Attachement 2

Public Disclosure Authorized GOVERNMENT OF

VICE PRIME MINISTER FOR ECONOMIC PROGRAMS

Integrated Growth Poles Project Environmental and Social Assessment Public Disclosure Authorized

English Language Summaries of Environmental and Social Safeguards Instruments Public Disclosure Authorized Public Disclosure Authorized March 8, 2005

Attachment 2 Page 2 of 64 Environmental and Social Impact Management Framework (ESMF)

With the financial support of the World Bank, the Government of Madagascar is planning to implement the Integrated Growth Poles Project (IGZP). This project consists of an extensive multi-sector development program that has to be carried out in three strategic regions of the country: the district of Nosy Be, the / axis and the district of Tolagnaro. The main initiatives planned within the IGPP framework include, among others, the setting up of export processing zones in the Antananarivo / Antsirabe sector, tourism development in Nosy Be and mining in Tolagnaro. Several other activities are planned in each of the poles, in particular the construction and rehabilitation of urban and port infrastructures.

As the World Bank will be helping to finance the IGZP, the project must comply with the Bank’s safeguard policies to ensure that the planned investments will not have a major impact on the natural and human milieus. This environmental and social management framework (ESMF) defines the rules under which the subprojects within the IG2P will be evaluated. It also includes some direction for setting up a regional planning process that is respecfful of environmental and social concerns in the Project’s different growth poles.

The ESMF objectives are to define the environmental and social evaluation process for the IG2P subprojects so as to respect the World Bank’s safeguard policies and Madagascar’s environmental laws, by ensuring that the most stringent of the requirements prevail. It should be noted that this ESMF constitutes one of the three policy frameworks of the IG2P, the two others being the policy frameworks for involuntary resettlement and cultural property.

This ESMF begins by describing the context dictated by the Poverty Reduction Strategy, which constitutes the strategic basis for development planning in the country. The aim of this strategy is in effect to promote rapid, long-lasting development that will cut Madagascar’s poverty rate in half within 10 years.

The organizational context of the IG2P and the frameworks for policies, laws and institutions are described one at a time below. It is important to properly understand all of these provisions, as they will have to be taken into account during the planning, evaluation and carrying out of these IG2P subprojects. Attachment 2 Page 3 of 64

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Data FIvrrer 2035 Projet 0513072

Location of the Growth Poles Attachment 2 Page 4 of 64

This ESMF continues by presenting the regional planning process proposed for the IG2P. The purpose of this process is to better integrate the environmental and social dimensions into the regional development and more specifically, into the medium- and long-term development endeavours in each of the poles. It also aims to rationalize future subprojects that have not been sufficiently defined within the growth poles. This step constitutes an absolute pre-requisite, in order to guarantee a certain amount of uniformity and cohesion of the development processes in the different growth poles, and to ensure that the proposals are technically consistent and that the parties concerned are supportive.

Four main themes stemming from the Poverty Reduction Strategy have been chosen to structure the proposed regional planning process: (i) the State as catalyst for, and regulator of, development, (ii) the region as the driving force for regional integration, (iii) the urban district as the development engine, and (iv) the public-private partnership. These themes give rise to a series of guiding principles and guidelines. The regional planning in these IG2P growth poles will then be carried out using a methodical, practical approach.

Following the recommendations on regional planning, the process for environmental and social evaluation of the IGPP subprojects is presented in detail in Chapter 7 of this ESMF. The aim of this process is to apply the World Bank’s safeguard policies and Madagascar’s environmental laws, by ensuring that the most stringent of the requirements prevail. This process has six stages: (i) screening, (ii) scoping, (iii) evaluating the environmental and social impact, (iv) appraisal of environmental and social studies, (v) environmental and social monitoring, and finally (vi) the environmental and social auditing. In particular, this process allows for verification of the applicability of each of the World Bank’s safeguard policies and the nature and the significance of the environmental and social studies to be conducted (impact study, resettlement plan, etc.). Attachment 2 Page 5 of 64

E

IG2P Process for Screening and Analysis of Subprojects Attachment 2 Page 6 of 64

Resett Ieme nt PoI icy Framework ( RPF)

The Government of Madagascar, in collaboration with the World Bank, intends to undertake a multi-sector development initiative in three key regions designated as “growth poles”: AntananarivolAntsirabe in the centre of the country, Fort-Dauphin (Tolagnaro) in the south and Nosy Be in the north. This effort, designated under the name Integrated Growth Pole Project (IG2P), is aimed at creating synergy among the different public and private participants around a priority area for intervention for each pole (Free-trade Export-processing Zones in Antananarivo/Antsirabe, mining in Tolagnaro (Fort-Dauphin) and tourism in Nosy Be). Technical studies and collaboration/consultation workshops have been conducted for the Project with a view to clarifying and confirming the sub-projects identified to date. It has also received environmental and social assessments so that the anticipated investments cause as little damage as possible and deliver the maximum advantages to the environment and to the population living in these regions.

When the activities or sub-projects envisaged within the Project Framework were defined, all precautions were taken, as far as was possible, so that no-one would suffer, or no property would sustain, damage or loss during and following the implementation of the Project. Nevertheless, involuntary resettlement of populations will be inevitable for certain of the sub- projects identified to date. Thus the Government of Madagascar has prepared this Policy Framework for Resettlement (PFR) in compliance with its legislation and the requirements of the World Bank, in particular Operating Policy OP 4.12 relative to the involuntary resettlement of populations.

The PFR establishes, among other things, the regulatory framework for Malagasy laws and the World Bank’s safeguard policies, principles for resettlement, operating procedures for awarding titles, eligibility criteria for people or groups of people affected, and applicable mechanisms for public consultation. The PFR will guide the development of Resettlement Plans (RP) that will be required for some sub-projects identified within the framework of the Project. The sub-projects identified for investment during the first year of implementation of the IG2P and that require the development of an RP are the following:

Nosy Be ring road (Nosy Be regional pole) Attachment 2 Page 7 of 64

Repair of the urban section of RN13 (Fort-Dauphin regional pole) QMM mining project (Fort-Dauphin regional pole).

A National Coordination Cell for the IG2P, possessing a legal and financial personality, was established by Decree No 2004 - 724 of July 20, 2004 dealing with the creation, organization and functioning of the National Coordination Cell for the Integrated Growth Poles Project. This Cell is jointly supervised by the Vice-Prime Minister for Economic Programs and the Minister of Finance. The Cell is the Preparation and Coordination Agency for the future Integrated Growth Poles Project, and is responsible for defining, implementing and monitoring preparatory activities for the Project. This is also the central vehicle for liaison among technical and financial partners, private and public partners and non-governmental organizations (NGO) associated with preparations for the Project.

The guiding principles upon which this Policy Framework for Resettlement is based are as follows: Involuntary resettlement and the acquisition of land must be avoided, as far as is possible, or minimized as much as possible, by studying all viable alternatives in the design of the sub-projects; In cases where the acquisition of properties or livelihoods cannot be avoided, an improvement in the livelihoods of the people affected, or at least the re-establishment of those livelihoods, must be ensured in real terms, at the same level as before the resettlement or at the level prior to the implementation of the project, depending on whichever is more advantageous to them; In cases where resettlement or the acquisition of land cannot be avoided, particular attention will be paid to the needs of vulnerable groups among the people affected, as the Government of Madagascar acknowledges that certain economic, social, environmental and natural conditions may increase the vulnerability of people and households; The people affected must be consulted and have the opportunity to participate in all the critical steps in the development process and the implementation of the activities related to involuntary resettlement and compensation; Activities related to involuntary resettlement and compensation must be conceived and carried out as sustainable development programs, providing sufficient investment resources so that the people affected by the project have the opportunity to share in the benefits; The human rights of the people affected by the Project must be fully respected and the compensation and resettlement process must be equitable and transparent. Attachment 2 Page 8 of 64

All the activities and all the sub-projects implemented within the framework of the Integrated Growth Poles Project will be subject to the guiding principles, without consideration for the sources of financing. In order to simplify the definition of the types of compensation foreseen, four categories of "Persons Affected by the Project" (PAP) have been defined: a) PAP who have lost their home; b) PAP who have lost farmland or tree lots; c) PAP who have lost commercial, agricultural or utility buildings; d) PAP whose street-vending stalls or kiosks will be moved.

The implementation of one (or more) Resettlement Plan(s) (RP) will require the setting up of an organization that will manage operations for the process. This organization will be composed of two entities: a Steering Committee (per regional pole concerned within the IG2P framework) and a Management and Implementation Unit (per sub-project). These two entities will make sure that the implementation of the RP is properly managed and coordinated, for each of the sub- projects concerned. The organization will unite all the parties involved in the implementation of operations resulting from this Policy Framework for Resettlement (PFR).

The PFR presents the methods to be used for assessing the losses according to their nature, as well as details on the compensation to be applied in terms of the PAP categories, the type of loss and the elements affected. Finally, it describes the public participation process to be undertaken, the procedures to apply in case of litigation and the organizational procedures for issuing laws, institutional organization and financing mechanisms related to the RP; it also specifies the monitoring and assessment methods to be applied. Attachment 2 Page 9 of 64

Cultural Heritage Policy Framework

In consideration of the need to protect the cultural heritage and strengthen the management of its policies, this Framework for the Cultural Heritage Policy sets out the main principles for preserving, rehabilitating and above all, enhancing cultural property that could be affected, positively or negatively, by IG2P projects, such as the development of tourism.

The objectives of the Framework are to ensure that:

0 Physical cultural resources that are subject to, or risk, being affected by the implementation of projects are identified and protected. Policies of the World Bank and the laws and regulations of Madagascar governing the protection of cultural property are respected during the implementation of a IG2P project. Archaeological and historic sites, historic urban centres, places of worship and cemeteries are protected. Colonial buildings, public spaces, royal sites and sacred sites will be rehabilitated and enhanced.

The Framework is formulating recommendations for these sites, in order to eliminate or lessen any potential adverse impacts of IG2P sub-projects on cultural property and to propose measures to facilitate their restoration and development.

This document therefore describes the procedures and methods to be applied in the management of cultural property during the implementation of IG2P projects in the Antananarivo-Antsirabe, Tolagnaro and Nosy Be poles.

The Framework includes:

0 A description of the IG2P and the projects

0 Principles and objectives applicable to cultural heritage

0 Categories and classifications for cultural property Attachment 2 Page 10 of 64

The normative, legal and institutional framework, as well as directives from the World Bank Procedures for carrying out the inventory, assessment, and methods for dealing with cultural and historic properties of prime importance that are at risk of being affected by these projects; rehabilitation of structures and public spaces Management plan for carrying out the process and the implementation, particularly public participation and the institutional framework.

Property that could be affected by the projects includes in particular:

Physical and natural heritage, and cultural heritage that could be destroyed by the projects Cultural heritage that could become polluted by activities carried out within the projects Cultural heritage where the value could be altered or increased by the existence of the projects Public spaces with historic and/or cultural character that will be enhanced in the colonial areas of the towns of Hell-Ville and Fort-Dauphin.

The World Bank’s policy on Cultural Heritage requires that the preparation and implementation of a Cultural Heritage management plan be a pre-requisite for the implementation of the projects. The purpose of this requirement is to ensure that all necessary measures for heritage development have been identified, studied and validated prior to the start of a project.

Particular attention should be paid to sites where the risk of being affected is very high, in particular:

Archaeological sites because of the fragility of the property and/or the scattered state, the diversity or the potential burial of site objects Sacred sites and tombs. Attachment 2 Page 11 of 64 Environmental and Social Impact Assessment (ESIA) for Taolognaro (Fort-Dauphin)

The Integrated Growth Poles Project (IG2P), implemented by the Vice-Prime Minister in charge of the Economic Programs (VPM), is a tool that will generate rapid, sustainable growth, and constitutes an instrument for reducing poverty in Madagascar, while at the same time seeking to help improve and preserve the environment. It is a Government of Madagascar initiative, stemming from the national strategy for rapid, sustainable development outlined in the PRSP. This document is the executive summary of the ESIA report on the Tolagnaro (Fort Dauphin) integrated growth pole project, the main thrust of which is mining, with tourism as the sub- dominant development.

The project under study

The sub-projects for this pole, which is part of the IG2P, will be carried out over a five-year period. In the first year, the IG2P will finance the following activities: Rehabilitation of the urban portion of RN13 from the Vinanikely intersection to the traffic circle at the Town Hall (4.9 km); Rehabilitation of the access road to the port and rehabilitation of the port of Fort Dauphin including dredging;

0 Rehabilitation of the access road to the hospital and modifications to the hospital (biomedical waste management);

0 Repair of breaches along the coast.

The development of the Tolagnaro pole is closely connected with the implementation of the mining program envisaged by QIT Madagascar Minerals (QMM, a subsidiary of Rio Tinto Corporation, in which the Malagasy government is a partner), and with the construction of related infrastructures, Le., the deep-water port and the road that would lead from the mine to the port. QMM will decide in 2005 on its investment, following the feasibility study now underway. Also within the framework of this major project, the IG2P will be asked to contribute to the financing of the new port at Ehoala, required for the start-up of this project. Thus the study is examining the impacts of: Attachment 2 Page 12 of 64

e Construction of the port of Ehoala, including the quarry and the road from the quarry to the port, the temporary camp for the workers and the Ehoala industrial and port park reserve; Mine-port road (private financing), in particular the resettlement of people who must be moved for this project.

In the coming years, the IG2P will be involved in supporting various projects, such as:

e RPI 18 between Fort Dauphin and Ranomafana with a view to opening up a zone with strong agricultural potential and to providing access to the Andohahela National Park;

e RN 12A (in town);

e Certain roads with a tourist or agricultural vocation, such as: o Road RNI3 - Ambatoambo (25 km) (Andoelha Park); o Road Ambatoabo - Hazofotsy (19 km) (Andoelha Park); o Road at the RN13 intersection - Ranomainty - Mangatsiaha (5 km) (Andoelha Park); o Road from Andromodromontra (RN12) PK17 to Evatra; o Road RN13 - Baie d’ltaly (RP261);

e Rehabilitation of various urban sections in the Fort Dauphin district (potentially);

e Improvements to telecommunications infrastructures;

e Reinforcement of energy infrastructures;

e Water conveyance;

e Waste and waste-water management;

e Ecotourism infrastructures;

e Support for a Chamber of Trade and a Tourism Office;

0 Support for the district.

Because the IG2P would be able to provide support for the construction of the industrial port, which is essential to the planned mining development and thus to the development of the pole, the entire mining project (extraction, transportation of the ore from the mine to the port, and the port itself) must also be considered within the framework of the IG2P’s environmental and social study. Thus it was concluded from an in-depth examination of the studies conducted by QMM over the last few years that in overview, the approach used in evaluating the QMM project respects international practices with regard to environmental assessment, and that the company’s commitments have been set out in a legal document that is binding. Mechanisms for Attachment 2 Page 13 of 64

monitoring are in place under the supervision of the ONE (Ofice National de I’Environnement - National Office for the Environment), which has the legal authority on the matter in Madagascar.

Within the framework of the IG2P environmental and social impact assessment, the Vice-Prime Minister, the districts concerned (in particular that of Fort Dauphin), and the Consultant conducted public consultations and formal and informal meetings relative to the IG2P in general, and to the Fort Dauphin growth pole in particular, so as to identify the challenges and develop the measures for attenuation so that the project can be completed.

Strengths and weaknesses of the region

This section presents the main assets, the major handicaps and the principal environmentally sensitive issues involved with the Fort Dauphin pole to be taken into consideration within the framework for the development of the IG2P projects.

Strengths

Tolagnaro and its surroundings represent undeniable potential for tourism (as yet mostly undeveloped), especially in the field of ecotourism, due to the great natural beauty of the countryside, and its parks and reserves, which are world-renowned but are still clearly underexploited. This is a sector of activity that will develop rapidly and that is proven to be less destructive than mass tourism in terms of both the environment and socio-cultural considerations. In fact, ecotourism becomes a positive force, because the nature reserves and even the culture of the local people become complementary attractions to the countryside and the observation of rare species (as happens with lemurs).

From a regional, and even national, point of view, the presence of major underground deposits of ilmenite has major economic appeal, and offers the potential for rapid development that neither tourism nor the creation of industrial zones can equal. And this occurs in a region that is currently one of the poorest in Madagascar. For the moment, the development envisaged by the QMM mine remains at the project level. Apart from some work on the exploration and research sites, nothing really concrete has as yet appeared on the ground for the populations, other than the establishment of mechanisms for consultation and initiatives for environmental conservation and the creation and financing of tree nurseries. Attachment 2 Page 14 of 64

Halieutic (fishing) resources probably offer useful development potential. Technical studies would be needed to evaluate and establish exploitation methods.

A major population pool (especially if one includes the back country), a rich, turbulent history, and a very agreeable climate are definite assets that can be added to the tourist attractions and to the mining potential for the region. This population, precisely because of its historic past, is open, tolerant and disposed to welcoming immigrants.

Planning for and utilization of the territory has already begun, at both the local and the regional level, and these planning exercises that have yet to be finalized have already taken into account the impacts associated with accelerated development through mining operations. In this sense, the region is ready for the development and has been preparing itself for it for quite some time; however it has not assessed the extent of the consequences.

The presence of numerous NGOs working in the area, especially on the humanitarian side and/ or with the environment, is a positive element in that these NGOs could work alongside the populations during the coming changes. For the moment, these NGOs can only heal the most visible social and environmental wounds.

Weaknesses

The state of poverty of the populations, the dilapidated condition of the infrastructures and the low level of general development observed in the zone do not favour economic development initiatives. Far from the capital (about 1,000 km) and isolated because of the very poor state of the roads, Tolagnaro gives the impression of a town that is sleeping, forgotten for thirty years, and slowly dying without even making any effort to survive. Here one senses a certain idleness, as if no-one has any reason to expect anything, and at worst, as if no-one believes in the place any more.

All the socio-economic indicators related to poverty are present: very low levels of schooling, hygiene problems and a disturbing state of health, a high rate of unemployment, etc. The most visible signs of a very deteriorated socio-economic situation are: begging, youths lounging about the streets, bare-footed children and adults, housing in very poor state of repair, the absence of social and health infrastructures, the lamentable state of the roads and other infrastructures, Attachment 2 Page 15 of 64

and an overall mood of carelessness and even general apathy that seems to exist (very high rates of alcoholism, especially amongst the youth). Even the marketplace seems to exist in slow motion, while the products offered are rather limited, both for food products and for other consumer goods.

This situation of poverty highlights a major problem of insufficiently qualified human resources. Whatever the focus of the planned development will be (tourism, mining or industrial development), it will be difficult at first to integrate the local manpower with the needs of the industry.

Environmentally sensitive issues

With regard to the biophysical component, the zone enjoys a climate and rainfall that are favourable to the growth of vegetation in the coastal zone, but the climate is much drier inland.

Wind patterns show the presence of strong winds for most of the year. Historical variations in sea level combined with these winds have given rise to areas of dunes, sometimes massive, relatively stable but remaining extremely fragile because of their quasi-complete deforestation over the last 50 years. One very large dune, the height of which can rise to over 70 metres close to the airport, is located on the Ehoala peninsula.

An asset is the presence of a string of lakes and coastal lagoons that are used both for subsistence fishing and as part of the drinking water supply for the town of Fort Dauphin, in particular Lake Lanirano. Marine life is generally quite rich on the coast, and the migration of whales is a phenomenon that offers some interest for tourists.

The abusive use of natural resources by the populations, due to chronic conditions of poverty, has created huge pressures on the ecosystems and endemic or rare species of fauna. These pressures have also made certain plant resources used by the local populations scarce (for basket-weaving, fishing, etc.) and have greatly compromised the survival of some rare endemic species.

Challenges Attachment 2 Page 16 of 64

While tourism is being developed progressively and somewhat in balance with the daily lives of the populations, the mining development with all the changes it involves will certainly result in social and cultural shock for the populations. But this shock seems necessary to shake Tolagnaro out of the torpor and neglect the town has found itself in for several decades.

The main infrastructures related to the mining project are the development of the deep-water port and the construction of a road running from the first ilmenite exploitation site to the port. Although it will disturb a portion of the countryside and perhaps even cause inconvenience to some fisher families living along the Andrianbe lake (or lagoon), the construction of the port at Ehoala is not in itself a very disruptive element from a social point of view.

The same could not be said for the road that would be needed to link a processing plant to the port. Three routes have been planned for this 12 km-long highway corridor. Of these three routes, that which seems to be preferred, both by the municipal authorities and the QMM mining company, crosses inhabited zones and parcels of farmland. It is true that it would be difficult, perhaps even impossible, to completely avoid all inhabited zones. The extent of the work planned and the type of traffic this road will have to accommodate as a matter of priority are extreme when compared to the needs of the population. This road, which will slash through a rural milieu, also presents dangers with regard to safety, even if crossing points are provided. The population cannot be expected to suddenly conform to a code of conduct that in no way corresponds to its way of life. Moreover, the quality of life of a good portion of the population would be affected by the noise and to a lesser extent the dust created by the passage of huge trucks filled with ore. Thus the exploitation of the road presents a challenge for the developers and the municipal authorities.

Another major challenge is the capacity of the municipality to host this project, in other words to put the accompanying measures necessary for development in place, with regard to both improving infrastructures and training the populations. The arrival of immigrants of all kinds - and not only Malagasies - and marked population growth will create needs that remain difficult to assess at this time.

The municipal team in place is aware of the challenge that the development of the zone’s potential for tourism presents, and above all, the economic importance of the planned mining Attachment 2 Page 17 of 64

development. It is actively preparing for change, but not without some trepidation. The completion of the Master Plan for Urban Planning (MPUP) reflects the political willingness of the municipal authorities and others involved to participate actively in this change. The MPUP suggests interesting directions and is innovative on many levels, in particular in its approach favouring cooperation among the districts. Mechanisms for collaboration and cooperation are already in place and everyone is learning to work together. Minimizing the shock and maximizing the returns for the populations are two of the challenges presented by accelerated development, challenges of which the municipal authorities are aware and to which they wish to devote their energies.

From this same viewpoint, a major challenge for all the participants, administrative authorities and economic players, is integrating the local populations into the development. Given the low levels of schooling and the fact that the people currently unemployed have no qualifications, this integration will prove very difficult at first. Obviously, jobs will be created, but most will not be filled by the local workforce. Thus thought must be given to training workers, especially the youths, who could potentially hold well-paying positions in the different sectors of economic activities. This will take a generation, perhaps two, but this situation cannot be ignored. Meanwhile the types of jobs that young people could hope to get will be mostly subordinate positions: cleaning ladies, baby-sitters, gardeners, maintenance workers, etc.

Given that this report presents an environmental and social situation that is quite catastrophic, has been declining over the last 30 years and continues to decline year after year, in spite of attempts by the NGOs to apply band-aid solutions, the question is no longer whether or not to develop the mining sector with all the impacts that this type of accelerated development has on the environmental and human fronts.

Instead, the question has become: how to do it, what to propose, what approach to adopt so that this development is carried out in the best possible way with regard to the context, and how it can best benefit as many people as possible, if not in the short term, then in a guaranteed form for the medium and long term, despite of course some inevitable collateral damage.

Even though they do not have much information, the people are waiting to find out if they will be getting a better life, or if not, at least what could and would be in store for them. In this sense, Attachment 2 Page 18 of 64

they are ready for change. Time seems to have stood still in Fort Dauphin, and it probably needs a good push to start the clock once more so that the people of Tolagnaro will succeed in projecting themselves into the future.

Impacts and mitigation measures

The impacts of constructing and operating the port of Ehoala have been identified well, and the measures proposed should lessen these impacts, whether they affect natural habitats or fishing operations. The expropriation of land located near the port and in the zones for associated infrastructures will have to be carried out using a public utility declaration process based on the Resettlement Plan prepared by the IG2P. This Resettlement Plan ensures that people affected will be adequately compensated and will not suffer damage or loss. The ore port project will greatly change the natural look of the Ehoala peninsula, and to a lesser extent, the character of Fort Dauphin, a small secondary town that has only a few small industrial units scattered about its territory. The main impacts result from the extent of the infrastructures and port equipment planned, as well as the new road, a portion of which runs along the coast. Therefore a few measures will be implemented, such as the construction of a path through the port area, between the villages located on the western edge of the Ehoala peninsula and Fort Dauphin, to facilitate fishing operations in the neighbouring villages.

Secondly, an architectural and landscaping integration plan will be drawn up for the port of Ehoala in order to develop and preserve the tourist vocation of the town. In addition, the district will receive support for the development and implementation of a coastal conservation program along the Fausse Baie des Gallions with a view to compensating for the loss of natural habitat associated with the construction of the port. Finally, the entire development of the peninsula will be drawn up on a general development plan with a view to ensuring a harmonious industrial development.

The IG2P has several urban infrastructure improvement projects planned for Fort Dauphin. Thus the port will be dredged for maintenance purposes along the wharfs and in the manoeuvring area. A mechanical dredger (clamshell dredge) would have to be used for this dredging because of the relatively small volume involved, and the dredged material will be dumped at sea. The ramp will be rehabilitated, thus improving services. Once the new port at Ehoala is in service, it will incorporate a marina, thus providing an added tourist attraction. Attachment 2 Page 19 of 64

As the machinery will be moved into place within the framework of the resurfacing of Route RN-13, the portion leading to the port of Fort Dauphin, and the portion leading to the hospital will also be resurfaced and the breaches along the Vinanikely axis, which pose risks for traffic, public safety and the environment due to landslides along the coastal zone, will be repaired. The management agency for public infrastructures in Antananarivo (AGETIPA) will be responsible for these repairs.

Renovations to the Philibert Tsiranana Hospital and the establishment of appropriate management of medical waste will ensure proper hygiene for the hospital area, and the safety of health care workers and surrounding communities. This will minimize the risks of spreading disease and infections associated with the generation, and more importantly the disposal, of medical waste.

Cumulative effects

The study of cumulative effects examines the impacts of sub-projects planned for the Fort Dauphin growth pole over the five years of implementation of the IG2P, as well as the impacts of other activities planned in the region. This assessment was carried out on a time horizon of 25 years.

The significant challenges, in terms of cumulative effects, in the IG2P sub-projects in the Fort Dauphin region that will be discussed are:

Phvsical and biophvsical challenqes

0 Atmospheric emissions contributing to the degradation of air quality.

0 Greenhouse gas emissions into the atmosphere.

0 Loss or degradation of forest resources and terrestrial habitats.

0 Modifications to the soil moisture regime. Loss or degradation of marine and estuary habitats.

0 Management of construction waste.

Human challenqes Attachment 2 Page 20 of 64

0 Social, economic and cultural pressures affecting low-income households.

0 Increase in the prevalence of venereal diseases, HIV/AIDS and water-borne diseases.

0 Pressures on the human habitat in urban and rural communities.

0 Degradation of countrysides attractive for touris'm.

The major lack of infrastructures and services is accentuated in Fort Dauphin by the phenomenon of migration linked to the start-up of the mining project. The cumulative effects of mining exploitation on top of the pressures on human habitat in urban and rural communities and the social impacts are judged to be of major importance.

To the extent that QMM is pursuing and respecting its commitments listed in the ESlA report and the EMP, and that the governments involved and the mining company are applying the proposed recommendations, these effects could in large measure be lessened.

Effective monit or in g The IG2P plans to implement a monitoring system for all the impacts and attenuation measures, alongside the responsibilities associated with them. The basic principles for the monitoring system, the sharing of responsibilities and the methods of implementing them are also described in detail in the study. The mitigation measures presented cover the design, construction and exploitation phases, as needed.

For each mitigation measure proposed, there are tables presenting the performance indicators and objectives associated with them. The monitoring and environmental monitoring system comprises the following elements:

- Specific methods for monitoring to measure the actual effectiveness of each mitigation measure by comparing it to the established performance objectives General methods for monitoring to identify any unanticipated impact for which no mitigation measure was planned Methods for implementing corrective actions required in cases where the performance objectives were not reached or the impact was unanticipated. Attachment 2 Page 21 of 64

Overall, the IG2P will bring positive, sustainable development to Fort Dauphin, by pre-planning the measures to accompany the mining development that will provide the region with important economic advantages through the creation of long-term jobs. A group of measures for social and environmental integration will make it easier to establish this project in a region gripped by conditions of chronic poverty. Attachment 2 Page 22 of 64 Environmental and Social Impact Assessment (ESIA) for Anta na na r ivolAnts i ra be

The IG2P consists of a vast multi-sector development program to be implemented in three strategic regions of the country: the growth poles of Nosy Be, Antananarivo/Antsirabe and Tolagnaro. The main initiatives planned within the framework of the IG2P include the development of Free-trade Export-processing Zones in the Antananarivo and Antsirabe sector, tourism development in Nosy Be and mining in Tolagnaro. To provide support for the chosen sector, several other activities are planned in each of these poles, in particular the installation and rehabilitation of urban and port infrastructures.

This document is a summary of the environmental and social impact assessment (ESIA) report for the AntananarivolAntsirabe growth pole (hereafter referred to as the Tana/Antsirabe pole), the main focus of which is industrial development. In this report, each sub-project is evaluated based on the information available, and the recommendations are formulated so as to perfect the preparation of the dossiers, so that they conform to the World Bank’s requirements. Thus, for the sub-projects that have been adequately defined, the assessment of their environmental and social impact was carried out in depth. For the sub-projects that have not as yet been defined adequately enough for an environmental and social impact assessment, the ESlA provides recommendations of a strategic nature based on the Environmental and Social Management Framework (ESMF) for the IG2P, in order to perfect the preparation of those dossiers and ensure that they conform to the World Bank’s requirements.

SUB-PROJECTS UNDER STUDY

In the terms of reference for the ESlA for the TanalAntsirabe pole, the following sub-projects have been planned:

0 Free-trade Export-processing Zone (EPZ) at Anosipatrana

0 EPZ at Ambohimangakely

0 EPZ in the Ambilibe Saharoaloha - Ambohimahazo zone Attachment 2 Page 23 of 64

0 EPZ in the south-east of Antsirabe

0 Training centre for new computer technologies and communications (NCTC) at Antanetibe

0 Construction of a bypass and/or slip roads for the EPZs at Antsirabe

0 Management system for solid and liquid waste at Antsirabe.

Following the studies carried out on the land and the discussions held during the various consultation and communications workshops on the Tana/Antsirabe pole, in September 2004 the Coordination Nationale for the IG2P drew up a new list of sub-projects for this pole. Then in December 2004, the World Bank’s pre-assessment study evaluated the various proposals for sub-projects in the three growth poles. Taking into account the advanced state of planning for the proposed sub-projects and their anticipated environmental and social impact, the study team recommended a series of modifications to the IG2P program, which gave the following result for the Tana/Antsirabe pole:

The only sub-project recommended by the study team for the first year of implementation of the IG2P is a business park at Antanetibe, possibly including an NCTC training centre. After the first year, the study team envisages supporting Phase II of the Antanetibe business park and is assessing the possibility of setting up a five-hectare agri-business park near the Antsirabe aerodrome. The study team considers that it could be possible eventually to develop a free-trade export- processing zone at Antananarivo if the Government were able to identify a suitable site close to the planned container terminal at Antananarivo, and private sector interests to invest in the development and management of the site. The study team recommended that the World Bank not finance any of the other sub-projects proposed for the Tana/Antsirabe pole. The description of these sub-projects and the environmental assessment that was carried out are however contained in this report, so that this background work remains available for any future implementation through other financing arrangements.

Thus the sub-projects studied are the following:

First-year sub-project financed by the World Bank: 0 Antanetibe Business Park - Phase I

Sub-projects in subsequent years with possible financing from the World Bank: 0 Antanetibe Business Park - Phase II (WB financing envisaged) 0 Antsirabe agri-business park (WB financing under evaluation) 0 EPZ at Antananarivo near the future container terminal (WB financing under evaluation). Attachment 2 Page 24 of 64

Potential sub-projects for which the financing has yet to be identified: 0 Antsirabe EPZ 0 Antsirabe bypass 0 Antsirabe solid waste management 0 Ampitatafika EPZ 0 EPZ

This summary only gives a brief description of Phase 1 of the Antanetibe business park. For a description of the other sub-projects, the reader is asked to consult section 2.3 of the ESIA.

During Phase 1 of the Antanetibe business park sub-project, the activities that could be financed by the project are the following:

0 rehabilitation of existing buildings;

0 acquisition and installation of a VSAT antenna;

0 electric power switching system;

0 development of the site, including if necessary the rehabilitation of the access road, and the installation of drainage, water supply, wastewater treatment solid waste disposal and electric power supply systems.

The Antanetibe business park will be developed within the framework of a public-private partnership that will be conceived and implemented with technical assistance from the IG2P. In this regard, the Government must (i) select an international expert who will work with a local consultant to develop a business plan before the project is assessed, and (ii) form a technical working committee chaired by the Director General of Information and Communication Technology and composed of representatives from the private sector and the government institutions involved, This committee will ensure follow-up and will provide technical support to the team from the IG2P to the Vice-Prime Minister.

LEGAL AND INSTITUTIONAL FRAMEWORK

The legal framework to which the Tana/Antsirabe IG2P must refer is explained in detail in the project ESMF. On the national level, the project must take into account legislation that might apply to activities associated with the IG2P. This includes laws and decrees dealing with Attachment 2 Page 25 of 64

politico-administrative organization, the socio-economic aspects and the environment, and must consider international conventions ratified by Madagascar on social and environmental issues.

The IG2P must also respect the safeguard policies of the World Bank, the Government of Madagascar’s principal partner in this initiative. The World Bank’s safeguard policies that apply to the IG2P are the following:

e PO 4.01 - Environmental assessment (January 1999) e PO 4.04 - Natural habitats (June 2001) PO 4.09 - Pest management (December 1998) e PO 4.12 - Involuntary resettlement of populations (December 2001) PO 4.36 - Forests (November 2002) e OPN 11-03 - Management of cultural property in bank-financed projects (September 1986)

Due to its trans-sector nature and its overall objective of helping to reduce poverty, the Integrated Growth Poles Project covers a wide range of public institutions, as well as civil society and private-sector organizations. The ministries that were called upon to collaborate in the design and implementation of the IG2P are of three types: national sovereignty ministries, ministries with an economic vocation and social ministries.

BRIEF DESCRIPTION OF THE TANNANTSIRABE POLE

The Tana/Antsirabe pole extends over a vast territory including and , two regions of the independent province of Antananarivo. In the Analamanga region, only the district of Ambohibao Antehiroka (located in a zone also called the “Antanetibe” pole in the Antananarivo MPUPi) is involved, while in the Vakinankaratra region, the districts involved are Antsirabe, Ampitatafika and Ambatolampy.

The district of Ambohibao Antehiroka (in the Antanetibe pole) is about fifteen kilometres north of Antananarivo, on RN 4 linking Mahajanga to the capital. On RN 7, which runs from Antananarivo to the south as far as Tulear, the districts of Ambatolampy, Ampitatafika and Antsirabe are at distances of 68, 93 and 169 km respectively from the capital. These three districts are on the uplands, in the midst of a fertile plateau resulting from soils of volcanic origin. Attachment 2 Page 26 of 64

Considering the vast territory covered by the pole, the ESlA has limited itself to describing the main environmental and social characteristics of the districts in which the VPM proposed sub- projects while this study was being carried out. However, a more detailed description of these milieus for insertion of the pole’s sub-projects is presented in Chapter 6 dealing with the environmental assessment for these sub-projects. Following the pre-assessment study by the World Bank in December 2004, the districts of Ampitatafika and Ambatolampy were no longer being considered for sub-projects with financing from the World Bank, but they remain in the study because the source of financing for the sub-projects proposed by the VPM has yet to be identified. Characterizations for these districts could thus potentially be of use to any future financial backer evaluating these sub-projects.

Taking into account land use in the districts involved in the Tana/Antsirabe pole, the ESlA puts the emphasis on the human milieu rather than on the natural milieu. In fact, the components of the human milieu will be the first to feel the impacts of the IG2P in the growth pole.

The urban district of Ambohibao Antehiroka, located immediately south-west of the Antananarivo (Ivato) international airport and west of Lake Ambohibao, is attached administratively to the sub-prefecture of Ambohidratrimo. It is on the outskirts of the Commune Urbaine dflntananarivo (CUA) [Antananarivo urban district] and is part of the Antananarivo Agglomeration. The 2004 Master Plan for Urban Planning (MPUP) for the Antananarivo Agglomeration mentions that this district is part of the “Antanetibe - Talatamaty” growth pole. According to the MPUPi, the population of the district of Ambohibao/Antehiroka (Antanetibe pole), which covers an area of 12 km2, was estimated in 2004 at almost 37,000 inhabitants, for an average density of 3,080 inhab/km2. The age pyramid observed in the Antananarivo sector shows a large number of children and young people, and a low number of older adults.

The urban district of Antsirabe is in the heart of the Vakinankaratra region, crossed by the RN 7 axis. Administratively attached to the sub-prefecture of Antsirabe I, in the independent province of Antananarivo, Antsirabe is the second largest town in Madagascar. The district of Antsirabe, the industrial heart of the region, is about 1,500 m above sea level and has an area of 182 km2. It is surrounded by five rural districts: to the south, to the east, to the north, -Alakamisy to the north-west and Attachment 2 Page 27 of 64

and to the west. The population of Antsirabe is also young. This population grew from 126,062 inhabitants in 1993 to 180,665 at the beginning of 2004, an increase of about 43% in the space of a decade. This growth is due in large part to the phenomenon of urbanization, which encourages positive migratory flows that result in an influx of rural populations as well as those from other sub-prefectures.

As for the rural district of Ampitatafika, it is located between the urban districts of Antsirabe and Ambatolampy, about 18 km north-west of , the sub-prefecture to which it is attached. It has an altitude of 1,550 m and covers an area of 352 km2, largely composed of farmland. The district of Ampitatafika is surrounded by other rural districts: and Ambohimandroso to the north, Antanifotsy (the administrative centre for the sub-prefecture) to the south, to the east and Ambohibary to the west. Mainly rural, the district of Ampitatafika, with a population estimated at 32,000 inhabitants in 2004, is the least densely populated of the districts in the Tana/Antsirabe pole.

The urban district of Ambatolampy is located 68 km from the capital and has an area of 30 km2. The main districts surrounding it are all rural. The town of Ambatolampy is thus the centre for services for a region of intensive and diversified farming. The population of Ambatolampy has a good proportion of people over 18 years of age - about 52%, compared to only 39% in Ampitatafika. In fact, it would seem that about 30% of young people travel regularly to Antananarivo for their work.

In spite of their differences, the districts selected for industrial development all face certain challenges for this type of development. The main challenge initially is job creation, and thus reducing poverty. Given the unemployment and underemployment that prevail, especially in Antsirabe and in Ambatolampy, and also the need to lessen the pressures on farmland in the region and absorb a young, available workforce, job creation is surely an immediate answer to these problems, at least with regard to job seekers who have the minimum qualifications for the types of industries created, or who are able to acquire them fairly rapidly. A major hurdle is in explaining these challenges to the populations and above all, integrating them into this type of development. Antsirabe already has a number of assets, but the creation of favourable conditions includes the capacity of the districts to develop the basic services, and provide the accommodation and the socio-collective instruments that must accompany the Attachment 2 Page 28 of 64

demographic growth and the resulting cultural diversity. Municipal authorities must be supported so that they can host these projects successfully by avoiding the pitfalls of unplanned, anarchic, even negative development.

Finally, the real challenge over the long term is improving the conditions and the quality of life for the populations. To do this, wages and working conditions must provide for this rise in social standards, which leads to real development. In all cases, the economic dynamism created by these industrial poles can only be a source of real development if wages and working conditions in the factories provide for improved living conditions in general. Otherwise, we risk creating further shantytowns with all the social problems that they can entail. Development cannot occur without the participation of the population. This is why the collaboration and the cooperation of all the economic players are indispensable.

PUBLIC CONS ULTATl 0 NS

The Vice-Prime Minister, the districts involved, in particular that of Antsirabe, and the Consultant conducted public consultations related to the IG2P in general and to the AntananarivolAntsirabe growth pole in particular. The public consultations were held at three different stages during the preparation of this impact assessment, as follows:

In July 2004, upon publication of the terms of reference for this environmental assessment

0 In November 2004, when information was given to local populations who could be affected by the EPZ projects and the agri-business park at Antsirabe, in particular

0 In December 2004, when the preliminary results of the ESlA were presented.

ENVIRONMENTAL AND SOCIAL ANALYSIS

Following the descriptions of the sub-projects, the legal and institutional frameworks and the main environmental and social components, this ESlA continues with the environmental and social analysis of the Tana/Antsirabe pole project. This analysis is carried out on three levels: (i) the environmental assessment of the sole sub-project for the first year of the IG2P, Le., Phase I - Antanetibe business park, including its environmental management plan, (ii) a description of the milieu for insertion, an analysis of options and the drawing-up of strategic recommendations Attachment 2 Page 29 of 64

for sub-projects in subsequent years for which the World Bank is evaluating the possibilities for financing, and (iii) the same approach as in (ii), but for potential sub-projects for which the financing has yet to be identified.

The environmental assessment for Phase I of the Antanetibe business park could not be accomplished with as many details as were hoped for, because it was identified late in the planning process for the Tana/Antsirabe pole, and because of the lack of information about this sub-project, especially the operating phase. In fact, the business plan for the business park still has to be prepared by the Government. This ESlA has however identified the main potential impacts of the construction phase with regard to water and soil quality, and health and safety. Nevertheless, as long as the recommended attenuation measures are applied, all the remaining impacts of the sub-project are considered minor.

The sub-projects in the TanalAntsirabe pole for which the World Bank is evaluating the possibilities for financing in years subsequent to the implementation of the IG2P, are Phase II of the Antanetibe business park (expansion), the Antsirabe agri-business park (5 ha) and an EPZ at Antananarivo near the container terminal. For these sub-projects, the ESlA limits itself to an analysis of all the information available for each of them. Once they have been sufficiently defined, the environmental and social studies required to conform with the policies of the World Bank and Malagasy laws currently in force could be completed based on the preliminary analysis presented in this report.

The scope of Phase II of the Antanetibe business park sub-project will be determined once the business plan has been prepared. For the time being, the ESlA is assuming that the work involved in this phase will be relatively similar to that planned for Phase I. Thus it suggests basing the planning of construction and operating activities for Phase II of the business park on the same attenuation measures recommended for Phase I. In addition, considering the possibility that the sub-project will lead to the resettlement of populations, it recommends that a parcel survey of the site be carried out as soon as possible in order to verify that people are living on MTPC [Ministry of Telecommunications, Post and Communications] land and if so, to launch the socio-economic survey needed to prepare the Resettlement Plan (RP). Attachment 2 Page 30 of 64

The Antsirabe agri-business park, for which the World Bank is evaluating the possibilities for financing with private investors, underwent a preliminary environmental characterization study for this ESIA, in order to evaluate the different options. In addition, following the recommendations of the interim report on the feasibility of incorporating industrial zones into the Tana/Antsirabe’ pole, and following the World Bank study carried out in December 2004, the area envisaged for the development of the agri-business park was considerably reduced, and is now down to 5 hectares. Under these conditions, two areas of approximately a dozen hectares, with no apparent use (fallow land only) were identified on the land. On the other hand, a preliminary exercise to identify property titles in this sector showed that several parcels on the land envisaged for the agri-business park are titled, hence the possible need for a resettlement plan.

The ESlA also recommends that all the guidelines for industrial development contained in the ESMF for the project be considered for the agri-business park, that all applicable environmental standards in Malagasy law and from the World Bank be applied, that the current level of pollution in the water courses in Antsirabe be taken into account (in order to adopt an approach that minimizes the cumulative impacts), that composting of organic agri-food waste for economic development purposes be encouraged, that wastewater be treated on the agri- business park site, and finally that a hydrogeological study be conducted in order to take into account the actual capacity of groundwater resources and the needs of other users.

In addition, The World Bank may evaluate the possibility of financing an Export-processing Zone (EPZ) at Antananarivo if the Government is able to meet the conditions required. However, this site has not yet been identified and thus no information is available on the specifics of the milieu for insertion, nor on the analysis of options envisaged. All that the ESlA can recommend at this stage is that the guidelines applicable to industrial development in the ESMF for the project be considered when this sub-project is being defined, in order to take the environmental and social concerns into account upstream of the design.

The sub-projects for which financing has yet to be defined are the following:

‘ TEBODIN /Vice Prime Ministry of Madagascar. “Integrated Growth Poles Project (IG2P) - Feasibility study for developing export processing zones in Antananarivo and Antsirabe” Interim report, December 10 2004 (under revision) Attachment 2 Page 31 of 64

0 Antsirabe EPZ 0 Antsirabe bypass road 0 Antsirabe solid waste management 0 Ampitatafika EPZ 0 Ambatolampy EPZ

At the request of the Vice-Prime Minister, and within the framework of this ESIA, these five sub- projects all underwent preliminary environmental and social studies and public consultation processes, before the World Bank’s pre-assessment team recommended that these five should not receive financing from the Bank. However, these five sub-projects remain in this ESlA so that future financial backers may benefit from the results of studies already conducted.

The preliminary environmental analysis for these five sub-projects consists of a description of the milieu for insertion, an analysis of the options, and strategic recommendations. The main recommendations have to do with selecting locations for the EPZs and the bypass. In addition, the current garbage dump at Antsirabe was examined and judged to be inadequate on a number of fronts. In particular, its location at the top of a knoll, immediately above large areas of farmland, and from which the drainage is uncontrolled, translates into a major risk for crop contamination.

ENVIRONMENTAL MANAGEMENT PLAN

The body of this ESlA concludes with the Environmental Management Plan (EMP) for the first phase of the Antanetibe business park, the sole sub-project in the first year of implementation of the IG2P in the Tana/Antsirabe pole. This EMP has four sections: (i) the plan for mitigating negative impacts, (ii) the plan for environmental monitoring plan, (iii) the institutional organization, and (iv) the implementation plan including the schedule of operations and cost estimates.

The impact mitigation plan lists all the impacts and mitigation measures identified in the environmental and social analysis, along with the methods for monitoring up and the responsibilities associated with it. For greater convenience during the implementation of the Attachment 2 Page 32 of 64

EMP, the mitigation measures are listed separately for each stage of the project, Le., the design, construction and operating phases.

The mitigation measures presented for the design phase must be read in conjunction with the engineering studies, and are measures aimed at minimizing the impacts for all the choices in the design of the installations.

The mitigation measures for the construction phase aim to eliminate or reduce the negative impacts generated by the site preparation and construction work. To be effective, these measures must be integrated into the specifications for the incumbent contractor who will be carrying out the development and construction work.

Finally, the mitigation measures for the operating phase must be applied for the long term, throughout the entire period the business park is in operation, Le., from the moment the development and construction work is completed and the site is transferred to its operator. To be effective, these measures must appear in the operating permit for the site.

The environmental monitoring system comprises the following elements:

Specific methods for monitoring to measure the actual effectiveness of each mitigation measure by comparing it to the established performance objectives General methods for monitoring to identify any unanticipated impact for which no mitigation measure was planned Methods for implementing corrective actions required in cases where the performance objectives were not reached or the impact was unanticipated.

Methods for monitoring and follow-up, corrective actions and documenting these activities are suggested for each of the three phases of the project.

To ensure that the measures recommended for mitigation and monitoring are implemented, the EMP defines the responsibilities associated with these measures as follows:

Responsibilities related to the implementation of the measures for mitigation and monitoring, for each phase of the project (design, construction, operation) Attachment 2 Page 33 of 64

0 An assessment of the need to strengthen the environmental management capacities of the organizations that have these various responsibilities.

The principal institutional bodies that have responsibility for implementing this EMP are the following:

0 National Coordination for the IG2P

0 Local monitoring committee for the IG2P

0 Manager (to be named) Leader for the neighbourhood and the District of Ambohibao Antehiroka.

With the measures for mitigation and monitoring having been identified and the institutional organization needed for their application having been described, the EMP presents the issues related to its implementation, as follows:

The schedule for carrying out the measures to be taken within the framework of the project; The estimate for investment and operating costs for mitigating impacts, monitoring, and capacity building. Attachment 2 Page 34 of 64

Environmental and Social Impact Assessment (ESIA) for Nosy Be

The Integrated Growth Poles Project (IG2P), implemented by the Vice-Prime Minister responsible for Economic Programs (VPM), is a tool that will generate rapid, sustainable growth, and constitutes an instrument for reducing poverty in Madagascar, while at the same time seeking to help improve and preserve the environment. It is a Government of Madagascar initiative, stemming from the national strategy for rapid, sustainable development outlined in the PRSP. This document is a simplified summary of the ESIA report on the Nosy Be growth pole, the main thrust of which is the development of tourism.

The project under studv In the Nosy Be pole, the main purpose of the IG2P is to install and/or bring up to standard the conditions essential for the rapid, sustainable development of tourism. The overall aim is to triple the number of tourists visiting the island over the next 10 years. The following data illustrate the current situation and the situation hoped for in 201 0.

/ Current situation: Number of tourists in Nosy Be per year: between 30,000 and 35,000 tourists; Proportion of international tourism for Madagascar: between 20% and 25% in terms of the number of tourists, but totalling 30% of national revenues for the sector; Tourism based on whale-watching and discovery (land and sea); Average number of nights per tourist: 4; Number of rooms: between 1000 and 1200; Occupation rate between 15 and 45% (according to the sources).

Situation hoDed for in 201 0: Number of tourists in Nosy Be per year: between 90,000 and 100,000 tourists; Average number of nights per tourist: 7; Number of rooms: 2000; Occupation rate of 50%; 4000 new jobs.

To ensure that tourism development in Nosy Be is sustainable in environmental and social terms, the IG2P plans to intervene on three main fronts: the development of infrastructures, the Attachment 2 Page 35 of 64

protection of biodiversity and cultural heritage, and the development of local capacities and tourism management. To this end, various sub-projects have been chosen by the IG2P, and the plan is to implement them over a five-year period. In the first year, the IG2P will finance the following activities: Repairs to the ring road Modernization of the telecommunications system Renovations to the hospital (2ndstorey) Establishment of a Marine and Coastal Protected Area (MCPA) at Nosy Tanikely

Over the course of subsequent years, the IG2P envisages supporting the following sub-projects:

Restoration of the port of Hell-Ville and associated work Repairs to other roads (service roads) Rehabilitation of the water conveyance system Repairs to the urban road network in Hell-Vile and installation of a sewage disposal system Modernization of the system for the production and distribution of electricity Improvements to the solid waste removal system and construction of a public landfill site Restoration of the colonial quarter Development of crafts.

Within the framework of assessing the environmental and social impact of the IG2Pl the Vice- Prime Minister, the local steering committee for the IG2Pl the district of Nosy Be and the Consultant held public consultations and formal and informal meetings related to the IG2P in general, and to the Nosy Be growth pole in particular. This meant that the challenges could be properly identified and attenuation measures developed to allow the project to succeed. These consultations and meetings enriched this study on several fronts.

Strenqths and weaknesses of the reqion This section presents the main assets, the major handicaps and the principal environmentally and socially sensitive issues involved with the Nosy Be pole to be taken into consideration within the framework for the development of the IG2P projects.

Strengths The island of Nosy Be effectively has a natural framework on which it can depend. The relaxed atmosphere that reigns here pervades the numerous activities offered to visitors (lots of beaches, deep-sea diving, sailing, hiking, ocean cruises and deep-sea sport fishing, etc.), making this a destination increasingly highly prized by vacationers. The numerous islets and Attachment 2 Page 36 of 64 the boat trip to the Lokobe Nature Reserve, which will be acquiring the status of a National Park, (where people will be able to easily observe native plants and species), as well as the island’s colonial past and cultural heritaqe all add to the tourist attractions that could keep the visitor in the area longer.

Because of its history and the various waves of immigrants who made Nosy Be their destination, it is an open, tolerant and welcominq place. It has a mix of people who are used to change and to the presence of foreigners.

The island of Nosy Be has for many years had a reputation as an interesting tourist destination, but currently it seems to be gaining popularity. Hotels and restaurants are multiplying, and investors are becoming increasingly numerous. The recent developments to the airport have meant the arrival of jumbo jets, which will definitely open Nosy Be to mass tourism.

Weaknesses The rapid development that currently seems to be taking place on Nosy Be is highlighting the limits of the district’s capacity to handle this development. In addition, the basic infrastructures, already insufficient to meet the current needs of the population, are found to be used to beyond their capacity. Electrical power outages, access to potable water, and management of solid waste and wastewater are all problems that the local population, just like commercial operators, must deal with on a daily basis. The constraints related to difficulties in transportation and provisioning, especially in high season, also hamper the development of the tourism sector. According to some, the additional cost of transporting provisions could represent about 20% to 25% of the total cost of food. This situation of course leads to increased operating costs.

The difficulty in findinu uualified workers to take the jobs in hotels and other tourist services adds to the difficulties encountered by the operators. Nosy Be does not have a workforce qualified to work in the hotel and food industry aimed at upscale tourism. In addition, the ease with which some young people can earn money in the informal economy makes the opportunity to acquire training in this sector less attractive, especially when this training is not currently offered on site. Attachment 2 Page 37 of 64

Uncontrolled development of the informal economy, especially in certain niche markets and in certain neighbourhoods, presents the risk of a downward spiral that is not negligible if nothing is done to control it. The most immediate risk seems to be the development of sex tourism, similar to what is happening in certain southeast Asian destinations. Other problems that arise are anarchic, uncontrolled development of housing and occupation of non-compliant areas, pollution of waterfront and beaches, traffic problems, etc.

In spite of grouping craftspeople within various associations, the development of the craft industry has not really been organized thus far, and product quality for the crafts and their supply and distribution cannot always be relied on, especially in the case of the embroiderers.

Environmentallv sensitive issues In many regards, Nosy Be is a milieu that is sensitive to environmental issues, this sensitivity having developed from the fact that it is an island and therefore a cramped, confined space with the ocean as a natural border; the pressures on the natural milieu are especially strong when there is little space over which they can be spread.

The main environmentally sensitive issues for Nosy Be are the following:

- Drinking water: one of the main issues faced by islands is their ability to capture and hold drinking water. Happily, Nosy Be has eleven lakes of different volumes that serve to irrigate the fields and supply drinking water to the island’s inhabitants and the numerous tourist centres. According to previous studies, a drop in water levels in some lakes has been observed over the years, with possible causes being reduced rainfall on the one hand and an increase in the amounts used for irrigation and drinking water supplies on the other; however, these hypotheses have not been confirmed. Thus protecting the island’s sources of drinking water is a major challenge for the IG2P.

- Flora and fauna: the island’s natural vegetation has all but disappeared, due to practices of slash-and-burn clearing and farming operations (rice, cash crops, sugar cane). Only about 750 hectares of old-growth forest remain, and these mainly survive in the Lokobe Nature Reserve and on the islet of Sakatia. But these forests are very rich in terms of biodiversity. As for mangroves, about 600 hectares remain, and the pressure on these Attachment 2 Page 38 of 64

is strong, because the wood of mangrove trees is much used locally for making charcoal, for firewood and for construction. With regard to fauna, the survival of native species is closely related to natural vegetation, and the wildlife also exerts much pressure at the moment.

- Coral reefs: recent studies assess the state of health of Nosy Be’s coral reefs as average to excellent, with some fairly light degradation over time. However, these areas are sensitive to the pressures caused by humans (pollution, tourism, fishing) and to some extreme weather events (e.g., cyclones), which make them vulnerable, considering the development planned for the pole.

C hallennes Despite the very promising picture that the development of the pole presents, some ongoing concerns and certain negative impacts on the natural milieu (such as human impacts) have already been felt because of the rapid development of tourism. This development has been somewhat uncontrolled, and brings with it various problems: privatization of certain portions of the coast, property conflicts, over-densification of certain sectors of the coast and a man-made backdrop to the waterfront, pollution (garbage and effluent), disturbance of marine ecosystems by water sports, higher cost of living and inflation, sex tourism2, etc. In view of the large-scale investments planned for Nosy Be, much effort will have to be put into reversing these trends and ensuring the best conditions for sustainable tourism.

One of the main challenges faced by the district of Nosy Be is the framework for tourism development. In effect, exploiting the natural environment and its tourist potential requires a framework for initiatives and for operators to ensure long-term viability for the sector. This framework must be part of the planned accompanying measures, in particular the improvement of all basic infrastructures.

Therefore it is of utmost importance that the projections for the growth of tourism and the anticipated increase in capacity of accommodation for the pole form part of the logistics for integrated planning. In this way, the needs will be realistically met for the development Attachment 2 Page 39 of 64

envisaged and its effects on the process of urbanization: demographic growth, increased planning needs, especially and as a priority, with regard to balancing the current capacity of the potable water supply, electricity (or other energy) and sanitary services with the projected needs over the medium and long terms. The same applies to integrating tourism on the social level and in particular, the fragile contact between the tourist and the local culture, as well as the prevention of HIV-AIDS.

A major challenge is intearatina the population into this type of development. Given the lack of a qualified workforce, it is not at all evident that the local population will be able to meet the needs of the tourism industry, especially when it comes to upscale tourism, and particularly as most operators are foreign investors. Much greater participation by the local workforce would allow the benefits resulting from tourism development to be more widely felt. Currently, participation by the local population comes partly from young people in basic service jobs, but more often from those in the informal economy, through activities such as prostitution, trafficking of soft drugs, and the adoption of certain behaviours copied from foreign tourists.

Impacts and attenuation measures

Impacts of, and attenuation measures for. sub-proiects in the first year of the IG2P The impacts of the construction and operation of infrastructures planned in the first year of implementing the IG2P have been well identified, and a series of mitigation measures are proposed to eliminate, attenuate or compensate for the negative impacts, both on the flora and fauna, and on the human milieu.

With regard to the repair of the ring road, several positive impacts for the population and the local economy have been identified, in particular with regard to improving access to the northern and eastern areas of the island, ease of transportation for merchandise and tourists, and improved road safety. On the other hand, the main negative impacts on the natural and human milieus that have been identified are:

* The Ministry of Tourism is aware of the existence of child prostitution in Madagascar (particularly in Nosy-Be and Diego Suarez) and there are insistent rumours of links to the world of international pornography. Attachment 2 Page 40 of 64

- Risk of degrading and contaminating the water courses and the milieus downstream (e.g., mangroves) during the construction work or during repairs to the crossings, which could be caused by erosion, shifting of solid materials, sewage (workers’ camp) or hydrocarbons (equipment maintenance) - Degradation of the natural milieu and the landscape with regard to lodgings and quarries used - Emissions of dust and gas coming from machinery operated during the construction - Degradation of the forest cover in the northern and eastern portions of the island, due to easier access to these zones once the repairs are completed - Population movements (houses and fields) caused by the widening of the right of way for the road to 12 m - Nuisances to which the population could be subjected during the work (noise, dust, hindrance to traffic) - Possible issues with security, conflicts, misdemeanours, prostitution and an increase in sexually-transmitted diseases that could result from the presence of many workers from outside the area during construction - Risk of accidents because vehicles are travelling faster, following improvements to the roads, in areas in which the population is not used to being.

The proposed measures for attenuating these impacts include, in particular:

- Minimizing the work in the flood zone to be planned at the design stage - Measures to protect the banks and the slopes during construction - Planning for adequate areas and equipment for maintenance of machinery - Priority given to the local workforce for construction jobs - Minimizing the needs in workers’ camps or keeping them properly cleaned - Rehabilitation of lodgings and quarries used - Measures to control noise and dust - Prior sensitization of workers with respect to the local population and the risks associated with sexually transmitted diseases - Suitable compensation for resettled populations in accordance with the resettlement action plan Attachment 2 Page 41 of 64

- Measures to protect the forest cover in the most sensitive areas and to reduce the speed of vehicles in residential areas after repairs.

The sub-project for modernizing the telecommunications network will have numerous positive effects for the local population and the economy, by facilitating telephone communications and Internet access right across the island. The negative impacts, mainly the visual impact on the landscape and the nuisances for the environment and the population during construction (development of the sites, telecommunications towers and access roads), could be attenuated by carefully planning the choice of sites and by applying measures similar to those planned for the repair of the ring road during the construction period. A priori, if the sites chosen for installing the towers are leased as planned, this sub-project should not involve any population resettlement.

With regard to the renovation of the Hell-Ville hospital (2ndstorey), this sub-project will also have major positive impacts for the population and the environment. In particular, the installation of an incinerator for hospital wastes and the implementation of safety procedures for segregating and eliminating these waste products, including encapsulating the ashes from the incinerator and dangerous hospital waste that cannot be incinerated, will significantly diminish the negative impacts on the environment and on health that would result if these hospital wastes were buried behind the hospital. The negative impacts that currently result from this sub-project are mainly related to emissions into the air from the incinerator and to nuisances for the environment and the local population during the construction period. Attenuation measures for these impacts include training hospital staff in the sanitary management of hospital wastes and adequate operation of the incinerator, as well as attenuation measures for noise and dust during construction.

The last of the four sub-projects in the first year of the IG2P at Nosy Be consists of the creation of a Marine and Coastal Protected Area at Nosy Tanikely. Right from the start, the purpose of this sub-project has been to attenuate the negative impacts of tourism development on the natural milieu, because it aims to control tourist operations on this islet in order to ensure its preservation, for the land ecosystem as well as the marine and reef ecosystems. The impact assessment for tourist operations on this islet concluded that there would be an accelerated risk of degradation of this natural jewel if tourist operations increased and no effort was made to Attachment 2 Page 42 of 64

control these activities on the island and on the coral reefs. Thus an environmental management plan was developed, integrating a development and management plan for Nosy Tanikely. This plan, the details of which are provided in a separate report, proposes firstly methods for developing the islet, with restricted access to some areas judged to be more fragile, the installation of a wharf and mooring buoys, and the redesign of picnic areas and existing trails, to attenuate the negative impacts associated with boat anchors and tourist activities, The plan also proposes management and follow-up methods that support the creation of an area protected on a voluntary basis, Le., not integrated into the national network of protected areas, while at the same time setting up an auto-control system for the activities of operators and an independent scientific follow-up to verify whether the preservation of the milieu is effective. In addition, a functional framework was also prepared (separate report) to manage the minor social impacts associated with restricted access to this protected area.

Impacts and attenuation measures for sub-Droiects in subsequent years of the IG2P At this time, the sub-projects in subsequent years of the IG2P have not been sufficiently developed to carry out an assessment of the environmental and social impact in accordance with best practices. The present study is thus limited to carrying out an assessment of a strategic nature, aimed at integrating the most critical environmental and social concerns, right from the design stage for these sub-projects. This strategic assessment was carried out using the Environmental and Social Management Framework (ESMF) and the other policy frameworks for the IG2P as reference, and was based on information available on each of the sub-projects, which provided varying amounts of detail. A bona fide assessment of impacts will be carried out later once these sub-projects have been defined.

In the case of the sub-project for the rehabilitation of the port of Hell-Ville, the main positive impacts anticipated result from improvements to the capacity of the port, which will have a positive effect on the local economy and on tourism, and will create jobs. The main negative impacts will be generated during the construction period: essentially, these are impacts caused by the slowing down of and disturbance to port activities, possible impacts on fishing (navigation disturbed and the risk of plumes of sediment raised during the work), as well as the impacts associated with dredging and the disposal of dredged material, which contains contaminants such as metals and petroleum products. Specific attenuation measures cannot be identified at this time, as the areas to be dredged have not yet been defined and the programming for the Attachment 2 Page 43 of 64

rehabilitation work is not yet available; however, when preparing the detailed technical study, the aim should be to minimize these impacts.

Overall, the project for rehabilitating the water conveyance system will have positive social impacts, because it will improve living conditions for the people of Nosy Be, who are for the most part currently destitute, by supplying them with truly potable water. On the other hand, the safety of the source of the drinking water supply must be ensured for health reasons; to this end, a protection zone with restrictions for use will have to be established around the perimeters of the two sources of drinking water supply under consideration, Lake Ampombilava and Lake Amparihibe. The definition of this perimeter will be based on a hydrological study of the supply to these basins, in order to ensure perennial protection of this drinking water source. Establishing such a perimeter will mean restrictions on the use of the land involved (e.g., farming, stock raising, or housing and domestic activities). These restrictions on use bring with them negative social impacts for the people affected, and a resettlement action plan will have to be put into effect in accordance with the framework for the resettlement policy developed within the framework of the IG2P. Given the configuration of these areas and the uses observed around this site, it is certain that the use of Lake Ampombilava (at the very least) as a source of drinking water will necessitate such a resettlement plan.

The sub-projects for repairing roads other than the ring road routes (service roads), the urban road network in Hell-Ville and the installation of a wastewater disposal system will have positive impacts for the local population in terms of the quality of infrastructures, ease of movement and hygiene/health. Wastewater treatment will also have a positive impact on the quality of the water and the natural milieu. The negative impacts of these sub-projects are, on the whole, associated with the construction phase and can be attenuated with measures similar to those proposed for the repair of the ring road.

The modernization of the electricity production system will also have beneficial effects on the quality of life of the local population, the economy and tourism. However, this project brings with it some critical aspects on the environmental and social front, due to the major nuisances that the thermal station currently generates, both for the surrounding population and for the environment (noise, emissions into the atmosphere, contamination of soils and water by waste oils). In this regard, this report recommends that this thermal station be relocated right at the Attachment 2 Page 44 of 64 start (in addition to updating it) or, if this is not possible, to plan for major measures of attenuation in the modernization project, in particular with regard to controlling noise, emissions into the atmosphere, disposal of waste oils, management of old transformers containing PCBs, etc. It also recommends planning for improvements to health and safety conditions for workers on the thermal station site.

The main purpose of implementing the sub-project for improving the removal system for solid waste and construction of a public landfill is to attenuate the environmental and social impacts generated by the gaps currently in the removal system and the uncontrolled disposal of solid waste in the landfill. In order to maximize the positive impacts and ensure that the solutions implemented are sustainable, this study recommends first proceeding with the preparation of a plan for managing waste for the entire island, taking into account the anticipated tourism development. Potential solutions (controlled landfill disposal, composting, recycling, etc.) should be the subject of a comparative study to find out which are the most advantageous in the context of the island, and the methods and collection plan should be adapted in terms of the treatment solutions chosen.

Overall, the rehabilitation of the colonial quarter will have positive social impacts, as it will improve the quality of the urban milieu of Hell-Ville and will create opportunities for enhancing tourism. Certain aspects, however, merit special attention during the planning of this sub- project, in particular the possible need to prepare a resettlement plan if tourist uses are envisaged for these colonial buildings and if these uses are incompatible with their current utilization by people or organizations for whom these buildings represent a means of subsistence or income. On this point it is recommended firstly, where reasonably practical, to plan the rehabilitation of the buildings by maintaining their current usage so as to avoid resettling people.

With regard to the sub-project for the development of crafts, the recommendation is first and foremost to plan education, sensitization and the required control measures to avoid using the natural resources (that should be safeguarded) as raw materials for making craft products (e.g., coral, fossils, mangrove wood or plant species from old-growth forests, products derived from animals such as skins, carapaces, etc.). Attachment 2 Page 45 of 64

Cumulative effects The study of cumulative effects examines the impacts on the natural and human milieus of tourism development for the Nosy Be pole as a whole, taking into account the sub-projects envisaged over the next five years of implementing the IG2P and the other activities taking place in the region or that could develop as a result of increased tourism.

At Nosy Be, the IG2P project is a multi-dimensional development intervention that will lead to the creation of a genre model for Madagascar. The fact that Nosy Be is an island makes such an undertaking easier and improves its chances of success; it does, however, present a few challenges on the biophysical and human levels.

In this context, the significant issues in terms of the cumulative effects of tourism development in the Nosy Be region are the following:

A) Phvsical or biophvsical issues

1. Loss or degradation or marine and estuary habitats

B) Human issues

2. Social, economic and cultural pressures on low-income households

3. Increased prevalence of STDs, HIV/AIDS

4. Pressures on the human habitat in urban and rural communities.

The scope of the issues identified above is limited to the island of Nosy Be. The time horizon for the analysis is 25 vears. Other actions envisaged on a 25-year horizon on the island of Nosy Be that could have an impact on the issues listed above are the following:

1, Continuing to farm on a slash-and-burn basis (tavy) 2. Continued spontaneous migration coming from the Grande Terre to satisfy manpower needs 3. Increase in the number of tourists 4. Probable development of the in-shore fishery. Attachment 2 Page 46 of 64

Examining the cumulative impacts revealed the risks of profound changes in the milieu resulting from poorly managed tourism development and a poorly controlled urbanization process. In general, most of the tourist activities are concentrated on the coast, making this an even more attractive and sought-after milieu and the focus of considerable spatial competition (real estate speculation). In terms of spatial layout and organization, island tourism development is a structuring factor for the space; it shapes the milieu by directing development efforts towards the coast, where the island opens out to the sea, so that the territory sees itself as becoming more coastal.

The current context for Nosy Be leaves room for improvement, for prevention measures and for the reversal of certain harmful trends. In this sense, the IG2P actually represents the opportunity to restructure tourism development on Nosy Be and to provide it with a strategic approach planned over the long term; it also allows for thought to be given to the issues involved in island tourism that are specific to the site. Thus the IG2P is presenting itself at an opportune moment as a means of reorganizing, diversifying and enriching what the island and the archipelago as a whole have to offer their tourists. This reorganization would also have to occur on a much larger, territorial scale so as to join with the region of DIANA in an integrated development strategy. New activities could be thought up to enlarge the space on the island assigned to tourism beyond the coastal strip, by encouraging the development of the centre, for example developing green networks and corridors that link the various attractions on the island. In this way, the diversification of tourist activities, among other things, could contribute to a spatial rebalancing of the heart of the island.

On the social level, the integration of the population into the tourism development envisaged is not at all obvious, given the lack of a qualified workforce, especially when it comes to upscale tourism, and particularly as most of the tourism operators are foreign investors. Much greater participation by the local workforce would allow the benefits resulting from tourism development to be more widely felt. It has already been stated that currently, participation by the local population comes partly from young people in basic service jobs but more often from those in the informal economy, through activities such as prostitution, trafficking of soft drugs, and the adoption of certain behaviours copied from foreign tourists, in particular in Ambatoloaka. This phenomenon of impoverishment risks being amplified by the phenomenon of tax evasion that Attachment 2 Page 47 of 64

has been observed, depriving the government of revenues that would allow it to intervene. Thus major interventions must be planned, in particular with regard to training the local workforce and tightening administrative controls on businesses to ensure adequate and continuing financing of social support activities.

As for sexually transmitted infections, the regional strategy in the fight against HIV/AIDS must receive support within the framework of the IG2P projects, even if these projects, taken Individually, do not have a very significant impact on this component. Methods for reinforcement are the use of sensitizing information, planned for each sub-project, and recourse to police patrols in the case of juvenile prostitution.

Effective follow-up The IG2P is planning to implement a follow-up system for all the impacts and attenuation measures, along with the responsibilities that go with them. The basic principles of the follow-up system - sharing responsibility and the methods for implementing them - are described in detail in the environmental management plan at the end of the study. The attenuation measures presented cover the design, construction and operating phases, as needed. For each attenuation measure proposed, the tables show the indicators and the performance objectives associated with them. The monitoring system and the environmental follow-up consist of the following elements:

Specific follow-up methods to measure the actual effectiveness of each of the attenuation measures, by comparing them to the established performance objectives General methods for monitoring to identify any unanticipated impact for which no attenuation measure was planned

0 Methods for implementing corrective actions required in cases where the performance objectives were not reached or the impact was unanticipated.

All in all, the IG2P will bring positive, sustainable development to Nosy Be, by developing measures to accompany the development of tourism. The success of the project on the environmental and social level depends however on the effective implementation of the measures for mitigation and follow-up proposed in this study, in particular with regard to the integrated approach for planning the development of the territory and the town planning, the Attachment 2 Page 48 of 64 attenuation measures and environmental monitoring specific to each sub-project, the measures for compensation related to the resettlement of the people affected, the measures for social integration aimed at maximizing the benefits for the local population, as well as the measures for controlling the prevalence of sexually transmitted infections and HIWAIDS. Attachment 2 Page 49 of 64

Resettlement Action Plan (RAP) for National Route 13 at Taolagnaro (Fort-Dauphin)

Within the framework of implementing the Integrated Growth Poles Project (IGPP), the resurfacing of a portion of the main highway of national importance (RN-13) called Route Marechal Foch to Fort-Dauphin is a first year project. The planned work involves the reconstruction of both lanes of the roadway and the repair of the drinking water supply pipe. In the short term, this work will cause some inconvenience and will from time to time disturb some business activities operating along this road axis, in particular along the section of the road in the busier sector around the main market in Tanambao and the bus station, near the entrance to the town.

Access to the businesses and the water supply will be maintained at all times while the work is being carried out. As the equipment and machinery will be mobilized on site, the plan is to restore the portion leading to the hospital, and that providing access to the port, and to repair the gaps along the Vinanikely axis, which pose risks for road traffic, public safety and the environment because of landslides along the edge of the coastal zone.

This reinstallation plan is provided essentially for reasons of public safety, in order to avoid the risk of disorderly confusion that could arise around the main market in Tanambao and the bus station during the road repair work, and with the movements of equipment and machinery used for the heavy construction. Specifically affected is a group of 44 street vendors who set up around the main market in Tanambao, located along the side of the road.

If these street vendors continue with their activities, there is a risk that they will probably suffer a brief loss of income (from the sale of their wares) because of the repair work being carried out and the passage and movements of the equipment and machinery required for this roadwork, where this work crosses the market area. It would thus be preferable to move them for a short period to a neighbouring site where they can continue their activities without suffering any loss of income, at the same time ensuring public safety during the road works and proper operation of the equipment and machinery used for the heavy construction. Attachment 2 Page 50 of 64

The zone encompasses a portion of the main highway (RN-13 and its approaches) between the intersection with the cross street opposite the Kaleta store and the bus station, and includes the market area. The length of this portion in the zone in question is estimated to be 300 metres.

No permanent kiosk will be relocated, only the tables of the 44 street vendors that are right on the edge of the road, because the work only involves repairing the road. These vendors set up each day in the same location and the census counted all the vendors who occupy this space on a regular basis.

For the purposes of this RP, a temporary area for these vendors to set up their tables was chosen after consultation with representatives from the Commune Urbaine de Fort-Dauphin. It is a space formed within the area around the shopping street running along the Tanambao market place that is known locally as the “rue peripherique du marche.

Each street vendor affected would be responsible for transporting - just as he does every morning at the market anyway - his own stall to the temporary reinstallation area. This move will not cause any loss of income because no permanent structure will be affected and the vendors will be relocated close to the area where they normally operate. Nevertheless, each vendor will have to move his stall himself and suffer the inconveniences, so each vendor moved will receive compensation of 5000 Ariary.

The AGETIPA, as the prime contractor chosen, will ensure that the implementation plan is followed. Prior to the work, the Commune, in collaboration with the prime contractor, will report any pertinent information to the group of street vendors affected and the managers of the market, and will discuss with them the relocation strategy (relative to orders to temporary relocate and the temporary relocation area). A recourse process is planned should there be unexpected damage or should a vendor not be satisfied. A follow-up report will be submitted to the VPM (Vice-Prime Minister) and the NOE (National Office for the Environment). Attachment 2 Page 51 of 64

Resettlement Action Plan (RAP) for New Port and Related Infrastructure at Taolagnaro (Fort-Dauphin)

The Government of Madagascar, with the support of the World Bank, intends to undertake a multi-sector development initiative in three key regions known as “Growth Poles”, namely AntananarivolAntsirabe in the centre of the country, Fort-Dauphin (Tolagnaro) in the south, and Nosy Be, in the north. This effort is known as the Integrated Growth Poles Project] (IG2P). In defining the activities or sub-projects planned within the framework of the Project, every precaution was taken to avoid, as far as possible, subjecting any person or property to harm or loss during and following the implementation of the Project. Nevertheless, some of the projects that have been identified so far for the Fort-Dauphin pole show that involuntary population resettlement may be inevitable. This is the case, in particular, for the QMM mining project in Fort-Dauphin, and for the repairs to the RN-13 road in Fort-Dauphin. Thus the government has prepared Resettlement Plans (RP) to guide the indemnity transactions and the resettlement of the populations affected by the Project. This RP concerns the QMM mining project in Fort- Dauphin. To facilitate this process, the World Bank and the Government will distribute the RP in the languages understood by, and in places accessible to, the local people involved.

The development of the Fort-Dauphin pole is related to the implementation of the mineral sands exploitation program in the Mandena sector, by QIT Madagascar Minerals S.A. (QMM, a subsidiary of the Rio Tinto Corporation, of which the Malagasy government is a partner), as well as to the construction of the associated infrastructures, namely a deep water port on the Ehoala peninsula, a national park reserve close to the port, a public road linking the RN-12 road to the port (mine-port road), a quarry and a private road linking the quarry to the port, as well as a temporary camp close to the quarry. The World Bank would only finance a portion of the Ehoala port project, while the rest of the aforementioned components are closely related to the new Ehoala port, and are thus covered by the current RP.

Within the framework of the QMM mining project in Fort-Dauphin, the government has promised to make available the land needed to build the required infrastructures, thus allowing the mining company to carry out its project. Attachment 2 Page 52 of 64

Thus, the development of this project involves the installation of various infrastructures, including a 13.3-km public road to link the mining to a public deep-water port located on the Ehoala peninsula, retaining an area for port infrastructures and for .a future industrial development, a quarry from which the materials required for the construction of the port and the road linking the mine to the port will be extracted, and finally a private road between the quarry and the site for the proposed port. Plans will also be required for a workers’ camp to house around 120 people during the construction period. The road between the quarry and the port will be removed once construction is complete, and the land affected will be re-landscaped.

The zone destined for the national park reserve and the port infrastructures will cover an area of 505 ha, 157 ha of which will become a port concession for a QMM subsidiary. The public road that links the mining sire to the port will be 100m wide (including a buffer zone of 50m) covering an area of 135 ha. The quarry will cover an area of 140 ha, and the workers’ camp 18 ha.

In order to prepare the current RP, a survey was conducted on the socio-economic and socio- cultural situation of the populations in the zone affected by the QMM mining project. The social survey began on December 13, 2004, and ended on February 3,2005 with a validation meeting involving the QMM, the mayor of the District of Fort-Dauphin and the Consultant. The survey was preceded by an information-gathering period and gave rise to public consultations in the districts. The purpose of this survey was to collect basic information on each household affected or impacted by the sub-project, on the social infrastructures and on the economic activities.

A total of 95 houses will be affected by the scope of the infrastructures, and will have to be moved. The lots, totaling an area of 841 ha, will also be affected. The land that will be affected has a total area of 283 ha, and is currently used for agriculture, fruit trees, as fallow land and forested areas. The number of individuals affected in various ways by the project totals 1046, which number includes members of 95 households that will have to be moved. It is these households that will be most affected. There were some graves on the Ehoala peninsula, and these were moved in 2004 to the satisfaction of the parties by QMM. According to the plans submitted by QMM, no other sacred places will be affected by the work. Attachment 2 Page 53 of 64

In terms of the current Resettlement Plan (RP), the Persons Affected by the Project (PAP) will receive proper compensation established on the basis of current market Drices and undepreciated caDital values for the real estate and other property lost, including farm/garden produce, trees and bushes.

For the parcels, the district will provide, where possible, parcels of the same size and comparable soil quality, with the same access to water. Parcels will be made available before the next growing season. New pens will be constructed on neighbouring parcels, if the owners so wish. The IG2P, the district and the prime contractor will provide assistance to the elderly and women to help them with the resettlement process.

In the case of private land, compensation will be assessed at the undepreciated replacement cost of an equivalent lot, based on recent transactions or by exchanging the lot with the district. State land will be compensated with replacement land of equal area and quality.

With regard to buildings, the compensation to individuals and households will be paid in cash, in kind, andlor through assistance, based on the value as new of the property affected. Preference will be given to reconstructing the neighbourhood’s pens rather than cash payments, but the PAP are free to choose once fully informed of their rights. Efforts will be made to point out the importance and the benefits of accepting compensation in kind, but the type of compensation will be an individual choice. Within the framework of this Resettlement Plan, compensation in kind is the method envisaged for compensating most of the losses. Deeded or customary parcels will be dealt with in the same way.

The district will publish a list of unit values for compensation to ensure that the process is transparent. Where property owners cannot be found or are unknown, the Service des domaines [property department] will take the steps required to identify them through title searches, advertising in the local papers or by other suitable means. In these cases, the money will be held in a special account until the owner has been identified. Compensation will be paid in such a way that the PAP may employ measures so that their quality of life is not affected. Payment of compensation in kind will be encouraged for the replacement of land parcels and pens. Subsistence compensation will be paid in cash in instalments. Attachment 2 Page 54 of 64

To ensure that the PAP use the compensation appropriately, the Steering Committee and the prime contractor together will carry out an awareness campaign for the PAP and ensure strict monitoring. Compensation will be paid sequentially to ensure its sustainability. Should any of the PAP decide to reconstruct their pens themselves, compensation will be paid in three payments according to the work progress observed by the district representative and the IG2P representative.

These measures mean that within the framework of the project, no-one will lose their means of subsistence. Nevertheless, particular attention must be paid to vulnerable persons at the socio- economic level, to ensure that they are treated considerately and will be provided with means of accompaniment and financial support required to resettle them properly. The great majority of the people affected are judged to be sufficiently vulnerable for accompaniment measures to be planned. These measures fall into three programs: food support over a five-year period for vulnerable PAP who lose their means of subsistence entirely or in part, a micro-credit program for the development of new land, and an economic support fund to allow the PAP to re-establish themselves in a new work activity if their method of subsistence is compromised.

Follow-up reports will confirm that the compensation amounts have been properly paid and that the PAP have used the money appropriately. The IG2P, the Service des domaines and the district will follow the process closely and will rely on the local leaders to detect any complaint or unexpected development; they will then involve the local traditional authorities in the process of negotiation and compensation payment.

Moreover, the Steering Committee and the district, including the staff responsible for the construction, will maintain close contact with the PAP so as to keep them informed, explain the procedures and register complaints until work on the site is completed. The PAP may, at any time before, during and after the work, exercise their right to appeal through the appropriate mechanisms and with assistance from the project. Attachment 2 Page 55 of 64

Resettlement Action Plan (RAP) for Ring Road at Nosy Be

The Government of Madagascar, with the collaboration of the World Bank, intends to undertake a multi-sector development initiative in the three key regions designated as “growth poles”: Antananarivo/Antsirabe in the centre of the country, Fort-Dauphin (Tolagnaro) in the south and Nosy Be in the north. This effort is called the Integrated Growth Poles Project (IG2P). When the activities or sub-projects planned within the framework of the Project were defined, every precaution was taken to avoid, as far as possible, subjecting any person or property to harm or loss during and following the implementation of the Project. Nevertheless, repairs to the ring road at Nosy Be indicate that involuntary resettlement of the population may be inevitable. The Government thus prepared a Resettlement Plan (RP) to guide the indemnity transactions and the resettlement of people affected by the repairs to this ring road. To facilitate this process, the World Bank and the Government will distribute the RP in the languages understood by the local people involved, and in places accessible to them.

The repairs involve complete rehabilitation of the road sections linking the Fascene airport and the intersection with the road from Andilana, over a distance of 19 kilometres. The road will be resurfaced and the two-lane highway will be widened to a minimum of 6 m, with I-m shoulders on each side. The right-of-way normally required is 12 m but this can be reduced in some spots to limit the amount of expropriation.

A study was carried out on the socio-economic and socio-cultural situation of the population in the area chosen for the sub-project. The social study was carried out in January 2005, and was preceded by an information-gathering period. The purpose of this study was to gather basic information on each household affected or impacted by the sub-project, on the social infrastructures and on economic activities. It concluded on Friday, January 21 with the holding of two public meeting in the public squares in Bemanondrobe and Andavakabe. 75 and 150 people respectively attended these public meetings held in the presence of government representatives. Attachment 2 Page 56 of 64

A total of 13 homes, I food stall, 1 outdoor kitchen and 2 fences will be affected by the right-of- way for the bypass road and will have to be moved. The lots will also be affected, over an area totalling 14.5 ha, as will farmed land and areas of fallow land and forest totalling 10.05 ha. In total, the number of people affected by the project in varying degrees is 814, with 14 homes housing 75 people having to be moved. These are the households most affected. A sacred tree was identified along the route, and special measures have been planned so that this element will not be impacted in any way by the bypass.

According to the current Resettlement Plan (RP), the Persons Affected by the Project (PAP) will receive proper compensation established on the basis of current market prices and undepreciated capital values for real estate and other property lost, including farm/garden produce, trees and shrubs.

For the land parcels, the district will provide, where possible, parcels of the same size and comparable soil quality, with the equivalent access to water. These parcels will be made available before the next growing season. New pens will be built on neighbouring parcels if the owners so wish. The IG2P, the district and the prime contractor will provide assistance to the elderly and women to help them with the resettlement process.

In the case of private land, compensation will be assessed at the undepreciated replacement cost of an equivalent lot, based on recent transactions or by exchanging the lot with the district. State land will be compensated with replacement land of equal area and quality.

With regard to buildings, the compensation to individuals and households will be paid in cash, in kind, and/or through assistance, based on the value as new of the property affected. Preference will be given to reconstructing the neighbourhood’s pens rather than cash payments, but the PAP are free to choose once fully informed of their rights. Efforts will be made to point out the importance and the benefits of accepting compensation in kind, but the type of compensation will be an individual choice. Within the framework of this Resettlement Plan, compensation in kind is the method envisaged for compensating most of the losses. Deeded or customary parcels will be dealt with in the same way.- Attachment 2 Page 57 of 64

The district will publish a list of unit values for compensation to ensure that the process is transparent. Where property owners cannot be found or are unknown, the Service des domaines [property department] will take the steps required to identify them through title searches, advertising in the local papers or by other suitable means. In these cases, the money will be held in a special account until the owner has been identified. Compensation will be paid in such a way that the PAP may employ measures so that their quality of life is not affected. Payment of compensation in kind will be encouraged for the replacement of land parcels and pens. Subsistence compensation will be paid in cash in instalments.

To ensure that the PAP use the compensation appropriately, the Steering Committee and the prime contractor together will carry out an awareness campaign for the PAP and ensure strict monitoring. Compensation will be paid sequentially to ensure its sustainability. Should any of the PAP decide to reconstruct their pens themselves, compensation will be paid in three payments according to the work progress observed by the district representative and the IG2P representative.

These measures mean that within the framework of the project, no-one will lose their means of subsistence. Nevertheless, particular attention must be paid to vulnerable persons at the socio- economic level, to ensure that they are treated considerately and will be provided with means of accompaniment and financial support required to resettle them properly. The great majority of the people affected are judged to be sufficiently vulnerable for accompaniment measures to be planned. These measures fall into three programs: food support over a five-year period for vulnerable PAP who lose their means of subsistence entirely or in part, a micro-credit program for the development of new land, and an economic support fund to allow the PAP to re-establish themselves in a new work activity if their method of subsistence is compromised.

Follow-up reports will confirm that the compensation amounts have been properly paid and that the PAP have used the money appropriately. The IG2P, the Service des domaines and the district will follow the process closely and will rely on the local leaders to detect any complaint or unexpected development; they will then involve the local traditional authorities in the process of negotiation and compensation payment. Attachment 2 Page 58 of 64

Moreover, the Steering Committee and the district, including the staff responsible for the construction, will maintain close contact with the PAP so as to keep them informed, explain the procedures and register complaints until work on the site is completed. The PAP may, at any time before, during and after the work, exercise their right to appeal through the appropriate mechanisms and with assistance from the project. Attachment 2 Page 59 of 64 Environmental Management Plan (EMP) for Marine Protected Area at Nosy Tanikely (Nosy Be)

The growth pole at Nosy Be essentially revolves around improving the capacity for tourism development on the island. One of the objectives for the tourism development supported by the IG2P is to triple the number of tourists disembarking at Nosy Be within 10 years, i.e., from 30,000 to 100,000 tourists annually. This objective can only be reached with massive improvements to the infrastructures and by enhancing places of interest to tourists, such as natural and cultural sites. Finally, from the viewpoint of sustainable development, tourism development must depend on the planning of development for the territory as a whole, and the attenuation measures for the environmental impacts that can result from this tourism development.

Nosy Tanikely is a fragile zone; it appears on the tourist circuit itinerary of numerous tour operators on Nosy Be and is probably the most visited islet in Madagascar. This island is already recognized as a protected site and numerous activities there, such as fishing, are prohibited by law. Traces of degradation are starting to show and this risk of degradation will increase if no precautions are taken in the short term. This is why the creation of a Marine and Coastal Protected Area (MCPA) has been proposed for Nosy Tanikely, with the aim of establishing a sustainable method of management that will allow tourism operations on the islet while at the same time preserving its biodiversity and its natural look. This protected area will be created on a voluntary basis and will not, at this stage, be integrated in the national protected area network.

More specifically, the MCPA sub-project at Nosy Tanikely consists of:

. Creating a voluntary Marine and Coastal Protected Area (MCPA) for the islet and the reef area at Nosy Tanikely, i.e., created through impetus from the district and the private sector; Managing the activities and their distribution in space and time, through zoning and regulations for use. Attachment 2 Page 60 of 64

The Environmental Management Plan (EMP) for the MCPA at Nosy Tanikely follows the study on the environmental and social impacts of tourism development on this natural islet, which was carried out within the framework of the ESlA for the Nosy Be pole. This EMP describes the measures for attenuation, follow-up and institutional organization required to reduce or eliminate the negative impacts that can result from an increase in tourism operations at Nosy Tanikely. These measures are based on a development and management plan (DMP) attached to this EMP.

Despite its small size, Nosy Tanikely’s fringing reef is quite important on a marine biodiversity level; in fact the study counted a total of 85 species of Cnidaria dominated by Scleractinia, distributed over 16 families and 32 genera typical of healthy coral reefs. The study also identified 101 species of fish belonging to 20 families and 45 genera. A previous study carried out in 2000 had identified 121 species of fish. In addition, the islet has 90 plant species and thirty or so animal species, including rare species.

The only permanent human presence on the islet consists of a lighthouse keeper and his family. The site is rarely used by fishermen, except for a few poachers who go there at night to fish. The other uses are mainly for tourism purposes. Thus between 10 and 15 boats land on Nosy Tanikely each day bringing tourists attracted by this islet and the ocean beds abundant in corals and teeming with colourful fish.

The main negative impact of the Nosy Be IG2P on the Nosy Tanikely milieu following the anticipated growth in tourism, is an increase in the pressure already existing on the coral reefs and the islet’s vegetation, which could lead to their degradation. With the repercussions anticipated from the tourism development at Nosy Be, we estimate that the number of visitors to Nosy Tanikely could rise from 20,000 to 60,000 within 10 years.

The sub-project overall, namely the proposal for a development and management plan with a view to creating a MCPA, will help to attenuate the impacts compared to the current uncontrolled use of the islet. The proposed development plan foresees, among other things:

Q Physical zoning dividing the coastal area of the islet into 6 zones a Construction of a wharf Attachment 2 Page 61 of 64

Installation and development of marked trails Installation of mooring buoys - Construction of picnic tables and good quality barbeques Construction of latrines etc.

The development plan is accompanied by a management plan that establishes the rules and management method for the future MCPA as follows:

9 activities permitted in each of the zones;

0 cost of access to each of the zones; method for controlling the activities; an institutional approach that would allow the MCPA to be managed in terms of any local distinctive features and its use.

An extra attenuation measure is recommended, this being the establishment of a visitor quota, compatible with the load capacity of the milieu, per zone and a daily quota for visits to the islet in general.

A separate report was prepared to establish a procedural framework for restricting access to the MCPA at Nosy Tanikely. We would refer the reader to this report for any information relative to the attenuation measures for negative social impacts that can arise from these restrictions to access.

The monitoring system and the environmental follow-up for the sub-project includes the following elements:

specific follow-up methods to measure the actual effectiveness of the attenuation measures, by comparing them to the established performance objectives;

9 general methods for monitoring to identify any unanticipated impact for which no attenuation measure was planned; Attachment 2 Page 62 of 64

Methods for implementing corrective actions required in cases where the performance objectives were not reached or the impact was unanticipated.

Following the recommendations for attenuation, monitoring and follow-up of the environmental and social impacts, this EMP presents the following organizational measures:

responsibilities associated with the implementation of the attenuation measures and the follow-up, for each stage of the project (design, construction, operation); * an evaluation of the needs for strengthening the capacity for environmental management for the orga niza t io ns involved .

To see this sub-project through successfully, we suggest adopting a participative approach that will allow the project to be planned and the creation of a management committee in which all the players are involved in terms of their connection to the project. This management committee, a type of public-private partnership, will include municipal governments, public and para-public institutions and the private sector. This management committee will provide the opportunity for the negotiation, preparation and revision of the DMP through a truly participative process that takes everyone’s interests into account.

With regard to the creation of a MCPA at Nosy Tanikely, this EMP suggests that the district of Nosy Be present to its council the proposed voluntary protected area, to be managed by a management committee (association) on the basis of specifications drawn up by the District acting as the Prime Contractor. Members of this management committee (or association) could be drawn from the District, from the Groupement lnterprofessionnel Hetelier et Touristique de Nosy-Be (GIHTNB), from the regional tourism bureau and others to be determined by the players. The voluntary MCPA under communal management would be created by common decree. Once financing is obtained, the District, as the Prime Contractor, would ensure supervision of the work based on the specifications.

Finally, a timetable for carrying out the entire EMP foresees finalizing the definition of the MCPA, putting in place the required elements, establishing the management structure and promoting the new MCPA, all within approximately I2 months. The costs associated with the implementation of this EMP are estimated at about $250,000 US. Attachment 2 Page 63 of 64

Resettlement Process Framework (PF) for Marine Protected Area at Nosy Tanikely (Nosy Be)

The Government of Madagascar, in collaboration with the World Bank, intends to undertake a multi-sector development initiative in three key regions designated as “growth poles”: Antananarivo/Antsirabe in the centre of the country, Fort-Dauphin (Tolagnaro) in the south and Nosy Be in the north. This effort, designated under the name Integrated Growth Pole Project (IG2P), is aimed at creating synergy among the different public and private participants around a priority area for intervention for each pole (Free-trade Export-processing Zones in Antananarivo/Antsirabe, mining in Tolagnaro (Fort-Dauphin) and tourism in Nosy Be). Technical studies and collaboration/consultation workshops have been conducted for the Project with a view to clarifying and confirming the sub-projects identified to date. It has also received environmental and social assessments so that the anticipated investments cause as little damage as possible and deliver the maximum advantages to the environment and to the population living in these regions.

This Framework Process (FP) applies to a particular sub-project in the Nosy Be pole, that is, the establishment of a Marine and Coastal Protected Area (MCPA) on the islet of Nosy Tanikely. According to the basic Planning and Management Program (PMP) prepared for this islet, the classification for the site could mean restricting access to resources for certain types of users, essentially about thirty tourism operators from Nosy Be.

Developed in compliance with the World Bank’s Operating Policy OP 4.12 related to the involuntary resettlement of people, the Framework Process (FP) identifies the methods and procedures to follow in order to avoid, minimize or compensate for the social impacts related to restricted access to Nosy Tanikely. It also sets out guidelines to follow in the preparation of an Action Plan for Restricting Access to Resources (APRAR), which will be developed during the implementation of the sub-project in collaboration with the local populations concerned. The FP puts forward principles and objectives applicable to the restriction of access to the resources, and to the process of preparing and approving the documents to be produced; it identifies the Attachment 2 Page 64 of 64

categories of people affected, presents the methods to be used for assessing the impacts, and describes the public participation process to be put in place as well as the procedures to be applied in case of litigation; it sets out the organizational procedures for issuing laws, for institutional organization and for financing mechanisms; finally, it lists the procedures for monitoring and evaluating the management of the protected area and the application of the APRAR. Attachment 1

Overview of Environmental and Social Assessment Reports

Policy Documents

Environmental and Social Resettlement Policy

j Impact Management Framework ~ Framework

Cultural Heritage Policy Frame work

Environmental and Social Impact Analyses (ESIA)

ESIA Taolagnaro ESIA ESIA Nosy Be Antananarivo/Antsirabe

Environmental Environmental Environmental Management Plan Management Plan Management Plan

Resettlement Action Plans

I RN 13 (Taolagnaro) 1 Ring Road (Nosy Be) I

QMM (Taolagnaro)

EnvironmentalManagement Plan

Nosy Tanikely (Nosy Be)

Process Framework

Nosy Tanikely