RP1217 v2

World Bank Financed Yan’an Water Supply Project

Public Disclosure Authorized

Resettlement Policy Framework

Public Disclosure Authorized

World Bank Financed Yan’an Water Supply Project

Management Office Public Disclosure Authorized

December 30, 2011, Yan’an,

Public Disclosure Authorized

A. Project Profile

1. As one of key construction projects in Yan'an City, World Bank Loaned Yan'an Water Supply Project (hereinafter referred to the Project) involves construction and improvement of water supply network in the urban area and its vicinity, perfection of urban water supply service facilities and enhancement of water supply management organizations’ capacities in order to ease the contradiction between water supply and demand and ensure sustainable economic and social development in the City. The project consists of two sub projects, namely World Bank Loaned Yan’an Water Supply Project (Gaojiawan Grade IV Pump Station -Yan’an Dongchuan Water Treatment Plant) and associated works ( Water Intake-Gaojiawan Grade IV Pump Station), covering one district () and one country (Yanchuan County) of Yan’an City. Expected to kick off in 2013 and be completed in 2016, the project will contribute to stable water supply sources for the above district and country, thus addressing mid-to-long water supply issue.

2. Located in Yanchuan County and Baota District of Yan’an City, the Yellow River Diversion Project, a Class III medium-sized water supply project, consists of World Bank Loaned Yan’an Water Supply Project (Grade IV pump station in Gaojiawan--Yan’an Dongchuan Water Treatment Plant) and associated works (Yellow River Water Intake-Gaojiawan Grade IV Pump Station). It contains water hubs, pumping stations, water transfer pipelines, sediment treatment, flood storage reservoirs and emergency reservoirs, water treatment plants (WTP), water supply plants, and the construction of electrical and water supply engineering information technology, etc..

As planned, the Project will select Wangjiacun Village, Yanshuiguang Town, and Yanchuan County, as raw water intake sites. After sediment treatment, water runs from east to west through Zhaojiahe Village, another village of Yanshuiguang Town, and then through Yangjiashan Tunnel into Gaojiawan Grade IV Pump Station in the south of Yanchuan County Town. From Gaojiawan Grade IV Pump Station to the west, the pipeline is routed as start at Gaojiawan Grade IV Pump Station in the east of Yanchuan County Town toward southwest direction into Xinshegu of Yichuan, Wen'an across Caojiayuan of Yanchuan County, Tanpingchuan, a tributary of Yan River across Wenanyi Town and Yuju Town through Lucaoliang Tunnel and finally Dongchuan Water Treatment Plant by way of Guyi Town and Yaodian Town in Yan’an City. After tested, the water at the intake sites is basically qualified to the requirements of drinking water sources and sufficient.

3. Since Yan'an Water Supply Project construction designed by phases, Resettlement Action Plan (RAP) prepared by World Bank Loaned Yan’an Water Supply Project Management Office in November 2011 just covers World Bank Loaned Yan’an Water Supply Project (Gaojiawan Grade IV Pump Station -Yan’an Dongchuan Water Treatment Plant) and associated works (Yellow River Water Intake-Gaojiawan Grade IV Pump Station). As the design plan for power supply and communications projects to be implemented in Phase II is not yet confirmed, it is under imperfect condition to conduct a detailed survey on acquisition and resettlement and develop a RAP. Therefore, with the consensus of the World Bank resettlement experts, Project Management Office (PMO) decided to develop Resettlement Policy Framework for power supply and communications projects before formal evaluation on the World Bank Loaned Yan'an Water Supply Project. Given the conditions are available, the acquisition and resettlement survey and a brief RAP would be put on the agenda. In short, the Resettlement Policy Framework is developed specially for power supply and communications projects.

B. Project Impact

4. Because the design for power supply and communications projects is still improved during affected assets survey, it is possible for the engineering design units to make route design optimization and adjust acquisition and resettlement data. In this case, PMO will use the ultimately affected data as resettlement basis. At the same time, any significant changes on project impact and related reasons will be reported to the World Bank (WB) prior to implementation. In case of impact on more people and village, the policies in this RAP will also apply.

C. Principles and Objectives

5. In order to avoid or reduce acquisition and resettlement in this project, the basic principles in the Resettlement Policy Framework shall be followed for all project construction involving involuntary resettlement. Once the impact of acquisition and resettlement can be confirmed, the RAP will be formulated based on the policies and procedures in this Framework.

6. The Resettlement Policy Framework aims to ensure that all the affected population in these projects can receive reasonable compensations for their losses and necessary support, so as to improve or at least restore their existing production levels, income levels and living standards.

7. Affected population mentioned in the resettlement policy framework refers to:

（a） people whose land is partially or wholly impacted by project construction, permanently or temporarily;

（b） people whose houses are partially or wholly impacted by project construction;

（c） people whose production and business activities are partially or wholly impacted by project construction, permanently or temporarily;

（d） people whose ground attachments are partially or wholly impacted by project construction.

8. In order to achieve aforesaid objectives, general principles in WB OP/BP4.12 are adopted for preparation of the Resettlement Policy Framework. The details are as follows:

（a） The resettlement should be carried out based on socio-economic surveys on the Project and affected assets statistics and in terms of national and local policies and provisions pertaining to land acquisition and demolition, and the WB OP/BP4.12, that is, Operational Policy on Involuntary Resettlement.

（b） Project design optimization should be required to mitigate the impact of land acquisition and demolition and keep away from densely populated areas, minimizing the extent of involuntary resettlement. Various people convenience should be taken in construction to reduce the nuisance to the utmost.

（c） All involuntary resettlement activities and related compensation should be considered as part of project construction in order to provide adequate funds timely and benefits from the Project for migrants.

（d） Affected residents must receive all the compensation for resettlement losses before the the Project implementation, reasonable livelihood arrangement and effective production restoration as well as subsidies and support for temporary difficulties.

（e） Livelihoods and standards of living of all affected persons should be restored or improved after land acquisition and resettlement.

（f） Compensation for demolished houses, specialized facilities and attachments are calculated at replacement price without deduction of residual value of partial materials demolished and the depreciations of original properties.

（g） Several resettlement approaches are available such as such as assets rehabilitation and monetary settlement for affected persons to select.

（h） Compensation should be made for dispatched persons during relocation transition period and transitional period.

（i） Subsidies for relocation and off-production and business suspension should be offered to non-residential units.

（j） Vulnerable groups should receive reasonable assistance to choose housing and resettle.

（k） Compensation should be made for infrastructure owners to relocate infrastructure and restore functions.

（l） Reasonable compensations should be made for acquired land and resulting losses.

（m） Land acquisition costs should be paid at the actual progress within three months from the date on which land acquisition compensation and resettlement plan is approved and no later than the date of land construction.

（n） During resettlement preparation and implementation, it is necessary to encourage dispatched persons’ participation, solicit their views on the compensation and resettlement, and timely issue policies and standards on resettlement.

（o） Measures should be pay attention to affected persons’ complaints and timely and properly solve problems and inconvenience during land acquisition and demolition. Dispatched persons’ opinion on compensation standards should be settled by negotiations as far as possible, otherwise should resort to arbitration or even prosecution.

（p） Bodies responsible for resettlement need to strengthen cooperation and collaboration. In this case, all levels of resettlement bodies should be improved and all employees should take related trainings.

（q） During resettlement process, reports in advance should be required to World Bank in the event of major changes incurred, including compensation standards, place and scale of acquisition and demolition, or new sub-projects.

D. Preparation and Review Process for RAP

9. As for resettlement sites relating to World Bank Loaned Yan’an Water Supply Project, RAP will be prepared and carried out according to the following procedures:

（a） Upon completion of preliminary project design, a brief RAP should be prepared based on policies identified in the Framework. （b） The brief RAP should be submitted to WB Project Group a month earlier than the implementation date for its approval.

（c） When the construction owner, external monitoring units and WB Project Group inspect and ensure RAP implementation in the construction site if necessary, the construction owner’s cooperation and coordination will be required. In case of any accidents, the WB Project Group will require the owner’s immediate and decisive measures, otherwise, the implementation of the Project will be negatively impacted.

10. According to the Resettlement Policy Framework, the RAP for project construction should include the following:

（a） survey on the resettlement impact and evaluation of affected assets;

（b） statement on resettlement compensation and other resettlement assistance measures;

（c） migrants’ opinions on alternative solutions;

（d） resettlement implementation agencies and complaints procedures;

（e） arrangements on supervision and implementation; and

（f） schedule and budget.

E. Eligibility Criteria for Compensation

11. The policy on compensation eligibility aims to provide affected persons with compensation for losses due to the project construction and restore or improve the livelihood and standard of living in possible short time. Overall, resettlement and restoration plan will cover the following: (1) compensation for housing and other property loss; (2) subsidies for living restoration to mitigate temporary impact on migrants’ living and economic activities; (3) capital and corporate support for income restoration to livelihood-loss persons through employment or training; (4) compensation and community services for affected communities.

12. Persons who lose farmland due to the project construction are entitled to enjoy compensation and resettlement benefits as follows:

（a） directly obtain compensation for land acquisition, resettlement and young crops.

（b） gain compensation for losses of young crops and income, damage to infrastructure and reclamation costs due to temporary land occupation.

13. Persons who lose houses and subsidiary structures due to the project construction are entitled to enjoy compensation and resettlement benefits as follows:

（a） after the completion of the project, obtain assets settlement better or equal to the level before the demolition;

（b） in the case of monetary settlement, obtain compensation at the replacement price;

（c） obtain relocation subsidies; （d） obtain transition-period subsidies, which is calculated in accordance with the actual transition time.

14. Persons who lose production and business opportunities due to the project construction are entitled to enjoy compensation and resettlement benefits as follows:

（a） provide acceptable production and business establishments;

（b） make reasonable compensation for relocation and loss of equipment;

（c） make compensation for off-production and business suspension in transition period; and

（d） make compensation for wholly or partially affected houses and other fixed assets at their replacement value.

F. Legal Framework

15. The resettlement for road construction and resettlement sites in Phase II should comply with the following relevant state laws and regulations:

 The Law of Land Administration of the People's Republic of China

 Basic Farmland Protection Regulations (PRC State Council No. 257 Order, December 27, 1998)

 Provisional Regulations on Urban Land Use Tax of the People's Republic of China (the State Council No. 511 Order, December 1, 2007)

 Measures of Province on the Implementation of “The Law of Land Administration of the People's Republic of China” (approved at the 12th meeting of the 9th Shaanxi People's Congress Standing Committee; come into force since January 1, 2000)

 Implementing Rules of "Basic Farmland Protection Regulations of Shaanxi Province" (Shaanxi Provincial People's Government No. 30 Order, which was issued on April 4, 1996)

 Decision of the State Council on Deepening Reforms and Tightening Land Administration (Guo Fa [2004] No.28)

 Circular of the Ministry of Land and Resources of PRC on “Guidance Opinions about Improving Land Acquisition Compensation and Resettlement” (Guo Tu Zi Fa [2004] No. 238, November 3, 2004)

 The Property Law of the People's Republic of China (PRC Decree No. 62, come into force since October 1, 2007)

 Measures of Shaanxi Province on Unified Land Acquisition for Construction Projects (promulgated by Shaanxi Provincial People's Government, Order No. 78, on January 8, 2002)  Circular of Shaanxi Provincial People's Government on Printing and Publishing the Average Standards of Unified Annual Production Value and Integrated Section Price of Land Expropriation in Land Acquisition in Shaanxi Province (Shaan Zheng Ban Fa [2010] No. 36)

 Circular of Yan'an Municipal People's Government Office on Printing and Publishing the Average Standards of Unified Annual Production Value and Integrated Section Price of Land Expropriation in Land Acquisition in Yan’an City (Shaan Zheng Ban Fa [2010] No. 228)

G. Institutional Structure

16. Project Management Office will be responsible for the World Bank Loaned Yan’an Water

Supply Project and Yan’an Water Investment Co., Ltd. will be specifically responsible for project implementation.

H. Implementing Procedures

17. The resettlement files contain a detailed implementation plan for all efforts to be taken. Compensation, livelihood restoration (in cash or physically) and subsidies will be offered timely in batches according to resettlement implementation schedule.

I. Complaints Mechanism

18. To ensure that affected persons can make complaints on issues arising from land acquisition and resettlement, the Policy Framework regulates a detailed complaints procedure, so as to quickly and fairly respond to residents’ opinions and avoid complex formal legal procedures as far as possible. The details about complaint procedures are as follows:

Stage 1: complain to villagers' committees either orally or in writing for a solution or answer; or directly appeal to township or county (district) project management agencies for coordination and settlement if necessary. If no answer or dissatisfied with solution within three weeks, just submit written appeal files to superior project management agencies.

Stage 2: The superior Project Management Office should resolve the appeals within three weeks since reception. If unsettled or no satisfactory solution within three weeks, the Office or affected persons can directly sue to the county (district) people's courts in accordance with legal proceedings.

Stage 3: If still dissatisfied with District People's Court's ruling, the affected persons can appeal to Yan’an Municipal Intermediate People's Court for final ruling, which will be executed no matter affected person satisfy or not.

J. Compensation Policy 19. Compensation Policy for land acquisition and demolition in World Bank Loaned Yan’an Water Supply Project contains:

The following principles should be complied for the compensation for all demolished buildings, such as houses or caves:

（a） The compensation for demolished houses will observe the principle of “compensating sufficiently for the demolition” to ensure relocating households (relocatees) to obtain new houses with the same structure, same size, same location as the old houses (pursuant to the RAP). Based on housing demolition and resettlement plans as well as housing structure and type, affected persons losing houses will receive direct compensation. It is not permissible to depreciate the original houses, but affected residents may recycle building materials of original houses.

（b） As for villagers whose houses need to be relocated, they can build their own houses by using compensation fees and relocation fees after receiving homesteads from their own villages. They can ask the village authority to arrange the construction of new houses. No matter for uniformly-constructed or for self-constructed houses, original houses cannot be demolished until their owners move into new houses. Additionally, as the impact brought by project construction is temporary, there’s no need to have its house relocated. This family can build a house in the original homestead. The household will obtain interim compensation costs in the transition period. Its owner can use such costs to find housing or require the village committee or project management office to provide rental housing. Upon the evaluation and review by the property management department, housing compensation criteria of the Project is as follows:

Table 1 Estimates for housing compensation

Unit: RMB

Brick/concrete (㎡) Brick/wood (㎡) Stone cave (No.) Earth Cave (No.)

1000 720 30000 15000

Note: The criteria above are the minimum housing compensation criteria, which has been evaluated and approved by the property management department. The compensation for other specific items not listed in the above table will be implemented by a property management department at district level or above according to corresponding standard.

As for residents whose houses need to be demolished, they will receive housing compensation according to specific standards, in addition to Compensation for relocation. Compensation for relocation is divided into two categories: temporary transition allowance and house-moving allowance.

A. Temporary transitional allowance:

Households will receive temporary transitional allowance: RMB4 per square meter every month for each household. 12 households will experience house demolition in total due to project construction. On average, their houses cover 140 square meters per household. 140 square meters per household, each household will receive transition compensation of RMB560 per month. According to the survey, the project's temporary transitional allowance will be able to meet the temporary transition needs of relocatees, which is also in line with local housing rental price level.

Demolition and resettlement transition period takes six months as the standard. Residents living in temporary transition houses provided by the Project’s implementing agency or those whose old house is demolished after the completion of new house construction, will not receive transition allowance.

B. House-moving allowance:

For the residents who will have their houses moved to a new location will get housing-moving allowance: RMB1000 for per household;

K. Public Participation and Consultation

20. Owner of the project construction will execute public participation and consultation procedures in the project implementation area. That measures and benefits put forward in the resettlement plan — including resettlement areas, replacement land, compensation policy and compensation standards, production and life income restoration measures, — are well received by the affected residents is a prerequisite for its approval. 21. People impacted by the project construction should participate in the whole process of resettlement planning and implementation. For this purpose, a general meeting for the public shall be convened before developing the migration plan, so as to let residents have the right to know of the policy framework. Relevant local governments should allow the affected households or non-residential units to get knowledge of what they can benefit and what choices they can make in the corresponding migration plan.

L. Monitoring

22. It is owners that are responsible for monitoring. Decision-making is an integral part of plan implementation. In the monitoring process, proprietors will evaluate settlement results with main implementation objectives as benchmarks. When necessary, they will amend the migration project. If they find major problems and issues in the implementation of the resettlement plan, proprietors should timely report to the WB Project Group promptly. According to WB Project Group's request, a qualified independent body will be introduced to implement an external monitoring.