INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE

I. Basic Information Date prepared/updated: 11/22/2009 Report No.: AC4740 Public Disclosure Authorized 1. Basic Project Data Country: Project ID: P118870 Project Name: Sri Lanka: Emergency Northern Recovery Project Task Team Leader: Nihal Fernando Estimated Appraisal Date: November 25, Estimated Board Date: December 17, 2009 2009 Managing Unit: SASDA Lending Instrument: Emergency Recovery Loan Sector: Irrigation and drainage (60%);Water supply (15%);Roads and highways (15%);General agriculture, fishing and forestry sector (10%) Theme: Conflict prevention and post-conflict reconstruction (100%) IBRD Amount (US$m.): 0.00 Public Disclosure Authorized IDA Amount (US$m.): 65.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 0.00 0.00 Environmental Category: B - Partial Assessment Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) Yes [X] No [ ] or OP 8.00 (Rapid Response to Crises and Emergencies)

Public Disclosure Authorized 2. Project Objectives The Project Development Objective (PDO) is #to support the Government of Sri Lanka#s efforts to rapidly resettle the IDPs in the Northern Province#. It will be achieved through: (A) Emergency Assistance to IDPs; (B) a Work-fare Program; (C) Rehabilitation and Reconstruction of Essential Public and Economic Infrastructure; and (D) Project Management Support.

3. Project Description Component A: (Emergency Assistance to IDPs) would be focused on providing assistance to resettled households to re-engage in livelihood activities such as agricultural farming and marine fishing. Specifically it will provide financing to: (i) meet costs related with mobile land task forces, surveys and studies required to rapidly restore contested property rights of the resettled people; (ii) conduct demining awareness to

Public Disclosure Authorized IDPs, project staff and contractors; (iii) clear thick vegetative growth of paddy lands to be able to resume land preparation for cultivation; and (iv) provide seeds, basic and miscellaneous agricultural and fishing implements to the people to be able to start paddy farming and marine fishing immediately after the resettlement. Component B: (Work-fare Program) - is designed to provide labor employment to the returnees immediately after their resettlement in the form of small scale labor intensive repair and rehabilitation works of village level infrastructure and facilities. Through the program, about 45,000 IDPs, one member from each IDP household will be employed as daily wage laborers to provide a minimum of about 50 labor days of guaranteed work employment. Fulfilling a dual objective, the work-fare program will provide short-term and immediately required cash to the people; and supply the urgent labor intensive repair works that are essential to restart the social and economic activities. This component would also cover the costs of construction material and implements and administration of the work-fare program.

Component C: (Rehabilitation of Essential Public and Economic Infrastructure) - This component will provide assistance to repair, reconstruct and restore vital public and economic infrastructure and facilities damaged by the war and that are dysfunctional or partly functional at present. This would enable the resettled and conflict affected people to: reestablish inter-village connectivity; have access to schools, markets, and safe drinking water; and have access to essential public and technical services from the Government#s civil administration. Specifically it will provide assistance to (i) rehabilitate damaged irrigation schemes to enable the returnee farmers to have reliable supply of irrigation water for crop production; (ii) rehabilitate rural roads; (iii) restore drinking water schemes to improve reliable and adequate supply of clean drinking water to beneficiaries; and (iv) rehabilitate and reconstruct public buildings and facilities.

Component D: (Project Management, Oversight, Monitoring and Evaluation, and Special Studies) - This component will support the Government in implementing the project, coordinating all project related activities, monitoring and evaluating project inputs, outputs and results, carrying out financial management, technical, procurement and safeguard audits. All incremental staff hired, incremental operating costs, and procurement of goods associated with the implementation of the project, such as vehicles, equipment and office facilities, would be financed under this Component.

4. Project Location and salient physical characteristics relevant to the safeguard analysis The Project will be located in the Northern Province of Sri Lanka. Northern Province has an area of 8,884 square kilometers. The province is surrounded by the Gulf of Mannar and to the west, Palk Strait to the north, the Bay of Bengal to the east and the Eastern, North Central and North Western provinces to the south. The province is divided into two distinct geographic areas: and the . Jaffna peninsula is irrigated by underground aquifers fed by wells whereas the Vanni has irrigation tanks fed by perennial rivers. Major rivers include: Akkarayan Aru, Aruvi Aru, , Kodalikkallu Aru, Mandekal Aru, , Netheli Aru, , Pallavarayankaddu Aru, , , Piramenthal Aru, and Theravil Aru. The province has a number of , the largest being Jaffna , Nanthi Kadal, Chundikkulam Lagoon, Lagoon, Uppu Aru Lagoon, , Nai Aru Lagoon and Chalai Lagoon. Most of the islands around Sri Lanka are to be found to the west of the Northern Province. The largest islands are: Mannar Island, Kayts, Neduntivu, Karaitivu, Pungudutivu and Mandativu.

The Northern Province tends to be hot and dry in the dry season (February to September), and moderately cool and wet in the wet season (October to January) when the North-East monsoons take place. The climate of the Province is tropical and therefore during monsoons there is always the chance of a deluge. In the lowlands the climate is typically tropical with the average temperature is around 28º Celsius to 30º Celsius for the year. Relative Humidity varies from 70% during the day to 90% at night. Annual rainfall is less than 1250 mm in the north west and south east of the Inland.

Majority of the people earn their livelihood as farmers, fishers and professionals in the civil and business sectors. Agricultural is the prominent source of income for the people of the province. The major agricultural crops produced in this province are Paddy, Chilli, Red Onion, Black gram, Green gram, Cowpea, Groundnut, and Bombay Onion. Other agricultural products are fruits such as Banana, Mango, Papaya, Lime, Orange, and Guava. Major vegetables grown here are Beans, Capsicum, Tomato, Cabbage, Beet root, Carrot, #Vendakkai#, Snakeguard, Bitterguard, #Brinjal#, Ashplantain, Long Beans, Manioc and Sweet Potatoes.

The Province has a wide range of flora and fauna, although there are hardly much information of their status. The Province has wide range of ecosystems spanning from deep jungles in the interior lands, scrub forest, thorn forest, drylands, wetlands and as well as beaches, , salt marshes, , and to coral reefs of the Bay of Bengal and Gulf of Mannar that provide habitat to diverse array of fauna and flora.

5. Environmental and Social Safeguards Specialists Mr Sumith Pilapitiya (SASDI) Ms Asta Olesen (SASDI) Ms Darshani De Silva (SASDI)

6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: The potential for adverse and irreversible environmental and social impacts by the proposed project are expected to be negligible since the Project supports the following activities: (a) economic security through rehabilitation of damaged agriculture and other livelihood assets, including restoration of property rights, clearing farmlands, provision of seeds, essential agriculture activities (b) community work fare program where the community will be involved in small scale, labor intensive, village and hamlet level public works such as cleaning abandoned dug wells, clearing construction debris from the aftermath of the conflict and clearing access roads; and (c) rehabilitation and improvement of essential infrastructure, such as rural roads, drinking water supply and sanitation facilities, reconstruction and renovation of existing public buildings. None of the above activities would give rise to significant adverse environmental issues if environmental management is mainstreamed within the activities during implementation. From a social safeguards perspective, the project activities are expected to have limited negative impact, if any, provided the social management framework is followed during implementation.

The potential impacts that may likely to arise from Component A and C of the project as described below:

Component A: Rehabilitation of Damaged Agriculture and Other Livelihood Assets

Clearing of farmlands: The prolonged conflict may have resulted in agricultural land being converted into shrub jungle. Clearance of the shrub jungle is a pre-requisite for recommencing agricultural activity for the resettled community. Precautions must be taken to prevent forest fires when clearing shrub jungle since burning is the method of choice for disposal of removed shrubs. Soil and water pollution due to the use of chemicals in agriculture should be avoided by better using agricultural practices. Significant adverse environmental impacts can be created during clearing of farmlands if the community attempts to encroach into environmentally sensitive areas or conservation land.

Component C: Rehabilitation of Essential Public and Economic Infrastructure

Rehabilitation of Irrigation Tanks, Canals and Ponds: Rehabilitation of irrigation tanks, canals and ponds may include de-silting and rehabilitation of the earthen bunds and reconstruction and repair of the sluice gates (in the case of larger tanks and in some irrigation canals). The more significant adverse environmental impacts of such rehabilitation activities are not on site but off site. Such off site impacts include the disposal of dredge material, which is a serious concern and must be disposed off in designated locations.

Rehabilitation of Rural Roads: Rehabilitation of existing rural roads would include resurfacing with gravel, bitumen or concrete. The exact surface type will vary depending on the use of the road and will be determined during project implementation. There may be a possibility of minor road widening in some instances, particularly based on road safety reasons. The major direct environmental impact associated with rural roads is erosion. Construction in the rainy season or improper construction methods which leave soil exposed unnecessarily can cause significant erosion. In forested areas, high traffic volumes and speeds could have adverse impacts on wildlife movement and adequate precautions have to be taken to protect animal migration routes from being interfered with. This is especially applicable to elephant migration routes and its interference would result in increased human-elephant conflict in such areas.

Drinking Water Schemes and Sanitation Facilities: Rehabilitation and reconstruction and improvement of water supply schemes include activities such as construction impacts, expansion and rehabilitation of the water supply source, wells and intake structures, transmission mains and pumping stations and treatment works and distribution systems. Rehabilitation, reconstruction and improvement of water supply schemes undertaken by the National Water Supply and Drainage Board (NWSDB) will be medium schemes supported under the Project. The smaller schemes supported by the Project would be community water supply and sanitation schemes largely constructed and managed by the communities. The rehabilitation, reconstruction and improvement of water supply schemes and sanitation facilities implemented by the NWSDB are medium scale sub-projects and would involve a greater probability for adverse environmental impacts.

Rehabilitation, Reconstruction and Improvement of Public Buildings: The Project will support the rehabilitation, reconstruction and improvement of public buildings damaged by the conflict. Adverse environmental impacts of such activities are minimal since these buildings were already on site and damaged or destroyed, therefore its potential impacts are construction and occupation related. The potential adverse environmental impacts of rehabilitation, reconstruction and improvement of public buildings are related to site clearance and debris disposal. Disposal of waste water and sewage will also be a problem during occupation of the buildings.

Applicable World Bank Operational Policies

OP/BP 4.01 Environmental Assessment. Activities under the Components A and C will include only rehabilitation or reconstruction of damaged land areas and infrastructure and in most cases will not require to carry out activity specific EAs.

OP/BP 4.12 Involuntary Resettlement. Physical works under Component A and C will comprise reconstruction of damaged infrastructure (irrigation, drinking water, roads, and public buildings) and no construction of new buildings, which means that there should be no or only very limited need of land acquisition under the project.

OP/BP 4.11 Physical Cultural Resources : The proposed operations pose limited risks of damaging physical cultural resources since physical works will only comprise reconstruction/ rehabilitation of existing war damaged structures.

OP/BP 4.10 Indigenous Peoples: The issue of ethnic and religious affiliation is a larger factor in determining vulnerability at national and local level in the present Sri Lankan context. It is not expected that stand-alone Indigenous Peoples Development Plans (IPDP) will be justifiable, as the main investments in the ENREP goes to reconstruction of war damaged infrastructure.

2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: The above mentioned impacts will also have a potential to cause indirect and long term impacts on the environment and natural resources. Resource extraction has the possibility of degrading the land, reducing the watershed and hence the quality and quantity of water available for natural ecosystems, people and their economic activities unless it is sustainable. Also if the investments are provided for activities to take place even closer to sensitive ecosystems, through time there is a high potential for communities to encroach into these areas. Therefore, it is essential to ensure environmental management plans are built into all activities under the Components A and C incorporating mitigation measures taking direct, indirect, short-term and long-term impacts into considerations.

3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. Not Applicable

4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. Sri Lanka is one of the leading countries in the South Asian Region in enacting environmental legislations. Its concern for the environment dates back to over two and a half millennia. The constitution of the Democratic Socialist Republic of Sri Lanka under chapter VI Directive Principles of State policy & Fundamental duties in section 27-14 and in section 28-f proclaim that, "The state shall protect, preserve and improve the environment for the benefit of the community", The duty & obligation of every person in Sri Lanka to protect nature and conserve its riches# thus showing the commitment by the state and obligations of the citizens. The constitution of Sri Lanka contains several provisions, relating to the environment. (i.e. Article 27 (14) and Article 28). The 13th constitutional amendment introduced a new level of institution for environmental protection and management. Therefore, provincial government also has legislative and executive power over environmental matters. (i.e. Article 154 (A) 9,19 and (III) 17).

The National Environmental Act (NEA) provides conservation and development guidelines for natural resources including water, forest, flora and fauna in Sri Lanka. The 1988 amendment transformed the Central Environmental Authority (CEA) to enforcement and implementing agency. The CEA issues Environmental Protection Licences (EPL) to medium and high polluting industries under the section 23 (A) of the NEA. Since 1994 issues of EPL to low polluting industries has been delegated to relevant local authorities. Under the section 7 (1), there is provision to establish an Environmental Council in collaboration with respective line agencies to advise the CEA. The section 9 (1) provide necessary guidelines to establish District Environmental Agency and District Secretary is the Chairman of each District Environmental Agency. Therefore, CEA has special power to monitor, assess and advise the government on critical environmental conservation, management and development issues. The Environmental Management functions of CEA, widely included, land use management, natural resources management and conservation, management policy for fisheries and aquatic resources, management policy for wild life, management policy for forestry and management policy on soil conservation. In addition to this, there are number of legislations in relation to various agencies that will participate in this project providing guidance to environmental safeguards in conducting such activities.

In view of the emergency nature of the Project (processed under OP 8.0) and the proposed areas for IDA financing, which will depend on the geographic areas that have been demined (which is still on-going) and based on an assessment of the extent of damage and destruction, which will determine the exact interventions by the Project, it is not possible to undertake an Environmental and Social Assessment prior to appraisal of the Project. At this stage, typical interventions required of the Project are not firmly known. On that basis, an Environmental and Social Assessment and Management Framework (ESAMF) has been developed, which will serve as a template for undertaking environmental and social assessment and management of Project activities to ensure environmental sustainability, prior to fund disbursements. ESAMF has provisions to assess and mitigate all potential issues comprehensively. It has assessed the likely impacts as described earlier arising from possible project interventions and has provided Codes of Practices (COPs) to identify mitigatory measures to minimize adverse environmental impacts arising from Project activities and directions to prepare Environmental Management and Monitoring Plans (EMPs) to guide the implementation of these COPs.

Physical works under Component A and C will comprise reconstruction of damaged infrastructure (irrigation, drinking water, roads, and public buildings) and no construction of new buildings, which means that there should be no or only very limited need of land acquisition under the project. Since the exact location and nature of project interventions are not know at appraisal, and will be determined according to the criteria agreed upon between the World Bank and the Government of Sri Lanka, the ESAMF provides guidance and procedures to be followed in case land acquisition is unavoidable. While resettlement and land acquisition will be kept to a minimum, and will be carried out in accordance with these guidelines, the ESAMF provides guidelines, principles and instructions to compensate negatively affected persons to ensure that they will be assisted to improve, or at least to restore, their living standards, income earning or production capacity to pre-project levels regardless of their land tenure status. The ESAMF guidelines and procedures for the acquisition are in accordance with the National Involuntary Resettlement Policy of Sri Lanka and the World Bank OP 4.12.

In order to manage potential risks while recognizing the emergency nature of the operation and the need to provide immediate assistance, the following general guidelines apply:

# No sub-project requiring land acquisition will be allowed prior to resettlement of the affected families as that would violate OP 4.12#s requirement of consultations with PAPs. # No sub-project will be allowed which causes displacement of more than 200 people or result in more than 10% loss of productive assets. # In compliance of the Bank#s Operational Policy 4.12, in case of less than 200 Project Affected People (PAPs), an Abbreviated Resettlement Framework shall be followed in order to restore housing and issue economic compensation for loss of land and livelihood through a consultative and mutually agreeable process. # No land acquisition can take place of lands subjected to competing or contested claims.

A Project Management Unit (PMU) will be set up under the Ministry of Nation Building and Estate Infrastructure. The PMU will have overall responsibility in ensuring compliance with social and environmental safeguards as outlined in the ESAMF. A designated Environmental Officer and a Social Officer will be located in the PMU whose responsibility is compliance oversight. Since there will be many small activities supported under the Project, designated District Environmental Officers (DEOs) and District Social Officers (DSOs) will be stationed in each Deputy Project Director#s Office in the Districts of the Northern Province. The DEO and DSO will be responsible for regular monitoring of environmental and social safeguards compliance. Safeguards auditing will take place as a part of the overall independent monitoring and evaluation of the Project. The Central Environmental Authority (CEA) as the national environmental regulatory agency will also conduct their own environmental compliance of activities that require Environmental Protection Licenses, such as for the operation of quarry and burrow sites and asphalt plants.

Ensuring compliance with the provisions of the ESAMF will be undertaken through independent monitoring and evaluation and safeguards audits supported under Component D of the Project. In addition, regular IDA implementation review missions will also undertake close monitoring of safeguards compliance.

Additionally, a broader CSIA (Continuous Social Impact Assessment) will be conducted for the overall project twice a year. This CSIA will review the larger issues of overall social impact of the project on IDP resettlement, sub-project selection, beneficiary identification, construction quality, local economic recovery, and conflict and reconciliation. This would be a significant measure of taking care of concerns regarding the conflict sensitivity of the project and its general impact including safeguards aspects. The CSIA will be carried out by independent, specialized consultancy firm.

5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The main groups of stakeholders are: (i) the local population in the conflict areas of the North; (ii) displaced people from the North; (iii) politicians and policy makers at central and local levels; (iv) security forces in the North and in the IDP camps controlling mobility in the conflict affected areas and screening IDPs as precondition for resettlement; (v) officials and personnel working in the public sector; (vi) civil society; (vii) public and private contractors; (v) UN agencies and NGOs working in the conflict affected areas; and (viii) the diaspora.

Tight security still prevails in the conflict affected areas and in the IDP camps. Consequently, during the preparation of the project, the team did not have access to the resettlement areas and no independent needs assessment conducted, nor consultations with IDPs or local population, so all available information has been produced by GoSL. During implementation and monitoring, the Bank needs clear assurances from the GoSL that the project management personnel and other implementing and consulting agencies will have free and safe access to the project areas and be able to engage with the returning local population, for consultations, participation in project implementation and for recruitment of local labor for the infrastructure rehabilitation. The quarterly CSIA would be designed to capture community feedback on safeguards implementation among other issues, and review functioning of Grievance Redress Mechanism.

B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 11/11/2009 Date of "in-country" disclosure 11/11/2009 Date of submission to InfoShop 11/22/2009 For category A projects, date of distributing the Executive

Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 11/11/2009 Date of "in-country" disclosure 11/11/2009 Date of submission to InfoShop 11/12/2009 Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Pest Management Plan: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: The policy process and fraemwork for Resettlement Action Plan is part of the Environmental and Social Management Framework.

C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting)

OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? Yes If yes, then did the Regional Environment Unit or Sector Manager (SM) Yes review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated in the Yes credit/loan? OP/BP 4.11 - Physical Cultural Resources Does the EA include adequate measures related to cultural property? Yes Does the credit/loan incorporate mechanisms to mitigate the potential Yes adverse impacts on cultural property? OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/process Yes framework (as appropriate) been prepared? If yes, then did the Regional unit responsible for safeguards or Sector Yes Manager review the plan? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank’s Yes Infoshop? Have relevant documents been disclosed in-country in a public place in a Yes form and language that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities Yes been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project Yes cost? Does the Monitoring and Evaluation system of the project include the Yes monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the Yes borrower and the same been adequately reflected in the project legal documents? D. Approvals

Signed and submitted by: Name Date Task Team Leader: Mr Nihal Fernando 11/11/2009 Environmental Specialist: Mr Sumith Pilapitiya 11/11/2009 Social Development Specialist Ms Asta Olesen 11/11/2009 Additional Environmental and/or Ms Darshani De Silva 11/11/2009 Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Mr Sanjay Srivastava 11/17/2009 Comments: cleared. Please see memo for details. Sector Manager: Mr Gajanand Pathmanathan 11/18/2009 Comments: Cleared