World Bank Document

E1448 ADDITIONAL FINANCING FOR THE FEDERAL WATER RESOURCES v. 1 MANAGEMENT PROJECT Public Disclosure Authorized ENVIRONMENTAL ASSESSMENT AND ENVIRONMENTAL MANAGEMENT FRAMEWORK Public Disclosure Authorized Public Disclosure Authorized UGPO – PROJECT MANAGEMENT UNIT FOR CIVIL WORKS AT THE MINISTRY OF NATIONAL INTEGRATION September 22, 2006 Public Disclosure Authorized 1. Executive summary This Environmental Assessment and Environmental Management Framework refers to the proposed additional financing, in the amount of US$ 100 million (one hundred million US dollars) to the Federative Republic of Brazil, for the continuation of the implementation of the Federal Water Resources Management Project (PROAGUA), P038895, Ln. 4310-BR, approved by the Board on April 2, 1998. This proposed additional loan would help finance the costs associated with scaled-up activities to enhance the impact of a well-performing project in the water sector and, most importantly, to consolidate institutional and legal reforms supported by the project, which require time to mature and be fully integrated into Government processes. The purpose of the additional loan is to provide continuity to PROAGUA activities, consistent with the project’s original objectives, components, sub-components, and the project’s present expenditure categories. No major changes are being proposed to the original project scope. This additional financing would: (i) support continued implementation of the existing water resources infrastructure component in the Northeast Region of Brazil, and (ii) expand the institutional development component to continue the support to the Northeastern states and also prepare other Brazilian states for a future infrastructure-intense project. The ongoing project is classified as Category A, and no new safeguard policy will be triggered during implementation of the additional financing phase. From the start of PROAGUA’s implementation until now, adequate planning, a project environmental strategy, and close supervision (field based), have ensured satisfactory compliance with Bank environmental and social safeguard policies. Whenever identified, potential problems were dealt with accordingly. The environmental, social, indigenous peoples, and resettlement frameworks originally prepared and approved for PROAGUA, especially in reference to the construction of dams and water supply systems, have been recently updated to conform with those safeguard policies that have since been updated. Manuals with environmental guidelines for the construction of dams and water pipelines were also prepared and adopted during project implementation, and would continue to be used during the additional financing phase. These reports are annexes to this EMF. The subprojects identified so far as potential candidates for implementation during the first year of the proposed additional financing were prepared within the original project’s environmental safeguards eligibility criteria. Additional subprojects, to be selected for implementation during the second and third years, would be developed and analyzed within this updated Environmental Framework.. As part of preparation activities for this proposed additional financing, a study was conducted to review the past and current environmental performance of PROAGUA subprojects under construction or already in operation. This study revealed that, although subproject preparation was usually satisfactory regarding identification of any necessary mitigation measures, improvements were needed regarding the supervision of the adoption of such measures after the conclusion of construction works and during operation of the subprojects. In order to address this issue, the following have been agreed as additional activities to be carried out by the Ministry of National Integration (MI)’s Unit during the additional financing phase: (i) training of Federal and State Units 2 on methodology for sub-project supervision during the operational phase; (ii) inclusion of a mitigation measures monitoring plan in the administration, operation and maintenance plan (PAOM) for each sub-project; (iii) assistance to the states for implementation of the PAOMs for the subprojects (including the sub-projects built within the original project); and (vi) supervision by MI of the implementation of the measures after subproject construction and throughout its operational phase. In all cases, sub-project proposals would cover the institutional arrangements and responsibilities for the implementation and supervision of the programmed environmental mitigation measures. The cost of such actions would mandatorily be included in each subproject’s budget, and used for economic and financial evaluation purposes. The future works to be financed, as in the original project, would not cause major negative environmental and/or social impacts. In addition to the environmental assessment, the following documents would also be submitted to the Bank for each subproject: (i) a plan for the management, operation and maintenance of the proposed work; (ii) evidence that the land and the rights to that land are physically and legally available; (iii) evidence that Participating States hold the rights over the water for the proposed work; (iv) evidence of all corresponding environmental permits; (v) whenever required, presentation of a resettlement plan; (vi) whenever required presentation of an indigenous peoples development plan.. Following the practice for the original project, and to comply with OP 4.37 (Safety of Dams), a Dam Safety Panel would be established to approve the final engineering designs, supervise contracting, and inspect the construction of any large dams that may be financed. In addition, the Panel would be called on to verify the safety of existing large dams that would be the source of water for a new subproject.. The Panel would be hired by the MI Unit and would assist all sub-projects where their participation would be deemed necessary. 2. Policy, legal and administrative framework regarding environmental issues Brazil is probably the developing country with the oldest and most consolidated environmental licensing system, launched in the early 70s. The system is well consolidated and widely disseminated. In addition to having qualified personnel, the environmental licensing procedures, including the more complex environmental impact assessments, are standard and widely disseminated in all states. The CONAMA (National Environmental Counsel), through its resolution nº 237/1997, updated the licensing system, establishing the environmental studies and licensing process to be carried out for any subproject to be implemented. The licensing process includes several stages of licensing: preliminary (LP), for implementation (LI) and for operation (LO). Some states included other stages in the process. For each stage a different set of documents is required, including the environmental studies, such as EIA. For subprojects that can potentially affect the environment, the CONAMA resolution requires that the environmental studies be disclosed and public consultations be carried out. Regarding the WRM institutional and policy framework, the GOB approved the Water Resources National Policy Law, law nº9433/1997, to establish a new institutional framework and instruments (e.g. Water Resources National Plan - PNRH, bulk water rights and charges, etc.) to address IWRM issues. The National Water Resources Management System (SINGERH) was created by this, with the main objectives of coordinating the integrated water management system and implementing the National 3 Water Resources Policy. The SINGERH comprises the National Water Resources Council (CNRH), the National Water Agency (ANA), State Water Resources Councils, River Basin Committees, federal, state and municipal institutions that deal with water management issues, and water agencies. Similar legislation has been introduced in almost all states. Since 1997, some 50 river basin committees have been established in federal and state river basins and one water agency was created. The Brazilian National Water Agency (ANA) was created in July 2000, in response to the increasing demands on water resources by conflicting uses (agriculture, industry, urban and recreational). ANA’s mandate is to implement the National Policy on Water Resources (PNRH) and the planning and management of the national water resources, subject to principles, guidelines and instruments defined by the National Policy on Water Resources. ANA is an executive agency of the Ministry of Environment. It is managed by a Board of Directors and has autonomy to regulate the multiple water uses. The National Water Resources Council (CNRH) is composed of representatives from the federal and state administrations, environmental representatives, water users groups and organized civil society. One of its major roles is to define complementary directives for the implementation of the Water Resources National Policy. MMA’s Water Resources Secretariat (SRH), created in 1995, supports the Council with technical work for its decision-making and as its technical secretariat. Its other attributions are the formulation of the National Policy on Water Resources, and the integration of water resources and environmental management. State-level institutions corresponding roughly to SRH, ANA and CNRH exist in virtually all states. 3. Project description The purpose of the proposed additional loan is to provide continuity to PROAGUA activities, consistent with the project’s

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