Integrated Safeguards Data Sheet (Updated) Report No: AC145 Section I - Basic Information Date ISDS Prepared/Updated: 04/20/2004 A. Basic Project Data (from PDS) Public Disclosure Authorized I.A.1. Project Statistics Country: Project ID: P057933 Project: TAI BASIN URBAN ENVIRONMENT Task Team Leader: Stuart Whitehead PROJECT Authorized to Appraise Date: November 7, 2003 IBRD Amount ($m): 64.61 Bank Approval: June 24, 2004 IDA Amount ($m): Managing Unit: EASUR Sector: Sewerage (85%); Flood protection (15%) Lending Instrument: Specific Investment Loan (SIL) Theme: Water resource management (P); Pollution Status: Lending management and environmental health (P); Environmental policies and institutions (P); Other urban development (S)

Public Disclosure Authorized I.A.2. Project Objectives (From PDS): The Government’s objective for the proposed Tai Basin Urban Environment Project is to enhance the quality of life of the rapidly increasing urban population and to enhance economic competitiveness to sustain economic growth in and , key municipalities in the Tai Basin and the Yangtze River Delta economic region, by alleviating degradation of water resources and improving the quality of the urban environment.

To meet this objective, the project is designed to increase the capture and treatment of wastewater in core cities and the rapidly industrializing suburban districts through physical investments and institutional and financial reforms that will enhance the viability and sustainability of wastewater systems, particularly in these rapidly developing districts. The project will support rehabilitation and water quality improvement in several urban and canal and river systems Public Disclosure Authorized through physical investments and improved water management. In addition, the project will support lakeshore rehabilitation around Wuli Lake as a new development and amenity area for Wuxi City. Finally, the project will seek to strengthen water resource protection in the Tai Basin through improved and integrated planning, water quality monitoring and environmental management. The project design therefore reflects the core elements of the Bank’s Urban Strategy – livability, good governance, competitiveness and bankability.

I.A.3. Project Description (From PDS): A. Wuxi Municipality

Wuli Lake Sub-project ($37.4 million): The component deals with the most-heavily polluted perimeter lake – Wuli Lake, and includes: a) pollution control facilities (10 sluice gates, 1

Public Disclosure Authorized shiplock); b) lake-bank restoration (19.4 km); and c) pilot research in ecological restoration.

Wastewater Treatment Plants and Networks ($70.9 million): The component will include: a) the first phase of the Chengbei-Huishan WWTP in with a capacity of 50,000 m3/day of primary and 25,000 m3/day of secondary treatment as well as 58 km of sewers serving 2 ISDS

Changan and Youqiao industrial area; b) expansion of Dongting WWTP in Xishan District (from 20,000 to 50,000 m3/day capacity) and 40 km of sewers; c) a new WWTP (25,000 m3/day capacity) and 130 km of sewers including 3 lifting stations to develop the full skeleton of the sewer network and user connections serving Anzhen, Houqiao and Yangjian townships and the proposed Wuxi East Industrial Park, all within Xishan District.

Wuxi City Sewer Network Rehabilitation ($21.9 million): support to expedite the ongoing rehabilitation program to increase the conveyance of wastewater flows to be treated in the additional WWTPs under construction or planned by Wuxi city with own financing.

B. Suzhou Municipality

Urban Area Canal Network Rehabilitation ($24.4 million): The component would include: control gates on Xujiang and Shangtang Rivers to enhance flood protection and prevent the intrusion of polluted water from the Grand Canal into Suzhou’s urban canal system and to prevent the loss of clean water diverted through Xitanghe from the WangYu River. This scheme is also part of the overall flood protection plan for Suzhou city area. The component includes one sluice gate/shiplock on the Xujiang River and on sluice gate/shiplock on the Shangtang River with bank heightening works. The component would also finance sediment dredging for 65 km to restore transit and absorptive flood capacities of canals in the urban area of Suzhou.

Wastewater Treatment Plants and Networks ($43.4 million): The component will include: a) a second phase of the Fuxin WWTP (100,000 m3/day capacity) serving the south and west areas of Suzhou city; b) a second phase of the Loujiang WWTP (80,000 m3/day capacity) serving the north and east areas of Suzhou city; and c) the first phase of a WWTP (25,000 m3/day capacity) and 72 km of associated sewers serving Wuzhong Economic Development Zone in .

C. Implementation Management and Sector Development Assistance ($3.8 million) This component will provide: a) technical assistance for wastewater masterplans for Wuxi and Suzhou Municipalities; b) capacity building for wastewater utilities management and financing; c) technical assistance for engineering design and construction supervision; d) locally-financed technical assistance to conduct a catchment management planning exercise for the WangYu River; and e) locally-financed technical assistance for external monitoring and evaluation of implementation of RAPs and EMP. 3 ISDS

Components:

Wuxi - Wuli Lake Rehabilitation Wuxi - Wastewater Treatment Plants/networks Wuxi - City Sewer Network Rehabilitation Suzhou - Central Urban Area Canal Network Rehabilitation Suzhou - Polluted Water Control Schemes (on Xujiang and Shangtang Rivers) Suzhou - Wastewater Treatment Plants/networks T/A and Capacity Building

I.A.4. Project Location: (Geographic location, information about the key environmental and social characteristics of the area and population likely to be affected, and proximity to any protected areas, or sites or critical natural habitats, or any other culturally or socially sensitive areas.)

The Lake Tai Basin is one of the most heavily populated and economically active areas of China. In 2000, over half of the Basin’s residents lived in cities and peri-urban towns and urbanization continues to increase. Driven by high levels of foreign direct investment, total GDP in the Basin has been growing at over 10% per year on average and stands at RMB 1 trillion – approximately 11% of the national total. In 1999, the GDP of Suzhou (RMB 136 billion) and Wuxi (RMB 114 billion) together accounted for almost three quarters of the GDP the area of the Tai Basin within Province in 1999.

Located in the Yangtze River delta region of Jiangsu and Zhejiang Provinces and Shanghai Municipality, Tai Basin is also one of China’s most important water resources. Lake Tai and its dense network of rivers and canals provide water supply for the majority of the Basin’s 36.3 million residents including those who live in the large and growing urban economies of Wuxi and Suzhou in Jiangsu Province. In addition, the Basin supplies over half of the domestic water supply for Shanghai Municipality.

Despite the region’s dependence on the water resources of the Basin for water supply, the provision of environmental infrastructure and services, including the collection and treatment of wastewater, has failed to keep pace with the rapidly growing economy of the region. Increasing flows of untreated domestic, industrial and agricultural wastewater into the Basin’s rivers and lakes have put the region’s water resources under severe environmental pressure.

Government reports indicate that the water quality in over 85 percent of the main water bodies in the Basin is Class IV or worse (unsuitable for domestic supply) and deteriorating. The canals within Suzhou and Wuxi cities are reportedly worse than Class V, the lowest classification according to Chinese water quality standards. Urban environmental conditions as poor as these have significant negative impact on the health of citizens and the livability of the urban areas.

No historic or cultural heritage sites are affected by the project.

B. Check Environmental Classification: A (Full Assessment) Comments: The project is classified as "A" category for EA purpose. This is deemed appropriate 4 ISDS because of the characteristics of the proposed investments in wastewater and environmental infrastructure in the Tai Basin.

C. Safeguard Policies Triggered (from PDS) (click on for a detailed desciption or click on the policy number for a brief description) Policy Triggered Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) Yes No Natural Habitats (OP 4.04, BP 4.04, GP 4.04) Yes No Forestry (OP 4.36, GP 4.36) Yes No Pest Management (OP 4.09) Yes No Cultural Property (OPN 11.03) Yes No Indigenous Peoples (OD 4.20) Yes No Involuntary Resettlement (OP/BP 4.12) Yes No Safety of Dams (OP 4.37, BP 4.37) Yes No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) Yes No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)* Yes No

Section II - Key Safeguard Issues and Their Management D. Summary of Key Safeguard Issues. Please fill in all relevant questions. If information is not available, describe steps to be taken to obtain necessary data.

II.D.1a. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts. The project investments will have positive environmental impacts, in terms of improving the water quality in the Tai Basin. Domestic and industrial wastewaters will be collected and treated at six wastewater treatment plants (WWTPs) to remove pollutants. For year 2010, the expected reduction of pollutant discharges to surface waters from the six WWTPs are 122 tpd of CODCr, 62 tpd of BOD5/day, 6 tpd of NH3-N, 80 tpd of SS, and 0. 6 tpd of TP. These reductions will improve the quality of the receiving surface waters in Suzhou and Wuxi and downstream areas. The canal network rehabilitation investments in Suzhou under this project – including dredging and construction of sluice gates and ship locks - will improve the water quality and reduce the risk of flooding in this City. The Wuli Lake restoration investments under this project will improve the water quality and aquatic life in the Lake, and create a public greenbelt for tourism and recreation.

Minor adverse impacts during construction and operation of particular investments are expected, but will be mitigated. The adverse impacts will be mostly in the form of noise, odor (stink gas), particulate matter (PM) emissions, sediment and sludge discharges, and traffic congestion. Noise emissions from WWTP have been assessed at the boundary line of WWTPs, and found to be in excess of standards only in the case of the Fuxin WWTP (both day and night times), Huishan WWTP (only at night time), and Loujiang WWTPs (only at night time). However, adverse impacts on receptors – which are 200 m to 500 m away from these WWTPs – are not expected. Regarding transportation of sediments dredged from the Suzhou Canals to the disposal site, alternatives were evaluated considering such factors noise and traffic impacts. Mitigatory measures for noise emissions will include no construction at night, use of equipment with low 5 ISDS noise, use of vehicles with noise control, and setting up of construction barriers. In addition, cargo ships will not be allowed at any time and pleasure boats will not be allowed at nights in the Shangtang and Xujiang networks in Suzhou, ship noise will be limited to 55 dBA, silencers will be installed on ships for noise suppression, siren duration and frequencies will be minimized, and use of sirens will not be permitted in residential areas. The key adverse social impacts of the project are largely related to land acquisition and demolition of structures for different components of the project. In accordance with local laws, regulations and the World Bank OP 4.12 on Involuntary Resettlement, two RAPs have been prepared for the various components, including wastewater treatment plants, sewerage networks, canal dredging, flood control facilities, sluice gates and embankment of Wuli lake in Suzhou and Wuxi Municipalities, respectively. The two RAPs are each based on a detailed census of the affected people, inventory of affected assets, socioeconomic surveys and extensive consultations with the project affected people.

Odor emissions from the Loujiang WWTP were estimated to reach ambient standards at a guesthouse 20 meters from this WWTP. As a mitigation measure, the guesthouse will be converted to another use that is not sensitive to odor. Odor emissions from the sedimentation and SBR tanks of six WWTPs financed under this project will be minimized by proper operation through adjustment of the air flow rate of the blower to bring wastewater to aerobic state, and through timely sludge dewatering, handling of sludge cakes in dewatering rooms, use of sealed trucks for transporting the sludge to the disposal site, sprinkling temporary sludge storage areas with bleach, and planting trees around the aeration tanks and WWTP. To mitigate PM emissions, vehicles will be covered and their speed will be limited to 40 km/h, and their wheels will be cleaned of mud.

Sediments from Suzhou Canals have been tested for hazardous materials and found to be within standards prescribed by applicable Chinese regulations - most indicators were low or undetectable - and, in accordance with applicable Chinese regulations, will be disposed at a site at Sanjiaozhui that is zoned as green area in Suzhou’s masterplan. Even so, further testing for hazardous materials is to be undertaken of sediments in the Xiaomiduqiao River section prior top dredging to determine if other disposal arrangements, for example at purpose built cells at the municipal landfill. Sludge from WWTPs will be tested for hazardous characteristics using the leachate test under applicable Chinese regulations/standards. Any sludge found to be hazardous will be disposed at a hazardous waste landfill. If the sludge is found to be non-hazardous, it will be disposed as an industrial solid waste at a landfill cell that is designed and operated in compliance with Chinese Government regulations. Prior to receiving the sludge, the hazardous and/or sanitary landfills will be certified as designed and operated in compliance with applicable government regulations. Transportation of the WWTP sludge will be conducted by leak proof trucks.

Public consultations have revealed considerable support for this project. However, concerns were also expressed about the potential unpleasant odors from WWTPs, and greater noise and dust levels as well as traffic. Some suggested shorter construction periods to reduce adverse impacts during the construction period. Regarding the ship lock at the Shangtang River, the sight of the Hangshang Temple was emphasized and the gate was re-sited. Agricultural use of the WWTP sludge was viewed not feasible by affected people for the Wuzhong and Dongting WWTPs. 6 ISDS

These concerns have been incorporated into the project design and in the EMP.

The key adverse social impacts of the project are largely related to land acquisition and demolition of structures for different components of the project. In accordance with local laws, regulations and the World Bank OP 4.12 on Involuntary Resettlement, two RAPs have been prepared for the various components, including wastewater treatment plants, sewerage networks, canal dredging, flood control facilities, sluice gates and embankment of Wuli lake in Suzhou and Wuxi Municipalities, respectively. The two RAPs are each based on a detailed census of the affected people, inventory of affected assets, socioeconomic surveys and extensive consultations with the project affected people.

The various components of the project will require a total of 904.7 mu of land, demolition of 53967 m2 of houses, relocation of 16 enterprises. These would affect 536 people due to land acquisition and 774 people in 176 households due to house demolition. Cash compensation or replacement housing will be offered to those who will lose their residence. Enterprises will be offered an alternative site and compensated for property loss. For persons whose employment will be affected temporarily, cash compensation will be paid for their income losses. The RAPs detail the census, inventory, project resettlement policy, compensation rates and budget, compensation and rehabilitation programs, institutional and monitoring arrangements.

A retroactive review was undertaken for related resettlement activities which have already been completed. The retroactive review provided detailed information of the number of affected people and the status of livelihood rehabilitation.

A Resettlement Policy Framework has been prepared in accordance with local laws, regulations and World Bank OP 4.12 on Involuntary Resettlement for the linked sewer networks rehabilitation in Suzhou and another for the Bank-financed Wuxi Sewer Network Rehabilitation Component. Details are available in Annex II-B.

No indigenous ethnic minority communities have been identified living in the project areas.

II.D.1b. Describe any potential cumulative impacts due to application of more than one safeguard policy or due to multiple project component. None

II.D.1c Describe any potential long term impacts due to anticipated future activities in the project area. No potential long-term negative impacts are envisaged.

II.D.2. In light of 1, describe the proposed treatment of alternatives (if required) None required

II.D.3. Describe arrangement for the borrower to address safeguard issues An EA including an EMP and RAPs have been prepared by the TBUEPO in conjunction with Wuxi and Suzhou Municipalities. Final EA, EMP and RAPs have been reviewed to ensure that they fully reflect the Bank’s comments and comply with Bank policies and guidelines. 7 ISDS

The following reporting arrangements by the Borrower have been made to address the safeguards issues:

(1) Clean Production Program by the Jiangsu Province. The Borrower will provide to the Bank on an annual basis the following documentation: (i) information on the industrial pollution prevention audits (past, current, and future) by industries that will discharge to each WWTP financed under this project, (ii) the pollution prevention implementation plan for each of these industries (after the audits are performed), and (iii) the expected reductions in wastewater flows and pollutant loads from each of these industries (after the audits are performed).

(2) Compliance Status of Industries and Enforcement by Suzhou and Wuxi EPBs. Wuxi and Suzhou EPBs will provide periodic (e.g. yearly) information to the Bank about: (i) the status of compliance by each discharging industry (to the WWTPs financed under this project), and (ii) their enforcement efforts to bring the polluters - discharging to the project-financed WWTPs - under compliance.

(3) WWTP Disposal at the Qizishan and Taohuashan Domestic Landfills. The Borrower agrees that the non-hazardous WWTP sludge is Category I industrial waste that requires disposal at a landfill designed and operated according to GB18599-2001 ("Disposal Site for General Industrial Wastes"). Given such industrial landfills are not yet available in Suzhou or Wuxi, the Borrower proposes to open a separate cell (zone) for the non-hazardous WWTP sludge at the Qizishan and Taohuashan Domestic Landfills, a solution which is acceptable to the Bank. During project implementation, the Borrower will certify that the cells that will receive non-hazardous sludge from the project WWTPs are designed and operated according to GB18599-2001. The certification methodology needs to be acceptable to the Bank.

(4) Environmental Management Plan (EMP). The Borrower will prepare a stand-alone EMP for use as a working document during project implementation. The Borrower will submit to the Bank periodic (e.g. bi-annual) reports on all activities included in the EMP (in particular, the monitoring results with compiled and analyzed data).

II.D.4. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Consultations with the potentially affected people were conducted by the EA team in two stages. First stage public consultations were held prior and during preparation of the EA Report (period between October 2002 and August 2003) at the following locations:

Project component/sub-component Location of consultations Wuzhong WWTP Yinxi Village, Hongzhuang Loujiang WWTP, Fuxin WWTP Hengtang Town, Xinguo Village, Youlian Village, Meiwan Village Huishan WWTP Huishan District Dongting WWTP Wangsongbang Village, Zhuangqiao Village Anzhen WWTP Nianyu Village, Nongxin Village River Course Dredging (Suzhou) , , 8 ISDS

Canglang District Polluted Water Control (Gates in Suzhou) Jinchang District Wuli Lake Restoration Dafu Town, Dongjiang Town, Jincheng and Xuelang Towns

At this stage, the EA team held meetings with the potentially affected people to discuss the EA TOR, including information about the project components and activities involved, potential environmental impacts, mitigatory measures, and the implementation schedule. Informal discussions and on-site visits were held, and questionnaires were distributed to understand the public attitude and needs about the project’s environmental aspects. The interviewees were from different sexes, age groups, culture levels, and family structures.

Second stage public consultations were conducted in July 2003 by the EA team after completion of the draft EA Report to disseminate the conclusions of the EA Report and disclose the mitigatory measures to the potentially affected people. This provided an opportunity to address the concerns that had been raised by the affected people regarding the project. Consultative meetings were held regarding the Anzhen WWTP (in Nianyu Village), Dongting WWTP (in Wangsongbang), Wuzhong WWTP (Yinxi Village), and Wuli Lake restoration (in Dafu Town, Dongjiang Town, Jingcheng and Xuelang Towns). In addition, on-the-spot interviews were held and questionnaires were used to receive feedback. In August 2003, the Project was publicized by the EA team in Hohai University’s website ( http://www.hhu.edu.cn), and a 24-hour telephone hotline was opened.

E. Safeguards Classification (select in SAP). Category is determined by the highest impact in any policy. Or on basis of cumulative impacts from multiple safeguards. Whenever an individual safeguard policy is triggered the provisions of that policy apply.

[ ] S1. – Significant, cumulative and/or irreversible impacts; or significant technical and institutional risks in management of one or more safeguard areas [X] S2. – One or more safeguard policies are triggered, but effects are limited in their impact and are technically and institutionally manageable [ ] S3. – No safeguard issues [ ] SF. – Financial intermediary projects, social development funds, community driven development or similar projects which require a safeguard framework or programmatic approach to address safeguard issues.

F. Disclosure Requirements Environmental Assessment/Analysis/Management Plan: Expected Actual Date of receipt by the Bank 7/20/2003 10/13/2003 Date of “in-country” disclosure 10/16/2003 Date of submission to InfoShop 10/17/2003 Date of distributing the Exec. Summary of the EA to the Executive 3/29/2004 Directors (For category A projects) Resettlement Action Plan/Framework: Expected Actual Date of receipt by the Bank 7/20/2003 10/15/2003 Date of “in-country” disclosure 10/15/2003 9 ISDS

Date of submission to InfoShop 10/16/2003 Indigenous Peoples Development Plan/Framework: Expected Actual Date of receipt by the Bank Date of “in-country” disclosure Date of submission to InfoShop Pest Management Plan: Expected Actual Date of receipt by the Bank Date of “in-country” disclosure Date of submission to InfoShop Dam Safety Management Plan: Expected Actual Date of receipt by the Bank Date of “in-country” disclosure Date of submission to InfoShop If in-country disclosure of any of the above documents is not expected, please explain why. 10 ISDS

Signed and submitted by Name Date Task Team Leader: Stuart Whitehead 03/26/2004 Project Safeguards Specialists 1: Chongwu Sun 03/31/2004 Project Safeguards Specialists 2: Bekir A. Onursal/Person/World Bank 04/02/2004 Project Safeguards Specialists 3: Chaogang Wang/Person/World Bank 04/13/2004

Approved by: Name Date Regional Safeguards Coordinator: Glenn S. Morgan 04/03/2004 Sector Manager/Director Keshav Varma 03/29/2004