants provided under the project, III) completing institutional development actions within their jurisdictions. The project will be implemented at the municipality level largely through existing systems, but with a focus of strengthening them.

Municipal Coordination Committee (MCC)

195. A Municipal Coordination Committee (MCC) comprising of Executive Officer (EO), representative from All Party Mechanism (APM), Government line agencies, Civil Society Organization (CSO) will be formed which will be responsible for overall program coordination, policy guidance, and monitor progress on a periodic basis at municipal level.

Project Management Team (PMT)

196. A local level Project Management Team (PMT) will be set up, comprising of the EO and the section chiefs of the key sections of the municipality (such as planning/technicaJ, finance, social/community mobilization, administration, etc). In addition, the municipalities shall designate staff for project-related financial management, procurement and safeguards implementation. In order to ensure a bottom-up planning process in the selection of the socio-economic infrastructure, community mobilization initiatives that allow the ward level committees to provide their inputs to the Municipal Council will be an integral part of the institutional arrangement at the municipality level the municipality level. The municipalities will provide timely progress reports to the concerned component implementing agencies. In addition, Municipal Support Team (MST), the municipalities will be supported with logistics and equipment under the lD component, as well as the flexibility to utilize their annual block grants for iristitutional strengthening, social mobilization and capacity building of their respective communities.

7.3 Institutional and Capacity Assessment

7.3.1 Ministry of Local Development (MLD)

197. MLD is the link agency between local government (DOCs, municipalities and VDCs) and central government, and is responsible for local development, local governance and decentralization. MLD's objectives include both the development function - with a critical emphasis on social inclusion and including capacity building for self governance - and the issues oflocal governance. The Objectives of the Ministry include:

80 I. Contribute to poverty reduction by mobilizing local means and resources, utilizing skill and technology to the optimum level and creating employment opportunity; 2. Enhance access of socially and economically disadvantaged groups, region and community to the service and facility delivered; 3. Capacity building of local government through local self governance and contribute to promote local good governance; 4. Empowerment of women, dalit, indigenous, Madheshi, Muslim, disabled and ultra-poor people through social mobilization and their mainstreaming into the wave of development; 5. Ensure inclusive development by enhancing people's participation in decision making

198. The main functions of MLD include formulation of policies, plans and programs related to local self-governance, local development, remote area development, rural and community development, and water supply drainage and sanitation at local level and their implementation, monitoring and evaluation. It is responsible to implement the LSGA, co­ ordinate local bodies, local development plans, local human resources and programs and execute administrative and development grants for local development.

199. Structurally, MLD is divided into four divisions and 14 sections. It has a Municipal Management Division to look after municipalities which comprises of three sections: the Municipal Management Section, the Municipal Planning Section and Environment Management Section. It appears that Environmental Management Section focuses almost exclusively on environmental impact assessment for municipalities since it is located under the Municipal Management Division. However, in reality, the environment management section works for the ministry as whole. The division is headed by a joint secretary and the sections are headed by under secretaries. There are no any units, focal points to look after the issues of social management of the urban development projects. Social issues like gender equity and social inclusion are critical to effective local governance. At present the Municipalities do not have social scientists to address these issues.

200. Similarly, there is a lacking of focal point with adequate human resources to ensure that it take responsibilities for social safeguards, monitoring and· capacity building for implementing urban development projects. It appears that the existing concerns of the division are focuses on the administration and delivery rather than focusing on social planning and management in urban situations.

81 7.3.2 Department of Urban Development and Building Construction (DUDBC)

201. DUDBC under Ministry of Physical Planning and Works (MPPW) is primarily a technical department focusing GoN Buildings, Housing and Urban Development. The function and responsibilities ofDUDBC are: • Formulation, planning and implementation of urban policies • Formulation, planning and implementation ofhousing plans and policies • Design construction, repair and maintenance of the government buildings • Planning and infrastructure development of Town Development Committees

202. Its main strength lies in the area of design, construction management and supervision. DUDBC has experience in preparing Periodic Plans, GIS maps, Urban Maps, Physical Development Plans and Master plans. It has also developed plans for the development of Corridors. The experience on the social aspects of development is very limited and minimal. In addition, there is a lack of clarity in the functions assigned to the DUDBC sections as a similar activity is being undertaken by multiple sections especially in the area of periodic plans, design and construction. The sections need to have a clear vision and sense of direction in terms of their functions and long term objectives including social aspects of the project management.

203. DUDBC has 16 sections in 3 divisions. The Housing Division and the Building Construction Division covers all 78 districts including urban and rural areas. Under the Urban Development Division, DUDBC is responsible for urban development in the 58 municipalities.

204. At the divisional level DUDBC has 24 divisional offices (Class A=4, Class B= 15, Class C=5). In addition there is a Building Research and Training Institute and one Special Building Construction and Maintenance Divisional office (for PM, Judges building etc.).

205. DUDBC has no any sections, units or focal points involved for social management of the projects. Of the total 580 existing staff, DUBC has not a single position for social scientist (sociologist, anthropologist) which clearly indicates that DUDBC has no qualified human resources to address social issues arising from the implementation of UGDP: NETP. However, an institutional development study for DUDBC (2009) has recommended for six new posts -- statistician officer-!, GIS specialist officer -1, economist -1, sociologist-I, environmentalist officer -1, and computer system engineer-l in DUDBe.

206. At present the institutional development and project management experience within DUDBC resides mainly in the UEIP project which is one of the large donor project being implemented by it. Through this project DUDBC has gained experience in dealing with the

82 municipalities and preparing and implementation of Land Acquisition and Resettlement Action Plan.

7.3.3 Town Development Fund (TDF)

207. TDF was established under the Ministry of Physical Planning and Works (MPPW) in 1989 to facilitate the financing of urban infrastructure projects in municipalities and urbanizing Villages. TDF established under the Town Development Fund Act in 1997 is an autonomous corporate body providing funds to municipalities as loans, soft loans and grants. The Act provides the necessary legal protection and mandate for its assigned functions and is quite enabling. TDF's main strength lies on its ability to provide long term loans to municipalities and manage the recovery of the interest and principal. It has the basic institutional arrangements for municipal financing in place and to work with GON, municipalities and donors.

208. As per the Town Development Act 1997, the objectives ofTDF are to conduct: • works necessary to keep town neat and clean; • different kinds of revenue generating and basic social infrastructure projects; and • Empirical research to find out possible solutions for problems related to the development of town and the necessary improvements for its development.

209. Similarly, under the TDF Act 1997, the main function of TDF is to implement social infrastructure and revenue generating projects and to carry out extension and development of towns in Nepal by providing essential financial and technical support to institutions relating to urban and town development (Le. Municipal Corporation, Sub-municipal Corporation, Municipality and the Village Developing towards Town).

210. TDF can collect necessary financial resources including grant, loan, donation and gift from GoN; Government owned organization, nongovernmental organization, foreign Government, international organization or agency, in order to conduct programs in accordance with its objectives as per the TDF Act 1997. Since its establishment the main source of funding for TDF has been from Government of Nepal and Donors (IDA, GTZ, KFW, and ADB).

211. TDF is headed by the Executive Director. TDF has three departments namely: business development and technical assistance, financial management, and monitoring, evaluation and administration. The business development and technical assistance division of TDF will be responsible project planning, and implementation. The monitoring of sub project and its activities will be done through monitoring, evaluation, and administration unit of TDF. Regarding UGDP: NETP, after the identification of the subprojects by the municipality, the

83 business promotion and project development division of TDF and municipality jointly recruits the consultant for program implementation. The project appraisal and risk management part will be dealt entirely by the TDF. The risk management aspect comprises of technical viability, economic and financial viability, environmental and social safeguards, and institutional capacities. Based on the project appraisal, the project operation and construction will take place. Regarding the operation and maintenance of the activity/services; the municipality itself or the private operator or management board will be responsible. TDF part will be financial monitoring of such programs and to work out on repayment side of the investment. At present it has 36 employees out of the total staff strength of 64.

212. The TDF organizational structure has not changed much since the 1980's. It is weak in the area of marketing, social management and safeguard appraisal, long tenn projections, private sector financing, technical support to clients, and monitoring. It can manage its affairs with the present staff and continue to perfonn at the current scale and level of efficiency. However, to improve its perfonnance it has to undergo a major organizational restructuring in terms of its vision, organizational structure and human resources. TDF is already working on finalizing the organogram on priority basis. However, even in the newly developed organogram, the position and roles and responsibility of TDF personnel to look after the issues of social safeguard of TDF involved projects are missing. It was noted that the TDF has no such institutional mechanisms to address social issues.

213. TDF has a development outlook as stated in the TD F Act and articulated in its vision. Its mission is to enhance the quality of life of the people by promoting the sustainable urban development in Nepal. However, this orientation and focus is not properly reflected in the activities of the TDF and in the management. Though the appraisal process is required to cover, social aspect of the proposal, TDF has no specific section, unit focal points with qualified social scientists to deal with social issues of the proposal. No data is being collected on the social and economic indicators of the municipalities. It appears that the exposure to social assessments and capacity to dealing with issues related to gender equity and social inclusion, preparation of R&R policy, vulnerable community development plans and any arrangement addressing such issues is not in place in TDF. Out of 36 employees, none of the staff in TDF have specific qualification associated with social safeguard except one socio-economist having degree of Bachelors of Art. The Bachelor degree in Arts may not been sufficient for conducting complex socio-economic analysis needed for implementation of socioeconomic infrastructure component of the UGDP: NETP.

214. The TDF is currently involved in two major projects funded by ADB; STWSSP and UEIP, both under MPPW. The TDF has assisted two classes of projects developed under UEIP: (i) revenue generating projects and Oi) small projects. In all cases the implementing

84 have been either municipalities, or functional Departments such as DWSS. TDF could not gain any experiences of addressing social management issues form these projects. TDF appears rather weak in social safeguard policy formulation and implementation.

7.3.4 Municipalities

Organizational Structure

215. All the participating municipalities are organized into different sections, sub sections and units. The number of sections, sub sections and units also vary in each municipality. For example, Mechinagar Municipality is organized into four sections: i) Administration, ii) Fiscal Administration, iii) Planning and Engineering and iv) Community Development. There are 18 sub-sections/units under these 4 sections including internal administration, legal, revenue, public health and sanitation, municipal police and building permits. Similarly, Itahari Municipality is organized into 6 sections: i) Administration, ii) Financial Administration, iii) Internal Audit, iv) Planning and Monitoring, v) Community Development and Inclusion, vi) HRD and Information Center. There are 23 sub­ sections/units under these 6 sections. Likewise, Dhankuta Municipality is organized into 7 sections: I) Administration, 2) Fiscal Administration, 3) Internal Audit, 4) Planning and Monitoring, 5) Community Development, 6) Rural Urban Partnership (RUP), 7) HRD & Information Centre. There are 27 sub-sections/units under these 7 sections including general administration, legal, revenue, store, engineering, building permits, street light, monitoring, municipal police, environment and sanitation, social protection, HRD Centre and entrepreneur development and technology transfer.

216. The organizational structure of Lekhanath Municipality is comprised of 10 sections: i) Administration, ii) Account, iii) Internal Audit, iv) Planning and Engineering v) Rural Urban Partnership, vi) Community and Solid Waste Management, vii) Information Centre, viii) Legal IX) Ward Service Centre and x) Revenue. There are 3 units under administration. Three units are store, vital registration and general registration (Darta Chalani). RUP section and Community and Solid Waste Management Section have the similar objectives but different sections. Similarly, administration section and Ward Service Centre are also the similar nature. There is Information Centre without staff provision. Similarly, Baglung Municipality is organized into 5 sections: i) General Administration, ii) Financial Administration, iii) Planning and Engineering, iv) Public Health, Sanitation and Environment v) Community Development and Social Welfare. There are 9 sub-sections and 2 units under these 5 sections including internal administration, vital registration, security & enforcement, account, revenue, store, plan formulation and implementation, urban development and building permits, drinking water and sanitation. There are six sections in Tansen Municipality. They are: 1) Administration, 2) Financial Administration, 3) Internal Audit, 4) Planning and

85 Implementation, 5) Rural Urban Partnership (RUP) and 6) Social Welfare. There are 17 sub­ sections/units under these 6 sections. Other sub-functions include planning, building permit, tax, store, information and management, environment and sanitation, community development, HRD and store. RUP and Social Welfare sections are similar in nature and the same staff takes care of both sections and their subsections and units.

217. All the municipalities have formed the All Party Mechanism (Sabadaliya Samyantra) which acts as the de facto Municipal Board due to the absence of elected representatives and the municipal council, and assembly is operated involving all parties' representatives, public figures, NGOs, CBOs, line agencies, and private sectors. Each municipality has formed several other committees as per the local need and requirements. The LSGA and LSGR allow forming up to nine committees in each municipality. The roles and responsibilities of the committees are as stated in the LSGA.

Human Resource Capacity for Managing SMF

218. In Dhankuta and Mechinagar Municipalities, the Community Development (CD) section is managed by officer level staff having education of Master's Degree in Geography and Sociology respectively. The CD sections of the remaining municipalities are managed by non officers having only intermediate level of education. There is a provision of recruiting at least one social mobilizer in the CD section of each municipality. The qualification of the social mobilize is however, vary in each municipality. Thus, the number, level and qualification of staff in CD section appear inadequate to efficient implementation of SMF.

Coordination and Monitoring

219. The coordination and monitoring of the actions of and services delivered by the municipalities is important for the organization to be effective. The function of municipalities and its committees are to coordinate and monitor the plan, programs and activities within their jurisdiction. But proper structural arrangement for coordination and monitoring is the main deficiency in the organization structure of all participating municipalities.

220. All the municipalities have formed a Supervision and Monitoring Committee whose main responsibility is to monitor and supervise the construction and investment projects. The final settlement of any project needs the endorsement from the Committee. However, the Committee's role is mainly limited to the certification to the project rather than monitoring and supervising construction. It clearly indicates that the monitoring and evaluation function is not undertaken properly, and coordination among stakeholders, service providers and clients appears to be weak.

86 221. Besides, it appears that all the municipalities have limited capacity for coordination in planning, implementation and monitoring of development activities with the line agencies (education, health, forest, agriculture, road, land management, and DUDBC). However, municipalities have remarkable experiences of working with community groups. It has been informed during the consultation meetings that in each municipalities numbers of TLOs, NGOs, CBOs and users' groups are working at household and community levels on development awareness, income generation activities, community level project development and implementation, woman empowerment and saving credit. TLOs in each municipality are very active, growing in number and maturing in organization management and services management.

Experiences of Social Management Practices

222. All the municipalities except Lekhanath have no concrete experience of social management from external supported program. Lekhanath Municipality executed the ADB loan project small water supply for construction and development/distribution. After completion ofthe project the users committee was formed for operation and management of the water supply facilities. Municipal support and coordination is mobilized by Water Users Committee for its capacity development and governance in Lekhanath. The Water User Committee plays very important roles in different ways in the municipality. Similarly, the UDLE's supports on pro-poor and strategy with action plan provided fund and capacity development programs to disadvantage groups' of the Municipality. However, continue support and extension ofthe similar programs for other areas are lacking in the municipality. Nevertheless, the TLOs, CBOs and women groups are engaged in planning and budgeting which seems positive.

223. However, all municipalities have been implementing some programs related to the socioeconomic development of women, dalits, Janajatis and other marginalized communities. They are mainly focused on delivering basic services to the disadvantaged and indigenous people, Dalits, women, disabled and other vulnerable groups.

224. All the municipalities have more or less experience of working with the private sector. The private sector is the main investor in municipalities. Private sector usually has invested in the sectors of public transportation, land development, commercial trading, hotels, and other services. However, there is lacking of proper coordination, regulation and support of these activities by the municipalities. For example, in all municipalities, the private sector is growing in a chaotic and unregulated manner. Uncontrolled development of land and unplanned growth of settlement growth in the municipal areas are some of the examples.

87 Minimum Condition Performance Measures (MCPM) Rankings

225. MCs (Minimum Conditions) are usually measure in relation to Local Self Governance, Financial Management, Service Delivery and Transparency, and Formation and Function of Committees and PMs (Performance Measures) are measures in relation to Local Self Governance, Financial Management, Planning and Program Management, Organization and Human Resource Development, and Urban Basic Service Management. The assessment of MCPM ofthe participating municipality is presented in the table 7.1.

Table 7.1 Minimum Condition Performance Measures (MCPM) Rankings

SN Municipality MC MC Ranking( N= PM Score PM Ranking( N=58) i I Score 58) I I no m 1. Mechinagar - 32 57 12 I 2. Itahari 10 12tn 50 26m 3. Dahnkuta - 13 tn 58 10th tfl 1n i 4. Lekhanath 11 9 49 29 5. Baglung - 3ra 59 8m 6. Tansen - lOIn 63 2na Source: Pre-feasibility Study, 2010

226. The Table 7.1 clearly indicates that all the participating municipalities have adequate MC scores to get the central grant without any deduction.

Experiences of Ensuring Transparency and Social Accountability

227. The municipalities publish annual budget and program bopklet and distribute to board members and the representatives of the political parties. Similarly, annual progress review meetings are held where LAs, NGOs, FNCCI and political parties' representative are invited for review. Public hearings take place annually in some municipalities. Similarly there are regular weekly FM radio programs on municipal affairs in Itahari and Tansen municipalities. However, disclosure of financial figure, planning and project selection, technical and overall evaluation on a regular basis to general public as per LSGA and Right to Information Act prescription is very limited. Similarly, it was revealed municipalities often do not inform the general public the findings of internal and external/statutory audits, budget achievement of expenditure and revenue targets, and social and public audits. For some municipal projects a public audit is undertaken but it appears that the comments of the stakeholders are presented in a ritualized manner and have little impact on the future operation of municipalities.

228. The staff of the municipalities are, formally, upward accountable, and elected representatives are, formally, downward accountable (to the general public). The community development section of the municipalities promotes community networks such as NGOs,

88 TLOs and CBOs. The section staffs have a perception that community organizations are growing and need support for quality community organization and empowerment of the members.

229. The nature and degree of civil participation appears to be improving. However, there is a limitation on community participation due to the fact that there are few programs for consultation. As a result people from different areas and levels of society cannot fully and effectively participate in the management and development of the Municipality. Let people know the municipality affairs and communicate their concerns to the municipality is limited in terms of quality, quantity, instruments/methods and timing. Nevertheless, LGCDP support to prepare the CD plan has enabled the involvement of stakeholders and the NGOs, CBOs, and UCs. This effort has contributed to the development of good governance of the municipalities.

230. Thus, all the participating municipalities are struggling with a limited financial and human resource capacities and capabilities to deliver their responsibilities. Besides lacking political leadership (at present municipalities are out of elected representatives), all six municipalities are characterized by a range of capacity and capability limitations, administrative inefficiencies, ineffective procedures and committees and a lack of co­ ordination amongst development partners (including central government lines agencies, INGOS, NGOs and the donor community). Few qualified staffs are available to manage infrastructure and urban service programs and projects. Furthermore, none of the six municipalities has an agreed and adopted Management Plan, Monitoring and Evaluation System to address various social issues. Given such weaknesses it is, perhaps, unlikely that in the absence of assistance the municipalities will be able to prepare and implement a development strategy that can stimulate the production (as opposed to the consumption) sector of the economy and which "reconciles the economic, environmental and social dimensions of urban growth with the evolving political economy of state restructuring.

89 PART TWO: SOCIAL MANAGEMENT FRAMEWORK

90 8. SOCIAL MANAGEMENT FRAMEWORK (SMF) .

Social Management Framework (SMF) is the instrument that provides the necessary guidance to identify and address the potential social concerns or impacts of a project right from the planning stage to its implementation and post-implementation operations.

231. SMF spells out strategies and principles for identifying project affected individuals, 4 families, communities, and to assess potential social impacts of sub-projects , and suggests measures to avoid/minimize and manage any adverse impacts. The SMF is meant to enable the project implementing agencies to adequately incorporate social safeguard considerations in the planning, execution and operation/management of different activities. This SMF offers advice on social considerations in three areas: (i) Resettlement Policy Framework (RPF) to address involuntary resettlement risks; (ii) an Indigenous People and Vulnerable Communities Development Framework (IP-VCDF) to enhance project benefits for the IPs and VCs; (iii) Guidance on Good Governance and Social Accountability (GGG) in project implementation and management. The RPF will apply to planning and implementation of all socio-economic infrastructure activities to be undertaken by Municipalities with funding support from the Town Development Fund (TDF) under this Project. The IP-VCDF and the GGG will apply to all activities undertaken by the Municipalities under this Project including those funded by the TDF. 8.1 Resettlement Policy Framework

This Resettlement Policy Framework (RPF) provides norms and procedures to screen, assess, and plan land acquisition and resettlement activities for sub-projects that are prepared and approved during implementation of the NETP in full compliance with WB's Involuntary Resettlement Policy as well as applicable laws of GoN.

8.1.1 Key Policy Norms and Principles

232. The resettlement principles adopted for UGDP: NETP recognize the Land Acquisition Act, 2034 (1977) and the requirements of the World Bank (WB) policies on Involuntary Resettlement, Indigenous People and other relevant acts, policies and guidelines related to urban development. The RPF has been prepared based on the general findings of the reviews of literatures and stakeholder consultations at the central and municipal levels. The details of the principles are presented in the table 8.1 below.

4 This is based on an analysis of the projects proposed in the pre-feasibility study and inputs received from the stakeholder's consultation held during "Social Assessment" to assess the potential social impacts in terms of involuntary resettlement and likely effects on indigenous and vulnerable communities. 91 Table 8.1 Principles and Corresponding Guidelines to Execute Resettlement Policy Principles Guidelines Principle 1; Land acquisition and involuntary resettlement will be avoided where feasible Minimize human displacement or minimized to the extent possible through the incorporation of social and resettlement wherever considerations into project design options. For example, In the case of any possible. activities where land acquisition may be required and land, house or assets may be affected, while selecting the sub-project, the Executing Agency (EA), in this case the Municipality will explore design and site alternatives and opt for the design and site alternative involving minimum land and resettlement impacts. The objective should be to avoid impact on productive land and economic assets, shelter and cultural properties.

Principle 2: • As soon as the site/land/RoW is identified for any activity, a Social IdentitY all Project impacts and Screening will be undertaken to broadly estimate the involuntary record all losses properly. resettlement and IP-VC impacts. • Based on the findings of the Social Screening, if the impacts are minimal, an abbreviated Resettlement Action Plan will be prepared wihich will record impacts in detail through a Census Survey. • Ifthe Social Screening shows substantial impacts requiring a fuJI RAP, a Social Impact Assessment (Census Survey supplemented by a Socio­ Economic Survey) will be carried out to record all the impacts in detail. • A database of all project Affected PersonslFamilies ( PAPsIPAFs) will be established which will include information on the following: o landholdings; non-retrievable loss of buildings and structures to determine fair and reasonable levels of compensation and mitigation; o census information, detailing household composition and demography; and o Current income streams and livelihood of the families. • The asset inventories will be used to determine entitlements of individual families/persons; severely project affected persons/families; • The socio-economic census data will be used to monitor how the affected households are able to re-establish their shelter and livelihoods with the resettlement and rehabilitation benefits provided by the Project. • All information will be entered into the database to facilitate planning, implementation, and monitoring and evaluation.

Principle 3: Land acquisition and involuntary resettlement activities will be integral part Plan and implement land of the project planning an implementation through the following steps. acquisition and resettlement • Land acquisition and resettlement costs will be built into the overall activities as an integral part of project budget as an upfront cost; the Project. • The design and site layout will be prepared with social screening in order to avoid/minimize LA and IR impacts; • Detail Project Report (DPR) for the sub-projects will incorporate Social ScreeninglSIA findings and the RAP and IPVCDP • An organizational framework will be established ensuring coordination of the roles and responsibilities of the social development and engineering units so that the schedules for LA and R&R and the civil works are properly linked; These arrangements i should ensure that payment of compensation, resettlement are

92 completed before site clearance. • LA process and key resettlement actions must be completed prior to award of civil works Principle 4: • Disclose and disseminate information on sub-project at feasibility stage; Inform and hold public • Disclose and disseminate Social Screening and SIA results (LA and consultations with affected R&R impacts) before preparing RAP and IP-VCDP; people during planning and • Disclose and Disseminate Entitlements, compensation and RR assistance implementation. payment schedule; RAP Implementation Plan; and Grievance Procedure during RAP preparation and implementation; • Pay special attention to the following: o inform people in time about of project proposals and implementation schedules; o consult people on measures to restore their shelter, and livelihoods, and ensure their participation in design and implementation; and o Inform affected families about relocation and land acquisition dates sufficiently in advance of actual implementation. Principle 5: • The Project implementing agencies will take the following steps to Assist the affected persons to enable the affected families to restore and improve their livelihoods restore, and ultimately to through the following provisions: improve, their livelihoods to o Provide compensation at replacement rates for all loss and conditions equal or better than damage caused to land and assets. their earlier status .. o Offer fair, equitable and prompt compensation for the loss of assets attributable to the project including to those without title to land where such asset is established provided that their eligibility for such assistance has been confirmed with the local community. o Support to reestablish lost or damaged shelter/shop any other structure through cash and/or, alternative site and/or, building at replacement value; o Relocation assistance including displacement allowance where physical relocation is required; and o Support for livelihood restoration and community development. Principle 6: • Pay special attention to adverse impacts on vulnerable households Special support to enhance (elderly and physically disabled, female-headed households, Dalits and project benefits for the indigenous groups) who may be vulnerable to changes brought about by Indigenous people and vulnerable project activities or excluded from its benefits. Members of these groups groups. are often not able to make their voice heard effectively, and therefore may need special support in accessing their entitlements and getting their grievances redressed.

• Municipalities will assess and compensate for any loss of or adverse impacts on their traditional rights to land and other natural resources, communal property resources; • The Municipalities will design and implement projects in a manner which does not adversely impact their social and cultural traditions and their traditional access to land and other natural resources. Any subsequent losses resulting from the project will be assessed and mitigated. Principle 7: Two level grievance mechanism is to be instituted at Municipality and Grievance and monitoring the Project Coordination Office level comprising representatives from procedures will be in place. the civil society • Independent monitoring agency will be instituted to carry out periodic review of the safeguard due diligence with regard to land acquisition, , resettlement and livelihood restoration.

93 • Monitoring will be an ongoing activity involving internal monitoring, and periodic external review using quantitative and qualitative methods; Principle 8: Resettlement planning will take account of: Resettlement planning will take • any current/planned government developments in the project account of the local socio­ area, including initiatives to address poverty; and economic development context. • any current/planned NGO/funding agency initiatives in the region. Principle 9: Resettlement planning and implementation will comply with project policies Resettlement planning and and the provisions of relevant national legislation and WB policies pertaining implementation will comply with to: ail legal and policy provisions of • environmental management; the Government of NepaJ and the • public participation and disclosure; World Bank safeguard policies. • land tenure, occupation, acquisition and compensation; • local government, development and service provision. Principle 10: • Sub-project planning and implementation will follow a bottom-up Establish safeguard procedure to approach, allowing communities to participate in the planning and ensure that voluntary land implementation. Where the local people are willing to voluntarily donation does not pose any donate a part of their land for establishing socio-economic impoverishment risks for the land infrastructure such as rural roads and small-scale rural infrastructure donors and that this process that provide direct benefit to community, the Municipality will remains purely voluntary without allow such donation on the following grounds: any use of pressure or influence. o As a first principle, APs will be informed of their right to receive compensation for any loss of their property (house, land, and trees) that might be caused by the sub-project construction, and the land donation might be accepted only as a last option; o No one will be forced to donate their land, and APs will have the right to refuse a land donation proposal from the EA; o In case APs are directly linked to sub-project benefits and thus are willing to voluntarily donate their land after they are fully informed about their entitlement, the sub-project will assess their socio-economic status and potential impact of land donation and accept land donation only from those APs who do not fall below the poverty line after the land donation. o In no case land donation shall be received from families living below poverty line and those who are marginal or small farmers o In case land donation involves giving away of more than 10% of the total land holding, such donation may be permitted only after confirming that such donation shall not adversely affect the future economic status of the willing donor. o Voluntary donation procedure will not apply to cases where this will cause any damage to private structures (boundary walls not included) o In all voluntary donation cases, there should be at least two neighborhood witnesses to attest the donation form I certifying that this was purely voluntary. i

8.1.2 Social Screening and Categorization of Impacts on IR

94 233. Screening of subproject for assessing its potential IR impacts will be carried out by the respective municipalities during the project identification and prioritization process using the Social Screening Format given in Annex I. Based on the screening data on the extent of likely IR impacts the sub-project safeguard requirements will be categorized as follows:

a) Significant (Category A) - If as a result of the subproject, about 200 or more people may experience major impacts, that is, being physically displaced from housing, or losing 10% or more of their productive (income-generating) assets; b) Not significant (Category B) - If as a result of the subproject, fewer than 200 people will be physically displaced from housing or lose less than 10% of their productive (income-generating) assets. Resettlement plans are prepared commensurate to their impacts; c) No resettlement effect (Category C) - If the subproject does not require temporary or permanent land acquisition, and there are no impacts involving the loss of land, structures, crops and trees, businesses or income. No resettlement plan is required. This category also includes temporary but not significant impacts which will have to be mitigated as a part of construction management in consultation with the PAP by the Contractor ( See section 9.4 for contractors compliance provisions)

234. Any subprojects that may cause significant resettlement impacts or indigenous people impacts (Category A) will -require a full scale Social Impact Assessment along with Environment Impact Assessment (EIA) and will require preparation and implementation of a comprehensive Resettlement Action Plan. The aim should be to avoid undertaking such projects in the first phase.

235. The screening and categorization of impact on involuntary resettlement will be initiated by Municipality either by the relevant staff or, if there are no such skills, then with the help of external consultants. The social screening report will be prepared by the Social Development Officer, reviewed by the Executive Officer of the Municipality and submitted to the TDF for appraisal. The Social Safeguard Specialist at PCO will finally endorse the social screening and safeguard categorization of the proposed sub-project.

8.1.3 Social Impact Assessment

236. If the Social Screening indicates that the project is Category A and B, then the Municipalities will carry out social impact assessment (see 8.2.4 below) including 100% census survey of resettlement impact. They can do this with their own staff or through consultants depending on size ofthe assignment. For large works such as ring roads, etc. they may like to hire external consultants. The Screening for categorization will be done using the Format provided in the Annex I and social impact assessment SlA (census survey of impacted households) will be done using the Format provided in Annex-4. The SIA will

95 provide information on loss and damage suffered by individuals/families, and communities, impact on indigenous and vulnerable communities. This will also provide a profile of the affected households including demographic and socio-economic details including landownership, usage and productivity and income, impacts on IPs and vulnerable communities. Additional information can be gathered through Stakeholder Consultations (focus group discussions) with the affected people, IPs and vulnerable community groups, their leaders, NGOs, and CBOs. These discussions should focus on the positive/negative impacts; measures to enhance positive impacts and reduce/mitigate negative impacts.

237. Based on the SIA findings, the Municipality will prepare safeguard action plans for the sub-project. It will prepare a Short RAP if the sub-project is category-B and a Full RAP if the sub-project is Category A. In case of limited impact on IPs and VCs, the RAP will include a section outlining the Indigenous People-Vulnerable Communities Development Plan (IP­ VCDP). The IP-VCDP will spell out additional mitigation measures for the IPs and VCs. If the SIA indicates that the sub-project will have significant adverse impacts on IPs and VCs compared to the mainstream population, a separate IPNCDP will be prepared to enhance the sub-project benefits for the IPs and vulnerable people.

238. The scope of RAP and IP-VCDP will depend on the magnitude of impact as explained above. Short RAPs will be prepared for Category B sub-projects affecting less than 200 persons, whereas full RAPs will be prepared for Category A sub-projects. If a sub-project has no adverse impact, a due diligence report will be submitted confirming the same and also stating reasons for the same.

239. When full RAP is prepared in case of significant impacts (for the Category A sub­ projects), the RAP will be shared with WB for review and clearance prior to the award of civil works contracts. The Short RAPs prepared in case of limited impacts will be evaluated by the TDF and will be cleared with the PCO. The WB will periodically review and do random checks for the documents.

240. A full resettlement plan shall include a statement of involuntary resettlement objectives and strategy, with: 1. Description of the Sub-Project with measures taken to minimize adverse impacts; 2. Findings of the socioeconomic survey and social and gender analysis incl uding summary of public consultations held, cut-off date; 3. Survey Maps showing land requirements, proposed location 4. Land Requirements and Action Plan for obtaining land (LA/Land PurchaseNoluntary Donation Plan; 5. Legal and policy framework, including eligibility criteria and cut off date for the sub­ project (cross referring to SMF) ;

96 6. Entitlements Matrix, proposed resettlement measures for the affected PAP categories 7. Participation, Consultation, Grievance Redress Mechanisms for resolution of complaints and conflicts with appeals procedures; 8. Relocation Planning (If some householders are displaced) with information on resettlement site, if available; 9. Income restoration and livelihood support measures including access to training, temporary employment, and credit; 10. Post resettlement support, if any required (shelter, infrastructure, and social services); 11. environmental protection and management; 12. Organizational responsibilities for implementing, monitoring and evaluation; 13. Cost estimate for implementing RAP; and 14. Implementation schedule, showing how activities will be scheduled with time-bound actions in coordination with the civil works.

241. A short resettlement plan will cover the same issues as that of a full resettlement plan, as relevant, but in less detail. The Short RAP will include key details such as: the list of affected households, their impact category, magnitUde of loss or damage to land or/and assets suffered by them (based on census survey); the entitlements matrix, cut-off date, detail information on specific entitlements of the implementation schedule including the payment of compensation and R&R benefits, budget, and site hand over for the civil work. Like the full RAP the short RAP shall ensure that adequate compensation, rehabilitation, and relocation arrangements are planned and budgeted.

242. Similarly, when full RAP is prepared in case of significant impacts, the RAP will be shared with the WB for clearance. However, the WB will periodically review and do random checks for the documents prepared for short RAP.

8.1.4 Entitlement for Various Losses

243. An Entitlement Matrix (EM) has been developed as per this framework and outlines various types of losses that could result from a sub-project and provides for compensation and resettlement and rehabilitation benefits for various categories of affected people (Table 8.2). The matrix lists various types of impacts and losses, application parameters, and entitlements. The matrix will apply to all sub-projects entailing IR impacts irrespective of the size of the sub-project and extent of impact. If in any stage of a sub-project, additional resettlement impacts are identified, the RAP will be updated by including provision of compensation and assistance for the additional impacts by the concerned the municipality.

244. The entitlement matrix has been prepared in accordance with the GoN and in compliance with the World Bank safeguard policies. Following the finalization of the design, the detailed measurement survey (DMS) of the affected land and/or non-land assets and detailed census survey of the affected families will be carried out to record the actual impacts. As a part of

97 the land acquisition, replacement cost surveys (or asset valuation) will be carried out, which will form the basis for determining the compensation for the affected land and assets. This information will be used by the Land Acquisition Compensation Fixation Committee (LACFC) for fixing up compensation amounts for the land and assets to be acquired. This valuation can also be used to inform the negotiation of land value between the municipality and plot owner as per the LAA, or when land is to be directly purchased. All involuntary land acquisition (other than exceptional voluntary land donation) will be compensated at replacement cost and the APs will be assisted to re-establish their living standards (affected shelter and incomes) to a level equal to or better than their living condition prior to the sub­ project. Under the Project, a representative from the affected persons is required to be a member of the LACFC to ensure compensation for assets is at replacement value. Where the replacement cost of the LACFC is lower than the market determined value, the municipality and/or government is required to pay the difference to the land loser. In cases of disputes such as where land records are not updated or where the APs are unable to produce the desired documents or absentee land owners, then the compensation amount will be deposited in the account of the concerned municipalities till the case is disposed.

Table 8.2 Entitlement & Policy Matrix

Tvpes of Lost Application Entitled Persons/family Policyl Entitlement 1. Acquisition Entire or part of • Titleholder I. Direct purchase of land by the Municipality through of private, land to be • Tenants negotiation with the land owner having the Ward tenancy, or acquired from Committee as witness. Guthi land ownerofthe 2. Land of equivalent size and category ( if available ), or land as recorded cash compensation at replacement cost, at cut-off date 3. In case of vulnerable group (IPs, Dalits, socio­ economically poor, women headed families), preference will be in replacing land for land, 4. Any transfer costs, registration fees or charges, 5. In case there are legal Tenant (mobi), tbe land owner will have to produce consent oftenant or the purchase price or compensation as described in clauses 1 & 2 above shall be apportioned 50: 50 between the owner and the legal tenant as per the Land Reforms Act, 1964, 6. Land compensation/registration shall be paid/done in favor of both the land owner and spouse, 7. If remaining land becomes unviable as a result of land acquisition, land owner will have an option to relinquish un viable remaining portion of land and receive similar benefits to those losing all their land parcel(s), 8. Non-titled persons cultivating public or private land will be given 3 months prior notice before site hand over for civil work; and otherwise receive compensation for crops and subsistence allowance as decided by the Ward Committee

2. Temporary Temporary land • Titleholder • One month Prior notice before civil works allowing the loss ofland taken by the • Tenants owners to salvage their assets and crops; sub-project • Compensation for any damage caused to structure/assets

98 1 or standing crops. I • The contractor will be responsible for compensating for , any temporary damage to property business, assets, crops and trees during civil works which will be reflected in the contract agreement. 3. Loss of Structures, • Owner I. Direct purchase of structure and land by the Municipality residential, buildings • Tenants through negotiation with the land owner having the Ward commercial, including cattle • Non-titled Committee as witness. and other shed, walls, toilets (encroachers and 2. Compensation for full or partial loss at replacement cost structure etc. affected by the squatters) of the affected structure(s) without depreciation or sub-project deduction for salvaged material, 3. Displacement and transportation allowance for residential and commercial structures to cover actual transaction cost as estimated in the resettlement plan, 4. Prior notice of 35 days delivered to the affected family (tenants) or 3 month's rent for tenants who have to relocate from tented building 5. Non-titled (squatters) persons will receive compensation for structures at replacement cost without depreciation or deduction for salvaged material. 6. Encroachers will not be provided any compensation. 7. Relocation assistance of NC 10,000 to all fully displaced households 4. Loss of Community The users of the • Reconstruction by the sub-project leaving such facilities community facilities (e.g. facility or in an equal or better condition than they were before, or structures irrigation, water, community or • Cash compensation to the legal/community custodians at and/or etc.) affected by group full replacement cost without depreciation of deduction resources the sub-project for salvaged material; or • Negotiated relocation in consultation with the community 5. Loss of Affected fruit/nut Owner ofthe • Cash compensation based on annual value of the produce trees and trees affected timber and and calculated according to Department of Agriculture crops fodder trees (DOA) norms, • Resettlement Plans to confirm that the DOA norms and techniques are sufficient and are updated regularly • Affected timber Owner ofthe • Cash compensation based on calculation of the and fodder trees I, affected timber and production and calculated according to the district norms , fodder trees as decided by the Department ofForestry Affected crops Owners and • Cash compensation based on local market prices for the sharecroppers of produce of one year and calculated as per the norms of affected crops District Agriculture Development Office, • 50% cash compensation of the lost crop for the sharecroppers/legal tenant (Mohi) • Non-titled persons will be informed 6 months prior to construction or provide compensation for crops. 6. Loss of Economic Persons in the subproject • Preferential involvement in project construction works, economic opportunity lost vicinity who may be • Skills training support for economic restoration, 1 i opportunity as result of loss adversely affected, • Priority in poverty reduction/social development program oflivelihood , although they do base not lose assets as such I 7. Loss oftime Expenses All sub-project • Program facilitates transportation in official process, I and travel incurred in affected persons • Payment on the same day as other compensation i expenses traveling to fill eligible for /i application and compensation I making claims

99 and time lost 8. Land Loss of land and Voluntary donation • No compensation for the donated land, compensation and Donations other assets by is accepted only if AP: allowances for assets (such as house, structures) which means of voluntary (i) is subproject may be partially affected due to land donation. donation beneficiary and is fully • Transfer of land ownership by negotiation (Municipality consulted and informed and the owner). about rights; (ii) doesn't • Free/escape of any transfer costs, registration fees, or fall below poverty line charges. after land donation; (iii) • Preferential employment in sub-project construction work donating up to 20% • Public acknowledgement of and appreciation for land holding; and (iv) voluntary land donors through concrete display boards freely willing to donate (with an agreement, including a "no coercion" verified by a third party) the remaining land should not be less than minimum size of plot or land as defined by the concerned Municipality. No donation in case of impact on structure unless the house owner has more than none house in the same town. 9. Additional Assistance 9.1 Preferential treatment in All APs • Construction contracts include provision that APs will employment in project activities have priority in wage labor/employment on sub-project construction during implementation, • APs shall be given priority after construction for work as maintenance workers, mandated in local body agreement 9.2 Skill training and Income One member of • Skills training and income generation support financed by generation support each project affected subproject with special focus on women, dalits and IPs family belonging to • Resettlement Plan to include a need assessment and skills vulnerable grouplbelow training program for APs. poverty line 9.3 Priority in Poverty All APs • Participation of APs, especially women, dalits, and IPs, reduction/social development with priority in saving credit scheme facilitated by the programs sub-project, • Participation of APs with priority in life skills, income generation, and other entrepreneurship opportunities

8.1.5 Eligibility of Affected HouseholdslPersons

245. The following individuals, group of peoples, communities and Government agencies are entitled to compensation and assistance under the project:

246. Landowner: A person who owns landis ("Land" here means only land or land along with structure and assets affixed to it) within the project-affected areas with legal ownership documents. In some exceptional cases, a person who owns landis within the project-affected

100 areas regardless of proof of such ownership will also be entitled. For example, some indigenous people exercise customary rights to their ancestral lands without any legal ownership documents. However, special decisions by the concerned Governmental agency shall be made taking into account the local government/community's recommendation also.

247. Tenant (mohl): A person who works on a project-affected land owned by another person; or occupies a structure on the same land with a legal proof from Land Revenue Office.

248. Non-residential Structure Owner: A person who owns a project-affected building/structure (along with land) including a dwelling/commercial unit but resides in an area not affected by the project. Slhe will be eligible to receive compensation and allowances for hislher affected land and structure, but no rehabilitation assistances meant for the fully or partially displaced families.

249. Business Owner: A person who owns or conducts a business within the project-affected area, the operation of which will be disrupted by the construction of the project.

250. Community: A community who owns project affected building structures or resources and utilizes buildings or resources of the affected areas.

251. Government Agency: A government agency that owns project affected building structures or resources and utilizes buildings and resources ofthe affected areas.

252. Project Affected People (PAP): Includes any populace, households regardless of their ownership status as encroachers I squatters etc that will face their living adversely affected; and/or lose their title, or beneficial right to land, house, habitat, water resources or any other asset possessed, due to the project implementation.

253. Project Affected Families (PAFs): All members of a project affected household residing under one roof and operating as a single economic unit, who are adversely affected by the project or any of its components. Significantly Project Affected Families (SPAFs). The affected families who lose 25% or more of their land or income or a residential house because of project intervention.

254. Significantly Project Affected Families (SPAFs): SPAF is an affected family that loses 25 percent or more of land or income or suffers over 25 percent impact on their residential house because of the project intervention.

101 255. Squatters: People who have occupied land and have erected structures on it for the purpose of residence / income activities without legal title/rights and are not entitled to compensation for lost land under this policy. But, if displaced they are entitled to resettlement assistance as well as compensation for loss of other assets except land.

256. Vulnerable Groups: Distinct groups of socially distressed people who might suffer disproportionately from the effects of resettlement. These may be ethnic minority/ dalits, indigenous groups, women headed households, the most poor (based on the poverty line), the disabled, elderly and landless/ families.

257. Cut-off date: The cut-off date for title holders is decided according to the Land Acquisition Act, 1977 and for non-titleholders the date of the census survey. Those who encroach into the subproject area after the cut-off date will not be entitled to compensation or any other assistance.

8.2 IPs and Vulnerable Communities Development (IP-VCDP) Framework

258. IPs and Vulnerable Community Development Framework (IP-VCDF) is prepared to guide the preparation of sub-projects under the program to ensure better distribution of the benefits and promote development of the Adivasiljanajatis along with other disadvantaged social groups in all sub-project areas of influence. The IPNCDF is developed based on the national policies/strategies as well as WB's Indigenous Peoples Policy. The principal objectives ofthe IPNCDF are to:

a. ensure the participation of the affected IPs and other disadvantaged groups in the entire process of preparation, implementation, and monitoring of the project activities including specific sub-projects, b. guarantee that sub-project benefits will accrue to IPs and vulnerable communities, and mitigate any adverse impact, c. define the institutional arrangements for screening, planning, and implementation of IPNCDF for sub-projects, and d. Outline the monitoring and evaluation process.

8.2.1 Relevant Policies on IPs and other Vulnerable Communities

259. Nepal does not have a standalone policy on Indigenous Peoples, however in the Tenth Plan significant emphasis has been placed on delivering basic services to the disadvantaged and indigenous people, Dalits, women, disabled and other vulnerable groups including the Adhibasi / Janajati. One of the main thrusts of the Tenth Plan is the implementation of targeted programs for the uplift, employment and basic security of Dalits, indigenous people and disabled peoples. The policy provision also outlines that the government should pilot

102 strong and separate package of program of basic security for vulnerable sections of society. The Three Year Interim Plan (TYIP) (2007-2010) includes the following policies for inclusive development ofAdivasi/Janajatis and other vulnerable groups: • Creating an environment for social inclusion; • Participation of disadvantaged groups in policy and decision making; • Developing special programs for disadvantaged groups; • Positive discrimination or reservation in education, employment, etc.; • Protection of their culture, language, and knowledge; • Proportional representation in development; and • Making the country's entire economic framework socially inclusive. 260. The National Foundation for Upliftment of Adivasi/Janjati Act, 2058 (2002), the National Human Rights Action Plan 2005, the Environmental Act 1997, and the Forest Act 1993 have emphasized protection and promotion of vulnerable groups in general, indigenous peoples' knowledge, and cultural heritage in particular. In 1999, the Local Self-Governance Act was amended to give more power to the local political bodies, including authority to promote, preserve, and protect the IP's language, religion, culture, and their welfare.

261. World Bank policy on indigenous people emphasized to design and implement projects in a way that fosters full respect for indigenous peoples' dignity, human rights, and cultural uniqueness and so that they • receive culturally compatible social and economic benefits, and • Do not suffer adverse effects during the development process.

8.2.2 Screening and Categorization of Impacts on IPs and Vulnerable Communities

262. Social screening will be undertaken at an early stage in all sub-projects for ascertaining impacts on the Indigenous people and vulnerable communities will be carried out alongside the screening done for land acquisition and involuntary resettlement impacts to categorize the impacts on IPs and decide whether it requires a separate IP-VC Development Plan or not. A thorough screening will be conducted during the project feasibility study and preparation of DPR. The screening will involve identifying IPs and vulnerable communities belonging to the area of the sub-project, their population (number and ratio), and their characteristics as compared to the main population in the sub-project influence zone through primary and secondary data collection.

103 263. Social screening provides first stage information about the subproject which also identifies: (i) beneficiary population living within various impact zones of the sub project (ii) extent of land required and number of land owners affected; (iii) impacts on poor and vulnerable groups including needs and priority for social and economic betterment; (iv) willingness of people for voluntary land donation; and v) other impacts.

264. Screening report also provided information about the potential damage / loss of common community structures such as resting place (Chautaro), water tank including pipelines, religious cultural monuments / sites, foot trail, Trial Bridge and so on.

265. Sub-projects will be categorized according to the level of impacts on IPs and vulnerable communities. These will be determined by the type, location, scale, nature, and presumed magnitude of potential impacts on IPs and vulnerable communities. Based on this, the sub­ projects will be categorized as per table 8.3

Table 8.3 Categorization of Impact on IPs and Vulnerable Communities for Sub-Projects • Category Determination ofthe type of Social Assessment Needed Category A Sub-projects expected to have significant impacts' that require an Indigenous People (IP)lVulnerable Group Development Program Category B Sub-projects expected to have limited impacts that require specific action for IP! Vulnerable Group in resettlement plans and!or social action plans Category C Sub-projects not expected to have impacts on IP! Vulnerable Group and, therefore, do not require special provision for IP! Vulnerable Group

266. The municipality will initiate the screening and categorization either by the relevant staff or, if there are no such skills, then on contract with an external party/social consultant. Required review will be done by Social Development Officer of the Municipality. Approval is provided by the Executive Officer of the Municipality. Final endorsement of the same is provided by the Social Safeguard Specialist at PCO.

267. In case of significant impacts (falling in categories A and B) on IPs and vulnerable groups, the respective municipalities will share the IP/VCDP to WB (via TDF) for clearance. Short IP-VCDPs prepared as a part of 'less impact' or 'no impact' category will be evaluated

5 The impacts on IPI Vulnerable Group will be considered 'significant' or Category A If the sub-project positively or negatively: a) affects their customary rights of use and access to land and natural resources, b) changes their socio-economic status, c) affects their cultural and communal integrity, d) affects their health, education, livelihood, and social security status, and/or e) alters or undermines the recogni !ion of indigenous knowledge<

104 by the TDF and will be cleared with the PCO. The WB will periodically review and do random checks for the documents.

268. The subproject IP-YCDP Impact Categorization Form is presented in Annex 2. Based on the categorization for screening impact, the individual municipalities will prepare sUb-project specific IP-YCDPs as per the guide lines provided in Annex 6.

8.2.3 Strategy for Social Inclusion of Vulnerable People

269. The overall development of any target beneficiaries cannot be achieved without their inclusion in the planning and implementation process through participation and targeted interventions. Some inclusive measures will be adopted to maximize project benefits and opportunities to indigenous/ethnic groups and other vulnerable communities along through mainstreaming and targeted approaches. Mainstreaming approach includes increased participation and proportionate representation of IPs and vulnerable communities in various user groups and committees under the project promoted and sponsored social development activities so that their needs, priorities, interests and perspectives are reflected in project planning and implementation. Targeted approach will cater poor and disadvantaged IPs and vulnerable communities through livelihood enhancement skills training activities to enable them to take full advantage of project opportunities and benefits, including employment opportunities. Livelihood enhancement skills training will be targeted to these groups on the basis of their specific needs and priorities, including promotion and upgrading of traditional skills for modem market requirements. Additional health and hygiene training programs will be provided in drinking water and sanitation program targeting IP groups and other disadvantaged community members.

270. Each Municipality will prepare an annual Social Inclusion Plan for the benefit of the IP and YCs as per the blended guidelines of the Ministry .of Local Development (MLD) which prescribes proactive targeting of the IPs and YCs by earmarking a certain percent of the annual budget for these vulnerable sections of society. In addition to this, based on social screening IPNCDPs will be prepared as a part of the RAP, or separately in case of the likelihood of major adverse impacts on them ascertained though the screening and social impact assessment.

8.2.4 Social Impact Assessment (SIA) and Preparation of IPNCD Plans

271. Respective municipalities will carry out stakeholder consultations and social impact assessment either by their own staff or by hiring of consultants (Anthropologist! IP specialist) as part of the detailed feasibility/design of the sub-project. The consultation and SIA will gather relevant information on demography; social, cultural and economic situation; and social, cultural and economic impacts on IPs and vulnerable communities including 100%

105 census survey of the IR affected people, an asset inventory, and landownership, usage and productivity assessments. The SIA survey format is provided in Annex 5. Additional information willbe gathered through separate group meetings or Focused Group Discussion (FGD) among the IPs and vulnerable community, including their leaders, NGOs, CBOs, and affected persons. Discussions will focus on potential positive and negative impacts of the sub-project; measures to enhancing positive impacts; and strategies/options to minimize and/or mitigate negative impacts.

272. Based on the SIA, the sub-project will develop appropriate mitigation measures and livelihood enhancement activities for IPs and other vulnerable groups. In case of limited impacts, specific actions for IPs will be spelled out in the resettlement plan and/or social development plan for the sub-project. If the SIA determines that the sub-project will have significant differential impact on IPs compared to the mainstream population, a separate IPNCDP will be prepared to enhance distribution of sub-project benefits and promote the development of IPs and vulnerable people.

273. The municipality staff or consultant will prepare either a short or a full IP/VCDP depending on the magnitude and complexity of sub-project impacts as determined by the social screening process described above.

8.2.5 Key Issues Raised by IPs and Vulnerable Groups

274. The key issues identified by the IPs and VCs and their representatives during public consultations organized for preparing this SMF are: (a) promoting participation of IPs, VCs and their organizations in planning and implementing programs at the municipal level, (b) providing targeted income generation and skill development support; (c) provision of fair compensation for affected land and assets; Cd) livelihood restoration support for affected IP and VC families; (e) employment opportunities; and (f) enhancing their cultural competence. The details are provided in the Consultation Report (Annex-7).

275. The IP/VCDP should include the following: • State how through consultations the aspirations, needs, and preferred options of the IPs were sought to be understood and incorporated in the Plan; • Describe local social organization, cultural beliefs, ancestral territory, and resource use patterns among the IPs and other vulnerable people; • Describe how free, prior, and informed consultations were held with the IPs and VCs for preparing the IP-VCDP and the results of such consultations. • Spell out potential positive and negative impacts on IPsNCs identified through screening and later SIA;

106 • Describe measures taken to avoid, mitigate, or compensate for the adverse sub-project effects on IP-VCs and measures planned to ensure that the sub-project benefits will accrue to IP-VCs; • Set out an action plan of measures to ensure that IPs receive social and economic benefits that are culturally appropriate; • Describe the procedures for grievance redress at Municipality and central level as in the SMF; • Summarize baseline information for evaluating the outcomes of the IPNCDP; • Include strategy/measures to strengthen capacity of the Municipality to better address social inclusion issues with special attention on IP and VC groups; • Spell out the role of the local organizations of IPs and VCs and non-governmental organizations (NGOs) having expertise in IP and social inclusion issues; and • Layout the budget allocation and plan for monitoring.

276. The IP/VCDP will provide for measures to mitigate negative impacts through modification of sub-project design and development assistance to enhance distribution of sub-project benefits to the IPs and VCs. In the event of land acquisition or loss of shelterlbusinesses due to impact on structures occupied by the ethnic/indigenous communities, the program will ensure that their customary rights will not be violated and that they will be compensated for the use of any part of their land in a manner that is culturally acceptable to them. The compensation measures will follow the Resettlement Framework discussed above.

277. The IPNCDP may include provisions to offer special skill development and technical support to IPs and VCs such as follows:

• Skill development training for gainful employment and income generation activities; • Technical support for income generation activities including micro-credit and enterprise, horticulture, livestock, etc., • Awareness generation on health and hygiene, safe motherhood, literacy, women empowerment, and leadership, health and hygiene.

278. It is also emphasized that each Municipality should prepare and implement a generic IP­ VCDP (See annex 6a) and should have specific IPVCDP for each sub-projects. Each municipality should implement following specific measures as the project strategies for indigenous peoples, Dalits and other vulnerable communities under different project components including utilizing the municipal block grants.

1. Provide training/income generation activities based on the identified needs and priorities of IPs and vulnerable people in the subproject area

107 2. Involve IP, Dalits and other vulnerable people in beneficiary groups and increase their participation through preferential treatment and special support to IPs, Dalits, women and other disadvantaged groups to get involved in UGDP subprojects cycle 3. Involve organizations of IPs and vulnerable people for subproject identification, implementation and monitoring 4. Provide targeted assistance! skills aimed at vulnerable groups to enhance livelihoods and social wellbeing 5. Consideration should be given to the establishment of a small loan assistance program, particularly for vulnerable women headed and Dalit households in order to promote their income opportunities. 6. Women's economic empowerment programs should be implemented, especially through micro-credit, village banking & savings, & small business operation. 7. Specific measures to minimize adverse impacts while maximizing project benefits to IPs, Dalits and other vulnerable groups could include: • mandatory employment opportunities of at least one member from each affected vulnerable household in project construction and maintenance work; and

• at least one member from each of the affected vulnerable households to participate in community empowerment activities,

• Supplementary infrastructure facilities in the poor IP and Dalit settlements including latrine construction and drinking water facilities. Preference will be given to qualified IP and Dalit individual in recruitment of community facilitators, who will maintain frontline contact with the community in implementing IP­ VCDP activities.

8.3 Framework for Strengthening Good Governance and Social Accountability

279. The purpose behind strengthening good governance and social accountability measures is to make public officials answerable for the services they provide to the beneficiaries and common people.

280. In order to ensure that the services and schemes targeted at the citizens, and especially the marginalized and excluded sections of the society are delivered as promised to their satisfaction, it is important to listen to people. Under the NETP, the Municipalities will make efforts to promote people's demands for quality services and necessary socio-economic infrastructure. In so doing the Municipalities will target especially the socially excluded citizens of the municipalities - women, Dalits, janjatis (IPs), minority ethnic groups who

108 otherwise may not be able to articulate their voice. As per the guidelines of the MLD, the Municipalities have in place policies for community consultation and participation and pro­ poor development activities through participatory budgeting and involvement of user groups in service delivery. However, in reality the existing processes of consultation, competition among various interest groups and political negotiation may tend to largely focus on the interests of the mainstream population which is not socially excluded. In order to break this practice, the Municipalities will try to make sure that

• Marginalized citizens know what they are entitled to by the laws ofNepal • Marginalized citizens are consulted about what investments they think are best for their communities • Marginalized citizens can comment on how they think things are going as the process unfolds • Marginalized citizens can blow a whistle if things are going wrong from their perspective

281. The UGDP: NETP will require the Municipalities to plan and implement measures to strengthen good governance in four key areas as follows, much of which is already required as per various laws and regulations of the Government ofNepal.

282. Promotion of Demand for Good Governance broadly means enabling citizens, civil society, and other non-state actors to ask for transparency in decision making, accountability to deliver good quality services. People can ask for these when they have access to necessary information, and how they are able to use this information. The RTI Act of Nepal, 2007 requires disclosure of information. The Good Governance Act and the Constitution requires public agencies to maintain transparency. Therefore, NETP will seek to ensure the following:

• Disclosure of all relevant project related information including budgets, 6 contracts , expenditures, program details, etc.); • Enable people to understand and make use of information disclosed by strengthening their awareness and understanding on laws, their rights, budgets, policies, etc.; and • Disseminating information on schemes, activities, laws, rights, and implementation processes to the ordinary public through community friendly means.

6 The contracting process can be susceptible to corruption. Certain contractors may try to bar others from submitting tenders by using strong-arm tactics. It is possible that at places, contractors try to receive contracts in connivance with certain people within the municipal office, or for the contractors' associations to indulge in coIlusion among embers while barring outsiders from submitting tenders. This can be checked by introducing more transparent and competitive measures such as e-bidding or a double envelope system which separates the technical proposal from the financial. In cases where users' groups resort to subcontracting, the process needs to be institutionalized and formalized by involving the municipality. As present, when subcontractors are awarded contracts, the process is not transparent and very haphazard, especiaIly since subcontracting by the UOs is against the provisions ofthe LSOA 109 283. The Community Development Officers of the Municipalities, with the help of local NGOs and local media will to carry out awareness campaigns on the NETP program, and people's rights to various schemes under this program and about the role of local bodies in general. This will include Information, Education, and Communication (IEC) activities specially targeted at Tole Lane Organizations (TLO), local youth, students, and the socially marginalized/ excluded groups.

284. Mediation of Demand for good governance is about establishing channels of contact between the people/their organizations and the government so that people are able to express their views and concerns which they want to the government to address. NETP will require the Municipalities to do the following for mediation of demand for good governance. o Creating and strengthening avenues receive feedback from citizens and civil society on working of the local body through annual forums and consultations; o Holding consultation with the Tole Lane Organizations (TLO), CBOs, and CSOs through annual social forums to facilitate their involvement in implementation planning and review process; o Establishing formal mechanism for grievance redress and dispute resolution at the Municipality level; and processes for complaint resolution at the community level through the Tole Lane Organizations (TLO)s;

285. Response to Demand: People's satisfaction depends on how the government responds to their demand. Under NETP, the Municipalities will institutionalize processes for responding to people's demand for improvements in local governance through the following steps:

• Undertake innovative pro-poor schemes managed by the community and user groups, with special attention to the Indigenous People and Vulnerable Communities including dalits, women, and the extremely poor7; • Set out performance incentives for Tole Lane Organizations (TLO) and User Groups and reward them. for their successful role in planning, implementing, monitoring, and managing schemes; (UGs and Tole Lane Organizations (TLO) lacking capacity and contracting out schemes awarded to them will be discouraged by encouraging their more efficient counterparts with schemes)

7 Upper-caste groups and Newars tend to dominate public life in rural areas and small towns including the six targeted municipalities. In order to ensure inclusive development, efforts must be made to greater representation of marginalized groups at all levels, especially those of Dalits and Janajatis. In order to address the issue, the Gender Equity and Social Inclusion (GESI) framework initialed by MPPW and provisions spelled out in the Municipal Guidelines should be adopted.

110 • Build the capacity of the UGs, CBOs and Tole Lane Organizations (TLO) to be able to implement schemes on their own, if possible with the help of 8 consultants • • Undertake participatory local area development planning and budgeting as 9 per the MLD guidelines and the GG Act ; 286. Monitoring to Inform Demand: Most government agencies have vertical monitoring systems where one level of officials are accountable to the next higher level. Social accountability involves independent and citizen monitoring of the public agencies. Such monitoring enables the citizens, their CBOs and local CSOs to understand what is right and what is wrong with what is happening in the local body. As a part of NETP, the following measures will be taken to strengthen monitoring:

• Participatory monitoringlO using citizen score cards and feedback surveys of the performance of municipalities; • Social audit exercises as per the GG Act; • Formal oversight mechanisms involving non-state representatives l1 will be established including the Municipal Coordination Committee (MCC)I2, and the Steering Committee at the Central level;

g CBOs and UOs do not have sufficient capacity to implement and manage large-scale projects handed to them. As a result, projects constructed and managed by the UOs are either of substandard quality (despite promoting community ownership, improving service delivery, etc) or are sub-contracted out to local contractors. It is therefore essential to build the capacity of community-based organizations. Members of users' group should be trained in aspects such as bookkeeping, work organization and planning, labor recruitment and supervision, procurement of goods and materials, and operation and maintenance. Trainings can be provided by municipal staff (site supervisor, social mobilizer), NOOs or consulting firms in the private sector. In addition, users' groups can be provided with external technical consultants if required.

9 Civil society organizations, interest groups and community-based organizations need to be incorporated better in municipal decision-making, particularly the planning process, so that municipal decisions are more inclusive, participatory and effective. This can be accomplished by requiring the municipalities to closely follow the 14-step planning process mandated in the LSOA. More specifically, the planning process could involve holding meetings in each ward with the involvement of political party representatives, municipal officials, members of civil society organizations and community-based organizations; collect suggestions and prioritize them based on certain criteria such as the needs of the municipality; and consulting again with these different groups at the ward level once the initial selection of projects has been completed. A final round of meetings/consultations should be held after the Executive Officer and the APM come up with their list of projects so as to provide different stakeholders with the opportunity to scrutinize the proposed plans/projects as well as demand modifications ifneed be. The final selection of the projects/plans should be made based on these consultations.

10 According to the LSOA, all monitoring is to be undertaken by the municipal office. This provision, however, has proven inadequate to monitor projects under implementation as it is undertaken in a somewhat haphazard manner. Steps should be taken to institutionalize monitoring arrangements, by requiring monitoring to take place at specific intervals, by the political representatives in monitoring skills and methods and also by involving civil society representatives, and external consultants in the project monitoring teams

II At present there is little civil society oversight in the local governance process. This can be remedied by working with NOOs and pressure groups to hold awareness-raising programs in communities regarding the responsibilities of 111 287. In view of low capacity of the Municipalities, it is recommended that following actions as per the World Bank's policy requirements and applicable government legislations requiring social accountability measures (see chapter 5) should be carried out in a phased manner. Necessary training and orientations should be conducted in first year and piloting of the key actions should be done in the 2nd year. Third year onwards the following actions should be implemented regularly.

a. Preparation and dissemination of IEC materials on legislations on disclosure/ right to information (first year-second year). Other disclosure measures should include community/toll level display boards; use of FM radio for disclosing b. Emphasize people's participation (as per LSG Act and blending guidelines) in the participatory budgeting c. Explain the role of the Municipal Coordination Committee (MCC) and how this will provide a bi-annual forum for public disclosure/discussion/monitoring of plans and measures, expenditures, implementation status, etc. d. Propose (as per laws on social audit) Citizen Report Cards (CRCs) for periodic assessment by the public of Municipality's efficiency in meeting people's needs as per. legislations. CRC is a participatory survey seeking user feedback on the performance of public services. CRCs imitate private sector practice of collecting consumer feedback in the context of public goods and services. CRCs are a useful tool enabling citizens to credibly and collectively 'tell' municipalities about their performance and create pressure for positive change. CRCs can enhance public accountability through the media coverage and civil society advocacy. e. Propose Community Score Cards (CSC): CSCs can be done for the delivery of specific services targeted at particular user groups and CBOs. This can be clarified that CSC process will be a community based monitoring process in which both the beneficiaries and service providers can express their satisfaction levels, problems, and concerns. CSC helps to link up service providers with the user/community groups in way that people are empowered to provide useful feedback to service providers and also understand their roles and responsibilities for sustainable management of a service/ asset provided to them. This makes both service providers and recipients mutually accountable.

local governments. Once sensitized, the same organizations can be encouraged to hold public hearings where people and their representatives can interact with the municipal officers, LOO, VOC secretaries or the COO.

12 A Municipal Coordination Committee (MCC) comprising of Executive Officer (EO), representative from All Party Mechanism (APM), Government line agencies, Civil Society Organization (CSO) including Nepal Federation of Indigenous Nationalities (NEFIN) and Oalit NGOs Federation (ONF) will be responsible for overall program coordination, policy guidance, and monitor progress on a periodic basis at the municipal level. 112 288. Municipality Grant Operation Guidelines, 2010 (2067) and Provisions of this SMF are applied wherever applicable to all the activities carried out under the Block Grant through MLD and Institutional Development activities through DUDBC.

113 289.

9. SMF IMPLEMENTATION AND MANAGEMENT

9.1 Institutional Arrangements

290. The Ministry of Physical Planning and Works (MPPW) will be the Executing Agency (EA), and the Ministry of Local development (MLD) will be co executing agency of the UGDP: ETP. On a day to day basis, implementation will be coordinated by a Program Coordination Office (PCO) comprising of a Program Director as well as three Component Managers, representing each of the participating national institutions (MLD, TDF and DUDBC) and in-charge of their respective components. The PCO will playa coordinating and facilitating role to all three components to implement social safeguard measures spell out in the SMF. A social safeguard specialist will be based in PCO for this purpose.

291. The TDF will manage the Socio-economic Infrastructure Development component, which will support expansion/rehabilitation of essential infrastructure/services for which the municipalities are responsible. The TDF will establish a social and environment management unit (SEMU) or focal point with qualified and adequate human resources. TDF will hire a social development specialist to monitor smooth implementation of the RP/IPP and take corrective actions if necessary.

292. The participating municipalities will be the Implementing Agencies (lAs) for (i) Socio­ economic investment sub-projects, (ii) utilizing the block grants provided under the project, and (iii) completing institutional development actions within their jurisdictions. A Municipal Coordination Committee (MCC) comprising of Executive Officer (EO), representative from All Party Mechanism (APM), Government line agencies, Civil Society Organization (CSO) including Nepal Federation of Indigenous Nationalities (NEFIN) and Dalit NGOs Federation (DNF) will be responsible for overall program coordination, policy guidance, and monitor progress on a periodic basis at municipal level. A municipal level Project Management Team (PMT) will be set up, comprising of the Executive Officer and the section chiefs of the key sections of the municipality to implement the project at the municipality level. In addition, the municipalities shall designate staff for project-related financial management, procurement and safeguards implementation.

293. The PMT with the continuing support of MCC will deal all project implementation issues, including land acquisition and resettlement issues, enhance collaboration among relevant departments and organizations, and expedite decision-making processes with an aim at achieving intended project output and outcome.

114 294. The municipalities will have the primary responsibility of planning, coordination and financing of the sub-project RP/IPPNCDP. TDF will ensure that the respective PMT will update the resettlement plan during the detailed design stage, if required, and implement the final plan. In addition, the TDF will verify the implementation of all RP/IPP requirements and confirm whether APs received entitlements as per the RP/IPP prior to the award of civil work contracts.

295. The PCO will have overall responsibility to ensure that municipalities are in compliance with framework and follow all policy principles and procedures to address IRJIPPNCDP issues as set down in the framework. The major steps and procedures for subproject implementation of Socio-Economic Infrastructure Component are presented in Annex 8.

296. An indicative schedule will be prepared for RPIlPPNCDP preparation and implementation activities in relation to technical works. It will show the time schedule of all land acquisition and resettlement activities including commencement and finish dates before acquisition/demolition and procedures for implementing the key elements.

Table 9.1 Role and Responsibilities for SMF Implementation in Sub Project Cycle of UGDP Sub Project Main Task related to SMF Responsibilities C cle Identification of Identification through a participatory process Social Development Sub-project considering social aspects, issues and problems Officer ( SDO) of the municipalities Collection of information required for social I i screening ofthe sub-project Project Preparation Social Screening & categorization of impacts in Social Development terms of land acquisition and impact on IPs and Officer ( SDO) of Vulnerable people the municipalities

Carrying out of Social Impact Assessment (SIA) & Social Safeguard prepare FULL/or SHORT Resettlement Action Plan Consultant hired (RAP) and Vulnerable Community Development Isupported by MST Plan (VCDP) wherever necessary

Preparation of a detailed sub-project proposal Social Safeguard detailing social aspects, alternatives for minimizing Consultant hired by I the negative impacts as per SIA Study findings municipalities Appraisal Assessment of mitigation measures and entitlements Social Safeguard initiatives stated in RAP Consultant hired by TDF Assessment of institutional capacities to implement mitigation measures, monitor social aspects of the I I sub projects 115 Implementing & Building of institutional capacities to implement Social Safeguard Executing mitigation measures, monitor social aspects of the Consultant hired by sub projects DUDBC

Implementation of the provision of entitlements to PMT + Social the PAPs and other social impacts mitigation Development measures with the help of local communities, Officers/ NGOs/CBOs and private sectors Consultants

Monitoring & Documentation of the progress acquiring the PMT+ SDO/Social Evaluation feedback from PAPs on provision of entitlements Consultant and other arrangements and reporting to the line ministry, PCO, TDF & World Bank

Annual monitoring and evaluation of progress on the social safeguard compliance through Third Party Independent Social Assurance Safeguard Consultant hired by Identification of shortcomings and PCO redressal of these grievances

I MCCIPMT

9.2 Consultation and Information Disclosure

9.2.1 Public Consultation

Consultations during Pre[easibility Study and Preparation ofSMF

297. Public consultations were conducted by the consultant and PPT members during prefeasibility study in June and September 2010. The main objectives of the consultation were to disseminate information about UGDP: NETP to municipalities and local stakeholders and to identify the priority project in each municipality. In each municipality, information about the UGDP: NETP was disseminated to (i) the representatives from the political parties, line agencies and the municipal administration; (ii) the member from the civil societies and CBOs; (iii) members from the poverty clusters and women and finally a plenary session was conducted where the findings from each group discussion and interaction were presented to prioritize project unanimously.

298. Similarly, Consultation meetings with MLD, DUDBC and TDF were conducted by the SMF consultant in order to prepare social and management framework. The consultation was mainly focused on institutional, human resources and past experiences of social management practices of these organizations in terms of land acquisition, R&R policies and IPs and

116 vulnerable community development plans. The consultation also assessed the institutional capacity of MLD, DUDBC and TDF to implement and monitoring the compliance of social safeguard measures reflected in the SMF. Modes ofFuture Consultations 299. A range of formal and informal consultative methods will be carried out for all subprojects including, but not limited to: focus group discussions (FGDs), public meetings, community discussions, and in-depth and key informant interviews; in addition to the censuses and socio-economic surveys. Consultations will be held with special emphasis on vulnerable groups. Encouraging public participation in consultations informs the public and serves as a venue for the public to express their opinion on priorities which the Project should address.

300. The key stakeholders to be consulted during sub-project preparation, RP/IP& VCDP implementation, and program implementation includes: • all APs, including vulnerable households; • project beneficiaries; • host populations in resettlement sites (if any); • political party representatives, community leaders, and representatives of community based organizations; • local NGOs; • Officials of municipalities and relevant government agency representatives.

30 I. Consultations with APs during RP and IP/VCDP preparation will ensure that views of APs on compensation and resettlement assistance measures are fully incorporated while consultations conducted during RP implementation will identify necessary assistance required by APs during rehabilitation. Continuing involvement of those affected by sub­ projects is necessary in the resettlement process. The municipality with support and guidance from the PMT and TDF consultants will ensure that APs and other stakeholders are informed and consulted about the sub-project, its impact, their entitlements and options, and allowed to participate actively in the development of the sub-project. This will be done particularly in the case of vulnerable APs, who will be encouraged to choose options that entail the lowest risk. This exercise will be conducted throughout the sub-project--during preparation, implementation, and monitoring of sub-project results and impacts.

302. The PMT will ensure that views of APs, particularly those who are vulnerable, related to the resettlement process are looked into and addressed. The PMT will ensure that APs

117 consulted are informed of the outcome of the decision-making process, and will confirm how their views were incorporated. Since resettlement is a continuous process and baseline data/information will be collected, the PMT will regularly update the baseline information.

9.1.1 Information Disclosure and Dissemination

303. Summaries of the RP/IPPs of SMF will be made available in to the APs, local NGOs, and public offices in the sub-project site. Copies of these documents will be provided to any requester by charging the photocopy cost. The draft and final SMF will be disclosed in the websites of MLD, DUDBC, TDF and WB and made available to APs. Information dissemination and consultation will continue throughout program implementation.

304. For all sub-projects, information will be disseminated to APs at various stages. In the initial stage, the participating municipalities will be responsible for informing potential APs and the general public of the project about the land acquisition requirements through leaflets and pUblication in local media outlets and newspapers. PMT will conduct consultations and disseminate information to all APs during these initial stages to create awareness. of the project.

305. In the implementation stage, the municipality will provide information to APs on IR policies and features of the RP in appropriate mode and means of communications. Basic information such as sub-project location, impact estimates, entitlements, and implementation schedule will be presented to APs. This will enable stakeholders to provide inputs on the resettlement process, prior to award of civil work contracts. 9.1.2 The Information and Consultation Strategy (ICS)

306. It is intended to layout the way in which information will be provided to the project implementers and beneficiaries and also how consultations will be held during project implementation. Its purpose is to ensure social and environmental issues are effectively addressed by the project and subprojects through a transparent and participatory manner. The primary responsibility for the implementation of the ICS is vested in the municipalities. The following matrix shows a typical plan for provision of information and consultations for sub­ projects in the UGDP: NETP

Table 9.2 Information and Consultation Strategy (ICS) for UGDP: NETP Stages of a subproject Consultation and Information,-,s~t~el:..p:s=---______--ll Pre-sub-project STEP -1: Proposal and Feasibility (Information Role) planning stage I

118 Once a sub-project is identified the PMT should undertake a feasibility study determining the feasibility of the sub-project in view of the adverse social impacts it may pose. This study is an important source of information to the executing and implementing agencies (MPPW, MLD, TDF municipalities) and also to the community for whom the sub-project has been proposed. The feasibility study should address the following: • Are the proposed goals of the sub-project valid • Who is the public for whose benefit the sUb-project is being introduced • How is the sub-project going to serve them and is it in their interests • The alternatives to the sub-project and whether the alternatives are cost affective • Will there be any adverse social impacts due to the implementation of the sub-project • What would be the implementation strategy of the sub-project etc. Pre-sub-project STEP - 2: Initial Public Consultation (Consultation Role) planning stage The findings of the sub-project feasibility, its benefits and impacts need to be discussed with the community for whom the sub-project is proposed. This would help the implementing agency in taking the opinion of people, make them understand the pros and cons of the sub- . project, alternatives examined and the sub-project finalized. Planning and STEP - 3: Socio Economic Assessment!Analysis (Information and grounding stage Consultation Roles) In this stage it is important to ensure that there are no adverse social impacts of the subproject. The sub-project may be passed if it has no impacts and implementation can be initiated. However, if the sub­ project triggers any social impacts then the following steps are to be considered while planning the sub-project. • Identification of the PAPs through census survey • Collection and analysis of the baseline data • Preparation of Resettlement Action Plan • Preparation of IPNCDP in case the sub-project effects IPs and vulnerable communities • Land Acquisition Assessment • Generation of other relevant information and • Consultation and communication strategy Planning and STEP - 4: Detailed Project Report (Information Role) grounding stage Initial consultations, feasibility and socio-economic assessments on • the sub-project will pave the way for the preparation of the Detailed Project Report (DPR). The DPR should constitute information on I various components for successful sub-project implementation. The

119 DPR will constitute: • A final design of the proposed sub-project after examining the various alternatives to reduce the social impact on the people • The cost of the sub-project construction • The time frame the completion of the sub-project • The institutional arrangements for implementing the sub­ project • Plans and proposals covering R&R issues • Design to ensure community participation in the sub-project (Beneficiaries, PAPs, NGOs, community organizations) • Plan for external help wherever needed (Experts, Advisors, Consultants) • Grievance redressal mechanisms Planning and STEP - 5: Preparing for project implementation and sharing grounding stage information (Information and Consultation Role)

Once all the documents like prepared list of PAPS affected, the type of entitlements, plans for reconstruction of public utility infrastructures, details of land acquisition etc., steps have to be taken to disseminate the information among the PAPs and prepare agencies for project implementation. Following tasks will be carried out in this step: • Announcement of the project • Displaying the layout of the project affected area • R&R policy provisions and entitlements for the PAPs • Consultations with the affected people and public hearing • Involving NGOs/community in R&R implementation Implementation stage STEP - 6: Addressing issues that arise during implementation (Consultation Role) In this stage there may be many issues that the project-implementing agency may face during the implementation of the project such as: • Problems pertaining to compensations & allowances • Unexpected reactions from the PAPs with regard to the entitlements • Conflicts between the displaced community and the host community etc. To overcome these problems the PMT would adopt a consensual approach and address the grievances and queries of the people affected. Monitoring and STEP - 9: Monitoring Process through participation (Information evaluation stage and consultation Roles) The process of participatory monitoring and evaluation (M&E) is the logical extension of the ICS activities. Beneficiary committees can be formed for monitoring and supervision of the sub-project works. The process should also ensure that the project benefits have properly reached the affected people and the execution of the project sticks its original designs so that social compliance is achieved. Following tasks

120 are essential in this stages: • Ensuring the implementation of the RPIIPNCDP and timely delivery of entitlements (Consultation Role) o Ensuring that the RPIIPNCDP is implemented according to a designed plan and also the timely delivery of the compensations and rehabilitation assistance to the PAPs is the responsibility of the PMT. The role of CSOs can be very crucial at this stage

• Reporting (Information Role) o Reporting is an important aspect of the M&E process. Periodical reporting is important to generate information on the progress of the work undertaken. The status of the implementation of the RP/IPNCDP and progress has to be documented

9.2 Grievances Redress Mechanism

307. It is expected that through a participatory process, acceptance of the sub-projects and grievances can be minimized. However, it is necessary to establish an effective grievance redressal mechanism to address complaints/grievances related to social issues that may arise. Any grievances and objections retarding the social aspects of the project will be referred to the project Grievances Redress Committee (GRC). The project GRC will be formed at central and municipal levels. The composition ofthe GRC at national level will be:

I. Project Director- Chairperson ii. PCO representatives/ component managers- Members (3) iii. Representatives from MUAN- member (1) iv. Representatives from two CSOs- members (2)

308. Similarly, the composition of the GRC at Municipal Level will be: i. Chairperson ( non official and eminent citizen) nominated by Municipal Board ii. Representative from TLO/User group Ill. Representative from NEFIN IV. Representative from Dalit organization v. Representatives from CSO vi. Representative from women organization

121 309. Executive officer of the concerned municipalities will act as the convener and SDO will document the GRC processes and procedures.

310. The affected persons can register their grievances at the complaint cell established at PCO in central level and municipality at local level. All cases will be registered, categorized and prioritized by the SDO at the municipality and by the Social Development Specialist at PCO. GRCs will meet periodically to discuss the merit of each case and fix a date for hearing and notify the PAP to submit necessary documents in proof of her/his claim/case; resolve grievances within 4 weeks of receipt of complaint. R&R and IP-VCD related Grievances will be referred to GRC LA related grievances will be addressed as per the Clause 11 of LA Act of Nepal 2034 (1977), where CDO is assigned the sole responsibility.

9.3 Monitoring and Reporting

311. Monitoring is a major part of the social management framework to ensure its goals are met. RP implementation will be monitored internally. The monitoring procedures of SMF will fully be consistent with the monitoring provisions spell out in the recently endorsed Municipal Blended Guidelines. PCO has overall responsibility of monitoring all activities under UGDP: NETP. The land acquisition and corresponding RPIIP-VCDP implementation activities will be closely monitored internally by the PMT and TDF. This will involve: (i) administrative monitoring to ensure that implementation is on schedule and problems are dealt with on a timely basis; (ii) socio-economic monitoring during and after any resettlement impact by utilizing baseline information from sub-project preparation; (iii) overall monitoring to assess AP status; and (iv) preparation of progress reports to be submitted to PCO and TDF by the PMT reporting actual achievements against the targets fixed and reasons for shortfalls, if any. MLD will be responsible to monitor social inclusion and accountabil ity aspects of the projects.

312. The PMT will maintain a record of all transactions in their resettlement database, followed by entitlement records signed by AP and survey based monitoring of resettlement / land acquisition progress on trimester basis and report to the line ministries, PCO, TDF and WB wherever required. Monitoring will ensure: • that all internal training of relevant safeguards staff occurred; • verification that there are no outstanding or unresolved land acquisition issues with respect to the project and that property valuation and economic rehabilitation has been carried out in accordance with the provisions of the plan; • information campaign and consultation has been carried out with APs; • status of land acquisition and payments on land compensation; • value ofentitlement received is equal to that of original structure or land acquired; • effective utilization of entitlements received;

122 • compensation for affected structures and other assets; • relocation of APs; if applicable; • payments for loss of income; • that all economic rehabilitation measures are implemented, as approved; • effective operation of both the Grievance Committees; • Funds for implementing land acquisition and economic rehabilitation activities are available in a timely manner, are sufficient for the purposes, and are spent in accordance with the plan.

313. PMT will also be responsible for carrying out field level SMF monitoring through: a. Review of census information for all APs; b. Consultation and informal interviews with APs; c. In-depth case studies; d. Informal sample survey ofAPs; e. Key informant interviews; and f. Community public meetings.

314. In order to third party validation of results, the social safeguard compliance will be monitored by independent consultants annually to ensure that appropriate social safeguards have been incorporated into the sub-project.

9.3.1 Monitoring Framework

315. Key social monitoring indicators relevant with safeguard measures have been developed and disaggregated at three levels: 1. Output 2. Outcome and 3. Impact level. Both internal and external monitoring system will be required providing adequate attention to assess the progress or preference for these indicators with evidences based on quantitative and qualitative facts. A generic social monitoring framework of the project has been presented in Table 9.3

Table 9.3 Monitoring Parameters, Methods, Schedule and Location

Levels Indicators Methods I Frequency Responsibility Activity/Output Land acquisition (ha), Review of Quarterlylha Municipality-SDO Level case compensation paid data/progress If yearly/ TDF & PCO - for acquired land and report/field annually Social Safeguard property( price, % paid, verification/me Specialist

! no.ofHHs eting i I , Ownership transfer of Review of Quarterly/ IMunicipality/Distri f acquired land progress half yearly/ Ict Land Revenue report/meeting annually Office

123 Enhancement Review of Quarterly/ PMTINGOs/ /mitigation measures progress half yearly/ Training Institution implemented( training, report/field annually dislocation verification/ transportation! meeting allowance distributed • Crop loss ( area, Review of Half yearly/ PMT/ Consultant/ quantity and value) progress annually Farmers report/field verification/ meeting ! Employment generated, Review of Quarterly/ PMTI Consultant/ (No. of employed by progress half yearly/ Contractors • gender, caste/ethnicity report/ annually and wage paid) contractor's I records Health and safety Review of Quarterly/ PMT! Consultant! measures adopted/ progress half yearly! Contractors awareness raising , report/field annually activities verification Labor camp( facilities, Review of Quarterlyl PMTI Consultant! services) progress half yearly! Contractors report/field annually verification Public infrastructure/ Review of Quarterly! PMTI contractors facilities compensated! progress half yearly! rehabilitated report/field annually verification! meeting B. Outcome ! No. of HH relocated and Review of Half yearlyl PMTI PCOITDF Level assisted progress annually independent report/field Consultant verification Livelihood improvement Review of Quarterly/ PMT! PCOITDF activities implemented progress half yearlyl independent and peoplelHHs report/field annually Consultant benefited verificationl meeting Compensation money Review of! Half yearlyl PMT! PCOITDF used by HH( land progress annually independent purchased, house report/field Consultant constructed, investment verificationl in productive assets) meeting Meeting Iconsultation Review of Half yearly! PMTI PCOITDF held at different levels ( progress annually independent no. of meetings, no. of report/field Consultant

124 complains filled, verification! handled and resolved meeting Income Review of Half yearly/ PMT/ PCO/TDP • generation/restoration progress annually independent I • measures taken and report/field Consultant changes in HH income verification/ MeetingIHH survey

Land use( price, land Review of Half yearly/ I PMT/ Line use, production) progress annually agencies/ reportlfield Consultant verification! meeting C. Impact Level Improved livelihood ( Review of Annual/mid Third party income, consumption, progress -termlfinal monitoring and poverty reduction, reportlfield evaluation- education, health, HH verification/ Independent assets etc) . meetinglHH . Consultant

i survey i Social! gender Review of Annual!mid Third party empowerment ( progress -termlfinal monitoring and leadership, decision report/field evaluation- making, participation, verification/ Independent representative etc) meetingIHH Consultant survey Social wellbeing( self Review of Annual!mid Third party satisfaction, security progress -term/final . monitoring and issues and problems) report/field i evaluation- verification! I Independent meeting Consultant

9.4 Contractors Compliance on Social Safeguard Measures

316. The contractors are also principle stakeholders in the project whose roles and responsibilities are to identify and mitigate the adverse impacts right from the beginning. Therefore, contract document needs to clarify the following roles / responsibility of contractors:

• Use construction materials form approved site, and of standard quality. • Reclaim the quarry site and fill up borrow pit after the completion ofthe work, • Keep the bitumen at least 0.8 Km far from the village /settlement, • Maintain health and sanitation of the labor camp, • Do not allow haphazard disposal of spoil along hill slopes, vegetated areas, water bodies and other environmentally sensitive areas • Enforce use of recommended disposal sites that are approved by project manager,

125 • Provide health and safety gears to the labors, • Restrict labors' use of forest products, hunting and poaching. • Hire as many local laborer as possible (priority has to be given for poor, marginalized and Dalits), • Avoid use of child labor (below 16 years age), • Employ at least 33 percent women laborer in construction, • Ensure life insurance of the laborers • A void damage I disturbance to historical I cultural I archeological sites Il'!atural habitats. • Relocate public infrastructure such as; electricity pole, telephone pole, taps, irrigation, etc.

317. The respective municipality authority is responsible to provide sites required for civil works. The cost associated to civil work sites (rent, repair of damages etc) will be borne by the contractors.

9.5 Capacity Building

318. Capacities for managing social management tasks need to be built in two ways. Firstly, capacities should be built considering the overall institutional development in addressing social issues and secondly, sub-project specific capacities that are useful in implementation of the sub-project. Thus, based on the findings of the assessments of the capacities of the institutions involved in UGDP (See section 7.3), the following measures are suggested for capacity enhancement.

9.5.1 Documentation and Orientation

319. A comprehensi ve document highlighting the relevant WorId Bank and GoN social safeguard policies, laws and legislations, constitutional provisions etc., should be prepared and provide orientation to the stakeholders and staff responsible to project implementation at various levels. It has to be prepared in simple and easy language for better understanding, and possibly circulate in both English and Nepali, if possible local languages. Project staff should be able ·to handle project induced grievances and conflicts with competence with the help of such reference documents. Training programs would help the municipal functionaries in understanding the framework and help in enhancing their capacity.

9.5.2 Training

320. Training is an important component for developing capacities. Appropriate and timely training to the officials with regard to project related issues can bring a positive change in the functioning of the staff. Apart from training in generic areas such as human resource management, information management, government, project and municipal functionaries

126 require training in handling certain specialized tasks pertaining to social safeguard issues as given under.

For the Members of PCO and Relevant Staff at MLD, DUDBC &TDF

321. Training on Social Assessment, Appraisal and Management:

PCO members and relevant staff at MLD, DUDBC and TDF would require capacity building inputs to help them understand the social risks attached to different sub-projects and the appropriate R&R measures that can be taken to mitigate adverse impacts on the community. In addition, they would require training to equip them with skills they can use to appraise sub-projects on key social criteria and ensure that they are socially sound.

For Municipal Staff

322. Training on Consultations and Surveys:

This training is important for municipal staff to enable them to get acquainted with processes linked to community participation, community mobilization, census surveys, baseline surveys, etc. Training on consultation processes for specific projects and exposure to various participatory methods of consultation will enhance the capacity of the relevant staff to carry out proper consultation. The training should concentrate on the various issues of ensuring participation and transparency in sub-project implementation. It should also stress on the type of information to be generated through the surveys, especially on the socio-economic information and other related issues. This training can also be imparted to NGOs/CBOs that are involved in the sub-project. This training would help the staff to be in close contact with the community as well as all the stakeholders involved.

323. Training on Social Assessment of Sub-projects:

It will enable the municipal staff to understand the social risks attached to different sub-projects and the appropriate measures that can be taken to mitigate adverse impacts on the community. This would not only enable them to prepare socially sound sub-projects but also help them put in place strong monitoring and management plans.

324. Training on Resettlement and Rehabilitation:

It is another very essential requirement for the municipal staff in addressing social issues. Staff in the municipalities needs to build capacity in this regard. This could include information on related laws, legislations, safeguard policies, methods of implementation, valuation of assets, grievance redressal, preparation and implementation of Social Management Plan (SMP)I IPs

127 Development Plan (IPDP), social impacts etc., that may be encountered in a typical urban infrastructure sub-projects. Members of PMT who are particularly involved in planning and drafting subprojects at the municipality should undergo this training as they playa primary role in implementing R&R provisions under the project.

325. Training on Preparing Communication Strategy:

A well-developed communication strategy needs to be in place to realize better results in implementing the projects. The concerned municipalities have to develop and effectively implement their own consultation and communication strategy. Successful implementation of sub-project would depend, to a large extent, on the ability to maintain close contact with the community in the sub-project area. For this purpose municipalities need to develop consultation plans along with the help of an NGO/community. Such a communication strategy would help in better communication, clearer understanding of social problems, better service delivery, easier conflict resolution and grievance redressal. Training modules may be developed to help municipalities draft and implement appropriate consultation strategies.

9.5.3 Human Resource Requirement

326. Municipal Support Team (MST), a mobile team of multidisciplinary experts including social scientist, environment scientists and financial analyst recruited as consultants, will be responsible for assisting MLD, DUDBC, TDF and six municipalities in three areas: ID, block grant (Service Delivery) and Socio-economic infrastructure.

327. Recruitment of Social Development (SD) advisor at PCO till the MST is in place and hiring of Social Safeguard (SS) specialists at MLD and TDF and Social Development Officer (SDO) in Municipalities will be required to strengthen their capacity to ensure that social safeguard measures are well addressed while implementing UGDP: NETP. The SD advisor will be responsible for providing training/orientation on SMF to TDF, MLD, DUDBC and the Municipalities; and also for giving technical support to Municipalities to do impact screening and prepare the RAPs for the likely pipeline as required. The SS specialists at MLD and TDF will responsible to ensures that social safeguard measures are well addressed by municipalities in block grant support and socioeconomic infrastructural development support respectively. The SDOs will be responsible to do impact screening, conduct social assessment and prepare the RAPs and IPs-VCDPs for the selected (sub) projects.

9.6 Budgeting

328. Implementation of the sub-projects is the responsibility of the PMT in each participating municipalities. Similarly, conformance of the social safeguards is also the responsibility of the PMT including bearing the costs for various social tasks. For the cost of Land Acquisition

128 GoN shall provide 90% of fund & the participating municipality has to bear 10%; and for RAP, IP-VCDP implementation, fund shall be made available to municipality through the project within the ceiling defined based on Grant Policy criteria. While the administrative costs for carrying out surveys, social assessments, safeguard screening and preparation of RAP, IP-VCDP will be financed under Socioeconomic Infrastructure Component, the SMF program costs (overall capacity building, social preparation, income restoration and livelihood enhancement; implementation management, supervision, M&E etc.) will be financed from Block Grant and Institutional Development Components of the UGDP: NETP. Some of the generic actions under the IP-VCDP will be implemented as a part of the annual activities supported by the block grants, 35% of which are earmarked for pro-poor investments as per the LSG Act. However, the RAP, IP-VCDP will include detailed cost estimate and indicate source of funds for the required activities. It is estimated that about 3 - 5 percent of the total budget of the subproject will be required for SMF implementation.

References Central Bureau of Statistics (CBS) (2001) Population Census ofNepal 2001: National Report. Kathmandu: HMG, Nepal, National" Planning Commission Secretariat in Collaboration with UNFPA Nepal. Dahal, Dev Raj, Hari Uprety, Phanindra Subba. "Good Governance and Decentralization in Nepal." Center for Governance and Development Studies/Friederich-Ebert-Stiftung, Kathmndu, Nepal, January 2001. DoLIDARIGoN (2009) Environmental and Social Management Framework (ESMF) for Rural Access Improvement and Decentralization Project (RAIDP), Kathmandu: Project Coordinate Unit, RAIDP DUDBC/GoN (2010) Social Safeguard Planning Document for Nepal: Secondary Towns Integrated Urban Environmental Improvement Project, Kathmandu: Department of Urban Development and Building Construction (DUDBC), Ministry of Physical Planning and Works, Government of Nepal. Department of Road ( DoR)/GoN (2010) Resettlement Action Plan (RAP) for Road Sector Development Project (RSDP), Kathmandu: Department ofRoad. Government of Nepal (GoN) (2007) Interim Constitution of Nepal 2007, Kathmandu: Government ofNepal. Government of Nepal (GoN) (1977) Land Acquisition Act 2034. Kathmandu: His Majesty's Government of Nepal. Government of Nepal & World Bank (2010) Nepal: Study on Urban Development and Service Delivery in Secondary Cities and Emerging Towns, A Prefeasibility'Report for UGDP: NETP prepared by The GHK, DMI Pvt. Ltd and WELINK International Crisis Group (2007) Nepal's Troubled Taral Region, Asia Report No. 136.

129 Khan, Riaz (2010) Institutional Assessment of Town Development Fond (TDF) Nepal for UGDP:NETP, Kathmandu: Town Development Fond (TDF) Khan, Riaz (2010) Institutional Assessment of Department of Urban Development and Building Construction (DUDBC) for UGDP: NETP, Kathmandu: Department of Urban Development and Building Construction (DUDBC) Khan, Riaz (2010) Institutional Assessment ofMinistry ofLocal Development (MLD) for UGDP: NETP, Lalitpur: Ministry of Local Development (MLD)/Government ofNepal LBFCIGON. "Staniya Nikayaharu ko Bittiya Stithi Bisleshan." Lalitpur, Nepal, Baisakh 2066. Mademba, Sita. "Special Security Plan falters: Despite government claims, eastern Nepal is still' under the sway of armed groups." Nepali Times, Issue #519, 10-16 September 2010. Ministry of Land Reform and Management (MoLRM) (2005) "Bhumisangha Sambandhit Niyamharuko Sanghalo" (Collection of Rules and Regulations Related to Land), Kathmandu: MoLRM Manandhar, Narayan. "Nepal's armed groups" Republica, 29 August 2009. Ministry of Local Development (MLD)/Government ofNepal (2008) Social and Environmental Safeguards Frameworkfor Local Governance and Community Development Program (LGCDP), Lalitpur: Ministry of Local Development (MLD)/Government ofNepal Ministry of Local Development MLD. "Local Authorities Fiscal Commission Report, 2000," Lalitpur, Nepal. Ministry of Local Development MLDIGON. "Local Bodies Financial Administration Regulation," Lalitpur, Nepal. MLDIGON. "Local Governance and Community Development Programme (LGCDP): Programme Document." Lalitpur, Nepal, 11 July 2008. Ministry of Local Development ( MLD)/GON, "Mantralayako Sanchipta Parichaya Ewam Barsik Karyakram, Budget tatha Pragati Pratibedan," 2066, Lalitpur, Nepal, Falgun 2066. Ministry of Local Development (MLD)/GON. Local Self-Governance Act, 1999, Kathmandu: HMGN Press. Ministry of Population and Environment (MoPE) (1996) Environmental Protection Act 1996. Kathmandu: HMGN Press. Ministry of Population and Environment (MoPE) (1997) Environmental Protection Rule 1997 and Amendments, 1999. Kathmandu: HMGN Press. National Planning Commission ( 2003) The Tenth Plan (Poverty Reduction Strategy Paper 2002-2007). Kathmandu: His Majesty's Government ofNepal. National Planning Commission (NPC) (2006) Land Acquisition, Compensation and Resettlement in Development Projects. Kathmandu. A Report Prepared with Assistance by the Asian Development Bank (TA-4422-NEP). Sharma, Pitamber (2003) "Urbanization and Development", in Population Monograph ofNepal Volume I. Kathmandu: Central Bureau of Statistics (CBS).

130 World Bank (20 to) Local Political Economy and Post-Conflict Situational Analysis, a Study Report for UOOP: NETP Prepared by Aditya Adhikari and Bandita Sijapati. World Bank (2005) Operational Policy (OP) and Bank Procedure (BP) 4.10 Indigenous People, Washington: The World Bank World Bank (2001) Operational Policy (OP) and Bank Procedure (BP) 4.12 Involuntary Resettlement, Washington: The World Bank

131 Annex 1. Involuntary Resettlement Impact Screening & Categorization Form

A. Project Data Municipality I Sub-project Title:

B. Screening Questions for Resettlement Categorization

Probable Involuntary Resettlement Effects Yes No Not Possible Remarks Known Will the sub-project include any physical construction work? Does the sub-project include upgrading or rehabilitation of sica I facilities? Are any sub-project effects likely to cause any damage/loss of housing, other assets, resource use? Is the site for chosen for this work free from encumbrances and is in possession ofthe governmentiMunicipality? lfthe site is privately owned, will this be purchased or obtained throu~h voluntary donation? If the land parcel has to be acquired, is the actual plot size and ownership status known? Is land for material mobilization or transport for the available within the existing plotl Right of Way? Are there any non-titled people who living/doing business on the proposed site for civil work? rn Will there be loss of!damage to agricultural lands, standing crops, trees? Will there be loss ofincomes and livelihoods? Will people lose access to facilities, services, or natural resources? Does the Municipality have its own laws! regulations for land ac uisition? Ie households including dalits and janjatis

cted land/structure owners likely to lose less than /structure area. d ! structure owners willing to voluntarily donate the required land for this sub-project? Is any temporary impact likely? C. Estimates of Specific Impacts

Components Private :'

132 D. Information on Affected Persons

Any estimate ofthe likely number of households that will be affected by the sub-project?

[ ] No. [ ] Yes. Ifyes, approximately how many? ___

No. of RRs losing <10% of their productive assets (land! cowshed/shops/economic units) ___

No. of HRs losing 10% or more of their productive assets? __

Are any ofthem poor, female-headed households, or vulnerable to poverty risks? [ I No. ( ] Yes. Ifyes, please briefly describe their situation with estimated numbers on-IRs?

Are any vulnerable households including dalits and janjatis affected? [ I No. [ ] Yes. Ifyes, please briefly describe their situation with estimated numbers ofHHs?

What are the needs and priorities for social and economic betterment of vulnerable people including dalits and janjatis who are affected by this sub-project?

E. Decision on Categorization After reviewing the answers above, it is determined that the sub-project is: • Categorized as an A project, a full Resettlement Plan is required • Categorized as a B project, a short Resettlement Plan is required • Categorized as a C project, no RP is required

Prepared by: Approved by: (Social Development Officer) (Executive Officer, Municipality)

Date: Date:

Reviewed by Social Specialist, TDF: Endorsed by: Social Safeguard Specialist, PCO

133 Date: Date:

Annex 2 IPs & Vulnerable Groups Impact Screening & Categorization Form A. Project Data

Municipality I Sub-project Title:

B, Id enb'fiIca f Ion 0 fImpact on IPsIVuInerabl e G roupm. S u b~prO.lec tArea Impact on Indigenous Peoples (IPs)/ Ethnic Not Ye N Remarks or Minority(EM)/ Vulnerable Group know s 0 identified n problems, if any Are there DaIits, Janjatis, or ethnic minorities present in project locations?

Do they maintain distinctive customs and traditions and economic activities in their locality?

Will the project in any way affect their economic and social activity and make them more vulnerable?

Will the project affect their socioeconomic and cultural integrity? Will the project disrupt their community life?

Will the project positively affect their health, education, livelihood or social security status?

Will the project negatively affect their health, education, livelihood or social security status?

Will the project alter or undermine their local knowledge, customary behaviors or institutions?

Are IP and VC households likely to lose customary rights over, access to land?

Are IPs and VCs likely to lose shelter/business and be displaced?

134 In case no disruption of indigenous community life as a whole, will there be loss of housing, strip of land, crops, trees and other fixed assets owned or controlled by individual indigenous households?

i

I I C. Specific Impacts on IPs and VCs No oflP NoVC No oflP Govt Forest No of No of No of Noof Public families families HHs land land IPNC IPNC other IPNC utilitie losing losing losing requir require houses shops IPNC Squatte s land land house ed in din Sq affecte affected structur rs affect over Sq. mts d es affected ed 10% of mts. affected their i

i residenc i e I

I I

D. Additional Information Required • Total and affected areas ofland, by type ofland assets; • Total and affected areas of structures, by type of structure (main or secondary); • Legal status of affected land and structure assets, and duration of tenure and ownership; • Quantity and types of affected crops and trees; • Quantity of other losses, e.g. business or other income, jobs or other productive assets, estimated daily net income from informal shops; • Quantity/area of affected common property, community or public assets, by type; • Summary data on PAP households including ethnicity, name of the head of household, sex, household size, primary and secondary source of income, if headed by women, or consists of marginalized ethnic groups, Dalits, Muslims/religious minorities, elderly, disabled, indigenous people, below poverty line of NRs 3000/month), landless or households losing 50% of total landholdings (particularly those totally dependent on agriculture for livelihood), as well as remote villages. • Identify whether affected land or source of income is primary source of income; and • AP knowledge of the subproject and preferences for compensation and as required, relocation sites and rehabilitation measures

E. Anticipated project impacts on indigenous peoples

Project activity and output Anticipated positive effect Anticipated negative effect ~l. 2. i 3. 4. 5.

135 F. Decision on Categorization After reviewing the above, it is detennined that the sub-project is:

Categorized as an A project, an Indigenous Peoples Development Plan (IPDP) is required

Categorized as a B project, a specific action favorable to indigenous peoples is required and addressed through a specific provision in related plans such as a Resettlement Plan, or a general Social Action Plan

Categorized as a 'C' project, no IPDP or specific action required

Prepared by: Reviewed by: (Municipality staff/Contracted Party) (Department/Section Head, Municipality)

Date: Date:

Approved by: Endorsed by: (Executive Officer, Municipality) (Social Safeguard Specialist, PCO)

Date: Date:

136 Annex 3a Voluntary Land Donation Agreement Form (Individual)

J, MrlMs ...... the grandson/granddaughter of ...... and son/daughter of ...... , permanent resident of ...... district...... VOC ward no ..., have agreed to donate ...... Sqm land voluntarily as per UGOP OPR and ESMF provision to Municipality ...... on...... 20 ...for upgrading / improvement of the UGOP sub project(s) titled ...... with the support of UGOP: NETP. To this effect, both parties have entered into agreement by consensus in presence of the witnesses signed below.

The land holding certificate no ... contains ...... land of which ... Sqm only is donated. I also, hereby, declare that the donated land amounts to ...... % of the total land holding.

That the donated land is surrounded towards the a) eastern side by .... ,...... b) western side by...... c) northern side by ...... d) southern side by ......

That the land owner testifies that the land / structure is free of squatters and encroachers and is not subject to any other claims.

That the owner will not claim any compensation against the grant of this asset nor obstruct the construction works on the land in case of which he/ she would be subject to sanctions according to Jaw / regulations.

That the Municipality ...... agrees to accept this grant of assets for the purpose.

That the Municipality ...... shall construct and develop the UGOP subproject considering possible precautions to avoid damages to adjacent land / structure / other assets.

That both the parties agree that the UGOP subproject construction shall be the community property.

That the provision mentioned in this document will come into force from the date of signing of this deed.

Signature of the Owner Signature of the EO

Name and Signature of Witnesses 1...... 2......

137 Annex 3b Voluntary Land Donation Agreement Form (Group)

We, the following permanent inhabitants of ...... Municipality/VDC have agreed through consensus to voluntarily donate our private land for construction! upgrading of UGDP sub projects titled ...... under Municipality through the support of UGDP:NETP. We, hereby, provide our commitment to adhere the terms and conditions mentioned in this agreement and transfer the land rights to the Municipality as per the rules of Land Revenue Office of Government of Nepal (GoN). All the donors have collectively signed this agreement after reaching common consensus for the donation upon informed choice from the project facilitators. . 1. The land owner testifies that the land I structure is free of squatters and encroachers and is not subject to any other claims. 2. That the land donation is made to Municipality ...... for the construction and development ofUGDP sub project (s) titled ...... supported by UGDP: NETP. 3. We, the owners of the donated land, will not claim any compensation against the grant of this asset nor obstruct the construction on the land and in case of which we would be subject to sanctions according to law! regulations. 4. That the Municipality ...... agrees to accept this grant ofassets for the specified purpose. 5. That the Municipality ...... shall construct or improve the UGDP sub project(s) through the participation of local communities considering possible precautions to avoid damages to adjacent land! structure I other assets. 6. Both the parties agree that the UGDP subproject construction shall remain as community property. 7. The provision mentioned herein will come into force from the date of signing of this paper.

SN Name of the Address Total Probable Registration land Signatures I Donors Land donated No. of the Donated of land holding in land in donated (as % of donors Sqm Sqm plot total) •

• 1 I .2

Date: Name & Signature of Executive Office of Municipality ( ...... )

138 Annex 4 Format for Social Impact Assessment

For sub-projects involving land acquisition and resettlement impacts, the social development officer at PMT or contracted consultant will undertake social impact assessment (SIA) for each identified subproject, on the basis of preliminary technical design. These surveys will help in determining the magnitude of displacement, prospective losses, better targeting of vulnerable groups, ascertaining actual costs ofresettlement, and preparing and implementing a resettlement plan.

Census Survey for Project Affected Persons The purpose of the census is to register and document the status of potentially affected persons within the subproject's direct impact zone. The census will cover 100 percent of APs. The census will provide a demographic overview of the population, and will cover people's assets and main sources of livelihood. The survey of the direct impact zone wili cover the following: (i) boundaries of the site identified for the proposed subproject elements in case of subprojects involving new interventions, (ii) proposed right-of-way (RoW) boundaries which will include titleholders and non-titleholders occupying the proposed RoW, (iii) current occupants of the subproject site including businesses, vendors, whether titleholders or otherwise and experience temporary disruptions during construction, and (iv) losses of PAPs.

Checklist for Census, Socioeconomic and Replacement Cost Surveys Census The census (also known as a detailed measurement survey - DMS) of lost assets will collect data on the affected assets from 100% of APs following detailed engineering design. The data collected during the census will constitute the formal basis for determining PAP entitlements and levels of compensation. For each AP, the scope of the data will include: • Total and affected areas ofland, by type ofland assets; • Total and affected areas of structures, by type of structure (main or secondary); • Legal status of affected land and structure assets, and duration of tenure and ownership; • Quantity and types of affected crops and trees; • Quantity of other losses, e.g. business or other income, jobs or other productive assets, estimated daily net income from informal shops; • Quantity/area of affected common property, community or public assets, by type; • Summary data on PAP households (ethnicity, gender and name of head of household, household size, primary and secondary source of income; whether household is headed by women, or consists of marginalized ethnic groups (Dalits, Freed Kamaiya), Muslims/religious minorities, elderly, disabled, indigenous people, below poverty line of NRs 3000/month), landless or households I losing 50% of total landholdings (particularly those dependent on

139 agriculture for livelihood), as well as location in remote villages. • Identify whether affected land or source of income is primary source of income; and • AP knowledge of the subproject and preferences for compensation and as required, relocation sites and rehabilitation measures. .Socioeconomic At a minimum, the Socioeconomic Survey (SES) will collect information Survey from a sample of 10% of Project Affected People (PAP) disaggregated by gender and ethnicity. The purpose of the socioeconomic survey is to provide baseline data on PAPs to assess resettlement impacts, and to be sure that proposed entitlements are appropriate, and to be used for resettlement monitoring. The scope of data to be collected includes: • Household head: name, sex, age, livelihood or occupation, income, education and ethnicity; • Household members: number, livelihood or occupation, school age children and school attendance, and literacy, disaggregated by gender; • Living conditions: access to water, sanitation and energy for cooking and lighting; ownership of durable goods; and • Access to basic services and facilities Replacement The replacement cost survey (RCS) will be done in parallel with DMS and Cost Survey SES activities by collecting information from both secondary and primary sources (direct interviews with people in the affected area, material suppliers, house contractors), and from both those affected and those not affected. The government rates will be adjusted, as necessary, based on the findings of a Land Acquisition Cost Fiction Committee (LACFC). Compensation rates will be continuously updated to ensure that PAPs receive compensation at replacement cost at the time of compensation payment.

Sample Questionnaires for Socioeconomic Survey of PAP

Municipality: Ward No. : Tole/settlement: Date of Interview: Name of RespondentiInterviewee: Name of Interviewer: Date of Interview:

1. Background Information

Name of Household Head: Age: Sex: Caste/Ethnicity:. Mother tongue: Religion:

2. Personal Information

2.1 How long have you been living in this village? If a migrant, number of years in the village

140 2.2 Does the family live here all year long? If not, how long: __ months ofthe year

2.3 Where do you live fot the remaining months? (District, VDC, Village)

2.4 Please provide the following information for each of your household members (Start from the respondent)

. SN Name Relation Age Marital Sex Education Skill/training I Main Secondary Monthly i with status occupation/ Occu)ation income HH types of I 2 head work I +=i 5 6

3. Landholding 3.l Do any members ofthis household own land within the project area? If yes,o b'tam t h e D o II owmg m. D ormation fior eac h o f t h e h ousehid' 0 s Ian d parce s: I Name Kitta Types Total Area Quality of Land use Location ofthe land • of No. of (ropanilkatha land owner land RIK AID P/ MunicipalitylVDC Ward No

3.2 Do any members ofthe household own land outside the project area? If yes, please provide the following information:

Name ofthe Relation Kitta Types i Total Area Quality I Land Location members with HH No. of (ro~ani!katha ofland Use Head land RIK AID P/ District VDClMuni. L- District VDClMuni. District VDClMuni. 3.3 Do any members of this household lease land from other persons? If yes, please provide the following information:

I Name ofthe I Relation Kitta Types Total Area Quality Land i Location i members withHH No. of (ropani/katha of land use Head land RIK AID PI District VDClMuni. District

141 IVDCiMuni. Dlstnct I I I I I I VDCIMuni. 3.4 Do any members of this household rent out land to other people? If yes please provide the following information:

Name ofthe Relation Kitta Types Total Area Quality Land Location members with HH No. of (ropani/katha of land use Head land RIK AID PI District VDCIMuni. District VDCIMuni. District VDCIMuni.

3.5 Did you sell any of your land in the last 3 years? If yes, how much land have you sold? (Area and rate per unit)

4. Land Acquisition 4.1 Temporary land acquisition Name of the Kitta No. Land use Total size of Land to be acquired owner the land Area in % of the total ropanilkatha size of the land

Residential Commercial Agricultural Forest Others

4.2 Permanent land acquisition Name ofthe Kitta No. Land use Total size of Land to be ace uired owner the land Area in % of the total ropani/katha size of the land Residential Commercial Agricultural Forest Others

5. Buildings

142 5.1 What is your occupancy status ofthe house you are living in (own, rental, provided free of charge by landlord/employer, provided free of charge by family/relative, squatting, other)? 5.2 If you own building, Please provide the following information

Use of I Types of Building: Total No. of No. of Year Built Building (1 ifconcrete, 2 ifsemi Number Story/floor Rooms I concrete, 3 if earthen, 4 ifkioskltin shed/wooden

cabin, etc I i i 1 2 3 4 i • Residence Business i Kitchen Cattle shed I l I 5.3 Apart from the above mentioned do you own other buildings outside the project area? If yes, please mention the type and location

I 1 Use Type Location District VDClMunicipality I I

6. Impact of the Land Acquisition (Impacts mean the adverse effects to the objects presently established on the affected lands, whether the acquisition is temporary or permanent) 6.1 Affected trees and plants

1 Name ofthe Types fuse Size Number I affected trees and plants i Timber ~ Fodder Fruit Other

6.2 Affected Building

Use of Types ofaffected Number of Year of Year of affected • buildings (I if . floors construction occupation · concrete,2 ifsemi building concrete, 3 if I 143 earthen, 4 if foot kiosk/tin shed/wooden cabin, etc Residential Business Mixed use Cattle shed

7. Income and Expenditure 7.1 Income Please provide the following information on your household's income over the past year:

SN Particulars Annual Income (NRs) Remarks 1 A2riculture Food crops Cash crops Vegetables Fruits Others 2 Animal Husbandry 3 Other Sources Service Daily wage/pottering Pension Business Cottage industries House rent Income from land Fishinglherb collection Trade/vending/small business Manufacturing Artisan work Remittance Interests/ share Others Total

7.2 Expenses

PI ease provi'd e teoh £ II owmg m. £ormation on your house hId'0 sex )enses over the past year: ISN Particulars Unit Amount Price NRs Total NRs I • ! l. Rice 2. Oal I 144 3. Maize 4. Wheat 5. Vegetables 6. Milk/curd 7. Meat/fish 8. Oil/Ghee 9. Spices l 10. Salt i 11. Sugar I 12. Tea

i 13. Firewood 14. Electricity 15. Kerosene 16. Medicine last year 17. Education last year 18. Clothing last year 19. Travel ! 20. Family/Community Responsibilities 21. Water bills 22. Any other taxes paid . to Government 23. Interest paid last year

i on loans taken I 24. Donations to political parties 25. Celebration last years 26. Others Total

7.3 Do you have any kind of outstanding loan? If yes, please provide the following information: i Purpose/ Amount in Date of . Interest rate Loan Who is the

Type of loan Rs. loan amount ! loan provider i Iyearly I :~id till I

8. Perception towards the project 8.1 What are your views on the proposed project (positive, negative, neutral, don't know/too early to say)? 8.2 Are you aware of the Social Management Framework and the Entitlement Matrix, would you be satisfied with this compensation proposal (yes, no)?

145 If no, please provide reasons.

8.3 Which of the following compensation options would be suitable to you?

Land for land and house for house Land for land and cash for house Cash payment for all losses Other (specify)

8.4 If you prefer cash compensation, please specify the reason.

To purchase land To build house To pay debt To start business Other specify

8.5 What kind of resettlement support do you expect in case your residential house and major portion of land is affected by the project construction works?

Resettle by self in the nearby locality Resettle as community if the project offers this option in the nearby locality Resettle as individual outside the locality Resettle as community if the project offers this option in the outside project locality

8.6 If the project affects your livelihood and property what kind of rehabilitation opportunitiesl benefits do you expect from the project?

Employment Skill Training Soft Loan Others (specify) 8.7 Please tell us whether you agree or disagree with the following statements about the project.

Q Statement A D Don't Know a. I support the project because it will lead to the development of the area. b The project will have a negative effect on my standard of living c As long as fair compensation is paid for my affected assets, I will support the project. d The project will provide opportunities for me to sell my crops/vegetables e The project will provide me the opportunity to start a small business f We'll be able to improve our livelihoods by earning money on construction jobs.

146 Thank you!

Annex 5 Guidelines for Preparation of a FULL/SHORTI3 Resettlement Action Plan (RAP)

A. Introdnction 1. Give a brief introduction to the sub-project and its components 2. Describe the components causing land acquisition/alienation and resettlement 3. Provide an overall picture on the estimates of land acquisition and R&R B. Measures to Minimize Resettlement 1. Describe the efforts made, results achieved and mechanisms in place to minimize displacement/loss of livelihood/income C. Social Screening and Impact Assessment (Census and Socioeconomic Survey) I. Summarize outcome of Social Screening as initial assessment of social impacts including in terms of involuntary resettlement and impact on vulnerable communities and indigenous people 2. Describe the process of conducting the census/socio-economic survey/enumeration 2. Discuss and analyze the results of the census/socio-economic survey/enumeration 3. Identify all categories of impacts and the extent of impact on each affected D. Consultation and Involvement of PAPs 1. Describe various stakeholders involved in the sub-project 2. Dovetail qualitative inputs from consultations, on quantitative survey information 3. Describe how consultations would be continued across all stages ofthe subproject 4. Describe how the information on the sub-project will be disseminated to PAPs E. Entitlement Framework 1. Provide clear definitions to the key terms like PAF, PAP etc., as specified in the SMF 2. Describe R&R entitlements for each category of impact and methods of valuation used for land, structures and other assets under the sub-project 3. Provide the full matrix of the Entitlements as in the SMF with specific numbers of people affected in each category. F. Relocation, if required 1. Assess the need for a relocation site along with the details of facilities to be provided like free housing, water, electricity, roads, sewerage and sanitation etc. 2. In case, the PAPs are to construct houses, provide details of compensation/provision for coverage under government housing scheme etc., to help them construct houses. 3. Specify the involvement and role of the PAPs in selecting the resettlement site and also list the proposed sites selected along with number of affected families to be relocated. 4. Describe respective mechanisms for (i) procuring/acquiring/alienating (ii) developing and (iii) allotting resettlement sites G. Income Restoration 1. List income restoration measures for rehabilitating PAPs as per the provisions in SMF 2. Briefly spell out the restoration strategies for each category of PAPs, and describe institutional, financial and technical arrangements/aspects involved

13 A short resettlement plan will cover the same issues as that of a full resettlement plan, as relevant, but in less detail. However, the short resettlement plan shall ensure that adequate compensation, rehabilitation, and relocation arrangements are planned and budgeted 147 3. Describe the consultation process in finalizing strategies for income restoration 4. If income restoration involves change in economic activities of PAPs, specify what capacity building measures would be undertaken, access institutional funds/ credits/ markets and preparation and implementation strategy. 5. Describe steps to be taken to reduce any impoverishment risks the PAPs may face. 6. Describe the process to monitor effective implementation of income restoration

H. Institutional Arrangements 1. Describe institutions & officers responsible for coordinating and implementing: (a) Delivery of entitlements (b) R&R program coordination and (c) RAP implementation 2. Describe the external (non-Project) institutions/departments involved in the process of resettlement and restoration of income such as land development, land allocation, credit, training for capacity building mechanisms etc., as the case may be. 3. Discuss institutional capacity, understanding on R&R & areas for improvement I. Monitoring and Evaluation 1. Describe overall internal monitoring process for the sub-project 2. Define key monitoring indicators for R&R and participation and provide a list of these indicators to be used for internal monitoring 3. Describe frequency of reporting and contents of reports 4. Describe the process for integrating feedback from internal monitoring into implementation 5. Describe financial arrangements for external monitoring including process for awarding and maintenance of contracts for the entire duration of R&R 6. Describe the methodology for external monitoring 7. Describe frequency of external reporting and its contents J. Redressal of Grievances 1. Describe the structure and process of Grievances Redressal Mechanisms (GRM) at sub-project level including a step-by-step process for registering and addressing grievances, consultations, response time etc., 2. Describe the mechanism for appeal for PAPs to approach courts if GRMs fail. K. Implementation Schedule 1. List the chronological steps in implementation of RAP including identification of agencies responsible for each activity along with a brief explanation of each activity 2. A month-wise implementation schedule of activities to be taken as part of RAP 3. Description of the linkage between R&R implementation and initiation of civil works for each of the sub-project component L. Costs and Budgets 1. Clear statement of financial responsibility and authority 2. Indicate that costs of R&R are included in the overall sub-project costs 3. Provide a cost-wise, item-wise budget estimate for entire R&R costs including administrative, monitoring and evaluation expenses incurred for R&R implementation

148 Annex 6 Outline Structure of an IP - Vulnerable Community Development Plan The identities, cultures, lands and resources of IPs groups are uniquely intertwined and vulnerable to changes caused by development programs. Because of this uniqueness and cohesiveness, sub-projects that include Janjati and DaHt settlements, should ensure that these groups are not disadvantaged by these development interventions and the proposed mitigation measureslbenefits are culturally compatible. This annexure provide a set of guidelines for addressing impacts on IP and vulnerable population through the preparation ofan IP-VCDP.

SUIiUtested Guidelines of Preparation of an IP-VCDP A. The Contest of IP-VCDP and its Objectives I. Provide overall background and context ofpreparing IP-VCDP 2. Describe the objectives of IP-VCDP B. Legal Framework i 1. Establish the legal status of the IPs and vulnerable groups identified under the sub-project 2. Spell out what is required by the relevant Acts and rules

C. Baseline Data 1. Include accurate, up-to-date maps and photographs of the sub-project area showing the areas inhabited by IPs and vulnerable people. 2. Present a description of the subproject and implication for IPs and vulnerable communities and analyze the social structure and income sources and socioeconomic level ofthe population by category of gender, caste and ethnicity 3. Provide disaggregated baseline data on the magnitude and nature ofnegative impact and losses from project intervention i 4. PrOVIde natural resource and asset holdmg, land tenure and lIvelIhood related mformatlOn • 5. Capture the full range ofproduction and marketing activities in which these people are en a ed. D. Strategy for Local Participation 1. Documentation of consultations with vulnerable groups to ascertain their views about the . project design and proposed mitigation measures i 2. Devise mechanisms for participation by these people in decision making throughout subproject planning, implementation, and evaluation. 3. Provide effective channels for communicating local preferences, representation and appropriate methods to guarantee full local-level participation with special attention to IPs and VCs and their or anizations IPOs and CBOs re resentin VCs ). E. Mitigation Activities 1. Propose assistance to these people including skill training and income generating activities. Ensure that activities that draw upon indigenous knowledge are used as they succeed better than those that are entirel new rinci les and institutions. F. Institutional Arrangement 1. Provide institutional structure and linkage with other project arrangement to implement IP­ i VCDP. ·2. Provide brief description about the adequacy of experienced professional staff and ability of indigenous peoples' own organizations, and local NGOs to interact with specialized government lliinstitutions. 149 3. Describe the role IPs and VCs and their organizations (IPOs and CBOs representing VCs will have in the implementation process. G. Implementation Schedule 1. Prepare an implementation schedule with benchmarks by which progress can be measured at appropriate intervals. H. Monitoring and Evaluation 1. Suggest monitoring mechanism (internal and independent monitoring institutions/officials. Explore the possibility of finding Janjati or Dalits peoples' own organizations for sub-project management 2. Prepare monitoring reporting formats for assessing sub-project implementation I. Cost Estimates and Financing 1. Prepare a plan which detailed cost estimates for planned activities and investments

150 Annex 7 Details of the Stakeholder Consultations

Consultation Held to Discuss Issues related to IP and VC groups: The Consultations with IP and VC groups were held during 28 January to 5 February, 2011. The local stakeholders and affected people were informed about these meetings through public notices and telephone request. At the meetings, the affected people and stakeholders were informed about the likely social impacts of UODP activities and about compensation, resettlement and rehabilitation processes. The table below summarizes the key issues raised by IPs and vulnerable people of the participating municipalities.

Municipalities Issues related to IPs and Vulnerable Communities Required Attention Mechinagar • Involve IP and vulnerable group's representative bodies such as ethniclDalitiwomen organizations, or any other traditional institutions in subproject identification and implementation and monitoring processes. • Provision of income generating programs; enhancement ofcultural competence • Provision offair compensation for lost assets and natural resources by the project Itahari • Involve IP and vulnerable group's representative bodies such as ethniclDalit/women organizations, or any other traditional institutions • Provision offair compensation for lost land, assets and natural resources • Skill development training for IPs including other vulnerable communities Dhankuta • Involve IP and vulnerable group's representative bodies such as ethniclDalitiwomen organizations, or any other traditional institutions in subproject identification and implementation and monitoring processes. • Skill development training for IPs including other vulnerable communities • Employment opportunities for the IPs, women and Dalit, during construction and operation phase ofthe project based on their qualification and skills with priority Lekhanath • Livelihood restoration program for the affected households who depend heavily on the natural resources such as fish and lake based activities • Involve IP and vulnerable group's representative bodies such as ethniclDaHtiwomen organizations, or any other traditional institutions in subproject identification and implementation and monitoring processes. • Employment opportunities for the IPs, women and Dalit, during construction and o eration hase of the ro'ect based on their ualification and skills with riori Baglung • Involvement ofIP and vulnerable group's representative bodies such as ethnic/DaHt/women organizations, or any other traditional institutions in subproject identification and implementation and monitoring processes, • Employment opportunities for the IPs, women and Dalit, during construction and operation phase ofthe project based on their qualification and skills with priority • Provision of income generating programs; enhancement ofcultural competence • Skill development training for IPs including other vulnerable communities, Tansen • Involve IP and vulnerable group's representative bodies such as ethniclDalitiwomen organizations, or any other traditional institutions in subproject identification and implementation and monitoring processes, • Skill development training for IPs including other vulnerable communities • Employment opportunities for the IPs, women and Dalit, during construction and operation phase of the project based on their qualification and skills with priority

151 Provided below is a detailed summary of consultations held at Central and Municipal levels.

Central Level Venue: Office of Municipal Management Division, MLD Date: 4th January 2011 Time-ll AM Major Issues of the Summary of the Findings on the Responses of the Participants Discussion Institutional Structure Structurally, MLD is divided into four divisions and 14 sections. It has a Municipal Management Division to look after municipalities which comprises of three sections: the Municipal Management Section, the Municipal Planning Section and Environment Management Section. It appears that Environmental Management Section focuses almost exclusively on environmental impact assessment for municipalities since it is located under the Municipal Management Division. However, In reality, the environment management section works for the ministry as whole. The division is headed by a joint secretary and the sections are headed by under secretaries. Capacity to Handle There are no any units, focal points to look after the issues ofsocial management ofthe Social Safeguard Issues urban development projects. It appears that the existing concerns of the division are focuses on the administration and delivery rather than focusing on social planning and management in urban situations. Social issues like gender equity and social inclusion are critical to effective local governance, but at present the division and sections are seriously lacking of social scientists to address the social concerns related to gender, equity and social justice that may arise due to the project.

Past Experience of i Ministry of Local Development (MLD) along with Local Bodies (DDC, Municipalities. Social Management and VDC) through Community Organizations and Non-Government Organizations has been implementing Local Governance and Community Development Program (LGCDP). It is a national program framework of support for decentralization, local governance, and community development with the intent of working throughout the country and at all levels of the local governments. The program approach ensures inclusiveness and gender equity, community-led local development, rights-based participatory approach, transparency and downward accountability at all levels. Human Resource The division is headed by a joint secretary and the sections are headed by under Available secretaries. There is a lacking of focal point with adequate human resources to ensure that it take responsibilities for social safeguards, monitoring and capacity building for • implementing urban development projects. I Composition of A committee headed by an urban development expert and members representing from Grievance Redress national NGOs, Association of Municipality and PCO. I Committee (GRC) Capacity Building Recruitment of Social Scientist to look after social safeguard issues Training on Resettlement and Rehabilitation Management, Preparing Communication Strategy Documentation and orientation on the relevant World Bank and GoN social safeguard policies, laws and legislations, constitutional provisions etc. Participants of the Consultation: l. Mr. Reshmi Raj Pandey, Joint Secretary, Ministry of Local Development 2. Mr. Govinda Bahadur Karki, Under Secretary, Ministry ofLocal Development

152 3. Mr. Binod Prakash Singh, Under Secretary, Ministry of Local Development 4. Mr. Rishi Ra' Ach a, Section Officer, Minist of Local Develo ment Venue: Premises of DUDBC Date: 9th January 2011 Time' 11 PM Major Issues of the Summary of the Findings on Responses of the Participants Discussion

Institutional Structure DUDBC under Ministry of Physical Planning and Works (MPPW) is primarily a technical department focusing GoN Buildings, Housing and Urban Development. DUDBC has 16 sections in 3 divisions. The Housing Division and the Building Construction Division covers all 78 districts including urban and rural areas. Under the Urban Development Division, DUDBC is responsible for urban development in the 58 municipalities. At the divisional level DUDBC has 24 divisional offices (Class A=4, Class B= 15, Class C=5). In addition there is a Building Research and Training Institute and one Special Building Construction and Maintenance Divisional office (for PM, Judges building etc.). Capacity to Handle Social Its main strength lies in the area of design, construction management and Safeguard Issues supervision. DUDBC has experience in preparing Periodic Plans, GIS maps, Urban Maps, Physical Development Plans and Master plans. It has also developed plans for the development of Corridors. The experience on the social aspects of development is very limited and minimal. DUDBC has no any sections, units or focal points involved for social . management of the projects. Past Experience of Social At present the institutional development and project management experience Management within DUDBC resides mainly in the UEIP project which is one of the large donor project being implemented by it. Through this project DUDBC has gained experience in dealing with the municipalities and preparing and implementation i ofLand Acquisition and Resettlement Action Plan. Human Resource Available Of the total 580 existing staff, DUBC has not a single position for social scientist (sociologist, anthropologist, rural development, geography etc) which clearly indicates that DUDBC has no qualified human resources to address social issues I arising from the implementation of UGDP: NETP. However, an institutional development study for DUDBC (2009) has recommended for six new posts -­ statistician officer-I, GIS specialist officer -I, economist -I, sociologist-I, environmentalist officer -1, and computer system engineer-1 in DUDBe. Composition of Grievance A committee headed by Project Director and members representing from PCO Redress Committee (GRC) and CSO working in the similar fields. Capacity Building Recruitment of Social Scientist to look after social safeguard issues Training on Resettlement and Rehabilitation Management, Preparing Communication Strategy ! Documentation and orientation on the relevant World Bank and GoN social i safeguard policies, laws and legislations, constitutional provisions etc. Participants of the Consultation: I. Dr. Mahendra Subba, Deputy Director General, DUDBC 2. Mr. Kiran Giri, Sr. Economist, DUDBC 3. Mr. Prakash Raghubanshi, Sr. Pfanner, DUDBC

153 Venue: Premises ofTDF Date: yd January 2011 Time'14 PM Major Issues of the Summary ofthe Findings on Responses of the Participants Discussion Institutional Structure TDF is headed by the Executive Director. TDF has three departments namely: business development and technical assistance, financial management, and monitoring, evaluation and administration. The business development and technical assistance division of TDF will be responsible project planning, and implementation. The monitoring of sub project and its activities will be done through monitoring, evaluation, and administration unit ofTDF. The TDF organizational structure has not changed much since the 1980's. It is weak in the area of marketing, social management and safeguard appraisal, long term projections, private sector financing, technical support to clients, and monitoring. Capacity to handle social TDF has a development outlook as stated in the TDF Act and articulated in its safeguard issues vision. Its mission is to enhance the quality of life of the people by promoting the sustainable urban development in Nepal. However, this orientation and focus is not properly reflected in the activities of the TDF and in the management. Though the appraisal process is required to cover, social aspect of the proposal, TDF has no specific section, unit focal points with qualified social scientists to deal with social issues of the proposal. No data is being collected on the social and economic indicators of the municipalities. It appears that the exposure to social assessments and capacity to dealing with issues related to gender equity and social inclusion, preparation of R&R policy, vulnerable community development plans and any arrangement addressing such issues is not in place in TDF. Past Experience of Social The TDF is currently involved in two major projects funded by ADB; STWSSP Management and UEIP, both under MPPW. The TDF has assisted two classes of projects developed under UEIP: (i) revenue generating projects and (ii) small projects. In all cases the implementing have been either municipalities, or functional Departments such as DWSS. TDF could not gain any experiences of addressing social management issues form these projects. TDF appears rather weak in social safeguard policy formulation and implementation. Human Resource Available At present it has 36 employees out of the total staff strength of 64. Out of 36 employees, none of the staff in TDF have specific qualification associated with social safeguard except one socio-economist having degree of Bachelors of Art. The Bachelor degree in Arts may not been sufficient for conducting complex socio-economic analysis needed for implementation of socioeconomic infrastructure component ofthe UGDP: NETP. Composition of Grievance A committee headed by an urban development expert and members representing Redress Committee (GRC) from national NGOs, Association of Municipality and PCO. Capacity Building Recruitment of Social Scientist to address the social safeguard issues arising from UGDP Training on Resettlement and Rehabilitation Management, Preparing Communication Strategy Documentation and orientation on the relevant World Bank and GoN social safeguard policies, laws and legislations, constitutional provisions etc.

154 Participants of the Consultations: 1. Mr. Sushi! GyawaJi, Executive Director, Town Development Fund 2. Mr. Binod Neupane, Deputy Manager, Town Development Fund 3. Mr. Rajendra Shrestha, Engineer, Town Development Fund 4. Mr. Subas Raj Panta, Socio-economist, Town Development Fund

Municipality Level Location: Mechinagar Municipality Date: 27 and 28 January 2011 Time: 2 PM & llAM Major Issues of the Summary of the Findings on Responses of the Participants Discussion Project Implementation The Municipal Coordination Committee (MCC) should be inclusive to reflect the Arrangements cultural diversity and spatial variation ofthe municipality. The participants proposed the composition of MCC: EO, representative from political parties, government line agencies present in the municipality, IPs, Dalits, Women and representatives from local NGOs working in similar fields. They also emphasized that the composition must be representative to the spatial variation of the municipality. The municipal level Project Management Team (PMT) should have a provision of hiring social safeguard expert to implement SMF. Likely social Impacts in Removal of squatters and encroachers from the footpaths causing livelihood losses­ terms of land acquisition even though they are illegal. and impacts on IPs and Few buildings and small houses ofRajbanshis ( IP of Jhapa) need to be removed other vulnerable community Land ownership should be transferred from Land Development Company to Municipality before starting construction. Mahendra Duwar Cooperative should be rehabilitated before construction of minimarket. Temporary shops owners I residences of the squatters and encroachers may loss their shelter. Resettlement Policy and Project must address the issues of land acquisition and compensation pragmatically entitlements rather than in terms oflegal requirements. Opportunity for local employment must be guaranteed. The local people were not aware about the standard (dimensions) of the subprojects (e.g. road) and demanded for adequate consultation and communication about standard: norms and operation modality of subprojects Rehabilitation and compensation modality for those who will lose unregistered (ai/ani) land. Social Screening and The screening and categorization of impact on IR and IPs should be initiated by Impact categorization either by the relevant staff or, if there are no such skills, then on contract by procedures external consultant. The review of the screening report should be done by the head of Community Development section. The Executive Officer provides the approval. Social Safeguard Specialist at PCO finally endorses the result of screening and cate orization of im act on IPs and IR. Capacity to handle social The capacities of existing municipal administration need to be upgraded to address • safeguard issues all the social issues related to R&R and IPs that may arise as a result of the project. Past experience of social It has been implementing some programs related to the socioeconomic development mana ement of women, Dalits, Jana' atis and other mar inalized communities. The are mainl

155 focused on delivering basic services to the disadvantaged and indigenous people, Dalits, women, disabled and other vulnerable groups Human resource available The existing human resources are adequate to handle the social safeguard issues of the project if they are provided basic orientation and training on social management. However, the project should be flexible to get expertise from outside as and when required. Composition of Grievance A committee representing from Dalits, Women, IPs and civil society organizations Redress Committee (GRC) including an expert nominated by PMT. The committee is headed by a respected member ofCSO. Consultation and It publishes annual budget and program booklet and distributes to board members Information Disclosures and the representatives of the political parties. There is a limitation on community participation due to the fact that there are few programs for public consultation. The project should have mandatory provisions of disclosure of financial figure, planning and project selection, technical and overall evaluation on a regular basis to general public as per LSGA and Right to Information Act prescription. Summaries of the RPIIPPs ofSMF should be made available in Nepali language to the APs, local NGOs, and public offices in the sub-project site .

• Monitoring & Reporting Annual progress review meetings are held where LAs, NGOs, FNCCI and political parties' representative are invited for review. Project should involve the IP and vulnerable group's representative bodies such as ethniclDalit/women organizations, or any other traditional institutions in subproject identification and implementation and monitoring processes Capacity Building Training on Consultations and Social Assessment Surveys Training on Resettlement and Rehabilitation Management Training on Preparing Communication Strategy Documentation and orientation on the relevant World Bank and GoN social safeguard policies, laws and legislations, constitutional provisions etc. Framework for Social Conduct biannual public hearing, FM broadcasting of major activities and Accountability achievements, involvement of organizations of IPs, Dalits, and women along with local user groups in project identification, implementation and monitoring, made clear provision ofthird party compliance of social safeguard measures. Details of the Participants: S.N Full Name Gender Post or Affiliated Address Contact Occupation Organization Number 1. Bhawanath Khatiwada M Executive Officer Mechinagar Chandragadi 9852678801 2. Ananta Prakash Wasti M Administrative Mechinagar Jorapani- 8 9852672758 Chief 3. Rajan Kumar Bhetwal M Account Officer Mechinagar Mechinagar 10 9852677660 4. Kamal Prasad Koirala M Engineer Mechinagar Mechinagar6 9852672684 5. Dipendra Karki M Food Officer Mechinagar Mechinagar 6 9852677674 6. Indra Bahadur Thapa M Engineer Mechinagar 7. Shambu Poudel M Office Assistant Mechinagar Mechinagar 3 9842719384 8. Gokul Nepal M Junior Engineer Mechinagar Mechinagar 3 9842652105 9. Chakrapadi Khanal M Revenue Mechinagar Mechinagar 2 9842624204 Inspection 10. Adhiklal Mochi M Sweeper Mechinagar Mechinagar 11. Til Bahadur Rajbansi M Supervisor Mechinagar Mechinagar

156 12. Indra Bahadur Thapa M Engineer Mechinagar Mechinagar 1 9852672738 13. Indira Kharel F Social Mobilizer Mechinagar Mechinagar 9842654994 14. Jayanti Kharel F Social Mobilizer Mechinagar Mechinagar 10 9842641872 15. Ramesh Kumar Karki A. Municipal Mechinagar Sinduli 9841788503 Facilitator 9806037628 16. Amin Rajbansi M President Nepal Sadbhawana Mechinagar 9806016330 Party Municipality 13 17. I Madav Rajbansi M Co-Secretary Nepal Sadbhawana Mechinagar 9806086993 Party Municipality 12 18. Raju Mahatjan M Member Mechinagar Mechinagar 9852672762 Municipality Municipality 10 Committee I 19. Keshav Raj Pandey M Chairperson Mechi Industry & Mechinagar 9852671137 Commerce Association 20. Deepak Pd.Pokharel M Managing Kakarbitta Mechinagar 9842629941 Director Drinking Water Municipality 10 21. Laxmi Pd. Upreti M Chairperson UML Mechinagar Mechinagar 9852672300 Committee Municipality 10 22 Deepak Bhandari M Chairperson UMLMechinagar Mechinagar 9852673226 1 . Committee Municipality 5 i 23. Bandan kumar Bunda M Member UML District Mechinagar 9804913604 Municipality 11 24. Prem Samwangambe M Municipality Mechinagar Mechinagar 9852677727 President Municipality Municipality 5 25. Bhawanath Khatiwada M Office Officer Mechinagar Chandugadi 8 9852678801 Municipality 126. Somraj Dhaka! M Chairperson Samudayik Vikash ~eChinagar 9852678187 Manch unicioalitvlO ! 27. Gopal Basnet M Managing Mechi Industry & Mechinagar 9842634242 Secretary Commerce Municipality 1 I Association 28. Januka Oli F Secretary Thople Viran Mechinagar 98426652493 Forest Committee Municipality 4 i 29. Mira Kafle(Pokharel) F Chairperson WAN Nepal Mechinagar 9842704654 Municipality 5 30. Milan Rai Prasai Member UCPN( maoist) Mechinagar 3 9842672355 31. Bindu Gurung F Member UCPN(maoist) Mechinagar 10 ! 32. Teeje Raut F Chairperson Ghodajeen Tol Mechinagar 9842686617 vikash Sanstha Municioality 8 : 33. Pagal Singh M Rastriya Jana Mechinagar 9807964961 Morcha Municipality ·34. Pradhan Karki F Chairperson Makhmali Mahila Mechinagar 9852672991 Bachat tatha rin Municipality 10 sahakari I i 35. Sabitri Khadka F Chairperson MahiJa Vikash Mechinagar 9842744681 Sahakari Municipality 10 36. Kamal Prasad Koirala M Engineer Mechinagar Mechinagar 9852672684 Municipality Municipality 37. i Indra Bd. Thapa M Engineer Mechinagar Mechinagar 9852672738 Municipality Municipality . 38. Dipendra Karki M Food Officer Mechinagar Mechinagar 9852677674 Municipality Municipality 39. Mukti Poudel M Media Person Mechinagar Mechinagar 9842704127 Municipality Municipality10

157 40. I Indra Prasad Baskota M Chairperson Chetansil Yuva Mechinagar 9804942146 Pariwar Municipality I 41. Ananta Prakash Basti M Officer Mechinagar Mechinagar Municipality Munici 42. Kishwor Bhandari M RPP Regional RPPNepal Mechinagar 9804922117 Committee Municipality 12 Secretary 43. Govinda Oli M RPP President RPPNepal M /,,-.... 195183 Municipality 11

Location: Dhankuta Municipality Date: 29 January 2011 Time" 2 PM Major Issues of the Summary of Findings on Responses of the Participants Discussion Project Implementation The Municipal Coordination Committee (MCC) should be inclusive to reflect the Arrangements cultural diversity and spatial variation (e.g. Hile and Dhankuta) of the municipality. The participants proposed the composition of MCC: EO, representative from political parties, government line agencies present in the municipality, IPs, Dalits, Women and representatives from local NGOs working in similar fields. They also emphasized that the composition must be representative to the spatial variation of the municipality.

Likely social Impacts In Acquisition of private land buildings in commercial location( entry point) of the terms of land acquisition proposed Triveni- Yakchana Road and impacts on IPs and Conflict may arise in terms of water using rights and ownership of the sources other vulnerable between Hele and Dhankuta user groups community Risk of exclusion of vulnerable communities due to compulsory financial contribution Community participation may be low due to the provision of compulsory contribution ofall users

Resettlement Policy and Local people residing lower part of the proposed Triveni- Yakchana Road show entitlements willingness to provide land for construction of the road with their full agreement and consent without any compensation packages. Foe other parts, project must address the issues of land acquisition and compensation pragmatically rather than in terms oflegal requirements. Opportunity for local employment must be guaranteed. The local people were not aware about the standard (dimensions) of the subprojects (e.g. road) and demanded for adequate consultation and communication about standard, norms and operation modality of subprojects Rehabilitation and compensation modality should be in place for those who will lose unregistered (ai/ani) lands. Social Screening and The screening and categorization of impact on IR and IPs should be initiated by Impact categorization either by the relevant staff or, if there are no such skills, then on contract by procedures external consultant. The review of the screening report should be done by the head of Community Development section. The Executive Officer provides the approval. Social Safeguard Specialist at PCO finally endorses the result of screening and categorization of impact on IPs and IR. Capacity to handle social The capacities of existing municipal administration need to be upgraded to address safeguard issues

158 all the social issues related to R&R and IPs that may arise as a result ofthe project Past experience of social It has been implementing some programs related to the socioeconomic development I management of women, dalits, Janajatis and other marginalized communities. They are mainly : focused on delivering basic services to the disadvantaged and indigenous people, Dalits, women, disabled and other vulnerable groups Human resource available The existing human resources are adequate to handle the social safeguard issues of the project if they are provided basic orientation and training on social management. However, the project should be flexible to get expertise from outside as and when required. Composition of Grievance The composition ofthe CRC should include representative from Dalit, Women, IPs, : Redress Committee (GRC) Civil Society and Expert They suggested that the committee should be headed by CSO member. Consultation and It publishes annual budget and program booklet and distributes to board members Information Disclosures and the representatives ofthe political parties. There is a limitation on community participation due to the fact that there are few programs for public consultation. The project should have mandatory provisions of disclosure of financial figure, planning and project selection, technical and overall evaluation on a regular basis to general public as per LSGA and Right to Information Act prescription. Summaries of the RPIIPPs of SMF should be made available in Nepali language to : the APs, local NGOs, and public offices in the SUb-project site. Monitoring & Reporting Annual progress review meetings are held where LAs, NGOs, FNCCI and political parties' representative are invited for review. Project should involve the IP and vulnerable group's representative bodies such as ethniclDalit/women organizations, or any other traditional institutions in subproject identification and implementation and monitoring processes Capacity Building Training on Consultations and Social Assessment Surveys Training on Resettlement and Rehabilitation Management Training on Preparing Communication Strategy i Documentation and orientation on the relevant World Bank and GoN social safeguard policies, laws and legislations, constitutional provisions etc. Framework for Social : Conduct biannual public hearing, FM broadcasting of major activities and Accountability achievements, involvement of organizations of IPs, Dalits, and women along with local user groups in project identification, implementation and monitoring, made I clear erovision ofthird earty compliance of social safeguard measures. Details of the Participants:

S.N Full Name Gender Post or Affiliated Address ! Contact i Occupation Organization Number

1. Dham LalRai M RPP Ne~al Chairperson Aaribais 9742066197 2. Yagya Bd. Karki M Rastriya Jana Rastriya Jana Dhankuta 9842111186 Morcha Morcha Municipality 2 3. Hari Bhakta Rai M Rastriya Jana Chairperson Dhankuta 9842071249 Morcha Municipality 7 4. Tika Prasad Ghimire M RPPNepal Chairperson Dhankuta 9842109605 Municipality 7 5. Dr. Bidur Pr. Gautam M Animal Specialist District Animal Dhankuta 9842388144 Service Office Municipality 7 i 6. JagatLimbu M UCPN(Maoist) Party member Dhankuta 9842062316 I

Municipality 5 i

159 7. Yerakh Bd. Limbu M Rastriya Jana Rastriya Jana Dhankuta 9814989496

Morcha Morcha Municipality 5 I 8. Faud chongwang M Vice Chairman Dhankuta 9814382803 Municipality 7 9. Dhojraj Bastola M Coordinator Tole Dhankuta 9842256155 Development Municipality Committee 10. Bogendra Thapa M Secretary Jana Chetana Dhankuta 9842062449 yuva Club Municipality I II. Amrit Bd. Rai M Road Chairperson Triveni Ghat Dhankuta 9848022164 Municipality 8 12. Ramananda Bhattarai M Land Reform Land Reform 9849182496 Committee Committee Municipality 9,Bara Chairperson Office 13. KulPd. Rai M Chairperson Dhankuta 7 9842048296 14. Gaurav Karki M Secretary Dhankuta I ~ngheme 15. Y ogendra Pd. Yadav M Proj Dhankuta 9844036577 ta 16. Nira Chapagain F Women & Child Women's & Dhankuta 026520156 Welfare Officer Child Welfare Office 17. Santa Shrestha F Treasury Drinking Water Dhankuta 026520522 Consumer Organization 18. Rajesh Silpakar M Technician Regional Dhankuta 9841458279 Hospital & Service Office 19. Raju Neupane M Architect Urban Dhankuta 9841543015 Development Committee 20. Dhron Pd. Guragain M Social Service Red cross Dhankuta 9842042173 21. Narayan Joshi M Chair person Salv-Nepal Dhankuta 6 22. Birash Pradhan M Treasury NC Dhankuta 9 23. Parvati Rai F Social Service Nepal lana Jati Dhankuta 9842159798 Federation of Association 24. lshwor Rogu M Subordinate Dhankuta Dhankuta 9842038093 Officer municipality Office 25. Bhuvan Singh Rai M Subordinate Dhankuta Dhankuta 9842109051 Officer municipality Office 26. Layen Rai M Municipality Dhankuta 7 Office 27. Rajesh Kumar Shrestha M Municipality Dhankuta 9842062861 Office 28. Tej Bd Thapa M Waste and Municipality Dhankuta 9842091853 Environment Office management 29. Nush Raj Shrestha M Managing Municipality Dhankuta 9842062969 Director Office 30. Krishna Pd. Bhandari M VDe Soc,et""~. . Dhankuta 9842089411

31. Aadap Hariya M Chairperson Kirat Aadap Dhankuta 9842110715

160 Hariya 32. DeepakRai M District Motivator DDC Dhankuta Dhankuta 9742066163 I Municipality 33. Milan Kumar Khadki M Chairperson Of Meat Business Dhankuta 9842040521 Meat Business Organization Municipality Dhankuta 34. Raju Guragai M Subordinate Municipality Dhankuta 9842062741 Officer Office Municipality 3 : 35. Keelam Bajaj M Head ofProject Municipality Dhankuta 9842055123 Planning Office Municipality 6 Department 36. C pendra Khanal M Environment Municipality Dhankuta 9842060850 Head Officer Office Municipality 4 37. Khagendra Ghimire M Journalist Federation Of Dhankuta 9842038774 i Nepali Municipality 7 Journalists : 38. Keshav Shrestha M Employee Municipality Dhankuta 9842062455 Office Municipalit~ 39. Mahendra Kumar M Officer Municipality Dhankuta 026-520119 Khamyagang 40. Salil Devkota M Environment Consultant Kathmandu Specialist

Location: Itahari Municipality Date: 30 January 2011 Time: 11 AM Major Issues of the Summary of Findings on Responses of the Participants .Discussion Project Implementation The Municipal Coordination Committee (MCC) should be formed without or less Arrangements involving political party representative. The participants proposed the composition of MCC: EO, representative from adjoining VDCs (as the road passes through these as well), government line agencies present in the municipality, representatives from User Forum and local NGOs working in similar fields. Likely social Impacts in Risk of exclusion and participation (as the road passes through different types of terms of land acquisition communities characterizes by varying incomes, the same contribution by each and impacts on IPs and community may not be applicable. other vulnerable Acquisition ofprivate land buildings is required community Few houses ofMushar (DaHt of Tarai) need to be removed There might be a loss of public utility services due to improper planning delays in restoring and reconstruction ofthe disturbed and lost public utility lines and causing inconvenience in the towns

Resettlement Policy and Project must address the issues of land acquisition and compensation pragmatically entitlements rather than in terms of legal requirements. Opportunity for local employment must be guaranteed. The local people were not aware about the standard (dimensions) of the subprojects, (e.g. road) and demanded for adequate consultation and communication about. standard, norms and operation modality of subprojects Rehabilitation and compensation modality for those who will lose unregistered

161 (ai/ani) land. Social Screening and The screening and categorization of impact on IR and IPs should be initiated by I Impact categorization either by the relevant staff or, if there are no such skills, then on contract by procedures external consultant. The review of the screening report should be done by the head of Community Development section. The Executive Officer provides the approval. • Social Safeguard Specialist at PCO finally endorses the result of screening and I categorization of impact on IPs and IR. Capacity to handle sociaJ The CD section is headed by junior officer with some positions of social mobilizers safeguard issues and community facilitators. The existing capacities of municipal administration may not be sufficient enough to address all the social issues related to R&R and IPs that may arise as a result of the project. Past experience of social It has been implementing some programs related to the socioeconomic development management of women, dalits, Janajatis and other marginalized communities. They are mainly focused on delivering basic services to the disadvantaged and indigenous people, Datits, women, disabled and other vulnerable groups I Human resource available Deputation of Social Development Officer is required to handle social safeguard measures. Composition of Grievance The proposed composition of GRC includes Representatives from political parties, i Redress Committee (GRC) Consumer's Forum, TLO, FNCCI, and Ex representatives. Consultation and It has regular weekly FM radio programs on municipal affairs Information Disclosures It publishes annual budget and program booklet and distributes to board members and the representatives ofthe political parties. There is a limitation on community participation due to the fact that there are few programs for public consultation though public hearing and audit are undertaken in a ritualized manner for some municipal projects. The project should have mandatory provisions of disclosure of financial figure, planning and project selection, technical and overall evaluation on a regular basis to general public as per LSGA and Right to Information Act prescription. Summaries of the RP/IPPs of SMF should be made available in Nepali language to the APs, local NGOs, and public offices in the sub-project site. Monitoring & Reporting Annual progress review meetings are held where LAs, NGOs, FNCCI and political parties' representative are invited for review. Project should involve the IP and vulnerable group's representative bodies such as ethniclDalitiwomen organizations, or any other traditional institutions in subproject identification and implementation and monitoring processes Capacity Building Training on Consultations and Social Assessment Surveys Training on Resettlement and Rehabilitation Management Training on Preparing Communication Strategy Documentation and orientation on the relevant World Bank and GoN social safeguard policies, laws and legislations, constitutional provisions etc. Framework for Social Conduct biannual public hearing, FM broadcasting of major activities and Accountability achievements, involvement of organizations of IPs, Dalits, and women along with local user groups in project identification, implementation and monitoring, made clear provision ofthird party compliance ofsocial safeguard measures. Details of the Participants:

162 S.N Full Name Gender Post or Affiliated Address Contact Occupation Organization Number I. Narayan Bd. Shrestha M President Users Forum ofNepaJ ltahari 9842024431 Municipality 1 2. Arjun Dahal M Engineer ltahari Municipality Itahari 9852048987 Municipality 3. Sarva dhoj saba M Ex-Mayor Itahari Municipality Itahari 9742014601 Municipality4 4. M Itahari Municipality ! ShekharChaudary Ex- VDC Itahari . 9842048111 Chairperson Municipality 7 i 5. Ganesh Pd. Dahal M Officer Itahari Municipality 9852045222 6. Jagdish Pd. Oli M Chairperson Civil Society Itahari ltahari 1 9852046068 7. Rohit Pd. Prasai M . Chairperson Industry & Commerce Itahari 1 9852020546 i Association 8. Binod Wagle M Chairperson CPN-United Itahari 9842034947 9. Dhana Raj Rai M RPP Itahari 7 9842056484

10 Jeevan Ghimire M Sub Engineer Itahari Municipality Itahari ! 9852045424 1 . Municipality Kailash Timsina M Sub Engineer Itahari Municipality Itahari 9842020525 Ill. M unici pality 12. Chandu Bhattarai M Vice UML, Itahari Itahari 4 9842020244 Chairperson Municipality 13. Madindra Bd. Katuwal M Chairperson Hotel Business Itahari 9852049085 Association 14. Dr. Rabindra KC M Medical officer , Head of health Care Itahari 9808320653 . Centre, Itahari 15. Suresh Pd. Singh M Sub Engineer NEA Itahari 9842100721 16. ThumNath Lamsal M Coordinator Tole Development Itahari 9842097797

I Committee 17. Tek Bd. Gurung M Business Itahari 9842232522 18. Chandra Bd. Tamang M Social Service Itahari 9842178629 19. Aljun Subedi M Employee Itahari Municipality Itahari 3 9842035492 20. Daya Ram Subedi M Employee Itahari Municipality ltahari 1 9842177200 21. Gayatri Lamsal F Employee ltahari Municipality Itahari 1 9852048735 22. Tek Nath Sa~kota M Employee Itahari Municipality Itahari 4 9842003285 23. Anita Guragain F Employee Itahari Municipality Itahari 4 9842061169 , 24. Ghana Shyam Giri M Employee Itahari Municipality Itahari 4 9842021798 25. Yadav Sapkota M Employee Itahari Municipality Itahari 1 9842177254 , 26. Mahesh Subedi M Employee Itahari Municipality Itahari 6 9842035491 27. Sunil Guragain M Employee Itahari Municipality Itahari 4 9842079409 28. Lakhan Lal Chaudary M Employee Itahari Municipality Itahari 6 9852046446 29. Kumari Timsina F Employee Itahari Municipality Itahari 5 9842080111 30. Chandra Devi F i Employee Itahari Municipality Itahari 8 9842185988 Chaulagain 31. Proshyan Pokharel M Employee Itahari Municipality Itahari I 9842037413

Location: Lekhnath Municipality Date: 2 February 2011 Time: 2 PM Major I.ssues of the Summary of Findings on Responses of the Participants IDiscussion i Project Implementation The participants proposed the composition of MCC: EO, representative from l Arrangements political parties, government line agencies present in the municipality, IPs, Dalits, 163 Women and representatives from local NGOs working in similar fields. ! Likely social Impacts in Removal of squatters and encroachers from the vicinity of lakes causing livelihood terms of land acquisition losses even though they are illegal and impacts on IPs and A number of community infrastructures such as irrigation system, foot trails, cattle other vulnerable track, water supply sources and water supply pipes, chautari, temple etc. may be community disrupted during implementation of the sub project Disputes on boundary demarcation between farm lands of local farmers and the lakes Resettlement Policy and Project must address the issues of land acquisition and compensation pragmatically entitlements rather than in terms of legal requirements. Opportunity for local employment must be guaranteed. The local people were not aware about the standard (dimensions) ofthe subprojects and demanded for adequate consultation and communication about standard, norms and operation modality of subprojects Rehabilitation and compensation modality for those who will lose unregistered (ai/ani) land. Social Screening and The screening and categorization of impact on IR and IPs should be initiated by Impact categorization either by the relevant staff or, if there are no such skills, then on contract by procedures external consultant. The review of the screening report should be done by the head of Community Development section. The Executive Officer provides the approval. Social Safeguard Specialist at PCO finally endorses the result of screening and categorization of impact on IPs and IR. Capacity to handle social As the CD section has no qualified staff, the municipal administration need safeguard issues additional trained staff to address all the social issues related to R&R and IPs that may arise as a result of the project. Past experience of social It has been implementing some programs related to the socioeconomic development management of women, dalits, Janajatis and other marginalized communities. They are mainly focused on delivering basic services to the disadvantaged and indigenous people, Dalits, women, disabled and other vulnerable groups

Human resource available Deputation of Social Development Officer is required to handle social safeguard measures. Composition of Grievance The proposed composition of GRC includes representatives from political parties, Redress Committee (ORC) Dalits, IPs, women organizations, representative from CSP being chairperson. Consultation and It publishes annual budget and program booklet and distributes to board members Information Disclosures and the representatives of the political parties. There is a limitation on community participation due to the fact that there are few programs for public consultation though public hearing and audit are undertaken in a ritualized manner for some municipal projects. The project should have mandatory provisions of disclosure of financial figure, planning and project selection, technical and overall evaluation on a regular basis to general public as per LSGA and Right to Information Act prescription. Summaries of the RP/IPPs of SMF should be made available in Nepali language to the APs, local NGOs, and public offices in the sub-project site. Monitoring & Reporting Annual progress review meetings are held where LAs, NGOs, FNCCI and political parties' representative are invited for review. Project should involve the IP and vulnerable group's representative bodies such as ethniclDalitlwomen organizations, or any other traditional institutions in subproject

164 identification and implementation and monitoring processes Capacity Building Training on Consultations and Social Assessment Surveys Training on Resettlement and Rehabilitation Management Training on Preparing Communication Strategy I Documentation and orientation on the relevant World Bank and GoN social I safeguard policies, laws and legislations, constitutional provisions etc. Framework for Social Conduct biannual public hearing, FM broadcasting of major activities and Accountability achievements, involvement of organizations of IPs, Dalits, and women along with local user groups in project identification, implementation and monitoring, made clear provision ofthird party compliance of social safeguard measures. Details of the Participants: S.N Full Name Gender Post or Affiliated Address Contact Occupation Organization Number 1. Rajendra Lamichane M Social Service CPN-UML LekhNath 9846028633 President Municipality 6

1 2. Tika Ram Pageni M Social Service CPN-UML LekhNath 9856024922 Municipality 14 3 Puspa K. Dhungana M Nagar Secretary UCPN(M) LekhNath 9846385059 1 . Municipality 12 4. Ravi Chandra Ghimire M LekhNath Deurali 2 9846096951 Municipality 5. Prakash C. Pagal M District Member UCPN(M) LekhNath 9846062970 Municipality 13 6. Hari Prasad Baral M Coordinator Rastriya Jana LekhNath 9846024791 i Morcha Municipality3 .7. Govinda P. Devkota M I LekhNath Aali Kaski I 9846036350 , Municipality 8 Mitthu Dhungana F LekhNath .LekhNath 9846114052 1 . Municipality Municipalit~4 19. Chandra Kanta Poudel M Accountant LekhNath LekhNath 9846036321 Municipality Municipality 2 10. Damber Bd. Thapa M Municipality Vice NC LekhNath • 9846025676 President Municipality 5 11. Kopila Rana Bhatt M Chairperson LekhNath 9846086031 Municipality 5 12. Rabindra Adhikari M Staff I LekhNath LekhNath 9846036978 • Municipality Municipality II 13. Hridya Nath Khanal M Staff LekhNath LekhNath 9846054277 Municipality Municipality7 14. Ram mani Adhikari M Legal Officer LekhNath LekhNath 9846029105 Municipality Municipality I I 15. Surya Mohan Adhikari M Staff LekhNath LekhNath 9841279886 Municipality Municipality 12

Location: Baglung Municipality Date: 3 February 2011 Time' 2 PM I Major Issues of the Summary of Findings on Responses of the Participants • Discussion Project Implementation The participants proposed the composition of MCC: EO, representative from Arrangements political parties, government line agencies present in the municipality, IPs, Dalits, Women and reEresentatives from local NGOs working in similar fields. The;t also

165 emphasized that the composition must be representative to the spatial variation (rural vs. urban settlements) ofthe municipality. Likely social Impacts in Removal of some houses along the proposed Ring Road which require acquisition terms of land acquisition of private land and buildings and impacts on IPs and Risk of exclusion and participation vulnerable section of the society (as the road other vulnerable passes through different types of communities characterizes by varying incomes, community the same contribution by each household may not be justifiable Dalits and other marginalized groups who are currently residing in rural part of the municipality might be excluded from project supports programs

Resettlement Policy and Local people residing rural part of the proposed Ring Road show willingness to entitlements provide land for construction of the road with their full agreement and consent without any compensation packages. Provide opportunity for local employment through skill trainings and upgrading of traditional occupations like shoe making, iron works Group saving schemes, easy flow ofloan to run small business, vegetable farming, goat and pig raising as IGA programs Sprinkle irrigation facilities for off-season vegetables farming Rehabilitation and compensation modality for those who will lose unregistered (ai/ani) land. Social Screening and The screening and categorization of impact on IR and IPs should be initiated by Impact categorization either by the relevant staff or, if there are no such skills, then on contract by procedures external consultant. The review of the screening report should be done by the head of Community Development section. The Executive Officer provides the approval. Social Safeguard Specialist at PCO finally endorses the result of screening and categorization of impact on IPs and IR. Capacity to handle social The capacities of municipal administration need to be upgraded to address all the safeguard issues social issues related to R&R and IPs that may arise as a result of the project Past experience of social It has been implementing some programs related to the socioeconomic development management of women, dalits, Janajatis and other marginalized communities. They are mainly i focused on delivering basic services to the disadvantaged and indigenous people, ' Daiits, women, disabled and other vulnerable groups In addition, it has executed the ADB loan project small water supply for construction and development/distribution Human resource available The CD section responsible to look after social issues is headed by junior officer and few social mobilizers and community facilitators. Composition of Grievance The participants proposed a committee representing from Dalits, Women, IPs and Redress Committee (GRC) civil society organizations including an expert nominated by PMT. The committee is headed by a respected member of CSO. Consultation and It has regular weekly PM radio programs on municipal affairs Information Disclosures It publishes annual budget and program booklet and distributes to board members and the representatives of the political parties. There is a limitation on community participation due to the fact that there are few programs for public consultation though public hearing and audit are undertaken in a ritualized manner for some municipal projects. The project should have mandatory provisions of disclosure of financial figure, planning and project selection, technical and overall evaluation on a regular basis to general public as per LSGA and Right to Information Act prescription. Summaries of the RPIIPPs of SMF should be made available in Nepali language to the APs, local NGOs, and public offices in the sub-project site.

166 Monitoring & Reporting Annual progress review meetings are held where LAs, NGOs, FNCCI,and political parties' representative are invited for review. Project should involve the IP and vulnerable group's representative bodies such as ethniclDalitlwomen organizations, or any other traditional institutions in subproject identification and implementation and monitoring processes Capacity Building Training on Consultations and Social Assessment Surveys Training on Resettlement and Rehabilitation Management Training on Preparing Communication Strategy Documentation and orientation on the relevant World Bank and GoN social safeguard policies, laws and legislations, constitutional provisions etc. Framework for Social Conduct biannual public hearing, FM broadcasting of major activities and Accountability achievements, involvement of organizations of IPs, Dalits, and women along with local user groups in project identification, implementation and monitoring, made clear provision ofthird party com~liance of social saf~uard measures. Details of the Participants: S.N Full Name Gender Post or Affiliated Address Contact Occupation Organization Number l. Ram Prasad U padhaya M Principal Daulagiri Baglung 9847622498 Multiple Municipality 2 Cam~us 2. Nar Bahadur Thapa M Secretary CPN-UML Baglung 9756700081 I magar 3. Hom Raj Bista M Officer of Agricultural Baglung 068-520130 Agriculture Development Development Office 4. Y ogendra Chitrakar M Engineer Drinking Water Baglung 068-520110 Committee • 5. Harsa Bd. Gurung M Engineer District head Baglung 9857620228 Office 6. Jeev M Public Health District Health Baglung 9847922314

I Officer Office 7. Bharat Puri M Chairman Mukti Baglung 9857620086 ToleVikash Samiti 8. Subash Khadka M Secretary Shanti Baglung 9847628873 ToleVikash Municipality 3 Samiti 9. Hira Bd. Thapa M Officer COO Baglung 957620202 Munici£.a1i~ I 10. Chitra Bd. Subedi M Chairpeson Shanti Baglung 9847629695 ToleVikash Municipality 8 Samiti 11. Shiva Khadka M Chairman Nagh road Baglung 9847668098 Community Municipality 3 welfare 12. Manju Chhetri F Member Antar party Baglung 9846700292 mahila samiti Municipality 3 13. Laxmi Baskota F Member Antar party Baglung 9847623081 mahila samiti Municipality 3 14. Shanti Gywali F Teacher Gender Baglung 9847630077 Networkin~ Munici£.ality 2

167 BetYNepal 15. Shashi Kiran Shrestha F Chairperson g 9847638820 t=ncipality 2 16. Pukhya Kumari Shrestha F Secretary Tole Vikash Baglung 9847629855 Sanstha Municipality 2 17. Dina nath Sharma M Chairperson 5421041 18. Dharma Dutta Sapkota Chairperson Ganga Tol Baglung 9847628814 M Sanstha Municipality 1 19. Shailendra Kumar M Chairperson RJP Baglung 9847634242 Shrestha 20. Indra Prasad Poudel M Sub Forest Officer District Forest Baglung 9845052922 Office 21. Binod Gywali M Land Reform District Land Baglung 9849030319 Officer Reform Office 22. Lila Poudel M Office Secretary Baglung 9857620207 23. Hari Bd. Khadka M Secretary Tansen District Baglung 9857620014 Office 24. M Chairperson RPP Baglung 9847624528 TikaRam~ • 25. KrishnaR M Chairperson RPP(BGL) Baglung2 9847637426 26. Padam Chandra Raj M Ex Municipality Baglung Baglung 9841225115 Bhandari Vice President Municipality 3 Municipality 3 I 27. Rishi Raj Sharma M Ex-Municipality Baglung 9847622226 President Municipality 1 28. Niraj Shakya M UCPN(Maoist) UCPN(Maoist) Baglung 98476215805 Municipality 3 29. Dhanapati Sapkota M Treasury Mukti Nath tole Baglung 984765331 Municipality 10 30. Trilochan Giri M SI Baglung Baglung 9857620024 Municipaity Police Station 31. Tulsi Ram Sapkota M Chairperson Sip Shakti tole Baglung 9847664801 Municipality 10 Ram Bd. Hayal M Chairperson Kholakhet Tole Baglung 9847623079 Municipality 5 Jaya Ram Bhati M Chief Secretary Baglung Baglung 9847621197 ~ Association Municipality 2 34. Yam Bd. Gharti Magar M CPN-UML Baglung 9847630611 35. LaxmiJ.C F Mahila Vikash Women and Baglung 9857620392 Aayog Children Baglung Office • 36. Amar Bd. Thapa M 9857620491 • 37. Aatma Ram Upadhaya Chairperson Aadarsha Tole g vikash Sanstha I!unnicipaiity 9847653212 38. Kaji Gaule Shrestha Legal Expert iey lung 9847653212 icipality 39. Mohan Bd. Shrestha M Treasury Laliguras Tole Baglung 9847631757 Vikash Municipality 9 Committee 40. Hemanta Khadi M Reporter I Dhaulagiri FM Baglung Municipality 41. Gopal Khadka M Business Man Baglung 9847669142 Municipality 3 42. Sangam Gharti Magar M Reporter Sayapatri FM Sikhakhani 1 9846706257 43. Aam Bd. M Chairperson Baglung 9847727649

168 Municipality 3 44. Hari Narayan Gautam M Chairperson Federation of Baglung 9847628317 Nepal Journalists 45. Mahendra Acharya M President Baglung 9857620209 46. Suresh KC M Baglung 9841294229 47. Dipendra Bd.Bhandari M Baglung Baglung 9857620023 Municipality Office 48. Prakash Raj Sapkota M Office Assistant Baglung Baglung 9847621864 Municipality Office ·49. Teej Prasad Neure M Clerk Baglung Baglung 9847620717 Municipality Office 50. Hariyan Chanyal M • Municipality Baglung Baglung 9841700872 I Assistant Municipality Motivator Office

Location: Tansen Municipality Date: 4 and 5 February 2011 Time: 2 PM & 11 AM Major Issues of the Summary of Findings on Responses of the Participants Discussion Project Implementation The participants proposed the composition of MCC which included EO, Arrangements representative from political parties, government line agencies present in the municipality, IPs, Dalits, Women and representatives from local NGOs working in similar fields, iLikely social Impacts in There might be a loss of public utility services due to improper planning delays in terms of land acquisition restoring and reconstruction of the disturbed and lost public utility lines and causing and impacts on IPs and inconvenience in the towns. other vulnerable Loss of incomes and livelihood while shifting ofexisting shops and offices from community Durbar Square Area may come up. Conflict may arise in terms of water using rights and ownership ofthe sources Risk ofexclusion of vulnerable communities while selecting the households for rain water harvesting Resettlement Policy and Relocation and rehabilitation of damaged and destructed cultural heritage, religious . entitlements and archeologically important sites . • Project must address the issues of land acquisition and compensation pragmatically ! rather than in terms of legal requirements. Opportumty for local employment must be guaranteed. Social Screening and The screening and categorization of impact on IR and IPs should be initiated by Impact categorization . either by the relevant staff or, if there are no such skills, then on contract by procedures external consultant. The review of the screening report should be done by the head of Community Development section, The Executive Officer provides the approval. Social Safeguard Specialist at PCO finally endorses the result of screening and categorization of impact on IPs and IR. Capacity to handle social The capacities of existing municipal administration need to be upgraded to address • i safe uard issues all the social issues related to R&R and IPs that rna arise as a result ofthe ro'ect of social It has been implementing some programs related to the socioeconomic development of women, dalits, Jana' atis and other mar inalized communities. The are mainl

169 focused on delivering basic services to the disadvantaged and indigenous people, Daiits, women, disabled and other vulnerable groups Human resource available The existing human resources are adequate to handle the social safeguard issues of the project if they are provided basic orientation and training on social management. However, the project should be flexible to get expertise from outside as and when required. Composition of Grievance A committee headed by a respected member of CSO and members representing Redress Committee (GRC) from Dalits, Women, IPs and civil society organizations including an expert nominated by PMT. Consultation and It has regular weekly FM radio programs on municipal affairs Information Disclosures It publishes annual budget and program booklet and distributes to board members and the representatives ofthe political parties. There is a limitation on community participation due to the fact that there are few programs for public consultation though public hearing and audit are undertaken in a ritualized manner for some municipal projects. The project should have mandatory provisions of disclosure of financial figure, planning and project selection, technical and overall evaluation on a regular basis to general public as per LSGA and Right to Information Act prescription. Summaries ofthe RP/IPPs of SMF should be made available in Nepali language to the APs, local NGOs, and public offices in the sub-project site.

Monitoring & Reporting Annual progress review meetings are held where LAs, ~GOs, FNCCI and political parties' representative are invited for review. Project should involve the IP and vulnerable group's representative bodies such as ethniclDalit/women organizations, or any other traditional institutions in subproject identification and implementation and monitoring processes Capacity Building Training on Consultations and Social Assessment Surveys Training on Resettlement and Rehabilitation Management Training on Preparing Communication Strategy Documentation and orientation on the relevant World Bank and GoN social safeguard policies, laws and legislations, constitutional provisions etc. Framework for Social Conduct biannual public hearing, FM broadcasting of major activities and Accountability achievements, involvement of organizations of IPs, Dalits, and women along with local user groups in project identification, implementation and monitoring, made clear provision ofthird party compliance of social safeguard measures. . f the Participants: S. ull Name Gender Post or Affiliated Address Contact Occupation Organization Number Ff • 1. Dinesh Gandarba M Chairperson Gandarva Tole Tansen 9847043632 I Vikash Sanstha Municipality 3 12. Bhimsen Karki M Treasurer Tansen Drinking Tansen Water Supply Committee 3. Kausal Raj Ghimire M Tansen Tansen 9847029322 Municipality 4. Tika Ram Poudel M Chairperson Rajmo Nagar Tansen 9847043253 Samiti Municipality 5. Keshab Poude! M Chief UCPN(Maoist) Tansen 9847005665 Municipality Municipality 16. Ramji Bd. Karki M Tansen Tansen 9847029893

170 Municipality Municipality 3 7. Gita Dhungana F Vice Secretary Lahare Pipal 2 Tansen 9847102539 Municipality 4 8. Chanda Maharjan F Vice Chairperson 1$Iungdi Tole Tansen 521797 ikash Municipality 4 : 9. Puma Maya F President Red cross Tansen 520227 Municipality 3

1 10. Yadav Raj Sharma M Chairperson Tuksar Tole Tansen 520929 Vikash Municipality 5 11. Dhurba Khati M Member Tansen Tansen 9847068088 Municipality Municipality 10 Committee 12. Vma Nath Acharya M Citizen Tansen Tansen 9847028588 Municipality 11 Municipality 11

13. Hom Nath Neupane M Representative of I Tansen Tansen 9847005992 Tole Sanstha Municipality Municipality 11 14. Rajendra Prasad Pant M Engineer Tansen 9847101443 Municipality 13 15 Ram Bd.Raut M Chairperson Tansen 9857060995 1 . Municipality 5 Dr. Puran Bajarcharya M Vice Chairperson Tansen Tansen 9847099233 1 16. Municipality Municipality 6 17. Bishnu Poudel Executive Drinking Water Tan sen 9847029373 Director Consumer

1 Committee 18. Bhim Kumari Shakya F Tole Chairperson Tansen 9815415196 Municipality 3 ! 19. GamalaJC F Teacher Tole Vikash Tansen 9747004615 Sanstha Municipality 4 20 Rajeshwor Udam M Vice-Principal Tribhuvan Multiple Tansen 9847029245 1 . Campus 21. Keshari Basnet F Teacher Unanati Vikash Tansen 9847343111 Tole Municipality 6 22. Deep Narayan M Business man Milejuli Tole Tansen 9847068293 Vikash Municipalit~ 8 123. Dr. Kama Bd. Baniya M Principal Tribhuvan Multiple Tansen 9847069379 Campus 24. Yadav Raj Sharma M Chairperson Tuksar 1 Tole Tansen 9847059528 Vikash 25. Jyoti Raj Bhandari M Chairperson Makhan Tole Tansen : 9847178092 Muni<;ipality ! 26. Rajeshwor Uday M Secretary 9847029245 BaLBd.Rana Magar Tansen 9847029588 i 27. M Member Municipality 7 : 28. Mina Rayamaj i F Chairperson Tole Vikash Samiti Tansen 520031 Municipality 6 29. Tumla Bajracharya F Secretary Tole Vikash 2 Tansen 520311 Tuksar Municipality 5 30. Sushma Gywali F Chairperson Tole vikash Asan Tansen 15522715 Municipality 31. Bhusan Rajlober M Tansen 9847043011 32. Ram Man Shrestha M Advisor Bhimsen Tole Tansen 9847043595 Vikash Municipality3 33. Chameli Shrestha F Chairperson Tole Vikash Tansen 98470129224 Sanstha Municipalit~ 5

171 34. Man Mohan Shrestha M Chairperson Tansen 8, palpa Get Up Palpa 9847028885 35. Bishnu Poudel M Managing Tansen Tansen 9847029373 Director Municipality Municipality

172 Annex 8 Sub-Projects Implementation Procedure & Major Steps for Socio-Economic Infrastructure Component

This is a tentative procedure laid out for explaining the steps to be taken for planning and implementing safeguards due diligence. These can be modified as approved by the peo and cleared with the Bank in order for efficiency and effectiveness ensuring quality ofsafeguard compliance and implementation outcomes.

Step 1: Identification of Sub-Project by Municipality and application to TDF for PFS: Documents needed: (project based on periodic plan or municipal council/Board Decision, Identified major Social, Environmental, and Land Acquisition issues, Land ownership Certificate (if needed), Last Five Years Balance Sheet, and Tentative Rough Cost of Project & Cost for PFS.) Step 2: Initial Screening by TDF and asks to the Municipality for TOR & Cost Estimate preparation . . Step 3: TOR, Scope of Work and cost estimate for PFS preparation by Municipality with support of TDF Engineer & MST/consultants and TDF approves Financing for PFS. (TOR shall have the scope of study especially in the areas of Technical, Financial, Economic, Legal, Institutional, Environmental, Social, Resettlement, Land Acquisition aspects) Step 4: Municipality sends 'Request for Proposal (RFP), to Short-Listed Consultants & receives proposals (Consultants annually Short Listed by TDF as per the Procurement Guideline for Services agreed with GoN, WB and TDF). Step 5: Evaluation of RFP proposals (Technical & Financial) by Municipality & gets no objection from TDF. Step 6: TDF provide financial assistance to municipality on installment basis as per the progress of study based on its 'Grant Policy' . Step 7: Municipality sends PFS Report to TDF, and TDF prepares 'PFS Appraisal Report' on the basis of which TDF recommends for further study on lEE, EIA, SIA, and RAP or recommends for Feasibility Study (FS) directly if these studies are not necessary. Step 8: Municipality makes IEEIEIA/SIAIRAP, if necessary, with support of MSTI consultants and finalizes IEEIEIA/SIAIRAP (approval process on these studies will be based on ESMF Guideline agreed among WB, GoN, & TDF prepared within the existing Laws of Nepal & that ofWB Guideline). Step 9: Municipality initiates Land Acquisition process, if necessary, as per the existing legal framework of Nepal. Step 10: After clearance on EIA/IEE/SIAIRAP and initiating Land Acquisition process (if needed) municipality requests TDF for Feasibility Study (FS), Detail Engineering Study and Bid Document (DPR) preparation Support. Step 11: TOR preparation, consultant selection and study completion for FS and DPR to be made with same process mentioned in step (3), (4), (5) & (6). Step 12: Municipality completes the Land Acquisition and implements the RAP, if needed as per above recommendations. (For the cost of Land Acquisition GoN shall provide 90% of Fund & municipality has to bear 10%; and for RAP implementation, fund shall be made available to municipality through the project within the ceiling defined based on Grant Policy criteria). Step 13: Municipality requests TDF for financing on the proposed sub-project along with the FS/DPRIBid Documents (for Loan & Grant as per LlG policy).

173 Step 14: TDF makes 'Final Appraisal Report' based on the FS/DPR and makes necessary approval of Loan & Grant amount based its own LlG Policy & procedures; and 'Financial Agreement' is made between TDF & Municipality accordingly. Step 15: Municipality, as per the Procurement Guideline agreed among WB/IDA, GoN and TDF, publishes Tender Notice for contractors, makes necessary evaluation & sends evaluation report to TDF for 'no objection' (No objection letter to be received from WB/IDA ifthe tender amount exceeds the prescribed limit). Step 16: As per the 'no objection letter' received from TDF (and WB, if needed), municipality makes 'Contract Agreement' with the contractor and requests Advance Amount to TDF. Step 17: Municipality requests TDF for 'Supervision Consultants' Support, if necessary; and selects consultant as mentioned in step (3), (4), (5) & (6) above. Step 18: Municipality sends progress reports of construction works in prescribed formats and duration to TDF, and thereby TDF disburses loan/grant blend on Installment basis to Municipality as agreed in 'Financing Agreement'. Step 19: Municipality, on recommendation of Supervision Consultant, sends 'Project Completion Report' to TDF and Final Disbursement is closed in TDF. Step 20: TDF sends 'Loan ,Repayment Schedule' to Municipality for the whole maturity period along with the agreed O/M framework. Step 21: TDF supports, through its concerned technical assistance division, to municipalities with technical assistance for OIM of the assets developed. (PPP arrangement or community management or other approach; support depends upon the availability of fund in TDF with GoN and/or donor support). Step 22: Municipality makes arrangement of OIM of the Project; and ensures service delivery to the people & thereby makes regular repayment to TDF (every six months). Step 23: TDF makes 'Periodic Post Construction Monitoring' through its "Work-Out Cell" and advises to: a. Municipality for necessary actions to be taken to improve the Service Delivery and Repayment. b. GoN (MLD, MPPPWlDepartments, MoF etc.) for necessary support to municipalities if the situation is beyond the capacity of municipalities; or, for necessary directives if municipality is not being responsible (in service delivery & repayment to TDF).

Step 24: GoN (through its appropriate mechanism- such as DSRF, or Revenue intercept provision from MLD etc.) ensures the sustainability of the project in terms of Service Delivery and Repayment to TDF.

(Note: If the municipality does not have the capacity for hiring DSM consultants and requests TDF for Technical Assistance, instead of Financial Assistance, TDF shall also provide such technical assistance to municipalities).

174 Note i In response to protests by NEFIN and other groups in aftermath of the peoples' movement of 2006, the Legislative Parliament of Nepal ratified International Labor Organization's Convention 169 (ILO 169) in August 2007, making Nepal the first country in South Asia to do so. ILO 169 supports the principle of self­ management and guarantees the right of indigenous people to consultation and participation in issues relating to their own development, and right to practice traditional economies, to traditional land and resources and to use indigenous languages in education, has been hailed as an important document that would assist in the development of an inclusive state, particularly in the context of the restructuring of the state which is an important task that has been assigned to the constituent assembly. iI Tensions between the Maoists and their historical rivals, different factions of Jana Morcha, particularly, the Rastriya Janamorcha, persists but these tensions however have not turned violent in the aftermath of the CA elections. Source: "Major Incidents of Terrorist Violence in Nepal, 1999-2010." http://www,satp.org. iii Dhankuta has witnessed numerous clashes between youth groups of UCPN(Maoist)-YCL and CPN(UML)­ YF in the post-conflict period. There have been at least three occasions when tensions have escalated to the extent that the district administration has had to impose a curfew. Source: "Major Incidents of Terrorist Violence in Nepal, 1999-2010." http://www.satp.or/i. iv The Ministry of Home Affairs in August 2009 released names of 109 different armed groups and outfits operating in NepaL Political commentators have indicated that 70-75 percent of these groups are based out of Tarai districts. Source: Narayan Manandhar. "Nepal's armed groups" Republica, 29 August 2009. v The Madhes Andolan of 2007, spearheaded by the Madhesi Janaadhikar Forum (MJF), now one of the major parties in the constituent assembly was a launched to demand the rights of Madhesis against the historic injustices against the group by the pahadi dominated Nepali state. Source: International Crisis Group. Nepal's Troubled Tarai Region, Asia Report No. 136, 9 July 2007. vi Due to the open border, criminal groups that have been forced to flee Bihar have found a sanctuary in Nepal. However, these groups have not been able to penetrate into Mechinagar and ltahari to the same extent as in other regions where the population of Madhesis is significantly higher. vii Armed groups in Eastern hills include: Khambuwan National Front, Khambuwan Democratic Front, Federal Limbuwan State Council (Sanju Hang Palungwa group), Federal Limbuwan State Council (Revolutionary), Upper Kirant Limbuwan National Forum, Kirant People's Workers Party, Khambuwan Combatant Party. Source: Sita Mademba. "Special Security Plan falters: Despite government claims, eastern Nepal is still under the sway ofarmed groups." Nepali Times, Issue #519, 10-16 September 2010. viii Samyukta Jatiya Mukti Morcha (SJMM) [Unified Ethnic Liberation Front] is an underground outfit that has recently spiked up their activities in different parts of Nepal. Reportedly, around 1500 VDC secretaries have been forced to resign due to threats and intimidation by this group in recent months. The leaders of this group have claimed that they will wage an armed struggle against the state if their demand for absolute proportional representation of Janajatis in all state organs is not met. Source: "Explosion rocks Saptari VDC office as secys of Tanahun and Dang resign enmasse," 5 July 2010, www.nepalnews.comjmainjindex.phpjnews-archivej 19-generalf 7 3 3 7 -explosion-rocks-sa ptari-vdc-offi ce­ as-secys-of-tanahun-and-dang-resign-enmasse.html ix MLD. "Local Government and Community Development Programme: Project Document." 11 July 2008; Government of Nepal. Interim Constitution 2007, Kathmandu, Nepal.

175 x For instance, in Tansen, it is evident that as the leaders of the two main parties-the Nepali Congress and the CPN-UML-are Newars, and share strong links with people in the core town areas, projects in these areas take precedence. The fact that political representatives select projects based on their proximity to those who are locally influential is revealed through a glance at Tansen Municipality's 2066 annual plan. In the core wards, a large number of planned programmes include names of people in front of whose houses roads or sewage pipes are to be constructed. For instance, a planned programme for ward 5 reads, "to construct a road between the houses of Chakra Kumari and Achyut Raj Sharma." xi In Lekhnath, for example, the political parties had set up office hours at the municipal office so that members of the general public could approach them directly with their problems. Very few people came to meet the representatives, however. The political representatives thought that this was so because the public was unaware of how local government functioned in a situation where local elections had not been held for eight years. xii In Itahari, these measures which were initiated under the aegis of Pro-public, a national level NGO working on governance related activities have been short-lived after DFID, the main funding agency for the program withdrew its support. xiiihttp://www.mld.goy.np/pdf downloadable file/local bodies financial administration rejiulations Z056 n epalLpdf(In Nepali) xiv Ibid. xv The contracting process is notoriously prone to corruption all over Nepal. Anecdotal accounts suggest that up to 50 percent of the funds allocated to projects are skimmed off during the tendering/contracting process. According to one estimate, out of the total cost sanctioned for a particular project, about 30 percent is invested in the work, 30 percent on contractor's profit, and 40 percent goes into various ministers' and officers' pockets. Source: Madhusudan Sharma Subedi. "Corruption In Nepal: An Anthropological Inquiry." Dhaulagiri Journal a/Sociology and Anthropology, Volume 1, ZOOS. xvi http://www.rupp.org.np/aboutus.asp

XVII There are currently 177 TLOs in Lekhnath and 89% of households are represented in them. The municipality has been providing various facilities to TLOs including lending money to members of TLOs from its revolving fund, providing trainings to TLO members in skills development, literacy and leadership. Municipality officials consider TLO savings to be a major success: currently, TLOs have saved over Rs. 10 million. The strength of TLOs has helped bring some public accountability to the projects that the municipality implements. In particular, the concept of public audits or public hearings has become ingrained and if the municipality or user groups do not hold these on schedule, it is common for TLOs to demand that they do. TLOs are also known for their initiative and drive when it comes to implementing projects. For instance, the Himalaya TLO formed in a squatter's colony consisting of very poor Chhetris and Dalits in Ward 13 was tasked with building toilets by the municipality with funds from LGCDP. From a total budget of around Rs. 3 million, it was estimated that 132 toilets would be built. However, the TLO managed to build around 180 toilets with the funds that they received. xviii LSGA, Article 88.Z.c xiXhttp://www.cbs.goy.np/Population/Monograph/ChapterOfoZ01O%ZO%ZOUrbanizationOfoZOandOfoZODeveio pment.pdf xx ibid xxi ibid

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