IPP353 , Public Disclosure Authorized The World Bank Nanning Urban Environment Project Public Disclosure Authorized Social Assessment Report Public Disclosure Authorized SA Research Group, Hehai University January 2009 Public Disclosure Authorized Summary Nanning, the capital city of Guangxi Zhuang Autonomous Region of the People's Republic of China, is under the process of booming urbanization. However, rapid urban expansion and economic growth have also brought about the problems of environmental pollution and ecological destruction, such as insufficient ecological water supply of tributary rivers, reduction of flood storage capacity, serious pollution in riverain areas, increasing volume of wastewater in urban areas, zero rate wastewater treatment in county towns etc. To different extents, all these hence cause pollution to the water body, damage the ecological environment, and adversely impact the socio-economic development and the living quality of the citizens. In this background, Nanning Urban Environment Project (NUEP) is proposed and which intends to apply for a loan of USD 100 million from the World Bank for project construction. The SA Group of Hehai University started the social assessment for NUEP in August 2008. During the course, the SA Group has received great help from Mr. Wang Chaogang, Senior Social Specialist of the World Bank, who guided us unselfishly in making the assessment and the active cooperation from the local leaders and residents during the field survey. The SA Group takes this chance to express its special thanks. Data collection of this Report was made via 5 methods, respectively: documentary research, PRA approach, individual household interview, focus group interview, and questionnaires. The contents of the Report include: (i) social and economic survey of the project areas; (ii) stakeholders and public participation; (iii) social impacts of the Project; (iv) public paying willingness and their affordability; (v) project and the ethnic minorities; (6) the Project social risks and corresponding measures. Socia-economic profiles of the project areas. The economy of Nanning City is comparatively less developed. The GNP of the whole city was RMB 8701481 million, averagely per capita RMB 13071, being lower than the national average level. The river improvement component and the phase-II of Jiangnan WWTP sUb-component are located in the urban area where the economy is well developed with low agricultural population. However, the wastewater components in the counties are located in the places of less economic development and high agricultural population. Project stakeholders and public participation. The stakeholders of the Project can be classified into three categories, respectively: governmental departments, implementing agencies (lAs) I construction units, and affected people (APs). During the course of preparing this report, the SA Group has undertaken adequate discussion and participation with the stakeholders with regard to the issues of construction necessity, possible positive and negative impacts, paying willingness and affordability etc., totally calling 15 discussion meetings with 77 persons involved and distributing 1061 questionnaires. Project social impacts. The river improvement component will bring about positive impacts on the people of the project areas due to the improvement of urban environment, 1 .. drinking water quality and flood control. The wastewater components will also bring about positive impacts in the aspects of fulfillment of the environmental target of the government, • improvement of drinking water quality, improvement of local environment and control of water-borne diseases. The main negative impacts brought about by the Project are land acquisition and resettlement, which however, can be mitigated or eliminated through preparing detailed resettlement action plans (RAP). The public paying willingness and their affordability. In terms of the paying willingness, affordability and wastewater tariff collection in the project areas, the SA Group is in the opinion that, based on the design conception of "cost compensation, . marginal profit", RMB 0.8 rr of wastewater treatment tariff is feasible and affordable by the majority people of the project areas. In addition, wastewater tariff levied according to the actual water consumption of individual family was determined according to the actualities of the project areas, which is quite operable. However in collection of wastewater tariff, different methods should be adopted according to different groups of people in the project areas. AlthOUgh the proposed RMB 0.8 rr wastewater tariff is affordable by the majority people who also have high paying willingness, during collection, special considerations should be also given to different groups of people, especially the vulnerable groups such as the recipients of the minimum living standard assistance. The project and the ethnic minorities. The Project is located in the capital city of Guangxi Zhuang Autonomous Region. Among the total population of Nanning City, the population of ethnic minorities accounts for 57.80%, while Zhuang accounts for 55.90%. In the eight counties and urban districts covered by the Project, except for Xixiangtang District, Binyang county and Hengxian county, ethnic minorities in the rest five areas constitute the vast majority of the local population, overwhelmingly the communities of Zhuang. The ethnic minorities are highly assimilated to the Han People and both of them are benefited from the Project equally. The total population benefited from the Project is 1.15 million, of which, the ethnic minorities account for 61 %, and most of them are Zhaung beneficiaries. All the consultation between the SA Group and the affected minority groups were conducted with prior notice and in a free manner. Totally 15 discussion meetings were held, investigating 589 persons of ethnic minorities, of which, 545 of Zhuang people. As a result, the project has received extensive support of the minority communities. As for the ethnic minorities, the general impacts of the project are positive. The project construction will create more job opportunities, upgrade the living environment, improve the living quality and reduce the occurrence of diseases. The cultural preservation of the ethnic minorities of the project areas has been ensured under the national legal framework, and this project will improve the local ecological environment and will not affect the cultural inheritance of the ethnic minorities. In addition, implementation of the project will not interfere with the language and region of the ethnic minorities, nor will break off their social customs and habits. The negative impacts on the ethnic minorities are reflected in two aspects: (i) Land acquisition and resettlement; and (ii) Some minority communities of Shang lin and Mashan counties may be unable to benefit from the project due to low affordability. The RAP has given full consideration on mitigating the possible negative impacts on the ethnic - 2­ minorities caused by the land acquisition and other issues, ensuring their living standards shall not be decreased due to land acquisition and house demolition. As for the low affordability of some minority communities in Shanglin and Mashan counties, the local governments have committed, before the project implementation, to work out necessary favorable policies for the poor to be equally benefited from the project, such as reduction or exemption of wastewater tariff. The SA Group is in the view that the demand of ethnic minorities has been incorporated in the project design scheme, and this project is out of the requirement of OP 4.10 (Operational Policy on Indigenous Peoples) on preparing an alone Indigenous Peoples Planning (IPP). Project social risks and suggestions. According to the SA Group, the main potential social risks of the river improvement component are: (i) risk caused by the residents due to the lack of environmental consciousness; (ii) risk caused by the change of farmland irrigative modes; (iii) risk caused by the impacts on "temple of the god of earth"; (iv) risk caused by the habits of the residents; and (vi) risk caused by land acquisition and house demolition. These risks can be avoided through adopting the following measures: (i) strengthen the public education for ecological protection and enhance sewage discharge monitoring against the riverside enterprises and households; (ii) pre-set the sites for reasonable water pumping in the engineering design; (iii) the compiler of the RAP should discuss with the villagers for re-construction of "temple of the god of earth" within the cost of the RAP; (iv) place warning signs at the dangerous river sections after project completion; and (v) work out feasible resettlement policies. The major potential risks of the wastewater components are: (i) risk caused by the low affordability of the poverty population (especially in the project areas of Mashan and Shanglin counties.); (ii) risk caused by low or unwillingness of enterprises to connect their wastewater with the WNTPs; (iii) risk of collecting wastewater tariff from those who do not use tap water; (iv) risk caused by land acquisition and house demolition; (v) risk caused by the damage of sewage pipelines; and (vi) risk caused by the discharge of sewage. The suggestions for avoiding risks of wastewater components are: (i) public hearings should be conducted before raising the wastewater tariff in the low-affordability areas, and reduction