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42916-014: Sarulla Geothermal Power Development Project Indigenous Peoples Plan Project Number: 42916 October 2013 Document Stage: Draft Proposed Loan Sarulla Operations Limited, Sarulla Power Asset Limited, Kyuden Sarulla Private Limited, OrSarulla Incorporated and PT Medco Geopower Sarulla Sarulla Geothermal Power Development Project (Indonesia) Prepared by The Indigenous Peoples plan is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff. DRAFT FINAL REPORT Volume III: Indigenous Peoples Plan Development of Sarulla Geothermal Field and Power Plant of 330 MW Capacity North Tapanuli Regency, North Sumatera Province October 2013 TABLE OF CONTENTS ES EXECUTIVE SUMMARY ................................................................................................. 1 1 INTRODUCTION ............................................................................................................. 1 1.1 PROJECT PROPONENT ........................................................................................................... 1 1.2 REPORT CONTEXT ................................................................................................................. 1 1.3 STRUCTURE OF THE IPP ........................................................................................................ 2 2 PROJECT DESCRIPTION ............................................................................................... 4 2.1 PROJECT LOCATION ............................................................................................................. 4 2.2 PROJECT OVERVIEW ............................................................................................................. 4 2.2.1 Pre-construction Stage ........................................................................................................ 8 2.2.2 Construction Stage ............................................................................................................ 11 2.2.3 Operation Stage ................................................................................................................. 18 3 SOCIAL IMPACT ASSESSMENT ............................................................................... 20 3.1 LEGAL AND INSTITUTIONAL FRAMEWORK ....................................................................... 20 3.1.1 National Framework ........................................................................................................ 20 3.1.2 Nation Legal Provisions Relating to the Recognition of Indigenous Peoples .......... 21 3.1.3 The AMAN (the ‘Nusantara’ Indigenous People Alliance) Concept ........................ 22 3.1.4 ADB Indigenous Peoples Safeguard Requirements .................................................... 23 3.1.5 Japan Bank for International Cooperation (JBIC) Guidelines for Confirmation of Environmental and Social Considerations ............................................................... 25 3.1.6 The International Finance Corporation (IFC) Performance Standards ..................... 25 3.2 SOCIAL BASELINE ............................................................................................................... 26 3.2.1 Methodology ..................................................................................................................... 27 3.2.2 Limitations ......................................................................................................................... 33 3.3 SOCIAL OVERVIEW OF THE PROJECT AREA ....................................................................... 33 3.4 DEMOGRAPHICS ................................................................................................................. 37 3.4.1 Population .......................................................................................................................... 37 3.4.2 Household Characteristics ............................................................................................... 38 3.5 ETHNIC PROFILE ................................................................................................................. 39 3.5.2 Customs and Cultural Practices...................................................................................... 41 3.6 ECONOMICS ........................................................................................................................ 42 3.6.1 Regional Economics .......................................................................................................... 42 3.6.2 Labour Market ................................................................................................................... 44 3.6.3 Livelihoods and Income ................................................................................................... 46 3.6.4 Land Ownership ............................................................................................................... 51 3.6.5 Housing Conditions ......................................................................................................... 52 Sarulla Geothermal Development IPP SARULLA OPERATIONS LIMITED (SOL) 3.6.6 Economic Infrastructure .................................................................................................. 53 3.7 HEALTH .............................................................................................................................. 54 3.7.1 Key Health Indicators ...................................................................................................... 54 3.7.2 Disease Status .................................................................................................................... 55 3.7.3 Environmental Health ...................................................................................................... 57 3.7.4 Health Awareness ............................................................................................................. 58 3.7.5 Health Infrastructure ........................................................................................................ 59 3.7.6 Education ........................................................................................................................... 61 3.7.7 Religion .............................................................................................................................. 63 3.7.8 Community Services and Infrastructure ....................................................................... 64 3.7.9 Crime .................................................................................................................................. 67 3.7.10 Social Interactions ............................................................................................................. 68 3.7.11 Vulnerability in the Project Area .................................................................................... 68 3.8 PERCEPTIONS TOWARDS THE PROJECT .............................................................................. 70 3.9 SOCIAL IMPACT ASSESSMENT METHODOLOGY ................................................................ 73 3.10 SOCIAL IMPACT ASSESSMENT DEFINITIONS ..................................................................... 73 3.10.1 Prediction of Impacts ........................................................................................................ 75 3.10.2 Characterisation of Impacts ............................................................................................. 75 3.10.3 Determining Magnitude .................................................................................................. 77 3.10.4 Determining Vulnerability .............................................................................................. 77 3.11 EVALUATING SIGNIFICANCE FOR SOCIAL AND HEALTH IMPACTS ................................ 79 3.11.1 Integration of Stakeholder Perceptions ......................................................................... 81 3.11.2 Interpretation of Social Impact Significance ................................................................. 82 3.12 SOCIAL IMPACT ASSESSMENT RESULTS SUMMARY .......................................................... 83 3.12.1 Impacts to IP Cultural Beliefs and Customs ................................................................. 85 3.13 GENDER IMPACTS ............................................................................................................... 87 3.13.1 Discussion of Impacts ....................................................................................................... 87 3.13.2 Impact Evaluation and Significance ............................................................................... 87 3.14 LAND ACQUISITION ........................................................................................................... 89 3.14.1 Discussion of Impacts ....................................................................................................... 89 3.14.2 Impact Evaluation and Significance ............................................................................... 90 3.15 WORKFORCE RECRUITMENT .............................................................................................. 92 3.15.1 Discussion of Impacts ....................................................................................................... 92 3.15.2 Impact Evaluation and Significance ............................................................................... 93 3.16 PROJECT REQUIREMENTS FOR GOODS AND SERVICES ....................................................
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