E2007 V2

Xining Flood and Watershed Management Project

Public Disclosure Authorized

P101829 Public Disclosure Authorized Social Assessment Report

Public Disclosure Authorized

West Development Research Center, Central University for Nationalities

2008.8.5 Beijing Public Disclosure Authorized Contents

I RESEARCH TASK, METHODOLOGY AND PROCESS ...... 1 I-I TASK AND TASK BASED POINT ...... 1 I-II ASSESSMENT QUANTIFICATION AND METHODOLOGY ...... 2 I-III SOCIAL ASSESSMENT RESEARCH PROCESS...... 3 I-IV PRELIMINARY CONCLUSION ...... 11 I-V ACKNOWLEDGE AND COMMITMENT ...... 12 II PROJECT INTRODUCTION AND REGIONAL ECONOMIC AND SOCIAL DEVELOPMENT ...... 14 II-I PROJECT AND PROJECT AREA ...... 14 II-II REGIONAL ECONOMIC AND SOCIAL DEVELOPMENT SITUATION ...... 16 II-II-I Natural Geographical Environment and Ecology...... 16 II-II-II Climate...... 17 II-II-III Human Geography...... 18 II-II-IV Economic and Social Development Status Quo ...... 20 II-III SEVERE ENVIRONMENTAL AND ECOLOGICAL SITUATION ...... 22 II-III-I Urgent Need to Improve Water Environment ...... 22 II-III-II Frail Natural Ecology...... 23 II-III-III Prominent Contradictory Between Economic Development and Environmental Protection ..24 II-III-IV The Necessity to Carry out This Project Construction ...... 24 II-IV CONCLUTION ...... 25 III REVIEW OF RELEVANT POLICIES...... 26 III-I THE CHINESE GOVERNMENT POLICY SPIRIT ...... 26 III-II THE CURRENT LAWS AND REGULATIONS IN CHINA ...... 27 III-II-I Ethnic and Religious Laws...... 27 III-II-II General Laws and Regulations...... 28 III-II-III Resettlement Policies and Measures of Immigration ...... 29 III-III WORLD BANK POLICY ...... 32 VI STAKEHOLDER ANALYSIS...... 33 IV-I IDENTIFICATION THE STAKEHOLDER OF THE PROJECT...... 33 IV-II STAKEHOLDER ANALYSIS ...... 33 IV-II-I Owner...... 33 IV-II-II People’s Government of Qinghai Province ...... 34 IV-III-III Xining City and Three Counties People’s Government Subordinate by It...... 34 IV-II-IV World Bank...... 35 IV-II-V Designer and Builder ...... 35 IV-II-VI Project Area Residents ...... 36 IV-II-VII Other Underprivileged Groups in the Project Area...... 36 IV-II-VIII Analysis on the Relationship Between Stakeholders in the Project Area...... 37 V LAND SYSTEM AND MODE OF LIVING...... 41 V-I LAND SYSTEM CHANGE...... 41 V-II LAND LAWS AND REGULATIONS ...... 41 V-III NATUR E RESOURCES, LIVELIHOODS AND LAND USE STRUCTURE...... 43 V-IV T HE IMPACT AND POSSIBLE CONSEQUENCES OF THE PROJECTS ON THEIR LIVELIHOOD AND LAND SYSTEM...... 45 VI ETHNIC MINORITIES ...... 49 VI-I THE CONNECTION BETWEEN PROJECT AND ETHNIC MINORITY ...... 49 VI-I-I The Overview of Ethnic Minorities in the project areas...... 49 VI-I-II The Connection Between Project and Ethnic Minority ...... 50 VI-II HISTORY, CULTURE AND LIVELIHOOD OF ETHNIC MINORITIES ...... 51 VI-II-I Tibetan...... 51 VI-II-II Hui people...... 55 VI-III ETHNIC RELATIONS IN PROJECT AREA ...... 57 VI-IV THE MAIN ATTENTION POINT OF THE ETHNIC MINORITY RESIDENTS TO THE PROJECT ...... 58 VII POVERTY AND GENDER ...... 62 VII-I POVERTY SITUATION IN THE PROJECT AREA...... 62 VII-I-I Overview ...... 62 VII-I-II Causes of Poverty Analysis...... 62 VII-I-III The impact on the poor of the project...... 63 VII-II WOMEN ...... 64 VII-II-I Women’s Quality and the Traditional Labor Division...... 64 VII-II-II The Association Between Project and Women ...... 64 VIII INSTITUTIONAL CAPACITY BUILDING...... 66 VIII-I INSTITUTION STATUS ...... 66 VIII-II INSTITUTE IMPROVEMENT...... 66 VIII-III CAPACITY BUILDING...... 67 VIII-III-I Enhance Learning ...... 67 VIII-III-II Experience...... 68 IX PUBLIC PARTICIPATION ...... 70 IX-I INFORMATION PUBLICITY...... 70 IX-II PROJECT DEMAND AND ATTITUDE ...... 70 IX-III PARTICIPATION SCHEME AND MECHANISMS ...... 72 IX-III-I Participation Scheme...... 72 IX-III-II Safeguard Mechanism of participation...... 73 X MONITORING AND ASSESSMENT OF SOCIAL ECONOMIC EFFECT...... 77 X-I THE TARGET, SUBJECT AND TASK OF MONITORING AND ASSESSMENT ...... 77 X-II THE BASIS, PRINCIPLES AND MAIN CONTENTS OF MONITORING AND ASSESSMENT ...... 78 X-III BASEMENT INVESTIGATION...... 79 X-IV MONITORING AND ASSESSMENT INDEX...... 79 X-IV-I Community Monitoring and Assessment Index...... 79 X-IV-II Farmers Monitoring and Assessment Index ...... 80 X-V MONITORING AND ASSESSMENT CYCLE AND INFORMATION PUBLICITY...... 80 XICONCLUSION AND SUGGESTION...... 82 XI-II PROJECT NECESSITIES AND SOCIAL SUITABILITY ...... 82 XI-II PROJECT PARTICIPATION DESIGN ...... 83 XI-III GENDER, POVERTY AND DEVELOPMENT ...... 83 XI-IVÃETHNIC MINORITIES ...... 84 XI-VÃIMMIGRATION AND LAND POLICY FRAMEWORK ...... 84 XI-VI CULTURAL RELICS...... 85 XI-VII INSTITUTIONAL CAPACITY-BUILDING AND PUBLIC PARTICIPATION ...... 85

2 .

I Research Task, Methodology and Process

I-I Task and Task Based Point

In November 2007, based on the recommendation of World Bank Project Preparation Group ,Xining World Bank Project Office (hereinafter using abbreviation the entrusting party) entrusts Professor Zhang Haiyang and Jia Zhongyi ,Who are director and deputy director of West Development Research Center, Central University for Nationalities (hereinafter using abbreviation the entrusted party)to have social influence assessment on Xining Flood and Watershed Management Project.The entrusted party accepted formal commission on December December 2, 2007. According to the TOR provided by Xining Project Office, entrusted party holds that the following tasks are what should be undertaken. First, Have integral Assessment on the social, economical and cultural effect that the Project(Engineering Control and ecological management included) have on the residents in Xining project area, including one city, three counties, and those live along the riverside of the three main branch river of Huangshui and its 28 gullies. Second, Have basic description of the Project, Project area, especially the Population Scale , Distribution ,Administration unit, Living style, Ethnic composition ,Cultural characteristics and Economic and social development condition of the residents influenced by the Project. Third, Identify the category, mode and degree of opportunities and risks brought to the minority ethnic residents and their community culture, meanwhile, put forward improvement suggestion referring to resident participative management organized by community. Fourth, Write social Assessment Report based on the above mentioned and make assessment suggestion on whether the Project can define ethnic minorities development plan. According to the agreement made by World Bank and the entrusting party, the entrusted party should submit Work Outline in Chinese to Xining Municipal People’s Government and World Bank. Besides, the entrusted party should complete the main part of field research and confirm whether the establishment of Ethnic Minorities Development Plan is needed by the end of February. The first draft of the social Assessment Report will be submitted to Xining Municipal People’s Government in March beginning (if needed, an ethnic minorities development plan will be included) and complete necessary supplement research as well as submit the Chinese and English final draft(electronic document included) named “Xining Flood Prevention and Watershed Management Project Social Assessment Report”(if needed, an ethnic minorities development plan will be included).The revised draft will be completed in 20 days after pre-evaluation and the final draft should be completed in 10 days after formal evaluation. From the last ten days of November 2007 to the middle ten days of January 2008, the entrusted party did field research on the project area for two times by a 9-person assessment group, including Zhang Haiyang, Jia Zhongyi (Miao Ethinic Group, associate professor), Lamaocuo (female, Tibatan, research fellow),Lu ShunYuan (Tibatan, associate research fellow),E Zongrong (Tu Ethinic Group, associate research fellow) and other four Graduate Students named Li Jianming (Tu Ethinic Group), Sui Yanqing, Liu xueli (Female,Tujia Ethinic Group ) and Yanying ( Female, Man Ethinic Group ). This assessment investigation will be mainly based on three sorts of documents. One is Policies and Regulations of the Safeguard on Ethnic Minorities’ Rights and Interests as well as reasonable resources utilizing and exploiting strategies (e.g. land, forest and water) from central and local governments; the other is World Bank Social Safeguard policies ,especially ethic minority policies; the last is “The Feasibility Study of Project”(FS) provided by Xining Project Office, alongside which gets reference from “Environmental Impact Assessment Draft”,“Immigration Action Plan Draft”,“Participatory Management Manual Draft”in Watershed Management part and brief instruction to dams above 15 meters in Project Area.

I-II Assessment Quantification and Methodology

The entrusted party has rich social assessment experience and participated in quite a few World Bank Loan Project in China, such as Reservoir, Highway, Forestation, Watershed Management and Railway, etc. We are familiar to World Bank Standard and have sufficient knowledge on Chinese laws, regulations and related policies; furthermore, we have understanding on the situation and demand of Chinese ethnic minorities and their language culture. All the four graduated students from Central University for Nationalities can develop community research work independently, since they have multiple ethnic culture background and field experience; besides, they all have received Anthropology, Sociology and History training and are familiar to the environment of project area. Totally considering factors like gender, ethnic group, knowledge background and project experience, the entrusted party consist of a research group with multiple subject background, also include 8 ethnic minority members, 3 of them are female, 5 are Qinghai natives, so this group is enough to meet the qualification standard of the social assessment project. Based on the Holistic and Comparative Study of Anthropology and Sociology, the entrusted party mainly applied Participatory Rural Appraisal (PRA) during the assessment research, collecting data from field work and statistical data from information list, using methodologies like participant observation, focus interview, focus group interview, adding the

2 . analysis of historical documents, policies and regulations, therefore, it will satisfy the writing requirement of social assessment and Ethnic Minority Development Plan. This assessment has covered the whole Project area with emphasis on basic community and paid prominent attention to nationality and religion. The assessment group has labor division and cooperation as well as share data with immigration and participatory management group. On county level assessment research, the group mainly held forum with local Project Office, Minorities and Religion Bureau, Women union, Poverty Relief office, Civil Affairs Bureau, Agricultural Bureau, Statistical Bureau and gets data from them. On town level assessment research, the group mainly collected data by interviewing the local leading cadres and investigating the economic and social development situation of the villages managed by them, meanwhile, studied the local ethnic cultural resources and their development demands. Community research mainly consists of two parts, including informal discussion with villager representatives, community baseline survey and household survey. The villager representatives who were invited to the informal discussion included village cadres, women, youth, old people, country teachers, religious personages, etc, fixed on the overview of community, development thought, sensitive problem, previous project experience ,demand and suggestion aiming at this project and so on. The questionnaires were completed by the villager representatives and village cadres. Household survey consisted of questionnaires and deep interviews, and the samples covered different economic status, livelihood,, family scale and member structure, ethnic composition and the degree affected by the Project. The above mentioned research and data collected will meet the social assessment objective; hereby, the entrusted party should appreciate the support from all local project office and residents there.

I-III Social Assessment research Process

The entrusted party did two times field research. From November 29 to December 3 ,2007,professor Zhang Haiyang and Jia Zhongyi went to Shuer Village in Qiaotou Town ,Datong Autonomous County of Hui and Tu Nationalities; Hanggou Drainage Area in Huangyuan County; Huoshao Channel, Baojia Channel, Liberation Dyke in Nanchuanhe Drainage Area, Urban district, Daya Channel in Xichuanhe and Urban district of Beichuanhe to investigate the ecological conditions , natural geographical environment, community arrangement and measures and results of previous project in the target watershed .Meanwhile, they communicated with the project office of city and county level, collecting data on nationalities, statistics, geography ,local history and project materials, consulting the target, task and coordination with the City Project Office.

3 . From January 4 to 15, 2008, all 9 social assessment group members met in Xining to develop formal field research and cooperated with immigration and small drainage area participatory management group under level best coordination of the City Project Office. The three groups reached mutual communication and cooperation. The social assessment group members attended the participatory management field activity in Huoxi village(Han People)and Huodong village(Han People)in Huoshao Channel, Nanchuanhe Drainage Area. The assessment group also and arranged members to attend community research in the South City organized by immigration group; Meanwhile, the assessment group have a general study on Hui ethnic Group Village in Wanfeng new village,Quanerwan Channel in Huangyuan county, Hujigou(han people) small drainage area and Daitong Village(Tibetan),Shuobei Town Dongxiang River. Furthermore, the group had deep investigation on 11 different communities, which are Erma Village(Tibetan) in Dongxia Town , Yuanshuer Village(Hui people)in Qiaotou Town, and QiaoergouVillage(Hui people) in Liangjiao Town, Datong County; Qingquanyi village(Hui and Han people), Qingquanervillage Hui,Han people and Tibetan in Lushaer Town,Qingshan Village(han people) in XibaoTown,Nalongxi Village Han people and Tibetan in BoHuang Town,Huangyuan County and Shangye Village(Han people),Dujiagou Village(Han people)in South City New District. Accompanied by the local People’s Political Consultative Conference member and the Project officer, the social assessment group had informal discussion with living Buddha, Tibetan monk representatives and persons in charge of the famous “Tar Temple”. The above mentioned research involved 3 counties, 2 districts,8 towns and 17 communities. Basically, it covers all minority ethnic towns and communities, multi-ethnic residential communities and important religious place. All about 130 families accepted the family baseline research, over 70 multiple ethnic residents accepted the deep interview, 8 communities accepted the participatory demand assessment. (Attached list 1: Schedule of the Field Research Condition of Project Communities.) To definite the validity of this social assessment, the entrusted party would like to introduce the detail process as follows: 1.Apply flexible investigation method according to the targets’ characteristics The investigation applied the holistic method of Anthropology research view. Considering the distribution features of the target communities; we take villages in the project area as research unit. The main investigation methods we apply are: participate observation, interview, questionnaire, etc. based on the concerned fact that the local resident’s pattern is “big area inhabited by several nationalities and little region inhabited by one’s own”; therefore, the assessment group adopts the semi-structure questionnaires and interviews. The assessment group consisted of Hui,Miao,Tu,Han people and Tibetans, so we can arrange research members aiming at the different community residents characteristics. For instance, Maolacuo is a Tibetan from Qinghai Academy of Social Science, we mainly depended on her

4 . when investigating in Tibetan communities, she can have deep interview by her Tibetan language advantage. Besides, the group used different research method and questionnaire design during the investigation. For instance, we fully considered the different religious belief in different religious areas, so we added or canceled the relative questions on minority characteristics and their taboo culture in our questionnaire design. 2.Stepwise process and research layer upon layer For the sake of the holistic assessment of the Project, the social assessment group based on cooperation and exchange with two other assessment groups to learn and complement each other, and developed investigating activity independently.1 Our work step is as follows, the main members of the studying group visited the Project Office, promoted work coordination and collected relative data and information. The research assistants follow the small drainage area participatory management group and immigration group instead, learning and observing their working process as well as paying preliminary visit to the target communities to grasp their local characteristics .They had to summarize the daily investigation condition ,comprehend relative data , finish investigation record and discuss the problems they find in the investigation . Besides, they should spare no effort to improve the investigating methods and daily efficiency. On January 5,2008, the main members in the entrusted party divided into two groups, one to Datong County and the other went to Huangyuan County to do initial investigation and know about the ethnic minority distribution situation in the project areas so as to determine the target communities. Meanwhile, the entrusted party sent one assistant to follow the participatory management group to Xining West City district, Huoxi Village to learn participatory management techniques and their spot investigation method, alongside doing community investigation. The social assessment group and the participatory management group had further discussion on research method and project experience that night and identified the investigation thought that combining Anthropology method with the participatory mobilization method, which got a good survey effect later. On January 6,2008,the entrusted party sent 6 assistants to accompany the participatory management group and staff from Agriculture and Animal Husbandry Administrative Bureau to Xining West City district, Pengjiazhai, Huodong Village to learn participatory management Programming and did community investigation. Basing on coordination work with the participatory management group, the social assessment group members had an informal discussion with the villagers there. They applied Stratified Sampling investigation method according to indexes like gender, age, duty and income, etc to have deep interview to village cadres, villagers (including 3 male and 2 female) and get primary understanding on the

1 The social assessment groups reported the main community condition where they did research and had discussion on the communities that had similar characteristics. So the villages and communities where the social assessment group did research are quite more that the villages mentioned in the report. The detail investigated village result will be showed in $WWDFKHGÃ OLVWÃ

5 . villagers’ attitude and desire to this project. The social assessment group learned that: There are quite lot abandoning croplands in the two villages and the basic income of the villagers is the compensation from these lands. Most villagers work in Xining urban district and many a villager has immigrant plan. Huodong and Huoxi village are typical Han people community in suburb, the characteristics of which are: lying in the Joint Region between urban and rural, for the lack of water, their livelihood modes are comparatively multiple; however, the villagers still want to have more farmland. Their best wishes to the Flood Control project are to promote ecological restoration and make water source supply stable. From January 8 to 9, 2008, the social assessment group had formal investigation on the main target communities. All members went to Datong County to do research on Touzhengdaitong Village and three natural villages of Dongxiazhengerma administrative Village. Erma Village has highest ratio of Tibetan residents, so it is defined as a typical Tibetan village to have social assessment on. The Tibetan residents there work on farm and generally raise cows and goats in captivity from Conversion of Cropland to Forest in 2000.The local Han people’s culture and custom are similar to the Tibetans. This project mainly uses Ecological way to control Erma gully and the control area is 5km×25m. The Project planned to control 500 mu2,but the villagers demand to add 900 mu barren hill and desolate slope to it. At present, there are over 200 families, 936 persons (including 749 Tibetans and 11 Tu people) in No 1,2 and 3 village which are under Erma administrative village. The total area of these three villages is 900 mu. There were totally 12 village cadres and villagers participating in the informal discussion (including 7 male and 5 female).The assessment group get 30 valid questionnaires and made 16 deep interviews in one and a half days. The result of the social assessment is as follows: The main residents in Erma village are Tibetans. Although Tibetans and Hans living in multinational pattern, they are in harmonious relationship. Erma village is next to Guanghui Temple. The villagers do not have outstanding language culture characteristics but their Ethnic Consciousness is clear. The questionnaire suggests that 96 percent of Tibetan residents have obvious Ethnic Identity. Villagers earn their living by agricultural and animal- husbandry. They plant on the hilly dry lands which are distributed on the slope of the gully and necessary to take soil and water conservation practices. The villagers are enthusiastic and attentive to the project. One of villagers recalled that many mountain flood disasters happened in the 1950s and 1980s.however, mountain flood controlling could not be solved for a lack of financial aid. They hope the project can completely solve the flood control problem and they also demand to increase fencing land area. During the interview, some villagers proposed the property right of the fenced forest, hoping the village collective can own the use right of forest resource and the income from it is used as the economic sources of the village collective.

2 conversion unit: one acre =6.07mu, one mu= 666.7m2.

6 . On January 9, 2008, the social assessment group did social research on Yuanshuer Village and Xiangqiaoergou Village ,which separately belongs to Qiaotou and Liangjia Town of Datong County. The detail information will be showed in the following graph.

7 . Graph 1: The status investigated on Yuanshuer village and Xiangqiaoergou Village Method

Investigation Time Community characteristics Achievements spot Personnel input input Personnel Time consuming informal discussion questionnaire interview Participation HuiPeople Community, Project 8 10 4 1.5 4 The project is welcomed by the January Yuanshuer area, low average farmland, villagers’ days Residents and religious 8 to 9 Village High ratio sideline production representa personnel; Shift of livelihood population, suburb tive need to be guided. HuiPeople Community, Project 4 village 14 4 1da 5 Small hydraulic engineering area, low average farmland, no and town y project January Qiaoergou irrigated land, relatively large cadres can be solved only by bring Datong County 9 Village poverty area, natural damaged into the Flood Control Project. small Hydraulic Engineering, urging Hydraulic Engineering

8 . What needs to be emphasized is the two communities belonging to the little region inhabited single Hui ethnicity. Residents mainly live around a Mosque, their religious activity place, which stands in the center of the community. Therefore, the residents comparably care about whether the Project will damage or occupy it. January 10, 2008, the social assessment group had assessment on villages under the project area in Huangzhong County where they had assessment on Qingquan Village in Lushaer Town, Tar temple, Qingshan Village in Xibao Town (governed by Huoshao channel) and Fengtaigou Village (governed by Fengtaigou Channel).The group paid great attention to the investigation in Huangzhong County, in which Tar Temple is a key research spot. Tar Temple is one of the six most eminent lamaseries of the Gelugba Sect, which is also the birth place of famous master Tsong-Kha-Pa. It is reputed both at home and abroad, attracting many visitors for sight and pilgrimage. Tar Temple just lies next to the Project area in Jiaomu channel but separated by a hill. Assorted with the county government, the social assessment group paid a special visit to the temple management committee director and superior monk Xiageri living Buddha and Xina living Buddha, alongside having around 2 hours’ informal discussion with the monks there. The assessment explained the visiting purpose and relative measures and arrangement of Xining Flood control project, also carefully hearing the temple management committee and monk’s suggestion. The Tar Temple management Committee suggested clearly that the Xining Flood Control Project has no conflict with their Temple both in physical and religious areas; meanwhile, they make sure that the execution of the Project will benefit the ecological environment around the Temple, so they sincerely welcome the Project. January 11.2008,the assessment group separated into two to have investigation on 4 Villages named Bohuang, Nalong, Guanghua and Wanfeng in Project area, Huangyuan County.3 One 4 -person group made investigation in Nalong Village which lies in Bohang Channel and the total area is 27.86 hm2 .4There are 6 villages in the Project red line and the total population is 1 900, including 80 Tibetans. The land area is 12 294.9 acre in the village, hereinto 8 257.8 mu are farmland. The woodland and forest covered area are 2 271 mu, 745 mu Returning Farmland to Forest.5 Villagers mainly pursue agriculture. 92 percent villagers welcome the project construction, thinking it will be good to improve the ecological environment and can defend the natural disaster damage to their life and production. Although there are only 80 villagers in the village and more than 20 Tibetan families, the villagers still

3 Nalong village has typical Representative of social culture condition of that region, hereby, the social assessment group only uses Nalong village as analysis object.the condition of other villages will show in Attached list 3 4 The data is all from the local village committee except special introduction. The assessment group check the facility of the data by interview the local villagers of different income level and admit the data is generally inerrant.

9 . have their self- identity and remain their own ethnicity boundary. There is significant difference between that Han people call them “them” and they call themselves “us”. They have their own history memory, for instance, The Yang family Tibetan have the memory of “brother ancestor”. On the aspect of religion, the village take on the condition of “culture combining” between Han people and Tibetans. The social assessment group got deep understanding on local culture through investigation and validated that although it is a village, it plays an important role for learning the whole history process of Hehuang Valley. To get culture comprehension like this will provide us great inspiration for how to deal with nationality relationship during the Project construction. Tibetans mainly lived in this region in the past, during the interaction process with Han people (Han people inlet while Tibetans out), some Tibetans remained living in this region but changed their livelihood from animal husbandry to agriculture. The contact between Han people and Tibetans did not embody into conflict, but accept according to their separate belief system. A culture agent in the village told us how the Han people and Tibetans honored the same hero or Mountain God by their own belief system and reach mutual fusion. To understand it means to learn why the relationship between Han people and Tibetans is so harmonious. Therefore, whether the project will damage the local belief system or how to mend it should be considered during the project executive process. Fortunately, the social assessment group can make sure that the project did not damage the local belief system. During the whole social assessment process, the group paid great attention to the local document data collection .The documents that the entrusted party collected including: County annals, Ethnography, Government work report, Development plan, Statistical yearbook, Report Forms, Study report, Map , various data provided by project office, data collected by the relative studying team and Local Scholar’s research works. The first hand data collected by the entrusted party include forum record, Community baseline census schedule, graphs filled in the villager participatory spot , Questionnaire, interview data and photos taken in the spot, etc. The assessment group thinks that the field investigation mentioned above fully considering multiple factors such as the religion sensitivity, administrative region, economic condition, project management measures and community type. Meanwhile, according to the commission of the assessment group, the city and county level Project Office did baseline investigation on 20 channels and all the administrative villages that they governs. Thereby, the report is reliable for being based on the entire information of the project area.

10 . I-IV Preliminary Conclusion

The social assessment group draws the following conclusion through investigation: (1) The mountain flood is profoundly affected by terrain and climate of local areas and the residents there have clear memory to the damage of the flood; meanwhile, the local ecological environment is comparably flimsy and the earth surface stream is seriously polluted ,thus the execution of this project is timely and necessary. (2) The Project Plan and Design advanced by Xining City government is based on the local practice and comparably practical and realistic. The previous project carried out in this Project area applied similar measures and have positive effect, besides, they accumulated experience. From Propaganda to Communication, the Project Office ensured the residents’ Right to Know in the Project. (3) Residents in the project area worry about flood threat as well as soil and water loss, instead, they eager to restore ecology and improve the quality of environment. They sincerely welcome the project and warmly hope to participate in it. (4) Hui people,Tu people ,Tibetans and many other ethnic minorities live in the project area, of whom only 10 Tu people and they are widely distributed ,so only Hui people and Tibetans can form extensive “little region inhabited by their own”. Hui people centralized in Datong (Liangjiao Town and Qiaotou Town) and Huangzhong County (Luersha town), less in Huangyuan County(Chengguan Town).The Project will not lead to the resident immigration and mosque removal. The Tibetans centralized in Datong County, Dongxia Channel, Shuobei Town, Tongdai village and Dongxia Town, Erma Village. According to the introduction of the local Tibetan cadres, the Tibetans’ ratio in Daitong Village is more than 95 percent, while it is not in the project area and will not be negatively influenced by project construction, land exploration ,house removing, returning farmland and fenced way. There are around 80 percent Tibetans in Erma village, which is a typical Tibetan village in project area. Not only because Tibetans relatively centralize there, but also for the strong representatives of their economic society and culture .Besides, there are also a few Scattered living Tibetans in Bohuang Channel(belonging to Boliang town) and Jiaomu channel (belonging to Lushaer Town) The investigation affirms that: over 10 communities including Tibetans distribute in the Project area, altogether more than 400 families,1886 persons ,98 percent of them are rural residents (“6.2.1 Tibetan” of this report details the distribution of Tibetans and their economic society and culture characteristics) The Tibetan residents in the project area belong to scattered living group, also named “Jiaxifan” by local people, meaning Tibetans who lose much of their own culture characteristics. They have nothing different from the local Han people except that they have Buddhism belief and relatively clear ethnicity consciousness. They scatter in the project area, mix residence with Han people and make intermarriage with them. So the national relationship is harmonious there. The project mainly take measures like Channel dredging,

11 . increasing flood mitigation and sand shelter dam, Forestation on barren hill and slope instead of house removing and immigration in the communities where the Tibetans live. Guanghui Temple (Datong Dongxia Town) and Tar Temple (Huangzhong Luersha town) are important Tibetan Buddhism Temples near the project area, but the project does not touch the holly space of the two temples or have side effect on their religious activities. By interviewing the community resident representatives, village cadres and eminent monks in the temples the assessment group learned that the Tibetan residents know the Project, moreover, they welcome and want to participate in it. Whereas the Tibetans mainly live in the edge not core of the project area, but their distribution scope is large, furthermore, both the Tibetans and Hui people accord with the definition of “ethnic minority of World Bank. To tone up the advantage to the ethnic minority meanwhile to materialize consistent policy and spirit of World Bank and Chinese Government, we advise that an ethnic minority development plan aiming at Tibetans and Hui people should be established. (5) The present policies and laws are unanimous with relative policies’ aim of World Bank .Besides, the present policies and laws can guarantee the establishment and implement of the project. There is no need of the new policies. (6) The relationship between nations and ethnic groups is harmonious and there is a good foundation to carry out ethnic minority development plan (EMDP), meanwhile, the all levels governments have capacity and enthusiasm to carry out this project and ethnic minority development plan (EMDP). (7) To bring ethnic minority development plan (EMDP) into effect mainly lies in carry out the following principles: One Overall Planning, Two Guarantees and Four promotions. The difficulty is to reasonably choose projects which match the characteristic of this project. (8) The project will not have direct side effect on women, children and poor people, while by protecting the local ecological environment, channel management and promoting the community infrastructure, the project will benefit the whole residents’ production and life.

I-V Acknowledge and commitment

To help and support data collected for this report , officials from local Project Office, Minorities and Religion Bureau, Women union, Poverty Relief office, Civil Affairs Bureau, Agricultural Bureau, Statistical Bureau etc in the 3 counties Huangyuan, Huangzhong and Datong gave up their holidays ,besides, village cadres and villagers sacrificed their labor or rest time to cooperate with our assessment work, hereby the Entrusted party express our sincere gratitude to all of them. The entrusted party promise that the data collected for this report is based on the Chinese laws. What we collected is according to the principles like informed consent, voluntary

12 . participation and free expression as World Bank requires. This report together with “Ethnic Minority Development Plan” will be public by World Bank and Xining Project Office in a proper way to hear the suggestion and feedback of local residents and other aspects The entrusted party ensures that the present data and attitude bear wide representative and can reveal the main condition, suggestion, problems and demands of the Project area. Meanwhile, the assessment group left our contact ways to the communities, greeting all idea and suggestion that were not proposed in the assessment spot.

13 . II Project Introduction and Regional Economic and Social Development

II-I Project and Project Area

Xining Flood Control and Watershed Management Project (hereinafter referred to Xining Project) is based on the result of Flood Control , Water Pollution Prevention and City Beautification Programs the in the early stage in order to further improve and optimize the urban flood control capacity of drainage systems, improve Ecology of Huangshui drainage area and protect life and property safety of residents there .So loans from the World Bank will be used in 4 District 3 County (North city, Downtown, West City, South of the new district , Huangyuan, Huangzhong, and Datong Hui and Tu Nationalities Autonomous County) ,3 Chuan 1 River (that is, Xichuan , Beichuan, Nanchuan and Dongxia River) and 20 small Ravine to have large-scale integrated Water Management Projects. The project mainly consists of flood control, flood management, watershed management and waste- water collection according to the consultation result of the Xining project Office and the World Bank preparation Mission. Flood control and flood management, including: strengthening the dikes, improving river water quality (support for strengthening 63.734 km main river embankment and 33.712 km dike tributary); flood control forecast, early warning systems and emergency plans (support flood control forecast in Xining City, develop early warning systems and emergency plans, including strengthening flood control of Xining City and the institutional capacity of Drought Control Office). Watershed Management include: start with support the implementation of participatory management of the small watershed in three pilot counties ( Huangshui, Huangyuan and Datong) of the three basins, finally to cover 20 Basin in the three counties. Investment-building activities include: environmental management (including reforestation, Terrace creation and planting grass to reinforce slopes); rural infrastructure construction of flood control, water and soil conservation, drainage improvement; community livelihood activities (including Greenhuse building, methane-generating pit Building and animal husbandry activities); capacity-building of lower-level members and members of the community. Wastewater collection system construction, including: Waste water interception and sewage collected project of Huangshui River, Beichuan River and Nanchuan River in urban Xining and improve the Rain drainage systems in Xiaoqiao area; 11 km wastewater interception and collection Project in the urban district area of Beichuan River and Dongxia River in Datong County; Wastewater collection and drainage pipe network in Huangzhong County District . To achieve these three objectives mentioned above, the project also includes strengthening institutional capacity and project management content: Project Management ,which includes Project Management Office as well as expert panels ’ project management activities related to it, such as the initial and final designed establishment; bidding document preparation and establishment, project supervision,

14 . quality control, project monitoring and evaluation and development of management information system (MIS) to improve project management, financial management and monitoring and evaluation of it. immigrants: Implementation of the immigration action plan. Environmental management: the Implementation and Management of Environmental Management Plan (EMP). Huangshui River is the largest branch of the Upper Yellow River and the Huangshui River Basin in Qinghai Province is the most densely populated and economically developed regions. The area accounts for only 2% of the Qinghai-Tibet, while population and economic output accounted for more than half of the province. Xining City in Qinghai Province is the political, economic, cultural and transport center. The project is of great significance for the upper Yellow River to reduce pollution and enhance flood control capacity of Xining City, meanwhile, it is of great significance for improving the ecological situation and the living environment, protecting life and property safety of residents of all ethnic groups and the protection of economic and social development results in Qinghai Province. The area where this project is implemented is Project Area. The Project focused on 3 Chuan and 1 River (that is, Xichuan, Huangshui direction of the main stream, Beichuan, the direction of Huangshui tributaries, Nanchuan, in the direction of Huangzhong and Dongxia River and the tributaries of the Beichua River) and 20 valleys , involving the land area of about 250 km ², the total length of River Management is 48.62 km and mountain torrents-channel management length 32.45 km, together control an area of about 170 km2. The project area is not over the scope of jurisdiction of Xining City government, specifically relating to North and West city, south of the new district, 16 townships or neighborhood offices and 53 Administrative villages, about 200 villager groups of municipal Datong, Huangyuan, Huangzhong County. In total, there are 2 127 Tibetan, Hui and Tu ethnic minority families, 11 673 people and the per capita of net income of rural residents in 2007 is about 3 158 Yuan. In the urban areas of Xining City, a total of 7 channels (Huoshao channel, Baojia channel, Daya Channel, Dujia Challel, Diaogou , Dacao Channel and Xigou) and 9 administrative villages in North city District are in management, of which 7 belong to Ershilibao Town .Besides, 4 administrative villages in West City district , 2 in Mid-city district and 4 in South city new district are also involved in the Project area. There are 7 429 families in the urban district and a population of 30 885, among which 28 232 people are the agricultural population and 1058 ethnic minorities, hereinto 796 people of Hui, 37 Tibetans, 16 Tu people and 209 other minorities. The minorities, including Tibetan and others get into the community through intermarriage or town residence registration in addition to a small settlement of Huis. A total of eight channels (Dongxia Channel, Huji Channel, Miaogou, Yuan Shuer Channel, Maojia Channel, Qiaoer Channel, Dameidong and Xiaomeidong Channel) are managed in Datong county, , involving three towns ( Dongxia Town, Qiaotou Town and Liangjao Town) , 14 administrative villages and 53 villager groups. Altogether 4288 families, 18 607 of them are agricultural population and 9 434 ethnic minorities, of whom 7 886 people of Hui, Tibetan 1391, 88 Tu people and 69 of other ethnicities. In 14 administrative villages, five for the small Muslim village inhabited by a single nation; five are mixed residence of Tibetans and others. Tibetans are relatively concentrated in Erma Village (749), the yuan Dunzi (224) and Liujiazhuang (240).

15 . Huang Yuan County manage four channels (Bohang Channel, Lasa Channel, Quanerwan Channel and Hela Channel), involving four towns (Chengguan, Bohang, Heping and Shengzhong), 9 villages and 61 groups of villagers. 2 155 families are in the project area, 877 ethnic minority people of the total 8 721, including 355 Hui people, 417 Tibetans and five of other nationalities. In all 9 administrative villages, Tibetan residents live in 7, of which 5 are over 40 Tibetan residents villages, in Husitong(134),Nalong (80)Village live a little more Tibetans. Hui residents distribute in three villages. Three channels(Huoshao Channel, Jiaomu Channel, Lu Shaer Channel) are managed in Huangzhong County, , involving two towns (Lu Shaer and Xibao ) 11 villages and 54 villager groups; totally 2 453 families, 10 030 people, 1 636 ethnic minority people , of whom 1 578 are Huis, 58 Tibetans. There are three of 11 administrative villages living Tibetan residents. The Hui residents mainly live in Qingquan village, Lu Shaer Town. (The distribution of Minority communities in project area details in Schedule 3) Economic and social conditions of project areas, engineering measures, community and the residents’ production and living conditions as well as the project need will be attached in chart (see Annex schedule 2, 3, 4 and 5). Please refer to Chapter II Section III of” Ethnic Minority Development Plan” for more detailed information of individual minorities in project area .

II-II Regional economic and social development Situation

II-II-I Natural Geographical Environment and Ecology

Qinghai Province lies in the northeast of the Qinghai-Tibet Plateau, between east longitude 89º35' to 103º04' and latitude 31º39' to 39º19'. It is about 1200 km long from east to west and 800 km from north to south.with the area of 721,200 square kilometers, covering 7.51 percent of China's total area , second only to Xinjiang, Tibet and Inner Mongolia, listing the fourth in the nation. It is next to Qinling Mountain in the east , connecting the Loess Plateau to the northeast and attaching Hengduan Mountains in the southeast and connecting with the Qiangtang Plateau,which is in Central Tibetan Plateau to the southwest. Aerjin Mountain and Qilian Mountains separate the North and Northwest of Qinghai, overlooking the Tarim Basin and opposite to the Hexi Corridor. Mountains tower in the province, which across the Kunlun Mountains in central. Tanggula Mountain lying in the south opposite to Qilian Mountains towering in the north. Among the mountains are the plateau, basins and valleys, and the terrain is complex and varied tilting from west to east, rivers crossing the province and lakes scattering the length and breadth grassland stretching everywhere.. Its average elevation is 3 000 meters, and the highest point of the Kunlun Mountains is Bukadaban peak, around 6 860 m, while the lowest point is Minhexiacunkou Village, with an elevation of 1 650 meters. Qingnan Plateau is over 4 000 meters and the area accounts for more than half of the province. Hehuang River Valley is in the lower altitude, around 2000 meters. In total area, the plains of 30.1 percent, 18.7 percent of the hilly; mountainous account for 51.2 percent and the area below 3,000 meters sea level account for 26.3 percent of

16 . the area, besides, 3 000 meters to 5 000 meters account for 67 percent of the area, 5 000 meters above 5 percent; Water area accounting for 1.7 percent. Elevation of 5 000 meters above the mountains and valleys are snow covered and glaciers widespread through the year , . Throughout all areas, there are 276 rivers with the water area of 500 square kilometers, and the lakes with the area more than one square km is 266 151 of which are fresh water lake, 85 lagoons and 30 Salt Lakes. The Yangtze River and the source of the Yellow River are evolved here and China’s largest conservation of the inland plateau salt-water lake is Qinghai Lake. The Yellow River Basin area account for18.7 percent of the total drainage area and the average runoff of it accounts for 49.2 percent of the entire Yangtze River. The Yangtze River drainage area accounts for 9 percent of the total drainage area. 16 percent of the Lancang River water outflows from the Qinghai .Heihe is the pulse of China’s second largest inland river originating from the Qilian Mountains. 40 percent of the water out flowing is from the Qinghai. Therefore, Qinghai Province is known as “the source of rivers” or “Chinese water tower”, which is strategic location of China’s ecological environment construction . Vegetation in Qinghai Province is diverse but mainly to meadow vegetation, followed by desert and grassland vegetation, forest vegetation is seldom. In 2006, the forest area in the province is 3.172 million hectares, 4.4% of the forest coverage rate and per capita forest area is 0.66 hectares. Forest reserves 35.926 million cubic meters and living tree stand volume is 41.014 million cubic meters. Wetland area of the Province is 4.126 million hectares, accounting for 5.7 percent of the land area, including: 4.088 million hectares natural wetlands and 2.748 million hectares marshes. Xining City is located in the eastern part of Qinghai province, lying in middle reaches of Huangshui River ,which is a branch of Yellow River, surrounded by mountains, where the three-convergence meet together and is the gateway to the East Qinghai-Tibet Plateau. Its Geographical coordinates of longitude is 101°49'17 " and north latitude is 36°34'3". Huangshui River, Nanchuan River, Beichuan River from the West, South and North direction meet in urban areas, then running into small Gap to the east ,forming “Four Hills folder three rivers” by the East, South, West and North to the river valley and the northeast, northwest, southwest and southeast to the mountain crossing area. Topography leaning from north to south toward the northwest, herein southeast is low but long and narrow from west to east, shaping as a tiny boat. Xining stands in the valley areas, covering 7 299 km2,and the city's total area is 7 665 km2, of which the urban area is 350 km2 and building urban area is 75 km2. The urban area is located on the first and second band ground in a river floodplain, , the highest elevation is 4 394 meters inland and ,2 275 meters above sea level in the urban centers, with an average elevation of 2 295 m.

II-II-II Climate

The Climate of Qinghai province belongs to plateau continental climate and has the following characteristics: (1) strong solar radiation and enough illumination. The sunshine time is more than 2,500 hours per year, so it has the longest sunshine hours and highest total radiation in the provinces of China. (2)Low average temperature, the average temperature in the territory is between minus 5.7 ~ 8.5 in

17 . one year, and the hottest average temperature across the province is 5.3 ~ 20 and the average temperature in the coldest month is between minus 17 ~ 5 . (3) Little rainfall and large regional differences, the annual rainfall in most regions is below 400 mm. (4) Rain and hot days are over the same period. Qinghai has monsoon climate and most areas stay in the rainy season after mid-May and the rainy season ends in mid-September , the monthly average temperature during this sustained period is equal or more than 5 .(5) Great harm of natural disasters. Natural disasters mainly include drought, hail, frost, snowstorms and heavy winds. Xining has semi-arid plateau continental climate. Its characteristics are: low pressure, long time sunshine, less rainfall, evaporation, strong solar radiation and temperature difference between day and night, frost-free period short but frozen period long .The average annual rainfall is 380 mm and the evaporation is 1363.6 mm. The average temperature is 7.6 with the duration of 1939.7 hours sunshine period ,The highest temperature is 34.6 and the lowest is minus 18.9 . Being surrounded by the hills, there is no much cold winter and too hot summer. The average summer temperature is between 17-19 . It is a summer resort famous as "China’s summer capital" for the pleasant climate,

II-II-III Human Geography

Qinghai is adjacent to Gansu Province to the north and east and Sichuan Province is to its southeast. The South is connected to the Tibet Autonomous Region and next to Xinjiang Uygur Autonomous Region to the northwest. Being a Connecting tie of Tibet, Xinjiang, Inner Mongolia and China mainland, Qinghai is a very important geographical position. There is one Province City (Xining), six Autonomous Prefectures and 51 County-level Administrative units (two cities, seven ethnic autonomous counties and 5 cities area, 30 counties and 7 executive committees), 114 towns, 285 townships (including 30nationality townships). The population is 5.516 million at the end of 2007, of which the urban population is 2210200, accounting for 40.07 percent; 3.3058 million rural populations, the proportion of which covers 59.93 percent of the total population.6 Separated by the Vehicles, which is a natural boundary, the Huangshui River drainage area in the east is agricultural area, accounting for 4 percent of the province area; the west, south and north are animal husbandry areas, accounting for 96 percent of the province. At present, Xining governs 5 districts ( East city, Mid-city, West city, North and South city), 3counties (Datong, Huangzhong and HuangYuan) , 50 towns( 27 towns , 23 townships, of which six national townships) and 934 villages, with a population of 2.1273 million ,accounting for 38.84 percent of the province population, among which Hui people, Tu people, Tibetan, Mongolian, Man ,Sarah and other ethnic minorities accounting for 23 percent of the city’s total population .Huis and Tibetans are particularly more. Xining is the first city whose population reaches over one million, which is also the centre of city and provincial politics, economy, culture, science and technology, education, transport and business. As a

6 Qinghai Provincial Bureau of Statistics, the National Bureau of Statistics survey of Qinghai Corps: "2007 national economic and social development in Qinghai Province Statistical Communiqué", February 22, 2008.

18 . famous historical and cultural city, there are many sites in Xining, of which Beishan Temple, the East Muslim Temple and Ma Bufang houses are famous; Tar Temple in Huangzhong County is the sacred place of Tibetan Buddhism and the famous Qinghai Lake is 290 km from Xining City. The East city district lies in the eastern urban part of Xining, and downstream area of the Huangshui River, covering the area of 114.59 square kilometers, with a population of 300,000, of which Hui People accounts for 32.4 percent of the total population. It is a major salt chemical, medicine, livestock products, real estate, tourism and catering base of Xining. Midcity district, where provincial and municipal party department and government organs are all centralized is located in the centre of Xining City, with the area of about 20 square kilometers and a population of about 150,000. It has the fastest growing Tertiary Industry and most concentrated service industries West city is located in the central territory of Xining City, connecting Huangzhong County in the south and scenic HuangYuan Gap in the west, with the area of 82.9 square kilometers and the population over 240,000. It is a collection of scientific research, culture, education, commerce and tourism. North City lies in the northern area of Xining City , with the area of 137.7 square kilometers and the population over 230,000.It is the main suburban agricultural areas and also the city’s high-efficiency agriculture demonstration zones , as well as standardized vegetable base of Xining City Datong Hui Ethnic Minority Autonomous County is in the northwest of Xining City and south to Qilian Mountains, with the area of 3,090 square kilometers and the population over 450,000. It is an important commodity grain base, also one of the 500 major grain and cotton counties of China as well as an important power, building materials and aluminum industrial base of Qinghai province. Huangzhong County lies in the eastern agricultural zone of Qinghai Province, located in the upper reaches of Nanchuan River, Huangshui River branch, covering 2,700 square kilometers and a population of about 480,000. The Tar temple, peasant paintings and hand-woven Tibetan carpets in Huangzhong County is famous at home and abroad. Huangyuan County is located in the eastern part of Qinghai-Tibet Plateau, covering 1,509 square kilometers with a population of about 140,000. It is the only way from mainland to the pastoral areas in Qinghai and Tibet, known as “the throat of Qinghai and Tibet” or “thoroughfare of Qinghai and Tibet”. New District in south city lies in the southern suburbs of Xining City, 11.3 km from north to south and 2.3 km width from east to west, covering 30 square kilometers. On April 25, 2001, It started foundation and set to be built as an modern ecological city district ,centralizing real estate industry, commerce and trade, information industry, the executive office, sightseeing, culture and entertainment, the ecological landscape and processing resources of Qinghai-Tibet Plateau characteristics. In July 2000, Xining economic and technological development zone lying in the East city District (National Level) was approved to establish by the State Council officially. The west of it is next to Qinghai Institute for Nationalities, East to small gorge, north from the Huangshui River and south to Nanshan. The first phase development area is 4.4 square kilometers, the control area of 8 square kilometers. The Development Zone implements the “three mainly insisted and one committed” policy to manage the

19 . District, that is, mainly to industrial projects, mainly to take advantage of foreign capital, mainly to export oriented and commit to the development of high-tech industries in order to build it as the Qinghai reform and opening-up test base, the industrial economy center, the high-tech incubator and the vanguard of economic development.

II-II-IV Economic and Social Development Status Quo

II-II-IV-I Economic and social development of Qinghai Province

Qinghai province is sparsely populated; whose population is only more than Tibet. As the statistics that Qinghai Provincial Bureau of Statistics released in 2007: the province realized 76.096 billion Yuan GDP, an increase of 12.5 percent over the previous year, the speed of growth rate is 0.3 percent over the previous year. The capita GDP is 13,836 Yuan, an increase of 11.5%. The agriculture production added value of 8.585 billion Yuan, an increase of 4.9% over the previous year, industrial production added value of 39.665 billion Yuan, increasing 14.8 percent; tertiary industry added value of 27.846 billion Yuan, an increase of 11.7%. The first, second and tertiary industry to GDP contribution rates were 4.3%, 59.4% and 36.3%. Three industrial structure by 2006 the 10.9:51.6:37.5 changed into 11.3:52.1:36.6 in 2007. The general budget revenue of the Province was 11.05 billion Yuan in 2007, an increase of 33 percent over the previous year. The local general budget revenue was 5.67 billion Yuan, up 34.2 percent; Central general budget revenues 5.38 billion Yuan, an increase of 31.8 percent. The general budget expenditures is 28.23 billion Yuan, an increase of 31.5 percent. The general public services spending 5.83 billion Yuan, up 38.7 percent; employment and social security expenditures 5.11 billion Yuan, up 16.3 percent; education expenditures 3.47 billion Yuan, up 26.5 percent; health spending 1.96 billion Yuan, an increase of 61.6% ; Environmental protection spending 1.9 billion Yuan, up 21.1 percent; public safety expenditures 1.6 billion Yuan, up 28.6 percent; agriculture spending 1.25 billion Yuan, up 44.5 percent; cultural, sports and media spending 700 million Yuan, up 91.1 percent; science and technology category Spending 250 million Yuan, an increase of 74.2 percent. The consumer price level of the residents rose 6.6 percent over the previous year. The urban consumer prices rose 6.3 percent, the rural consumer prices rose 7.3 percent. Food prices rose 14.8 percent, non-food prices rose 3 percent, consumer prices rose 7.9 percent and that of service rose 2.7 percent. In the food category, food prices rose 8.1 percent, oil prices rose 24.8 percent, meat and its products prices rose 37.9 percent. Compared with the previous year, commodity retail prices rose 6.0 percent; agricultural capital goods prices rose 8.1 percent, factory price of industrial products rose 4.15 percent; raw materials, fuel and power purchase prices rose 4.44 percent; investment in fixed assets rose 4.2 percent; Xining Urban property prices rose 3.9 percent, and housing sales price rose 3.8 percent, land transactions price up 3.2 percent; property rental prices rose 4.2 percent. The employment population is 3 124 400 in end of 2007, an increase of 2.8 percent. Among them, urban employment staff 1 091 700 people, 58,200 more than the previous year, an increase of 5.6 percent.

20 . The registered urban unemployment rate was 3.77 percent.

II-II-VI-II Economic and social development of Xining City

By the end of 2006, Xining City achieved 28.161 billion Yuan GDP, calculated according to constant prices, an increase of 14.5 percent and over a year increased 0.3 percentage points. Per capita GDP 13,326 Yuan, calculated according to constant prices, an increase of 12.9 percent. The first industry realized an added value of 1.237 billion Yuan, an increase of 5.6 percent; Secondary industry realized an added value of 13.786 billion Yuan, up 19.9 percent; tertiary industry realized an added value of 13.138 billion Yuan, an increase of 10.4%. The first, second and tertiary industry value added production of the region’s Gross Domestic Product from the previous year 4.84:45.71:49.45 adjusted to 4.40:48.95:46.65. To achieve financial year total revenue 3.042 billion Yuan, an increase of 20.0 percent, of which: local general budget revenues 1.415 billion Yuan, an increase of 20.1 percent. Completion of 3.514 billion Yuan of financial expenditure, an increase of 29.8 percent, of which: local general budget spending 3.429 billion Yuan, an increase of 30.2 percent. The present resident population is 2127300 in Xining City, 28,300 people more than the previous year, an increase of 1.35%; population birth rate is 11.22 ‰, mortality rate was 4.97 ‰, the natural growth rate of 6.25 ‰, respectively fell 1.38, 0.45 0.93 per thousand over the previous year, the population development initially into the stage of "low birth, low mortality rate and low growth". In the general population, the urban population is 1267700, the rural population to 859,600 people, the level of urbanization reached 59.59 percent, 0.77 percentage point increased. At present, the city has the full realization of the “Two Bases” target and a nine-year compulsory education is basically universal. There are a total of 679 primary schools, 145 for ordinary schools, four vocational schools, four special schools, 216 kindergartens. Primary school-age children enrollment rate of 99.9 percent, Promotion Rate of Primary School was 100 percent; Promotion Rate of junior middle school graduates was 81 percent. The gender disparities eliminated for children to access to basic education. The schooling per capita of population over six years reached 8.25 years, the adult literacy rate of 90.54 percent. According to 2006 population survey data showed: people over a college education degree accounted for 8.04 percent and a high school education accounted for 14.28 percent of the staff, with primary and junior middle school education level of staff 68.81 percent, illiteracy and semi-illiteracy account for 8.87% . The employment is 1 182 200 people all around the city, an increase of 28 200 people over the previous year, among whom urban employment is 528,300, accounting for 44.69 percent of total employment; primary industry employment 334 200, accounting for 28.27 percent over the previous year, fell 6.23 percentage point; secondary industry employed 308 100 people, covering 26.06 percent, raising 2.39 percentage points; tertiary industry employed 539 900 people, covering 45.67 percent, 3.84 percentage point increase. The registered urban unemployment rate was 4.04 percent over the previous year, fell 0.11 percentage point. The urban residents’ per capita disposable income is 9 334.63 Yuan, an increase of 11.16 percent;

21 . rural resident’s per capita net income is 2 950.99 Yuan, an increase of 13.82 percent. In post staff annual average wages is 20 984 Yuan, an increase of 18.23 percent. Urban household’s per capita consumption expenditure is 6 722.54 Yuan, an increase of 4.91 percent, among which food expenditure covers 2 463.71 Yuan, an increase of 4.26 percent; recreation, education and cultural services expenditure 788.99 Yuan, an increase of 1.03 percent. Per capita consumption expenditure in the rural residents’ family is 1 604.59 Yuan, an increase of 177.10 Yuan, and 12.41 percent. Among them food expenditures is 447.16 Yuan, an increase of 54.04 Yuan, 13.75 percent; cultural and educational entertainment products and services expenditure 165.08 Yuan. Minimum living guarantee for urban residents of 73 600 people, provide relief for the population of 55 300 people of rural extremely poor families. Urban resident’s per capita housing space is 24.72 square meters, 0.62 square meters more than the previous year; rural per capita living space is 27.5 square meters, impartial with last year. Urban per capita public green area is 7.38 square meters. The countryside changes the water benefit 94.6% of the population, rural sanitation restroom popular rate is 82.4%, countryside excrement detoxification processing ratio 9%, urban sewage processing ratio 38%, city life trash detoxification processing ratio 91.54%. The contradictions of living environment, such as the people's housing, travel and drinking water have eased, urban and rural residents living conditions and the rate of tap water coverage, all these increasing the water security in rural areas and improving farmer's quality of life effectively. There are 453 health agencies and 8 534 beds in the whole city, every thousand people have 4.04 hospital bed; health professionals 9 345, generally realizes every village has the clinic. Neonatal mortality rate from the previous year's 22.81‰ dropped to 21.08‰; under-five mortality rate from the previous year's 28.49‰ dropped to 27.89‰; maternal mortality rate dropped significantly from 79.33 down to 60.8 in 100 000; Incidence of infectious diseases from 630.37 fell to 615.65 in 100 000. The broadcast population coverage fraction is 96.09% and the TV population coverage fraction is 98.72%, furthermore, the television launch transmission network has covered the whole city basically.

II-II-VI-III Economic and Social development situation within Red Line Region

The economic and social development of community and resident for details will list in Annex 3, Schedule 5 according to the questionnaire survey and the residence interview material statistics.

II-III Severe Environmental and Ecological Situation

II-III-I Urgent Need to Improve Water Environment

According to “the Environment Communiqué of Qinghai Province in 2006” issued by the EPA in Qinghai Province in June 2007, the water condition of Huangshui branch and major tributaries of it is better

22 . than that in 2005. The water pollution of it is moderate. Provincial Boundaries and Bridge cross section is in inferior water quality . The main polluting factor is ammonia nitrogen .Beichuan River tributaries and Shatang River is lightly polluted, Nanchuan River is in severe pollution. The 17 monitor cross section success rate raises 23.5 percentage points compared to 2005 ,main polluting factors are: ammonia nitrogen, the permanganate index, on fifth the biochemical oxygen demand and the petroleum, assuming the organic pollution. In 2006, Xining City government set five groundwater monitoring points in Nanchuan, Xina Chuan, Xichuan ,Pingan and other places, with the exception of the groundwater quality in 1st water wells in Xina Chuan Dan Ma Temple and the 4th well of water sources one in Nanchuan reaches class Standard, the water quality of other three measuring points has varying degree exceeding the allowed figure, the main exceeding factors are total hardness and Kraft index. Huangshui River is the focus of water pollution control basin in Qinghai Province. In 2006, the total wastewater discharged into the basin was about 141.1 million tons; accounting for 72.7 percent of the province’s total, including: industrial wastewater of 49.06 million tons, accounting for the total basin 34.77%; sewage volume 92.04 million tons, accounting for 65.23 percent of the total watershed. COD emissions 52,314 tons, accounting for 69.9 percent of the province's total, including: industrial COD emissions 24,971 tons, accounting for 47.73 percent of the total watershed; life COD emissions by 27,343 tons, accounting for 52.27 percent of the total watershed. Ammonia emissions by 5 152 tons, accounting for 74.2 percent of the province's total, including: industrial ammonia emissions by 1 049 tons, accounting for 20.36 percent of the total watershed; life ammonia emissions by 4 103 tons, accounting for 79.64 percent of the total watershed. The compliance rate of the industrial wastewater discharged into basin was 69%, increasing 8 percentage points over the previous year. Xining First Sewage Treatment Plant processes around 71 800 tons sanitary sewage per day, achieving 84.5% of the designed handling ability, raising 5.6 percentage points over the previous year. Annual volume of sewage handling is 26 million tons, COD removal 7 826 tons, which enables urban sewage treatment rate reach 21.24 percent, increasing 0.42 percentage points over the previous year. In 2006, a Sewage Treatment plant which can processes 22 500 ton sewage started to construct in the newly developed area of Xining City.

II-III-II Frail Natural Ecology

Qinghai Province is located in the plateau with complex terrain and various vegetation types, mainly to meadow vegetation, followed by desert vegetation and grassland vegetation, while the forest coverage rate is only 4.4 percent. Limited by the special natural condition, the ecosystems and ecological types both show as unique complexity and vulnerability. The bearing and resistance ability is relatively poor on climate change and anthropogenic interference. Ecological environment's sensitivity and instability are prominent. In recent

23 . years, due to the rainfall increase and the implementation of a series of ecological projects, such as nature reserve construction, ecological protection and construction, returning farmland to forest (grassland), draws back the herd also grass, artificial forestation, protecting natural forests and soil and water conservation, the ecological environment quality in some areas has improved, but the worsening trend overall ecological environment has not been effectively curbed.

II-III-III Prominent Contradictory Between Economic Development and Environmental Protection

In recent years, the western area has obtained considerable development along with the country’s West Developmental Strategy, especially achieved great achievement in the infrastructural facilities and economic development. The central authorities enlarged investment efforts in the industrial development area to promote economic development in the western area, at the same time, numerous large enterprise groups presented, which enabled the western economic development to have the economical support's basic point. As one of national west development provinces, Qinghai has obtained the unprecedented development opportunity during the development process. Various industries have benefited from the development plans, particularly the industry obtained considerable development and provided working opportunity and skill for people of various races, meanwhile, people’s living standard improved .However, along with the industry rapidly expanded and the urban rapid expansion, production and daily life cause growing serious pollution to the natural environment, such as soil, water, air and so on, bringing serious challenge for Qinghai's ecological environment. Qinghai is situated at the Qinghai-Tibet Plain, famous as “water tower” of Chinese nation, is the origin of main big rivers in our country, which is also a frail ecological environment area. Its ecological environment self-repair cycle is long, all by all, the incisive contradiction between regional economic development and country ecological security becomes obvious.

II-III-IV The Necessity to Carry out This Project Construction

Therefore, this project is imperative in view of the situation above. Through river pollution control, ecological environment maintenance and flood control, not only can greatly improve the ecological environment and beautifies the humanities environment of project area in Xining City, also can actively prevent the threat of the flood to the economic and social development of Xining ,even Qinghai. Moreover, it will also play an important role to the current pollution management of Huangshui downstream, the Yellow River main branches and the flood management.

24 .

II-IV Conclution

The report reached the following conclusions on the situation above: First, the project is conducive to enhancing the project area’s ability to withstand natural disasters and has the important safeguard and promoter action regarding Xining, even the entire Qinghai Province’s economy and the social development. Secondly, the project involves a number of ethnic minorities’ neighborhood and communities, moreover, the local ethnic minorities are Native peoples (indigenous people), so the establishment of Ethnic Minority Development Plan of this project is essential to project procedures, also it will reflects the project and the local national minority residents offer mutual benefit and achieve common progress.

25 . III Review of Relevant Policies

III-I The Chinese Government Policy Spirit

The People’s Republic of China established in 1949 and the ruling Chinese Communist Party always advocate the interests of the people and serve the people. Since 2000, the country has enriched the connotation of the concept of serving the people and proposed” humanist” and scientific development concept, striving to build a harmonious society. These thought and the idea, become guiding principle for all levels of the government to formulate the social policy and process social affair. In ethnic and religious issues, the CPC and the Chinese government in accordance with international pop values, claim national equality and freedom of religious belief in the principle of “three inseparables” (Han people can not be separated from ethnic minorities, ethnic minorities can not be separated from the Hans, ethnic minorities can not be separated from each other) and “ethnic and religion is no small matter” ,using “unite to struggle and promote common prosperity and development ” as a basic principle, striving to build “equality, solidarity, mutual assistance and harmony” socialism Ethnic relations. At the policy level, the Chinese central government base on the basic national condition of regional, urban and rural, ethnic imbalance in the development, and stress that advanced to help backward, the Han to help ethnic minorities, developed areas to support poverty-stricken backward areas. Since the 1980s, the government has implemented poverty elimination and the western development strategy. Since 1998, in order to reverse the trend that the land ecological environment is deteriorating, the nation carry out policies like returning farmland to forest, drawing back the herd to grass with national strength .As China's ecological barrier, the western region is key areas of the projects above mentioned. In recent years, the state energetically improve the social security situation of urban and rural residents and implement financial transfer payment system on state-level poor counties, eight provinces and autonomous regions (including the Qinghai) with large proportion of ethnic minority population and all the ethnic autonomous areas . Meanwhile, the government speeds up rural material and spiritual civilization construction through the implementation of socialism new rural construction. The guiding ideology, policies and measures reflect that the Chinese Communist Party and the Chinese government sincerely serve the people and the society, caring for ethnic minorities and like to accelerate their development, which has made universally acknowledged achievements in practice.

26 . III-II The Current Laws and Regulations in China

Qinghai Province has multi-ethnic population, which also enjoys the treatment of ethnic minority autonomous and provinces in the western region, meanwhile, it is deeply affected by Tibetan Buddhism and Islam, and also key areas for the Government launch the ethnic and religious work. Therefore, this project involves environmental, social, ethnic, religious, and other factors, the suitable laws and regulations are widespread. Hereby focus on general ethnic and religious laws and regulations and have a brief assessment on them.

III-II-I Ethnic and Religious Laws

The Chinese government implements the regional autonomy for the safeguard the right of domestic ethnic minorities and help to speed up their development. In 1984 the government developed fundamental law “Law on Regional Ethnic Autonomy” whose status is lower than the constitution but higher than the criminal law, and obtained the revision in 2001. Besides reiterate the right that "Constitution" entrusts with the ethnic minority and ethnic minority area, “Law on Regional Ethnic Autonomy” also particularly makes it clear: Chapter 6, Article 54: Resolution, Decision, Order and Instruction of the higher authority State agency related to ethnic autonomous areas should be suitable for the actual situation of the ethnic autonomous areas. Article 65: When exploring resources or making construction in ethnic autonomous areas, the state should take care of the interests of the ethnic autonomous areas and the arrangements made should benefit the economic construction of the ethnic autonomous areas, should take care of the local production and life. State should take measures to give certain benefit compensation to the ethnic autonomous areas for output of the natural resources. Article 66, Section 3: Any organizations and individuals developing resources or making construction in ethnic autonomous areas, should take effective measures to protect and improve the local living and ecological environment, prevent pollution and other hazards. To ensure the implementation of Law on Regional Ethnic Autonomy, the Chinese State Council promulgated “Implementation of The Chinese State Council ‘People's Republic of China Law on Regional National Autonomy’ certain provisions” in 2005, especially stressed that: Article 5: when making medium or long-term plan of economic and social development, the higher authority people's government and Functional departments should listen to the views of the Ethnic autonomous areas and the national department, should base on the characteristic of ethnic autonomous areas and their demands, meanwhile, should support and help to strengthen the infrastructural facilities, develop the human resources, optimize economic structure and use natural resource reasonably, should strengthen the ecological building and the environmental protection, accelerate the development of economic,

27 . education, science and technology, culture, health, sports and other utilities to achieve a comprehensive, coordinated and sustainable development. In order to safeguard citizen’s religious belief right, the Chinese government has promulgated “Regulations on Religious Affairs”, which came into effect from March 1, 2005. In order to guarantee the urban ethnic minority resident's legitimate rights and interests, the Chinese government has also formulated “Urban Ethnicity Work Rule” authorized by the State Council and issued the execution by the State Ethnic Affairs Commission on August 29, 1993. In addition, Datong Hui and Tu Ethnic Minority Autonomous County in the project area promulgated the regulations on autonomy in 1990, basing on“ People’s Republic of China Law on Regional Ethnic Autonomy” and connecting the local realities. The regulation, together with laws and regulations established by central government and organs at higher levels constitute a system of laws and regulations to safeguard ethnic minorities’ rights and interests. It is also the basic standard which this project construction should follow.

III-II-II General Laws and Regulations

Any stakeholders’ rights and obligations of all parties involved in the project construction, governments at all levels and Functional departments will have the quite perfect laws and regulations to carry on the standard. For example: On Project establishment and bidding, guaranteed by “Law of the People's Republic of China on Tenders and Bids” (January 1, 2000) and so on; On land acquisition and demolition, guaranteed by “Land Administration Law of the People’s Republic of China” (August 28, 2004),” “Law of the Peoples Republic of China on Land Contract in Rural Areas” (March 1, 2003), “Real Right Law of the People's Republic of China ”(March 16, 2007), “Xining Regulations for Management of Urban House Demolition ” (September 20, 2002), “Regulations on City Planning of Xining” (July 24, 1998) and so on. Environmental safety and ecological protection, guaranteed by “Environmental Protection Law of the Peoples Republic of China” (December 26, 1989), “Law on Environmental Impact Assessment in People's Republic of China” (September 1, 2003), “ Forest Law of the People’s Republic of China ” (1998), “Law of the People’s Republic of China on Water and Soil Conservation” (1991), “Law of the People's Republic of China on Prevention and Control of Water Pollution.” (May 15, 1996) and "People's Republic of China Water Pollution Control Act Rules" (March 24,2000), “Law of the People's Republic of China for the Protection of cultural relic” (October 28, 2002) and “Rules of the People's Republic of cultural relic conservation” (May 1992), “returning farmland to forests Ordinance” (January 20, 2003), “on the Qinghai Provincial People's Government to further strengthen the work of energy-saving emission reduction policies and measures”(July 19, 2007), “Xining water and

28 . soil conservation management approach”(August 27, 2001)and “Xining Urban residents living pollution prevention approach”(July 1, 2001),etc.

III-II-III Resettlement Policies and Measures of Immigration

(1) Resettlement principles To facilitate the implementation of this project, the Xining municipal government formulated the following resettlement principles: Correctly handle the relationship among the state, collective and individuals, the resettlement of migrants should be co-ordination arranged within the framework of in national policies. The immigration resettlement should be in accordance to the local economic development, resource development and conservation of water and soil, diligently guaranteeing the residents’ living standard in the flood-control project area achieves or surpasses the original level and createing the development condition. Resettlement planning should implement the policy of “development resettlement” and “taking modernized agriculture primarily but basing on soil”. The immigration production restores and living facility compounding should be comprehensive feasibility studied and planned. The resettlement plan should take flood control project area and the local resource situation in consideration, and give preference to the “latterly settled” and “protective”. Stick to the development of immigration policy and enhance their self-development power, mobilize the masses of immigrants self-reliance and hard work for development, reasonably develop and use resources, strengthen their self-accumulation and self- development ability Adhere to environmental protection, economical use of land and the principle of arable land protection, promote harmony between man and nature in accordance with the construction of a resource-saving society’s requirements, realize the harmony among economic development, population, resources and environment , Promote the sustainable development of socio-economic. Adhere to connecting regional economic development planning and the integration of the region in economic. Establish the development plan on the basis of social economic plan, speed up the economic and social development speed of reservoir area and resettlement areas. (2) The legal principle basis of resettlement Land Administration Law of the People’s Republic of China (August 29, 1998 revision); Environmental Protection Law of the People’s Republic of China (December 26, 1989);

29 . Law of the Peoples Republic of China on Water and Soil Conservation (June 29,1991); Forest Law of the People’s Republic of China (April,1998 revision); Law of the People's Republic of China for the Protection of Cultural Relic (October 28, 2002); Regulations for the Implementation of the Land Administration Law of the People’s Republic of China (December 27, 1998); Village and Town Planning Standard (GB50188-93); Dike project Design Standard (GB50286-98) (3) Resettlement planning objectives Planning horizon year 2007 is the reference year of the plan, the recent planning horizon is 20l0, medium and long-term planning horizon is 2020. Planning goals Short term target: Solve outstanding problems of economic development in the flood prevention project area and resettlement areas by increasing investment and make the economic and social development of resettlement areas reach the end average level in “11th Five-Year Plan”. Medium and long-term target: Connect the requirement of the socialism new countryside construction and the comprehensive construction affluent society, further strengthen the infrastructure and the ecological environment construction of flood-control project area and the immigrant resettlement area, make the living standard achieves the local countryside average level gradually and realize economic society and the local countryside simultaneously develop in the flood-control project area and immigrant resettlement area. (4) Safeguard mechanism of the plan implementation Clear about the organization and leadership in the implementation and management of plan. Bring forward the work responsibility and administration authority of the organization at all levels. Propose the names and contents of rules and regulations which safeguard the plan implement smoothly. Carries out organization funds and the operational funding of the plan implementation supervisory work; carry out the local co-funding measure in the fund raising plan Clear supervision of the monitoring mechanism, propose immigration supervision, administrative supervision, monitoring and evaluation of the main contents. (5) Resettlement plan for the project To protect arable land with every effort, reduce wastage and lighten the difficulty of the immigrant resettlement, the project fully considered characteristics like topography, landscape, ground elevation, geology, and so on in the flood control project area on the choice resettlement:

30 . Xining City Project Area: the project scheme to take the occupation of 1380.4 hectares cultivated land, housing demolition 62 919.91 square meters, people involved in the relocation covering a population of 1880. As a result of this relocation scope located at the city center, both sides of the river, the moving population subordinate city resident, has integrated the cities’ social security system. According to the municipal government concerned requirements, this project relocation occupying land area uses the disposable currency placement means that the displaced households should purchase or lease commercial housing by individuals with compensation funds. Datong County project area: Land occupation and resettlement dealt with the principle of compensation funds. As a result of this project for the social public welfare project, therefore, compensation methods is based on “Land Administration Law of the People’s Republic of China ”, also referring to the 74th Command of State Council and “Land Compensation and Resettlement Rule on large and medium-sized water conservation and hydropower project construction”. Principles of construction in Project area is: Insisting humanist, science plan, rational distribution principle, strictly based on the construction plan, insisting circumstances permit, realistic, the government support as well as rely on their own effort to revive; Insisting paying equal attention to the project construction and ecology restoration, unifying the immigration new village construction with the socialism new rural reconstruction, insisting resettlement after housing construction. Huangyuan County Project Area: The relocation of the population involved in this project area is township dwellers and has been incorporated into the urban social security system. According to the concerned requirements, this project uses the disposable monetary resettlement, so the relocated households can purchase or rent commercial housing with the compensation fund. The project relocation placement take full respect of local displaced households’ wish as a premise, adopting relative centralism but also combining with decentralization principle. The local government provides preferential policy and gives certain subsidy on the house of the immigrants, guiding them move out by subsidization and encourages. The project occupying land area uses the fund compensation principle, besides, they also make the later period support and solve the resident’s employment question, which is not only the premise to increase the income, also the key to maintain the project area to be stable. The government releases the corresponding employment favorable condition in the displace households’ employment aspect and provide the employment information to those who have the ability to work by the local re-employment department, they also provide career guidance and employment training fro them. The Local government act tax revenue preferential policies to enterprises which employ the immigrants. To those no longer have the ability to work, the government include them into urban minimum living subsidy and give the fund subsidy.

31 . Huangzhong County does not involve the occupying land area relocation compensation issues.  Costs of migration and settlement  According to preliminary calculation, the immigration moves and places expenses, including other costs, is 197 140 700 Yuan.

III-III World Bank Policy

The World Bank, which has the widespread international background and the multi- disciplinary training background first-class expert team and the management troop develop numerous domain aid project in the global scale, accumulating the rich project experience for more than a half centuries, has forming the scientific standard project establishment and examination procedure, and also owning the advanced development idea. The service policy it draws up has the important instruction value to the numerous countries and the area, specially the developing country and the area. This project is suitable for world bank service policy OP 4.01 (environmental impact assessment), OP 4.10 (ethnic minority), OP 4.11 (cultural relic) and OP 4.12 (involuntary resettlement) and so on. Through comparative analysis, this assessment group beholds that: the goal of the World Bank’s relevant operational policies and legal framework is consistent with China’s existing policy in the promotion of economic and social development in less developed areas, increase residents rights, and safeguarding the interests of vulnerable groups, protection of minority cultures and sustainable development foundation. As the World Bank’s policy is to face the vast number of developing countries and regions, so, it bears the nature of guidelines in practice, while policies and regulations in China are more focused and practical. However, the World Bank’s policy emphasizes on informed consent and participation in decision-making, which plays an important guiding role in practice of this project. Relevant policies and regulations in China benefit the society, and the determination and sincerity of China to pursue sustainable development, promote social justice and harmony, help accelerate economic and social development in ethnic minority area is of the high degree of unity with the World Bank's policies of standard, tightness, cautiousness. All these ensure the project design optimization, construction projects evolvement smoothly, protection of the rights of residents and the achievement of the project. Therefore, the editorial group believes that this project implementation does not need to formulate the special supporting policies.

32 . VI Stakeholder Analysis

IV-I Identification the Stakeholder of the Project

Based on the feasibility study material compiled by “Coordination Leading Group of Xining Urban District and Three Counties Flood Control Project Using World Bank Loan”, this report identified the related stakeholders/groups as follows: Owner: After consulting with the World Bank, the Xining Municipal government agreed to establish “the Xining Project Office” (to hereafter refer to as “Project Office”) ,which has the separate legal entity status, and specifically charge of the project construction and later operations. People’s Government of Qinghai Province: one of capital contribution party of the project. Xining City People’s Government and the subordinate districts and counties: one of capital contribution party of the project. World Bank: the main provider of loans of this project. Residents in the Project Area: Han residents, Minority residents, immigrants an so on. Enterprises and institutions in the Project Area: Enterprises, Organs, and Institutions related to the Project or impacted by project construction. Residents in Xining City: the Change of the sewage treatment expense involve the residents’ benefit. Builder: project contractor undertaking the project construction work

IV-II Stakeholder analysis

IV-II-I Owner

In order to avoid departmental interests interfered with the project and raise the professional level of the project, also enable the project progress smoothly under the supervision of all interest related parties, an the project Office with independent legal person status is specially set up with the agreement of Xining City government and the World Bank, mainly responsible for the initial operation of the project, building construction, maintenance and later administration. Project Office has separate personnel, financial and decision-making powers, whose staff unhooked from government departments, or directly to social employment advertise. The planning, project design, budgets, work program proposed by it should accept the supervision and review of World Bank and Xining City People's Government , the World Bank

33 . will provide specific guidance to its capacity-building. The present project office which has launched the preliminary work is a provisional institution, a will have the separate legal entity qualifications and truly independent legal status of the project implementation, namely the owners, after its personnel quit relevant government departments and confirmed by world bank and Xining Municipal government. In accordance with the requirements of World Bank experts ,the project Office must absorb professionals of water supply, agriculture, forestry, finance, computers, engineering and other areas, and the staff recruited not necessarily limited in Xining City or Qinghai Province. In order to guarantee that the project can advance smoothly, the assessment group suggests that a formal Project Office should be set up as soon as possible, besides, should identify its responsibility, authority and benefits, clearing about its legal status and the relationship with the city and county government, meanwhile, the present Project office should strength institution and capacity-building, constantly improve their own function while continuing the current project with the support of government and guidance of the World Bank.

IV-II-II People’s Government of Qinghai Province

Qinghai Provincial People’s Government is one of the investment party also the beneficiaries of the project. According to the memorandum (on January 18, 2008) of the project preparation group, Qinghai Provincial People's Government should provide 190 million Yuan project investments, accounting for 16% of the static investment of the project, of which 80 million invest to Xining urban district project, 20 million to Chengnan newly developed area ,40 million to Huangyuan County and 50 million to Datong County. In addition to investment support, the Qinghai provincial government also provides supports for implementation of the project on policy, task decomposition of returning farmland to forest , technology, personnel, inter-regional cooperation, declared the operation of project and so on. Meanwhile, the Qinghai provincial government should also fulfill their oversight responsibilities for the usage of the project fund.

IV-III-III Xining City and Three Counties People’s Government Subordinates

Xining City People’s Government as well as three county governments administered is the application party of this project, also the main beneficiaries and the repaying responsible party. They are also responsible for the entire process guidance, supervision and support responsibilities of the project. Based on the

34 . memorandum, Xining City governments at all levels need to bear part of the project matching funds, the total amount of about 381 million Yuan, accounting for about 32% of the total investment. As a large investment and long-term impact project, Xining and three county people’s government’s responsibility is significant. On one hand, they must guarantee that the fund is in full amount and prompt arriving, also pay attention to strengthening project monitoring to ensure the construction progress and quality, on the other hand, To respect the project office as an independent legal status, the guidance and supervision to it can not be offside so as to avoid affecting their routine work.

IV-II-IV World Bank

World Bank is the loans provider of the project. According to the memorandum, World Bank confirmed to Xining City for a total of 615 million Yuan of loans, accounting for about 52% of all project investment. The contribution of World Bank to this project is not limited to the provision of loans. In order to help Xining to carry out this project construction smoothly, World Bank established a project team, providing important guidance and the support for Xining’s project application, project design and evaluation, study tours and the organization ability construction and so on .At the same time, World Bank maintains that its security policy must be implemented in the entire process of project, which is also of significant value for improving the project regulatory policy, normative operation and reducing potential risks of the it.

IV-II-V Designer and Builder

The main designer of this project is the Design Institute of Gansu. The Design Institute has many years’ business and cooperative relations with related departments of Xining City in Qinghai Province and of mutual trust between each other. The Design Institute has the Project Design Qualification other than the design of flood control early warning systems, which is also the reason why World Bank confirmed to look for other institution with the corresponding qualification to undertake the feasibility study report of early-warning system of flood control. Builder: Project Office will select specific construction unit by public bidding. Since the project is still in the trial stage and the construction unit has not yet been determined, so the vast majority of small watershed management project will suitably absorb the local labor force participation according to the project content and technical requirements.

35 . IV-II-VI Project Area Residents

Project area resident mainly refers to those distributing in the project area and belonging to each kind of city and rural local resident population, including the Han residents, ethnic minority residents, project non-voluntary immigrant and so on. From field investigation of the social assessment group to three counties and two district, the immigration group to the urban district, as well as the materials of participation investigation of the small basin participation management group, we know that residents in the project area generally welcome and expect the project, bearing good anticipation on conservation of water and soil, ecology restores, environment beautification, flood and disaster prevention function and so on. Ethnic minority residents in project areas: They have high expectation on community driven project for development and improvement of traditional livelihoods, improve infrastructure and enhance the ability of individuals and families in the development of such areas, hoping the project to strengthen its support functions, to create more opportunities for participation. The establishment of Ethnic Minority Development Plan (EMDP) is welcomed in this area. Project involuntary immigration: Mainly in urban and rural and urban intersections, primarily Han residents. The non-voluntary immigrants deeply concern about land expropriation, house relocation’s compensation standard and whether the compensation funds can be realized and prompted full amount, and they also regard the replacement plan. They hope to have the opportunity to equal participation in the consultations when the authorities concern formulates plans of action and immigration policy introduced.

IV-II-VII Other Underprivileged Groups in the Project Area

The poor, the elderly, women, children and handicapped persons do not have much side effect on the Project Area, but there are still some problems to be caused concern in this project: The project which takes Returning Farmland to Forests and animal husbandry limited as one of important measures, will inevitably stimulate the capable labor force outflow quantity increase, the increase in traffic, so elderly maintenance, burden on women, child care and education, the care of critically ill patients and other issues will become more prominent. In order to better protect their interests, the Government and relevant departments in the proposed project areas should co-ordinate the resource of civil administration, poverty relief, education, agricultural, health, infrastructural facilities etc, and the project again puts in appropriate fund to help improve irrigation,

36 . water diversion, Medical care, markets, schools, transport, communications and other production and living conditions for residents of the project area . Meanwhile, provide more security on development of planting and breeding, treatment medication, shopping transactions, outside connection and children schooling. At the same time, it is necessary to strengthen working-age women and youths in the scientific and technological knowledge and production skills training, to improve their working ability and production efficiency. Provincial, municipal, county government should strengthen leadership and coordinate to ensure that the above measures which to enhance the social benefits of the project can be implemented.

IV-II-VIII Analysis on the Relationship Between Stakeholders in the Project Area

It is certain that this project aims at a win-win situation and long-term benefits, so the coordination among various interest groups should be cared. Besides, the project should ensure that all parties have the opportunity to benefit. For an in-depth analysis of the complex relationship of stakeholders, and further ensure a clear win- win measures, SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) will be adopted here to analyze the relationship of various interest groups to show the association among various groups of interests and the potential interest risk that need to avoid, finally, provide the necessary background for countermeasures to this project.

37 . Table 3: SWOT Analysis of projects related interest group People’s Government People’s government of World Bank (C) Designer and Project Area residents Stakeholder of Qinghai Provincial Xining and three county Builder (D) (including other under- s (A) subordinate by it (B) privileged groups) (E) (1) Strong (1)Relatively strong (1) Adequate financial (1) Strong (1) Direct beneficiaries administrative capacity, administrative capacity, capacity, (2) Rich work operational of the project; (2) Unique ability to (2) Unique ability to experience (3) Strong capacity, (2) (2) Strong initiative regulate and control the regulate and control the ability to regulate and Mature construction ability Advantage local community local community control; (4) Strong experience, (3) resources, (3) Rich resources, (3) With rich supervision. good social experience in the local experience in the local reputation. community. community. (1) Relative lack of (1) Relative lack of (1) Less indigenous (1) less funds; (2) (1)less self- construction funds; (2) construction funds (2) knowledge; weaker determination ability (2) lack of Flood lack of Flood (2) Limited management and less problem analysis Disadvantag management management experience, supervision; (3) The supervision capacity, (3) relatively e experience, (3) (3) Relatively weak self- consequences of the dynamics; (3) loose organization . (4) Relatively weak self- supervision project can not be potential direct undertaker of supervision expected construction quality project negative effect problems (1) obtains World Bank (1) Obtains World Bank (1) More opportunities (1) economic (1) Completely solve the project investment; (2) project investment; (2) for cooperation, (2) efficiency; (2) potential flood danger (2) Thorough Settlement Thoroughly Settle Promote the accumulation to improve the living potential flood danger potential flood danger of development of experience (3) environment, (3) to Opportunity of Xining and three Xining and three county ; developing countries, more cooperation increase employment county ; (3) good (3) good cooperation (3) To strengthen the opportunities; opportunities, (4) cooperation foundation foundation and prestige; sense of participation promote local economic and prestige (4) more (4) more investment of citizens in development, (5) poverty investment plans and plans and cooperation developing countries in elimination

38 . cooperation opportunity. public welfare opportunity. undertakings.

(1) To coordinate the (1) how to achieve the (1) How to effectively (1)how to enable (1) How to protect their interests of all parties, balance between use the funds on project the project quality legitimate rights and and integrate resources participatory and management (2) how to achieve interests, (2) how to effectively , (2) how to government planning (2) to effectively monitor superiorly; (2) how make useof favorable achieve the balance How can local residents the various interest to use the existing opportunities to promote between participatory benefit from the groups to effectively resources their own development, and government project;(3) How to carry out cooperation effectively; (3)how (3) how to make itself the planning (3) How can eliminate the benefit (3) how to help to get good real beneficiaries of the Challenge local residents benefit battles among parties developing countries relationship with project. from the project;(4) improve the conditions the with the How to eliminate the of the residents, (4) residents in benefit battles among how to handle construction areas ; parties relationship well with (4) how to the local government coordinate the interests of all parties.

39 . As is seen from the table, not only interests of consistency existing among the various interest groups, there are also potential conflicts of interest. (1) There is something in common between interest group A and B, and the difference lies in the two is their intensity. This is because the administrative rank of interest group A is higher than interest group B. However, interest group B also reduced the inferiority and challenge as a result of that. (2) Very strong as well as a strong mutual dependence cooperation exists between interest group A and C, this is because interest group A is one of partial investors and also beneficiary of this project .Interest group C is the main investor of this project, but they must depend on the local experience and resources of interest group A. The superiority and inferiority between the two groups is actually a kind of supplementary relationship, furthermore, the opportunity between groups has many similarities. Therefore, if the two groups like to take positive and operative attitude, they both will obtain more opportunities. (3) Like the relation between interest group A and C, the difference between interest group B and C is intensity. (4) The relation between interest group A, B, C and D is labor and employment relationship, that is, interest group D is actually the main implementation party of the first three. Therefore, how to effectively monitor interest group D and make it complete the task better is the common challenges in the face of the first three interest group. (5) E is the ultimate goal of manifestation of the first four interest groups, among which, interest group A, B, C have objectives of coincidence to interest group E, namely, to improve the living environment of E through the project and avoid the potential challenges and disadvantages encountered by E. The problem that how to coordinate between D and E exists during the construction period, and what enforced by D would become the effective safeguards key to the living environment of E and flood control management.

40 .

V Land System and Mode of Living

V-I Land System Change

More than half a century since the 1950s, China’s land system experienced three major changes: The first time was in the early 1950s; the land reform abolished the feudal land ownership and practiced “the cultivator had its field” small farmer system of ownership, the general farmers obtained Land-use autonomy. The second time was collectivization of agriculture during the mid-1950s to the late 1970s, when farmer collective ownership substitutes for the small farmer system of ownership, the land use right concentrated in village groups and teams. Third is the late 1970s and early 1980s, based on not changing the nature of the collective ownership of land use to practice household contract responsibility system, farmers got the land (mainly farmland and woodland) contracted by the operational autonomy. After 1995, in order to further stabilize the enthusiasm of farmers operating and enhance their confidence in the rural policy, the government carried on second round land contract., which is a status-based land contract and also based on the regional actual land to have trimming of small scope area , the contract duration extended to 30-50 years. Qinghai land system is almost simultaneously with the changes throughout the country .From 1998, the project areas carried on the second round of land contract on the basis of household contract system in 1980-1982, that is, the rural households contract will be extended for a period of 30 years through the formal signing of the contract between the collective and farmers. The system of this phase will become the land based system during the process of the implementation of this scheme or project when the issue of land item involved.

V-II Land Laws and Regulations

200331 “Law of the Peoples Republic of China on Land Contract in Rural Areas”(March 1, 2003) says that: Article 4: The State protects, in accordance with law, the long-term stability of the relationship of land contract in rural areas. Article 9: The State protects the legitimate rights and interests of the owners of the collective land and the right of the contractors to land contractual management, which no organizations and individuals may infringe upon.

41 . Article 10: The State protects the circulation of the right to land contractual management, which is effected according to law, on a voluntary basis and with compensation. Article 20: The term of contract for arable land is 30 years. The term of contract for grassland ranges from 30 to 50 years. The term of contract for forestland ranges from 30 to 70 years; the term of contract for forestland with special trees may, upon approval by the competent administrative department for forestry under the State Council, be longer. Article 24: After a contract goes into effect, the party giving out the contract may neither modify nor revoke the contract due to the change of the representative for the party giving out the contract or the responsible person concerned, or due to the split or merger of the collective economic organization. Article 26: During the term of contract, the party giving out the contract may not take back the contracted land. Article 27: During the term of contract, the party giving out the contract may not readjust the contracted land. Article 32: The right to land contractual management obtained through household contract may, according to law, be circulated by subcontracting, leasing, exchanging, transferring or other means. Article 42: For the purpose of developing the agricultural economy, the contractors may, of their own free will, jointly pool their rights to land contractual management as shares to engage in cooperative agricultural production. In addition to “Law of the Peoples Republic of China on Land Contract in Rural Areas”, governments at all levels of the project areas also issued related land management provisions, such as “the implementing method of Qinghai Province on‘Land Administration Law of the Peoples Republic of China’ ” ( revision in 2006), “Xining City Interim Procedures for the collective land expropriation ”(February 16, 2001), “Management approach on using rights transfer of urban state-owned land in Xining City”(October 1, 2001) , “Management approach on idle land in Xining City”(October 1, 2001) etc, clearly defining the ownership of rural land resources, development and utilization, expropriation, compensation standards and so on. The basic spirit of these laws and regulations is to ensure the contract farmers have long-term land use rights and to protect their enthusiasm and independency of agriculture management, also to avoid the waste of land and protect the limited arable to make farmers have a basic source of livelihood. The ultimate goal is to safeguard farmers enjoy a good and prosperous life and the society is harmonious ordered.

42 . V-III Nature Resources, Livelihoods and Land Use Structure

Although Qinghai Province a is vast territory with a sparse population, yet for the cold highland climate, most districts only suit the forage grass to grow, area that is suitable for forestry is not big; the suitable agriculture’s land is less. The arable land only accounts for 0.85 percent of the area, woodland (including woodland, stocked land and shrub land) only 4.68 percent, meadows accounting for 50.5 percent and the rest is desert, desertification, which is very difficult for human being to survive .The total arable land in the Province is 515 600 hectares, per capita arable land area is only about 1.5 mu. The Huangshui valleys where the Project area covers only accounting for around 4 percent of Qinghai land area, while centralizes 72 percent of arable land of and support about 85 percent of the population the Province, causing the situation of many people and less land, cultivated land tension and serious shortage of back-up land resources. Residents of all ethnic groups living in the rural project areas are in the agriculture-based livelihoods. Tibetan communities are concentrated away from urban and suburb of the larger population density , usually in farmland and pasture intersection mountainous area, therefore the village territory is broad, the land area is wide , per capita arable land is relatively more and have abundant land types. such as Dongxia Town Maer village in Datong County, Bohang Town Nalong Village in Huangyuan County, the per capita arable land area is more than 2 mu (land in Nalong Village is irrigated land, Maer Village only has slope land ), 4-5 per capita acre of barren hills and meadows , and some woodland. Therefore, their traditional mode if living is planting and breeding, mainly to agriculture and a small collection of resources. Muslim communities are mainly in suburbs, along the transportation routeThe community density is big while villages territory is small, per capita cultivated land is generally less than 1 acre, some communities do not have irrigated land also barren hills and meadows are less, nearly few large areas of forest land. So their livelihood is based on the planting industry, combining agriculture and commerce, restaurants, fur processing, slaughtering and trafficking. Tibetan areas lie in relatively high altitude, and more in the 2 700-3 000 meters. Their farming System is one-year maturity. They plant and fertilize per year from March to April, and harvest crops around September, they turns the soil around November. Their main crops are wheat, barley, potatoes, broad bean, etc. In general, families mainly grow grain, of which wheat, potatoes, rape are planted in their basic land while barley, broad bean in the high mountain regions. The potato production per acre is approximately 1 000 kilograms, the wheat class production per acre is 150 to 200 kilograms, the Tibetan barley yield per acre is approximately 100 kilograms, rape

43 . per-acre production is about 150 kilograms, and broad bean per-acre yield is about 200 kilograms. In addition to the arable land contracted at the beginning of household contract responsibility system ,families of large population and labors wealthy also reclamation a number of slope lands in the barren hills and slopes .In more than 10 years, since there are many young migrant workers and the relatively stably employed minority families will be transferred their arable land to their relatives and friends for free , resulting in the actual acreage land of some families is to 2-30 mu, while some families basically not planting anything, but rely on migrant workers to make a living. The barren hills and slopes belong to village’s collective ownership, mainly as public grazing land. Families of large population and ability have land cultivation according to their need and are not necessary to pay rates for the collectivity. The shady side region plants the birch tree, the spruce and so on, some region of serious soil erosion also stopped plowing and plant trees, grass for restoration in recent years. Hui people mainly live in the region of an altitude of 2 700 meters or below. Their farming System is also one-year maturity. Families in general are fighting for self-sufficiency in food; arable lands are mainly used for species of wheat, potatoes, and a small number of rape and broad bean. As most arable lands lie in the gentle slope, so there is less loss of soil and fertilizer, meanwhile, farmers put into much chemical fertilizers and other agricultural materials , therefore, the per-acre yield is relatively high, in 1200-1500 kg of potatoes, wheat and rapeseed about 200-300 kg, broad bean 200-250 kilograms. As less barren hills and slopes and a lack of arable land reserves, the per capita arable land is decreasing with population growth. To transfer employment to the non-agricultural area has increasingly become a necessary survival and development choice of the Hui people. The main body of residents in the project area is Han people, most of whom are relatively concentrated, and forming single ethnic sectors-connecting villages, part of them living mixed with the Hui people and Tibetans. The regional distribution of the Han people is density, which is similar to Hui people with little land but large population. Han people mainly live on farming and fence cultivation and their farming Systems is one-year maturity and land use method is basically the same with Hui people. Since public barren hills and grass land is small in size and the reserve of arable land is less. Therefore, the labor migrant is also a way to increase household income and the main choice to solve livelihood difficulty. The living structure of all nationalities and ethnic groups of counties in project area is detailed in Schedule 3.

44 . V-IV the Impact and Possible Consequences of the Projects on Their

Livelihood and Land System

The project has both positive and negative impact on the livelihood of residents of all ethnic groups in the project area and the current land system, of which the major positive impact is the following aspects: First, Exclusion measures of planting trees and grass in the small basin is conducive to water and soil conservation as well as the improvement of ecological state in the project areas. The assessment group make the following conclusions by investigation and understanding of a number of typical communities: 96 percent of villagers in Erma agreed with the measures and expected benefits, with the support rate of 94 percent in Qiaotou Village and Yuanshu Village(both the two villages Are Hui ethnic villages and have strong social structure similarity, so the statistics merges together),while 95 percent and 94 percent support rate in Huangzhong and Huangyuan. The above data show that the residents in the project area highly affirm that the project will help to improve the local ecological environment. Second, the project to reinforce slope cropland on both sides of the steep valley and change slopes for terrace is conducive to maintaining water and soil fertility, also can consolidate the arable area. The survey that the social assessment group did in the communities of project area showed that torrents disasters happened in many villages. Take Erma village as an example, the survey showed that several serious mountain torrents happened in Erma village in the 1950s, two of which directly caused economic losses to the local Tibetan residents. The serious trend of soil erosion increasingly declined the fertility of arable land, the standard of living growth is in negative Second Derivative trend(that is, the standard of living in the process of growth is slow, to a certain stage there will be zero growth). Third, the construction of check dam, flood prevention wall and dam etc in the gully area can effectively reduce threat of mountain torrent to farmland and villages during the rainy season, also good to prevent further deep channel and reduce sediment, the villagers also facilitate the use of plot water for irrigation, increasing irrigated area. Such a conclusion is from the practice of local residents, many of the residents in different villages affirm that the dams and flood prevention walls that government department built in tens of years, especially in recent decades, in Erma, Qiaoergou and Yuanshuer Village of Datong County,Yongxing,Guanghua,Bohuang of Huangyuan County and Qingquan Villages of Huangzhong County definitely play the role of water storage in usual time and flood control in flood period.

45 . Fourth, the long-term benefit of afforestation is to increase local live standing timber reserves and the lumber reserves, if managed well can also increase the income of local communities. The practice of Erma village has proved that: local residents are reluctant to report the area in the initial implementation of exclusion, but after a period of exclusion to facilitate afforestation, local residents found the relatively rapid recovery of ecological environment, furthermore, it brings a lot of actual and expected benefits, forest products, such as mushrooms has increased; so has the expected natural scenery such as the summer tourism opportunities. Therefore, we found in this survey that residents have expressed their willingness to report area of exclusion that they did not report first to further increase the forest coverage rate and make the vegetation around more luxuriant as well as the scenery more pleasant to attract tourists. Fifth, with the gradual restoration of the ecological environment, manual and non-manual gathering forest product, even dangerous animals like wild boar have increased. However, as the community involvement in management strengthened, the farmers can increase the long-hoped Games in the four seasons on their dinner table without having a negative impact on the ecosystem. Sixth, as some residents actually have the ability to transfer to towns or non- agricultural industries, and they also have such wishes. So if negotiate properly in the project land-levying and demolition process, the relative department can give cash compensation to this part of residents, and replace their land to farmers who need it, so that everything can take their proper place. Village cadres and farmers agreed that during the investigations and thought there is no difficulty in consultation. The potential negative effects may include: First, Project construction need to occupy a small amount of arable land, resulting in further reduction of the total arable land which will have the long-term impact on residents income and life ,also stimulate labor migration. Therefore, minimizing land- levying, cleaning up the temporary land and restore their function promptly should become the important principles of the project design and construction. During the interview in Huodong and Huoxi Village, the assessment group found that the villagers had misgivings about the last project of returning farmland to forests and grasslands. While the Government still have regular compensation policy, but the villagers generally believe that losing lands makes their lives more uncertain in the long term, and they have many worries for the future. Second, Exclusion measures to be implemented in small basins will lead to the reduction of community pasturage also restrict grazing activities, so it is imperative to develop captivity , but burdens like shed building, feed stuff and labor force will increase correspondingly. Part of the residents surveyed indicated that if there is no

46 . place to herd, they will no longer raise sheep or cattle. However, we learned through the survey that those who do not raise cattle, horse and other animals when farm on the slopes that can not be implemented mechanized operations must hire animals of others (40-50Yuan per acre) to plow and turn the soil, twice in the spring and winter; even if the arable land is on the gentle slope, farmers also need tractors to plow and the cost is still relatively high. Without cows or sheep raise, farmers will suffer from a lack of their own source non-staple food and their breed aquatics income will cut off, meanwhile, the meat or milk they usually have will depend on the market and the demand for cash will also increase. Third, the reclamation activities on barren hills and slopes have been strictly limited after the implementation of exclusion measures, the income of a small number of residents who once benefited from the reclamation way will be reduced accordingly. From the space of resources, the production and living space of farmers is not just limited to farming the land, the land without restriction before was not the wasteland, the villagers will take full advantage of these space for the benefit, if limit strictly, their space activities may be reduced and the resources will be reduced accordingly. Since 2000 Qinghai had the program of conversion of slope farmland to forestry and the related farm households gained grain and cash subsidies in accordance with the national policy. In 2004, Xining municipal government and its surrounding three county authorities issued official decrees to prohibit grazing on ecological deteriorated mountainous areas, with the hill closure measures, encouraging fenced livestock. The total area of hill closure in Xining municipal region was about 145 square km, in which rotational closures were conducted quite often so that local households could graze as needed rotationally in another years. No population relocation caused by the hill closure took place, as reported. However, there were also no compensation or subsidies from the exclusion measures of hill closure. The project social assessment has assessed the possible impacts of hill closure under this project in different localities, working with RAP team and Participatory Management team together, and a Process Framework document was developed to guide project activities in the Watershed Rehabilitation component in light of minimizing the closure impact and developing alternative livelihoods as needed. Fourth, The gentle and farming accessible slope land on both sides of valley surrounding communities are changed into terrace, however, according to the investment principle of “the one who benefits must share the burden” , the burden of land contract farmers will increase. Fifth, In addition to the impossibility of involuntary immigrants in Huangzhong and Datong County, there are still a small number of immigrants in the urban district

47 . and Huangyuan County. The overwhelming majority of immigrants are located in the urban-rural intersections, mainly belong to town accounts. On sensitivities about ethnic, religion and culture, because there are no ethnic minority groups involved in resettlement, there is no need of special measures. On the livelihoods and compensation for resources, the long-term prospect of this part of residents is employed or living in the cities and towns, therefore, the immigrants who had restaurants, shops or other business should be considered to continue operating the original business when resettled and guarantee the basic conditions for their operating activities ; the relative department of this project should also create a stable employment condition to those who do not have any business before in accordance with their wishes and requirements . For the small part rural residents in the urban- rural intersections formed by construction and exclusion should also be provided in cash compensation, meanwhile, taking into account the shift of their employment, skills training, and opportunities provision to help them smoothly integrate into the life of towns. Detailed discussions will be conducted in the immigration assessment report.

On the whole, in view of the project impact by land acquisition or hill closure, closest attention need to be paid and effective mitigating measures should be designed and adopted in consultation with local peoples to be affected, so as to ensure this kind of impact could be minimized. According to the World Bank OP4.12 Involuntary Resettlement, the project is preparing Resettlement Action Plan (RAP) and Process Framework (PF) to safeguard local people from project adverse impacts .

48 . VI Ethnic Minorities

VI-I The Connection between project and Ethnic Minority

VI-I-I The Overview of Ethnic Minorities in the project areas

By the end of 2006, the total population of Xining City is 2 127 300, covering 38.84 percent of total population in Gansu province, of which Tibetan, Mongolian, Man people, Sarah, and other 37 ethnic minorities come up to 543 385 people, covering 25.55 percent of the total population of Xining City. There is one ethnic autonomous counties (Datong Hui and Tu Autonomous County ) and six national towns of all 5 districts (East, mid, west, north and south city) 3 counties (Datong, Huangzhong, Huangyuan) and 50 townships and towns (27 towns and 23 townships) under the city governs . There is one autonomous counties and three national township (Dongxia Town,Shuobei Township and Liangjiao Township)in the project and project-affected area. The ethnic minorities distribute in the small watershed of Datong, Huangyuan, and Huangzhong County where the ecological engineering management is in implementation. Among them Includes ethnic minority centralized communities, such as Dongxia Town, Liang xiang and Qiaotou Town in Datong County, Chengguan Town, Bohang township in Huangyuan County, and Lu Shaer town in Huangzhong County , of which Muslim and Tibetan account for higher proportion . Although the statistics also reflect on Tu people, Salar and Mongolians, etc, but they are mainly urban residents living in urban areas ,some individuals are found in the village census because of work, marriages, etc. Ethnic Minority population and its distribution detailed in the table below (The concrete distribution of ethnic minority in small watershed see Table 3).

Xining City, ethnic minority population List in 2000,2006

Other ethnic District Tibetan Hui TU Salar Mongolian minorities County 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006 2000 2006

East City 7733 8732 88233 99314 2219 2504 2160 2736 1017 1186 3311 3575

Mid City 3576 3940 10395 11417 993 1095 470 584 760 857 1498 1659

West City 7751 8854 14775 16793 1953 2235 820 1032 1133 1347 1785 2064

North City 2581 2857 11124 12288 928 1036 347 429 729 834 2454 2731

49 . Subtotal 21641 24383 124527 139812 6093 6870 3797 4781 3639 4224 9048 10029

Datong 29160 30436 125161 130264 43810 45947 162 225 4611 4960 949 992

Huangyuan 13565 14283 2259 2369 397 415 81 97 1815 1981 62 55

Huangzhong 38899 40876 74913 78392 1288 1362 29 48 427 438 144 146

Total 103265 109978 326860 350837 51588 54594 4069 5151 10492 11603 10203 11222

1 In 2000, the total population of the city is 1 733 400, among which 506 500 is ethnic minority; In 2006, the total population of Xining City is2127300, 543,400 ethnic minorities.

2 IN 2006, the ethnic minority accounts for the total population proportion:: urban 23.06 percent; 47.20% in

Datong; Huangyuan 13.86 percent, 24.92 percent in Huangzhong. Source: "Xining Statistical Annual (2007)", Xining Statistics bureau, in June, 2007

VI-I-II The Connection Between Project and Ethnic Minority

The overall situation of the distribution of minority population in the project area as mentioned above (see Annex 3, also can be found in Chapter II, section I of this report that “2.1 projects and project areas”). From the area and river basin that the project actually impact on we can see, only Tibetans and Hui people relatively centralize in the project area and will suffer from the radiation and significantly effect of the project. Specifically speaking, the Tibetans mainly distribute in Donghe basin of Datong County (Erma, Yuandunzi and Liujiazhuang in Dongxia Town), Bohang Channel in Huangyuan County and Huoshao Channel in Huangzhong County; Hui people mainly live in Qiaoergou, Yuanshuer, Dameidong and Xiaomeidong etc in Datong County , Lassa Channel (Chengguan Town)in Huangyuan County and Huoshao Channel in Huangzhong County (Lushaer Town). From the distribution pattern, Hui people live in individual concentrated communities around the mosque, especially prominent in Datong and Huangzhong County;They live together with Han people in Huangyuan County. Tibetans rarely form a single ethnic communities, but the rate of Tibetan covers up to 90 percent in Erma Village ,Datong County. There are 134 residents in Angzang Village and more than 80 of them in Nalong village, living together with the local Han people. From the layout of urban and rural areas, Hui people distribute in the urban-rural intersections and along traffic lines; Tibetans mostly live in mountainous areas, namely the transitional zone of agricultural and pastoral areas, far from cities and the strategic way, among which Tibetans in Dongxia Town is most typical. The measures that the project take will help to reduce soil erosion in project areas and strengthen the local residents’ (including minority residents) flood prevention and

50 . disaster reduction capacity, but the project will also bring about the occupation of a small amount of arable land, demolition of some housing and ancillary facilities, interference of construction and so on . The biological measures that the project take, such as returning farmland to forests, grasslands grazing limitation and afforestation will compress the space of production of rural ethnic minority residents and bring about the press like the changes of resource usage system, livelihood transition, labor movement, re-learning to enhance skills and ability to adapt to the demands and stress, etc. Through the establishment and implementation of ethnic minority development plan and the related policies and measures carried out, the negative impact above will be greatly reduced; moreover, the project can create opportunities to restore and improve living standards of minority residents, enhance their adaptive capacity and increase the sustainability of the survival and development.

VI-II History, Culture and Livelihood of Ethnic Minorities7

VI-II-I Tibetan

Tibetan is an ethnicity with a long history and excellent cultural tradition. According to historical records, the Tibetan ancients lived on both sides of the middle reaches of the Yarlung Zangbo River as early as before Qin and Han dynasty. They multiplied and expanded gradually and absorbed many other ethnic groups with their expansion, thus covering the whole Qinghai-Tibet Plateau. The geographic distribution pattern of Tibetans today forms around the Tang period and directly relate to the rise of Tubo Dynasty. The main body of Tibetan ethnic group mainly distributes within the boundaries of China, mostly centralizing in Tibet (accounts for 52.84 percent of the total Tibetan population), besides, states of Yushu, Hainan, Huangnan, Haibei, Guoluo, Haixi in Qinghai province, Gannan state and Tianzhu County in Gansu province, Ganzi state, Aba state and the Muli county in Sichuan province, Diqing state in Yunnan province etc are also relatively centralized the Tibetan minority. In addition, Bhutan, Nepal, Sikkim, India, Pakistan and even Europe and America also have a part of Tibetan to live. The Tibetans call themselves “Bobas”, which is divided into “Duiba”(Ali), “Zangba” (Rikeze), “Weiba”(Lhasa) , Kangba (Western Sichuan) and “Anduowa” (Northwestern Tibet, Yunnan and Sichuan) according to the different region . The Tibetan ethnic minority has their own language which is divided into three dialects,

7 The Social Assessment Group list the livelihood structure of Tibetan and Hui ethnic group by the comparison table of income and expenditure according to the investigation of typical communities, See Table 1-5.

51 . Weizang, Kang and Anduo depending on the regionalization. Tibetan ethnic minority is divides into two kinds in terms of this project, one weighs pasturage and speaks Tibetan, strictly attaches to Tibetan Buddhism and lives together in a community, the other stresses agriculture and speaks Chinese (they nearly can not speak Tibetan and live together with Han people, named “Xifan”in local). The Tibetan residents in this project area all belong to the latter. According to the fifth national population census, the total population of Tibetans in China is 5.416 million, increasing 822 900 compared with the “fourth census” in 1990, with the growth rate of 17.92 percent, and the average annual growth rate is 1.60%. The life expectancy of the population is 66 years old. The urban Tibetan population accounts for 12.83 percent of the total population, while rural population accounts for 87.17 percent. Compared with the data before1990, the ratio of urban population increases 5.76 percentage points. In the population over 15 years old, the illiteracy rate is 47.55 percent, 35.14 percent for men, women accounting for 59.66 percent. Compared with 1990, the illiteracy rate dropped by 21.85 percent. In the population of 6 years old and above, those with primary (including primary school) education account for 48.44 percent, junior middle school or above (including junior high school) education account for 13.27 percent, with high school or above education account for 5.55 percent. Those who have received tertiary or university education account for 1.35 percent, the average level of education is 3.52 years. In the population aged 15 and above, the labor force participation rate is 81.53 percent, 80.87 percent in employment and 0.81 percent unemployment. 86.41 percent of the employment population engage in the primary industry, 2.66 percent in the secondary industry and 10.93 percent in the third industry. As far as the occupation, 86.74% of the population engage in the countryside physical labor, 8.11% in the mental labor work and 5.16% engage in the city physical labor. Tibetans live in the edge of Tibetan Centre in the projects area belonging to mixed living group of the Tibetan. By the end of 2006, the total Tibetan population is nearly 110,000 in Xining City, nearly covering 5.17 percent of the city's total population and 20.24 percent of the city's total minority population; Tibetans living in cities and towns in the province account for about 25 percent of the total Tibetan population, rural Tibetans accounting for about 75 percent. The report confirms that Tibetans who live in the project area and directly affected by the project measures are over 400 households, 1866 people. Dongxia river basin in Datong County is most concentrated. There are four villages whose Tibetan is close to or more than 100, and the total number of Tibetan is 1391, accounting for about 75 percent of the Tibetan population in the red line. Among them there are 749 Tibetan residents in Erma village, up to 40 percent of the total Tibetan population within the project red line.

52 . 417 Tibetan people are in the red line of Huangyuan County, and they concentrate in Bohang Town, that is, the several administrative villages in Bohang Channel management region, among them administrative villages which have over 50 Tibetan people is over 5. There are 58 Tibetans in the red line of Huangzhong County, concentrating in Angzang and No.2 Qingquan Village of Lu Shaer Town, belonging to Jiaomugou management area, besides; there are some Tibetan monks in Tar Temple which is near one side of Jiaomugou. Tibetans in the project area, that is, “Jia xifan” mainly live on farming, which includes planting wheat, potatoes, and industry crop like rape and peas, etc. Some Tibetans in the top mountains also plant barley as food crops, but the project doesn’t have a negative impact on it. The Tibetans self supply their own food, while transportation, animal power, meat and cash income mainly depend on their breeding industry. What they raise including cattle, horses, Tibetan antelope, pig, etc. Some farmers keep cows since the 1990s. After 2000, the implementation of returning farmland to forest and exclusion area affects the livestock, so some farmers no longer raise cattle, sheep, or they change from stocking into captivity. The gathering of herbal medicine and wild fungus and so on are also traditional economic activities in summer or fall season, but it accounts for very small proportion of the household income .Over the past 20 years, the Tibetans are the same with the majority of farmers, to increase their income by the capable migrant labor force, which is also the choice of many Tibetans in the project area. The places go for work are mainly in Qinghai Province, such as providing labor force to build house, repair the railing or mine in pastoral areas like Guoluo and Yushu. Tibetan ethnic minority’s livelihood structure and their economic conditions are detailed in Schedule 5. Tibetan residents in the project area mainly live in brick cottage like the local Han and Hui people. Every household have a courtyard, taking the courtyard house as the basic pattern. Main room is in the center, where Buddhist statues are consecrated; houses on its right are for daily living and bedrooms for the elders and superiors, the left are bedrooms for the younger people; the left of the side houses are for the younger people’s bedroom, storage and the right for the animals and wood storage. A small number of Tibetan in Huangyuan set Woi-sang stove in their courtyard to show their ethnic identity. But the stoves are not often used. There is a portrait of living Buddha in the Tibetan’s room. The mountains near the villages where Tibetans live have the eye-catching Mani rock pile or arrow rests. There are rural roads in Tibetan villages within the project area .Generally the Tibetan residents all have walking tractor for transport, land plow and so on. Some Tibetan villages have equipped the tap water, and villages without tap water have wells, so the drinking water for human being and animals are safeguarded. Labor in

53 . the top steep mountain is relatively difficult, Tibetans need trolleys, ox-cart or carriage to transport fertilizer, besides, they also need animal power to turn the soil and manual handling when harvest, Animals also needed in pulling grind and turn millstone in autumn. The staple food of Tibetan residents is mainly wheaten food, and some high- altitude area residents also have the roasted barley and buttered tea, however, some residents in better conditions buy rice as one of the staple food. They drink brick tea themselves or treat guests. They have diet taboo, namely do not eat dead animals and horse, donkey, mule or dog meat. They cook in their daily life or heat in winter mainly by lump coal or honeycomb briquette, using leaves and crops such as straw to light fire; nearly every village has electricity, television and telephone, and some young people also use mobile phones. They use electricity power to have grain processing. Tibetans in the project areas no longer use their mother tongue and basically do not understand Tibetan language, so they communicate in Chinese each other or with others ,and they have switched to Chinese for about five or six generation. The living elder seldom heard the old generation speak mother tongue when they were young. However, some Tibetan residents in a few communities next to Guanghui temple in Dongxia Village of Datong County still know Tibetan language, but they mainly communicate in Chinese in their daily life. Daitong primary school in Shuobei Town use bilingual teaching in recent years for the restoration of the Tibetan language. They invite teachers from the pastoral areas to teach Tibetan language, two classes per week. However, due to lack of language environment, children easy to forget the language when learning it and the effect is not so satisfactory, but the national cadres and the schools are very serious to it. The Tibetan ethnic costumes are still in reservation and people wear them mainly during the New Year period or in wedding or funeral ceremony. There is no difference in dress between the Tibetans and the local Han residents in daily life. The Tibetans don’t have any special ethnic holiday and their major holidays are spring Festival, Dragon Boat Festival and Mid-Autumn Festival, which roughly the same with local people. Enshrining the image of Buddha is the only way to maintain Tibetan Buddhism beliefs and custom, however, they do not have the Buddhist Shrine or hang Golden Statue of Buddha. Tibetans in Dongxia Town should enshrine living Buddha in Guanghui Temple. They also go to burn joss sticks in the 15th of lunar January , lunar June 15th and the first day of the Lunar New Year , meanwhile ,they also go to burn joss sticks and ask Living Buddha touch the top and get Lucky Knot to safeguard peace in the first and mid day every month. The family which have the old

54 . shall kowtow in front of the Buddha statues in their own family in the monthly first and 15th day , and some family worship food.

VI-II-II Hui people

Hui is one of the ethnic groups which believes in Islamism in China which consist of Persian and Arab businessmen, who were known as “fan off” during the Tang and Song Dynasties of China, and ethnicities of Mid-Asia, Persians, Arabs who had the Islamic faith and moved into China at the beginning of the 13th century when Mongolian army in the western expedition , also include Han, Mongolian, Uygur and other ethnic groups that were absorbed through intermarriage after a long- term integration. The Hui is a ethnic group of big area inhabited by several ethnicities and little region inhabited by their own, distributed all over country and centralize in Ningxia, Gansu, Henan, Hebei, Qinghai, Shandong, Yunnan, Xinjiang and other provinces and autonomous regions. The Hui ethnic group mainly uses the Chinese language, but still retains some Arabic and Persian glossary in their religious or daily life. A part of Hui ethnic group which lives together with different ethnic minorities also know the language of the neighbor ethnic group. According to the fifth national population census in 2000, the total Hui ethnic population is 9.8168 million, of which the urban population accounts for 45.30 percent and rural population accounts for 54.7 percent. Life expectancy for the population is 73.36 years old. In the population over the age of 15, the illiterate population ratio is 17.77 percent. Compared with 1990, the illiteracy rate dropped by 15.34 percent. Those of 6 years old or above who have primary school or more education account for 81.67 percent, junior middle school education or above account for 44.88 percent, and high school or higher education account for 15.89 percent. Those who have received tertiary or university education account for 4.08 percent. The average number of years of education is 6.89 years. In the population aged 15 and above, the labor force participation rate is 73.76 percent; 69.7 percent in employment and the unemployment rate is 5.50 percent. In the employed population, 59.59 SHUFHQW engage in the primary industry, 14.29percent in the secondary industry and 26.12 percent engage in the third industry. As to profession, the ratio of population that engages in manual labor in rural areas is 59.59 percent, 12.39 percent in the intellectual work and the ratio of population who engage in city physical labor t is 28.02 percent. Hui ethnic group began to enter Hehuang district since Yuan dynasty, and increasingly moved to Qinghai province during Ming and Qing dynasty by promoting

55 . the immigration policy. By the end of 2006, there were 350,837 Hui people in Xining City, accounting for 16.49 percent of the total city population, and is the most populous ethnic minority in Xining City .The rate of urbanization is on the national average level. Hui people in the cities and towns mostly run catering business, handicraft industry, and fur processing industry, commerce and trade activities, while the rural Hui people engage in agriculture, also working on breeding industry. The common characteristics of Hui people in Qinghai province is that they are proficient in beef and mutton business, fur processing and catering industries, therefore, they become the most active ethnicity in Qinghai commercial trade market. Hui people distribute broadly in the project Area. Besides the urban district, there are Muslim communities in Dameiyao, Xiaomeiyao, Qiaoergou ,Yuanshuer gou and other small watershed (Qiaotou Town, Liaojiao Township) of Datong County, Quanerwan, Lhasa gou (Chengguan Town) of Huangyuan County and Jiaomugou (Lu Shaer town) of Huangzhong County. 9 819 Hui people live in the Red line, including 7886 in Datong County , accounting for 80 percent and concentrating in five Muslim villages; 1578 in Huangzhong, concentrating in Lu Shaer town Chingchuan Village; 355 Hui people in Huangyuan County, Mainly concentrate in Guanghua and Wanfeng administrative villages of Chengguan Town. The traditional livelihoods of rural Hui residents in the Project Area is mainly planting,and some of the families also run breeding industry and commerce. The crops they plant are mainly wheat, potatoes, and economic crops such as rape and peas. Most household food is basically self-sufficiency, however, there are still some residents who have little arable land and do not have enough rations, so they need buy food to eat. The major livestock they breed are horses, ox and Tibetan sheep, also a small number of farmers raise cows. Horses and cows are mainly kept for animal force while sheep are sold for cash. Since the implementation of returning farmland to forests and grasslands, the grazing land reduced and only left a handful of sheep farmers now. Part of farmers even does not raise draft animals. Most Hui families run business, restaurants, trafficking cows and sheep or other traditional sideline to increase revenue in addition to planting and breeding industry. The Hui people in Datong County mainly work on digging coal and mine. In recent years, some young people also do business or work outside the province. The economic conditions and livelihood structure of Hui people in the project areas are detailed in Schedule 5. Although Hui and Han people live in a mixed pattern, however, Hui people in the communities usually live around the mosque. Hui residents generally live in brick courtyard-style room, which is consistent with the local Han people. The main room is in the north and trees or flowers are planted in the yard. The communities they live in generally access to road, electricity, television and tap water. Most families have

56 . walking tractor to turn the soil, transport fertilizer, harvest crops, and daily travel; Young people generally ride motorcycle instead of walking. The dress of men Muslim is slightly the same with the local Han people, but adults generally wear the white flat topping and no brim” top hat” and the elderly often store beard. The religious worship and elderly persons wear “quasi-white” (long coat) and “Tess Daer” (entangle head wrap) females after “Young” (9-12 years old) should wear veils when out, young people often use green, cyan for middle-aged and white for the elderly. Hui people primarily eat wheaten food; they have many strict diet taboos. For example: they are banned to drink muddy water and generally refuse to drink stagnant or filthy water that is trampled by human and animas. They refuse to wash food; generally prohibit tobacco and alcohol also do not treat guest with them. Pig, horse, mule, donkey, dog, pigeon and all meat from self death are all their fasting. They are banned to drink animal blood, mare's milk or Koumiss; they must invite imam or the honest elderly to kill cows, sheep, chickens, ducks, rabbits, camels with the regulations. The birds or animals which are killed by those who do not belong to muslin or not clean and honest in the religion are also regarded as unclean. Hui people in the project area reverently believe in Islamism, which is divided in to new and old religion within it, but they gather in Mosque to have worships together, some communities build Mosque separately for the new and old religion of muslin. Generally there is Mosque administrative committee in the community. They manage the possession of Mosque and organize the religious activities. Major festivals of Hui people are the Lesser Bairam, the Corban Festival and Mawlid al-Nabi (Shengji Festival or the Birthday of the Prophet Mohammed). Hui people implement burial after death. Generally there is a public cemetery in the community where they live together or take the family as the unit to concentrate burying. They do not believe in geomancy, do not select date and time and do not use coffin. The corpse is buried with head to north and feet to south.

VI-III Ethnic Relations in Project Area

The relation of Han, Tibetan and Hui people, and the relation between Muslim of the old and new religious sects are relatively harmonious. One of the performances is that Han, Tibetan and even Hui people live together or next to each other, forming the general living pattern along Huangshui River. This mixed situation is not only showed as the different ethnic communities in terra connection, but many communities are formed by multi-ethnic polymerization. The second performance is that intermarriage

57 . among ethnic groups is very common, particularly between Han people and Tibetan. Although Hui people have the religious beliefs and living habit restraint, so they are less active in marriages with other ethnic group, however, great change has happened in the past 10 years, the intermarriage between Hui and Han people or Tibetan has gradually increased. Third, in the village cadres elections of the multi-ethnic communities, there were no inter-ethnic struggle for power. The social assessment group found in the field survey that village cadres are well aware of different ethnic villagers and their family circumstances, reflecting ethnic barriers rarely exist between the cadres and the villagers. The fourth performance is that Hui people can bear Tibetan and Han residents raise pigs, eat meat or have the habit of smoking and drinking. There is nearly no contradict and conflict caused by very little mutual respect for each other’s customs and practices. The fifth performance is that Tibetan Buddhism and Islam, and Islam between the old and new religious sects live in harmony, and have no religious conflict or sectarian conflict. The sixth Performance is that school students of all ethnic groups in schools at all levels and the youth from different ethnic communities communicate freely and hold harmonious relations. There is no group fight, no language discrimination, and no national or ethnic boundaries among them. The seventh performance is that the cadres of all ethnicities at all levels of government departments and organizations hold harmonious relation, close cooperation and mutual respect each other. Given the harmonious relations between various ethnic groups in the project area, the ethnic minority development plans must try to avoid dividing Hui ethnic minority, Tibetan and Han into different areas, and should increase public welfare projects while appropriately reduce particular projects which specially aim at the development and support for the ethnic minorities or individual Farmers to reduce the negative stimulus of project measures to inter-ethnic relations.

VI-IV The Main Attention Point of the Ethnic Minority Residents to the Project

The positive and negative influence of the project listed in the previous chapter is completely applicable to the ethnic minority residents which will not be repeated here. However, during the investigation in the minority communities, the residents asked much about the following questions which should arouse the concern of the owners, since they also directly link to the project design and effect, and the social assessment group suggests taking it as an important part of the informed consultations. First, they express the understanding that the project will take up part of their arable land inevitably, and some farmers even said that the land belongs to the

58 . country so the government have right to decide how to use the existing arable land. However, they also are very concerned about the following: how to ensure that the income of the farmers does not reduce when their land reduce , that is, how to properly resolve the traditional planting way which is heavy labor output but low efficiency, and safeguard their income resource and standard of living when their arable land reduce? Ways to renew crop varieties improve cultivation methods and promote irrigation conditions all can be considered as effective substitute. However, which measures are more practical needed to have further consultations and research. Second, the ethnic minority residents can accept that the implementation of the project has to remove housing and ancillary facilities and lead to the occupation of cultivated land. They did not object to that during the survey. However, they pointed out: how to ensure that the compensation of farmland is reasonable, if necessary, make farmers in their proper place through land transfers? If the occupied arable land belongs to those who rely on them to have long-term food supply and basic survival rations, and the contracting household which can not access to income supplement through the output of labor, the limitations of cash compensation and risks will increase. Therefore, a better approach might be to allow those who have relatively stable source of income and are willing to exchange their arable land with cash compensation of farmers who need the arable land. The difficulty of this issue is that the replacing arable land is different in the farming conditions, such as the production, so it is hard to solve if the farmers care too much for that. Therefore, it is necessary to fulfill the red line to find out possible problems and difficulties and have timely consultation with village cadres and farmers, so as to avoid affecting the progress of project due to such outstanding issues during the occasion of the construction. Third, they generally can not afford the project financing principle, which is “those who benefits from must share”. The measures that the project owners take are reasonable and necessary from a long-term and overall interests .However, the minority communities and farmers in the project area are hard to bear the cost burden of the project, including dam, drains, irrigation canals, bridge, aqueduct, slope changes and so on, because each of these small projects usually need millions of RMB, and a majority of communities have no source of collective income, so many farmers failed to this cost. Therefore, alternatives need to be considered, such as convert labor force into investment, or through participation in the management of post-maintenance to change manual labor inputs into financing and so on. In any case, details of specific alternatives and the cost of labor standards should have serious consultations with the local residents. Fourth, minority residents also concerned about: how to make it possible and sustainable to restructure breeding methods? After exclusion and animal husbandry

59 . restriction, the barren hills and slopes where residents can graze freely before reduce, but it is not realistic to completely give up farming. First, the power animal which suit to the Top Mountain and slope land can not be completely abandoned; besides, many residents also plan to raise cows to increase revenue. From the results of the breeding restructure methods in the region of Erma village, the efficiency of new fence is not bad, but the cost is as high as 5,000 Yuan or above, also need 10 square meters of space, which is inappropriate to the crowded living Hui people community; furthermore, fresh milk preservation and processing need certain technique, so it is hard to expand. How to safeguard the high quality and inexpensive pasture is also a problem, because grazing species and arable land resources are not easy to resolve. Therefore, how to take measures to keep breeding and ensure the income of farmers need the involved investigation and research by agriculture, animal husbandry and other departments. Fifth, the residents in Erma village also asked: when the wood formed by biological engineering become useful, how to definite the ownership? Although this problem was not generally asked, still it is actually a very important issue and worth serious consideration and consultation of owners and communities in the project area. Part of residents point out that the use right of woods planted on the barren hills and slopes of the village within the small watershed during the construction of projects should belong to the villages, which will also be responsible for caring of them; the village community members should share the economic benefits from over cutting the wood. According to the experience of the social assessment group on a number of projects, we propose that project should clarify the responsibility of caring the trees in the form of contracts and the economic benefits after the trees become useful can use as collective economy of the corresponding village. However, in order to ensure the ecological effectiveness of these woods does not reduce by over cutting; the owners should commission the forestry departments of territorial government to strengthen supervision and technical services. Sixth, the residents also generally concern about: how this project link up with the returning farmland to forests and grassland project that has implemented before? The project is carried out after generally returning farmland to forest and grassland in the project area, so, part of small watershed does not need additional exclusion area, but still some small watershed need to implement and expand the exclusion area. Then what compensation policy will be taken on the new exclusion area? The social assessment group suggest that all levels of government of the project areas could consider giving priority to new task of the returning farmland to forest into the project area, trying to covering exclusion area (including the new area needed)of this project, on one hand to ensure that residents in the project area to enjoy the same policy and

60 . reduce working difficulty; on the other hand can also reduce the burden of compensation of the project to ensure that limited funds can be used on key project construction.

61 . VII Poverty and Gender

VII-I Poverty Situation in the Project Area

VII-I-I Overview

The total population Qinghai Province was 5 165 000 by the end in 2001, among which poverty population is 1 976 900, accounting for as high as 38.27 percent of the entire province total population. By the end of 2005, according to the data which is provided in “The 11th Five-year Plan Summary about Qinghai Province National economy and Social development”, the total population of the province was 5 180 000, Stricken people reduced 770 000 in the farmland and pasture area, and the proportion dropped by 23.3%. According to data from investigation of the social assessment group, the poverty population in project area is approximately 4 500, covering 8 percent of the various ethnicities of residents in the community .The lowest incidence of poverty is around 3% and the highest incidence of poverty does not surpass 10 percent. (For details sees the attached list: Community Baseline Investigation Statistical Table in the Project area)

VII-I-II Causes of Poverty Analysis

Project areas belong to relatively economic development regions of Qinghai Province, whose overall inhabitants poverty levels is nearly lower 14 percentage points than that of the province. However, there are about 8-10 per cent of the population living in poverty, of which 99 percent has been included in the target of rural minimum life insurance and enjoy the minimal needs subsidies. The amount of subsidies is from 150 Yuan per person to 500 Yuan per person every year and implemented by the civil affairs department. The causes of poverty of this part of the population are: (1) Less arable land and food rations can not be self-sufficient; what’s more, they have no surplus grain to develop family breeding and other business to increase income, resulting in the vicious circle of little grain causes less money and less money leads to less grain. Namely: less arable land - food shortage - breeding difficulty – smaller input in the field - low-yield - food gap further expanded……the highest proportion of this part of residents is Hui people who have less arable land per capita .According to statistics from the survey data analysis, the average household expenditure on food consumption of residents in the project area is up to around 40

62 . percent of total revenue8, so even if they have some extra income, which will also be used to solve food supply and can not increase production inputs. (2) Labor shortage. Another important reason for poverty is the lack of family labor. 35 percent of the household income of the residents is from the labor income of the migrant workers, some families are even unable to operate their own land because the families members are old or disabled .There are nearly 2 to3 families like this in every village, and they belong to the most difficult crowd. (3) Poverty caused by disease and education. The expenditure of medicine and education which is a great burden on the families in the project areas accounts for about 25% of their average expenditures. About 15 percent of poor families lead to poverty by medical treatment and education. As the government is vigorously promoting the new cooperative medical care, and putting the 6-year compulsory education and 9-year compulsory education into effect, which will help relieve the poverty situation caused by medical treatment and education in the near future.

VII-I-III The impact on the poor of the project

The positive effects of the project for the poor are roughly the same as the general population (see section 5.4 and 6.4 of this report). Potential risks and countermeasures are: (1) The reduction of arable and available land will lead to the labor shortage; the families which can not increase the family income through the labor movement will suffer from the basic survival difficulties. If the project occupies the land of this part of residents, we propose to replace land within the village to guarantee the stability of their basic income, since cash compensation can not solve their fundamental problem. At the same time, when the project provides livelihood transition support, it is better to have well-off families help the poor, strong families help the weak ones, friends and relatives help each other or other combinations through voluntary or consultations, to provide support for the production development of these families to ensure the support of the project can bear fruit. According to various investigation and observation in the project area, we found that residents in the local communities and relations between ethnic groups are relatively harmonious, so the helping and supporting in relatives, friends, neighbors and other primary groups can be organized. In addition, the village communities participate in part of the project management (such as management and protection of the new forest, and inspections of limited pastoral areas, etc.), whose staffing requirements may also consider arising from these

8 Information, in 2003and 2004, the Engel’s coefficient of urban and rural areas in Xining city is 0.40 and-++ 0.35.

63 . families and reward them from the compensation of the collective barren hills and slopes from returning farmland to forest in order to increase the income of these families. (2) The effect of the poor caused by disease and education is mainly from migrant workers job opportunities and the uncertainty of new livelihood support projects. To strengthen the labor skills training and enhance the competitiveness of their operating capacity are reliable approaches to reduce the risk.

VII-II Women

VII-II-I Women’s Quality and the Traditional Labor Division

According to the family members’ baseline data from field investigations, the women in the project areas, especially the women employees are generally in low level of education, illiteracy or semi -illiteracy and primary level education covers more than 80 percent of the women. They often work on the traditional crafts and rarely have the opportunity to receive new knowledge, learn new technology. The traditional role of women of all ethnic groups in the project area is to maintain almost all the housework and care for the elderly and children. They help in the field in busy seasons and do embroidery in the farm slack seasons; they hardly participate in the affairs outside the family, only men take part in the village affairs and the assembly, and there is almost non-participation of women. With the rise of the labor economy in more than 10 years, men labors and unmarried women go out to work the whole year or in farm slack seasons to earn money. The majority of women at home have more responsibility for caring for children and elderly, meanwhile, their Labor burden are gradually increased. That women plant and care for family while men go out to earn money becomes a gender labor division model of average family.

VII-II-II The Association Between Project and Women

The labor division model of “the Domestic Wife and Social Husband” makes the community participation of this project will be mainly to the participation of women. In order to increase women's participation and make it effective, meanwhile to improve women's economic and social status through project, the social assessment group recommends: (1) To enhance the mobilization of the project and create opportunities to strengthen women's participation and improve their awareness to participate in the project. Publicity mobilization of the project must ensure that women at home arrive

64 . at the scene, if necessary, can convene special meetings for women (This is particularly needed in the Muslim communities), so as to make them understand the project purpose, significance, content, participation mode and demands, also increase their consciousness in the participation. (2) To involve women in the community-based project management organizations and ensure their organization and decision-making participation. (3) To strengthen women’s skill training. Aiming at the weaknesses that women have less access to education, poor self-learning ability and slow to understand, the project can organize knowledge and skills training for them or set up special teams to give more attentive and meticulous guidance and training to women. (4) To enable women establish the confidence to participate in the project, apart from concentrating on skills training, the project can organize study tours or provide internship opportunities to broaden their outlook and arouse their enthusiasm. (5) In design of women’s participation project, in addition to absorbing the participation of women in decision-making and organizational management, the participation of women’s federations and other departments which are familiar to the situation of rural women is also very important. In the organization of training, we propose to increase the female experts and technical personnel to facilitate local women learn from them. This is particularly important in the training of Muslim women.

65 . VIII Institutional capacity building

VIII-I Institution Status

Currently the main executing agency of the project is “Xining, flood control and watershed management project office world bank project” the plan establishment of personnel is around 140 people. Internal labor division and its organizational structure decomposition as is shown in the attached drawing: Project leading group consist of a vice mayor, a director general of the Water Supplies Department and two deputy directors separately from Municipal Development and Reform Commission and the Water Supplies Department. The Leading Group mainly plays a key role in decision-making and macroeconomic coordination. Project Management Office is the specific institutions of implementation, whose members are mainly from Xining City water supply system. According to the requirements of World Bank, with the project forward, the Office should be separated from the Water Supplies Department and become a specialized agency of independent legal status, and should be given personnel , financial and property right in accordance with their function.

VIII-II Institute Improvement

From the view of field survey, we found two major problems existing in the Project Office: First, relatively a single source of personnel who are basically from the water supply system, so the knowledge of team is rather narrow and is not sensitive enough on the areas covered by the project, particularly those involving ethnicities, society, gender, religion, agriculture, animal husbandry and factors of the livelihood transition. The other is that the project does not get enough support and cooperation from the people's government of cities and counties or relevant departments, which will affect the project to co-ordinate all Kind of resources and the implement ability of complementary measures related to the project. The social assessment group can understand that the main reasons of the current status is that the project is still at a trial stage and the tasks are not specific, nor have a clear responsibility, therefore, the main energy of all departments and the leadership is on the work of the established plan. However, initial preparations of this project will have great impact on the smooth progress of the work for a formal project later. In particular, the design and content of project are most crucial and will directly influence the effectiveness of the project. Therefore, solving the problem of

66 . inadequate participation has become the work that government at all levels should focus on strengthening in current project areas The Social Assessment Group recommends: (1) Major leaders or leaders who are in charge of the project at all levels governments in project areas should pay more attention to this project, not only play a coordinating role in the horizontal level People’s Government, but also co-ordinate in the lower or higher levels of government and departments to match make the cooperation between the project office and other department also remove obstacles to create advantageous conditions for co-ordinate the use of various resources in the project area. (2) Clarify that ethnic, religious, women’s federations, poverty relief, civil affairs, education, health, agriculture, forestry, animal husbandry, environmental protection, transportation and other departments are all business support units for the project . It will be better to take experienced senior leadership in these departments as advisory experts and involve them in the project design and evaluation of the program to improve the reliability and feasibility of the project, meanwhile, to achieve more understanding and support in co-coordinating the use of related resources.

VIII-III Capacity Building

VIII-III-I Enhance Learning

This project is the first World Bank project declared in Xining City even Qinghai Province, therefore, there is a lack of personnel who are familiar with the World Bank’s policies and procedures related to the project. The Projects is related to flood control and flood management, watershed management, waste water collection, institutional capacity building, project management, and so on. Although they are not totally new business to the relevant departments, however, they are quite different from the project and related businesses led by the Government or function department in the past. This requires that the project office should study as soon as possible and familiar with the rules and regulations of World Bank and understand their concept and procedure in order to form suitable institutions, team, and ability, work plan in accordance with it. Learning content should include: the World Bank’s policies; the concept of the World Bank project; financial management; the location of project implementing agencies; requirements and quality of the project participation; objectives and methods of project management , policy development and improvement related to supporting the project; Multi-department and multi-level coordination and

67 . cooperation; advocacy and mobilization of the project; organizing farmers training and practicing sensitivity on ethnic, religious, social factors ,gender, and so on. The contents of the study above can be solved by two basic ways: One is the recruitment of senior experts with relevant experience into the project in a targeted manner from both within and outside of the province to solid team and strengthen the operational capacities of relevant departments, especially the function and role of agriculture, forestry, animal husbandry, and other experts can not be ignored .the other is to help raise the awareness of projects office staff and help them to enter the role through the guidance of World Bank experts and supports of the cooperation experts. According to the field research of the social assessment group, the consciousness, initiative and enthusiasm of current personnel in Xining Project Office are to be applauded. However, due to the staffing is still not in place, the existing burden of the work is too heavy and work-and temporary-bit are more frequently, which is not conducive to learning and improving professional level. At the same time, the basic staff of the project must remain relatively stable, which can help maintain the continuity and efficiency of work.

VIII-III-II Experience

Gansu Province, which is adjacent to Qinghai Province, has as long as more than 10 years project cooperation experience with the World Bank is in the western provinces. World Bank loan projects that Gansu Province has implemented involve water and soil conservation, water, electricity, agriculture, animal husbandry, health and farmers training with wide field, multi scope and level. They also have accumulated experience and trained a good many local experts in the project implementation. What’s more, there are many similarities between Gansu province's natural environment, ethnic, religious, humanities and social situation and those of Qinghai Province. Departments and government at all levels of the two provinces are holding the horizontal cooperation and remain harmonious relations. Besides, Gansu Province is next to Xining City, so it is very accessible. All these decide that Qinghai, with a lack of project implementation experience will mainly learn from Gansu Province. At present, Xining Project Office has hired Design Institute of Gansu Province to have project feasibility study, and invite experts of watershed management in the responsible for the typical small watershed management pilot projects, meanwhile, have staff training related to the projects. The Social Assessment Group noted that the feasibility of the flood control project on early warning systems can not be completed by the existing team of experts with

68 . established qualification in Gansu Province by the review of the World Bank experts, In response, the World Bank experts help the project office in Xining City get in touch with relative institution in Bengbu City of Anhui Province. Officials in the Xining Project Office have gone to approach in mid-January 2008. The social assessment group also noted that the World Bank is very concerned about and support this project, experts specified by the World Bank have both strict and detailed guidance to all the project-related aspects, which can not only help the project run smoothly in Xining in all aspects of the work, But also conducive to enhancing the confidence to do the project, and strengthening the relations of trust between the two sides.

69 . IX Public Participation

IX-I Information Publicity

Since the project establishment, all levels of government and departments in the project areas have learned the basic situation of the project through meetings, documents, and other means. As the project still in the stage of establishment and project approval, therefore, it has not been public widely through television, radio, newspapers and other public Medias. However, in various small watershed areas of the project, the publicity and mobilization work have already been carried out by municipal and county project office and the local government departments since October, 2007. The objective of the municipal and county project Office is to have the baseline survey of all communities of the entire watershed and develop publicity and mobilization work before March 2008. The survey of typical small watershed participative management presided by the cooperation experts covers south city and three small watershed of three counties and six communities; immigrant groups developed parts of investigation in the urban Xining; the communities and farmers’ baseline survey chaired by the social assessment experts covers 7 small watersheds and 15 different types of communities, including ethnic communities and religious temples, not only made investigation on the project demand and publicity of local residents , but also learned that the municipal and county project office have done in-depth pre-publicity publicity and mobilization work; besides, the village level community held the villager assembly ,therefore, the residents informed level is the relatively high. Information Publicity is a premise for public participation, with the date of the formal assessment of the project is approaching, we hope that the project office and governments at all levels in project areas to strengthen information Publicity and widen the channels of public information, meanwhile, to establish an effective information communication platform and maximally to ensure the public's right to know.

IX-II Project Demand and Attitude

Based on open participative field surveys conducted in the community, we found the residents in the project area put forward the following demands: Statistical table of Residents’ demands in Project area

70 . Residents’ Project participative demands Concentration degree To improve road infrastructure, harden and widen the road to make the 100% residents enjoy convenient traffic condition. To improve school facilities, increase teacher staff, improve the 77.8%% teaching quality and solve the problem of education. To constructs the canal and solves the human and animals’ potable 66.7% water problem To develop technical training, construct greenhouse facilities and 66.7% bring into livestock-breeding to develop breeding industry. The government should strengthen the employment information 55.6% service and skill training to solve the rural labor force’s hard hiring problem To built formal health care, and equip the doctors with high 55.6% technique and the necessary medical equipment. To manage dirty and chaotic drainage, and solve the problem of its 44.4% infiltration. To repair communications towers and improve communication 33.3% facilities. To engage in greenhouse cultivation of vegetables and develop a 33.3% variety of economic crop cultivation. To re -forest on barren hills, reduce soil erosion and improve the 33.3% ecological environment. To improve housing conditions, solve the housing difficulties. 33.3% To Implement the new rural reconstruction project. 33.3% To manage the littering issue 22.2% To strengthen “five guarantees” and establish pension institutions. 11.1% To construct cultural centers and enrich cultural life of the villagers. 11.1% Sources: According to the collect of participative assessment investigation and base line survey that the social assessment group did in Erma, Qingquan, Qiaoergou, Guanghua,Nalong, Huodong, Huoxi and Shangye village and so on. Data reflected on the table that the residents in the project area have high expectations on solving the infrastructure issue, followed by the hope that the project could increase training opportunities to help them improve production skills. Information on these requirements explains that residents in the project area focus on how to improve the community, family and personal development capabilities. Residents concern little about the religious and cultural issues and the demand for regional and ethnic differences is not evident.

71 . The social assessment group mainly concern about the rural communities in the project area, rural residents of all ethnic groups in the project area fully affirmed the efficiency of the project on flood prevention, disaster reduction, soil erosion reduction and ecological environment improvement. They thought this is a win-win project both for the country and themselves. At the same time, they also actively expressed their wish to participation the project construction and benefit from the project by their participation. Religious figures of Tibetan Buddhism temples, mosques did not worry about the negative impact of the project and welcome the project to develop in the local.

IX-III Participation Scheme and Mechanisms

IX-III-I Participation Scheme

(1) Participation approaches Organization means: the residents of all ethnic groups should participate in the project mainly basing on the existing villager groups or natural village .Since apart from the land requisition and immigration which are related to individual residents, projects and biological measures are implemented on the barren hills and slopes or in the village’s public channel. So no matter pre-launch organization, informed consultation, or maintenance and management of the latter period, are all suitable to carry out with village as the basic unit. Measures: In order to avoid the project participation of residents only having the forms, or even just the implementation of directives, the General Assembly of residents or residents of representatives must be held in the project preparation stage to have fully informed consultation so that the content of the project arrangements, design and implementation of the program will absorb the views and wisdom of the residents, and get their understanding and recognition. (2) Participation type The level of resident participation may be considered as three forms: infrastructure and ecological projects are mainly participated in the form of the village collective ;skills training, livelihood transition and poverty alleviation are mainly in the form of individual and family participation ;at the same time, in order to reduce the loan risks of the livelihood restructuring project and increase the driven effect by loan project, which may encourage the farmer’s families to combine cooperation group freely while the collective proposes the project plan . Resident’s participation should be voluntary and autonomous, government departments at all levels and the project office can not impose organization mode,

72 . participation way, the type and amount of fund, etc on the people of all ethnicities. However, the government departments and project office do need to provide relevant information services, safeguard the people’s right to know, and make the request of participation as simple as possible. Since the vast majority of villages in the project area belonging to multi-ethnic mixed community, in order to provide a good social infrastructure to implement the project, the government should encourage the participation of all ethnic groups and compose inter-ethnic working Group on the project so that the implementation of the project can strengthen while not undermine the relations among various ethnicities. (3) Participation in Decision-making Process The construction period of the project is rather long and the later operation will be longer. During this period will possibly present some situation that is not estimated in advance and need to amend the original plans and program. Therefore, the entire process of the project construction and operation need to maintain openness of policy and transparency of information to ensure that residents of the communities involve in the decision-making on any change of their own interests and have the right to know and full right to participate.

IX-III-II Safeguard Mechanism of participation

(1) Women’s federations, Civil affair, Poverty alleviation, Agriculture, Forestry, Animal husbandry and other departments in cities, counties, townships and towns should be involved in the project institutions, and give the relevant policy advice during the entire process of implementation of the project, meanwhile, they should provide ethnic community project experience ,knowledge and technical guidance. (2) To elect one from each corresponding ethnicities’ county or township cadres who are from project area and familiar to situation there, besides, they also have experience to join in the project management. If there is related ethnic cadre in the related department and they have rich experience, then these personnel should better represent this department into the project management team, to provide advice, communication services and play a supervisory role. (3) To set up a Service Association in the township for farmer’s production and operation, its members should include the township agricultural, animal husbandry and veterinary, forestry, science and technology department cadres and experienced representatives in every village. They will become an important bridge in the communication of village farmers, counties, township technical support Agencies, and county and township project offices. They will be directly involved in the planning

73 . design, implementation, evaluation and other activities to ensure that farmers in the township-level participation in the implementation. (4) To elect villager representatives in every village to form project management teams, and organize residents to participate in specific activities; members in the management team should be considered factors like gender, ethnic, religion and so on in order to avoid significant omission when considering the needs and wishes of members in the community. (5) In multi-ethnic mixed villages, if the project can not cover all, at least to ensure that all ethnic groups in accordance with the same proportion, and based on the principle of voluntary participation in project. The scattered ethnic minorities should be directly included in the scope of participation under the premise of their own willingness (6) Cities and Counties should implement the project in accordance with its content, implementation steps and the needs of the project content to maintain regular contact and close communication and consultation with the villagers in the project area, the scene should be in the village to facilitate participation by the masses. (7) Through the relevant training to absorb the local residents as far as possible to participate in the project implementation process. (8) Finally, as the basic participation guarantee, the project should provide the necessary fund support in activities like promotion, mobilization and participation. In order to make arrangement of the consultation and participation above more concisely, more illustration provided in the table below.

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Stage Main tasks Specific content Target Organizer Fund resource Time

The Project design, • Organizing experts to have baseline research and Safeguard the right to know Project offices of city first Demonstration, participatory watershed plan, to understand needs of each kind of resident in and county Project Office May, 2007 to stage propaganda and and aspirations of residents, and know local community, and their mobilization knowledge. participation independency March, 2008 • To provide guidance and promotional materials to and enthusiasm; forms the residents in project area, through meetings, feasible project plan radio, notices and other forms of project publicity plan The Collect the feedback, • To identify the specific participation way of every Ensure that the program is The city and county Project Office April to second and further improve project community specific and feasible; project office; towns December,20 stage the project design • To establish the necessary institutions or Ensure the full participation government and the two 08 organizations and clarify the organizational functions of community residents; village committees • Identify family participating plan Guarantee funds • Organizing corresponding training • Clarify relevant sources of funding The The specific • Continue to conduct training Make the residents have The city and county Project Office January to third implementation of • Implementation of the participation plan appropriate skills; project office; towns December, stage project • Complete part of the project tasks production and lifestyle government and the two 2009 adjustment to the project village committees The Continue to • Communities and farmers have assessment on Maintain the dynamic The city and county Project Office January to fourth implement projects, project construction and participation benefit and optimization of project plan; project office; World March, 2010 stage mid-term assessment, make recommendations for improvement To promote community and Bank and fine-tune the plan • residents adjust to the new Project Office and the independent expert assessment Community Resident in accordance with production and lifestyle; to and make recommendations for improvement Representatives or the the problems which • create sustainable Continue to receive relevant training two village committees may arise to • Continue the implementation of the project plan development ability; To resolve project risks The Continue to • Community and the residents have independent Ensure that the project tasks The project Project Office March 2010 fifth implement the project assessment on the project benefits completed on schedule; Office World Bank to the stage plan and have • Ensure the win-win project completion of Organize experts to have project assessment and assessment on the and get general agreement of projects approval to the project Resident project results community and residents. Representatives or the ;acceptance two village committees

75 . The Operation and • Maintenance of infrastructure To ensure the sustainability The project Project Office Is expected sixth maintenance of the • Maintenance of the outcome of the ecological of project results, and Office World Bank after 2013 stage latter part of the continued to benefit construction resident representatives project • communities and residents Continuing to improve livelihoods or the two village • Improvement of the related system committees

76 . X Monitoring and Assessment of Social Economic Effect

X-I The Target, Subject and Task of Monitoring and Assessment

Monitoring and Assessment of the project is an important part to ensure the economic and social effects of this project, also an important correcting and participation mechanism. To the grass-roots community residents, Monitoring and Assessment is an important arrangement to assure and reflect their participation. In order to ensure the extension and objectivity of Monitoring and Assessment, the plan propose: to establish independent, but mutual communication assessment and monitoring teams by four representatives of the Government, World Bank, Project Office and Residents , the focus of the monitoring and Assessment of each team is: Government supervisor assessment team: Mainly concern about the implementation capacity and efficiency of the Project Office and whether the environmental, ecological, social benefits, SA, MEGDP plans are implemented, whether farmers face problems or help them to solve problems that may arise, so as to avoid accumulation of the problems. Their memberships include officials from Departments of agriculture, forestry, animal husbandry, science and technology, poverty alleviation, women’s federations and civil administration. World Bank supervisor assessment team: mainly concentrate on the project design, technology guidance, supporting policies, participation degree of relevant departments involved in the project, project progress, the implementation effect of EMDP, the residents participation and satisfaction degree, the implementation of rules and regulations, the reasonable fund usage and the work carried out by the other three Monitoring and Assessment teams, and so on. World Bank assessment team consist of independent experts of assessment, immigration, participatory watershed management, finance, water conservation, agriculture, forestry, and other aspects who are employed by the World Bank The Project Office supervisor assessment team: to urge the relevant government departments and community residents implements a responsibility system and to assist and promote the supervision work of Government, Resident Representative, World Bank assessment group and put forward concrete proposals to perfect MEGDP. The vast majority of the content of EMDP is also appropriate for other communities. Resident representative supervisor assessment team: mainly to have Monitoring and Assessment on the implementation situation of MEGDP by village-level project management team, the effect of the project implementation, and whether the project can achieve objectives on schedule. They should be elected from the farmers who are involved in the project, represent various ethnic groups, and have the courage to

77 . speak; moreover, they are not overlap with the team members in the village administration.

X-II The Basis, Principles and Main Contents of Monitoring and Assessment

The main principles of Monitoring and Assessment of the project: China’s national and local relevant laws, administrative regulations and technical standards; World Bank guidelines of the business; The project’s relevant legal documents, including technical documents, project reports, assessment reports and the loan agreement and so on; The project implementation plans, statements and the related report. The project Monitoring and Assessment should obey the following principles: To select rural family and village samples prior to the implementation of the project, investigate the socio-economic information of the survey base year, and establish the basement database; After the implementation of the project, conduct regular or irregular follow-up survey, monitoring the samples of village and families in the project area after the implementation of socio-economic conditions; To have accurate data collection and data analysis and make scientific, objective and impartial evaluation of economic social benefits before and after the implementation of projects; To report the Monitoring and Assessment situation timely to the project management agencies and the World Bank, so they can grasp the social and economic consequences of the project timely and have dynamic decision-making. The project Monitoring and Assessment focus on the economic social benefits and divide into two levels, communities and residents, the main contents are: The reasonableness of the projects and the provision of related services; Whether the community and residents access to these services and how to use them; The immediate impact by the services provided directly The Monitoring and Assessment process should not only concern the process, including the participation procedure of communities and residents, the effectiveness of organizations etc, also should concern about the results, for example: whether the ecological environment is improved, whether droughts and floods, erosion have a significant mitigation; whether the infrastructure such as transportation, irrigation and so on has been markedly improved; whether the crops are appropriate to animals,,

78 . whether residents’ employment opportunities have increased and the labor shift is smooth, whether the income of farmers increased and whether it is convenient for residents to see doctors, and so on..

X-III Basement Investigation

During the process of investigation, the assessment group chose 15 communities to have investigation, in 10 of which, around 130 residents of all ethnic groups carried out questionnaire investigation according to the level of economic development, ethnic composition of residents, livelihood type, the region and other factors. Meanwhile, the social assessment group also instructed the project office of three counties to assist investigation on all the watersheds of the project areas based on the investigative tools provided by the social assessment group. Villages in the project area have a routine annual report of households’ basic conditions of rural residents to the township; therefore, the basement of communities and farmers in the project area is relatively clear. See Schedule 3 and 4.

X-IV Monitoring and Assessment Index

X-IV-I Community Monitoring and Assessment Index

Community monitoring and Assessment includes infrastructure, ecological environment, economic development, participation and recognition, and other aspects. The social assessment group proposes to use the following specific indexes: (1) Infrastructure The level of village road and the accessible situation in the Four Seasons Irrigation facilities and utility “Four-joint” (water, electricity, TV and telephone) condition and the ratio Clinic settings and medical services capacity School building status and the enrollment graduation and promotion rate of school-aged children , etc. (2) Ecological environment The effective exclusion area and the restoration of vegetation Whether forest products increase or not Whether the channel runoff can use or not The times of flash floods; arable land and housing destruction, personnel loss, etc. (3) Economic development

79 . Whether form the new industries The change of labor migration scale The changes of residents’ per capita income and expenditure Changes of poor families and poverty population Changes of residents’ housing type and area The increase amount of agricultural machinery and consumer durable goods, etc. (4) Participation and self-identity Community participation Residents’ population of participation and benefit Project engineering maintenance Destruction or stolen of project infrastructure, secret herding, etc.

X-IV-II Farmers Monitoring and Assessment Index

Farmers monitoring and assessment can be considered from two aspects, participation and benefit. Specific indexes for the following recommendations: (1) Participation Participation in the project construction Participation in planting ecological forest etc Provide local knowledge The times of training acceptation and training content Access to funding support Participation in project design, facility maintenance etc. (2) Benefit situation Changes in household income sources Per capita net income (Yuan) Production and living expenses (Yuan) Type of housing and the per capita housing area (square meters) Household appliances and other consumer durable goods (pieces) Farm vehicles Whether the wounded and sick can get prompt treatment Direct income from project participation, etc

X-V Monitoring and Assessment Cycle and Information Publicity

Monitoring and assessment, including two basic forms, annual assessment and periodic assessment .Four monitoring and assessment groups can carry out their work separately or together with other groups. It will be better to have a joint consultation of monitoring and assessment every year. The fundamental purpose of monitoring and

80 . assessment is not to make troubles, but to find reasons or countermeasures of the problems and solve or reduce them. Therefore, monitoring and assessment is a constructive mechanism. Consultation of monitoring and assessment of projects is organized and coordinated by the project office, so the running fees should be incorporated into the project budget.

The work of monitoring and assessment by governments, project offices, World Bank’s should form into report and submit to the project office, governments in the project area, World Bank and communities. What is more, the report should be public in the World Bank and government website, community and village affair column and so on to accept the supervision from all sides, in particular to ensure that residents in the project area are informed. Supervisor on behalf of the residents group’s views must get the agreement of the community residents and then submit to the project office, government and World Bank by the text form after the censor of representatives from community residents .Given residents in the project area do not use ethnic minority language, the assessment report domestic text only provide the Chinese version.

81 . XIConclusion and Suggestion

XI-II Project Necessities and Social Suitability

Qinghai has a higher proportion of China’s ethnic minority population and is one of the less economic developed provinces. Xining City in Qinghai Province is the centre of its politic economic ,cultural exchanges and traffic. The total economic output covers about two-fifths economy gross of the province, which plays an important role of radiation to the province’s economic and social development. As the special geographical structure, Xining City lies in the intersection of Huangshui Valley belt, Huangshui main stream and the major tributaries Nanchuan River, Beichuan River ,coupled with the rainy season here is mass and more heavy rain storms, which is easy to cause flood and bring catastrophic damage to Xining, even the province’s weak economy. At the same time, traditional farming communities are mainly distributed in both sides of the Huangshui River channel and develop irrigation agriculture by surface water, so mountain torrents and other natural disasters also pose a serious threat to the rural life and property safety of residents. The project aims to strengthen the flood control; watershed management and flood warning capacity in the project area, at the same time enhance the functions of living and industrial sewage treatment capacity, which is entirely appropriate for the economic and social development of the project area.

Before the implementation of this project, river management, drainage channels, landscaping and small watershed returning farmland and other related and ecological projects have been implemented in the urban district of city and counties in the project areas, whose ecological, economic and social effect have initially manifested and the residents welcomed the project. Owing to the above-mentioned project experience, residents in the project areas have relevant experience of participation and reasonable expectations to the project; furthermore, they also have psychological preparation for the negative impact of the project. According to field surveys of social assessment group, small watershed management participation, immigration and other independent third-party investigation group, we can confirm: the urban and rural residents of all ethnic groups welcome this project; meanwhile, they have understanding and support on the project engineering and non-engineering measures. The benefit of the previous projects is significant, and the potential negative impact on the project can be controlled and prevented. Other sensitive points like ethnic, religion, cultural and substance can be ruled out, therefore, the implementation of projects has the availability of social conditions and there is no unforeseen social risk.

82 . XI-II Project Participation Design

In the existing project content design, the content about the communities and farmers participation is not specific enough, the diversity needs of farmers participation is not fully reflected, therefore, we propose the project office to promote survey activities of small watershed participation management as soon as possible and have more in-depth and meticulous informed consultation with the community residents, trying to form a more specific and targeted participation plan. Informed consultations are essential and necessary in the entire process of the project .It is also a premise to improve and fulfill the project design. At the same time, aiming at the policy of “those who benefit should share the financing investment ”, the project office and the leading group have formed the thought that converting labor force investment into financing investment, which is in line with the aspirations of the community residents, hoping it can be confirmed as soon as possible in the form of official documents, This is not only a compensating people policy to alleviate the burden on communities and farmers, but also an important policy which can stimulate the initiative, awareness of the community residents to participate in project and enhance social recognition of the project.

XI-III Gender, Poverty and Development

The labor division model of “the Domestic Wife and Social Husband” and the fact that the female’s average education is generally lower than the males’ lead to the regardless ness of the female participation demands. However, the present male capable labor forces go out to work massively, the general families more and more depend on the income from work, so women not only dominate the family life, also gradually become the main force in the community public affairs. Therefore, the community and residents participation condition of the project will directly affected by the women’s participative capacity and degree. Hope that in the publicity and mobilization of the project, informed consultation, and organizing participation in the project area, we must pay special attention to the protection of women's rights, and develop informed consultation activities and skills training aiming at the characteristics of women. If this project can effectively promote the participation of women, their position in families and communities will be improved, so their ability and confidence will be significantly enhanced.

Because of a lack of labor force and basic means of production, plus the poor laboring skill and fund insufficient, the poverty groups are easy to be marginalized in the project participation. Therefore, we propose in the session of informed

83 . consultation between communities and farmers, the way to help poverty-stricken family should be specifically discussed, forming that party member households or well off ones combine with the poverty-stricken households in helping and supporting mechanisms and absorb the poor households into the project activities. At the same time, although the project area in Qinghai Province is relatively developed regions, however, Qinghai Province’s overall economic and social development level is relatively low, the lack of infrastructure is the universality obstacle when the community residents seeking for development. Therefore, this project should fight for the strong support of the relevant departments and all levels of government co- ordinate resources. The residents should also take the project construction as an opportunity to promote infrastructure construction of the community and create conditions for the development of residents and community, meanwhile, lay the foundation for the community oriented action to help the poor.

XI-IVEthnic Minorities

Minority residents in the project area are mainly Hui and Tibetan, except that Hui people relatively form more mono-ethnic communities, many Tibetans live together with Han and Hui people, which is a long term pattern. The ethnic relation among ethnicities is relatively harmonious. Against the relative group living ethnicities, the assessment group propose a “Ethnic Minority Development Plan”, the plan is necessary to enhance the development of ethnic minority groups and raise positive political and social impact of the project, which is hoped to follow in the entire project Process. Meanwhile, the social assessment group propose that the minority and Han mixed living community where the degree of livelihood and development is not significantly different should be based on the reality and stressed the community's overall interests and common development, otherwise it will trigger new contradictions and conflicts. (Please refer to the detailed contents of the EMDP)

XI-VImmigration and Land Policy Framework

There are some immigrants in urban areas and Huang Yuan County where there is land expropriation and demolition, no immigrants in Datong and Huangzhong County. People to be affected by land acquisition and resettlement are the Hans in the project context, and no ethnic minority groups involved. In this regard, project safeguard document RAP will guide resettlement implementation and the Process Framework direct hill closure in watershed rehabilitation (cf. RAP and PF). The situation of household’s contract in the village immigrants is needed to have special

84 . consideration. If the farmers are willing to sign the land, or mainly rely on the land, the assessment group proposes to replace the land through consultation in the community. Meanwhile, to consider the combination between the resettlement of immigrants and urbanization, of which the important condition is the sustainability of immigrant’s livelihood and the opportunity for entering the urban life. Anyway, the key is to have fully informed consultations on the resettlement plan with the residents and respect their wishes as far as possible. In addition, afforestration on the public barren hills and slopes to maintain water and soil and restore the ecology needs to solve the new forest property right ownership and the benefit distribution policy, which is suggested to be an important point and should form a clear policy during the informed consultations between the Project Office and the residents.

XI-VI Cultural Relics

There are two points need to clarify in the ethnic, religious and cultural sensitivities of this project: First, Tar Temple, which is located in Lu Shaer Town of Huangzhong County, is a famous temple of Tibetan Buddhism, the national conservative heritage unit. The assessment group specifically went to visit the Tar Temple and senior monks, illustrating the projects and seeking for their advice. They clearly expressed that they had understanding on the project and the project construction will positively improve the surrounding environment of Tar Temple while do not have negative impact. Datong Guanghui Temple, which is another important Tibetan Buddhist Temple, lies in Dongxia town. After field investigation and asking the local residents for advice by the assessment group, we found that there is a long distance between the project construction areas to the sacred space under the safety control. No sensitivity issue exists. Secondly, the project within the Muslim community did not have demolition activities, so will not affect mosques and Muslim religious activities of residents.

XI-VII Institutional Capacity-building and Public Participation

There are four points that needed to pay attention to during Institutional capacity- building and public participation: (1) Public Participation of the current projects has not been carried out and related work need to be developed as soon as possible. The purpose of publicity is not

85 . simply to ensure that the various interest groups’ right to know also is to ensure the public's right to participate. (2) The project Office of city and county levels need to recruit professionals from society so that the knowledge structure , team ability structure can adjust to the comprehensive characteristic of the project. (3) The project office should fight for the support and participation of the leaderships and relevant functional departments at all levels to enhance working efficiency and effectiveness. (4) Community Participation should base on the project content and actual need to establish the appropriate organizations and promote residents participation and enhance the participation sustainability in the form of organization.

——The End——

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