48358-001: Shanxi Inclusive Agricultural Value Chain

Home , Heshun County, Huo (state), Jinzhong, Liulin County, Qin County, Shilou County

Environmental Monitoring Report

Project Number: 48358-001 October 2019

PRC: Shanxi Inclusive Agricultural Value Chain Development Project (2018)

Prepared by: Shanxi Foreign Capital Poverty Alleviation Project Management Office.

This environmental monitoring report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management or staff, and may be preliminary in nature.

In preparing any country program or strategy, financing any project, or by making any designation of or

reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CURRENCY EQUIVALENTS (as of 31 December 2018)

Currency unit – Yuan (CNY) CNY1.00 = $ 0.1454 $1.00 = CNY 6.8755

ACRONYMS AND ABBREVIATIONS

ADB Asian Development Bank GRM Grievance redress mechanism AVC Agricultural value chain Leq Equivalent continuous sound pressure level, in decibels BOD5 5-day biochemical oxygen demand LAeq Equivalent continuous A-weighted sound pressure level, in decibels CNY Chinese Yuan, Renminbi IA Implementing agency CODcr Chemical oxygen demand IEE Initial environmental examination CSC Construction supervision company MOE Ministry of Environment dB Decibels NH3-N Ammonia nitrogen DO Dissolved oxygen NO2 Nitrate EIA Environmental impact assessment O&M Operation and maintenance EA Executing Agency pH potential of hydrogen; used to specify the acidity or basicity of a solution EIA Environmental impact assessment PMO Project management office EIR Environmental impact report PAC Project agribusiness company or cooperative EIT Environmental impact table PPTA Project preparatory technical assistance EMA Environmental monitoring agency PRC People’s Republic of China EMP Environmental Management Plan RP Resettlement plan EMR Environmental Management Report SPG Shanxi provincial government EMS Environmental monitoring station SOE State-owned enterprises EPB Environmental protection bureau SPS Safeguard Policy Statement (of ADB) FSR Feasibility study report WHO World Health Organization FYP Five Year Plan WRB Water resources bureau GDP Gross domestic product WRS Water resource specialist GHG Greenhouse gas WWTP wastewater treatment plant

NOTE In this report, "$" refers to US dollars

SUMMARY PROJECT INFORMATION

GENERAL INFORMATION Project title: Shanxi Inclusive Agricultural Value Chain Development Project Date of project effectiveness: 11 January 2018 Executing agency: Shanxi Provincial Government Implementing agency: 16 County Project Management Offices (CPMOs) under the County Poverty Alleviation and Development Offices. Counties include: Yanhu,Jishan.Ruicheng,Xinjiang,Yuanqu in Yuncheng Municipality;Yaodu, Fenxi,Fushan,Fenxi, Xiangning in Linfen Municipality;Heshun,Taigu in Jinzhong Municipality;Liulin, Shilou in Luliang Municipality;Guangling in Datong Municipality, Qin County in Changzhi Municipality. Project implementing units 19 Project Agribusiness Companies and Cooperative (PACs) * including: Shanxi Qinzhouhuang Millet Group Co., Ltd. Guangling Kitano Edible Fungus Industrial Development Co Ltd. Shanxi Juxin Weiye agricultural and Science & Technology Development Co., Ltd Heshun County Lvhe Ecological Agriculture & Livestock Development Co., Ltd. Fenxi Hongchang Breeding Co., Ltd. Fushan Guhuan Husbandry Science & Technology Co., Ltd. Quwo Lvheng Agricultural Development Co., Ltd. Shanxi Qierkang Elaeagnus Biological Products Co., Ltd. Linfen Zhongde Farming Technology Development Co., Ltd Liulin Fuzhongyuan Agricultural Development Co., Ltd. Shilou Shude Jujube Industry Co., Ltd. Shanxi Tianzhirun Date Processing Co., Ltd. Xinjiang Hefeng Grain Planting Technology Cooperatives Shanxi Xinjiang Vegetable Industry Development Co., Ltd Shanxi Kaisheng Fertilizers Group Co., Ltd. Yuncheng Xinke Taifang Vegetable Trading Co., Ltd Shanxi Shanlihong Food Co., Ltd. Shanxi Jinglong Group Jinghua Livestock and Poultry Products Development Co., Ltd Shanxi Phonenix Wine Co., Ltd PMO (name of agency): Shanxi Poverty Alleviation and Development Office PMO Environment Officer (name, email): Ms. Li Xiaojuan, [email protected] Loan implementation consultant / firm: ESS: Mr. Zhang Defa, 13001214518 Construction supervision company(ies): NA Contractor(s): NA ADB web link to EMP: https://www.adb.org/projects/documents/prc-48358-001-iee Domestic web link to EMP: NA Note: Nine PACs highlighted are considering quit from the project

ENVIRONMENTAL SAFEGUARD MONITORING ADB environment safeguard category: B Environmental report prepared as per Initial Environmental Examination ADB requirements for this category: Domestic safeguard report: 19 domestic EIA reports (one for each subproject) Quarterly period covered by this report: 11 Junuary 2018 –31 December 2018 # EMRs to date including this report: 1 Agency/person responsible for internal* 19 person (One from each PAC) environmental monitoring: Agency/person responsible for external* PACs will contract external environment monitoring agency one environment monitoring: month before civil work construction. Agency/person responsible for Mr. Zhang Defa, the ESS compliance* environment monitoring: Agency/person responsible for This is environment safeguard category B project. No independent independent compliance monitoring: compliance monitoring for this project is required Overall status of environmental On track safeguards: ADB = Asian Development Bank, EMP = environmental management plan, EMR = environment monitoring report, ESS = environmental safeguard specialist, PMO = project management office.

TABLE OF CONTENTS

EXECUTIVE SUMMARY ...... 3 A. OVERVIEW...... 3 B. PROGRESS IN IMPLEMENTING THE EMP...... 3 C. KEY ISSUES ...... 3 D. LESSONS LEARNED ...... 3 E. NEXT STEPS ...... 3 II. INTRODUCTION ...... 1 A. PURPOSE OF REPORT ...... 1 B. PROJECT OUTCOME, OUTPUTS AND SUBCOMPONENTS ...... 1 C. PROJECT IMPLEMENTATION PROGRESS ...... 2 III. SUMMARY OF THE PROJECT ENVIRONMENTAL MANAGEMENT PLAN ...... 5 IV. ENVIRONMENTAL MANAGEMENT DURING THE REPORTING PERIOD ...... 6 A. ASSESSMENT OF PROJECT READINESS ...... 6 B. INSTITUTIONAL ARRANGEMENT ...... 7 C. IMPLEMENTATION OF THE PROJECT MITIGATION MEASURES ...... 9 D. IMPLEMENTATION OF THE PROJECT MONITORING PROGRAM ...... 11 E. PUBLIC CONSULTATIONS AND GRIEVANCE REDRESS MECHANISM ...... 13 F. TRAINING AND CAPACITY BUILDING ...... 13 G. COSTS OF EMP IMPLEMENTATION DURING THE REPORTING PERIOD ...... 14 H. COMPLIANCE WITH LOAN AND PROJECT ASSURANCES ...... 15 V. NEXT STEPS ...... 16 APPENDIX 1. COMPLIANCE WITH ENVIRONMENTAL ASSURANCES ...... 17 APPENDIX 2. TRAINING ACTIVITIES ...... 21

EXECUTIVE SUMMARY

A. Overview.

1. This semi-annual report presents the status of compliance with the environment management plan (EMP) during the project implementation covering the period from effectiveness in January 2018 until December 2018. The key environment issues caused by project construction have been discussed, and corresponding improvement measures and follow up actions have been suggested according to the issues found.

B. Progress in Implementing the EMP.

1. In general, the project has been implemented in accordance with EMP requirements.

2. Contractual arrangement. Since all of the subprojects are still in design stage and bidding stage, no civil work contract has been awarded. Relevant environmental requirement have been included in the bidding document. PPMO has distributed the EMP to PACs and design institutes.

3. Institutional setup. PPMO, municipal and county PMOs and PACs have designated environment officers to conduct environment management. An environment person will be appointed by each contractor and each supervision company to be responsible for the implementation of environmental mitigation measures and internal monitoring.

4. Mitigation measures implementation. No construction has been initiated during reporting period and thus no mitigation measures implemented.

5. Public consultation and GRM. At the project preparation stage, PACs, design institutes, EIA Institutes have conducted related public consultation activities in accordance to ADB requirements. The GRM has been established and carried out by PPMO and PACs. No complaints have been received during this reporting period.

6. Environmental Monitoring. It has been planned by the PPMO and PACs that each PAC will contract one external environmental monitoring agency one month before civil work construction commencement.

7. Training. Environmental officers of PPMO and PACs have been working effectively on the project with the support of the loan implementation consultants (LICs) including environmental safeguard consultant(ESS). One formal training workshop has been conducted during reporting period. The LICs conducted training to PPMO, MPMOs, CPMOs and PACs and design institutes by phone.

C. Key issues

8. No key environmental issues was found during reporting period.

D. Lessons learned

9. No lessons learned.

E. Next steps

10. As shown in following table ES-1.

Table ES-0-1. Actions to be Taken during Following Reporting Period

Issue Action By When By Whom Training The ESS provide training to PACs, During field visits to ESS contractors and CSCs construction sites Environmental design PACs ensure the design institute to Design completion Design institute incorporate all of the measures date PACs proposed in the EMP into detail design PPMO and PACs monitor the Design completion PPMO, PACs progress of environmental design. date Environmental Bidding document include Bidding stage Tendering provisions into work environmental safeguards company, PACs contracts requirements Incorporation of environmental clauses into civil work contracts External Each PAC recruit one environmental One month before civil PACs environmental monitoring agency work construction monitoring Construction site Prepare site management plan before construction Contractors management commencement GRM disclosure Disclose GRM focal points to affected before construction Contractors, people at the main entrance to each commencement PACs construction site.

II. INTRODUCTION

A. Purpose of report

11. The purpose of this environmental monitoring report (EMR) is to describe and assess progress for implementation of the environmental management plan (EMP) for the Shanxi Inclusive Agricultural Value Chain Development Project, for the reporting period 11 January 2018 to 31 December 2018. This EMR is submitted in compliance with the Safeguard Policy Statement (SPS)1 of the Asian Development Bank (ADB) and the loan agreement between ADB and the project executing agency.

12. This is the first EMR for the project. It covers part of the design phase of the project since all the subprojects are still in design stage during reporting period. The report describes: (i) project readiness with respect to fulfilling environmental requirements; (ii) implementation of mitigation measures; (iii) monitoring activities; (iv) public consultations (including grievance redress); (v) training and capacity building; (vi) expenditures for EMP implementation (including mitigation, monitoring, and training); (vii) reporting; and (viii) an overall assessment of key achievements, challenges, issues, corrective actions, and lessons learned, during the reporting period.

B. Project outcome, outputs and subcomponents

13. The PACs comprise 18 companies and 1 cooperative (Xinjiang Hefeng Grain Planting Technology Cooperatives). The project outcome (income-generating opportunities from selected local specialty agricultural products are increased) will be accomplished through two outputs: (i) agricultural value chains (AVCs) strengthened; and (ii) inclusive business mechanism piloted. The PACs are grouped into two categories: (i) 9 PACs that were assessed to have the potential for value chain development (PAC1s) (output 1); and (ii) the other 10 PACs selected for the potential for inclusive business for output 2 (PAC2s).

14. Output 1: Agricultural value chains strengthened. This output will comprise nine subprojects of the PAC1s (i.e., five companies producing, processing, and/or marketing fruits, vegetable, mushroom, and wine; and four livestock and poultry farms). Investment component will help the PAC1s invest in civil works (workshops, cold storages, animal sheds, biogas digester) and/or goods (equipment and materials) for primary production, processing, and research and development to scale up and improve their operations and value chains based on their respective investment designs (AVC investment). Non- investment component will comprise (i) technical support for the PAC1s, including training and advisory services; (ii) preparation and implementation of the AVC action plans for at least eight PAC1s (model PAC1s) to demonstrate model AVCs; (iii) training on the value chain approach for agribusiness companies, cooperatives, farmers, and relevant government agencies; (iv) training for cooperatives and farmers on institutional and financial management, and cooperation arrangements in production and processing, and contracting; (v) awareness-raising and training on business opportunities in AVC for services providers, such as financial institutions and logistics services providers; and (vi) study tours on best practices on the AVC for the PAC1s and relevant government agencies.

15. Output 2: Inclusive business mechanism piloted. This output will comprise 10 subprojects of the PAC2s (i.e., eight companies producing, processing, and/or trading coarse grains, mushroom, fruits, vegetable and its seedlings, herbal plants; and two livestock and poultry farms). The investment component will help the PAC2s invest in civil

1 ADB. 2009. Safeguard Policy Statement. Manila.

1 works (workshops, storages, animal sheds, and biogas digester) and/or goods (equipment and materials) for primary production, processing, marketing, and product quality control to scale up and upgrade their operations based on the PAC-specific investment designs; and further demonstrate inclusive business to generate viable income-generating opportunities, particularly for the poor and low-income people, based on the inclusive business action plans (inclusive business investment). Non-investment component will comprise (i) technical support to the PAC2s, including training and advisory services; (ii) development and implementation of a localized inclusive business mechanism (LIBM), which entails company appraisal, incubation, monitoring, evaluation, and recognition, to systematically promote inclusive business; (iii) preparation of inclusive business action plans for the PAC2s and their implementation, (iv) training for the Shanxi Poverty Alleviation and Development Office (SPADO) and the Shanxi Provincial Agriculture Department on localized inclusive business mechanisms; (v) training on the inclusive business approach for agribusiness companies; (vi) preparation and sharing of a policy brief on the LIBM and experiences with SPG and the government for their consideration to incorporate it in the PRC’s Fourteenth Five-Year Plan; (vii) study tours on best practices on inclusive business for the PAC2s and relevant government agencies; (viii) dissemination of the achievements of the LIBM implementation.

16. The PACs have existing agreements with local farmers to provide technical support, training, and materials (e.g. seedlings, young livestock) and in return, the farmers sell their products to the PAC. At the cooperative, all members are farmers who are co-owners and have contributed their lands to a common pool, share the resources, work, and benefits.

17. Key project activities. All subproject facilities will be expansions to the existing facilities, and the siting of subprojects meets PRC regulations. None of the PAC locations affect ecologically sensitive areas, including water source protection areas, nature reserves, scenic reserves, and cultural heritage sites.

C. Project implementation progress

18. The project became effective on 11 January 2018. As of 31 December 2018, most of the subproject are still in design and bidding stage. Only one civil work contract of Lvheng has been signed; and Lvheng is about to start its construction during next reporting period. Heshun County Lvhe Ecological Agriculture & Livestock Development Co. Ltd.(Lvhe) is now revising its bidding documents in accordance with ADB’s comments. Other PACs are in the process of preparing and revising their respective preliminary design, construction drawings and technical standards. Physical progress by the project was estimated by the project management office (PMO) to be 0 %, the elapsed implementation of 18% (11 months out of 60 months since the date of project effectiveness). The project is currently rated by ADB as on track. Implementation progress for subcomponents is summarized in Table 2.

Table II-1 Project implementation progress as of 31 December 2018

PAC Scope Implementation Stage Output 1: Agricultural value chains strengthened. 1.Heshun Lvhe 1. Cattle shed construction (3,600 m2); Bidding 2. Forage pool construction (440 m2, 2,200 m3) 3. Cow procurement (1,500 heads) 2.Fenxi 1. Chicken breeding base construction Design Hongchang 2. Chicken shed equipment 3. Fushan 1. Construction of pig houses Design Guhuan 2. Biogas digesters 3. Feed processing workshops and equipment 4. Pig house equipment

PAC Scope Implementation Stage 5. Breeding pigs 4. Quwo Lvheng 1. Equipment for mushroom cultivation Civil work contract signed on 12 greenhouses December 2018, the construction 2. Construction of mushroom processing will be initiated during next reporting and storage facilities period. 3. Equipment for mushroom processing and storage facilities 4. Ancillary work construction 5. Production equipment 5. Liulin 1. Pig houses and equipment Design Fuzhongyuan 2. Fodder processing workshop 3. Breeding pigs 4. Ancillary civil works and equipment 6. Shanxi 1. Construction of new plastic Design Kaisheng greenhouses 2. One mushroom culturing workshop 3. Two processing workshops 4. Ancillary facilities and other equipment 7. Yuncheng 1. Construction of cold storage Design Xinke Taifang 2. Procurement of ancillary equipment 8. Shanxi 1. Poultry house Design Jinghua 2. Egg storage construction 3. Organic fertilizer processing plant 4. Ancillary works Equipment 9. Shanxi 1. Expanded area of grape vines on Removed from the project. Phoenix Wine farmers’ land 2.Wine-processing equipment procurement Output 2: Inclusive business mechanism piloted 10. Shanxi 1. Millet processing equipment Design Qinzhouhuang 2. Millet flour packaging equipment 3. Quality-testing equipment 11. Guangling 1. Fungus bags workshop Design Kitano 2. Cold storage 3. Fungus incubator 4. Strain production workshop 5. Supporting workshop construction 12. Shanxi Juxin 1. Cold storage transportation Design Weiye equipment 2. Seedling nursery greenhouse reconstruction 3. Seedling nursery equipment 4. One vegetable production line 13. Shanxi 1. Planting economic forest Design Qierkang 2. Land preparation Elaeagnus 3. Agricultural equipment 4. Irrigation facilities 5. Production facilities 14. Linfen 1. Pig houses and equipment Design Zhongde 2. Biogas plant 3. Breeding pigs 4. Ancillary facilities 15. Shilou Shude 1. Construction of integrated processing Design workshop 2. Production equipment 16. Shanxi 1. Jujube beverage production Design Tianzhirun equipment

PAC Scope Implementation Stage 2. Ancillary equipment 17. Xinjiang 1. Processing workshops Design Hefeng 2. Raw materials and finished product warehouse 3. Processing equipment 18. Shanxi Xinjiang 1. Cold storage Design Vegetable 2. Trading market 3. Market stalls 4. Vehicles and other equipment 19. Shanxi 1.Walnut storage Design Sanlihong 2.Cold storage 3.Production workshop 4.Ancillary building 5.Major equipment

III. SUMMARY OF THE PROJECT ENVIRONMENTAL MANAGEMENT PLAN

19. The project environmental management plan (EMP) is the primary reference document for the government and ADB for all environment-related mitigation, monitoring, reporting, and training activities for the project. Timely and effective implementation of the EMP is a key condition of the loan agreement between the government and ADB. The EMP was prepared as part of the initial environmental examination> in 2017. The EMP is being implemented about 1 year. The content of the EMP includes: institutional roles and responsibilities for EMP implementation; mitigation measures for environmental safeguard risks; environmental monitoring and reporting; training and capacity building; grievance redress mechanism (GRM); cost estimates; and, other information e.g. terms of reference for key positions.

20. Project institutional arrangements (Section B of the EMP). This section of the EMP describes the roles and responsibilities of relevant agencies for EMP implementation.

21. Project readiness assessment (Section B of the EMP). This is the first key step prior to the start of project civil works, to ensure that preparations for EMP implementation have been completed.

22. Potential impacts and mitigation (Section C of the EMP). This section of the EMP summarizes the potential environmental impacts and mitigation measures for the different phases of the project: detailed design and pre-construction phase; construction phase; and operations phase. Table EMP.2 in the EMP summarizes the environmental risks and mitigation measures, and agencies responsible for implementation and supervision of these measures..

23. Environmental monitoring program (Section D of the EMP). The program comprises three types of monitoring: (i) internal monitoring; (ii) external monitoring; and (iii) compliance monitoring Internal monitoring is assessment by the project implementation units (PIUs) and/or CSCs to ensure the contractors are implementing mitigation measures as described in their contractual arrangements and EMP. External monitoring is the measurement of specific environmental variables (e.g. air quality, dust levels, noise emissions) to ensure that the construction activities do not exceed the legal parameters and standards specified for the project. This is being conducted by certified monitoring agencies. It has been agreed that each PAC will hire one external agency. Compliance monitoring is the overall assessment of whether all EMP measures are being complied with, and is conducted by the PMO Environment Officer, supported by the ESS. This monitoring does not involve quantitative measurement of environmental variables, but is based on visual inspection, site visits, and review of the progress reports for internal and external monitoring

24. Reporting (Section D of the EMP). This section of the EMP describes the reporting requirements for the project, including the responsible agencies and reporting frequency.

25. Training (Section E of the EMP). This section of the EMP describes the training program for environmental safeguards, including the recipients and frequency of training.

26. Grievance Redress Mechanism (Section F of the EMP). This section of the EMP identifies the mechanisms to receive and manage any public environmental and/or social issues which may arise due to the Project.

27. Costs (Section G of the EMP). This section of the EMP describes the estimated costs for EMP implementation over 5 years. The cost estimates in the EMP include the costs for the mitigation measures, training, and monitoring.

IV. ENVIRONMENTAL MANAGEMENT DURING THE REPORTING PERIOD

28. This section summarizes the progress made to implement the project EMP during the current reporting period.

A. Assessment of project readiness

29. An assessment of project readiness (Table IV-1) was conducted between 11 January 2018 and 31 December 2018, before the start of project civil works. The assessment was conducted by the. PMO Environment Officer, PAC Environment Officers and ESS. The indicators that were assessed are presented in Table 3 (which corresponds with “Table EMP.1” of the EMP). These indicators include whether: (i) the EMP mitigation measures have been incorporated in the detailed design; and (ii) the PMO and PACs have included project-specific clauses for environment safeguards to be incorporated in the bidding documents.

Table IV-1 Project readiness assessment

Indicator Assessment Target Target Achieved? (Y/N) Environmental ESS and WRS are in place Yes Supervision Qualified EMAs contracted by PACs and endorsed by CPMOs No construction initiated Compliance with The borrower complies with loan covenants and assurances Yes loan assurances related to project design and environmental management planning Domestic Domestic EAs updated and are consistent with the IEE and Yes Environmental EMP Assessments Public involvement Meaningful consultation completed Yes GRM GRM established with entry points Yes Contracts include Bidding documents and contracts incorporating the Yes environmental environmental activities and safeguards listed as loan safeguards assurances Construction plans Site construction plan prepared for each PAC No construction initiated Water extraction Permit / approval for construction water received No permits/approvals Permit / approval for PAC facility operation received construction initiated Solid waste Documents showing capacity and willingness of agencies to Yes arrangements accept waste from each PAC (includes all waste streams not used for fertilizer or animal feed) EMP financial The required funds have been set aside for EMP No support implementation by each PAC construction initiated EMP = environmental management plan, ESS = environment safeguard specialist, GRM = grievance redress mechanism, PAC = project agribusiness company or cooperative, WRS = water resources specialist.

30. The assessment found the following: most of readiness requirements have been completed except the requirements for PACs to contract environmental monitoring agencies and acquire water extraction permits/approvals from local Water Resource Bureaus (WRBs). This is because all of the subproject are still in design and bidding document preparing stage. No construction was initiated during reporting period.

31. Next steps include:

 Each PAC recruit one environmental monitoring agency one month before civil work construction.  All civil work bidding documents include environmental safeguards requirements  Incorporation of environmental clauses into civil work contracts  The PACs ensure contractors prepare site management plan and submit to PACs before civil work construction commencement  PPMO, municipal and county PMOs, and ESS to supervise and guide the implementation of above measures. B. Institutional Arrangement

32. EA/PMO environment officer. Shanxi Provincial Government is the executing agency (EA). A Project Leading Group (PLG) has been established to help guiding the project. The PMO established by the provincial government holds overall responsibility for supervising the mitigation measures implementation and reporting to ADB. The PMO is also responsible for replying to petitions and/or complaints from the affected people in the project area. Mrs Li Xiaojuan has been designated as PMO environment officer.

33. IA/MPMOs/CPMOs environment officer. As the implementing agencies, each municipal government will be accountable for ensuring the implementation of the environmental management plan and coordinating the environmental audit and monitoring of the subproject(s) in the respective district/county. The district/county governments (CPMOs) will be responsible for ensuring the implementation of the specific mitigation measures in cooperation with PACs as prescribed in the EMP. Each MPMO and each CPMO has designated an environment officer (Table IV-2).

34. PACs environment person. Each PAC will be responsible for (i) implementing the EMP and developing further implementation details; (ii) supervising their staff and contractors’ implementation of mitigation measures during construction; (iii) implementing training programs for construction crews; (iv) incorporating environmental management, monitoring, and mitigation measures into construction and operation management plans; (v) developing and implementing internal regular environmental monitoring; (vi) redressing public grievances; and (vii) reporting performance of the EMP to CPMOs. All PACs have designated environment person (Table IV-2).

35. Loan implementation consultant-Environment Safeguard Specialist (ESS). The ESS will advise the PPMO, MPMOs, CPMOs, contractors, and construction supervision companies on all aspects of environmental management and monitoring for the project. The ESS will (i) assist in updating the EMP and environmental monitoring program, as needed; (ii) supervise the implementation of the mitigation measures specified in the EMP; (iii) support the PPMO MPMOs and CPMOs to prepare the semi-annual EMP monitoring and progress reports in English and Chinese and submit them to ADB; (iv) provide training to the project agencies on the PRC’s environmental laws, regulations and policies, ADB’s Safeguard Policy Statement (SPS, 2009), EMP implementation, and GRM in accordance with the training program; (v) identify any environment-related implementation issues, and propose necessary corrective actions; and (vi) undertake site visits for EMP inspection as required. Currently environmental specialist Mr. Zhang is ESS of the Project.

36. Loan implementation consultant - Water Resource Specialist (WRS). The WRS will (i) review the status of water resources use of all 19 PACs ;(ii) facilitate meetings with the PACs and provincial and local bureaus for water resources and environment protection; (iii)based on these initial assessments, identify the PACs which are the highest priority for

water resources management and monitoring; (iv) facilitate the preparation of water management plans (WMPs) by each PAC; (v) the WMPs will initially focus on the existing PAC facilities, and extend to the new facilities as they are completed; (vi) the WMPs will be presented as user-friendly practical manuals with step-by-step guides for PACs to increase water use efficiency and improve their resilience to water shortages and drought; (vii) identify simple and cost-effective water meters (and other equipment if needed) that are locally available in the PRC; (viii) guide the PACs in the installation of the water meters; (ix) begin piloting the WMPs, including the monitoring program, at the existing PAC facilities. Currently water resource specialist Mrs Zhang Xiying is the WRS of the Project.

37. Environment person of construction supervision companies (CSCs). Environment persons of CSCs will have the principal responsibility for observing contractor construction activities, and for ensuring that those activities are accomplished in compliance with the Project's environmental requirements, specifications, goals and objectives. They will ensure coordination at field level with representatives of government agencies in charge of EMP supervision as well as those in charge of control and monitoring activities. During this reporting period, no CSC has been recruited.

38. Environment person of contractors. An environment person will be appointed by each Contractor to be responsible for the implementation of environmental mitigation measures and internal monitoring. During this reporting period, no construction has been initiated and no environment persons has been appointed.

39. Environment monitoring agency (EMA). The environment performance of the project will be verified by external environmental monitoring agencies (EMA). The EMAs will be contracted by the PACs. It has been planned that each PAC will contract one EMA. The EMAs will conduct the external monitoring of EMP implementation. During reporting period, no EMA has been recruited.

40. Table IV-2 lists the environment person of PMO, MPMOs, CPMOs, PACs.

Table IV-2 PMO and PACs Safeguard Staff Environment and Social） Project Agribusiness Company / No. City Name County Name Name Cooperative Shanxi Qinzhouhuang Millet Group 1 Changzhi Hou Jiaxin Qin county Wang Yan Li Renyu Co., Ltd. Guangling Kitano Edible Fungus Co., 2 Datong Li Xiaodong Guangling Yang Haixia Chai Yushan Ltd. Shanxi JuxinWeiye Agricultural and 3 Taigu Wang Xiaofang Du Qingdan Sci & Tech Co., Ltd. Jinzhong Zhou Feng Heshun County Lvhe Ecological 4 Heshun Song Baozen Agriculture & Livestock Development Li Wuyan Co. Ltd. 5 Fenxi Zhang Liangliang FenxiHongchang Breeding Co., Ltd. Guo Xiangdong FushanGuhuan Husbandry Sci. & 6 Fushan Fan Ping Zhuo Guoyin Tech. Co., Ltd. Quwo Lvheng Agricultural 7 Quwo Zhu Xiaoyu Duan Wei Linfen Li Zhiqing Development Co., Ltd. Shanxi Qierkang Elaeagnus 8 Xiangning Chen Jihua Ding Cheng Biological Products Co. Yandu Linfen Zhongde Farming Technology 9 Yue Xia Sun Yue district Development Co., Ltd. Liulin Fuzhongyuan Agricultural 10 Liulin Liu Nulian Zhang Zhiping Development Co., Ltd. Lvliang Li Qing Shilou Shude Jujube Industry Co., 11 Shilou Wang Liming Ltd.

Project Agribusiness Company / No. City Name County Name Name Cooperative Shanxi Tianzhirun Date Processing 12 Ruicheng Gao Xianfang Nan Yifeng Co., Ltd. Xinjiang Hefeng Grain Planting 13 Technology Cooperatives Xinjiang Yan Xiaofang Shanxi Xinjiang Vegetable Industry 14 Shi Qiaohong Development Co., Ltd. Shanxi Kaisheng Fertilizers Group 15 Hu Jun Pan Yanhu Co., Ltd. Yuncheng Huo Zhujuan Yonghong dIstrict Yuncheng XinkeTaifang Vegetable 16 Jing Jun Trading Co., Ltd. 17 Yuanqu Wang Zhisheng Shanxi Shanlihong Food Co., Ltd. Zhang Min Shanxi Jinglong Group Livestock 18 Jishan Wei Hong Huang Jianyun Products Development Co., Ltd. 19 Shanxi Wei’erfu Biological Co, Ltd Sun Hao Yuncheng Xinjiang Pengxiang 20 Wang Libin Agricultural Development Company

C. Implementation of the project mitigation measures

41. Implementation of the mitigation measures in the EMP is summarized Table IV-3. This table is the same as Table EMP.2 of the EMP but has 2 additional columns, to summarize the implementation status and compliance for each listed mitigation measure within the reporting period. During reporting period, except Lvheng subproject signed the civil work contract, all the other subprojects are still in design and approval stage, this table only include the implementation of measures for Pre-construction and Construction Preparation Stages.

Table IV-3 Project impacts, mitigation measures, and implementation status Item Issue Mitigation / Safeguard measure Implementation In status, issues compliance identified and ? corrective actions 1.1 Detail a. Public Complete public consultations for two PACs Not conducted. The To be Design consultations (for which consultations were not conducted two PACs planned to canceled Stage during the project preparation phase): Shanxi remove from the Tianzhirun Date Processing Co., Ltd., and project Shanxi Xinjiang Vegetable Industry Development Co., Ltd. The detailed technical designs should reflect the findings of the consultations, as needed. b. • Guangling Kitano Edible Fungus Industrial Wastewater treatment Being Wastewater Development Co., Ltd.: ensure the design are being complied treatment wastewater treatment designs in DEA are conducted with design and included in the detailed engineering disposal designs; • All other PACs: ensure that all wastewater management measures and specifications in the DEAs are addressed, including new or upgraded WWTPs and emergency overflow ponds. This includes pretreatment facilities if discharging to central sewerage systems. Verify design and performance parameters of existing facilities. c. Manure Prepare and submit to PPMO details of the Manure treatment Being treatment design, management and monitoring of biogas have been arranged complied

Item Issue Mitigation / Safeguard measure Implementation In status, issues compliance identified and ? corrective actions arrangements systems or manure fermentation systems to with ensure compliance design standards and with standards for discharge and use as organic fertilizer (GB7959-87). For Hongchang PAC: Ensure design of temporary manure storage pit in DEA is included in the detail engineering design. e. Water PACs will obtain a water use permit for their PACs obtained water Complied extraction water inputs from the local Water Resources extraction permit permission Bureaus – providing all details required for that application to the WRB f. Climate change Ensure that the measures in Table EMP.4 of Climate change Being adaptation and this EMP are addressed as far as possible in adaptation and mitigation complied with mitigation the detailed engineering designs. This includes measures are being measures specific features for mitigation and adaptation, incorporated in to design related to energy efficiency and resource use. 1.2 Project Establish and Contract two external specialists, one ESS and ESS (Mr. Zhang Defa) Complied environment implement one WRS and WRS (Mrs. Zhang al Support environmental Xiying have been support positions mobilized since March 2018 Contract environmental monitoring agencies in No EMA has been Not complied each county contracted due to no construction initiated during reporting period Appoint PPMO Environmental and Social Mrs. Li Xiaojuan from Complied Officers PPMO has been appointed as Environmental and Social Officer since February 2018 Appoint County Environment and Social Each County PMO has Complied Officers appointed one environmental officer since February 2018 Assign Environment and Social officers at Each PAC has appointed Complied each PAC one environmental officer since February 2018 1.3 Update EMP Update mitigation measures defined in this No project scope change Not yet due Constructio EMP based on the detailed design, including during reporting period n re-disclosure (if needed) of EMP on ADB except some subproject Preparation website plan to remove from the Stage project Construction • Prepare environment section in the terms No construction initiated Not yet due plans and of reference for construction bidders documents • Prepare environmental contract clauses for construction from EMP Tables EMP.2 –EMP.8 Establish and • Identify GRM entry points and brief them The GRM entry points Being publicize GRM on their role has been identified and complied with • Publicize GRM entry points, people and publicized in contacts at each PAC construction site, in newspapers, websites,

Item Issue Mitigation / Safeguard measure Implementation In status, issues compliance identified and ? corrective actions local newspapers, websites, and village and village committee committee and community premises and community premises. It will be publicized at construction site during construction Construction site • Prepare construction plans for each PAC, No civil work contract Not yet due planning including (i) measures to avoid was signed during disturbance to existing operations; (ii) reporting period. No inclusion of relevant actions from this construction initiated table • Nominate an Environmental, Health and Safety Officer (EHSO) in contractors’ team • Develop site environmental health and safety plan for approval by the PAC. Construction • If contractor will use tankers to supply No civil work contract Not yet due water use construction water: obtain approvals, was signed during arrangements submit to PPMO reporting period. No • If water from on-site well(s) is to be used, construction initiated obtain approvals, submit to PPMO Environmental Provide training to contractors on their roles Environment training Complied training and responsibilities in EMP workshop was held in May 2018

42. Based on Table IV-3, of the 16 mitigation measures proposed in the EMP for design and pre-construction stage, 1 mitigation measure related to public consultation is to be cancelled due to the two PACs planned to remove from the project, 10 measures related to institutional arrangements, design and GRM, as well as water permission are being implemented, 4 measures to be implemented because they are not yet due as the mitigation measures is for the stage of project construction preparation and the only one civil work contract was signed at the end of reporting period, no construction is planned till now. One measure that are not fully in compliance with the EMP requirements include:

• The Quwo Lvheng PAC has not contracted an EMA, though the first civil work contract already in 12 December 2018.

43. Conclusions and next steps. During reporting period, institutional strengthening appointments has been conducted and incompliance with the EMP. The measures has been/being incorporated into the design. The next steps include:

 The PAC of Lvheng should contract an EMA and initiate the first monitoring as soon as possible.  All PACs recruit EMA one month before subproject civil work construction.  All PACs submit water use application one month before extracting water from water. D. Implementation of the project monitoring program

44. During reporting period, no environmental monitoring was conducted because no construction has been initiated.

45. Internal environmental monitoring will be conducted by CSCs, PMOs/PACs environmental officers. External environmental monitoring will be conducted by qualified environmental monitoring. Next steps include:

 The PAC of Lvheng should contract an EMA and initiate the first monitoring as soon as possible.  All PACs recruit EMA one month before subproject civil work construction.

E. Public consultations and grievance redress mechanism

46. This section describes the public consultations undertaken during the reporting period and implementation of the project grievance redress mechanism (GRM). Documentation for the consultations and/or GRM (e.g. lists of participants in stakeholder workshops) is in Appendix 4.

47. Public consultations. During preparation of the subproject EIAs, public consultation has been conducted by IAs with assistance of EIA teams. During this reporting period, no public consultation was conducted.

48. Grievance redress mechanism. A project specific GRM has been established. The environmental and social safeguard officers designated at all level of PMOs and will also be responsible for operating and managing GRM. Complaints can be received and dealt with via various entry points, including the municipal government public complaints hotline (number 12345) and EPB’s (number 12369). No grievance was documented during the reporting period.

49. Conclusions and next steps. The GRM has been established and appointed GRM coordinators within the PMO and PACs. No grievance was documented during reporting period. Next steps include:

 The ESS will provide training to GRM access points (GRM coordinators, contractors);  The GRM will be disclosed to affected people before construction begins at the main entrance to each construction site.  Maintain and update a Complaints Register to document all complaints.  Conduct public consultation during construction.

F. Training and capacity building

50. In May 2018, PPMO assisted ESS, WRS, social and procurement specialists in making a start-up training (Table IV-4). The training covered topics: ADB environment safeguard policy, PRC national environmental laws and regulations, EMP implementation and supervision, Environmental monitoring, inspection and reporting, public participation and GRM. The staff from PMO at municipality and County level and PACs took part in the training which involved 75 participants. Later on, the ESS and WRS visited 12 PACs of 11 Counties located in Linfen, Yuncheng, Jinzhong, Datong Municipality respectively and made investigations and on-site trainings to the local MPMOs, CPMOs and PACs, 52 people received environmental and water resource management training.

Table IV-4 Training for environmental safeguards conducted during the reporting period # Topic Trainees Content Trainees Date Outcomes M F Environmental PPMO, SPS, domestic 40 35 May 2018 Trainees safeguard MPMOs, environmental laws, demonstrated good policy CPMOs, international best practice understanding of PACs for construction; regulatory frameworks; EMP implementation Environmental Trainees expressed management appreciation for responsibilities during training, requested construction; reporting further guidance format for EMP compliance; concerning

# Topic Trainees Content Trainees Date Outcomes M F issues and corrective environmental actions; opportunities for management Environmental improvement of EMP; monitoring, Basic understanding of inspection and Environmental monitoring environmental reporting and inspection methods, monitoring method and data collection and reporting system. processing, interpretation of GRM data, reporting systems

GRM structure, Basic understanding of responsibilities, steps; GRM concepts types of grievances, achieved but further eligibility assessment; training required; gender responsive GRM reporting procedures Environmental PPMO, Environmental 30 22 June Basic understanding management 4 MPMOs management 2018, the requirements and of Linfen, responsibilities during and defined in the EMP, environmental Yuncheng, construction; reporting December environment monitoring Jinzhong, format for EMP compliance; 2018 monitoring and Datong issues and corrective reporting procedures 11 County actions; opportunities for PMOs, 12 improvement of EMP GRM PACs Basic understanding of GRM structure, GRM concepts and responsibilities, steps; implementation types of grievances, eligibility assessment; gender responsive GRM reporting procedures Total trainees 70 47 Grand total: 117

51. Results. During the trainings, all the participants agreed to conduct the environment management according to the EMP. After the training, basic understand the EMP implementation, monitoring and reporting requirements as well as the GRM concepts and implementation are achieved.

52. Conclusions and next steps. The training material has been delivered to all participants. It is hard for all participants to understand and clearly remember the EMP requirements and implementation procedures through one or two training events. Next steps include:

 With the progress of subprojects, new contractors and CSCs will be contracted, training to the contractors and CSCs on implementation of environment measures and inspection will be held in the following reporting period.

G. Costs of EMP implementation during the reporting period

53. The Table EMP.9 estimated the PPMO cost for EMP implementations . An estimate of total costs spent to date includes the following (Table IV-6):

Table IV-5 Cost Estimates in EMP and Actual Cost Item 2018 2019 2020 2021 2022 Subtotal EMP Actual EMP Actual EMP Actual EMP Actual EMP Actual EMP Actual Consultant – 100,800 100,800 100,800 100,800 100,800 100,800 504,000 100,800 ESS* Consultant – 106,400 106,400 106,400 106,400 106,400 106,400 532,000 106,400 WRS* GRM 1,800 1,800 800 800 800 800 5,000 1,800 Training program EMP 42,000 8,000 84,000 8,000 implementation Groundwater 30,000 22,000 30,000 22,000 awareness Agriculture 0 0 30,000 0 extension Humane treatment of 0 0 30,000 0 livestock GRM 24,000 8,000 24,000 8,000 Environmental protection, 24,000 8,000 24,000 8,000 monitoring TOTAL in 329,000 255,000 208,000 0 208,000 208,000 208,000 1,263,000 255,000 CNY Note: * means funded by the ADB

54. Based on these estimates, the total amount spent to date for implementation of the EMP is approximately CNY 255,000.

H. Compliance with loan and project assurances

55. The loan agreement and project agreement between the government and ADB includes 9 assurances (or “covenants”) for environmental safeguards and/or related to environmental issues (Appendix 1). These relate to the timely and effective implementation of the EMP, as well as project-specific assurances tailored to the current project. Compliance with these assurances is a condition of the loan and project agreements. For the current reporting period: except the assurance that require Tianzhuzui and Xinjiang PACs to conduct public consultation is not applicable as the two PACs would not participate in the project anymore, the other assurances are being complied with.

V. NEXT STEPS

56. Based on the findings of this EMR, actions and next steps are summarized in Table V-1.

Table V-1 Environmental issues and Corrective Actions Issue Action By When By Whom Training The ESS provide training to PACs, During field visits to ESS contractors and CSCs construction sites Environmental design PACs ensure the design institute to Design completion Design institute incorporate all of the measures date PACs proposed in the EMP into detail design PPMO and PACs monitor the Design completion PPMO, PACs progress of environmental design. date Environmental Bidding document include Bidding stage Tendering provisions into work environmental safeguards company, PACs contracts requirements Incorporation of environmental clauses into civil work contracts External Each PAC recruit one environmental One month before civil PACs environmental monitoring agency work construction monitoring Construction site Prepare site management plan before construction Contractors management commencement GRM disclosure Disclose GRM focal points to affected before construction Contractors, people at the main entrance to each commencement PACs construction site.

APPENDIX 1. COMPLIANCE WITH ENVIRONMENTAL ASSURANCES

No. Description Schedule Status/Remarks 1 Conditions for Award of Contract LA, Being complied The Borrower shall cause SPG, through the Project Executing Agencies Schedule with. acting under the Onlending Agreements, not to permit the award by any 4, para. 7 PAC of any Works contracts which involve environmental impacts until: (a) The county-level or other relevant Environmental Protection Bureau for the PAC’s location has approved the domestic environmental impact assessment required for the Works in accordance with applicable laws and regulations; and (b) SPG has confirmed, through the Project Implementing Agencies, that the PACs have incorporated the relevant provisions from the EMP into the Works contract. 2 Onlending Agreements PA, SPG shall cause the Project Implementing Agencies to enter into legally Schedule, Being complied valid and binding Onlending Agreements with the PACs located within para. 2 with. their respective administrative regions. SPG agrees that, subject as 10, onlending provided below, interest rates and fees on the onlent loans will be as agreements determined by each Project Implementing Agency in consultation with were signed SPG and that tenors of the onlent loans will be as set out in the PAM. between PACs SPG shall ensure that the Onlending Agreements clearly set out all of the with their obligations to be performed by the respective PAC under the Loan respective PIAs. Agreement, this Project Agreement, the PAM, the EMP, the SDAP and the GAP so as to enable SPG to perform its undertakings hereunder. Without limiting the foregoing, SPG shall ensure that the Onlending Agreements provide that:

(c) The PAC will use the proceeds of the loan to purchase specified Goods and Works and to pay for a portion of the cost of Consulting Services for specified Project uses, in the case of the Goods and Works in accordance with the Procurement Plan in the PAM and incorporating into the bidding contracts and contracts for all such Goods and Works, the environmental, labor, health, safety, gender, social, integrity and other requirements specified herein and in the PAM to be included in bidding and contracting documents;

(e) The PAC will ensure that no proceeds of the loans under the Onlending Agreement are used for any activities prohibited under Appendix 5 of the SPS;

(h) In applying the loan proceeds to the specified Project uses and in operating equipment and facilities funded in whole or part by the loan, the PAC will comply with all applicable environmental and social requirements in the EMP, the GAP and the SDAP;

((k) The PAC will promptly notify the Project Implementing Agency or SPADO of any occurrence that is not in accordance with, or not anticipated by, the IEE, the EMP or the SPS and will cooperate with SPG, the Project Implementing Agency and SPADO to develop and implement corrective or remedial actions;

(r) In addition to general undertakings about compliance with environmental laws and regulations and the EMP, the PAC shall make the following specific undertakings to the extent relevant to its activities under the Project and will also give any specific undertakings that SPG considers necessary for a particular PAC:

(i) Before and during implementation of the Works to be funded in whole or in part by the loan, the PAC will ensure that appropriate officers and staff complete training that is provided by the PPMO on implementation and supervision of the EMP.

(ii) Prior to borrowing any funds for Works, arrangements for the “external environment monitoring” described in Table

No. Description Schedule Status/Remarks EMP-4 of the EMP will be finalized. The external environment monitoring will be conducted by a domestic-certified agency, e.g., the environment monitoring station (EMS) of a county environment protection bureau, design institute or consulting firm. A clear arrangement will be made with the selected agency (either by the government or PAC) for the monitoring. The arrangement will be formalized in a written statement and/or contract, and a copy provided to ADB.

(iii) Prior to commencing any construction activities, the PAC will: (A) obtain water resource permits for existing facilities to be connected to the facilities funded under the Project and for the Project-funded facilities, and will provide the PPMO and the Project Implementing Agency or its project management office copies of these permits; (B) with the support of loan implementation consultants specified in the PAM, finalize the design of a water management plan for all Project-funded facilities, including a water monitoring program; (C) install the necessary equipment to implement the water monitoring program, including water meters at key water source and/or extraction points (e.g., wells, reservoirs, and/or municipal pipeline services); (D) initiate the water monitoring program with existing operations and then expand it to operations of the Project-funded facilities as they come on line; and (E) implement the water efficiency measures included in the facility designs and operational procedures.

(iv) The PAC will ensure that the design and operation of its facilities for solid and liquid waste collection, treatment, storage, and disposal: (A) comply with relevant regulatory standards; (B) match waste volume levels predicted in the Project’s feasibility study report; and (C) avoid pollution of surface water, groundwater and lands.

(v) If the PAC has biogas facilities, it will ensure that the design, management and monitoring of biogas facilities comply with regulatory standards for discharge of liquid and solid residuals such as organic fertilizer and will obtain confirmation from the relevant county environment protection bureau that all regulatory standards are met prior to commencing any construction.

(vi) If the PAC is engaged in livestock production and processing, (A) it will ensure that its processing facilities for waste, wastewater, and feed are equipped with electricity meters to measure energy use; and (B) it will maximize energy savings measures in design and operation of all such processing facilities.

(vii) The PAC will not expand site operations beyond its land and stock inventories described in the domestic feasibility study reports and ADB project documents.

(viii) Where the PAC’s Works will involve “associated facilities” as described in the EMP, it: (A) will ensure that such associated facilities are operational not later than the Project- funded facilities; and (B) it will not make any changes to such associated facilities that might impact their capacity or functioning without the consent of the Project Implementing Agency with the concurrence of SPG and ADB. 3 Prohibited List of Investments PA, Being complied SPG shall ensure that no proceeds of the Loan are used to finance any Schedule, with. activity included in the list of prohibited investment activities provided in para. 19 Appendix 5 of the SPS. 4 Environment SPG shall, and shall cause the PACs to, ensure that the preparation, PA, Being complied

No. Description Schedule Status/Remarks design, construction, implementation, operation and decommissioning of Schedule, with. the Project and all Project facilities comply with (a) all applicable laws and para. 6 regulations of the Borrower relating to environment, health and safety; (b) the Environmental Safeguards; and (c) all measures and requirements set forth in the IEE, the EMP, and any corrective or preventative actions (i) set forth in a Safeguards Monitoring Report, or (ii) which are subsequently agreed between ADB and SPG. 5 Safeguards – Related Provisions in Bidding Documents and Works PA, Being complied Contracts Schedule, with. SPG shall ensure that all bidding documents and contracts for Works para. 9 entered into by the PACs contain provisions that require contractors to: (a) comply with the measures relevant to the contractor set forth in the IEE and the EMP, and any corrective or preventative actions set forth in (i) a Safeguards Monitoring Report, or (ii) subsequently agreed between ADB and SPG; (b) make available a budget for all such environmental and social measures; and (c) provide SPG with a written notice of any unanticipated environmental, resettlement or indigenous peoples risks or impacts that arise during construction, implementation or operation of the Project that were not considered in the IEE and the EMP. 6 Pre-construction Readiness SPG shall ensure that the PPMO implements all of the following PA, Being complied measures before the Project Implementing Agencies provide any funds to Schedule, with. the PACs for: (a) appoint at least one qualified environment officer as full para. 10-12 time PPMO staff; (b) ensure that arrangements that satisfy the requirements of paragraph 2(r)(ii) of this Schedule have been made for all PACs for environmental impact monitoring; and (c) ensure that the arrangements require all environment monitoring agencies to report their monitoring results to the Project Executing Agencies or their project management offices at the same time as they report it to the PACs.

SPG shall cause the PPMO to ensure that public consultations required Not applicable under the SPS and the EMP are completed for Shanxi Tianzhirun Date as the two PACs Processing Co., Ltd, and Shanxi Xinjiang Vegetable Industry would not Development Co., Ltd. before they commence preparing detailed participate in the engineering designs for their respective subprojects. project anymore.

Before and during the implementation of Works, SPG shall cause the PPMO to organize and conduct training on implementation and Being complied supervision of the EMP for the Project Implementing Agencies, SPADO with. and their project management offices, the PACs, construction supervision companies, and contractors. 7 Safeguards Monitoring and Reporting SPG shall do the following: (a) submit semi-annually Safeguards Monitoring Reports to ADB in PA, Being complied respect of implementation of, and compliance with, Environmental Schedule, with. Safeguards, and the EMP during construction and the implementation of para. 13 the Project until the issuance of ADB’s Project completion report, unless a longer period is agreed in the EMP, and disclose relevant information from such reports to the respective affected people under the Environmental Safeguards promptly upon submission; (b) if any unanticipated environmental and/or social risks and impacts arise during construction, implementation or operation of the Project that were not considered in the IEE, the EMP and the LURT agreements, promptly inform ADB of the occurrence of such risks or impacts, with detailed description of the event and proposed corrective action plan; and (c) report any actual or potential breach of compliance with the measures and requirements set forth in the EMP promptly after becoming aware of the breach. 8 Grievance Redress Mechanism SPG shall ensure that a safeguards grievance redress mechanism PA, Being complied acceptable to ADB is established in accordance with the provisions of the Schedule, with. GRM IEE, the EMP and the PAM at the project management offices and the para. 25-26 established at PACs, within the timeframes specified in the relevant IEE, EMP and PPMO and

No. Description Schedule Status/Remarks PAM, to consider safeguards complaints. participating SPG shall ensure that within 60 days following the Effective Date of the PACs as well. Loan Agreement, a grievance redress mechanism acceptable to ADB is established for non-safeguards complaints in accordance with the PAM. In each case, such mechanism shall function to (a) review and document eligible complaints of Project stakeholders; (b) proactively address grievances; (c) provide the complainants with notice of the chosen mechanism and/or action; and (d) prepare and make available to ADB upon request periodic reports to summarize (i) the number of complaints received and resolved, (ii) chosen actions, and (iii) final outcomes of the grievances and make these reports available to ADB upon request. Eligible non-safeguards complaints include those related to the Project, any of the service providers, any person responsible for carrying out the Project, complaints on misuse of funds and other irregularities as well as gender issues. 9 Labor Standards, Health and Safety SPG shall ensure that the core labor standards and the Borrower’s PA, Being complied applicable laws and regulations are complied with during Project Schedule, with. implementation. SPG shall cause the PACs to include specific provisions para. 14-15 in the bidding documents and contracts financed by onlent proceeds of ADB loans under the Project requiring that the contractors, among other things: (a) comply with the Borrower’s applicable labor law and regulations and incorporate applicable workplace occupational safety norms; (b) in particular, do not use child labor, do not discriminate workers in respect of employment and occupation, do not use forced labor; and (c) disseminate, or engage appropriate service providers to disseminate, information on the risks of sexually transmitted diseases, including HIV/AIDS, to the employees of contractors engaged under the Project and to members of the local communities surrounding the Project area, particularly women. SPG shall strictly monitor compliance with the requirements set forth in paragraph 14 above and provide ADB with regular reports.

APPENDIX 2. TRAINING ACTIVITIES

Training Workshop in Taiyuan, May 2018

List of Participants

APPENDIX 3. PHOTOGRAPHES

Lvheng PAC, Quwo County

Zhongde PAC, Linfen City

Guhuan PAC, Fushan county Hongchang PAC, Fenxi county

Shanlihong PAC, Huanqu county

Pengxiang PAC, Xinjiang county, Yuncheng

Qierkang PAC, Xiangning, Linfen

Wei’erfu PAC (proposed newly added), Ruicheng City

Kaisheng PAC, Yanhu district, Yuncheng City

Jinlong PAC, Jihan County, Yuncheng City

Qinzhouhuang, Qin County, Changzhi City

Fuzhongyuan PAC, Liulin County, Lvliang City

Shude PAC, Shilou County,Lvliang City